Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
2016-11-22 - AGENDA REPORTS - TAX ALLOCATION REFUND BONDS (2)
Agenda Item: 16 CITY OF SANTA CLARITA Q) AGENDA REPORT NEW BUSINESS i, CITY MANAGER APPROVAL: fAl DATE: November 22, 2016 SUBJECT: APPROVAL OF PRELIMINARY OFFICIAL STATEMENT AND BOND PURCHASE AGREEMENT IN CONNECTION WITH THE PROPOSED ISSUANCE OF SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA TAX ALLOCATION REFUNDING BONDS SERIES 2016 DEPARTMENT: Administrative Services PRESENTER: Carmen Magana RECOMMENDED ACTION City Council acting as the Successor Agency to the former Redevelopment Agency (Successor Agency Board) adopt a resolution approving a form of preliminary official statement and a bond purchase agreement in connection with the issuance of its Tax Allocation Refunding Bonds, Series 2016, and authorizing certain actions relating thereto. On June 3, 2008, the Redevelopment Agency of the City of Santa Clarita (RDA) issued its $29,860,000 Tax Allocation Bonds, Series 2008 (Newhall Redevelopment Project Area) (the "2008 Non -Housing Bonds") and its $8,850,000 Housing Set -Aside Tax Allocation Bonds, Series 2008 (the "2008 Housing Bonds," and together with the 2008 Non -Housing Bonds, the "2008 Bonds"). The remaining interest cost on the 2008 Bonds is 4.88%. The proceeds of the 2008 Bonds were used to finance redevelopment projects and housing programs. On September 13, 2016, the Successor Agency approved the issuance of refunding bonds to refinance all of the outstanding 2008 Bonds. The outstanding par amount of the 2008 Non- housing Bonds to be refunded is $26,155,000. The outstanding par amount of the 2008 Housing Bonds to be refunded is $7,755,000. The final maturity of the 2008 Bonds is October 1, 2042. All of the outstanding 2008 Bonds are callable at par or 100% on October 1, 2018. Based on current bond market conditions, a refunding could reduce true interest costs to 3.23% inclusive of bond underwriting fees. Savings are currently estimated to be approximately $3.3 million in net present value dollars. The estimated average annual debt service savings is anticipated to be approximately $247,000 per year. Final savings may be higher or lower depending on bond Page 1 Packet Pg. 95 market conditions at time of sale. The financing plan is to issue not to exceed $38,000,000 in Series 2016 refunding bonds (the "Refunding Bonds") secured by a pledge on the Redevelopment Property Tax Trust Fund ("RPTTF"). Final sizing will be determined at time of bond sale. The proposed Refunding Bonds are expected to be rated by Standard and Poor's Corporation and most likely insured and sold with "AA" Bond Ratings. The Refunding Bonds are proposed to be sold through a negotiated sale. The current uninsured bond rating on both issues to be refunded is "BBB+." On September 15, 2016, the Oversight Board to the Former Redevelopment Agency of the City of Santa Clarita approved the issuance of the Refunding Bonds. A request for review and approval was submitted to the Department of Finance (DOF). The DOF approved the Oversight Board resolution and the issuance of the Refunding Bonds in a letter dated October 14, 2016. A required step in the process of issuing the Refunding Bonds is approving a Preliminary Official Statement (POS) to be used in marketing the Refunding Bonds. Staff has worked with Bond and Disclosure Counsel, Financial Advisor, Fiscal Consultant and the Underwriters to prepare a draft of the POS for review by the Successor Agency Board. The POS is the `offering document" for the Refunding Bonds. The Successor Agency Board has an obligation to ensure that the POS includes all information that would be material to a prospective investor's decision whether to purchase the Refunding Bonds. The POS describes the terms of the bonds, the project area, the Successor Agency, tax revenues, investor risk and other information for potential investors. While the Successor Agency's legal counsel, consultants, and the Underwriters have participated in preparing the POS, the Successor Agency Board and staff are ultimately responsible for ensuring that the POS is accurate, contains no misleading information and does not omit any information necessary to make the POS not misleading to investors. The resolution before the Successor Agency Board will approve the form of the POS and authorize the Executive Director and other officials of the Successor Agency to finalize the POS for distribution to prospective investors. The resolution will also approve the form of the Bond Purchase Agreement. The Bond Purchase Agreement is the contract between the Successor Agency and the Underwriters, pursuant to which the Underwriters agree to buy the Refunding Bonds when issued, subject to certain termination events, for resale to investors. The bond sale is scheduled for late November, with a closing the second week of December. ALTERNATIVE ACTION Other action as determined by the Successor Agency Board. FISCAL IMPACT The estimated average annual debt service savings is anticipated to be approximately $247,000 per year, which will be split evenly between the Successor Agency's obligations and loan repayment. Page 2 Packet Pg. 96 Savings to the Successor Agency's obligations will result in an annual increase of approximately $123,500 in residual RPTTF available for distribution to the taxing entities. In addition, approximately $123,500 will be available annually for loan repayment, of which 20 percent is allocated to the Successor Housing Agency. ATTACHMENTS Resolution Form of Preliminary Official Statement (available in City Clerk's Reading File) Form of Bond Purchase Contract (available in City Clerk's Reading File) Page 3 Packet Pg. 97 16.a RESOLUTION NO. RESOLUTION OF THE GOVERNING BOARD OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA APPROVING A FORM OF PRELIMINARY OFFICIAL STATEMENT AND A BOND PURCHASE AGREEMENT IN CONNECTION WITH THE ISSUANCE OF ITS TAX ALLOCATION REFUNDING BONDS, SERIES 2016, AND AUTHORIZING CERTAIN ACTIONS RELATING THERETO WHEREAS, the Redevelopment Agency of the City of Santa Clarita (the "Former Redevelopment Agency") was a public body, corporate and politic, duly created in 1989, established and authorized to transact business and exercise its powers under and pursuant to the provisions of the Community Redevelopment Law (Part 1 of Division 24 (commencing with Section 33000) (the "Redevelopment Law"), of the Health and Safety Code of the State of California (the "Health and Safety Code"); and WHEREAS, the Former Redevelopment Agency issued its $29,860,000 City of Santa Clarita Redevelopment Agency Tax Allocation Bonds, Series 2008 (Newhall Redevelopment Project Area) (the "2008 Nonhousing Bonds") and its $8,850,000 City of Santa Clarita Redevelopment Agency Housing Set -Aside Tax Allocation Bonds, Series 2008 (the "2008 Housing Bonds," and, together with the 2008 Nonhousing Bonds, the "Prior Bonds"), secured by a pledge of certain tax increment revenues from the Newhall Redevelopment Project Area for the purpose of financing the redevelopment activities and housing programs of the Former Redevelopment Agency; and WHEREAS, Assembly Bill Xl 26, effective June 29, 2011, together with AB 1484, effective June 27, 2012 ("AB 1484") resulted in the dissolution of the Former Redevelopment Agency as of February 1, 2012, and the vesting in this Successor Agency to the Redevelopment Agency of the City of Santa Clarita (the "Successor Agency") of all of the authority, rights, powers, duties and obligations of the Former Redevelopment Agency; and WHEREAS, AB 1484, among other things, amended the Redevelopment Law to authorize the Successor Agency to issue bonds pursuant to Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code (the "Refunding Law") for the purpose of achieving debt service savings; and WHEREAS, to provide funds to refund the Prior Bonds, the Successor Agency intends to authorize pursuant to the Redevelopment Law and the Refunding Law the issuance of its Tax Allocation Refunding Bonds, Series 2016 (the "2016 Bonds"), in the aggregate principal amount not to exceed $38,000,000; and WHEREAS, on September 13, 2016, the Successor Agency adopted Resolution No. 16-03 approving the issuance of the 2016 Bonds and approving certain documents in connection therewith, including an indenture of trust; and Packet Pg. 98 16.a WHEREAS, on September 15, 2016, the Oversight Board to the Former Redevelopment Agency of the City of Santa Clarita adopted Resolution No. 16-08 approving the issuance of the 2016 Bonds (the "Oversight Board Resolution") and approving certain documents in connection therewith; and WHEREAS, on October 14, 2016, the Successor Agency received a letter from the Department of Finance stating that based on the Department of Finance's review and application of the law, the Oversight Board Resolution approving the 2016 Bonds and the issuance of the 2016 Bonds are approved by the Department of Finance; and WHEREAS, the Successor Agency now desires to approve a Preliminary Official Statement relating to the 2016 Bonds, the form of which is on file with the Secretary and has been presented to this meeting along with the form of a Bond Purchase Agreement relating to the sale of the 2016 Bonds substantially in the forms on file with the Secretary and presented to this meeting. NOW, THEREFORE, the Governing Board of the Successor Agency to Redevelopment Agency of the City of Santa Clarita (the "Board"), does hereby resolve as follows: SECTION 1. Findings. The Board hereby finds and determines that the recitals hereto are true and correct. SECTION 2. Preliminary Official Statement. The Board hereby approves the Preliminary Official Statement, and the distribution thereof, substantially in the form on file with the Secretary, a copy of which has been made available to the Board, with such changes therein as an Authorized Representative, may determine necessary, to be furnished to the underwriters for the 2016 Bonds. The Board authorizes any of the Chairperson, Vice -Chairperson, or Executive Director, and their respective designees (each an "Authorized Representative") to deem the Preliminary Official Statement to be final within the meaning of U.S. Securities and Exchange Commission Rule 15c2-12 (the "Rule"), subject to completion of those items permitted by such Rule. Any Authorized Representative is hereby authorized and directed to execute and deliver the final Official Statement in substantially the form of the Preliminary Official Statement hereby approved, with such additions thereto and changes therein as are consistent with this Resolution and recommended or approved by Norton Rose Fulbright US LLP, as Disclosure Counsel to the Successor Agency, subject to advice of counsel to the Successor Agency, and approved by an Authorized Representative, such approval to be conclusively evidenced by the execution and delivery thereof. If, in the opinion of the Authorized Representative, upon consultation with Disclosure Counsel, any revisions or updates to the information contained in the Preliminary Official Statement would require supplemental approval of such revised or updated Preliminary Official Statement by the Board, then such revised or updated Preliminary Official Statement shall be submitted to the Board for consideration and further approval. SECTION 3. Bond Purchase Agreement. The form of the Bond Purchase Agreement, proposed to be executed and entered into by and between the Successor Agency, and Stifel, Nicolaus & Company, Incorporated, as representative (the "Representative"), on behalf of Packet Pg. 99 itself and Hilltop Securities Inc., as underwriters (collectively, the "Underwriters"), in substantially the form on file with the Secretary, a copy of which has been made available to the Board, is hereby approved, and any Authorized Representative is hereby authorized and directed, for and in the name and on behalf of the Successor Agency, to execute and deliver the Bond Purchase Agreement in substantially such form, with such changes as may be approved by any Authorized Representative, acting on behalf of the Successor Agency, subject to advice of counsel, such execution thereof to constitute conclusive evidence of the approval of the Successor Agency of all changes from the form of the Bond Purchase Agreement presented to this meeting; provided, however, that the true interest cost of the 2016 Bonds shall not exceed four and one-half percent (4.5%) and so long as the Underwriters' discount for the 2016 Bonds (exclusive of any original issue discount which does not constitute compensation to the Underwriter) does not exceed one percent (1%). SECTION 4. General Authorization. Each Authorized Representative and any other officer of the Successor Agency is hereby authorized to execute and deliver any and all agreements (including, but not limited to, investment agreements, bond insurance, reserve fund surety policies, guaranteed investment agreements, escrow agreements or escrow instructions), documents, certificates and instruments and to do and cause to be done any and all acts and things deemed necessary or advisable for carrying out the transactions contemplated by this Resolution and in furtherance of the issuance of the Bonds and the refunding of the 2008 Bonds Such actions heretofore taken by such officers or their designees are hereby ratified, confirmed and approved. SECTION 5. Effective Date. This Resolution shall take effect immediately upon its adoption. PASSED, APPROVED, AND ADOPTED this day of November, 2016. CHAIR ATTEST: SECRETARY I� 16.a Packet Pg. 100 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) I, Mary Cusick, Secretary of the Successor Agency to the Redevelopment Agency of the City of Santa Clarita, do hereby certify that the foregoing Resolution was duly adopted by the Governing Board of the Successor Agency to the Redevelopment Agency of the City of Santa Clarita at the regular/special meeting thereof, held on the day of November, 2016, by the following vote: AYES: BOARDMEMBERS: NOES: BOARDMEMBERS: ABSENT: BOARDMEMBERS: SECRETARY 16.a Packet Pg. 101 s o - � m n� d V T U A N N O a „ s coc� T ctl a w a o 0 0 m o.. ro� as o� Go o� �s 0 1~ >~ o v � � o y U N � v � m d m _U E03 as o o ryyN' 3 U y o � h h n"i o y m m '= o � Z? U U S O W d � o N D U 5 h U ] U � U L 9 S �a E =.5 rn�= d � � N U U N � d � � o d h d .. m h � PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER , 2016 NEW ISSUE - BOOK -ENTRY ONLY Draft of 11/14/16 RATINGS: Insured: S&P: "_' Underlying: S&P: " ' See the caption "CONCLUDING INFORMATION—Ratings." In the opinion of Norton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel, under existing statutes, regulations, rulings and court decisions, and assuming compliance with the tax covenants described herein, interest on the Bonds is excluded pursuant to section 103(a) of the Internal Revenue Code of 1986 from the gross income of the owners thereof for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. It is also the opinion of Bond Counsel that under existing law interest on the Bonds is exempt from personal income taxes of the State of California. See the caption "TAX MATTERS. " x $[Principal Amount] SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA Tax Allocation Refunding Bonds Series 2016 Dated: Delivery Date Due: October 1, as shown on the inside front cover The above -captioned bonds (the "Bonds") me being issued by the Successor Agency to the Redevelopment Agency of the City of Santa Clarita (the "Successor Agency") pursuant to the provisions of section 34177.5 of the California Health and Safety Code and Section 53580 et seq. of the California Government Code (collectively, the "Refunding Law"), a resolution adopted by the Successor Agency and an Indenture of Trust, dated as of December 1, 2016 (the "Indenture"), by and between the Successor Agency and The Bank of New York Mellon Tmst Company, N.A., as trustee (the "Trustee"). The Bonds will be delivered as fully registered bonds, registered in the time of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), and will be available to ultimate purchasers (the "Beneficial Owners") in the denomination of $5,000 or any integral multiple thereof, under the book -entry system maintained by DTC. Beneficial Owners will not be entitled to receive delivery of bonds representing their ownership interest in the Bonds. The principal of, premium, if any, and semiannual interest (due April 1, 2017 and each April 1 and October 1 thereafter) on the Bonds will be payable by the Tmstee, to DTC for subsequent disbursement to DTC participants, so long as DTC or its nominee remains the registered owner of the Bonds. See the caption "THE BONDSBook-EntrySystem." The Bonds are subject to optional and mandatory sinking account redemption prior to maturity. The Bonds are being issued by the Successor Agency: (i) to refund the Prior Agency's Tax Allocation Bonds, Series 2008 (Newhall Redevelopment Project Area) (the "2008 Non -Housing Bonds"), (ii) to refund the Prior Agency's Housing Set -Aside Tax Allocation Bonds, Series 2008 (the "2008 Housing Bonds," and together with the 2008 Non -Housing Bonds, the "2008 Bonds"), (iii) to purchase a municipal bond insurance policy (the "Policy") from [INSURER]. (" " or the "Insurer") to guarantee the payment of principal of and interest on the Bonds; (iv) to purchase a municipal bond debt service reserve insurance policy (the "Reserve Policy") from the Insurer for deposit in the Reserve Fund for the Bonds; and (v) to pay costs of issuance for the Bonds. The Bonds are payable from and secured by the Pledged Tax Revenues, as defined in the Indenture, and moneys in certain funds and accounts established under the Indenture, as further described in this Official Statement. See "SECURITY FOR THE BONDS" herein. Pledged Tax Revenues include amounts deposited to the Redevelopment Property Tax Trust Fund maintained by the County of Los Angeles, California (the "County"), less certain amounts described herein. In addition to the Bonds, the Successor Agency may issue or incur parity bonds that are payable from Pledged Tax Revenues on a parity with the Bonds, but only to refund all or a portion of the Bonds. See the caption "SECURITY FOR THE BONDS Parity Bonds." This cover page of the Official Statement contains information for quick reference only. It is not a complete summary of the Bonds. Investors should read the entire Official Statement to obtain information essential to the making of an informed investment decision. Attention is hereby directed to certain risk factors more fully described herein. The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Bonds by INSURER. [INSURER LOGO] The Bonds are not a debt of the City of Santa Clarita (the "City"), the County, the State of California (the "State") or any of its political subdivisions (except the Successor Agency) and none of said City, said County, said State, nor any of its political subdivisions (except the Successor Agency) is liable hereon, nor in any event will the Bonds be payable out of any funds or properties other than those of the Successor Agency as set forth in the Indenture. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. None of the members of the Governing Board of the Successor Agency, the Governing Board of the Oversight Board (defined herein), the County Board of Supervisors or any persons executing the Bonds is liable personally on the Bonds. The Bonds are offered, when, as and if issued, subject to the approval of Norton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel. Certain legal matters will be passed on for the Successor Agency by Burke Williams & Sorensen LLP, Los Angeles, California, the City Attorney, as counsel to the Successor Agency, and by Norton Rose Fulbright US LLP, Los Angeles, California, Disclosure Counsel, for the Underwriters by their counsel, Stradling, Yocca, Carlson & Routh, a Professional Corporation, Newport Beach, California, for the Trustee by its counsel and for the Insurer by its counsel. It is anticipated that the Bonds will be available far delivery through the facilities of DTC on or about December, 2016 Dated: November _, 2016 Preliminary, subject to change. [STIFEL LOGO] [HILLTOP LOGO] MATURITY SCHEDULE BASE CUSIP t $[Principal Amount] SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA TAX ALLOCATION REFUNDING BONDS SERIES 2016 Maturity Date Principal (October 1) Amount Interest Rate Yield Price CUSIP, $ % Term Bond due October 1, 20_ -Yield %, Price: , CUSIPt: _ Preliminary, subject to change. f CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by S&P Capital IQ. Copyright© 2016 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided jar convenience of reference only. The Agency and the Underwriter take no responsibilityfor the accuracy of such numbers. SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA CITY COUNCIL Robert C. Kellar, Mayor Dante Acosta, Mayor Pro Tem Marsha A. McLean, Councilmember TimBen Boydston, Councilmember Laurette F. Weste, Councilmember CITY OFFICIALS Kenneth W. Striplin, Ed.D., City Manager Darren Hernandez, Deputy City Manager Carmen Magana, Director ofAdministrative Services Frank Oviedo, Assistant City Manager Tom Cole, Director of Community Development Mary Cusick, City Clerk Joseph M. Montes, City Attorney SPECIAL SERVICES Bond and Disclosure Counsel Norton Rose Fulbright US LLP Los Angeles, California Trustee The Bank of New York Mellon Trust Company, N.A. Los Angeles, California Financial Advisor C.M. de Crinis & Co., Inc. Glendale, California Fiscal Consultant HdL Coren & Cone Diamond Bar, California Verification Agent Causey Demgen & Moore P.C. Denver, Colorado The City Council of the City of Santa Clarita serves as the Governing Board of the Agency, and City Staff serve as Staff to the Agency. GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been authorized by the Successor Agency to give any information or to make any representations with respect to the Bonds other than as contained in this Official Statement, and, if given or made, such other information or representation must not be relied upon as having been given or authorized by the Successor Agency or the Underwriters. Use of Official Statement. This Official Statement is submitted in connection with the sale of the Bonds described in this Official Statement and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement does not constitute a contract between any Bond owner and the Successor Agency or the Underwriters. Preparation of this Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness. The Underwriters have provided the following sentence for inclusion in this Official Statement: The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure made by the Successor Agency, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "forecast," "expect," "intend" and similar expressions identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, section 21E of the United States Securities Exchange Act of 1934, as amended, and section 27A of the United States Securities Act of 1933, as amended.. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the Successor Agency or the other parties described in this Official Statement, since the date of this Official Statement. Document Summaries. All summaries of the Indenture or other documents contained in this Official Statement me made subject to the provisions of such documents and do not purport to be complete statements of any or all such provisions. All references in this Official Statement to the Indenture and such other documents are qualified in their entirety by reference to such documents, which are on file with the Successor Agency. No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. No Registration with the SEC. The issuance and sale of the Bonds have not been registered under the Securities Act of 1933 or the Securities Exchange Act of 1934, both as amended, in reliance upon exemptions provided thereunder by Sections 3(a)(2) and 3(a)(12), respectively, for the issuance and sale of municipal securities. Public Offering Prices. The Underwriters may offer and sell the Bonds to certain dealers and dealer banks and banks acting as agent at prices lower than the public offering prices stated on the inside cover page of this Official Statement, and the Underwriters may change those public offering prices from time to time. Web Page. The City of Santa Clarita maintains a website. However, the information maintained on the website is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds. Bond Insurance. [Insurer disclosure] TABLE OF CONTENTS 0_. INTRODUCTORY STATEMENT......................................................................................................................1 Authorityand Purpose...................................................................................................................................1 The City, the Prior Agency and the Successor Agency.................................................................................1 TheRedevelopment Plan...............................................................................................................................2 TaxAllocation Financing...............................................................................................................................4 Authorityto Issue Refunding Bonds..............................................................................................................4 Securityfor the Bonds....................................................................................................................................4 ParityBonds...................................................................................................................................................5 BondInsurance..............................................................................................................................................5 ReserveFund.................................................................................................................................................5 Further Information............................................................... REFUNDINGPLAN............................................................................................................. SOURCES AND USES OF FUNDS................................................................................................. THEBONDS........................................................................................................................................................ 7 Anthnritv fnr tcenanre 7 SECURITYFOR THE BONDS.........................................................................................................................14 PledgeUnder the Indenture..........................................................................................................................14 PledgedTax Revenues.................................................................................................................................14 Elimination of Housing Set-Aside...............................................................................................................15 Statutory Pass -Through Amounts................................................................................................................15 Flow of Funds Under the Indenture.............................................................................................................16 ReserveFund...............................................................................................................................................17 Dissolution Act Covenant by the Successor Agency...................................................................................18 LimitedObligation.......................................................................................................................................18 CountyAdministrative Fees.........................................................................................................................18 OtherObligations.........................................................................................................................................19 ParityBonds.................................................................................................................................................19 BONDINSURANCE.........................................................................................................................................19 PROPERTY TAXATION IN CALIFORNIA....................................................................................................20 Property Tax Collection Procedures............................................................................................................20 UnitaryProperty ...........................................................................................................................................22 Article XIIIA of the State Constitution........................................................................................................23 Appropriations Limitation — Article XIII13 ..................................................................................................24 Articles XIIIC and XIIID of the State Constitution.....................................................................................25 Proposition87..............................................................................................................................................25 RedevelopmentTime Limits........................................................................................................................25 Appeals of Assessed Values and Proposition 8...........................................................................................26 Propositions218 and 26...............................................................................................................................27 FutureInitiatives..........................................................................................................................................27 TABLE OF CONTENTS (continued) LM THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA........................................................................................................................................................... 27 Successor Agency Powers...........................................................................................................................28 DueDiligence Reviews................................................................................................................................28 THEPROJECT AREA.......................................................................................................................................29 General......................................................................................................................................................... 29 LandUse......................................................................................................................................................31 Statutory Pass -Through Amounts................................................................................................................31 TaxRates..................................................................................................................................................... 32 LargestTaxpayers........................................................................................................................................33 Historical Assessed Valuations....................................................................................................................35 Historical Tax Increment Receipts...............................................................................................................35 Appeals........................................................................................................................................................37 Change in Assessed Value Due to Sales......................................................................................................39 HistoricalRPTTF Deposits..........................................................................................................................39 Projected Taxable Valuation and Estimated Debt Service Coverage..........................................................42 Activity Within the Project Area..................................................................................................................44 RISKFACTORS................................................................................................................................................45 Recognized Obligation Payment Schedule..................................................................................................45 Challengesto Dissolution Act......................................................................................................................46 Reductionin Taxable Value.........................................................................................................................47 Risksto Real Estate Market.........................................................................................................................47 Concentration of Property Ownership.........................................................................................................48 Reduction in Inflationary Rate.....................................................................................................................48 DevelopmentRisks......................................................................................................................................48 Future Land Use Regulations and Growth Control Initiatives.....................................................................49 AssessmentAppeals.....................................................................................................................................49 Levy and Collection of Taxes...................................................................................................................... 50 Bankruptcy and Foreclosure........................................................................................................................50 EstimatedRevenues.....................................................................................................................................51 HazardousSubstances..................................................................................................................................51 NaturalDisasters..........................................................................................................................................51 Changesin the Law......................................................................................................................................52 AdditionalObligations................................................................................................................................. 52 SecondaryMarket........................................................................................................................................ 52 No Validation Proceeding Undertaken........................................................................................................52 IRS Audit of Tax -Exempt Bond Issues........................................................................................................53 Lossof Tax Exemption................................................................................................................................53 Bonds Are Limited Obligations...................................................................................................................54 Limitationson Remedies............................................................................................................................. 54 Risks Associated with Bond Insurance........................................................................................................54 TAXMATTERS.................................................................................................................................................55 CONCLUDING INFORMATION.....................................................................................................................57 Underwriting................................................................................................................................................ 57 Verification of Mathematical Computations................................................................................................57 LegalOpinion..............................................................................................................................................58 Litigation...................................................................................................................................................... 58 Legality for Investment in California...........................................................................................................58 Ratings.........................................................................................................................................................58 ii TABLE OF CONTENTS (continued) 50 ContinuingDisclosure..................................................................................................................................59 FinancialAdvisor.........................................................................................................................................61 Miscellaneous..............................................................................................................................................61 APPENDIX A SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE...................................A-1 APPENDIX B FORM OF BOND COUNSEL OPINION............................................................................. B-1 APPENDIX C BOOK -ENTRY ONLY SYSTEM........................................................................................ C-1 APPENDIX D FORM OF CONTINUING DISCLOSURE CERTIFICATE................................................D-1 APPENDIX E COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR FISCAL YEAR ENDEDJUNE 30, 2015........................................................................................................ E-1 APPENDIX F FISCAL CONSULTANT'S REPORT...................................................................................F-1 APPENDIX G SUPPLEMENTAL INFORMATION—THE CITY OF SANTA CLARITA .......................G-1 APPENDIX H SPECIMEN MUNICIPAL BOND INSURANCE POLICY.................................................H-1 iii OFFICIAL STATEMENT $[Principal Amount]* SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA TAX ALLOCATION REFUNDING BONDS SERIES 2016 INTRODUCTORYSTATEMENT This Official Statement, including the cover page and the appendices, is provided to furnish information in connection with the sale by the Successor Agency to the Redevelopment Agency of the City of Santa Clarita (the "Successor Agency") of its $[Principal Amount]` Tax Allocation Refunding Bonds, Series 2016 (the "Bonds"). Authority and Purpose The Bonds are being issued pursuant to the Constitution and laws of the State of California (the "State"), including Section 34177.5(a)(1) of the Health and Safety Code of the State, and Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State (collectively, the "Refunding Law") and an Indenture of Trust, dated as of December 1, 2016 (the "Indenture"), by and between the Successor Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). See the caption "THE BONDS—Authority for Issuance." The Bonds are being issued by the Successor Agency: (i) to refund the Prior Agency's (as defined herein) Tax Allocation Bonds, Series 2008 (Newhall Redevelopment Project Area) (the "2008 Non -Housing Bonds"), (ii) to refund the Prior Agency's Housing Set -Aside Tax Allocation Bonds, Series 2008 (the "2008 Housing Bonds," and together with the 2008 Non -Housing Bonds, the "2008 Bonds"), (iii) to purchase a municipal bond insurance policy (the "Policy") from [INSURER]. ("" or the "Insurer") to guarantee the payment of principal of and interest on the Bonds; (iv) to purchase a municipal bond debt service reserve insurance policy (the "Reserve Policy") from the Insurer for deposit in the Reserve Fund for the Bonds; and (v) to pay costs of issuance for the Bonds. The City, the Prior Agency and the Successor Agency City. The City is a general law city, incorporated in 1987. The City is located in the Santa Clarita Valley, which is comprised of the communities of Canyon Country, Newhall, Saugus, and Valencia, within Los Angeles County (the "County"), 35 miles northwest of Los Angeles and 40 miles east of the Pacific Ocean. The City encompasses an area of approximately 64 square miles and, as of January 1, 2016, had an estimated population of approximately 219,611. The City operates under a Council Manager form of municipal government. The City Council is comprised of five council members, elected biannually at large to four-year staggered terms. The City provides general government services either with its own employees or through contracts. See Appendix G for further information with respect to the City. Prior Agency. The Redevelopment Agency of the City of Santa Clarita (the "Prior Agency") was activated by the City Council of the City on November 28, 1989 pursuant to the Community Redevelopment Law (Part 1, Division 24, commencing with Section 33000 of the Health and Safety Code of the State) (the "Redevelopment Law"). At the time of its establishment, the City Council declared itself to be the governing board of the Prior Agency. `Preliminary, subject to change. Dissolution Act. On June 29, 2011, Assembly Bill No. 26 ("AB X 26") was enacted as Chapter 5, Statutes of 2011, together with a companion bill, Assembly Bill No. 27 ("AB X 27"). A lawsuit entitled California Redevelopment Association, et al. v. Matosantos, et al., was brought in the State Supreme Court challenging the constitutionality of AB XI 26 and AB XI 27. In a published decision (53 Cal. 4th 231 (December 29, 2011)), the State Supreme Court largely upheld AB XI 26, invalidated AB XI 27 and held that AB XI 26 may be severed from AB XI 27 and enforced independently. As a result of AB Xl 26 and the decision of the State Supreme Court, as of February 1, 2012, all redevelopment agencies in the State, including the Prior Agency, were dissolved, and successor agencies were designated as successor entities to the former redevelopment agencies to expeditiously wind down the affairs of the former redevelopment agencies. The primary provisions enacted by AB X 26 relating to the dissolution and winding down of former redevelopment agency affairs are Parts 1.8 (commencing with Section 34161) and 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code of the State, as amended on June 27, 2012 by Assembly Bill No. 1484 ("AB 1484"), enacted as Chapter 26, Statutes of 2012, and as amended on September 229 2015 by Senate Bill 107 ("SB 107") (as further amended from time to time, the "Dissolution Act"). On January 24, 2012, pursuant to Resolution No. 12-3 and Section 34173 of the Dissolution Act, the City Council of the City elected to serve as the successor agency to the Prior Agency. Section 34173(g) of the Dissolution Act, added by AB 1484, expressly affirms that the Successor Agency is a separate public entity from the City, that the two entities will not merge, and that the liabilities of the Prior Agency will not be transferred to the City nor will the assets of the Prior Agency become assets of the City. The Redevelopment Plan The City Council adopted Ordinance No. 97-12 on July 8, 1997, which adopted the redevelopment plan (the "Redevelopment Plan") for the single project area within the Prior Agency known as the "Newhall Redevelopment Project Area" (the "Project Area"). The Project Area is approximately 913.6 acres in size and consists of a single, very irregularly-shaped area within the City. The Project Area is located between Interstate 5 and State Highway 14 and includes the commercial corridors along Lyons Avenue and San Fernando Road. The Project Area is generally bounded on the west by Interstate 5, on the east by State Highway 14 and on the north by the intersection of San Fernando Road and Magic Mountain Parkway. The Project Area extends approximately four blocks to the east and west of San Fernando Road between its intersection with Lyons Avenue and its intersection with 16th Street. It also includes a large area on the north side of San Fernando Road between its intersections with Lyons Avenue and with Pine Street. Large areas that are beyond the immediate San Fernando Road corridor exist southeast of the intersection with Pine Street and at the intersection with State Highway 14. Several areas that extend beyond the immediate Lyons Avenue corridor exist near the intersection with Valley Street and near the Lyons Avenue intersection with Interstate 5. For more information on the Project Area, see the caption "THE PROJECT AREA." The total assessed valuation of taxable property in the Project Area for fiscal year 2016-17 is estimated to be $652,161,528, and the corresponding incremental assessed valuation of the taxable property over the base year for the Project Area is estimated to be $388,055,314. See Table 3 under "THE PROJECT AREA—Historical Assessed Values" for historical assessed values of the taxable property within the Project Area. See "THE PROJECT AREA" and APPENDIX F—"FISCAL CONSULTANT'S REPORT. A map of the Project Area is shown on the following page. MAP OF NEWHALL REDEVELOPMENT PROJECT AREA Tax Allocation Financing Prior to the enactment of AB Xl 26, the Redevelopment Law authorized the financing of redevelopment projects through the use of tax increment revenues. This method provided that the taxable valuation of the property within a redevelopment project area on the property tax roll last equalized prior to the effective date of the ordinance which adopts the redevelopment plan becomes the base year valuation. Assuming that the taxable valuation never drops below the base year level, the taxing agencies thereafter received that portion of the taxes produced by applying then current tax rates to the base year valuation, and the redevelopment agency was allocated the remaining portion produced by applying then current tax rates to the increase in valuation over the base year. Such incremental tax revenues allocated to a redevelopment agency were authorized to be pledged to the payment of agency obligations. Authority to Issue Refunding Bonds The Dissolution Act authorizes refunding bonds, including the Bonds, to be secured by a pledge of moneys deposited from time to time in a Redevelopment Property Tax Trust Fund held by a county auditor - controller with respect to a successor agency, which are equivalent to the tax increment revenues that were formerly allocated under the Redevelopment Law to the redevelopment agency and formerly authorized under the Redevelopment Law to be used for the financing of redevelopment projects. Under the Indenture, Pledged Tax Revenues consist of the amounts deposited from time to time in the Redevelopment Property Tax Trust Fund established pursuant to and as provided in the Dissolution Act, less unsubordinated Statutory Pass - Through Amounts (as such term is defined herein), if any. See the caption "SECURITY FOR THE BONDS— Pledged Tax Revenues." Successor agencies have no power to levy property taxes and must look specifically to the allocation of taxes as described above. See the caption "RISK FACTORS." Security for the Bonds The Dissolution Act requires the County Auditor -Controller to determine the amount of property taxes that would have been allocated to the Prior Agency had the Prior Agency not been dissolved pursuant to the operation of AB Xl 26, using current assessed values on the last equalized roll on August 20, and to deposit that amount in the Redevelopment Property Tax Trust Fund for the Successor Agency established and held by the County Auditor -Controller (the "Redevelopment Property Tax Trust Fund") pursuant to the Dissolution Act. The Dissolution Act provides that any bonds authorized thereunder to be issued by the Successor Agency will be considered indebtedness incurred by the dissolved Prior Agency, with the same legal effect as if the bonds had been issued prior to the effective date of AB Xl 26, in full conformity with the applicable provision of the Redevelopment Law that existed prior to that date, and will be included in the Successor Agency's Recognized Obligation Payment Schedule. See Appendix A and the caption "DISSOLUTION ACT— Recognized Obligation Payment Schedule." The Dissolution Act further provides that bonds authorized thereunder to be issued by the Successor Agency will be secured by a pledge of, and lien on, and will be repaid from moneys deposited from time to time in the Redevelopment Property Tax Trust Fund, and that property tax revenues pledged to any bonds authorized under the Dissolution Act, such as the Bonds, are taxes allocated to the Successor Agency pursuant to the provisions of the Redevelopment Law and the State Constitution which provided for the allocation of tax increment revenues under the Redevelopment Law, as described in the foregoing paragraph. In accordance with the Dissolution Act, "Pledged Tax Revenues" are defined under the Indenture as the portion of the moneys available for deposit into or deposited from time to time in the Redevelopment Property Tax Trust Fund established pursuant to Section 34172(c) of the Dissolution Act, as provided in Section 34183(a)(2) of the Dissolution Act, that are equal to that portion of taxes levied upon taxable property in the Project Area and received by the Successor Agency on or after the date of issue of the Bonds, less (i) amounts payable by the State to the Successor Agency under and pursuant to Chapter 1.5 of Part 1 of Division 4 of Title 2 (commencing with section 16110) of the California Government Code, and (ii) Statutory Pass - Through Payments, but only to the extent such amounts are not subordinated to payment of debt service on the Bonds. If, and to the extent, that the provisions of Section 34172 or Section 34183(a)(2) are invalidated by a final judicial decision, then Pledged Tax Revenues will include all tax revenues allocated to the payment of indebtedness pursuant to Health & Safety Code Section 33670 or such other section as may be in effect at the time providing for the allocation of tax increment revenues in accordance with Article XVI, Section 16 of the State Constitution. The Bonds are payable from and secured by the Pledged Tax Revenues to be derived from the Project Area and a portion of the moneys in the Redevelopment Obligation Retirement Fund established and held by the Successor Agency pursuant to the Dissolution Act. The Bonds are also payable from and secured by all of the moneys in the Debt Service Fund (including the Interest Account, the Principal Account, and the Redemption Account therein) and the Reserve Fund established and held by the Trustee under the Indenture. Taxes levied on the property within the Project Area on that portion of the taxable valuation over and above the taxable valuation of the applicable base year property tax roll with respect to the various territories within the Project Area, to the extent that they constitute Pledged Tax Revenues, as described herein, will be deposited in the Redevelopment Property Tax Trust Fund for transfer by the County Auditor -Controller to the Successor Agency's Redevelopment Obligation Retirement Fund on January 2 and June 1 of each year to the extent required for payments listed in the Successor Agency's Recognized Obligation Payment Schedule in accordance with the requirements of the Dissolution Act. See the caption "DISSOLUTION ACT— Recognized Obligation Payment Schedule." Moneys deposited by the County Auditor -Controller into the Successor Agency's Redevelopment Obligation Retirement Fund will be transferred by the Successor Agency to the Trustee for deposit in the Debt Service Fund established under the Indenture and administered by the Trustee in accordance with the Indenture. Parity Bonds The Successor Agency may issue additional parity obligations (only for the purpose of refunding outstanding parity obligations) in accordance with the provisions of the Indenture. See the caption "SECURITY FOR THE BONDS—Parity Bonds." Bond Insurance The scheduled payment of the principal of and interest on the Bonds will be insured by the Policy to be issued by the Insurer concurrently with the issuance of the Bonds. See the caption "BOND INSURANCE." A specimen of the Policy is set forth in Appendix H. Reserve Fund A Reserve Fund for the Bonds is established in accordance with the Indenture in an amount equal to the Reserve Requirement of $ .* The Insurer has committed to issue, simultaneously with the issuance of the Bonds, the Reserve Policy in the principal amount of the Reserve Requirement for deposit in the Reserve Account. See the caption "SECURITY FOR THE BONDS—Pledged Tax Revenues—Reserve Fund." The Successor Agency is not obligated: (i) to make any additional deposits into the Reserve Fund in the event that the Insurer defaults on its obligation to make payments under the Reserve Policy; or (ii) to replace the Reserve Policy in the event of a rating downgrade or the withdrawal of a raring of the Insurer. Further Information Brief descriptions of the Bonds, the Indenture, the Successor Agency, the Prior Agency and the City are included in this Official Statement. Such descriptions and information do not purport to be comprehensive Preliminary, subject to change. or definitive. All references herein to the Indenture, the Refunding Law, the Redevelopment Law, the Dissolution Act, the Constitution and the laws of the State as well as the proceedings of the Prior Agency, the Successor Agency and the City are qualified in their entirety by reference to such documents. References herein to the Bonds are qualified in their entirety by the form thereof included in the Indenture and the information with respect thereto included herein, copies of which are all available for inspection at the offices of the Successor Agency. During the period of the offering of the Bonds, copies of the forms of all documents are available from the City Clerk's office, City of Santa Clarita, 23920 Valencia Boulevard, Santa Clarita, California 91355. REFUNDING PLAN The Successor Agency plans to apply the proceeds of the Bonds, together with other funds on hand to refund the 2008 Non -Housing Bonds and the 2008 Housing Bonds on October 1, 2018. Under an Escrow Agreement, dated as of December 1, 2016 (the "Escrow Agreement"), by and between the Successor Agency and The Bank of New York Mellon Trust Company, N.A., as escrow bank (the "Escrow Bank"), the Successor Agency will direct a portion of the proceeds of the Bonds to be delivered to the Escrow Bank for deposit in the applicable escrow fund established under the Escrow Agreement (each, an "Escrow Fund" and collectively, the "Escrow Funds"). Such amounts, together with amounts deposited in the Escrow Funds from certain funds and accounts established in connection with the 2008 Non -Housing Bonds and the 2008 Housing Bonds, will be invested in escrow securities as described in the Escrow Agreement or held uninvested as cash. The escrow securities will be scheduled to mature in such amounts and at such times and bear interest at such rates as to provide funds (together with any cash deposit in the applicable Escrow Fund) sufficient to pay: (a) the regularly scheduled payments of principal and interest on the 2008 Non - Housing Bonds and the 2008 Housing Bonds through October 1, 2018; and (b) the redemption price of the 2008 Non -Housing Bonds and the 2008 Housing Bonds on October 1, 2018. Sufficiency of the deposits in the Escrow Funds for such purposes will be verified by Causey Demgen & Moore P.C., Denver, Colorado (the "Verification Agent"). Assuming the accuracy of such computations, as a result of the deposit and application of funds as provided in the Escrow Agreement, the 2008 Non -Housing Bonds and the 2008 Housing Bonds will be defeased in accordance with their provisions as of the date of issuance of the Bonds. The amounts held by the Escrow Bank in each Escrow Fund are pledged solely to the refunding of the 2008 Non -Housing Bonds and the 2008 Housing Bonds, respectively. Neither the moneys deposited in the Escrow Funds nor any interest on the invested moneys will be available for the payments of principal of and interest on the Bonds. See the caption "CONCLUDING INFORMATION—Verification of Mathematical Computations." SOURCES AND USES OF FUNDS The estimated sources and uses of funds are summarized as follows: Sources(`): Principal Amount of Bonds Successor Agency Contribution (2) Plus/Less Net Original Issue Premium/Discount Total Sources Usesltl: 2008 Non -Housing Bonds Escrow Fund 2008 Housing Bonds Escrow Fund Reserve Policy Premium Bond Insurance Policy Premium Costs of Issuance (3) Total Uses Rounded to nearest dollar. a) Reflects moneys held in funds and accounts established in connection with the 2008 Non -Housing Bonds and the 2008 Housing Bonds. Includes fees and expenses of Bond Counsel, Disclosure Counsel, Financial Advisor, Trustee, Escrow Bank and Verification Agent, printing expenses, rating agency fees, Underwriters' discount and other miscellaneous costs. THE BONDS Authority for Issuance The Bonds were authorized for issuance pursuant to the Indenture, the Refunding Law and the Dissolution Act. The issuance of the Bonds and the Indenture was authorized by the Successor Agency pursuant to a resolution adopted on September 13, 2016 (the "Resolution"), and by the Oversight Board for the Successor Agency pursuant to a resolution adopted on September 15, 2016 (the "Oversight Board Action"). Written notice of the Oversight Board Action was provided to the State Department of Finance (the "DOE") in accordance with the Dissolution Act. On October 14, 2016, the DOE provided a letter to the Successor Agency stating that based on the DOF's review and application of the law, the Oversight Board Action approving the Bonds is approved by the DOE. Description of the Bonds The Bonds will be issued in fully -registered form, without coupons, in integral multiples of $5,000 for each maturity, initially in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), as registered owner of all Bonds. See the caption "—Book -Entry System." The Bonds will be dated the date of issuance and mature on October 1 in the years and in the amounts shown on the inside front cover page of this Official Statement. Interest on the Bonds will be calculated at the rates shown on the inside front cover page of this Official Statement, payable semiannually on April 1, 2017 and each April 1 and October 1 thereafter, by check mailed to the registered owners thereof or upon the request of the Owners of $1,000,000 or more in principal amount of Bonds, by wire transfer to an account in the United States which is designated in written instructions by such Owner to the Trustee on or before the Record Date preceding the Interest Payment Date. Interest on the Bonds will be payable on each Interest Payment Date to the person whose name appears on the Registration Books as the Owner thereof as of the Regular Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check or draft of the Trustee mailed on the Interest Payment Date by first class mail to such Owner at the address of such Owner as it appears on the Registration Books; provided, however, that upon the written request of any Owner of at least $1,000,000 in principal amount of Bonds received by the Trustee at least 15 days prior to such Regular Record Date, payment will be made by wire transfer in immediately available funds to an account in the United States designated by such Owner. Principal of and redemption premium (if any) on any Bond will be paid upon presentation and surrender thereof, at maturity or redemption, at the Corporate Trust Office. Both the principal of and interest and premium (if any) on the Bonds will be payable in lawful money of the United States of America. Interest will be calculated based upon a 360 -day year of twelve thirty -day months. "Regular Record Date" means the fifteenth calendar day of the month preceding any Interest Payment Date, whether or not such day is a Business Day. Each Bond will be initially dated as of the Delivery Date and will bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless: (a) it is authenticated after a Regular Record Date and on or before the following Interest Payment Date, in which event it will bear interest from such Interest Payment Date; or (b) a Bond is authenticated on or before March 15, 2017, in which event it will bear interest from the Delivery Date; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. Book -Entry System DTC will act as securities depository for the Bonds. The Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. See Appendix C for further information relating to DTC and the book -entry system. Redemption Optional Redemption. The Bonds maturing on or after October 1, 20 will be subject to redemption prior to their respective maturity dates as a whole or in part on any date on or after October 1, 20 , in any order deemed reasonable by the Successor Agency, and by lot within a maturity, from any available source of funds at the option of the Successor Agency, at a redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued but unpaid interest to the date fixed for redemption, without premium. The Successor Agency will give the Trustee written notice of its intention to optionally redeem the Bonds, and the principal amount of each maturity to be redeemed in sufficient time to enable the Trustee to give notice of such redemption in accordance with the notice requirements under the Indenture. See the caption —Notice of Redemption" below. Mandatory Sinking Account Redemption. The Bonds maturing on October 1, 20 are subject to redemption in part by lot on October 1 in each year shown below until maturity, from sinking account payments made by the Successor Agency, at a redemption price equal to the principal amount thereof to be redeemed with accrued interest thereon to the redemption date, without premium, in the aggregate respective principal amounts and on the respective dates as set forth in the following tables; provided, however, that if some but not all of the Bonds have been redeemed the total amount of all future sinking account payments will be reduced by an amount corresponding to the aggregate principal amount of Bonds so redeemed, to be allocated among such sinking account payments on a pro rata basis in integral multiples of $5,000 as determined by the Successor Agency (notice of which determination will be given by the Successor Agency to the Trustee). Redemption Date Redemption (October 1) Amount 20 20 20 20_ (maturity) In lieu of sinking account redemption of Bonds, amounts on deposit in the Successor Agency's Redevelopment Obligation Retirement Fund (to the extent not required to be transferred to the Trustee during the current Bond Year) may also be used and withdrawn by the Successor Agency at any time for the purchase of the Bonds at public or private sale as and when and at such prices (including brokerage and other charges and including accrued interest) as the Successor Agency may in its discretion determine. The par amount of any of the Bonds so purchased by the Successor Agency and surrendered to the Trustee for cancellation in any twelve-month period ending on September 15, in any year will be credited towards and will reduce the principal amount of the Bonds otherwise required to be redeemed on the following October 1 pursuant to the Indenture. Notice of Redemption The Trustee on behalf and at the expense of the Successor Agency will mail (by first class mail) notice of any redemption to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books, to the Securities Depositories and to one or more Information Services, at least 30 but not more than 60 days prior to the date fixed for redemption; provided, however, that neither failure to receive any such notice so mailed nor any defect therein will affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon. Such notice will state the date of the notice, the redemption date, the redemption place and the redemption price and designate the CUSIP numbers, the Bond numbers and the maturity or maturities (in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and will require that such Bonds be then surrendered at the Corporate Trust Office for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date. Neither the Successor Agency nor the Trustee have any responsibility for any defect in the CUSIP number that appears on any Bond or in any redemption notice with respect thereto, and any such redemption notice may contain a statement to the effect that CUSIP numbers have been assigned by an independent service for convenience of reference and that neither the Successor Agency nor the Trustee will be liable for any inaccuracy in such numbers. If at the time of mailing of any notice of optional redemption there have not been deposited with the Trustee moneys sufficient to redeem all the Bonds called for redemption, such notice will state that it is subject to the deposit of the redemption moneys with the Trustee not later than the opening of business on the redemption date and will be of no effect unless such moneys are so deposited. The Successor Agency has the right to rescind any notice of optional redemption by written notice to the Trustee on or prior to the date fixed for redemption. Any notice of such redemption will be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation will not constitute an Event of Default under the Indenture. The Successor Agency and the Trustee have no liability to the Owners or any other party related to or arising from such rescission of redemption. The Trustee will mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent. Annual Debt Service Set forth below is the annualized debt service for the term of the Bonds. Bond Year Ending Principal Interest Total (October 1) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 Total 10 DISSOLUTION ACT General The Dissolution Act requires the County Auditor -Controller to determine the amount of property taxes that would have been allocated to the Prior Agency (pursuant to subdivision (b) of Section 16 of Article XVI of the State Constitution) had the Prior Agency not been dissolved pursuant to the operation of AB XI 26, using current assessed values on the last equalized roll on August 20, and to deposit that amount in the Redevelopment Property Tax Trust Fund for the Successor Agency established and held by the County Auditor -Controller pursuant to the Dissolution Act. The Dissolution Act provides that any bonds authorized thereunder to be issued by the Successor Agency will be considered indebtedness incurred by the dissolved Prior Agency, with the same legal effect as if the bonds had been issued prior to effective date of AB Xl 26, in full conformity with the applicable provision of the Redevelopment Law that existed prior to that date, and will be included in the Successor Agency's Recognized Obligation Payment Schedule. See Appendix A and the caption "—Recognized Obligation Payment Schedule." The Dissolution Act further provides that bonds authorized thereunder to be issued by the Successor Agency will be secured by a pledge of, and lien on, and will be repaid from moneys deposited from time to time in the Redevelopment Property Tax Trust Fund, and that property tax revenues pledged to any bonds authorized to be issued by the Successor Agency under the Dissolution Act, including the Bonds, are taxes allocated to the Successor Agency pursuant to the subdivision (b) of Section 33670 of the Redevelopment Law and Section 16 of Article XVI of the State Constitution. Pursuant to subdivision (b) of Section 33670 of the Redevelopment Law and Section 16 of Article XVI of the Constitution of the State and as provided in the Redevelopment Plan, taxes levied upon taxable property in the Project Area each year by or for the benefit of the State, any city, county, city and county, district, or other public corporation (herein sometimes collectively called "taxing agencies") after the effective date of the ordinance approving the Redevelopment Plan, or the respective effective dates of ordinances approving amendments to the Redevelopment Plan that added territory to the Project Area, as applicable, are to be divided as follows: (a) To Taxing Agencies: That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of the taxing agencies upon the total sum of the assessed value of the taxable property in the Project Area as shown upon the assessment roll used in connection with the taxation of such property by such taxing agency last equalized prior to the effective date of the ordinance adopting the Redevelopment Plan, or the respective effective dates of ordinances approving amendments to the Redevelopment Plan that added territory to the Project Area, as applicable (each, a "base year valuation"), will be allocated to, and when collected will be paid into, the funds of the respective taxing agencies as taxes by or for the taxing agencies; and (b) To the Prior Agency/Successor Agency: Except for that portion of the taxes in excess of the amount identified in (a) above which are attributable to a tax rate levied by a taxing agency for the purpose of producing revenues in an amount sufficient to make annual repayments of the principal of, and the interest on, any bonded indebtedness approved by the voters of the taxing agency on or after January 1, 1989 for the acquisition or improvement of real property, which portion will be allocated to, and when collected will be paid into, the fund of that taxing agency (as discussed under the caption "PROPERTY TAXATION IN CALIFORNIA—Article XIIIA of the State Constitution"), that portion of the levied taxes each year in excess of such amount, annually allocated within the redevelopment plan limit following the Delivery Date, when collected will be paid into a special fund of the Prior Agency. Section 34172 of the Dissolution Act provides that, for purposes of Section 16 of Article XVI of the State Constitution, the Redevelopment Property Tax Trust Fund will be deemed to be a special fund of the Successor Agency to pay the debt service on indebtedness incurred by the Prior Agency or the Successor Agency to finance or refinance the redevelopment projects of the Prior Agency. 11 That portion of the levied taxes described in paragraph (b) above, less amounts deducted pursuant to Section 34183(a) of the Dissolution Act for permitted administrative costs of the County Auditor -Controller (as discussed under the caption "PROPERTY TAX COLLECTION IN CALIFORNIA—Property Tax Collection Procedures—Property Tax Administrative Costs"), constitutes the amounts required under the Dissolution Act to be deposited by the County Auditor -Controller into the Redevelopment Property Tax Trust Fund. In addition, Section 34183 of the Dissolution Act effectively eliminates the January 1, 1989 date from paragraph (b) above. In addition, pursuant to section 34187 of the Dissolution Act, funds associated with retired enforceable obligations are required to be reallocated to taxing agencies as regular property taxes and not deposited into the Redevelopment Property Tax Trust Fund for the Successor Agency at all (however, section 34187(a)(2) of the Dissolution Act provides for retention of funds by the Successor Agency to the extent needed for payment of enforceable obligations upon authorization by the DOE). Recognized Obligation Payment Schedule Submission of Recognized Obligation Payment Schedule. The Dissolution Act requires successor agencies to prepare, and submit to the successor agency's oversight board and the DOE for approval, a recognized obligation payment schedule (the "Recognized Obligation Payment Schedule") pursuant to which enforceable obligations (as defined in the Dissolution Act) of the successor agency are listed, together with the source of funds to be used to pay for each enforceable obligation. Commencing on February 1, 2016, successor agencies were transitioned to an annual Recognized Obligation Payment Schedule process pursuant to which successor agencies are required to file Recognized Obligation Payment Schedules with the DOE and the County Auditor -Controller for approval on or before each February 1 for the July 1 through June 30 period immediately following such February 1. For example, on February 1, 2016, the Successor Agency was required to file a Recognized Obligation Payment Schedule for the period commencing July 1, 2016 through June 30, 2017. In addition, commencing on September 22, 2015, successor agencies that have received a Finding of Completion and the concurrence of the DOE as to the items that qualify for payment, among other conditions, may at their option, file a "Last and Final" Recognized Obligation Payment Schedule. If approved by the DOE, the Last and Final Recognized Obligation Payment Schedule will be binding on all parties, and the Successor Agency will no longer submit a Recognized Obligation Payment Schedule to the DOE or the Oversight Board. The County Auditor -Controller will remit the authorized funds to the Successor Agency in accordance with the approved Last and Final Recognized Obligation Payment Schedule until each remaining enforceable obligation has been fully paid. A Last and Final Recognized Obligation Payment Schedule may only be amended twice, and only with approval of the DOE and the County Auditor- Controller. The Successor Agency has not yet determined if it will file a Last and Final Recognized Obligation Payment Schedule. Payment of Amounts Listed on the Recognized Obligation Payment Schedule. As defined in the Dissolution Act, "enforceable obligation" includes bonds, including the required debt service, reserve set - asides, and any other payments required under the indenture or similar documents governing the issuance of the outstanding bonds of a former redevelopment agency, as well as other obligations, such as loans, judgments or settlements against a former redevelopment agency, any legally binding and enforceable agreement that is not otherwise void as violating the debt limit or public policy, contracts necessary for the administration or operation of the successor agency, and amounts borrowed from the Low and Moderate Income Housing Fund. A reserve may be included on the Recognized Obligation Payment Schedule and held by the successor agency when required by a bond indenture or when the next property tax allocation will be insufficient to pay all obligations due under the provisions of the bonds for the next payment due in the following half of the calendar year. Sources of Payments for Enforceable Obligations. Under the Dissolution Act, the categories of sources of payments for enforceable obligations listed on a Recognized Obligation Payment Schedule are the 12 following: (i) the Low and Moderate Income Housing Fund; (ii) bond proceeds; (iii) reserve balances; (iv) administrative cost allowance (successor agencies are entitled to receive not less than $250,000, unless that amount is reduced by the oversight board); (v) the Redevelopment Property Tax Trust Fund (but only to the extent that no other funding source is available or when payment from property tax revenues is required by an enforceable obligation or otherwise required under the Dissolution Act); or (vi) other revenue sources (including rents, concessions, asset sale proceeds, interest earnings and any other revenues derived from the former redevelopment agency, as approved by the oversight board). The Dissolution Act provides that, commencing on the date that the first Recognized Obligation Payment Schedule is valid thereunder, only those payments listed in the Recognized Obligation Payment Schedule may be made by the Successor Agency from the funds specified in the Recognized Obligation Payment Schedule. Order of Priority of Distributions from Redevelopment Property Tax Trust Fund. Typically, under the Redevelopment Property Tax Trust Fund distribution provisions of the Dissolution Act, a county auditor - controller is to distribute funds for each six-month period in the following order specified in section 34183 of the Dissolution Act: (i) first, subject to certain adjustments for subordinations to the extent permitted under the Dissolution Act, if any (as described above under "SECURITY FOR THE BONDS— Statutory Pass - Through Payments") and no later than each January 2 and June 1, amounts required for pass-through payments such entity would have received under provisions of the Redevelopment Law, as those provisions read on January 1, 2011, including negotiated pass-through agreements and statutory pass- through obligations; (ii) second, on each January 2 and June 1, to the successor agency for payments listed in its Recognized Obligation Payment Schedule, with debt service payments scheduled to be made for tax allocation bonds having the highest priority over payments scheduled for other debts and obligations listed on the Recognized Obligation Payment Schedule; (iii) third, on each January 2 and June 1, to the successor agency for the administrative cost allowance, as defined in the Dissolution Act; and (iv) fourth, on each January 2 and June 1, to taxing entities any moneys remaining in the Redevelopment Property Tax Trust Fund after the payments and transfers authorized by clauses (i) through (iii), in an amount proportionate to such taxing entity's share of property tax revenues in the tax rate area in that fiscal year (without giving effect to any pass-through obligations that were established under the Redevelopment Law). Failure to Submit a Recognized Obligation Payment Schedule. There are strong incentives for the Successor Agency to submit Recognized Obligation Payment Schedules on time. If the Successor Agency does not submit a Recognized Obligation Payment Schedule to the Oversight Board, the County Auditor -Controller and the DOE on or before each February 1 commencing February 1, 2016 (unless the Successor Agency submits and obtains approval from the DOE of a Last and Final Recognized Obligation Payment Schedule), then the Successor Agency will be subject to a $10,000 per day civil penalty for every day the schedule is not submitted to the DOE. See "THE DISSOLUTION ACT—Recognized Obligation Payment Schedules" for discussion regarding submission of Last and Final Recognized Obligation Payment Schedule. Additionally, if the Successor Agency does not submit a Recognized Obligation Payment Schedule to the Oversight Board and the DOE within 10 days of the deadline, then the Successor Agency's maximum administrative cost allowance may be reduced by up to 25%. For additional information regarding procedures under the Dissolution Act relating to late Recognized Obligation Payment Schedules and implications for the Bonds, see "RISK FACTORS – Recognized Obligation Payment Schedule." 13 See Table 8 — "RPTTF Deposits" for a description of Recognized Obligation Payment Schedule deposits for Fiscal Years 2011-12 through 2015-16. SECURITY FOR THE BONDS The County Auditor -Controller will deposit property tax revenues into the Redevelopment Property Tax Trust Fund pursuant to the requirements of the California Health and Safety Code, including inter alfa Health and Safety Code Sections 34183 and 34170.5(b). The Bonds are payable from and secured by the Pledged Tax Revenues to be derived from the Redevelopment Project consisting of the property tax revenues deposited in the Redevelopment Property Tax Trust Fund. Pledge Under the Indenture Except as described under the heading "SECURITY FOR THE BONDS—Flow of Funds Under the Indenture" below and as required to compensate or indemnify the Trustee, the Bonds are equally secured by a pledge of and lien on all of the moneys in the Redevelopment Obligation Retirement Fund. The Bonds shall be equally payable from and secured by a pledge of, security interest in and a first and exclusive lien on all of the Pledged Tax Revenues, whether held in the Redevelopment Property Tax Trust Fund, the Redevelopment Obligation Retirement Fund or by the Successor Agency or the Trustee, and a first and exclusive pledge of, security interest in and lien upon all of the moneys in the Debt Service Fund (including the Interest Account, the Principal Account, the Sinking Account and the Redemption Account and all subaccounts in the foregoing) and in the Reserve Fund to the Trustee for the benefit of the Owners of the Bonds, on a parity with the first pledge of and lien thereon of the Parity Bonds without preference or priority for series, issue, number, dated date, sale date, date of execution or date of delivery. Except for the Pledged Tax Revenues and such moneys, no funds or properties of the Successor Agency are pledged to, or otherwise liable for, the payment of principal of or interest or redemption premium (if any) on the Bonds. In consideration of the acceptance of the Bonds by purchasers of the Bonds, the Indenture is deemed to be and will constitute a contract between the Successor Agency and the Trustee for the benefit of the Owners from time to time of the Bonds, and the covenants and agreements set forth in the Indenture to be performed on behalf of the Successor Agency are for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds over any of the others by reason of the number or date thereof or the time of sale, execution and delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or in the Indenture. Pledged Tax Revenues "Pledged Tax Revenues" are defined under the Indenture as the portion of the moneys available for deposit into or deposited from time to time in the Redevelopment Property Tax Trust Fund established pursuant to Section 34172(c) of the Dissolution Act, as provided in Section 34183(a)(2) of the Dissolution Act, that are equal to that portion of taxes levied upon taxable property in the Project Area and received by the Successor Agency on or after the date of issue of the Bonds, less (i) amounts payable by the State to the Successor Agency under and pursuant to Chapter 1.5 of Part 1 of Division 4 of Title 2 (commencing with section 16110) of the California Government Code, and (ii) Statutory Pass -Through Payments, but only to the extent such amounts are not subordinated to payment of debt service on the Bonds. If, and to the extent, that the provisions of Section 34172 or Section 34183(a)(2) are invalidated by a final judicial decision, then Pledged Tax Revenues will include all tax revenues allocated to the payment of indebtedness pursuant to Health & Safety Code Section 33670 or such other section as may be in effect at the time providing for the allocation of tax increment revenues in accordance with Article XVI, Section 16 of the State Constitution. Prior to the enactment of AB XI 26, the Redevelopment Law authorized the financing of redevelopment projects through the use of tax increment revenues. This method provided that the taxable valuation of the property within a redevelopment project area on the property tax roll last equalized prior to the 14 effective date of the ordinance which adopts the redevelopment plan becomes the base year valuation. Assuming that the taxable valuation never drops below the base year level, the taxing agencies thereafter received that portion of the taxes produced by applying then current tax rates to the base year valuation, and the redevelopment agency was allocated the remaining portion produced by applying then current tax rates to the increase in valuation over the base year. Such incremental tax revenues allocated to a redevelopment agency were authorized to be pledged to the payment of agency obligations. The Dissolution Act authorizes refunding bonds, including the Bonds, to be secured by a pledge of moneys deposited from time to time in a Redevelopment Property Tax Trust Fund held by a county auditor - controller with respect to a successor agency, which are equivalent to the tax increment revenues that were formerly allocated under the Redevelopment Law to the redevelopment agency and formerly authorized under the Redevelopment Law to be used for the financing of redevelopment projects, less amounts deducted pursuant to Section 34183(a) of the Dissolution Act for permitted administrative costs of the county auditor - controller. Under the Indenture, Pledged Tax Revenues consist of the amounts deposited from time to time in the Redevelopment Property Tax Trust Fund established pursuant to and as provided in the Dissolution Act. Successor agencies have no power to levy property taxes and must look specifically to the allocation of taxes as described above. See the caption "RISK FACTORS." Elimination of Housing Set -Aside Before it was amended by the Dissolution Act, the Redevelopment Law required the Prior Agency to set aside not less than 20% of all tax increment generated in the Redevelopment Project into a low and moderate income housing fund to be used for the purpose of increasing, improving and/or preserving the supply of low and moderate income housing. These tax increment revenues were commonly referred to as "Housing Set -Aside." The Dissolution Act eliminated the Housing Set -Aside requirement. The housing fund into which these set-aside amounts were formerly deposited has been eliminated and any unencumbered amounts remaining in that fund have been identified through a mandated due diligence review. The amounts found to be unencumbered through this due diligence review have been paid to the County and these funds have been allocated to the taxing entities within the Redevelopment Project. Since a deduction for the Housing Set -Aside is no longer required, amounts that were previously required to be deposited in the housing fund are now included in Pledged Tax Revenues. Statutory Pass -Through Amounts Under Sections 33607.5 and 33607.7 of the Redevelopment Law and Section 34183 of the Dissolution Act, certain amounts in the Redevelopment Project Tax Trust Fund (the "Statutory Pass -Through Amounts") are to be paid to the affected taxing agencies, and have a senior lien on property tax revenues generated from the Redevelopment Project. However, the Redevelopment Law allows for the Successor Agency to subordinate the Statutory Pass -Through Amounts to the payment of debt service on the Bonds, if the Successor Agency reasonably expects to have sufficient funds to pay both the debt service on the Bonds and the Statutory Pass - Through Amounts. Affected taxing agencies with jurisdictions within the Redevelopment Project include, among other public agencies, the following: Los Angeles County General Fund, Consolidated Fire Protection District and County Forester/Fire Warden, County Flood Control District, County Vector Control District, County Sanitation District No. 32 Operating Unit, Castaic Lake Water Agency, Newhall County Water District, County Office of Education, Newhall School District, Saugus Union School District, William S. Hart Union High School District, College of the Canyons Community College District and the City. A redevelopment agency's obligations to make Statutory Pass -Through Amounts are not subordinate to the redevelopment agency's obligations with respect to the agency's loans or bonds unless the incurrence of such debt satisfies certain conditions and the affected taxing entity does not object to the subordination on grounds permitted by Section 33607.5. The Successor Agency has taken all actions necessary under the 15 Redevelopment Law and the Dissolution Act and its agreements with other taxing agencies to subordinate its obligations to make Statutory Pass -Through Amounts to its obligation to repay the Bonds. Flow of Funds Under the Indenture General. The Successor Agency previously established the Redevelopment Obligation Retirement Fund pursuant to section 34170.5(a) of the Dissolution Act and agrees to hold and maintain the Redevelopment Obligation Retirement Fund as long as any of the Bonds are Outstanding. Deposit in Redevelopment Obligation Retirement Fund; Transfer to Debt Service Fund. The Indenture provides that the Successor Agency shall deposit all of the Pledged Tax Revenues received in any Bond Year from the Redevelopment Property Tax Trust Fund in accordance with the Dissolution Act into the Redevelopment Obligation Retirement Fund promptly upon receipt thereof by the Successor Agency, and promptly thereafter shall transfer amounts therein to the Trustee for deposit in the Debt Service Fund and the Reserve Fund (each as described below), if necessary until such time that the aggregate amounts on deposit in such Debt Service Fund and the Reserve Fund equal the aggregate amounts required to be deposited into the Interest Account, the Principal Account, the Sinking Account, the Redemption Account and the Reserve Fund in such Bond Year pursuant to the Indenture, and for deposit in such Bond Year in the funds and accounts (including any Reserve Fund) established with respect to Parity Bonds, as provided in any Supplemental Indenture. Deposit of Amounts by Trustee. There is established under the Indenture a trust fund to be known as the Debt Service Fund, which will be held by the Trustee under the Indenture in trust. Moneys in the Debt Service Fund are to be transferred by the Trustee in the following amounts, at the following times, for deposit in the following respective accounts, which are established with the Trustee in the Debt Service Fund, and for deposit to the Reserve Fund, and in the following order of priority: Interest Account. On or before the 5th Business Day preceding each Interest Payment Date, the Trustee will withdraw from the Debt Service Fund and transfer to the Interest Account an amount which, when added to the amount contained in the Interest Account on that date, will be equal to the aggregate amount of the interest becoming due and payable on the Outstanding Bonds on such Interest Payment Date. No such transfer and deposit need be made to the Interest Account if the amount contained therein is at least equal to the interest to become due on the next succeeding Interest Payment Date upon all of the Outstanding Bonds. Subject to the Indenture, all moneys in the Interest Account will be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds as it becomes due and payable (including accrued interest on any Bonds redeemed prior to maturity pursuant to the Indenture). Principal Account and Sinking Account. On or before the 5th Business Day preceding each Interest Payment Date on which principal on the Bonds is due, beginning October 1, 2017, the Trustee will withdraw from the Debt Service Fund and transfer to the Principal Account an amount equal to the principal payments becoming due and payable on Outstanding Bonds on such September 1, to the extent monies on deposit in the Redevelopment Obligation Retirement Fund are available therefor. No such transfer and deposit need be made to the Principal Account if the amount contained therein is at least equal to the principal payments to become due on such September 1 on all Outstanding Bonds. Subject to the Indenture, all moneys in the Principal Account will be used and withdrawn by the Trustee solely for the purpose of paying the principal payments of the Bonds as it becomes due and payable. On or before each Sinking Account Payment Date, the Trustee shall set aside from the Debt Service Fund and deposit in the Sinking Account an amount of money equal to the Sinking Account Installment, if any, payable on the Sinking Account Payment Date in such Bond Year. The Trustee shall use moneys in the Sinking Account to redeem Bonds pursuant to the sinking fund redemption provisions of the Indenture. 16 Reserve Fund. In the event the moneys on deposit in the Debt Service Fund five (5) Business Days before any Interest Payment Date are less than the full amount of the interest, principal and sinking account payments required to be deposited, the Trustee will, five (5) Business Days before such Interest Payment Date, withdraw from the Reserve Fund an amount equal to any such deficiency and will notify the Successor Agency of any such withdrawal. Promptly upon receipt of any such notice, the Successor Agency will withdraw from the Redevelopment Obligation Retirement Fund and transfer to the Trustee for deposit in the Reserve Fund an amount necessary to increase the amount in the Reserve Fund (and any reserve fund for any Parity Bonds) to the amount of the then Reserve Requirement. If there is not sufficient moneys in the Redevelopment Obligation Retirement Fund to make any such transfer, the Successor Agency will have an obligation to continue making transfers of Pledged Tax Revenues into the Debt Service Fund, as such revenues become available, and thereafter, as moneys become available in the Debt Service Fund, the Trustee will make transfers to the Reserve Fund and any reserve fund for any Parity Bonds) until there is an amount sufficient to maintain the Reserve Requirement on deposit in the Reserve Fund and any reserve fund for any Parity Bonds. No such transfer and deposit need be made to the Reserve Fund so long as there is on deposit in such fund a sum at least equal to the Reserve Requirement for the Bonds. Redemption Account. On or before the 5th Business Day preceding any date on which Bonds are to be redeemed, the Successor Agency will deliver or cause to be delivered funds to the Trustee for deposit in the Redemption Account an amount required to pay the principal of, interest and premium, if any, on the Bonds (other than Bonds redeemed from Sinking Account Installment) to be redeemed on such date. Subject to this Indenture, all moneys in the Redemption Account will be used and withdrawn by the Trustee solely for the purpose of paying the principal of and interest or redemption premium (if any) on the Bonds to be redeemed on the date set for such redemption. Reserve Fund Definition of Reserve Requirement. The Indenture defines "Reserve Requirement' to mean, as of any date of calculation, an amount equal to the lesser of (i) 10% of the issue price (within the meaning of Section 148 of the Code) of the Bonds; (ii) 125% of the average Annual Debt Service on the Bonds for that and every subsequent Bond Year; or (iii) the Maximum Annual Debt Service on the Bonds. [Application has been made to municipal bond insurance companies for qualification of the Bonds for a reserve fund municipal bond insurance policy, the terms of which will be reflected in the final official statement for the Bonds if such insurance is purchased.] Relationship to Parity Bonds. The Reserve Fund shall be held by the Trustee in trust solely for the benefit of the Owners of the Bonds and will not be available to secure Parity Bonds. Use of Moneys in the Reserve Fund. Subject to the provisions of the Indenture, all money in the Reserve Fund will be used and withdrawn by the Trustee solely for the purpose of making transfers to the Interest Account, the Principal Account and the Sinking Account, in such order of priority, in the event of any deficiency at any time in any of such accounts or for the retirement of all the Bonds then Outstanding, except that so long as the Successor Agency is not in default hereunder, any amount in the Reserve Fund in excess of the Reserve Requirement will be withdrawn from the Reserve Fund semiannually on or before the 5th Business Day preceding April 1 and October 1 by the Trustee and deposited in the Interest Account. All amounts in the Reserve Fund on the 5th Business Day preceding the final Interest Payment Date will be withdrawn from the Reserve Fund and will be transferred either (i) to the Interest Account, the Principal Account and the Sinking Account, in such order, to the extent required to make the deposits then required to be made or, (ii) if the Successor Agency shall have caused to be deposited with the Trustee an amount sufficient to make the deposits required by the Indenture, then at the Written Request of the Successor Agency such amount shall be transferred as directed by the Successor Agency. The prior written consent of the 17 Insurer shall be a condition precedent to the deposit of any credit instrument provided in lieu of a cash deposit into the Reserve Fund, if any. Notwithstanding anything to the contrary set forth in the Indenture, amounts on deposit in the Reserve Fund shall be applied solely to the payment of debt service due on the Bonds. Dissolution Act Covenant by the Successor Agency The Successor Agency covenants in the Indenture that it will comply with all of the requirements of the Redevelopment Law and the Dissolution Act, including with respect to the timely filing of each Recognized Obligation Payment Schedule. Pursuant to section 34177 of the Dissolution Act as modified by passage of Senate Bill 107, by February 1 of each year the Successor Agency shall submit to the Department of Finance, a Recognized Obligation Payment Schedule that has been approved by the Oversight Board. More specifically, prior to each February 1, the Successor Agency has covenanted to submit an Oversight Board - approved Recognized Obligation Payment Schedule to the State Department of Finance and to the County Auditor -Controller, which shall include all scheduled interest, principal and mandatory sinking fund payments that are due and payable on all Bonds and Parity Bonds of the Successor Agency during the next ensuing calendar year, together with any amount required to replenish the Reserve Fund, and any amounts due and owing to the Insurer under this Indenture. If, on January 2 of any year, the amount remitted by the County Auditor -Controller to the Successor Agency's Redevelopment Obligation Retirement Fund is less than the full amount specified in the preceding paragraph, then not later than February 1 of such year, the Successor Agency will submit an Oversight Board -approved Recognized Obligation Payment Schedule to the State Department of Finance and to the County Auditor -Controller, which shall include the balance due for remittance on June 1 of such year. The Successor Agency has no power to levy and collect taxes, and various factors beyond its control could affect the amount of Pledged Tax Revenues available in any six-month period to pay the principal of and interest on the Bonds (see "RISK FACTORS"). Limited Obligation The Bonds are not a debt of the City, the County, the State or any of their political subdivisions except the Successor Agency, and none of the City, the County, the State or any of their political subdivisions except the Successor Agency is liable therefor. The Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction. No member, officer, agent or employee of the Successor Agency, the Oversight Board or the Board of Supervisors of the County shall be individually or personal liable for the payment of the principal of or interest or redemption premium (if any) on the Bonds; but nothing contained in the Indenture relieves any such member, officer, agent or employee from the performance of any official duty provided by law. County Administrative Fees Chapter 466, Statutes of 1990 (referred to as SB 2557), permits the County to withhold a portion of annual tax revenues for the recovery of County charges related to property tax administration services to cities in an amount equal to their property tax administration costs proportionately attributable to cities. SB 2557, and subsequent legislation under SB 1559 (Statutes of 1992), permitted counties to charge all jurisdictions, including redevelopment agencies, on a year-to-year basis. Section 34182(a)(3) of the California Health and Safety Code also provides for recovery of county costs in connection with performing duties related to the dissolution of redevelopment agencies. The actual fiscal year 2015-16 charges for the Successor Agency equate to 1.33% of gross Redevelopment Property Tax Trust Fund revenues. The Fiscal Consultant's projections included assume that the County administrative costs will continue to be charged at approximately 1.33% of gross revenue in subsequent fiscal years. For purposes of showing debt service coverage, the Fiscal Consultant has assumed that the County administrative fees are senior to the Successor Agency's pledge of Pledged Tax Revenues to its obligation to make debt service payments on the Bonds. m Other Obligations The Successor Agency has various other obligations, not secured by a pledge of the Pledged Tax Revenues, which are not described in this Official Statement and not included in any way in the projections of Pledged Tax Revenues in this Official Statement. All payment obligations of the Successor Agency must be listed on the Successor Agency's Recognized Obligation Payment Schedule for the six-month period during which such payments are made. Parity Bonds "Parity Bonds" means any additional tax allocation bonds (including, without limitation, bonds, notes, interim certificates, debentures or other obligations) issued by the Successor Agency and payable from Pledged Tax Revenues on a parity with the Bonds, as authorized by the Indenture. The Indenture permits the issuance of Parity Bonds in such principal amount as shall be determined by the Successor Agency, pursuant to a separate or Supplemental Indenture adopted or entered into by the Successor Agency and Trustee and solely for the purpose of refunding the Bonds as permitted under the Dissolution Act, including without limitation Section 34177.5 thereof, the Redevelopment Law or the Refunding Law. The Successor Agency may issue or incur such Parity Bonds subject to the following specific conditions precedent set forth in the Indenture: (a) The Successor Agency must be in compliance with all covenants set forth in the Indenture; (b) The Parity Bonds will be on such terms and conditions as may be set forth in a separate or Supplemental Indenture, which will provide for (i) bonds substantially in accordance with the Indenture, and (ii) the deposit of moneys into an account of the Reserve Fund or separate reserve fund securing such Parity Bonds in an amount equal to the reserve requirement provided for in the Supplemental Indenture or authorizing document relating to such Parity Bonds to the extent permitted pursuant to the Code; (c) The Parity Bonds must mature on and interest must be payable on the same dates as the Bonds (except the first interest payment may be from the date of the Parity Bonds until the next succeeding March 1 or September 1); provided, however, that the Successor Agency may issue and sell Parity Bonds which do not pay current interest. (d) When bonds are issued to provide savings to the Successor Agency pursuant to Section 34177.5(a)(1) of the Dissolution Act, the following constraints apply to the size of the financing: (i) the total interest cost to maturity on the refunding bonds or indebtedness plus the principal amount of the refunding bonds or other indebtedness may not exceed the total remaining interest cost to maturity on the bonds or other indebtedness to be refunded plus the remaining principal of the bonds or other indebtedness to be refunded, (ii) the principal amount of the refunding bonds or the indebtedness will not exceed the amount required to defease the refunded bonds or other indebtedness, to establish customary debt service reserves, and to pay related costs of issuance, and (iii) the resulting aggregate Annual Debt Service for the remaining Outstanding Bonds and Parity Bonds must be reduced in each succeeding Bond Year. If the foregoing conditions are satisfied, the initial principal amount of the refunding bonds or indebtedness may be greater than the outstanding principal amount of the bonds or other indebtedness to be refunded. BOND INSURANCE The information under this caption has been prepared by the Insurer far inclusion in this Oficial Statement. None of the Successor Agency, the City or the Underwriter has reviewed this information, nor do the Successor Agency, the City or the Underwriter make any representation with respect to the accuracy or completeness thereof. The following information is not a complete summary of the terms of the Policy and reference is made to Appendix Hfor a specimen of the Policy. [to follow] 19 PROPERTY TAXATION IN CALIFORNIA Property Tax Collection Procedures Classification. In the State, property which is subject to ad valorem taxes is classified as "secured" or "unsecured." Secured and unsecured property are entered on separate parts of the assessment roll maintained by the county assessor. The secured classification includes property on which any property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does not become a lien against the taxed unsecured property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens on the secured property arising pursuant to State law, regardless of the time of the creation of other liens. See the caption "RISK FACTORS—Bankruptcy and Foreclosure" for certain limitations on the priority of secured tax liens under federal law, however. Generally, ad valorem taxes are collected by a county for the benefit of the various taxing agencies (e.g., cities, schools and special districts) that share in the ad valorem tax (each, a taxing entity) and successor agencies eligible to receive distributions from the respective Redevelopment Property Tax Trust Fund. Collections. Secured and unsecured property are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property. The taxing authority has four ways of collecting unsecured personal property taxes: (i) initiating a civil action against the taxpayer; (ii) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (iii) filing a certificate of delinquency for record in the county recorder's office to obtain a lien on certain property of the taxpayer; and (iv) seizing and selling personal property, improvements or possessory interests belonging or assessed to the assessee. The exclusive means of enforcing the payment of delinquent taxes with respect to property on the secured roll is the sale of the property securing the taxes to the State for the amount of taxes which are delinquent. Penalty. A 10% penalty is added to delinquent taxes which have been levied with respect to property on the secured roll. In addition, property on the secured roll on which taxes are delinquent is declared in default by operation of law and declaration of the tax collector on or about June 30 of each fiscal year. Such property may thereafter be redeemed by payment of the delinquent taxes and a delinquency penalty, plus a redemption penalty of 1.5% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the county tax collector. A 10% penalty also applies to delinquent taxes with respect to property on the unsecured roll, and further, an additional penalty of 1.5% per month accrues with respect to such taxes beginning on varying dates related to the tax bill mailing date. Delinquencies. The valuation of property is determined as of the January 1 lien date as equalized in August of each year and equal installments of taxes levied upon secured property become delinquent on the following December 10 and April 10. Taxes on unsecured property are due January 1 and become delinquent August 31. The Los Angeles County Auditor -Controller apportions tax increment revenue based on collections and does not utilize the Teeter Plan. See Table 5 herein. Supplemental Assessments. California Revenue and Taxation Code Section 75.70 provides for the supplemental assessment and taxation of property as of the occurrence of a change of ownership or completion of new construction. Such reassessment is referred to as the Supplemental Assessment and is determined by applying the current year's tax rate to the amount of the increase or decrease in a property's value and prorating the resulting property taxes to reflect the portion of the tax year remaining as determined by the date of the change in ownership or completion of new construction. Supplemental Assessments become a lien against real property. Prior to the enactment of this law, the assessment of such changes was permitted only as of the next tax lien date following the change, and this delayed the realization of increased property taxes from the new assessments for up to 14 months. Since fiscal year 1984-85, revenues derived from Supplemental Assessments 20 have been allocated to redevelopment agencies and taxing entities in the same manner as the general property tax. The receipt of Supplemental Assessment revenues by taxing entities typically follows the change of ownership by a year or more. This statute provides increased revenue to the Redevelopment Property Tax Trust Fund to the extent that supplemental assessments of new construction or changes of ownership occur within the boundaries of redevelopment projects subsequent to the January 1 lien date. If a change in ownership results in a decrease in assessed value, a negative supplemental assessment may occur requiring a refund of taxes paid to the property owner. To the extent such supplemental assessments occur within the Redevelopment Project, tax increment may increase or decrease. However, because supplemental assessments cannot be accurately projected, no provision has been made by the Fiscal Consultant to reflect the impact of supplemental assessments on Pledged Tax Revenues. See Appendix F. Property Tax Collection and Administrative Costs. Senate Bill 2557 (Chapter 466, Statutes of 1990) allows counties to charge for the cost of assessing, collecting and allocating property tax revenues to local government jurisdictions in proportion to the tax -derived revenues allocated to each. Senate Bill 1559 (Chapter 697, Statutes of 1992) explicitly includes redevelopment agencies among the jurisdictions which are subject to such charges. In addition, Sections 34182(e) and 34183(a) of the Dissolution Act allow administrative costs of the County Auditor -Controller for the cost of administering the provisions of the Dissolution Act, as well as the foregoing Senate Bill 1559 amounts, to be deducted from property tax revenues before moneys are deposited into the Redevelopment Property Tax Trust Fund. For fiscal year 2015-16, the County charges were 1.33% of gross tax increment within the Redevelopment Project. Based on the collection charges for fiscal year 2015-16, the Fiscal Consultant projected the charge for fiscal year 2016-17 as a percentage of gross tax increment to remain at 1.33%. For purposes of the Fiscal Consultant's projections of tax increment available to pay debt service on the Bonds, the Fiscal Consultant assumed that the County will continue to charge the Successor Agency for property tax collection and administration and that such charge will increase proportionally with any increases in revenue. Prior to dissolution of redevelopment agencies, the County disbursed secured tax increment revenue to all redevelopment agencies from November through August with approximately 35% of secured revenues apportioned by the end of December and a total of 75% of the secured revenues by the end of the following April. Unsecured revenues are disbursed from October through August of each fiscal year with approximately 95% of the unsecured revenues being apportioned in October. The Los Angeles County Auditor -Controller apportions tax increment revenue based on collections and does not utilize the alternative allocation method known as the "Teeter Plan." The apportionment schedule described above and the apportionment of tax increment revenue based on collections was in use by Los Angeles County for many years prior to redevelopment dissolution and continues to be the pattern of tax increment revenue allocation. As of February 1, 2012, the apportionment of tax increment revenue was dictated by the legislation adopted as ABxl 26. Revenue is now apportioned to successor agencies on January 2 and June 1 of each fiscal year. All tax increment revenue is accumulated by the County Auditor -Controller in the Redevelopment Property Tax Trust Fund for allocation on these two dates. The tax increment revenue available for allocation on January 2 consists of revenues collected after June 1 of the previous fiscal year and for collections in November and December of the current fiscal year. The tax increment revenues available for allocation on June 1 include revenues collected from January 1 to June 1 of the current fiscal year. From the amounts accumulated in the Redevelopment Property Tax Trust Fund for each allocation date, the County Auditor -Controller is to deduct its own County administrative charges and is to calculate and deduct unsubordinated amounts owed, if any, to taxing entities for tax sharing agreements entered into pursuant to Section 33401 of the Redevelopment Law and for statutory tax sharing obligations required by Sections 33607.5 and 33607.7 of the Redevelopment Law. The amount remaining after these reductions, if any, is what is available for payment by the Successor Agency of debt obligations of the former redevelopment agency. The Successor Agency is entitled to receive an amount to cover the administrative costs of winding down the business of the former redevelopment agency. This amount is set by ABIx 26 at the greater of 21 $250,000 per year or a maximum of 3% of the amount allocated from the Redevelopment Property Tax Trust Fund. AB 1484 added language that allowed the Oversight Board to reduce the amount of the minimum administrative allowance. To the extent that revenues are insufficient to pay all of the approved Recognized Obligation Payment Schedule obligations, the Successor Agency's administrative allowance will be reduced or eliminated. The Successor Agency administrative allowance amounts that have been approved but cannot be paid due to a lack of Redevelopment Property Tax Trust Fund revenue will be carried over to the next Redevelopment Property Tax Trust Fund allocation for payment as funds become available. As a result of passage of SB 107, commencing July 1, 2016, the administrative cost allowance will be 3% of the actual property taxes allocated to the Successor Agency in the preceding fiscal year less the Successor Agency's administrative cost allowance and City loan repayment amounts. If, however, 3% of the actual property taxes allocated in the preceding fiscal year is greater than 50% of the total Redevelopment Property Tax Trust Fund amounts distributed to pay enforceable obligations as reduced by the administrative allowance and City loan repayment amounts, then the administrative cost allowance shall not exceed 50% of the total Redevelopment Property Tax Trust Fund amounts distributed to pay enforceable obligations as reduced by the administrative allowance and City loan repayment amounts. If there are Redevelopment Property Tax Trust Fund amounts remaining after reductions for County administrative charges, amounts owed, if any, to taxing entities for tax sharing agreements or statutory tax sharing obligations, enforceable obligations and Successor Agency administrative allowance, these remainder amounts are referred to as Residual Revenue. Residual Revenue for each allocation cycle is proportionately allocated to the taxing entities and to the Educational Revenue and Augmentation Fund (FRAY). The legislation stipulates that the combination of tax sharing payments and Residual Revenue payments to taxing entities may not exceed that taxing entity's full share of tax increment revenue. In circumstances where a taxing entity receives all or most of its share of tax increment revenue as a result of its tax sharing agreement, that taxing entity's share of the Residual Revenue distribution may be reduced and the portions of Residual Revenue allocated to the other taxing entities will be proportionately increased. Recognized Obligation Payment Schedule. The Dissolution Act provides that, commencing on the date that the first Recognized Obligation Payment Schedule is valid thereunder, only those payments listed in the Recognized Obligation Payment Schedule may be made by the Successor Agency from the funds specified in the Recognized Obligation Payment Schedule. The Dissolution Act requires successor agencies to prepare and approve, and submit to the successor agency's oversight board and the DOE for approval annually, a Recognized Obligation Payment Schedule pursuant to which enforceable obligations (as such term is defined in the Dissolution Act) of the successor agency are listed, together with the source of funds to be used to pay for each enforceable obligation for the next two property tax distribution dates. Pledged Tax Revenues will not be distributed from the Redevelopment Property Tax Trust Fund by the County Auditor -Controller to the Successor Agency's Redevelopment Obligation Retirement Fund without a duly approved and effective Recognized Obligation Payment Schedule obtained in sufficient time prior to the first property tax distribution date to which the Recognized Obligation Payment Schedule is applicable. See the captions "DISSOLUTION ACT—Recognized Obligation Payment Schedule" and "RISK FACTORS—Recognized Obligation Payment Schedule." Unitary Property Assembly Bill ("AB") 2890 (Statutes of 1986, Chapter 1457) provides that, commencing with fiscal year 1988-89, tax revenues derived from unitary property and assessed by the SBE are accumulated in a single Tax Rate Area for the County. The tax revenues are then to be allocated to each taxing entity county- wide as follows: (a) each taxing entity will receive the same amount as in the previous year plus an increase for inflation of up to 2%; (b) if utility tax revenues are insufficient to provide the same amount as in the previous year, each taxing entity's share would be reduced pro rata county wide; and (c) any increase in revenue above 2% would be allocated in the same proportion as the taxing entity's local secured taxable values are to the local secured taxable values of the County. 22 AB 454 (Statutes of 1987, Chapter 921) further modified Chapter 1457 regarding the distribution of tax revenues derived from property assessed by the State Board of Equalization. Chapter 921 provides for the consolidation of all State -assessed property, except for regulated railroad property, into a single tax rate area in each county. Chapter 921 further provides for a new method of establishing tax rates on State -assessed property and distribution of property tax revenue derived from State -assessed property to taxing jurisdictions within each county in accordance with a new formula. Railroads will continue to be assessed and revenues allocated to all tax rate areas where railroad property is sited. To administer the allocation of unitary tax revenues to redevelopment agencies, the County no longer includes the taxable value of utilities as part of the reported taxable values of a project area. Consequently, the base year values of project areas are reduced by the amount of utility value that existed originally in the base years. The Auditor Controller allocated a total of $11,168 of unitary revenues to the Successor Agency from the Redevelopment Project for fiscal year 2015-16. For purposes of the Fiscal Consultant's projection of Pledged Tax Revenues available to pay debt service on the Bonds, the Fiscal Consultant assumed that the amount of unitary revenue allocated for fiscal year 2015-16 will continue to be allocated to the Redevelopment Project in the same amount for the life of the projection. See Appendix F. Article XIIIA of the State Constitution On June 6, 1978, State voters approved an amendment (commonly known as Proposition 13 or the Jarvis -Gann Initiative) which added Article XIIIA to the State Constitution. Article XIIIA limits the amount of ad valorem taxes on real property to 1% of "full cash value" of such property, as determined by the county assessor. Article XIIIA defines "full cash value" to mean "the County Assessor's valuation of real property as shown on the 1975-76 tax bill under `full cash value,' or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment." Furthermore, the "full cash value" of all real property may be increased to reflect the rate of inflation, as shown by the consumer price index, not to exceed 2% per year, or may be reduced. Article XIIIA has subsequently been amended to permit reduction of the "full cash value" base in the event of declining property values caused by substantial damage, destruction or other factors, and to provide that there would be no increase in the "full cash value" base in the event of reconstruction of property damaged or destroyed in a disaster and in other special circumstances. Article XIIIA: (i) exempts from the 1% tax limitation taxes to pay debt service on: (a) indebtedness approved by the voters prior to July 1, 1978; or (b) bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition; (ii) requires a vote of two-thirds of the qualified electorate to impose special taxes, or certain additional ad valorem taxes; and (iii) requires the approval of two-thirds of all members of the State Legislature to change any State tax laws resulting in increased tax revenues. The validity of Article XIIIA has been upheld by both the State Supreme Court and the United States Supreme Court. On November 4, 1986, voters of the State approved two measures, Propositions 58 and 60, which further amended Article XIIIA. Proposition 58 provides that the terms "purchase" and "change of ownership," for the purposes of determining full cash value of property under Article XIIIA, do not include the purchase or transfer of: (1) real property between spouses; and (2) the principal residence and the first $1,000,000 of other property between parents and children. This amendment to Article XIIIA may reduce the rate of growth of local property tax revenues. Proposition 60 permits the State Legislature to allow persons over the age of 55 who sell their residence and buy or build another of equal or lesser value within two years in the same county to transfer the old residence assessed value to the new residence. As a result of the State Legislature's action, the growth of property tax revenues may decline. 23 Legislation enacted by the State Legislature to implement Article XIIIA provides that all taxable property is shown at full assessed value as described above. In conformity with this procedure, all taxable property value included in this Official Statement is shown at 100% of assessed value and all general tax rates reflect the $1 per $100 of taxable value (except as noted). Tax rates for voter -approved bonded indebtedness and pension liabilities are also applied to 100% of assessed value. Each year the Board of Equalization announces the applicable adjustment factor. Since the adoption of Proposition 13, inflation has, in most years, exceeded 2% and the announced factor has reflected the 2% cap. The changes in the California Consumer Price Index ("CCPF') from October of one year to October of the next year are used to determine the adjustment factor for the January assessment date. Through fiscal year 2010-11 there were six occasions when the inflation factor was less than 2%. Until fiscal year 2010-11 the annual adjustment never resulted in a reduction to the base year values of individual parcels; however, the factor that was applied to real property assessed values for the January 1, 2010 assessment date was negative 0.237% and this resulted in reductions to the adjusted base year value of parcels. Each year the Board of Equalization announces the applicable adjustment factor. Since the adoption of Proposition 13, inflation has, in most years, exceeded 2% and the announced factor has reflected the 2% cap. The changes in the California Consumer Price Index from October of one year and October of the next year are used to determine the adjustment factor for the January assessment date. Through fiscal year 2010-11 there were six occasions when the inflation factor was less than 2%. Until fiscal year 2010-11 the annual adjustment never resulted in a reduction to the base year values of individual parcels; however, the factor that was applied to real property assessed values for the January 1, 2010 assessment date was -0.237% and this resulted in reductions to the adjusted base year value of parcels. The table below reflects the inflation adjustment factors for the current fiscal year and 10 prior fiscal years. Historical Inflation Adjustment Factors Fiscal Year Inflation Adj. Factor 2007-08 2.000% 2008-09 2.000 2009-10 2.000 2010-11 -0.237 2011-12 0.753 2012-13 2.000 2013-14 2.000 2014-15 0.454 2015-16 1.998 2016-17 1.525 The inflationary adjustment for 2017-18 has not been determined. For purposes of the projection of Pledged Tax Revenues, the Fiscal Consultant has assumed that the inflation adjustment factor for fiscal year 2017-18 and future years will be 2.00%. This assumption is based on the fact that the inflation adjustment factor has been at the maximum allowed amount of 2.00% in 31 of the 40 years since the adoption of Proposition 13. Appropriations Limitation —Article XIHB On November 6, 1979, State voters approved Proposition 4 (also known as the Gann Initiative), which added Article XIIIB to the State Constitution. Article XIIIB limits the annual appropriations of the State and its political subdivisions to the level of appropriations for the prior fiscal year, as adjusted for changes in the cost of living, population and services rendered by the government entity. The "base year" for establishing such appropriations limit is the 1978-79 State fiscal year, and the limit is to be adjusted annually to reflect changes in population, consumer prices and certain increases in the cost of services provided by these public agencies. 24 Section 33678 of the Redevelopment Law provides that the allocation of taxes to a redevelopment agency for the purpose of paying principal of, or interest on, loans, advances, or indebtedness will not be deemed the receipt by an agency of proceeds of taxes levied by or on behalf of an agency within the meaning of Article XIIIB, nor will such portion of taxes be deemed receipt of proceeds of taxes by, or an appropriation subject to the limitation of, any other public body within the meaning or for the purpose of the Constitution and laws of the State, including Section 33678 of the Redevelopment Law. The constitutionality of Section 33678 has been upheld in two State appellate court decisions. On the basis of these decisions, the Successor Agency does not believe that it is subject to Article XIIIB and has not adopted an appropriations limit. Articles XIIIC and XIIID of the State Constitution On November 5, 1996, Proposition 218 was passed by the voters of State. The initiative added Articles XIIIC and XIIID to the State Constitution. Provisions in the two articles affect the ability of local government to raise revenues. The Bonds are secured by sources of revenues that are not subject to limitation by Proposition 218. See the caption "—Propositions 218 and 26" below. Proposition 87 On November 8, 1988, the voters of the State approved Proposition 87, which amended Article XVI, Section 16 of the State Constitution to provide that property tax revenue attributable to the imposition of taxes on property within a redevelopment project area for the purpose of paying debt service on certain bonded indebtedness issued by a taxing entity (other than the Prior Agency or the Successor Agency) and approved by the voters of the taxing entity after January 1, 1989 will be allocated solely to the payment of such indebtedness, and not to redevelopment agencies. SB 107 amended Section 34183(a)(1) of the Dissolution Act to provide that such debt service override revenues approved by the voters for the purpose of supporting pension programs, capital projects, or programs related to the State Water Project that are not pledged to or not needed for debt service on successor agency obligations will be allocated and paid to the entity that levies the override. The Castaic Lake Water Agency levies an override tax rate that received voter approval prior to January 1, 1989. The Castaic Lake Water Agency is a State Water Contractor as defined in Section 33607.8 of the Redevelopment Law and the revenue from the water agency's override rate is used to purchase water from the California Water Project. Prior to the dissolution of redevelopment agencies, revenue derived from this override tax rate was received by the Successor Agency but was subject to being passed through to said water agency. With the passage of SB 107, the revenue generated by the Castaic Lake Water Agency state water contract override tax rate will be allocated directly to Castaic Lake Water Agency because these revenues were not pledged to the payment of debt service nor needed for debt service on Successor Agency obligations. Redevelopment Time Limits Chapter 942, Statutes of 1993, established limits on redevelopment plans, such as the Redevelopment Plan, adopted after December 31, 1993. These limits included a time limit on the life of the redevelopment plan, a time limit on the incurrence of indebtedness, a time limit on the receipt of property tax increment and the repayment of indebtedness and a limit on the amount of bonded indebtedness outstanding at any time. SB 107 amended the Dissolution Act to provide that the time limits for receiving property tax revenues and the limitation on the maximum amount of property tax revenues that may be received by the Successor Agency for the Project Area are not effective for purposes of paying the Successor Agency's enforceable obligations. As a result, the time and amount limits with respect to property tax revenues described under the caption "THE PROJECT AREA—General" will be disregarded to the extent that property tax revenues are required to pay debt service on the Bonds. 25 Appeals of Assessed Values and Proposition 8 Pursuant to State law, a property owner may apply for a reduction of the property tax assessment for such owner's property by filing a written application, in a form prescribed by the State Board of Equalization, with the appropriate county board of equalization or assessment appeals board. In the County, a property owner desiring to reduce the assessed value of such owner's property in any one year must submit an application to the County Assessment Appeals Board (the "Appeals Board"). Applications for any tax year must be submitted by November 30 of such tax year. Following a review of each application by the staff of the County Assessor's Office, the staff makes a recommendation to the Appeals Board on each application which has not been rejected for incompleteness or untimeliness or withdrawn. The Appeals Board holds a hearing and either reduces the assessment or confirms the assessment. The Appeals Board generally is required to determine the outcome of appeals within two years of each appeal's filing date. Any reduction in the assessment ultimately granted applies only to the year for which application is made and during which the written application is filed. The assessed value increases to its pre-reduction level for fiscal years following the year for which the reduction application is filed. However, if the taxpayer establishes through proof of comparable values that the property continues to be overvalued (known as "ongoing hardship"), the Assessor has the power to grant a reduction not only for the year for which application was originally made, but also for the then current year as well. Appeals for reduction in the "base year" value of an assessment, which generally must be made within three years of the date of change in ownership or completion of new construction that determined the base year, if successful, reduce the assessment for the year in which the appeal is taken and prospectively thereafter. Moreover, in the case of any reduction in any one year of assessed value granted for "ongoing hardship" in the then current year, and also in any cases involving stipulated appeals for prior years relating to base year and personal property assessments, the property tax revenues from which Pledged Tax Revenues are derived attributable to such properties will be reduced in the then current year. In practice, such a reduced assessment may remain in effect beyond the year in which it is granted. See the caption "THE PROJECT AREA—Largest Taxpayers" for information regarding the assessed valuations of the top ten property owners within the Project Area. See the caption "THE PROJECT AREA— Appeals" for information regarding pending property tax appeals in the Project Area. If all pending assessed valuation appeals in the Project Area are granted and assessed valuations reduced by the historical average percentage (65.08%) reduction of the full amount that the appellants seek (approximately $128,991,780), taxable values in the Project Area would be reduced by approximately $65,402,955. This estimated reduction of value has been factored into the Pledged Tax Revenues for fiscal year 2017-18 as more fully described in the Fiscal Consultant's report set forth in Appendix F. Proposition 8, approved in 1978 (California Revenue and Taxation Code section 51(b)), provides for the assessment of real property at the lesser of its originally determined (base year) full cash value compounded annually by the inflation factor, or its full cash value as of the lien date, taking into account reductions in value due to damage, destruction, obsolescence or other factors causing a decline in market value. Reductions under this code section may be initiated by the County Assessor or requested by the property owner. After such reductions in value are implemented, the County Assessor is required to review the property's market value as of each subsequent lien date and adjust the value of real property to the lesser of its base year value as adjusted by the inflation factor pursuant to Article XIIIA of the California Constitution or its full cash value taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property or other factors causing a decline in value. Reductions made under Proposition 8 to residential properties are normally initiated by the County Assessor but may also be requested by the property owner. Reductions of value for commercial, industrial and other land use types under Proposition 8 are normally initiated by the property owner as an assessment appeal. 26 After a roll reduction is granted under this code section, the property is reviewed on an annual basis to determine its full cash value and the valuation is adjusted accordingly. This may result in further reductions or in value increases. Such increases must be in accordance with the full cash value of the property and may exceed the maximum annual inflationary growth rate allowed on other properties under Article XIIIA of the State Constitution. Once the property has regained its prior value, adjusted for inflation, it once again is subject to the annual inflationary factor growth rate allowed under Article XIIIA. The Successor Agency is aware that the County Assessor made such reductions to assessed values of residential and non-residential property in the Project Area and the City generally in recent Fiscal Years, a portion of which reductions have now been restored. The Fiscal Consultant's report set forth in Appendix F also does not assume future reductions in assessed valuations as a result of Proposition 8. However, there can be no assurance that such reductions will not be made in the future. The Successor Agency does not believe that any such reductions will have a material adverse impact on Pledged Tax Revenues or the Successor Agency's ability to pay debt service on the Bonds. However, additional reductions in assessed value due to current or future economic conditions in the Project Area could impact the receipt of Pledged Tax Revenues as projected in Appendix F. See the caption "THE PROJECT AREA—Appeals." Propositions 218 and 26 On November 5, 1996, California voters approved Proposition 218—Voter Approval for Local Government Taxes—Limitation on Fees, Assessments, and Charges—Initiative Constitutional Amendment. Proposition 218 added Articles XIIIC and XIIID to the State Constitution, imposing certain vote requirements and other limitations on the imposition of new or increased taxes, assessments and property -related fees and charges. On November 2, 2010, California voters approved Proposition 26, the "Supermajority Vote to Pass New Taxes and Fees Act." Proposition 26 amended Article XIIIC of the California Constitution by adding an expansive definition for the term "tax," which previously was not defined under the California Constitution. Pledged Tax Revenues securing the Bonds are derived from property taxes which are outside the scope of taxes, assessments and property -related fees and charges which are limited by Proposition 218 and outside of the scope of taxes which are limited by Proposition 26. Future Initiatives Articles XIIIA, XIIIB, XIIIC and XIIID of the State Constitution and certain other propositions affecting property tax levies were each adopted as measures which qualified for the ballot pursuant to the State's initiative process. From time to time other initiative measures could be adopted, further affecting Successor Agency revenues or the Successor Agency's ability to expend revenues. THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA The Prior Agency was activated by the City Council of the City on November 28, 1989. The City Council adopted the Redevelopment Plan establishing the Project Area by Ordinance No. 97-12 on July 8, 1997 pursuant to the Redevelopment Law. On June 29, 2011, AB XI 26 was enacted as Chapter 5, Statutes of 2011, together with a companion bill, AB Xl 27. A lawsuit entitled California Redevelopment Association, et al. v. Matosantos, et al., was brought in the State Supreme Court challenging the constitutionality of AB XI 26 and AB Xl 27. In a published decision (53 Cal. 4th 231 (December 29, 2011))9 the State Supreme Court largely upheld AB XI 26, invalidated AB XI 27, and held that AB XI 26 may be severed from AB XI 27 and enforced independently. As a result of AB Xl 26 and the decision of the State Supreme Court, as of February 1, 2012, all redevelopment agencies in the State, including the Prior Agency, were dissolved, and successor agencies were designated as successor entities to the former redevelopment agencies to expeditiously wind down the affairs of the former redevelopment agencies. 27 On January 24, 2012, pursuant to Resolution No. 12-3 and Section 34173 of the Dissolution Act, the City Council of the City elected to serve as the successor agency to the Prior Agency. Section 34173(g) of the 27 Dissolution Act, added by AB 1484, expressly affirms that: (i) the Successor Agency is a separate public entity from the City; (ii) the two entities will not merge; (iii) the liabilities of the Prior Agency will not be transferred to the City; and (iv) the assets of the Prior Agency will not become assets of the City. The Successor Agency is governed by a five -member Board of Directors (the `Board") which consists of the members of the City Council of the City. The Mayor acts as the Chair of the Board, the City Manager as its Executive Director and the City Clerk as its Secretary. Successor Agency Powers All powers of the Successor Agency are vested in the Board. Pursuant to the Dissolution Act, the Successor Agency is a separate public body from the City and succeeds to the organizational status of the Prior Successor Agency, but the Successor Agency has no legal authority to participate in redevelopment activities except to complete any work related to an approved enforceable obligation. The Successor Agency is tasked with expeditiously winding down the affairs of the Prior Agency pursuant to the procedures and provisions of the Dissolution Act. Under the Dissolution Act, many Successor Agency actions are subject to approval by the Oversight Board, as well as review by the DOE. California has strict laws regarding public meetings (known as the Ralph M. Brown Act) which generally make all Successor Agency and Oversight Board meetings open to the public in similar manner as City Council meetings. Due Diligence Reviews In accordance with the requirements of the Dissolution Act, the Successor Agency retained independent accountants to conduct two reviews, known as due diligence reviews (each, a "DDR"): one for the Low and Moderate Income Housing Fund and the other for all of the other funds and accounts (the "Other Funds"). The purpose of the DDRs was to determine the unobligated balance (the "Unobligated Balance"), if any, of the Low and Moderate Income Housing Fund and the Other Funds, as of June 30, 2012, so that such Unobligated Balance would be distributed to taxing agencies. The DOF issued its final determinations regarding the Successor Agency's DDR for the Other Funds and the Low and Moderate Income Housing Fund on March 8, 2013 and January 11, 2013, respectively, having determined that the Successor Agency's Unobligated Balance available for distribution to the taxing agencies was $0 for the Other Funds and $451,742 for the Housing Fund. The Successor Agency has remitted such sums to the County Auditor -Controller and the DOE issued a "Finding of Completion" to the Successor Agency on June 20, 2013. The Finding of Completion enables the Successor Agency to proceed with certain actions permitted under the Dissolution Act. After receiving a finding of completion, each successor agency is required to submit a Long Range Property Management Plan detailing what it intends to do with its inventory of properties. Successor agencies are not required to immediately dispose of their properties but are limited in terms of what they can do with the retained properties. Permissible uses include: sale of the property, use of the property to fill an enforceable obligation, retention of the property for future redevelopment, and retention of the property for governmental use. These plans must be filed by successor agencies within six months of receiving a finding of completion, and the DOE will review these plans as submitted on a rolling basis. The Successor Agency submitted its Long Range Property Management Plan to DOE on December 19, 2013. . After SB 107 was chaptered with provision for a Successor Agency to amend its Long Range Property Management Plan one time to allow for retention of properties that constitute parking facilities and lots dedicated solely to public parking for government purposes, the Successor Agency submitted a revised Long Range Property Management Plan on December 14, 2015, which was approved by the DOE on January 28, 2016. Pursuant to an Asset Transfer Review Report dated February 24, 2014, the State Controller's office found that the City should turn over to the Successor Agency $13,864,758 of net unallowable transfers. Rent M revenues were transferred for housing purposes and a parcel of land was transferred to the City. Additionally, $6,104,268 of Prior Agency bond proceeds were transferred to the City for construction of a library. The DOF and Oversight Board have approved the use of these funds for these stated purposes. A transfer of $7,700,000 for a City loan repayment was disallowed; however, the City's position is that it is allowable since the loan repayment constituted at least $5,135,000 of the same City funds loaned to the Prior Agency due to projects to be financed with such funds being placed on hold during the economic downturn. The disputed amount of $7,700,000 is a contingent liability of the City and contingent receivable for the Successor Agency. THE PROJECT AREA General The City Council adopted Ordinance No. 97-12 on July 8, 1997, which adopted the Redevelopment Plan. The overall objective of the Redevelopment Plan is to eliminate blighted conditions in the Project Area by undertaking all appropriate projects pursuant to the Redevelopment Law. The general objective is to encourage investment in the Project Area by the private sector, to eliminate blighted conditions and to upgrade the quality of the community. The Redevelopment Plan provides for the acquisition of property, the demolition of buildings and improvements, the relocation of any displaced occupants, and the construction of streets, parking facilities, utilities and other public improvements. The Redevelopment Plan also allows the redevelopment of land by private enterprise, the rehabilitation of structures, the rehabilitation or construction of low and moderate income housing, and participation by owners and the tenants of properties in the Redevelopment Project. The Project Area is approximately 913.6 acres in size and consists of a single, very irregularly-shaped area within the City. The Project Area is located between Interstate 5 and State Highway 14 and includes the commercial corridors along Lyons Avenue and San Fernando Road. The Project Area is generally bounded on the west by Interstate 5, on the east by State Highway 14 and on the north by the intersection of San Fernando Road and Magic Mountain Parkway. The Project Area extends approximately four blocks to the east and west of San Fernando Road between its intersection with Lyons Avenue and its intersection with 16th Street. It also includes a large area on the north side of San Fernando Road between its intersections with Lyons Avenue and with Pine Street. Large areas that are beyond the immediate San Fernando Road corridor exist southeast of the intersection with Pine Street and at the intersection with State Highway 14. Several areas that extend beyond the immediate Lyons Avenue corridor exist near the intersection with Valley Street and near the Lyons Avenue intersection with Interstate 5. The base year of the Project Area was set in 1996-97. The 1996-97 base year assessed valuation is $2665351,517. The Prior Agency passed a Specific Plan in December 2005 to transform downtown Newhall into a thriving, mixed-use, pedestrian -oriented urban village with a series of economic engines. The Specific Plan consists of a 20 -block downtown served by Metrolink commuter rail, a commercial corridor in downtown, two flanking neighborhoods, and an industrial district. Upon buildout, the Specific Plan will include up to 1,092 new residential units and nearly 1 million square feet of new commercial space. A portion of this growth will be attributed to new development, while some will also include revitalization of existing buildings. A copy of the draft Specific Plan can be viewed at http://www.santa-clarita.com/citvhall/cd/ed/redevelopment/index.asp. Chapter 942 specified that the effectiveness of a redevelopment plan adopted after 1993 shall expire 30 years from the date of adoption of the Redevelopment Plan. The time limit for establishing indebtedness is 20 years from the date of adoption of the redevelopment plan and the Prior Agency may repay indebtedness for a total of 45 years from the date of the adoption of the redevelopment plan. Any eminent domain proceedings undertaken by the Prior Agency must be initiated within 12 years of the adoption date of the redevelopment plan. The City Council adopted the Redevelopment Plan through Ordinance 97-12 on July 8, 1997 containing the limitations provided in Chapter 942. 29 Pursuant to Senate Bill 1045 the City Council was allowed to extend the term of the Redevelopment Plan by one year. On May 13, 2008 the City Council adopted and approved Ordinance No. 08-6 extending the expiration date of the redevelopment plan by one year pursuant to Section 33333.2 of the Redevelopment Law. Pursuant to Senate Bill 1096, the City Council was allowed, as described below, to extend the term of effectiveness for certain redevelopment plans and the periods within which the Prior Agency would be allowed to repay indebtedness by up to two additional years. This two-year extension of the time limits was predicated upon the payment by the Prior Agency of its ERAF obligations for 2005 and 2006. The ERAF obligations for 2005 and for 2006 were paid in a timely manner. For project areas that had less than 10 years of plan effectiveness remaining after June 30, 2005 a two-year extension was authorized. For project areas that had more than 10 years and less than 20 years of plan effectiveness remaining after June 30, 2005 a two-year extension was authorized if the City Council could make certain findings. For those project areas with more than 20 years of plan effectiveness remaining after June 30, 2005 no extension of time was authorized. The Redevelopment Plan could not be extended under Senate Bill 1096. SB 107 implemented a number of revisions to the Health and Safety Code including an amendment to Section 34189 that impacts the time and tax increment limits of former redevelopment project areas. The legislation eliminated the effectiveness of both annual and cumulative tax increment limits and time limits on repayment of indebtedness for all enforceable obligations (as defined under Health and Safety Code Sections 34171(d)(1) and 34191.4), except in cases where contractual agreements that contain specific terms to terminate payment based on a project area reaching its tax increment and/or time limits. The Auditor Controller has informed the Fiscal Consultant that, in light of the amended Section 34189, the Auditor Controller will not limit the amount of tax increment revenue deposited into the Redevelopment Property Tax Trust Fund due to the time limits or due to the annual tax increment limit contained in the Redevelopment Plan. Pursuant to SB 107, tax increment revenues will continue to be allocated from the Project Area until such time as all authorized enforceable obligations, including the Bonds, have been repaid. 30 Land Use Of the 913.6 acres within the Project Area, 210.8 acres (or 23.07%) are designated as vacant land, and are zoned commercial/industrial. Not all of this acreage may be readily developable The below table summarizes land uses in the Project Area as of Fiscal Year 2016-17. TABLE 1 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA LAND USE SUMMARY Category No. Parcels Assessed Value % of Total Residential 716 $270,051,116 41.41% Commercial 212 2065211,786 31.62% Industrial 39 45,727,691 7.01% Vacant Land 165 40,2775034 6.18% Irrigated 1 1859956 0.03% Recreational 5 298949765 0.44% Institutional 13 993375547 1.43% Exempt(') 131 0 0.00% Subtotal: 11282 $574,6859895 88,12% Possessory Interest(z) Unsecured (2) Subtotal: 3,055,821 0.47% 74,419,812 11.41% $ 7794759633 11,88% Totals: 19282 $652,161,528 100,00% Exempt category includes parcels exempt from property taxes such as those owned by the City, Successor Agency, State or other governmental agencies. a> Unsecured and SBE non -unitary values are connected with parcels that are already accounted for in other categories. Source. County of Los Angeles 2016-17 Equalized Property Tax Roll, as reported by the Fiscal Consultant. Statutory Pass -Through Amounts The Project Area was adopted after January 1, 1994 and is therefore, subject to the Redevelopment Law as it was amended by passage of AB 1290. As amended, the Redevelopment Law requires that for project areas adopted after January 1, 1994, a prescribed portion of tax increment revenue must be shared with all taxing entities within the project area. This defined tax -sharing amount has three tiers. The fust tier began with the first year that the project area received tax increment revenue and continues for the life of the project area. This first tier tax -sharing amount is 25% of gross tax increment revenue net of the Housing Set -Aside Revenues. The second tier began in 2008-09, the eleventh year after the Prior Agency first received tax increment revenue. This second tier is 21% of the tax increment revenue, net of the Housing Set -Aside Revenues, that is derived from the growth in assessed value that is in excess of the assessed value of the project area in year ten. The third tier payments will begin in 2030-31, the 31st year after the Prior Agency first received tax increment revenue. This third tier is 14% of the tax increment revenue, net of the Housing Set -Aside Revenues that is derived from the growth in assessed value that is in excess of the assessed value of the project area in the 30th year. These three tiers of tax sharing are calculated independent of one another and continue from their inception through the life of the project area. Section 33607.5(e) of the Redevelopment Law as it existed prior to the dissolution of redevelopment and Section 34177.5(c) of the Dissolution Law specifies a procedure whereby the Successor Agency may 31 request subordination of the statutory tax sharing payments to payment of debt service on the Bonds by all of the Project Area's taxing entities. As part of this request, the Successor Agency must provide substantial evidence to the taxing entities that it will have sufficient funds to make the debt service payments on the Bonds as well as making the required statutory tax sharing payments. The taxing entities may respond and agree to the subordination request, they may do nothing and after 45 days be deemed to have agreed to the subordination or they may disapprove the subordination request. A taxing entity may disapprove a subordination request only if it believes based on substantial evidence that the Successor Agency's financial estimates are incorrect and that the Successor Agency will not be able to make debt service and the tax sharing payments. It is the Successor Agency's belief that sufficient evidence can be provided to warrant subordination of the tax sharing payments and that no later than 45 days from receipt of the notice by the taxing entities, the tax sharing payments will be subordinate to the payment of debt service on the Bonds. Subordination of the statutory tax sharing payments has been requested pursuant to Section 34177.5(c) and is expected to be achieved prior to the closing of the Bonds. The Dissolution Act requires county auditor-controllers to distribute from the Redevelopment Property Tax Trust Fund amounts required to be distributed under the Pass-Through Agreements (including subordinated Pass-through Agreements) and for Statutory Pass-Through Amounts to the taxing entities for each six-month period before amounts are distributed by the County Auditor-Controller from the Redevelopment Property Tax Trust Fund to the Agency's Redevelopment Obligation Retirement Fund each January 2 and June 1, unless: (i) pass-through payment obligations have previously been made subordinate to debt service payments for the bonded indebtedness of the Prior Agency, as succeeded to by the Successor Agency; (ii) the Successor Agency has reported, no later than the December 1 and May 1 preceding the January 2 or June 1 distribution date, that the total amount available to the Successor Agency from the Redevelopment Property Tax Trust Fund allocation to the Successor Agency's Redevelopment Obligation Retirement Fund, from other funds transferred from the Prior Agency and from funds that have or will become available through asset sales and all redevelopment operations is insufficient to fund the Successor Agency's enforceable obligations, pass-through payments and the Successor Agency's administrative cost allowance for the applicable six month period; and (iii) the State Controller has concurred with the Successor Agency that there are insufficient funds for such purposes for the applicable six-month period. Section 33607.8 of the Redevelopment Law provides that notwithstanding the tax sharing requirements outlined above, the Successor Agency may make payments to a taxing entity that is a state water supply contractor. These payments may not exceed the amounts that the taxing entity would have received from an override tax approved by voters prior to July 1, 1978 absent the existence of the Project Area. In addition, the payments made shall be made for the purpose of funding the payments of the state water supply contractor pursuant to its water supply contract with the Department of Water Resources. The section further stipulates that payments made to the water supply contractor were not to cause any reduction in the statutory tax sharing amounts that are required to be paid to the other taxing entities. The Castaic Lake Water Agency requested and the Successor Agency agreed to make such payments. Because the Castaic Water Agency's revenue from this state water contract tax rate are no longer allocated to the Redevelopment Property Tax Trust Fund, no payments relative to these revenues are required or made. Tax Rates Tax rates will vary from area to area within a State, as well as within a community and a project area. The tax rate for any particular parcel is based upon the jurisdictions levying the tax rate for the area where the parcel is located. The tax rate consists of the general levy rate of $1.00 per $100 of taxable values and the override tax rate, which is that portion of the tax rate that exceeds the general levy tax rate in order to pay voter approved indebtedness or contractual obligations that existed prior to the enactment of Proposition 13. Revenues associated with the override tax rates have not been included in the projections of the net Tax Revenues. The projections are effectively based on a 1.0% tax rate. See "APPENDIX F - FISCAL CONSULTANT'S REPORT." 32 Largest Taxpayers The following table shows the ten largest taxpayers in the Project Area on the secured roll for the 2016-17 assessment year. The information has been gathered by the Successor Agency, but the accuracy or completeness of such information is not guaranteed by the Successor Agency. See "APPENDIX F — FISCAL CONSULTANT'S REPORT." TABLE 2 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA LARGEST TAXPAYERS Secured Unsecured Property Owner Value Value Time Warner Cable (Charter Comm.) $4390415370 Saugus Station LLC $1892609394 Casden Santa Clarita LLC 1' 1699045000 Lyons Properties Limited 10,276,022 Telfair Corporation (1) 898419991 David Weiswasser Trust 8,247,025 25805 San Fernando LLC 8,205,360 RFT Sprouts LLC et at 798549588 23801 San Fernando Rd Land Co LLC 75416,673 Peter & Barbara Coeler et al ") 790389158 Top Property Owner Total Value $13690859581 Project Area Assessed Value $652,1619528 Project Area Incremental Value $388,0555314 (1) These taxpayers have pending assessment appeals on parcels owned. Source: Fiscal Consultants Report. % of Total % of Inc. Value Value Property Use 6.60% 11.09% Cable Television/Intemet Facilities 2.80% 4.71% Industrial & Warehousing Buildings 2.59% 4.36% Vacant Industrial/Commercial Land 1.58% 2.65% Santa Clarita Medical Center/Offices 1.36% 2.28% Retail Strip Center 1.26% 2.13% Mulberry Mobile Home Park 1.26% 2.11% Plaza Clarita — Mixed Use Comm. 1.20% 2.02% Walnut Village Apartments 1.14% 1.91% Santa Clarita Convalescent Hospital 1.08% 1.81% Villa La Paz Aoartments/Offices 20.87% 35.07% The ten (10) largest taxpayers own properties whose combined assessed value accounts for approximately 21% of the total assessed valuation of the Project Area and 35% of the incremental value of the Project Area. The following is information about the largest secured taxpayers in the Project Area. The information has been gathered by the City and the Successor Agency from various taxpayers and other sources believed to be reliable, but the accuracy or completeness of such information is not guaranteed by the Successor Agency or the City. Charter Communications Inc. The values indicated for Time Warner Cable are for the combined value of the company's underground cable and internet facilities within the entire City. The practice of the Assessor is to aggregate these values and assign the unsecured values to single secured parcel within the City. The values for Time Warner Cable and its predecessor cable companies have been assigned to this parcel in the Project Area since the adoption of the Project Area. Time Warner Cable Inc. merged with Charter Communications, Inc. in May 2016. Charter Communications, Inc. (NYSE:CHTR) is the second-largest cable operator in the U.S. delivering services to approximately 26 million homes. More information about Charter Communications can be found at www.charter.com. The foregoing internet address is included for reference 33 only, and the information on this internet site is not apart of this Official Statement and is not incorporated by reference into this Official Statement. Saugus Station LLC. Saugus Station LLC owns approximately one hundred acres within the Project Area, of which approximately twenty-three acres consist of vacant land. The developed portion of the property consists of over one million square feet of motion picture and sound recording studio storage space within ten buildings. Saugus Station LLC, a Delaware limited liability company, is wholly owned by TMC Properties LLC. Devco Santa Clarita LLC. Devco Santa Clarita LLC (formerly known as Casden Santa Clarita LLC) ("Devco Santa Clarita") owns 24 parcels within the Project Area consisting of approximately 95 acres of vacant land zoned for commercial and industrial uses. Devco Santa Clarita is a Delaware limited liability company, wholly owned by Devco California LLC, a California limited liability company, whose principal members are Cerberus Partners LP, a division of New York private -equity firm Cerberus Capital Management LP and AIMCO REIT. Devco Santa Clarita has retained Ravello Holdings to process entitlements for the property. Four tax -defaulted parcels were sold at auction on January 12, 2016 in error. Payment was made on time, but the County Assessor sold such properties due to a clerical error. Devco Santa Clarita is currently working to correct the issue with the County Assessor's office. The County Assessor has refunded three of the four buyers. A rescission of tax deed is in the process of being recorded for the three properties. The remaining sale is pending rescission. The County Assessor has the right to reverse the sale of the fourth property, even if the buyer continues to be uncooperative. Tittle to the four subject parcels will be restored to the Casden Santa Clarita LLC name. Ravello Holdings, is the entity responsible for getting planning and zoning entitlements. The entitlement and environmental process is anticipated to take two to three years, with building anticipated to take approximately one to two years following entitlement approval. Owners have indicated that an estimated 400 to 450 single-family detached homes and attached townhomes will be proposed with all units to be for - sale units. Owners have also indicated that an application for entitlements for development is expected to be filed with the City by the end of 2016. Property taxes in fiscal year 2013-14 and in fiscal year 2015-16 were delinquent with respect to the subject parcels. According to the Los Angeles County Tax Collector all such parcels are now current on their property taxes. Due to successful assessment appeals, the properties owned by Casden Santa Clarita LLC have declined in value by $61.1 million (-78.34%) since fiscal year 2008-09. See "THE PROJECT AREA — Appeals." 34 Historical Assessed Valuations The following table sets forth a summary of the historical taxable valuation within the Project Area. See APPENDIX F — FISCAL CONSULTANT'S REPORT" for a detailed report from fiscal year 2007-08 to present. TABLE 3 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA HISTORICAL AND INCREMENTAL ASSESSED VALUATIONS c0 Revised Revised Base Year 2012-13 Base Year 2013-14 2014-15 2015-16 2016-17 2012-13 2013-14 Secured (2) Land 119,213,240 322,803,745 119,175,032 327,858,620 344,1851541 314,440,384 326,414,902 Improvements 125,450,197 214,686,716 125,4311865 2249158,005 235,2961919 248,411,443 261,321,551 Personal Prop. 3,3921830 1,933,165 3,392,830 1,935,296 1,834,594 19800,473 11805,385 Exemptions (1,825,751) (7,016,751) (1,825,165) (8,905.512) (8,950,743) (7,252,816) (11,800,122) Total $2469230,516 $53294069875 $246,1749562 $5459046,409 $572,3669311 $5579399,484 $5779741,716 Unsecured Land 0 0 0 0 0 0 Improvements 69557,624 34,353,633 6,557,624 29,032,248 29,680,032 25,613,074 27,678,090 Personal Prop. 11,376,128 46,665,422 119376,128 42,521,245 40,942,980 43,953,114 46,741,722 Exemptions (21100) (102,000) (2,100) (84,500) (39,500) (32,500) 0 Total 179931,652 809917,055 17,9319652 719468,993 70,583,512 $69,533,688 $749419,812 Grand Total 5264.162.168 5613 i23-930 $264.106.214 S61fi515-402 $642-949.R23 562fi.933-172 5652.16L52R Annual Incremental Value $349,1611762 $3529409,188 $378,8439609 $36298269958 $3889055,314 Change in Value from Prior Year (1,755,321) 39191,472 269434,421 (16,016,651) 255228,356 % Change in Total Value -0.29%0.52% 0 4.29 /o 0 -2.49 /0 0 4.02 /o (1) Assessed Values data provided by the County of Los Angeles. (2) Secured values include state assessed non -unitary utility property. Source. Fiscal Consultant's Report. Between 2007-08 and 2016-17, the taxable value within the Project Area increased by $37,096,933 (6.029%). Assessed values decreased in fiscal years 2010-11 through 2012-13 and fiscal year 2015-16. Values dropped by $16 million (-2.49%) in 2015-16. This drop in value was the result of assessment appeals reductions of land value on 16 vacant parcels owned by Casden Santa Clarita LLC. See "THE PROJECT AREA - Appeals" below. Absent the large appeals losses, the remaining parcels in the Project Area grew by $24.1 million, an amount of growth comparable to that of 2014-15. Growth in taxable values in the Project Area from 2007-08 to 2016-17 was $37.1 million (6.03%). Historical Tax Increment Receipts The following tables show the historical Pledged Tax Revenues along with the estimated and actual receipts of tax increment for the Project Area. See "APPENDIX D — FISCAL CONSULTANT'S REPORT." 35 TABLE 4 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA HISTORICAL TAX REVENUES Assessed Valuation') Less Revised Base Year Valuation Incremental Valuation') Tax Levy Rate Gross Estimated Revenues(') Gross RPTTF Deposit(") Fiscal Year 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 $615,079,251 $613,3239930 $616,515,402 $642,9495823 $6269933,172 $6521161,528 (265,015,401) (264,162,168) (264,106,214) (264,106,214) (264,106,214) (264,106,214) $350,063,850 $349,1619762 $352,409,188 $378,843,609 $362,826,958 $388,055,314 1.00% $3,500,638 $2,772,170 1.00% 1.00% 1.00% $3,491,618 $3,127,146 $3,524,092 $3,7885436 1.00% 1.00% $396285270 $3,880,553 $3,703,773 $3,3909115 $3,6069510 N/A t'1 Figures for Fiscal Year 2016-17 are based on assessed valuation information provided by County Auditor -Controller and do not include State -assessed values. (2) Increase over revised base year valuation. Includes unitary and supplemental tax revenues. For Fiscal Year 2016-17, tax increment revenues do not include estimated supplemental revenues, but do include $11,168 in estimated unitary revenues. See the caption "PROPERTY TAXATION IN CALIFORNIA—Unitary Property." tai Amounts for the June 2012 RPTTF Deposits are the total revenues for FY 2011-12 less amounts allocated to the Prior Agency through January 31, 2012. Source.: Fiscal Consultant and County afLos Angeles. 36 TABLE 5 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA HISTORICAL LEVY AND COLLECTIONS Fiscal Adjusted Current Year Current Year Prior Year Total Total Year Tax Levy Apportioned Collection % Collections5 Apportioned Collection % 2005-06 $2,2379235 $2,179,332 97.41% $650,342 $2,829,675 126.48% 2006-07 29806,040 2,708,385 96.52 438,193 3,146,578 112.14 2007-08 3,666,600 3,470,405 94.65 223,244 3,6935650 100.74 2008-09 3,978,489 3,773,188 94.84 229,455 4,002,642 100.61 2009-10 4,068,572 3,8859719 95.51 42,260 39927,979 96.54 2010-11 3,618,835 2,744,263 75.83 (204,741) 29539,523 70.18 2011-121`1 3,762,457 2,867,475 76.21 116,381 25983,855 79.31 2012-1311 3,485,808 2,786,791 79.95 342,729 35129,519 89.78 2013-1411 3,526,463 2,828,495 80.21 835,488 35663,983 103.90 2014-15121 3,836,835 3,185,967 83.04 341,817 35527,784 91.95 2015-16 3,579,829 3,430,748 95.84 518,2912 35704,259 103.48 (1) sources: Ledgers and 2011-12 Revenue & Collections from Year -End Adjusted Gross TI Collections by CRA reports from Los Angeles County Auditor/Controller. (2) sources: Ledgers and special reports from Los Angeles County Auditor/Controller commencing February 2012 pursuant to An X 126. Source, Los Angeles County Auditor/Controller, Disbursement/Tax Division "CRA Remittance Advice "from Fiscal Years 1999- 00 through 2010-11, and for Fiscal Year 2011-12, November 2011 through January 2012. Appeals As previously discussed under the caption "PROPERTY TAXATION IN CALIFORNIA—Appeals of Assessed Values," property owners may apply for a reduction of their property tax assessment by filing a written application, in form prescribed by the State Board of Equalization, with the appropriate county board of equalization or assessment appeals board. In the County, a property owner desiring to reduce the assessed value of such owner's property in any one year must submit an application to the Appeals Board. Applications for any tax year must be submitted by November 30 of such tax year. The Appeals Board, within two years of each appeal's filing date, will hold a hearing and then either reduce the assessment or confirm the assessment. According to the Fiscal Consultant, as of 1, 2016, there are 49 appeals outstanding for properties in the Project Area, requesting an assessed valuation reduction of $128,991,780. Based on the historical average success rate of 65.08% over the past five years, the reduction in assessed valuation is estimated to be $65,402,955. Such estimated reduction is reflected in the projected debt service coverage figures set forth herein for fiscal year 2017-18. The following tables set forth information regarding historical and pending appeals in the Project Area. The Successor Agency has no way of knowing the outcome of these pending appeals or their effect on the valuation in the Project Area. ' Prior Year Collections include Supplemental Revenue, reductions far taxpayer refunds and revenue from prior years. 37 TABLE 6 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA HISTORICAL & OUTSTANDING ASSESSMENT APPEALS For Appeals Filed From January 1, 2010 Through 124 Number 65.56% Estimated Estimated Reduction Number Number of Number of of Value of Number of on Pending Appeals of Appeals Resolved Successful Average Appeals Appeals Appeals (2017-18 Value Filed Appeals Appeals Reduction Pending Pending Allowed Reduction) 124 75 58 65.56% 49 $12899919780 38 $65,402,955 FY of No. of Parcels Under Opinion of Value Source.: Fiscal Consultant Report. Appeal Value Reduction For fiscal year 2016-17 there are 46 residential properties that have values that were reduced pursuant to Proposition 8 and that have not been sold or fully restored to their inflation adjusted base values. Proposition 8 amended the Revenue and Taxation Code to allow for reduction of a property's taxable value when the property's market value drops below the inflation adjusted base value for that property. Once reduced, the Assessor is required to revalue the property each year and enroll the lesser of the current market value of the property or its original inflation adjusted base value. If a property that has been reduced in value under Proposition 8 is sold, its value is reset based upon the sales price and this new value is no longer subject to annual revaluation under Proposition 8. The 46 single family residential properties in the Project Area that are still enrolled at reduced values are enrolled at values that are a combined $5.0 million below the inflation adjusted base value for these properties. For 2016-17, there were 20 Proposition 8 reduced properties that recovered $558,217 in taxable value. See "APPENDIX F — FISCAL CONSULTANT'S REPORT." Four of the Project Area's top ten taxpayers have pending appeals of their assessed value. Casden Santa Clarita LLC, Lyons Properties Limited, Telfair Corporation and Peter & Barbara Coeler all have assessment appeals pending as shown in table below. TABLE 7 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA OUTSTANDING ASSESSMENT APPEALS AMONG TOP TEN TAXPAYERS Casden Santa Clarita LLC 2014-15 Value Owner Max. Potential FY of No. of Parcels Under Opinion of Value Taxpayer Appeal Under Appeal Appeal Value Reduction Casden Santa Clarita LLC 2014-15 18 $509196,814 $16,254,027 $33,942,787 2015-16 18 16,9041000 8,128,000 8,776,000 2016-17 18 1639045000 753175000 955875000 Lyons Properties Limited 2014-15 1 9,923,399 5,460,000 41463,399 2015-16 1 10121,667 5,954,000 4,167,667 2016-17 1 10,276,022 6,073,000 4,203,022 Telfair Corporation 2014-15 2 8,538,579 5,2649425 3,274,154 Peter & Barbara Coeler 2015-16 1 3,735,781 0 3,735,781 Source. Fiscal Consultant Report. The reductions in value on the Casden Santa Clarita LLC parcels were based on Proposition 8 assessment appeals and the owner's argument that the enrolled values were greater than the actual market value of the parcels. In future years, the value reductions granted must be restored by the Assessor as the market value of the parcels increases. However, there is no way to project any timetable for this value recovery. In the event that these parcels are sold, the Assessor is obligated to enroll the values that are consistent with the sales price. M Change in Assessed Value Due to Sales Since January 1, 2016, the lien date for fiscal year 2016-17, within the Project Area, there were 21 transfers of real property ownership where the sales price can be confirmed. These transfers of ownership represent a combined increase of $6.63 million in assessed value that is expected to be added to the tax rolls for fiscal year 2017-18 and has been incorporated into the projected revenues of the Project Area.. Although new development and change of ownership is expected to continue to occur within the Project Area, no other additional value has been included in the projections of the Pledged Tax Revenues. Residential property sales for the full calendar year 2015 totaled 13 in the Project Area and reflected an increase in median sales price of 19.71% above sales for calendar year 2014. Sales of residential property through July, 2016 reflect a decrease of -9.21% in median sales prices based on only 8 sales. The current median sales price is $369,500. Through July, 2016, the median price of single family homes within the Project Area is currently 12.02% below the peak median price of $420,000 in 2007. See "APPENDIX F — FISCAL CONSULTANT'S REPORT." From January 1, 2016 through November 7, 2016, the City processed 119 building permits within the Project Area with estimated valuations totaling approximately $1,900,000. Once completed, the value of the new construction will be added to the tax rolls. Due to the uncertainty of the completion of these projects, none of this estimated value has been included in the projections of the Pledged Tax Revenues. Historical RPTTF Deposits Tables 8 and 9 below sets forth historical RPTTF deposits for the Project Area. TABLE 8 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA HISTORICAL RPTTF DEPOSITS Fiscal Years 2011-12(3) 2012-13 2013-14 2014-15 2015-16 January RPTTF Depositltl $2,0419347 $0779893 $1,8251812 $1,7839226 $19674,809 June RPTTF Deposit (2) 730,823 1,149,253 19877,961 1,606,889 1,931,701 14,819 129091 Less: Subordinated Tax Sharing Gross RPTTF Deposit $29772,170 $3,127,146 $3,7039773 $393909115 $3,606,510 Less: SB 2557 Admin Fees 52,292 50,515 509554 51,315 489248 Less: County RPTTF Admin. Fees 2,857 19,893 20,311 14,819 129091 Less: Subordinated Tax Sharing 569,957 956,577 740,755 7259584 742,159 Net RPTTF Available $2,1479063 $2,100,162 $2,892,153 $2,5989397 $258049012 n Collections deposited in the RPTTF for allocation in January include June and July collections from the prior fiscal yew and collections for August through December of the current fiscal year. t�1 Collections deposited in the RPTTF for allocations in June include January through May collections for the current fiscal year. t3> Revenues for the January RPTTF Deposits are the total revenue amounts allocated to the Prior Agency through January 31, 2012. Amounts for the June RPTTF Deposits are the total revenues for FY 2011-12 less amounts allocated to the Prior Agency through January 31, 2012. Source. Fiscal Consultant. 39 TABLE 9 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA RPTTF DEPOSITS Bond Year") FY 2014-15 Actual FY 2015-16 Actual FY 2016-17 Projected FY 2017-18 Projected Tax Installment 1st 2nd 1st 2nd tat 2nd tat 2nd ROPS Cycle (2) 14-15B 15-16A 15-16B 16-17A 16-17B 17-18A 17-18-B 18-19A RPTTF Distrib. Dates January 2 June 1 Total January 2 June t Total January 2 June 1 Total January 2 June 1 Total RPTTF Deposits (3) $1,783,226 $1,606,889 $3,390,115 $1,674,809 $1,931,701 $3,606,510 $2,023,695 $1,868,026 $3,891,722 $1,774,050 $1,637,585 $3,411,635 Less: County Admin. Costs4) 59,133 7,002 66,134 53,775 6,565 60,339 51,585 6,500 51,585 45,221 6,500 45,221 Pass Through ) Obligations (4 356,645 368,939 725,584 313,453 428,706 742,159 437,147 403,520 840,667 354,810 327,517 682,327 Total Available for ROPS Obligations $1,367,448 $17230,949 $27598,397 $1,307,582 $1,496,430 $2,804,012 $1,534,963 $1,458,006 $21999,470 $1,374,019 $1,303,568 $2,6847087 ADD Reserved Amts $ 330,000 $ 335,000 $ 330,000 2008 Bonds - Non - Housing 640,544 820,774 1,461,318 629,940 824,391 1,454,331 2008 Bonds - Housing 192,978 342,978 535,956 189,978 344,978 534,956 2016 Refunding Bonds 419,023 1,658,325 2,077,348 1,374,019 710,631 2,084,650 Total Debt Service $ 833,522 $1,163,752 $1,997,274 $ 819,918 $1,169,369 $1,989,287 $ 419,023 $1,658,325 $2,077,348 $1,374,019 $ 710,631 $2,084,650 Remaining Revenue $ 533,926 $ 397,197 $ 601,123 $ 487,664 $ 662,061 $ 814,725 $1,115,940 $ 129,681 $ 922,122 0 $ 592,937 $ 599,437 Overall Coverage (5) 1.6 1.3 1.3 1.6 1.6 1.4 3.7 1.1 1.4 1.0 1.8 1.3 Reserve for Debt Service (6) $ 330,000 $ 335,000 $ 330,000 (1) Bond year ending October 1 for purposes of annual debt service totals. (2) Terms used by the DOF to denote semiannual ROPS periods are based on the fiscal year during which Recognized Obligation Payment Schedule expenditures occur, rather than the fiscal year in which revenues are collected. (3) RPTTF deposits are actual through ROPS 16-17A. Amounts shown for FY 2016-17 and 2017-18 are projected based on 2% growth model. The sum of the RPTTF deposits for 2014-15 and 2015-16 will not equal reported tax increment revenue for such fiscal year due to the fact that the "B" cycle RPTTF deposits include Jane and July collections from the prior fiscal year and the "A" cycle RPTTF deposits do not include collections for Jane and July of the current fiscal year. This is the result of the allocation cycles mandated in the Dissolution Act. Projected RPTTF deposits for 2016-17 and 2017-18 are divided assuming 53% of annual revenue being allocated to the "B" ROPS in January and 47% being allocated to the "A" BOPS in Jane. (4) County Administration and pass through amounts are actual for fiscal years 2014-15 and 2015-16. Amounts shown for fiscal years 2016-17 and 2017-18 are projected with annual projected amounts proportionally divided between the two RPTTF cycles based on the County's allocation schedules. County Administration Costs are assumed to include $6,000 of RPTTF deposits for CAC administration of the RPTTF process. Pass through amounts are actual for fiscal years 2014-15 and 2015-16 and include both senior and subordinate pass through amounts as allocated by the County. Projected pass through amounts for fiscal years 2016-17 and 2017-18 also include both projected senior pass through payments and projected subordinate pass through payments. Ell] (5) Calculated as the sum of Total Available for ROPS Obligations and Add Reserve divided by Total Debt Service. (6) During 2014-15 the Successor Agency reserved $330,000 from the 'B" RPTTF allocation for payment of the next debt service amounts. During 2015-16 the Successor Agency reserved $335,000 from the 'B" RPTTF allocation. For the previously approved 16-17B RPTTF allocation, the Successor Agency has reserved $330,000 for reserved $330,000 for payment of debt service from the 17-18A RPTTF allocation. As part of the approval of the 17-18 ROPS, the Successor Agency will provide for the full 2019 debt service amount within the 17-18 B RPTTF allocation. To the extent that there are insufficient funds available from the 17-18B RPTTF allocation to fully fund the 2019 debt service the unpaid amount will be funded from the 18-19A RPTTF allocation. Source.: Fiscal Consultant. 41 Projected Taxable Valuation and Estimated Debt Service Coverage The Successor Agency has retained HdL Coren & Cone, Diamond Bar, California, to provide projections of taxable valuation and Pledged Tax Revenues from the Project Area. The Successor Agency believes that the assumptions (set forth in the footnotes below and in Appendix F) upon which the projections are based are reasonable; however, some assumptions may not materialize and unanticipated events and circumstances may occur. See the caption "RISK FACTORS." Therefore, actual Pledged Tax Revenues received during the forecast period may vary from the projections, and the variations may be material. Table 10 shows the analysis of projected growth of assessed valuation in the Project Area and the resulting net tax increment revenues over the next twenty-seven years, as estimated by the Fiscal Consultant. Table 11 depicts the projected net tax increment revenue available to pay debt service on the Bonds based on 2% growth of assessed valuation in the Project Area, as estimated by the Fiscal Consultant. See "APPENDIX F — FISCAL CONSULTANT'S REPORT" for more information regarding these projections. Receipt of projected net tax increment revenues in the amounts and at the time projected by the Fiscal Consultant depends on the realization of certain assumptions relating to the net tax increment revenues. See "APPENDIX F — FISCAL CONSULTANT'S REPORT" for a discussion of the assumptions used in preparing the tax revenue projections. Based upon the projected net tax increment revenues, the Successor Agency expects sufficient funds should be available to the Successor Agency to pay principal of and interest on the Bonds. Although the Successor Agency believes that the assumptions utilized by the Fiscal Consultant are reasonable, the Successor Agency provides no assurance that the projected net tax increment revenues will be realized. To the extent that the assumptions are not actually realized, the Successor Agency's ability to timely pay principal and interest on the Bonds may be adversely affected. Key assumptions include: • Tax rates have been estimated based on a 1.0% tax rate; • For determining projected gross tax increment revenues from the Project Area, secured and unsecured real property assessed values are increased at 2% per year; • No deductions were made to the gross tax increment for Tax Sharing Statutory Payments since such Tax Sharing Statutory Payments for the affected taxing agencies are subordinate to the payment of the principal of and interest on the Bonds; • There have not been any deductions to the gross tax increment revenue to recognize the impact of future tax delinquencies; • A reduction of $65,402,955 in total assessed value was estimated for 2017-18 due to pending appeals. Gross tax increment revenue was not reduced to reflect any impact of future appeals or potential refunds which may occur for future appeals; and • Anticipated valuation increase of $6.63 million has been added to the 2017-18 assessment roll due to ownership changes for sales through September 1, 2016. See "APPENDIX F — FISCAL CONSULTANT'S REPORT" for more information regarding these projections. [Remainder ofpage intentionally left blank.] TABLE 10 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA PROJECTED PLEDGED TAX REVENUES (000's omitted) County Actual Subordinated Statutory Fiscal AV Total Estimated Admin Pledged Pass -Through Amounts Net Year Growth Assessed Incremental Gross Tax Fee Tax Tax Rate Value Valuation Increment (1.33%) Revenue Tier I Tier 2 Tier 3 Revenues Base Year $264,106 604,153 340,047 2016-17 Actual 652,162 388,055 3,892 (52) 7840 (778) (62) 0 21999 2017-18 2.00% 604,153 340,047 3,412 (45) 31366 (682) 0 0 21684 2018-19 2.00% 615,265 351,159 3523 (47) 3,476 (705) (0) 0 21771 2019-20 2.00% 626,599 362,493 3,636 (48) 3,588 (727) (19) 0 23841 2020-21 2.00% 638,160 374,054 37752 (50) 31702 (750) (39) 0 21913 2021-22 2.00% 649,953 385,846 31870 (51) 31818 (774) (59) 0 21986 2022-23 2.00% 661,981 397,875 3,990 (53) 31937 (798) (79) 0 31060 2023-24 2.00% 674,249 410,143 41113 (55) 41058 (823) (99) 0 31136 2024-25 2.00% 686,764 422,657 41238 (56) 41182 (848) (120) 0 31214 2025-26 2.00% 699,528 435,422 4,365 (58) 41308 (873) (142) 0 31293 2026-27 2.00% 712,547 4487441 41496 (60) 41436 (899) (164) 0 31373 2027-28 2.00% 725,827 461,721 4,628 (61) 41567 (926) (186) 0 33455 2028-29 2.00% 739,373 475,267 41764 (63) 41701 (953) (209) 0 31539 2029-30 2.00% 753,190 489,083 41902 (65) 41837 (980) (232) 0 33625 2030-31 2.00% 767,282 503,176 57043 (67) 47976 (11009) (256) (16) 3,696 2031-32 2.00% 781,657 5177551 5,187 (69) 5,118 (1,037) (280) (32) 3,769 2032-33 2.00% 796,319 532,213 5,333 (71) 51263 (11067) (305) (48) 3,843 2033-34 2.00% 8113275 547,169 5,483 (73) 5,410 (11097) (330) (65) 3,919 2034-35 2.00% 826,529 562,423 51635 (75) 51561 (11127) (355) (82) 3,996 2035-36 2.00% 842,089 577,983 57791 (77) 5,714 (17158) (381) (100) 4,075 2036-37 2.00% 857,960 593,854 57950 (79) 5,871 (17190) (408) (117) 4,155 2037-38 2.00% 874,148 610,042 6,112 (81) 61031 (1,222) (435) (135) 4,238 2038-39 2.00% 890,660 626,554 61277 (83) 61194 (11255) (463) (154) 4,321 2039-40 2.00% 907,502 643,396 61445 (85) 61360 (11289) (491) (173) 4,407 204041 2.00% 924,681 6607575 67617 (88) 67529 (1,323) (520) (192) 4,494 204142 2.00% 942,204 678,098 6,792 (90) 6,702 (1,358) (550) (212) 4,582 Source: Fiscal Consultant's Report. TABLE 11 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA PROJECTED PLEDGED TAX REVENUES AND DEBT SERVICE COVERAGE Year Ending June 30 Estimated Pledged Tax Revenues Bonds Debt Service t11 Debt Service Coverage Remaining Tax Revenues Estimated Subordinated Pass-thrus 2017 3,840,137 $290739914 1.85x $1,766,223 $ 8409667 2018 3,3669414 290805375 1.62x 1,286,039 665,662 2019 39476,062 2,0789825 1.67x 1,397,237 6879553 2020 395879904 290779425 1.73x 1,510,479 7149697 2021 3,7019982 290749625 1.78x 1,627,357 756,603 2022 3,8189341 290709425 1.84x 1,747,916 799,348 2023 3,9379028 290745825 1.90x 1,862,203 842,948 2024 49058,088 290779425 1.95x 1,980,663 8879419 2025 49181,570 290789225 2.01x 2,103,345 9329780 2026 45307,522 290779225 2.07x 2,230,297 9795049 2027 4,4359992 290749425 2.14x 2,361,567 1,026,242 2028 4,567,032 290749825 2.20x 2,492,207 1,074,380 2029 49700,692 290729575 2.27x 2,628,117 1,1239480 2030 498379026 2,0729925 2.33x 2,764,101 1,1739562 2031 45976,087 290809663 2.39x 2,895,424 1,2405194 2032 5,117,928 290789663 2.46x 3,039,266 1,308,157 2033 5,2629607 290789663 2.53x 3,183,944 1,377,481 2034 5,41Q179 290755400 2.61x 3,334,779 19448,190 2035 59560,703 2,075,675 2.68x 3,485,028 1,5209314 2036 59714,237 290799325 2.75x 3,634,912 1,5939880 2037 5,870,841 290779100 2.83x 3,793,741 1,668,918 2038 6,030,578 290779950 2.90x 3,952,628 1,745,456 2039 6,193,510 290765700 2.98x 4,116,810 19823,525 2040 6,359,700 290689350 3.07x 4,291,350 1,9039156 2041 69529,214 290789075 3.14x 4,451,139 1,9849379 2042 65702,118 290759175 3.23x 4,626,943 2,0675226 (1) For the Bond Year ending October 1. Source: Fiscal Consultant and Financial Advisor Activity Within the Project Area Development activity is occurring within the Project Area. However, due to the speculative and uncertain nature of the scope and completion timelines of these projects, no additional value has been included in the projections of the Pledged Tax Revenues relating to the projects discussed below. There are several projects currently underway within the Project Area. Of note and under construction are the following: (a) a 30 -unit affordable multi -family housing project, (b) the refurbishment of a 16,388 sq. ft. building for a hardware store, post office, and restaurant and (c) a boutique hotel with 47 rooms located on the comer of Railroad and 5th Street with an estimated completion date in 2018. CL! City Block. In 2008, the Prior Agency, in partnership with the City, acquired a block of property within the Project Area. The site encompasses one full City block, directly across the street from the Old Town Newhall Library, bounded by Lyons Avenue to the north, Railroad Avenue to the east, 9th Street to the south, and Main Street to the west. The site was purchased with the intent of a public-private development partnership in the future that was in line with the vision of the Old Town Newhall Specific Plan adopted by the City Council in 2005. The Specific Plan envisioned, among other things, that at the north end of Main Street, a six -screen theater would serve as an "anchor" to a project that, combined with retail space, residential units, and a public parking structure, would create consumer activity and further the arts and entertainment district vision in the area. Old Town -Main, LLC, (OTM) is under contract to purchase approximately 34,325 square feet of the site at fair market value to develop a mixed-use project oriented towards Main Street and Lyons Avenue. OTM will undertake the work to remedy environmental concerns (including three underground storage tanks, one concrete filled clarifier, one vehicle hoist, one vehicle wash sump, one vehicle frame straightener, and asbestos floor tiles associated with prior uses) prior to the close of escrow, the adjustment to the property's value having been applied to the sale price. The proposed mixed-use project will provide an estimated 20,240 square feet of retail space, 46 multi -family units ranging from one bedroom to three bedrooms, and public plaza space. Escrow is anticipated to close in the first quarter of calendar year 2017. Laemmle Theatres is under contract to purchase approximately 12,680 square feet of the site to develop a two-story, 17,688 square -foot art house theater and 2,293 square feet of retail space. The theater is proposed to include seven screens and between 475-525 seats, in addition to public art space. Escrow is anticipated to close in the first quarter of calendar year 2017. The Old Town Newhall Specific Plan calls for two public parking structures, with approximately 400 spaces each, to be built in the Main Street area as a public infrastructure investment to serve the entire business district. The site is to include a City public parking structure currently envisioned to be one level subterranean and five stories above grade. RISK FACTORS The following information should be considered by prospective investors in evaluating the Bonds. However, the following does not purport to be an exhaustive listing of risks and other considerations which may be relevant to investing in the Bonds. In addition, the order in which the following information is presented is not intended to reflect the relative importance of any such risks. Recognized Obligation Payment Schedule The Dissolution Act provides that only those payments listed in a Recognized Obligation Payment Schedule may be made by a successor agency from funds specified in the Recognized Obligation Payment Schedule. Pursuant to Section 34177 of the Dissolution Act, on or before each February 1 commencing February 1, 2016, the Successor Agency shall submit to the Oversight Board and the DOE, a Recognized Obligation Payment Schedule unless, at the option of the Successor Agency and subject to DOF approval and satisfaction of certain other conditions, a Last and Final Recognized Obligation Payment Schedule is filed by the Successor Agency and is approved by the DOF in which event no such periodic filing requirements apply. In instances where a Last and Final Recognized Obligation Payment Schedule is not filed, for each semiannual or annual period, as applicable, the Dissolution Act requires each successor agency to prepare and approve, and submit to the successor agency's oversight board and the DOE for approval, a Recognized Obligation Payment Schedule pursuant to which enforceable obligations (as defined in the Dissolution Act) of the successor agency are listed, together with the source of funds to be used to pay for obligation. Consequently in instances where a Last and Final Recognized Obligation Payment Schedule is not filed, Pledged Tax Revenues will not be withdrawn from the Redevelopment Property Tax Trust Fund by the County Auditor -Controller and remitted to the Successor Agency without a duly approved and effective Recognized Obligation Payment 45 Schedule to pay debt service on the Bonds and to pay other enforceable obligations for each applicable annual period. In the event the Successor Agency were to fail to file a Recognized Obligation Payment Schedule as required, the availability of Pledged Tax Revenues to the Successor Agency could be adversely affected for such period. See "SECURITY FOR THE BONDS—Recognized Obligation Payment Schedules." In instances where a Last and Final Recognized Obligation Payment Schedule is not filed, if a successor agency does not submit a Recognized Obligation Payment Schedule within five business days of the date upon which the Recognized Obligation Payment Schedule is to be used to determine the amount of property tax allocations, the DOE may determine if any amount should be withheld by the county auditor - controller for payments for enforceable obligations from distribution to taxing entities, pending approval of a Recognized Obligation Payment Schedule. The county auditor -controller is then required to distribute the portion of any of the sums withheld as described above to the affected taxing entities in accordance with applicable provisions of the Dissolution Act upon notice by the DOF that a portion of the withheld balances are in excess of the amount of enforceable obligations. The Dissolution Act in accordance with a Recognized Obligation Payment Schedule approved by the DOE. Although the Successor Agency currently has no plans to file a Last and Final Recognized Obligation Payment Schedule nothing in the Indenture prevents it from doing so in the future. For a description of the covenant made by the Successor Agency in the Indenture relating to the obligation to submit Recognized Obligation Payment Schedules on a timely basis, and the Successor Agency's history of submissions of Recognized Obligation Payment Schedules, see "THE DISSOLUTION ACT— Recognized Obligation Payment Schedules." AB 1484 also added provisions to the Dissolution Act implementing certain penalties in the event a successor agency does not timely submit a Recognized Obligation Payment Schedule as required. Specifically, an oversight board approved Recognized Obligation Payment Schedule must be submitted by the successor agency to the county auditor -controller and the DOE, no later than each February 1 for the subsequent annual period. If a successor agency does not submit a Recognized Obligation Payment Schedule by such deadlines, the city or county that established the redevelopment agency will be subject to a civil penalty equal to $10,000 per day for every day the schedule is not submitted to the DOE. Additionally, a successor agency's administrative cost allowance is reduced by 25% if the successor agency does not submit an oversight board - approved Recognized Obligation Payment Schedule within 10 days of the February 1 deadline, with respect to the Recognized Obligation Payment Schedule for the subsequent annual period. Challenges to Dissolution Act Several successor agencies, cities and other entities have filed judicial actions challenging the legality of various provisions of the Dissolution Act. One such challenge is an action filed on August 1, 2012, by Syncora Guarantee Inc. and Syncora Capital Assurance Inc. (collectively, "Syncora") against the State, the State Controller, the State Director of Finance, and the Auditor -Controller of San Bernardino County on his own behalf and as the representative of all other County Auditors in the State (Superior Court of the State of California, County of Sacramento, Case No. 34-2012-80001215). Syncora are monoline financial guaranty insurers domiciled in the State of New York, and as such, provide credit enhancement on bonds issued by state and local governments and do not sell other kinds of insurance such as life, health, or property insurance. Syncora provided bond insurance and other related insurance policies for bonds issued by former California redevelopment agencies. The complaint alleged that the Dissolution Act, and specifically the "Redistribution Provisions" thereof (i.e., California Health and Safety Code sections 34172(d), 34174, 34177(d), 34183(a)(4), and 34188) violate the "contract clauses" of the United States and California Constitutions (U. S. Const. art. 1, §10, cl.1; Cal. Const. art. 1, §9) because they unconstitutionally impair the contracts among the former redevelopment agencies, bondholders and Syncora. The complaint also alleged that the Redistribution Provisions violate the "Takings Clauses" of the United States and California Constitutions (U.S. Const. amend. V; Cal Const. art. 1 ER §19) because they unconstitutionally take and appropriate bondholders' and Syncora's contractual right to critical security mechanisms without just compensation. After hearing by the Sacramento County Superior Court on May 3, 2013, the Superior Court ruled that Syncora's constitutional claims based on contractual impairment were premature. The Superior Court also held that Syncora's takings claims, to the extent based on the same arguments, were also premature. Pursuant to a Judgment stipulated to by the parties, the Superior Court on October 3, 2013, entered its order dismissing the action. The Judgment, however, provides that Syncom preserves its rights to reassert its challenges to the Dissolution Act in the future. The Successor Agency does not guarantee that any reassertion of challenges by Syncom or that the final results of any of the judicial actions brought by others challenging the Dissolution Act will not result in an outcome that may have a material adverse effect on the Successor Agency's ability to timely pay debt service on the Bonds. Reduction in Taxable Value Pledged Tax Revenues allocated to the Redevelopment Property Tax Trust Fund and thereby available to pay principal of and interest on the Bonds are determined by the amount of incremental taxable value in the Redevelopment Project and the current rate or rates at which property in the Redevelopment Project is taxed. The reduction of taxable values of property in the Redevelopment Project caused by economic factors beyond the Successor Agency's control, such as relocation out of the Redevelopment Project by one or more major property owners, sale of property to a non-profit corporation exempt from property taxation, or the complete or partial destruction of such property caused by, among other eventualities or other natural disaster, could cause a reduction in the tax increment available to pay debt service on the Bonds. Such reduction of tax increment available to pay debt service on the Bonds could have an adverse effect on the Successor Agency's ability to make timely payments of principal of and interest on the Bonds; this risk could be increased by the significant concentration of property ownership in the Redevelopment Project. see "THE PROJECT AREA—Largest Taxpayers." As described in greater detail under the heading "PROPERTY TAXATION IN CALIFORNIA – Article XIIIA of the State Constitution," Article XIIIA provides that the full cash value base of real property used in determining taxable value may be adjusted from year to year to reflect the inflation rate, not to exceed a two percent increase for any given year, or may be reduced to reflect a reduction in the consumer price index, comparable local data or any reduction in the event of declining property value caused by damage, destruction or other factors (as described above). Such measure is computed on a calendar year basis. Any resulting reduction in the full cash value base over the term of the Bonds could reduce tax increment available to pay debt service on the Bonds. In addition to the other limitations on, and required application under the Dissolution Act of Pledged Tax Revenues on deposit in the Redevelopment Property Tax Trust Fund, the State electorate or Legislature could adopt a constitutional or legislative property tax reduction with the effect of reducing Pledged Tax Revenues allocated to the Redevelopment Property Tax Trust Fund and available to the Successor Agency. Although the federal and State Constitutions include clauses generally prohibiting the Legislature's impairment of contracts, there are also recognized exceptions to these prohibitions. There is no assurance that the State electorate or Legislature will not at some future time approve additional limitations that could reduce the tax increment available to pay debt service on the Bonds and adversely affect the source of repayment and security of the Bonds.. Risks to Real Estate Market The Successor Agency's ability to make payments on the Bonds will be dependent upon the economic strength of the Project Area. The general economy of the Project Area will be subject to all of the risks generally associated with urban real estate markets. Real estate prices and development may be adversely affected by changes in general economic conditions, fluctuations in the real estate market and interest rates, 47 unexpected increases in development costs, the supply of or demand for competitive properties in such area, the market value of property in the event of sale or foreclosure and other similar factors. Further, real estate development within the Project Area could be adversely affected by limitations of infrastructure or future governmental policies, including governmental policies to restrict or control development. In addition, if there is a decline in the general economy of the Project Area, the owners of property within the Project Area may be less able or less willing to make timely payments of property taxes or may petition for reduced assessed valuation causing a delay or interruption in the receipt of Pledged Tax Revenues by the Successor Agency from the Project Area. See "THE PROJECT AREA – Projected Available Pledged Tax Revenues and Estimated Debt Service Coverage' for a description of the projected debt service coverage on the Bonds. Because assessed values do not necessarily indicate fair market values, the declines in fair market values in recent years may have been even greater than the declines in assessed valuations, although it is also possible that market values could be greater than assessed valuations at any given time. No assurance can be given that the individual parcel owners will pay property taxes in the future or that they will be able to pay such taxes on a timely basis. See the caption "—Bankruptcy and Legal Delays" for a discussion of certain limitations on the City's ability to pursue judicial proceedings with respect to delinquent parcels. Concentration of Property Ownership Based on fiscal year 2016-17 locally assessed taxable valuations, the top ten taxable property owners in the Redevelopment Project represent approximately 20.87% of the total fiscal year 2016-17 taxable value and 35.07% of the fiscal year 2016-17 incremental value. See Table 2 herein. Some of these property owners have pending assessed value appeals respect to their property in the Redevelopment Project. Although the bankruptcy, termination of operations or departure from one of the Redevelopment Project by one of the largest property owners from the Redevelopment Project could adversely impact the availability of Pledged Tax Revenues to pay debt service on the Bonds, the Successor Agency believes any such adverse impact is unlikely in light of the debt service coverage provided by fiscal year 2016-17 available tax increment. See "THE PROJECT AREA—Projected Available Tax Revenues and Estimated Debt Service Coverage" for a description of the projected debt service coverage on the Bonds. Reduction in Inflationary Rate Article XIIIA of the State Constitution provides that the full cash value of real property used in determining taxable value may be adjusted from year to year to reflect the rate of inflation, not to exceed a 2% increase for any given year, or may be reduced to reflect a reduction in the consumer price index or comparable local data. Such measure is computed on a calendar year basis. Because Article XIIIA limits inflationary assessed value adjustments to the lesser of the actual inflationary rate or 2%, there have been years in which the assessed values were adjusted by actual inflationary rates, which were less than 2%. Since Article XIIIA was approved, the annual adjustment for inflation has fallen below the 2% limitation several times, and in Fiscal Year 2010-11, the inflationary value adjustment was negative for the first time at -0.237%. In Fiscal Year 2011-12, the inflationary value adjustment was 0.753%, which also is below the 2% limitation. The State Board of Equalization directed county assessors to use 1.998% as the inflation factor for purposes of preparing the 2015-16 tax roll and 1.525% as the inflation factor for purposes of preparing the 2016-17 tax roll. The Successor Agency is unable to predict if any adjustments to the full cash value of real property within the Project Area, whether an increase or a reduction, will be realized in the future. Development Risks The general economy of the Project Area will be subject to all the risks generally associated with real estate development. Projected development within the Project Area may be subject to unexpected delays, disruptions and changes. Real estate development operations may be adversely affected by changes in general economic conditions, fluctuations in the real estate market and interest rates, unexpected increases in development costs and by other similar factors. Further, real estate development operations within the Project me Area could be adversely affected by future governmental policies, including governmental policies to restrict or control development. If projected development in the Project Area is delayed or halted, the economy of the Project Area could be affected. If such events lead to a decline in assessed values, they could cause a reduction in Pledged Tax Revenues. In addition, if there is a decline in the general economy of the Project Area, the owners of property within the Project Area may be less able or less willing to make timely payments of property taxes, causing a delay or stoppage of the Pledged Tax Revenues received by the Successor Agency from the Project Area. In addition, the insolvency or bankruptcy of one or more large owners of property within the Project Area could delay or impair the receipt of Pledged Tax Revenues by the Successor Agency. The projected Pledged Tax Revenues set forth in Appendix F and under the caption "PLEDGED TAX REVENUES" do not include projections of Pledged Tax Revenues from future development within the Project Area, but do include additional values from transfers of real property ownership where the sales price was confirmed, representing a combined increase of $6.63 million in assessed value that is expected to be added to the 2017-18 tax rolls. Pledged Tax Revenues projections herein reflect a 2% annual growth assumption. There can be no assurance that Pledged Tax Revenues may not increase at different rates. Future Land Use Regulations and Growth Control Initiatives In the past, citizens of a number of local communities in Southern California have placed measures on the ballot designed to limit the issuance of building permits or impose other restrictions to control the rate of future growth in those areas. It is possible that future initiatives could be enacted that could be applicable to the City and have a negative impact on the ability of developers in the Redevelopment Project to complete any existing or proposed development. Bond Owners should assume that any event that significantly affects the ability to develop land in the City could cause the land values within the Redevelopment Project to decrease substantially and could affect the willingness and ability of the owners of land within the Redevelopment Project to pay property taxes when due. There can be no assurance that land development within the City will not be adversely affected by future policies, including, but not limited to, government policies to restrict or control development. Under current State law, it is generally accepted that proposed development is not exempt from future land use regulations until building permits have been issued and substantial work has been performed and substantial liabilities have been incurred in good faith reliance on the permits prior to the adoption of such regulations. Assessment Appeals Property taxable values may be reduced as a result of Proposition 8, which reduces the assessed value of property, or of a successful appeal of the taxable value determined by the County Assessor. An appeal may result in a reduction to the County Assessor's original taxable value and a tax refund to the applicant property owner. A reduction in taxable values within the respective redevelopment project and the refund of taxes which may arise out of successful appeals by property owners will affect the amount of Pledged Tax Revenues. The Successor Agency has in the past experienced reductions in its Pledged Tax Revenues as a result of assessment appeals. The actual impact to tax increment is dependent upon the actual revised value of assessments resulting from values determined by the County Assessment Appeals Board or through litigation and the ultimate timing of successful appeals. For a discussion of historical assessment appeals in the Redevelopment Project and summary information regarding pending and resolved assessment appeals for the Successor Agency, see APPENDIX F—FISCAL CONSULTANT'S REPORT. Certain of the top ten largest property taxpayers in the Redevelopment Project have pending property tax appeals. See "THE PROJECT AREA—Assessment Appeals" and "THE PROJECT AREA— Largest Taxpayers" for a description of pending appeals and the potential impact on Pledged Tax Revenues if the appeals are granted. M Levy and Collection of Taxes The Successor Agency has no independent power to levy or collect property taxes. Any reduction in the tax rate or the implementation of any constitutional or legislative property tax decrease could reduce the Pledged Tax Revenues, and, accordingly, could have an adverse impact on the security for and the ability of the Successor Agency to pay the debt service on the Bonds. Although delinquencies in the payment of property taxes by the owners of land in the Project Area, and the impact of bankruptcy proceedings on the ability of taxing agencies to collect property taxes, could have an adverse effect on the Successor Agency's ability to make timely payments on the Bonds, the Successor Agency believes any such adverse impact is unlikely in light of the debt service coverage provided by fiscal year 2015-16 net tax increment. See Table 5 and also "THE PROJECT AREA— Projected Taxable Valuation and Estimated Debt Service Coverage" for a description of the projected debt service coverage on the Bonds. Bankruptcy and Foreclosure The payment of the property taxes from which Pledged Tax Revenues are derived and the ability of the County to foreclose the lien of a delinquent unpaid tax may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights (such as the Soldiers' and Sailors' Relief Act of 1940 discussed below) or by the laws of the State relating to judicial foreclosure. In addition, the prosecution of a foreclosure action could be delayed due to crowded local court calendars or delays in the legal process. 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 bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors' rights, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases. Although bankruptcy proceedings would not cause the liens to become extinguished, bankruptcy of a property owner could result in a delay in prosecuting superior court foreclosure proceedings because federal bankruptcy laws may provide for an automatic stay of foreclosure and sale of tax sale proceedings. Such delay would increase the possibility of delinquent tax installments not being paid in full and thereby increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds. Moreover, if the value of the subject property is less than the lien of property taxes, such excess could be treated as an unsecured claim by the bankruptcy court. Further, should remedies be exercised under the federal bankruptcy laws, payment of property taxes may be subordinated to bankruptcy law priorities. Thus, certain claims may have priority over property taxes in a bankruptcy proceeding even though they would not have priority outside of a bankruptcy proceeding. In addition, the United States Bankruptcy Code might prevent moneys on deposit in the Redevelopment Obligation Retirement Fund from being applied to pay interest on the Bonds and/or to redeem Bonds if bankruptcy proceedings were brought by or against a landowner and if the court found that such landowner had an interest in such moneys within the meaning of Section 541(a)(1) of the United States Bankruptcy Code. Other laws generally affecting creditors' rights or relating to judicial foreclosure may affect the ability to enforce payment of property taxes or the timing of enforcement thereof. For example, the Soldiers and Sailors Civil Relief Act of 1940 affords protections such as a stay in enforcement of the foreclosure covenant, a six-month period after termination of military service to redeem property sold to enforce the collection of a tax or assessment and a limitation on the interest rate on the delinquent tax or assessment to persons in military service if a court concludes that the ability to pay such taxes or assessments is materially affected by reason of such service. 911 Estimated Revenues In estimating that Pledged Tax Revenues will be sufficient to pay debt service on the Bonds, the Successor Agency has made certain assumptions with regard to present and future assessed valuation in the Project Area, future tax rates and the percentage of taxes collected. The Successor Agency believes these assumptions to be reasonable, but there is no assurance these assumptions will be realized and to the extent that the assessed valuation and the tax rates are less than expected, the Pledged Tax Revenues available to pay debt service on the Bonds will be less than those projected and such reduced Pledged Tax Revenues may be insufficient to provide for the payment of principal of, premium (if any) and interest on the Bonds. Hazardous Substances While governmental taxes, assessments, and charges are a common claim against the value of a taxable parcel, other less common claims may be relevant. One example is a claim with regard to a hazardous substance. The presence of hazardous substances on a parcel may result in a reduction in the value of a parcel. In general, the owners and operators of a taxable parcel may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as "CERCLA" or the "Superfund Act," is the most well-known and widely applicable of these laws, but State and local laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the taxable parcels be affected by a hazardous substance is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of the property that is realizable upon a delinquency and foreclosure. Further, it is possible that liabilities may arise in the future with respect to any of the taxable parcels resulting from the existence, currently, on the parcel of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently, on the parcel of a substance not presently classified as hazardous but which may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of a taxable parcel that is realizable upon a delinquency. Natural Disasters The value of the property in the Project Area in the future can be adversely affected by a variety of additional factors, particularly those which may affect infrastructure and other public improvements and private improvements on property and the continued habitability and enjoyment of such private improvements. Such additional factors include, without limitation, geologic conditions such as earthquakes, topographic conditions such as earth movements, landslides and floods and climatic conditions such as droughts, high winds and wildfires. In the event that one or more of such conditions occur, such occurrence could cause damages of varying seriousness to the land and improvements and the value of property in the Project Area could be diminished in the aftermath of such events. A substantial reduction of the value of such properties and could affect the ability or willingness of the property owners to pay the property taxes. The City, like most communities in California, is an area of unpredictable seismic activity, and therefore, is subject to potentially destructive earthquakes. The City is located in a seismically dynamic region featuring two active fault systems: the San Andreas System which includes the San Andreas and the San 51 Gabriel faults; and a system of faults associated with the transverse ranges including the Sierra Madre and San Fernando faults. As a result of the January 1994 Northridge Earthquake, damage to City facilities included the City Hall which was repaired and retrofitted for approximately $4.5 million. The City has adopted a Seismic Safety Element to the City's General Plan and implemented the Element's recommendation by ordinance. The ordinance specifies development restrictions and requirements for engineering and geologic reports based on the type of project, intensity of use and proximity to the identified hazard zones. City development has generally avoided these areas of highest risk and General Plan policy will prevent development in high risk areas. The occurrence of severe seismic activity in the City could result in substantial damage to property located in the Project Area, and could lead to successful appeals for reduction in assessed values of such property. Such a reduction could result in a decrease in Pledged Tax Revenues. The Project Area is subject to very minimal flood risk and is in the 100 to 500 year flood plain Changes in the Law There can be no assurance that the California electorate will not at some future time adopt initiatives or that the Legislature will not enact legislation that will amend the Dissolution Act, the Redevelopment Law or other laws or the Constitution of the State resulting in a reduction of Pledged Tax Revenues, which could have an adverse effect on the Successor Agency's ability to pay debt service on the Bonds. Additional Obligations The potential for the issuance of Parity Bonds could, in certain circumstances, increase the risks associated with the Successor Agency's payment of debt service on the Bonds in the event of a decrease in the Successor Agency's collection of Pledged Tax Revenues. However, Section 34177.5 of the Dissolution Act provides limited authority for successor agencies to issue bonds, and the Successor Agency's ability to issue Parity Bonds is subject to the requirements of the Dissolution Act as in effect from time to time, as well as the requirements of the Indenture, which generally allow for the issuance of Parity Bonds for refunding purposes only. See the caption "SECURITY FOR THE BONDS—Parity Bonds." Secondary Market There can be no guarantee that there will be a secondary market for the Bonds, or, if a secondary market exists, that the Bonds can be sold for any particular price. Although the Successor Agency has committed to provide certain financial and operating information on an annual basis, there can be no assurance that such information will be available to Bondowners on a timely basis. See the caption "CONCLUDING INFORMATION—Continuing Disclosure" and Appendix D. Any failure to provide annual financial information, if required, does not give rise to monetary damages but merely an action for specific performance. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon the then -prevailing circumstances. Such prices could be substantially different from the original purchase price. No Validation Proceeding Undertaken California Code of Civil Procedure Section 860 authorizes public agencies to institute a process, otherwise known as a `validation proceeding," for purposes of determining the validity of a resolution or any action taken pursuant thereto. Section 860 authorizes a public agency to institute validation proceedings in cases where another statute authorizes its use. Relevant to the Bonds, California Government Code Section 53511 authorizes a local agency to "bring an action to determine the validity of its bonds, warrants, contracts, obligations or evidences of indebtedness." Pursuant to Code of Civil Procedure Section 870, a final 52 favorable judgment issued in a validation proceeding will, notwithstanding any other provision of law, be forever binding and conclusive, as to all matters herein adjudicated or which could have been adjudicated, against all persons: "The judgment shall permanently enjoin the institution by any person of any action or proceeding raising any issue as to which the judgment is binding and conclusive." The Successor Agency has not undertaken or endeavored to undertake any validation proceeding in connection with the issuance of the Bonds. The Successor Agency and Bond Counsel have relied on the provisions of AB 1484 authorizing the issuance of the Bonds and specifying the related deadline for any challenge to the Bonds to be brought. Specifically, Section 34177.5(e) of the Dissolution Act provides that notwithstanding any other law, an action to challenge the issuance of bonds (such as the Bonds), the incurrence of indebtedness, the amendment of an enforceable obligation or the execution of a financing agreement authorized under Section 34177.5, must be brought within 30 days after the date on which the oversight board approves the resolution of the successor agency approving the such financing. The last day of such challenge period with respect to the Bonds and the Oversight Board Resolution was October 15, 2016. It is possible that a lawsuit challenging the Dissolution Act or specific provisions thereof, such as the Syncora Lawsuit described under the caption "LITIGATION" could be successful and that the mechanisms currently provided for under the Dissolution Act to provide for distribution of Pledged Tax Revenues to the Successor Agency for payment on the Bonds could be impeded and result in a delinquency or default in the timely payment of principal of, and interest on, the Bonds. However, the Indenture additionally provides that if, and to the extent, that the provisions of Section 34172 or Section 34183(a)(2) of the Dissolution Act (upon which the distribution of Pledged Tax Revenues to the Successor Agency rely) are invalidated by a final judicial decision, then Pledged Tax Revenues will include all tax revenues allocated to the payment of indebtedness pursuant to Health & Safety Code Section 33670 or such other section as may be in effect at the time providing for the allocation of tax increment revenues in accordance with Article XVI, Section 16 of the State Constitution. Additionally, any action by a court to invalidate provisions of the Dissolution Act required for the timely payment of principal of, and interest on, the Bonds could be subject to the same issues regarding unconstitutional impairment of contracts and unconstitutional taking without just compensation as raised in the Syncom Lawsuit. The Successor Agency believes that the aforementioned considerations would provide some protections against the adverse consequences upon the Successor Agency and the availability of Pledged Tax Revenues for the payment of debt service on the Bonds in the event of successful challenges to the Dissolution Act or portions thereof. However, the Successor Agency does not guarantee that the Syncora Lawsuit or any other lawsuit challenging the Dissolution Act or portions thereof will not result in an outcome that may have a detrimental effect on the Successor Agency's ability to timely pay debt service on the Bonds. IRS Audit of Tax -Exempt Bond Issues The Internal Revenue Service has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the Internal Revenue Service. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of similar municipal obligations). Loss of Tax Exemption As discussed under the caption "TAX MATTERS," in order to maintain the exclusion from gross income for federal income tax purposes of the interest on the Bonds, the Successor Agency has covenanted in the Indenture and the Tax Certificate relating to the Bonds not to take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of interest on the Bonds under Section 103 of the Internal Revenue Code of 1986, as amended. Interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of issuance, as a result of acts or omissions of the Successor Agency subsequent to the issuance of the Bonds in violation of 53 such covenants with respect to the Bonds. Should such an event of taxability occur, the Bonds are not subject to redemption by reason thereof and will remain outstanding until maturity or unless earlier redeemed under the redemption provisions of the Indenture. Bonds Are Limited Obligations Neither the faith and credit nor the taxing power of the Successor Agency (except to the limited extent set forth in the Indenture), the City, the State or any political subdivision of the State is pledged to the payment of the Bonds. The Bonds are special obligations of the Successor Agency; and, except as provided in the Indenture, they are payable solely from Pledged Tax Revenues. Pledged Tax Revenues could be insufficient to pay debt service on the Bonds as a result of delinquencies in the payment of property taxes or the insufficiency of proceeds derived from the sale of land within the Successor Agency following a delinquency in the payment of the applicable property taxes. The Successor Agency has no obligation to pay debt service on the Bonds in the event of insufficient Pledged Tax Revenues, except to the extent that money is available for that purpose in the Redevelopment Obligation Retirement Fund, the Redevelopment Obligation Retirement Fund, the Debt Service Fund or the Reserve Fund. Limitations on Remedies Remedies available to the Owners of the Bonds may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on the Bonds or to preserve the tax-exempt status of the Bonds. Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the Indenture to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or other similar laws affecting generally the enforcement of creditors' rights, by equitable principles and by the exercise of judicial discretion. Additionally, the Bonds are not subject to acceleration in the event of the breach of any covenant or duty under the Indenture. The lack of availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the Owners. Enforceability of the rights and remedies of the Owners of the Bonds, and the obligations incurred by the Successor Agency, may become subject to the United States Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect, equity principles which may limit the specific enforcement under State law of certain remedies, the exercise by the United States of America of the powers delegated to it by the federal Constitution, the reasonable and necessary exercise, in certain exceptional situations, of the police powers inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose and the limitations on remedies against governmental entities in the State. See the caption "—Bankruptcy and Foreclosure." Risks Associated with Bond Insurance In the event that the Successor Agency defaults in the payment of principal of or interest on the Bonds when due, the owners of the Bonds will have a claim under the Policy for such payments. See the caption "BOND INSURANCE." In the event that the Insurer becomes obligated to make payments with respect to the Bonds, no assurance can be given that such event will not adversely affect the market for the Bonds. In the event that the Insurer is unable to make payment of principal of and interest on the Bonds when due under the Policy, the Bonds will be payable solely from Pledged Tax Revenues and amounts held in certain funds and accounts established under the Indenture, as described under the caption "SECURITY FOR THE BONDS." The long-term rating on the Bonds is dependent in part on the financial strength of the Insurer and its claims -paying ability. The Insurer's financial strength and claims -paying ability are predicated upon a number M of factors which could change over time. If the long-term ratings of the Insurer are lowered, such event could adversely affect the market for the Bonds. See the caption "CONCLUDING INFORMATION—Ratings." Neither the Successor Agency nor the Underwriter have made an independent investigation of the claims -paying ability of the Insurer and no assurance or representation regarding the financial strength or projected financial strength of the Insurer is being made by the Successor Agency or the Underwriters in this Official Statement. Therefore, when making an investment decision with respect to the Bonds, potential investors should carefully consider the ability of the Successor Agency to pay principal and interest on the Bonds, assuming that the Policy is not available for that purpose, and the claims -paying ability of the Insurer through final maturity of the Bonds. So long as the Policy remains in effect and the Insurer is not in default of its obligations thereunder, the Insurer has certain notice, consent and other rights under the Indenture and will have the right to control all remedies for default under the Indenture. The Insurer is not required to obtain the consent of the Owners with respect to the exercise of remedies. See the caption "THE INDENTURE—Bond Insurance." TAX MATTERS Tax Exemption. The Internal Revenue Code of 1986 (the "Code") imposes certain requirements that must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Bonds to be included in the gross income of the owners thereof for federal income tax purposes retroactive to the date of issuance of the Bonds. The Successor Agency has covenanted to maintain the exclusion of the interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. In the opinion of Norton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel, under existing statutes, regulations, rulings and court decisions, interest on the Bonds is exempt from personal income taxes of the State of California and, assuming compliance with the covenants mentioned herein, interest on the Bonds is excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. It is the further opinion of Bond Counsel that, under existing statutes, regulations, rulings and court decisions, the Bonds are not "specified private activity bonds" within the meaning of section 57(a)(5) of the Code and, therefore, that interest on the Bonds will not be treated as an item of tax preference for purposes of computing the alternative minimum tax imposed by section 55 of the Code. Receipt or accrual of interest on Bonds owned by a corporation may affect the computation of the alternative minimum taxable income. A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by section 55 of the Code will be computed. Pursuant to the Indenture and in the Tax Certificate Pertaining to Arbitrage and Other Matters under Sections 103 and 141-150 of the Internal Revenue Code of 1986, to be delivered by the Successor Agency in connection with the issuance of the Bonds, the Successor Agency will make representations relevant to the determination of, and will make certain covenants regarding or affecting, the exclusion pursuant to section 103(a) of the Code of interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. In reaching its opinions described in the immediately preceding paragraph, Bond Counsel will assume the accuracy of such representations and the present and future compliance by the Successor Agency with its covenants. Except as stated in this section above, Bond Counsel will express no opinion as to any federal or state tax consequence of the receipt of interest on, or the ownership or disposition of, the Bonds. Furthermore, Bond Counsel will express no opinion as to any federal, state or local tax law consequence with respect to the Bonds, or the interest thereon, if any action is taken with respect to the Bonds or the proceeds thereof predicated or permitted upon the advice or approval of other counsel. Bond Counsel has not undertaken to 55 advise in the future whether any events after the date of issuance of the Bonds may affect the tax status of interest on the Bonds or the tax consequences of the ownership of the Bonds. Bond Counsel's opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the representations and covenants of the Successor Agency described above. No ruling has been sought from the Internal Revenue Service (the "Service") with respect to the matters addressed in the opinion of Bond Counsel, and Bond Counsel's opinion is not binding on the Service. The Service has an ongoing program of examining the tax-exempt status of the interest on municipal obligations. If an audit of the Bonds is commenced, it is likely that under current procedures the Service would treat the Successor Agency as the "taxpayer" and that the owners would have no right to participate in the examination process. In responding to or defending an examination of the tax-exempt status of the interest on the Bonds, the Successor Agency may have different or conflicting interests from the owners. Public awareness of any such examination of the Bonds could adversely affect the value and liquidity of the Bonds during the pendency of the examination, regardless of its ultimate outcome. No assurance can be given that future legislation, if enacted into law, will not contain provisions that could directly or indirectly reduce the benefit of the exemption of interest on the Bonds from personal income taxation by the State or of the exclusion of the interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. A copy of the proposed form of opinion of Bond Counsel relating to the Bonds is attached hereto as Appendix B. Tax Accounting Treatment of Bond Premium and Original Issue Discount. To the extent that a purchaser of a Bond acquires that Bond at a price in excess of its "stated redemption price at maturity" (within the meaning of section 1273(a)(2) of the Code), such excess will constitute "bond premium" under the Code. Section 171 of the Code, and the Treasury Regulations promulgated thereunder, provide generally that bond premium on a tax-exempt obligation must be amortized over the remaining term of the obligation (or a shorter period in the case of certain callable obligations); the amount of premium so amortized will reduce the owner's basis in such obligation for federal income tax purposes, but such amortized premium will not be deductible for federal income tax purposes. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss) to be recognized for federal income tax purposes upon a sale or other taxable disposition of the obligation. The amount of premium that is amortizable each year by a purchaser is determined by using such purchaser's yield to maturity. The rate and timing of the amortization of the bond premium and the corresponding basis reduction may result in an owner realizing a taxable gain when its Bond is sold or disposed of for an amount equal to or in some circumstances even less than the original cost of the Bond to the owner. The excess, if any, of the stated redemption price at maturity of Bonds of a maturity over the initial offering price to the public of the Bonds of that maturity is "original issue discount." Original issue discount accruing on a Bond is treated as interest excluded from the gross income of the owner thereof for federal income tax purposes and is exempt from California personal income tax to the same extent as would be stated interest on that Bond. Original issue discount on any Bond purchased at such initial offering price and pursuant to such initial offering will accrue on a semiannual basis over the term of the Bond on the basis of a constant yield method and, within each semiannual period, will accrue on a ratable daily basis. The amount of original issue discount on such a Bond accruing during each period is added to the adjusted basis of such Bond to determine taxable gain upon disposition (including sale, redemption or payment on maturity) of such Bond. The Code includes certain provisions relating to the accrual of original issue discount in the case of purchasers of Bonds who purchase such Bonds other than at the initial offering price and pursuant to the initial offering Persons considering the purchase of Bonds with original issue discount or initial bond premium should consult with their own tax advisors with respect to the determination of original issue discount or me amortizable bond premium on such Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of such Bonds. Bond Counsel will express no opinion regarding any such tax accounting matters. Other Tax Consequences. Although interest on the Bonds may be exempt from California personal income tax and excluded from the gross income of the owners thereof for federal income tax purposes, an owner's federal, state or local tax liability may be otherwise affected by the ownership or disposition of the Bonds. The nature and extent of these other tax consequences will depend upon the owner's other items of income or deduction. Without limiting the generality of the foregoing, prospective purchasers of the Bonds should be aware that (i) section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Bonds and the Code contains additional limitations on interest deductions applicable to financial institutions that own tax-exempt obligations (such as the Bonds), (ii) with respect to insurance companies subject to the tax imposed by section 831 of the Code, section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15% of the sum of certain items, including interest on the Bonds, (iii) interest on the Bonds earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by section 884 of the Code, (iv) passive investment income, including interest on the Bonds, may be subject to federal income taxation under section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year if greater than 25% of the gross receipts of such Subchapter S corporation is passive investment income, (v) section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in determining the taxability of such benefits, receipts or accruals of interest on the Bonds and (vi) under section 32(i) of the Code, receipt of investment income, including interest on the Bonds, may disqualify the recipient thereof from obtaining the earned income credit. Bond Counsel will express no opinion regarding any such other tax consequence. CONCLUDING INFORMATION Underwriting The Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated and Hilltop Securities, Inc., as Co -underwriters (the "Underwriters") pursuant to a Bond Purchase Agreement, dated December _ 2016 (the "Purchase Agreement"), by and between the Underwriters and the Successor Agency. The Underwriters have agreed to purchase the Bonds at a price of $ (being the aggregate principal amount thereof, plus/less a net original issue premium/discount of $ and less an Underwriters' discount of $. The Purchase Agreement provides that the Underwriters will purchase all of the Bonds if any are purchased. The obligation to make such purchase is subject to certain terms and conditions set forth in the Purchase Agreement, the approval of certain legal matters by counsel and certain other conditions. The initial public offering prices stated on the inside front cover page of this Official Statement may be changed from time to time by the Underwriters. The Underwriters may offer and sell the Bonds to certain dealers (including dealers depositing Bonds into investment trusts), dealer banks, banks acting as agents and others at prices lower than said public offering prices. Verification of Mathematical Computations The Verification Agent, an independent accountant, upon delivery of the Bonds, will deliver a report on the mathematical accuracy of certain computations, contained in schedules provided to them that were prepared by the Successor Agency, relating to the sufficiency of the cash and/or the maturing principal of and interest on the escrow securities to be deposited in the respective Escrow Funds, to pay, when due, the principal, whether at maturity or upon prior redemption, interest and redemption premium with respect to the 2008 Housing Bonds and the 2008 Non -Housing Bonds. 57 The Verification Agent's report will include the statement that the scope of its engagement is limited to verifying the mathematical accuracy of the computations contained in such schedules provided to it, and that it has no obligation to update its report because of events occurring, or date or information coming to its attention, subsequent to the date of its report. Legal Opinion The opinion of Norton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel, approving the validity of the Bonds and stating that interest on the Bonds is excluded from gross income for federal income tax purposes and that such interest is also exempt from personal income taxes of the State of California under present State income tax laws, will be furnished to the purchaser at the time of delivery of the Bonds at the expense of the Successor Agency. A copy of the proposed form of Bond Counsel's final approving opinion with respect to the Bonds is attached hereto as Appendix B. The legal opinion relates only to the legality of the Bonds and is not intended to be, nor is it to be interpreted or relied upon, as a disclosure document or an express or implied recommendation as to the investment quality of the Bonds. In addition, certain legal matters will be passed on for the Successor Agency by Norton Rose Fulbright US LLP, Los Angeles, California, as Disclosure Counsel, for the Underwriters by Stradling Yocca Carlson & Rauth, Newport Beach, California, as Underwriters' Counsel, for the Trustee by its counsel and for the Insurer by its counsel. Litigation There is no action, suit or proceeding known to the Successor Agency to be pending and notice of which has been served upon and received by the Successor Agency, or threatened, restraining or enjoining the execution or delivery of the Bonds or the Indenture or in any way contesting or affecting the validity of the foregoing or any proceedings of the Successor Agency taken with respect to any of the foregoing. See, however, RISK FACTORS -Challenges to Dissolution Act." Legality for Investment in California The Redevelopment Law provides that obligations authorized and issued under the Redevelopment Law will be legal investments for all banks, trust companies and savings banks, insurance companies and various other financial institutions, as well as for trust funds. The Bonds are also authorized security for public deposits under the Redevelopment Law. The Superintendent of Banks of the State of California has previously ruled that obligations of a redevelopment agency are eligible for savings bank investment in California. Ratings S&P has assigned an underlying raring of "_" to the Bonds. S&P is also expected to assign the Bonds the raring of "_" ( outlook) based upon the delivery of the Policy by the Insurer at the time of issuance of the Bonds. There is no assurance that any credit raring given to the Bonds will be maintained for any period of time or that the ratings may not be lowered or withdrawn entirely by S&P if, in the judgment of S&P, circumstances so warrant. Any downward revision or withdrawal of the ratings may have an adverse effect on the market price of the Bonds. The ratings reflect only the views of S&P and an explanation of the significance of such ratings may be obtained from S&P. The Successor Agency makes no representation as to the Insurer's creditworthiness and no representation that the Insurer's credit raring will be maintained in the future. S&P has previously taken action W6 to downgrade the ratings of certain municipal bond insurers and has published various releases outlining the processes that S&P intends to follow in evaluating the ratings of financial guarantors. For some financial guarantors, the result of such evaluations could be a rating affirmation, a change in rating outlook, a review for downgrade or a downgrade. Potential investors are directed to S&P for additional information on S&P's evaluations of the financial guaranty industry and individual financial guarantors, including the Insurer. See the caption `BOND INSURANCE" for further information relating to the Insurer. Continuing Disclosure The Successor Agency has agreed in a Continuing Disclosure Certificate (the "Continuing Disclosure Certificate") entered into with Digital Assurance Corporation, as dissemination agent, for the benefit of the holders and Beneficial Owners of the Bonds to provide certain financial information and operating data relating to the Successor Agency by February 15 following the end of the Successor Agency's Fiscal Year (currently its Fiscal Year ends on June 30) (the "Annual Report"), commencing with the report for the Fiscal Year ending June 30, 2016, and to provide notices of the occurrence of certain enumerated events. The form of the Continuing Disclosure Certificate is set forth in Appendix D. The Annual Report and the notices of enumerated events will be filed by the Successor Agency with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access System for municipal securities disclosures, maintained on the Internet at http://emma.msrb.org/. The specific nature of the information to be contained in the Annual Report and the notices of enumerated events are set forth in Appendix D. These covenants have been made in order to assist the Underwriter in complying with Rule 150-12(b)(5) promulgated under the Securities Exchange Act of 1934 ("Rule 15c2-12"). Other than as described in the following paragraph, the Successor Agency has not failed in the previous five years to comply in any material respect with any previous undertaking to provide annual reports or notices of certain events in accordance with Rule 150-12. As an obligated parry under the Rule, the City or related entity, including the Successor Agency, is, or was during the past five years, responsible for providing continuing disclosure with respect to the following seven bond issues: 1. $169485,000 City of Santa Clarita Community Facilities District No. 2002-1 (Valencia Town Center) Special Tax Bonds, Series 2012, dated October 12, 2012 (the "2012 CFD Bonds"). 2. $8,850,000 City of Santa Clarita Redevelopment Agency Housing Set -Aside Tax Allocation Bonds, Series 2008, dated June 12, 2008 (the "Housing RDA Bonds"). 3. $29,860,000 City of Santa Clarita Redevelopment Agency Tax Allocation Bonds, Series 2008, dated June 12, 2008 (the "RDA Bonds"). 4. $15,525,000 City of Santa Clarita Certificates of Participation (Open Space and Parkland Acquisition Program) 2007 Series (the "2007 Certificates". 5. $13,785,000 Santa Clarita Public Financing Authority Lease Revenue Bonds, Series 2007 (Golden Valley Road) (the "2007 Bonds") 6. $17,700,000 City of Santa Clarita Refunding Certificates of Participation (Public Facilities — Civic Center), 2005 Series, dated July 12, 2005 (the "2005 Certificates"). 7. $1793709000 City of Santa Clarita Community Facilities District No. 2002-1 (Valencia Town Center) Special Tax Bonds, dated October 29, 2002 (the 6'2002 CFD Bonds"). M In conjunction with the delivery of the Bonds, the City engaged the services of Digital Assurance Certification LLC ("DAC") to conduct a continuing disclosure compliance review with respect to the above - referenced bond issues. During the course of DAC's review, it was determined that during the past five years, there were several instances of non-compliance by the City with the requirements of certain undertakings due primarily to the City failing to provide unaudited financial information when the audited financial statements (AFS) were not yet available, failing to timely link AFS already filed for one bond issue with all applicable bond issues, and failing to provide specific information within certain Annual Reports. Specifically: 1. With respect to the 2012 CFD Bonds, the City for the fiscal years (FY) 2012, 2013 and 2015 was late in filing the audited financial statements (AFS) by 31, 26, and 14 days, respectively, due to the failure to file the unaudited versions of the AFS when the audited version was unavailable prior to applicable deadlines, and the Annual Report that was posted to EMMA failed to include certain required information for FY 2013, which information was subsequently provided in 2014 (303 days late). 2. With respect to the Housing RDA Bonds and the RDA Bonds, the Annual Report that was posted to EMMA failed to include certain required items for FYs 2011, 2012 and 2013, which information was subsequently provided and corrected in 2014 (998, 632 and 267 days late), material event notices were not timely filed for an underlying rating downgrade in 2015, and the Agency for FY 2011 was late in filing the AFS by 19 days due to failing to file the unaudited versions of the AFS when the audited version was unavailable prior to applicable deadline; 3. Additionally, with respect to the RDA Bonds, the Agency for FY 2012 and 2015 was late in filing the AFS by 31 and 22 days, respectively, and the Agency failed to file the AFS in 2013, each due to the failure to link the AFS already filed with EMMA for the Housing RDA Bonds to the RDA Bonds. 4. With respect to the 2007 Certificates, the Annual Report that was posted to EMMA failed to include certain required items for FYs 2011 and 2013, which information was subsequently provided in 2014 (942 and 211 days late), the material event notice was not timely filed for an underlying rating upgrade in 2012, and the City for FY 2011 was late in filing the AFS by 19 days due to failing to file the unaudited versions of the AFS when the audited version was unavailable prior to applicable deadline. 5. With respect to 2007 Bonds, the material event notice was not timely filed for an underlying rating upgrade in 2012, and the City for FY 2011 was late in filing the AFS and Annual Report by 24 days due to failing to file the unaudited versions of the AFS when the audited version was unavailable prior to applicable deadline. 6. With respect to the 2005 Certificates, material event notices were not timely filed for bond insurer rating downgrades in 2011 and 2013 and bond insurer upgrades in 2013 and 2014, nor an underlying rating upgrade in 2012, and the City for FY 2011 was late in filing the AFS and Annual Report by 19 days due to failing to file the unaudited versions of the AFS when the audited version was unavailable prior to applicable deadline. 7. With respect to the 2002 CFD Bonds, the City for the fiscal year 2011 was late in filing the AFS by 51 days due to the failure to file the unaudited versions of the AFS when the audited version was unavailable prior to applicable deadline. The City recently undertook a review of its adopted Fiscal Policies and has revised its Fiscal Policies to include a formal continuing disclosure policy that will help assure compliance with existing and future 1' continuing disclosure undertakings through creation of a disclosure practices working group including a City staff disclosure coordinator. As previously described herein, the Prior Agency was statutorily dissolved on February 1, 2012, and the Agency commenced operations as of the same date. Therefore, the Prior Agency operated for only seven months in Fiscal Year 2011-12, and the Successor Agency operated for the last five months of Fiscal Year 2011-12. Commencing with the Comprehensive Annual Financial Report (i.e., audited financial statements) of the City for Fiscal Year 2011-12, the activities of the Successor Agency are reported as a fiduciary trust fund as part of the City's Comprehensive Annual Financial Report, which is in accordance with guidance issued by the DOE and available on its website as of February 4, 2013, interpreting Section 34177(n) of the California Health and Safety Code concerning certain successor agency post audit obligations. The final seven months of activity of the Prior Agency prior to its February 1, 2012 dissolution was reported in the governmental funds of the City in the Comprehensive Annual Financial Report for Fiscal Year 2011-12. Pursuant to the Dissolution Act, the housing assets, housing obligations, and housing activities of the Prior Agency have been transferred to the City as the Successor Housing Authority after the dissolution date. Financial Advisor The Successor Agency has retained C.M. de Crinis & Co., Inc. (the "Financial Advisor"), as financial advisor in connection with the authorization, issuance, sale and delivery of the Bonds. The Financial Advisor is an independent financial advisory furn and is not engaged in the business of underwriting, trading or distributing municipal or other public securities. The Financial Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in the Official Statement or any of the other legal documents. Miscellaneous All of the preceding summaries of the Indenture, the Bond Law, the Dissolution Act, the Redevelopment Law, other applicable legislation, the Redevelopment Plan for the Project Area, agreements and other documents are made subject to the provisions of such documents respectively and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the Successor Agency for further information in connection therewith. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] ;7! This Official Statement does not constitute a contract with the purchasers of the Bonds. Any statements made in this Official Statement involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Agency. The execution and delivery of this Official Statement has been duly authorized by the Successor SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA By: S-1 Executive Director APPENDIX A SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE I:IM1 APPENDIX B FORM OF BOND COUNSEL OPINION Upon issuance of the Bonds, Norton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel, proposes to render its final approving opinion with respect to the Bonds in substantially the following form: December , 2016 $ Successor Agency to the Redevelopment Agency of the City of Santa Clarita Tax Allocation Refunding Bonds, Series 2016 Ladies and Gentlemen We have acted as Bond Counsel to the Successor Agency to the Redevelopment Agency of the City of Santa Clarita (the "Successor Agency"), in connection with the issuance of its $ Successor Agency to the Redevelopment Agency of the City of Santa Clarita Tax Allocation Refunding Bonds, Series 2016 (the "Bonds"). The Bonds are being issued under the provisions of Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code, and pursuant to an Indenture of Trust, dated as of December 1, 2016 (the "Indenture"), by and between the Successor Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). The Bonds are limited obligations of the Successor Agency secured under the Indenture by a pledge of Pledged Tax Revenues and certain other moneys held under the Indenture. In our capacity as Bond Counsel, we have reviewed the Indenture, certifications of the Successor Agency, the Trustee and others, opinions of counsel to the Successor Agency and the Trustee, and such other documents, opinions and instruments as we deemed necessary to render the opinions set forth herein. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Indenture. Based upon the foregoing, we are of the opinion that 1. The Bonds constitute valid and binding limited obligations of the Successor Agency as provided in the Indenture, and are entitled to the benefits of the Indenture. 2. The Indenture has been duly and validly authorized, executed and delivered by the Successor Agency and, assuming the enforceability thereof against the Trustee, constitutes the legally valid and binding obligation of the Successor Agency, enforceable against the Successor Agency in accordance with its terms. The Indenture creates a valid pledge, to secure the payment of principal of and interest on the Bonds, of the Pledged Tax Revenues and certain other amounts held by the Trustee in certain funds and accounts established pursuant to the Indenture, subject to the provisions of the Indenture permitting the application thereof for other purposes and on the terms and conditions set forth therein. 3. Under existing law, and assuming compliance with the covenants mentioned below, interest on the Bonds is excluded pursuant to section 103(a) of the Internal Revenue Code of 1986 (the "Code") from the gross income of the owners thereof for federal income tax purposes. We are further of the opinion that under existing law, the Bonds are not "specified private activity bonds" within the meaning of section 57(a)(5) of the Code and, therefore, that interest on the Bonds will not be treated as an item of tax preference for purposes of computing the alternative minimum tax imposed by I �I section 55 of the Code; however, receipt or accrual of interest on Bonds owned by a corporation may affect the computation of its alternative minimum taxable income. A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by section 55 of the Code is computed. We are further of the opinion that interest on the Bonds is exempt from personal income taxes of the State of California under present state law. The Code imposes certain requirements that must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Non-compliance with such requirements could cause the interest on the Bonds to fail to be excluded from the gross income of the owners thereof retroactive to the date of issuance of the Bonds. Pursuant to the Indenture, and in the Tax Certificate Pertaining to Arbitrage and Other Matters under Sections 103 and 141-150 of the Internal Revenue Code of 1986 being delivered by the Successor Agency in connection with the issuance of the Bonds, the Successor Agency is making representations relevant to the determination of, and is undertaking certain covenants regarding or affecting, the exclusion of interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. In reaching our opinions described in the immediately preceding paragraph, we have assumed the accuracy of such representations and the present and future compliance by the Successor Agency with its covenants. Further, except as stated in the preceding paragraph, we express no opinion as to any federal or state tax consequence of the receipt of interest on, or the ownership or disposition of, the Bonds. Furthermore, we express no opinion as to any federal, state or local tax law consequence with respect to the Bonds, or the interest thereon, if any action is taken with respect to the Bonds or the proceeds thereof predicated or permitted upon the advice or approval of other counsel. The opinions expressed in paragraphs 1 and 2 above are qualified to the extent the enforceability of the Bonds and the Indenture may be limited by applicable bankruptcy, insolvency, debt adjustment, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally or as to the availability of any particular remedy. The enforceability of the Bonds and the Indenture is subject to the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, to the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, and to the limitations on legal remedies against governmental entities in California. Our opinions are based on existing law, which is subject to change. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any facts or circumstances that may hereafter come to our attention or to reflect any changes in any law that may hereafter occur or become effective. Moreover, our opinions are not a guarantee of result and are not binding on the Internal Revenue Service; rather, such opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations and covenants referenced above. No opinion is expressed herein on the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds. Respectfully submitted, I ba APPENDIX C BOOK -ENTRY ONLY SYSTEM The information in this Appendix C concerning The Depository Trust Company ("DTC'), New York, New York, and DTC's book -entry system has been obtained from DTC and the Successor Agency takes no responsibilityfor the completeness or accuracy thereof. The Successor Agency cannot and does not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners: (a) payments of interest, principal or premium, if any, with respect to the Bonds; (b) certificates representing ownership interest in or other confirmation or ownership interest in the Bonds; or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current `Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post - trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's raring of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in tum to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book -entry system for the Bonds is discontinued. C-1 To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Successor Agency as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal, premium (if any), and interest payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the Successor Agency or the Trustee, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Trustee, or the Successor Agency, subject to any statutory or regulatory requirements as may be in effect from time to time. Principal, premium (if any), and interest payments with respect to the Bonds to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Successor Agency or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Successor Agency or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, certificates representing the Bonds are required to be printed and delivered. The Successor Agency may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, representing the Bonds will be printed and delivered to DTC in accordance with the provisions of the Indenture. C-2 The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the Successor Agency believes to be reliable, but the Successor Agency takes no responsibility for the accuracy thereof. C-3 APPENDIX D Upon the issuance of the Bonds, the Successor Agency proposes to enter into a Continuing Disclosure Certificate in substantially the following form: FORM OF CONTINUING DISCLOSURE CERTIFICATE This Continuing Disclosure Certificate (this "Disclosure Certificate"), dated December _, 2016, is executed and delivered by the Successor Agency to the Redevelopment Agency of the City of Santa Clarita (the "Successor Agency"), for the benefit of the Holders (hereinafter defined) of the Bonds (hereinafter defined) in order to provide certain continuing disclosure with respect to the Bonds in accordance with Rule 15c2-12 of the United States Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time (the "Rule"). SECTION 1. Definitions. Capitalized terms not otherwise defined in this Disclosure Certificate shall have the meaning assigned in the Rule or, to the extent not in conflict with the Rule, in the Official Statement (hereinafter defined). The capitalized terns shall have the following meanings: "Annual Report" means an Annual Report described in and consistent with Section 3 of this Disclosure Certificate. "Annual Filing Date" means the date, set in Section 2(a) and Section 2(f), by which the Annual Report is to be filed with the MSRB. "Annual Financial Information" means annual financial information as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(a) of this Disclosure Certificate. "Audited Financial Statements" means the financial statements (if any) of the City for the prior fiscal year, certified by an independent auditor as prepared in accordance with generally accepted accounting principles or otherwise, as such term is used in paragraph (b)(5)(i) of the Rule and specified in Section 3(b) of this Disclosure Certificate. "Bonds" means $[principal amount] Successor Agency to the Redevelopment Agency of the City of Santa Clarita Tax Allocation Refunding Bonds, Series 2016. "Certification" means a written certification of compliance signed by the Disclosure Representative stating that the Annual Report, Audited Financial Statements, Notice Event notice, or Failure to File Event notice delivered to the Disclosure Dissemination Agent is the Annual Report, Audited Financial Statements, Notice Event notice, or Failure to File Event notice, required to be submitted to the MSRB under this Disclosure Certificate. A Certification shall accompany each such document submitted to the Disclosure Dissemination Agent by the City and include the full name of the Bonds and the 9 -digit CUSIP numbers for all Bonds to which the document applies. "Disclosure Representative" means the Treasurer of the Successor Agency or his or her designee, or such other person as the Successor Agency shall designate in writing to the Disclosure Dissemination Agent from time to time as the person responsible for providing Information to the Disclosure Dissemination Agent. 11131 "Disclosure Dissemination Agent" shall mean Digital Assurance Certification LLC, or any successor Dissemination Agent designated in writing by the District and which has filed with the District a written acceptance of such designation. "Failure to File Event" means the Successor Agency's failure to file an Annual Report on or before the Annual Filing Date. "Force Majeure Event" means: (i) acts of God, war, or terrorist action; (ii) failure or shut -down of the Electronic Municipal Market Access system maintained by the MSRB; or (iii) to the extent beyond the Disclosure Dissemination Agent's reasonable control, interruptions in telecommunications or utilities services, failure, malfunction or error of any telecommunications, computer or other electrical, mechanical or technological application, service or system, computer virus, interruptions in Internet service or telephone service (including due to a virus, electrical delivery problem or similar occurrence) that affect Internet users generally, or in the local area in which the Disclosure Dissemination Agent or the MSRB is located, or acts of any government, regulatory or any other competent authority the effect of which is to prohibit the Disclosure Dissemination Agent from performance of its obligations under this Disclosure Certificate. "Holder" means any person (i) having the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries) or (ii) treated as the owner of any Bonds for federal income tax purposes. "Information" means, collectively, the Annual Reports, the Audited Financial Statements (if any), the Notice Event notices, and the Failure to File Event notices. "MSRB" means the Municipal Securities Rulemaking Board established pursuant to Section 1513(b)(1) of the Securities Exchange Act of 1934 or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Marketplace Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org. "Notice Event" means any of the events enumerated in paragraph (b)(5)(i)(C) of the Rule and listed in Section 4(a) of this Disclosure Certificate. "Obligated Person" means any person, including the Successor Agency, who is either generally or through an enterprise, fund, or account of such person committed by contract or other arrangement to support payment of all, or part of the obligations on the Bonds (other than providers of municipal bond insurance, letters of credit, or other liquidity facilities). With respect to the Bonds, only the Successor Agency constitutes the Obligated Person. "Official Statement" means that Official Statement, dated November _, 2016, prepared by the Successor Agency in connection with the Bonds. "Trustee" means The Bank of New York Mellon Trust Company, N.A., as trustee under the Indenture, dated as of December 1, 2016, by and between the Successor Agency and the Trustee, as amended and supplemented, providing for the issuance of the Bonds. SECTION 2. Provision of Annual Reports and Other Disclosures. D-2 (a) The Successor Agency shall provide, annually, an electronic copy of the Annual Report and Certification to the Disclosure Dissemination Agent, together with a copy for the Trustee, not later than the Annual Filing Date. Promptly upon receipt of an electronic copy of the Annual Report and the Certification, the Disclosure Dissemination Agent shall provide an Annual Report to the MSRB no later than March 1 following the end of each fiscal year, commencing with the report for Fiscal Year 2016-17. Such date and each anniversary thereof is the Annual Filing Date. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 3 of this Disclosure Certificate. (b) If on the fifteenth (15th) day prior to the Annual Filing Date, the Disclosure Dissemination Agent has not received a copy of the Annual Report and Certification, the Disclosure Dissemination Agent shall contact the Disclosure Representative by telephone and in writing (which may be by e-mail) to remind the Successor Agency of its undertaking to provide the Annual Report pursuant to Section 2(a). Upon such reminder, the Disclosure Representative shall either (i) provide the Disclosure Dissemination Agent with an electronic copy of the Annual Report and the Certification no later than two (2) business days prior to the Annual Filing Date, or (ii) instruct the Disclosure Dissemination Agent in writing that the Successor Agency will not be able to file the Annual Report within the time required under this Disclosure Certificate, state the date by which the Annual Report for such year will be provided and instruct the Disclosure Dissemination Agent that a Failure to File Event has occurred and to immediately send a notice to the MSRB in substantially the form attached as Exhibit A. (c) If the Disclosure Dissemination Agent has not received an Annual Report and Certification by 6:00 p.m. Eastern time on the Annual Filing Date (or, if such Annual Filing Date falls on a Saturday, Sunday or holiday, then the first business day thereafter) for the Annual Report, a Failure to File Event shall have occurred and the Successor Agency irrevocably directs the Disclosure Dissemination Agent to immediately send a notice to the MSRB in substantially the form attached as Exhibit A without reference to the anticipated filing date for the Annual Report. (d) If Audited Financial Statements of the Successor Agency are prepared but not available prior to the Annual Filing Date, the Successor Agency shall, when the Audited Financial Statements are available, provide in a timely manner an electronic copy to the Disclosure Dissemination Agent, accompanied by a Certification, together with a copy for the Trustee, for filing with the MSRB. (e) The Disclosure Dissemination Agent shall (i) verify the filing specifications of the MSRB each year prior to the Annual Filing Date; (ii) upon receipt, promptly file each Annual Report received under Sections 2(a) and 2(b) with the MSRB; (iii) upon receipt, promptly file each Audited Financial Statement received under Section 2(d) with the MSRB; (iv) upon receipt, promptly file the text of each Notice Event received under Sections 4(a) and 4(b)(ii) with the MSRB, identifying the Notice Event as instructed by the Successor Agency pursuant to Section 4(a) or 4(b)(ii) (being any of the categories set forth below) when filing pursuant to Section 4(c) of this Disclosure Certificate: 1. "Principal and interest payment delinquencies;" D-3 2. "Non -Payment related defaults, if material;" 3. "Unscheduled draws on debt service reserves reflecting financial difficulties;" 4. "Unscheduled draws on credit enhancements reflecting financial difficulties;" 5. "Substitution of credit or liquidity providers, or their failure to perform;" 6. "Adverse tax opinions, IRS notices or events affecting the tax status of the security;" 7. "Modifications to rights of securities holders, if material;" 8. "Bond calls, if material;" 9. "Defeasances;" 10. "Release, substitution, or sale of property securing repayment of the securities, if material;" 11. "Rating changes;" 12. "Tender offers;" 13. `Bankruptcy, insolvency, receivership or similar event of the obligated person;" 14. "Merger, consolidation, or acquisition of the obligated person, if material;" and 15. "Appointment of a successor or additional trustee, or the change of name of a trustee, if material;" (v) upon receipt (or irrevocable direction pursuant to Section 2(c) of this Disclosure Certificate, as applicable), promptly file a completed copy of Exhibit A to this Disclosure Certificate with the MSRB, identifying the filing as "Failure to provide annual financial information as required" when filing pursuant to Section 2(b)(ii) or Section 2(c) of this Disclosure Certificate; (f) The Successor Agency may adjust the Annual Filing Date upon change of its fiscal year by providing written notice of such change and the new Annual Filing Date to the Disclosure Dissemination Agent, Trustee (if any) and the MSRB, provided that the period between the existing Annual Filing Date and new Annual Filing Date shall not exceed one year. (g) Any Information received by the Disclosure Dissemination Agent before 6:00 p.m. Eastern time on any business day that it is required to file with the MSRB pursuant to the terms of this Disclosure Certificate and that is accompanied by a Certification and all other information required by the terms of this Disclosure Certificate will be filed by the Disclosure Dissemination Agent with the MSRB no later than 11:59 p.m. Eastern time on the same business day; provided, however, the Disclosure Dissemination Agent shall have no liability for any delay in filing with the MSRB if such delay is caused D-4 by a Force Majeure Event provided that the Disclosure Dissemination Agent uses reasonable efforts to make any such filing as soon as possible. SECTION 3. Content of Annual Reports. (a) Each Annual Report shall contain an update of the following information with respect to the Successor Agency's preceding Fiscal Year (to the extent not included in the audited financial statements described in paragraph (b) below): (i) An update for the last fiscal year of the financial information in "Table 4 — Ten Largest Property Taxpayers," and "Table 5 — Historical Tax Increment Receipts" located in the Official Statement; and (ii) an update on "THE REDEVELOPMENT PROJECT AREA- Assessment Appeals" (to the extent based on actual appeal information and not estimates) located in the Official Statement. (b) Audited Financial Statements prepared in accordance with generally accepted accounting principles ("GAAP") as described in the Official Statement will also be included in the Annual Report. If audited financial statements are not available, then, unaudited financial statements, prepared in accordance with GAAP as described in the Official Statement will be included in the Annual Report. Audited Financial Statements (if any) will be provided pursuant to Section 2(d). Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues with respect to which the Successor Agency is an Obligated Person, which have been previously filed with the Securities and Exchange Commission or available to the public on the MSRB Internet website. If the document incorporated by reference is a final official statement, it must be available from the MSRB. The Successor Agency will clearly identify each such document so incorporated by reference. Any Annual Financial Information containing modified operating data or financial information is required to explain, in narrative form, the reasons for the modification and the impact of the change in the type of operating data or financial information being provided. SECTION 4. Reporting of Notice Events. (a) The occurrence of any of the following events with respect to the Bonds constitutes a Notice Event: Principal and interest payment delinquencies; 2. Non-payment related defaults, if material; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- D-5 TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; Modifications to rights of Bond holders, if material; 8. Bond calls, if material, and tender offers; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds, if material; 11. Rating changes; 12. Bankruptcy, insolvency, receivership or similar event of the Obligated Person; Note to subsection (a)(12) of this Section 4: For the purposes of the event described in subsection (a)(12) of this Section 4, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an Obligated Person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Obligated Person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Obligated Person. 13. The consummation of a merger, consolidation, or acquisition involving an Obligated Person or the sale of all or substantially all of the assets of the Obligated Person, other than in the ordinary course of business, the entry into a definitive Certificate to undertake such an action or the termination of a definitive Certificate relating to any such actions, other than pursuant to its terms, if material; and 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. The Successor Agency shall, in a timely manner not in excess of ten business days after its occurrence, notify the Disclosure Dissemination Agent in writing of the occurrence of a Notice Event. Such notice shall instruct the Disclosure Dissemination Agent to report the occurrence pursuant to subsection (c) and shall be accompanied by a Certification. Such notice or Certification shall identify the Notice Event that has occurred (which shall be any of the categories set forth in Section 2(e)(iv) of this Disclosure Certificate), include the text of the disclosure that the Successor Agency desires to make, contain the written authorization of the Successor Agency for the Disclosure Dissemination Agent to disseminate such information, and identify the date the Successor Agency desires for the Disclosure Dissemination Agent to disseminate the information (provided that such date is not later than the tenth business day after the occurrence of the Notice Event). D-6 (b) The Disclosure Dissemination Agent is under no obligation to notify the Successor Agency or the Disclosure Representative of an event that may constitute a Notice Event. In the event the Disclosure Dissemination Agent so notifies the Disclosure Representative, the Disclosure Representative will within two business days of receipt of such notice (but in any event not later than the tenth business day after the occurrence of the Notice Event, if the Successor Agency determines that a Notice Event has occurred), instruct the Disclosure Dissemination Agent that (i) a Notice Event has not occurred and no filing is to be made or (ii) a Notice Event has occurred and the Disclosure Dissemination Agent is to report the occurrence pursuant to subsection (c) of this Section 4, together with a Certification. Such Certification shall identify the Notice Event that has occurred (which shall be any of the categories set forth in Section 2(e)(iv) of this Disclosure Certificate), include the text of the disclosure that the Successor Agency desires to make, contain the written authorization of the Successor Agency for the Disclosure Dissemination Agent to disseminate such information, and identify the date the Successor Agency desires for the Disclosure Dissemination Agent to disseminate the information (provided that such date is not later than the tenth business day after the occurrence of the Notice Event). (c) If the Disclosure Dissemination Agent has been instructed by the Successor Agency as prescribed in subsection (a) or (b)(ii) of this Section 4 to report the occurrence of a Notice Event, the Disclosure Dissemination Agent shall promptly file a notice of such occurrence with the MSRB in accordance with Section 2(e)(iv) hereof. SECTION 5. CUSIP Numbers. Whenever providing information to the Disclosure Dissemination Agent, including but not limited to Annual Reports, documents incorporated by reference to the Annual Reports, Audited Financial Statements, Notice Event notices, and Failure to File Event notices, the Successor Agency shall indicate the full name of the Bonds and the 9 -digit CUSIP numbers for the Bonds as to which the provided information relates. SECTION 6. Additional Disclosure Obligations. The Successor Agency acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule I Ob -5 promulgated under the Securities Exchange Act of 1934, may apply to the Successor Agency, and that the failure of the Disclosure Dissemination Agent to so advise the Successor Agency shall not constitute a breach by the Disclosure Dissemination Agent of any of its duties and responsibilities under this Disclosure Certificate. The Successor Agency acknowledges and understands that the duties of the Disclosure Dissemination Agent relate exclusively to execution of the mechanical tasks of disseminating information as described in this Disclosure Certificate. SECTION 7. Voluntary Filings. Nothing in this Disclosure Certificate shall be deemed to prevent the Successor Agency from disseminating any other information through the Disclosure Dissemination Agent using the means of dissemination set forth in this Disclosure Certificate or including any other information in any Annual Report, Audited Financial Statements, Notice Event notice, or Failure to File Event notice, in addition to that required by this Disclosure Certificate. If the Successor Agency chooses to include any information in any Annual Report, Audited Financial Statements, Notice Event notice, or Failure to File Event notice in addition to that which is specifically required by this Disclosure Certificate, the Successor Agency shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report, Audited Financial Statements, Notice Event notice, or Failure to File Event notice. SECTION 8. Termination of Reporting Obligation. The obligations of the Successor Agency and the Disclosure Dissemination Agent under this Disclosure Certificate shall terminate with respect to the Bonds upon the legal defeasance, prior redemption or payment in full of all of the Bonds, when the Successor Agency is no longer an Obligated Person with respect to such Bonds, or upon delivery by the D-7 Disclosure Representative to the Disclosure Dissemination Agent of an opinion of nationally recognized bond counsel to the effect that continuing disclosure is no longer required with respect to such Bonds. SECTION 9. Disclosure Dissemination Agent. Digital Assurance Certification LLC will serve as the initial Disclosure Dissemination Agent under this Disclosure Certificate. The Successor Agency may, upon thirty days written notice to the Disclosure Dissemination Agent and the Trustee, replace or appoint a successor Disclosure Dissemination Agent. Upon termination of the Disclosure Dissemination Agent, whether by notice of the Successor Agency or the Disclosure Dissemination Agent, the Successor Agency agrees to appoint a successor Disclosure Dissemination Agent or, alternately, agrees to assume all responsibilities of Disclosure Dissemination Agent under this Disclosure Certificate for the benefit of the Holders of the Bonds. Notwithstanding any replacement or appointment of a successor, the Successor Agency shall remain liable, until payment in full, for any and all sums owed and payable to the Disclosure Dissemination Agent. The Disclosure Dissemination Agent may resign at any time by providing thirty days' prior written notice to the Successor Agency. SECTION 10. Remedies in Event of Default. In the event of a failure of the Successor Agency or the Disclosure Dissemination Agent to comply with any provision of this Disclosure Certificate, the Holders' rights to enforce the provisions of this Disclosure Certificate shall be limited solely to a right, by action in mandamus or for specific performance, to compel performance of the parties' obligation under this Disclosure Certificate. Any failure by a party to perforin in accordance with this Disclosure Certificate shall not constitute a default on the Bonds or under any other document relating to the Bonds, and all rights and remedies shall be limited to those expressly stated herein. SECTION 11. Duties, Immunities and Liabilities of Disclosure Dissemination Agent. (a) Article VI of the Indenture is hereby made applicable to this Disclosure Certificate as if this Disclosure Certificate were (solely for this purpose) contained in the Indenture. The Disclosure Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee thereunder. The Disclosure Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate. and the Successor Agency agrees to indemnify and save the Disclosure Dissemination Agent, the Trustee, their officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of the disclosure of information pursuant to this Disclosure Certificate or arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees) of defending against any claim of liability, but excluding liabilities due to the Disclosure Dissemination Agent's negligence or willful misconduct. The Disclosure Dissemination Agent's obligation to deliver the information at the times and with the contents described herein shall be limited to the extent the Successor Agency has provided such information to the Disclosure Dissemination Agent as required by this Disclosure Certificate. The Disclosure Dissemination Agent shall have no duty with respect to the content of any disclosures or notice made pursuant to the terms hereof. The Disclosure Dissemination Agent shall have no duty or obligation to review or verify any Information or any other information, disclosures or notices provided to it by the Successor Agency and shall not be deemed to be acting in any fiduciary capacity for the Successor Agency, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent shall have no responsibility for the Successor Agency's failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine, or liability for failing to determine, whether the Successor Agency has complied with this Disclosure Certificate. The Disclosure Dissemination Agent may conclusively rely upon certifications of the Successor Agency at all times. The obligations of the Successor Agency under this Section shall survive resignation or removal of the Disclosure Dissemination Agent and defeasance, redemption or payment of the Bonds. IMA (b) The Disclosure Dissemination Agent may, from time to time, consult with legal counsel (either in-house or external) of its own choosing in the event of any disagreement or controversy, or question or doubt as to the construction of any of the provisions hereof or its respective duties hereunder, and shall not incur any liability and shall be fully protected in acting in good faith upon the advice of such legal counsel. The reasonable fees and expenses of such counsel shall be payable by the Successor Agency. (c) All documents, reports, notices, statements, information and other materials provided to the MSRB under this Disclosure Certificate shall be provided in an electronic format and accompanied by identifying information as prescribed by the MSRB. SECTION 12. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Successor Agency and the Disclosure Dissemination Agent may amend this Disclosure Certificate and any provision of this Disclosure Certificate may be waived, if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws acceptable to both the Successor Agency and the Disclosure Dissemination Agent to the effect that such amendment or waiver does not materially impair the interests of Holders of the Bonds and would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule; provided neither the Successor Agency nor the Disclosure Dissemination Agent shall be obligated to agree to any amendment modifying their respective duties or obligations without their consent thereto. Notwithstanding the preceding paragraph, the Disclosure Dissemination Agent shall have the right but not the duty to adopt amendments to this Disclosure Certificate necessary to comply with modifications to and interpretations of the provisions of the Rule as announced by the Securities and Exchange Commission from time to time by giving not less than 20 days prior written notice of the intent to do so together with a copy of the proposed amendment to the Successor Agency. No such amendment shall become effective if the Successor Agency shall, within 10 days following the giving of such notice, send a notice to the Disclosure Dissemination Agent in writing that it objects to such amendment. SECTION 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Successor Agency, the Trustee of the Bonds, the Disclosure Dissemination Agent, the participating underwriters (as defined in the Rule), and the Holders from time to time of the Bonds, and shall create no rights in any other person or entity. SECTION 14. Governing Law. This Disclosure Certificate shall be governed by the laws of the State of California (other than with respect to conflicts of laws). D-9 The Successor Agency has caused this Disclosure Certificate to be executed, on the date first written above. SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA Kenneth W. Striplin, Executive Director ACCEPTED AND AGREED TO: DIGITAL ASSURANCE CERTIFICATION LLC, as Disclosure Dissemination Agent Name: D-10 EXHIBIT A NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT Issuer: Obligated Person: Name of Bond Issue: Date of Issuance: Successor Agency to the Redevelopment Agency of the City of Santa Clarita City of Santa Clarita, California $[principal amount] Successor Agency to the Redevelopment Agency of the City of Santa Clarita Tax Allocation Refunding Bonds, Series 2016 December , 2016 NOTICE IS HEREBY GIVEN that the Successor Agency to the Redevelopment Agency of the City of Santa Clarita (the "Successor Agency") has not provided an Annual Report with respect to the above-named Bonds as required by the Disclosure Certificate of the Successor Agency. The Successor Agency anticipates that the Annual Report will be filed by Dated: 20 Digital Assurance Certification LLC, as Disclosure Dissemination Agent 191911 APPENDIX E COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR FISCAL YEAR ENDED JUNE 30, 2015 E-1 CITY OF SANTA CLARITA, CALIFORNIA 6�P BUILDING ANO CQ 4 F Quality 0 J pomb7vrt d PROACTIVE, Fiscal Year Ended June 30, 2015 City of Santa Clarita, California Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2015 PREPARED BY THE DEPARTMENT OF ADMINISTRATIVE SERVICES CITY OF SANTA CLARITA, CALIFORNIA City of Santa Clarita Comprehensive Annual Financial Report Table of Contents For the Year Ended June 30, 2015 INTRODUCTORY SECTION Letter of Transmittal GFOA Certificate of Achievement for Excellence in Financial Reporting ................................................... viii Officials of the City of Santa Clarita..............................................................................................................ix OrganizationChart........................................................................................................................................ x Mapof the City of Santa Clarita....................................................................................................................A FINANCIAL SECTION IndependentAuditor's Report.......................................................................................................................1 Management's Discussion and Analysis (Unaudited)...................................................................................3 Basic Financial Statements: Government -wide Financial Statements: Statementof Net Position...................................................................................................................... 14 Statementof Activities........................................................................................................................... 16 Fund Financial Statements: Governmental Fund Financial Statements: BalanceSheet......................................................................................................... Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position........................................................................... Statement of Revenues, Expenditures and Changes in Fund Balances.................................................................................. Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statementof Activities.......................................................................................... Proprietary Fund Financial Statements: Statement of Net Position.............................................................. Statement of Revenues, Expenses and Changes in Net Position Statement of Cash Flows.............................................................. Fiduciary Fund Financial Statements: Statement of Net Position (Deficit) .................... Statement of Changes in Net Position (Deficit). Notes to Financial Statements 18 21 22 25 26 27 28 City of Santa Clarita Comprehensive Annual Financial Report Table of Contents For the Year Ended June 30, 2015 FINANCIAL SECTION (Continued) Required Supplementary Information (Unaudited) Schedules of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual: GeneralFund.........................................................................................................................................83 Bridge and Thoroughfare Special Revenue Fund.................................................................................84 Public Library Special Revenue Fund.................................................................................................... 85 Landscape Maintenance District #1 Special Revenue Fund................................................................. 86 Schedule of Funding Progress.................................................................................................................87 Schedule of Changes in the City's Net Pension Liability and Related Ratios ......................................... 88 Schedule of City Contributions.................................................................................................................90 Notes to Required Supplementary Information........................................................................................ 92 Supplementary Information: Non -Major Governmental Funds: Description of Nonmajor Governmental Funds...................................................................................... 93 CombiningBalance Sheet.....................................................................................................................96 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ..........................104 Schedules of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual: Developer Fees Special Revenue Fund...........................................................................................112 Bikeway Special Revenue Fund.......................................................................................................113 Gas Tax Special Revenue Fund.......................................................................................................114 Proposition A Special Revenue Fund...............................................................................................115 Special Assessment Special Revenue Fund....................................................................................116 State Park Special Revenue Fund....................................................................................................117 TDASpecial Revenue Fund..............................................................................................................118 Traffic Safety Special Revenue Fund................................................................................................119 CDBGSpecial Revenue Fund..........................................................................................................120 AQMDSpecial Revenue Fund..........................................................................................................121 Stormwater Special Revenue Fund..................................................................................................122 Surface Transportation Program Special Revenue Fund.................................................................123 BJA Law Enforcement Special Revenue Fund.................................................................................124 Supplemental Law Grant Special Revenue Fund.............................................................................125 HOMESpecial Revenue Fund..........................................................................................................126 Library Facilities Fees Special Revenue Fund..................................................................................127 Public Education and Government Special Revenue Fund.............................................................. 128 Proposition C Special Revenue Fund...............................................................................................129 Federal Grants Special Revenue Fund............................................................................................. 130 Measure R Special Revenue Fund...................................................................................................131 Tourism Marketing District Special Revenue Fund...........................................................................132 OSPDSpecial Revenue Fund...........................................................................................................133 Miscellaneous Grants Special Revenue Fund..................................................................................134 Park Dedication Special Revenue Fund...........................................................................................135 Housing Successor Agency Special Revenue Fund.........................................................................136 Tourism Marketing Bureau Special Revenue Fund..........................................................................137 City of Santa Clarita Comprehensive Annual Financial Report Table of Contents For the Year Ended June 30, 2015 FINANCIAL SECTION (Continued) General Capital Projects Fund ............................ Public Financing Authority Capital Projects Fund Public Financing Authority Debt Service Fund.... Internal Service Funds ..138 ..139 ..140 Description of Internal Service Funds..................................................................................................141 Combining Statement of Net Position..................................................................................................142 Combining Statement of Revenues, Expenses and Changes in Net Position ....................................143 Combining Statement of Cash Flows..................................................................................................144 Fiduciary Funds: Description of Fiduciary Funds............................................................................................................145 Combining Statement of Assets and Liabilities—Agency Funds......................................................... 146 Combining Statement of Changes in Assets and Liabilities—Agency Funds .....................................148 STATISTICAL SECTION (Unaudited) Tableof Contents......................................................................................................................................151 NetPosition by Component......................................................................................................................152 Changesin Net Position............................................................................................................................154 Fund Balances of Governmental Funds...................................................................................................158 Changes in Fund Balances of Governmental Funds................................................................................160 Assessed Values and Actual Values of Taxable Property........................................................................162 Assessed Values and Actual Values of Taxable Property—Redevelopment Agency..............................164 Assessed Values—Taxable Property.......................................................................................................166 Assessed Values—Use Category Summary ............................................................................................168 Direct and Overlapping Property Tax Rates.............................................................................................170 PrincipalProperty Taxpayers....................................................................................................................172 Property Tax Levies, Tax Collections and Delinquencies.........................................................................173 Top Property Owners Based on Net Values—Successor Agency ...........................................................174 Project Area Assessment Appeals Summary and Tax Collection History—Successor Agency ..............175 Charge Detail Report for CFD 2002-1 (Valencia Town Center)—Successor Agency .............................. 176 Ratio of Outstanding Debt by Type...........................................................................................................178 Ratio of General Bonded Debt Outstanding.............................................................................................180 Direct and Overlapping Tax and Assessment Debt..................................................................................181 LegalDebt Margin Information.................................................................................................................. 182 PledgedRevenue Coverage.....................................................................................................................184 Demographic and Economic Statistics.....................................................................................................185 PrincipalEmployers..................................................................................................................................186 Full -Time and Part -Time City Employees by Function.............................................................................187 Operating Indicators by Function..............................................................................................................188 Capital Asset Statistics by Function..........................................................................................................189 City of SANTA CLARiTA 2392D Vatenda Boulevard a Suite 300 a Santa Claris, CWomia 91355-2194 Phone: (661)259-2969 a FAX (661)259-8125 14 u ..umta-vlanta-cam December 24, 2015 Honorable Mayor, Mayor Pro Tem, and City Councilmembers: The Comprehensive Annual Financial Report (CAFR) of the City of Santa Clarita for fiscal year ended June 30, 2015, is hereby submitted in accordance with Chapter 2.12 of the City of Santa Clarita Municipal Code. This report provides the City Council and the public with an understanding of the financial condition of the City of Santa Clarita as of June 30, 2015. This report consists of management's representations enaceming the finances of the City of Santa Clarita. As such, management assumes full responsibility for the completeness and reliability of the information contained in this report. To provide a reasonable basis for making these representations, management of the City has established a comprehensive framework of internal controls that is designed to protect the City's assets from loss, theft, or misuse, and to compile sufficient reliable information for the preparation of the City's financial statements. Because the cost of internal controls should not outweigh their benefits, the City's comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements are free from material misstatement. To the best of our knowledge and behcG the enclosed data is accurate in all material respects and reported in a manner designed to present fairly the financial position and results of operations of the various funds of the City of Santa Clarita. State Law requires the City to prepare an annual financial report. This report fulfills that obligation. McGladrey LLP, an independent firm of certified public accountants, has issued an unmodified ("clean") opinion on the financial statements of the City of Santa Clarita for the year ended June 30, 2015. The independent auditor's report is located at the front of the financial section of this report. The CAFR has been prepared in conformity with Generally Accepted Accounting Principles (GAA.?) and the financial reporting requirements prescribed by the Governmental Accounting Standards Board (GASB). These reporting requirements specify that management provide a narrative introduction, overview, and analysis to accompany the financial statements in the form of a Management's Discussion and Analysis (MD&A). The MD&A, which immediately follows the independent auditor's report, complements this letter of transmittal and should be read in conjunction with it, Also, as a recipient of federal and state financial assistance, the City is required to have a "Single Audit" performed by our independent audit firm. The Single Audit was designed to meet the special needs of the tederal grantor agencies. The standards governing the Single Audit engagements require that the independent auditor report on the fair presentation of the financial statements and the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in the City's separately issued Single Audit Reports. CITY PROFILE The City of Santa Clarita was incorporated on December 15, 1987, as a General Law City, and operates under a City Cotmcit/City Manager form of government. Located minutes from Bob hope Airport in Burbank, Santa Clarita lies between the Santa Susana and San Gabriel mountain ranges. Encompassing the communities of Canyon Country, Newhall, Saugus, and Valencia, Santa Clarita covers approximately 64.4 square miles. With a population of 213,231, the City is the 18i" largest city in the State of California and the third largest in Los Angeles County. Santa Clarita residents enjoy an expansive year-round parks and recreation network, featuring 32 beautiful park facilities totaling more than 368 acres, over 8,745 acres of City -owned open space, and more than 98 miles of picturesque trails and paseos designed for commuting and recreational use, including walking, riding, jogging, and skating. With its unique blend of rural, old -west heritage, and urban sophistication, this fast-growing City has established an enviable balance between quality living and growth. The City of Sunta Clarita's five City Councilmembers are elected at large to four-year overlapping terms, with elections held bi-annually. The position of Mayor is annually selected by the Councilmembers. The City Council is responsible, among other things, for passing ordinances, adopting the budget, setting policy, and appointing committees. The City Council appoints the City Manager, who is responsible for implementing the policies of the Council, overseeing the day-to-day operations of City government, and for appointing and managing the various Directors. The City Council also appoints the City Attorney. The City provides, either directly or under contract, a full range of municipal services including public safety, construction, maintenance of streets and other infrastructure, public libraries, public works, parks and recreation, community development, and cultural events. The City also provides services through the Santa Clarita Public Financing Authority (PFA), which is a blended component unit of the City of Santa Clarita. The financial activities of this entity are included in this report, as their activities are under the control of the City. A separate component unit report for the Santa Clarita PFA is also available. The City operates on a fiscal year basis which begins July 1 and ends June 30. The City's Municipal Code requires the City Manager to prepare a budget and present it to the City Council each year. The budget process begins by January of each year and is carried out under the direction of the City Manager in cooperation with the various City departments. The proposed operating and capital budget is submitted by the City Manager to City Council for adoption by June 30, to take effect at the beginning of the fiscal year on July 1. Budgetary control for the City is maintained through its accounting systems. Once adopted, the budget may be amended throughout the year as necessary. Budgetary control is established at the category level within each fund. LOCAL ECONOMY The City of Santa Clarita is one of Southern California's most desirable places to live and do business. City officials pridethemselves on the organization's ability to balance the needs of locally based companies with those of the community, resulting in an unmatched quality of life. We continue to see positive changes in the economy, such as an increase in sales tax revenues and a recovering housing market. The City has a 100 percent track record for adopting a balanced, on-time budget, with ample reserves and contingency funds. Fiscal Year 2014-15 was successful and stable forthe City due to prudent fiscal planning. Targeted employment sectors in Santa Clarita include aerospace, manufacturing, biomedical, entertainment, and technology. This past year we welcomed several new retailers to Westfield Valencia Town Center including. Lyfe Kitchen, SoLitas, H&M and 1,1111110111011. An Audi Dealership and Mamba Motorsports also opened in Santa Clarita. Retail vacancy rates continue to decline, currently at a low 4.8 percent compared to 5.2 percent in the 2nd Quarter of 2014. The same is true for industrial vacancy rates, which decreased to 3 percent from 5.6 percent in the 2nd Quarter of 2014. The largest area of potential growth in the City continues to be in office space, which increased to 10.8 percent in the 2nd Quarter of 2015 compared to 9.4 percent in the 2nd Quarter of 2014. The City's Film Office enjoyed its best year ever since its inception in 2001 In Fiscal Year 2014-15, filming in Santa Clarita meant an economic impact of $33,9 million to the local economy from location filming. Santa Clarita is home to more than 20 sound stages, 10 movie ranches, and hundreds of film -related businesses. Network television shows like "NCIS," "Switched at Birth," "Chasing Life," "Westworld," "The Player," "Blunt Talk," "Stitchers," and "Recovery Road" are based in Santa Clarita and regularly film on location within the City. Tourism continues to be one of the City of Santa Clarita's largest economic generators contributing more than $3.1 million to the general fund from Transient Occupancy Tax (TOT) in Fiscal Year 2014-15. The fifth year of the Tourism Marketing District (TMD), a collaborative assessment program and partnership between the City and five local hotels, grew upon previous success and collected over $576,000 in support of increased marketing and promotion of Santa Clarita as a tourism destination. TMD dollars are a vital component of the area's continued attraction of events and visitors, which translates to dollars spent in the community and at local businesses. The following events are just a iii few that were attracted as part of the City's increased event attraction efforts: Cal South State Soccer Cup, California Super States Chess Championships, USSSA Baseball, Masters College Collegiate Golf'Tournament, USA Swinin ing Western Speedo Sectionals, Triple Crown Softball, NAIA Baseball National Championship, Masters College Collegiate Volleyball Tournament, and the Bonspiel Curling Tournament. The City also attracted two internationally sanctioned events, including the Amgen Tour of California, returning to the City for the 70 year, and the 2`1 Annual Wings for Life World Run. The Santa Clarita Valley Enterprise Zone officially ended benefits to local businesses on December 31, 2014. The proposal to eliminate the California Enterprise Zone program was passed by the State Senate in June 2013. Even with the program ending in 201 ?, Santa Clarita businesses were still eligible to obtain a voucher certificate for qualified employees hired through the end of 2014. Since its inception in 1484, the Enterprise Zone program provided hiring credits and tax breaks in economically distressed areas of the state to encourage business investment and promote the creation of new jobs. Santa Clarita was awarded an Enterprise Zone in 2007 and received an expanded zone designation in 2011. The program provided approximately 600 local businesses with savings of over $542 million through hiring tax credits and issued 14,493 vouchers for people hired in local jobs in the Santa Clarita Valley. In 2014, the City worked with the Santa Clarita Valley Economic Development Corporation (SCVEDC) and the County in a final effort to market the SCV Enterprise 'Lone and ensure that companies that were eligible for the Enterprise Zone credit completed the vouchering process. The SCVEDC held multiple workshops to get the word out before the conclusion of the program and assisted an additional 16 companies with voucher credits for 177 jabs. Santa Clarita recognizes the important role education plays in the success of the community. The City is home to three premier colleges, including California Institute of the Arts (CalArts), College of the Canyons, and The Masters College. These colleges ofler world-class instruction and programming to prepare students to become the next generation of business professionals and leaders. LONG -TERM FINANCIAL PLANNING Santa Clarita is one of California's model cities, boasting the essential elements needed for well-balanced living and total well-being. Santa Clarita remains one of the safest cities in California among cities with populations exceeding 150,000. Santa Clarita is home to a well-educated population, with more than 70 percent of adults over age 25 and older having attained some college or higher, as compared to Los Angeles County, which averages 56.6 percent. The City of Santa Clarita has experienced steady growth since its inception in 1987, and City officials work directly with the private and public sectors to attract new businesses to the Santa Clarita Valley. The City of Santa Clarita is focused on retaining existing companies and encouraging their growth within the City while working to attract new business, thereby creating new jobs for residents. Santa Clarita has set an aggressive goal ro of creating two jobs for every household, whereby providing an increased opportunity for residents to work close to home, The conthming recovery in our economy has directly affected the City's revenue growth, producing increases in property tax, sales tax, real property transfer tax, and TOT. The City provides necessary funding for essential services for City Council and community identified priorities, while taking steps to ensure the City remains in good financial health. Annually, the City prepares extended forecasts for the General Fund to determine the future impact of current actions. 'These forecasts indicate a stable General Fund over the next few years, primarily due to projected marginal increases in sales, property taxes, and property taxes in lieu ol'vehicle license fees. However, because the City of Santa Clarita has practiced smati growth in successful Financial times, the City is well prepared for times when revenue projections do not include growth. The City maintains a General Fund balance sufficient to provide far various identified contingencies, as well as an established operating reserve, In addition, the General Fund contributes annually to the City's facilities replacement fund, which provides for major maintenance and replacement of infrastructure and capital improvements. The City's Capital Improvement Program (CIP) is a component of the annual budget process that addresses the City's short- and long-term capital needs. Just as important, the CIP emphasizes a plan of action that effectively maintains the existing infrastructure to a sound physical standard, as well as providing new facilities to support current growth and complement new development. MAJOR MILESTONES IN FISCAL YEAR 2014-15 The City of Santa Clarita set new film records in Fiscal Year 2014-15, with an estimated total economic impact of $33.9 million from location filming. The Santa Clarita Film Office has again surpassed previous year numbers for the 5th year in a row, processing 553 permits this fiscal year, a 4 percent rise over last year's 531 permits and recorded 1,437 film days, a 5 percent increase over last year's 1,370 film days, making fiscal Year 2014-15 its best to date. 4+ Improving, maintaining, and adding to the City's infrastructure continues to be a high priority and focus for the City. During fiscal Year 2014-15, the City completed the beautification project at Sand Canyon and SR 14; finished the widening of the McBean Parkway bridge across from the post office, adding a protected bike lane; opened its first Business Incubator in Old Town Newhall; dedicated Gateway Ranch open space which also prevented a massive development at the 1-5/SR 14 junction;. opened River Village Park and the Santa Clara River Trail Phase three; and broke ground for the Golden Valley Road bridge -widening project that will include protected bike and pedestrian lanes. •s Santa Clarita continues to be proactive in addressing teen drug use. To raise awareness about drug availability and use, the City continued to reach out to parents and families and provide assistance to those in need. 'rhe City's Drug Free Youth In Town (DFYIT) program continues to grow, with thousands of teens pledging to stay sober and engaged in meaningful, healthy activities on every junior and senior high school campus in the Santa Clarita Valley. Santa Clarita Public Library continues to thrive in its fourth year of operation. The three branches saw over 894,000 patron visits, issued 15,810 new library cards, circulated more than 1.5 million books and materials, and library website traffic rose 78 percent over last year. Special events hosted by the City attracted visitors from across the globe. Santa Clarita hosted the Amgen Tour of California bike race and the International Wings for Life World Run, in addition to the annual Marathon in November. The City also worked with community partners to host the Thursdays at Newhall event series, which includes Art Slam, JAM Sessions, Revved up, Senses, and the ARTree Speaker Series. The City's Cowboy Festival in April moved to Old Town Newhall and adjacent l lart Park for the first time with high attendance. AWARDS AND ACKNOWLEDGEMENTS The City of Santa Clarita was recognized many times throughout the year, being named in the top five Most Business Friendly Cities in Los Angeles County by the Los Angeles Economic Development Corporation and named among the Best City for Young Families by Nerd Wallet. Parenting.com also named Santa Clarita as the 3"O Safest City in America and Safewise.com titled the City as one of the 50 Safest Cities in California. The City of Santa Clarita also won various awards incJudin& the 2015 1Ielen Putnam Award of Excellence liom the league of California Cities in Economic Development through the Arts category for the revitali-yation of Old Town Newhall and given the title of "2014 Project of the Year' by the Southern California Chapter of the American Public Works Association (APWA) and "Project of the Year" by the APWA's High Desert Branch for the Newhall Roundabout. The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting, to the City of Santa Clarita for its Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2014. This was the 26th consecutive year the City has achieved this prestigious award. In order to be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report must satisfy GAAP and applicable legal requirements. A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only. We believe our current comprehensive annual financial report continues to meet the requirements of the GFOA Certificate of Achievement Program, and we are suhmitting it to GFOA to determine its eligibility for another certilicatc, vi The City also received a Certificate of Excellence Award from the Association of Public Treasurers of the United. States and Canada for Santa Clarita's Investment Policy. The City annually submits its Investment Policy to the Association's Investment Policy Certification Committee for award consideration and has received the prestigious Certificate of Excellence Award for the past 20 years. This report is a joint effort by many people from many different areas of responsibility. The preparation of this report could not have been accomplished without the hard work and team effort of the staff of the Finance Division, in particular, Finance and Technology Manager, Carmen Magana; Financial Analysts, Susan Cromsigt, Mary Ann Ruprecht, Jan Downey, Brittany Houston, Blanca Gomez, and Lisett Bautista; and General Accounting Specialist. Aruna Patel. I would like to express my appreciation to all members of the Division who assisted and contributed to its preparation. I would also like to thank the Mayor; Mayor Pro Tem; Councilmembers; City Manager, Ken Striplin; Assistant City Manager, Frank Oviedo; Director of Public Works, Robert Newman; Director of Community Development, Tom Cole; and Director of Parks, Recreation and Community Services, Rick Gould, for their continuing efforts in administering the financial operations of the City in a conservative and responsible manner, Sincerely, o.— - Darren Hernandez Deputy City Manager DH:cm:hds Dara Wau m tW Lmv 2015 vii Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Santa Clarita - California For its Comprehensive Annual Financial Report for the Fiscal Year Ended ,Tune 307 2014 Executive DivMWiyCZO VIII OFFICIALS OF THE CITY OF SANTA CLARITA As of June 30, 2015 City Council Marsha McLean MAYOR Bob Kellar MAYOR PRO TEM Dante Acosta COUNCILMEMBER TimBen Boydston COUNCILMEMBER Laurene Weste COUNCILMEMBER Citv Officials Ken Striplin CITY MANAGER Frank Oviedo ASSISTANT CITY MANAGER Darren Hernandez DEPUTY CITY MANAGER Joseph Montes CITYATTORNEY Tom Cole DIRECTOR OF COMMUNITY DEVELOPMENT Richard Gould DIRECTOR OF PARKS, RECREATION & COMMUNITY SERVICES Robert Newman DIRECTOR OF PUBLIC WORKS/CITY ENGINEER ix City of Santa Clarita ORGANIZATION CHART As of June 30, 2015 Santa Clanta Residents City Council City Manager Conununity Public Parks, Recreation & city ASanager's Development Works community Se rices Office Planning Engineering Recreation Sheriffs Department s conununity Preservation Traffxe Engineering Parks Fire Protecn.on Redevelopment Suiiding & Safety com unity Services Human Resources Conrmunit_v Dev. Block Grant General Services Parks Planninv & Open Space Purchasing Economic Dewlopment Environmental Services Risk Management x XI ■m Independent Auditor's Report To the Honorable Mayor and Members of the City Council of the City of Santa Clarita Santa Clarita, California RSM ,?Trr.3rr� Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City of Santa Clarita, California (the City) as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund and the aggregate remaining fund information of the City as of June 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended, in accordance with accounting principles generally accepted in the United States of America. THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING RWUSLLPktheU.% m dmfhnafRSMYernW ri4adoWnawakath&Vud a Ltwad=wjlt sg m VAtrwmu WEB formm kfznatlmmprftF USLLPad RWkrmnWad. Emphasis of Matter As discussed in Note 12 to the financial statements, the beginning net position of the governmental and business -type activities has been restated as of June 30, 2014 as a result of the implementation of Governmental Accounting Standards Board Statement Nos. 68 and 71. We also audited the adjustments described in Note 12 that were applied to restate the 2014 financial statements. In our opinion, such adjustments are appropriate and have been properly applied. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, budgetary comparison information and schedules of funding progress be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The combining non -major fund financial statements and schedules, and other information such as the introductory and statistical sections, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining non -major fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining non -major fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 24, 2015 on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance. Irvine, California December 24, 2015 MANAGEMENT'S DISCUSSION AND ANALYSIS Fiscal Year Ended June 30, 2015 This discussion and analysis of the City of Santa Clarita's (the City) financial performance provides an overview of the financial activities of the City for the fiscal year ended June 30, 2015. Our analysis includes information regarding the City's overall financial position and results of operations to assist users in evaluating the City's financial position, a discussion of significant changes that occurred in funds, and information regarding significant budget variances. In addition, it describes the activities during the year for capital assets and long-term debt. We end our discussion and analysis with a description of currently known facts, decisions and conditions that are expected to have a significant effect on the financial position or results of operations. Please read it in conjunction with the accompanying transmittal letter, the basic financial statements and the accompanying notes to those financial statements. FINANCIAL HIGHLIGHTS • The assets of the City exceeded its liabilities at the close of the most recent fiscal year by $1.05 billion. Of this amount, $82.0 million represents unrestricted net position that may be used to meet the City's ongoing obligations to citizens and creditors (Table 1). • The City's total net position increased by $43.2 million. Net position of the business -type activities decreased by $4.3 million, or 5.0%, and the net position of the governmental activities increased by $47.5 million (Table 2). • Due to the implementation of GASB 68 and 71, the City restated its net position as of June 30, 2014 and recorded a total net pension liability of $26.9 million as of June 30, 2015. For additional information, see Note 12 regarding the prior year restatement and Note 13 for changes in the net pension liability. • The net capital assets of the City's governmental activities increased by $17.5 million, or 2.1%, over last fiscal year. The increase was in part due to purchases and contributions of land totaling $15.9 million. See Note 7 to the financial statements for additional information. • As of the close of the current fiscal year, the City's governmental funds reported combined ending fund balances of $196.9 million. This represents an increase of $8.5 million as compared to the prior year. • Within governmental funds, the General Fund reported a fund balance of $116.5 million, an increase of $7.6 million over the prior year. USING THIS ANNUAL REPORT The financial statements presented herein include all of the activities of the City of Santa Clarita and its component unit using the integrated approach as prescribed by Governmental Accounting Standards Board (GASB) Statement No. 34. The three components of the basic financial statements are as follows: 1) Government -Wide Financial Statements The Government -Wide Financial Statements present the financial picture of the City from the economic resources measurement focus using the accrual basis of accounting in a manner similar to a private -sector business. These statements include all assets of the City (including infrastructure) as well as all liabilities (including long-term debt). See independent auditor's report. USING THIS ANNUAL REPORT (CONTINUED) 2) Fund Financial Statements The Fund Financial Statements include statements for each of the three categories of activities: governmental, proprietary and fiduciary. For governmental activities, these fund statements tell how these services were financed in the short term, as well as what remains for future spending. Fund financial statements also report the City's operations in more detail than the government -wide statements by providing information about the City's most significant funds and other funds. 3) Notes to the Basic Financial Statements The notes provide additional information necessary to enable the user to fully understand the various financial statements. In addition to the basic financial statements and notes, this report contains other supplementary information. REPORTING THE CITY AS A WHOLE — GOVERNMENT -WIDE FINANCIAL STATEMENTS The Statement of Net Position and the Statement of Activities One of the most important questions asked about the City's finances is, "Is the City as a whole better or worse off as a result of the year's activities?" The Statement of Net Position and the Statement of Activities report information about the City as a whole, and its activities, is a way to answer this question. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private -sector companies. All of the current year's revenues and expenses are taken into account, regardless of when cash is received or paid. The Statement of Net Position reports all of the City's assets and deferred outflows of resources, and liabilities and deferred inflows of resources, with the difference reported as net position. Net position is one way to measure the City's financial health or financial position. Over time, increases or decreases in the City's net position is an indication of whether its financial health is improving or deteriorating. Other things to consider are non-financial factors, such as changes in the economy due to external factors that would cause an increase or decrease in consumer spending. The Statement of Activities presents information relating to how the City's net position changed during the fiscal year. All activities resulting in changes in net position are reported when earned or incurred, regardless of the receipt or disbursement of the related transaction's cash flows. Some of the revenues and expenses reported in this statement will result in future fiscal period cash flows, such as the receipt of uncollected taxes and the payment of interest expense or compensated absences. In the Statement of Net Position and the Statement of Activities, we separate the City's activities as follows: Governmental Activities — Most of the City's basic services are reported in this category, including general administration (City Manager, City Clerk, Finance, etc.), public safety, public works, parks, recreation and community services, and community development (planning and engineering). These activities are distinguished due to the use of property taxes, sales tax, transient occupancy tax, user fees, interest income, franchise fees, state and federal grants, contributions from other agencies, and other revenues to finance these activities. Business -Type Activities — City functions that are intended to be primarily self-supporting through the imposition of user fees and charges are reported in the business -type activity category. Business -type activities for the City consist of transit activities related to the operation of the City's local public transportation system. See independent auditor's report REPORTING THE CITY AS A WHOLE — GOVERNMENT -WIDE FINANCIAL STATEMENTS (CONTINUED) Component Unit Activities — The City of Santa Clarita is the primary government unit to one legally separate entity. The financial activity and data of the Santa Clarita Public Financing Authority has been accounted for within the funds of the City, and therefore, separate component unit financial information is not presented within the financial statements. REPORTING THE CITY'S MOST SIGNIFICANT FUNDS — FUND FINANCIAL STATEMENTS A fund is a grouping of related accounts used to account for and accumulate financial information related to a specific activity or objective. Some funds are required to be established by State law and bond covenants; however, management established many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants and other resources. The fund financial statements provide detailed information about the most significant funds and other funds — not the City as a whole. The City's three types of funds are governmental, proprietary and fiduciary. Governmental Funds — Most of the City's basic services are reported in governmental funds. Governmental fund financial statements focus on how money flows in and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called "modified accrual" accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs. Because the focus of the governmental funds is narrower than that of the government -wide financial statements, it is useful to compare the information presented for the governmental funds with similar information presented for the governmental activities in the government - wide financial statements. Reconciliation of the Fund Financial Statements to the Government -Wide Financial Statements is provided to explain the differences created by this integrated approach. The City reports governmental fund financial information within 33 governmental funds. The General Fund, Bridge and Thoroughfare Fund, Public Library Fund and Landscape Maintenance District Fund are presented separately as major funds in the governmental fund balance sheet and in the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances. Financial data for the remaining 29 governmental funds are combined into a single, aggregated presentation. Supporting financial information on each of the other governmental funds is also provided within the report. Proprietary Funds — The City maintains two different types of proprietary funds. When the City charges customers for the services it provides, these services are generally reported in a type of proprietary fund known as an enterprise fund. Enterprise funds are used to report the same functions presented as business -type activities in the government -wide financial statements, but the proprietary fund statements provide more detail and additional information, such as a statement of cash flows. The City uses the Transit Enterprise Fund to account for the activities related to transit operations. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses three internal service funds to account for costs related to self- insurance, computer replacement and vehicle -equipment replacement. Proprietary funds are reported in the same way all activities are reported in the Statement of Net Position and the Statement of Activities. The proprietary fund financial statements provide separate information for the Transit Enterprise Fund, which is considered to be a major fund of the City. All of the internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements in the supplementary information section of this report. See independent auditor's report THE CITY AS TRUSTEE — FIDUCIARY FUND STATEMENTS Reporting the City's Fiduciary Responsibilities The City is the trustee, or fiduciary, for certain funds held for the benefit of other parties outside of the City. The City's fiduciary activities are reported in separate Statements of Fiduciary Net Position and Statement of Changes in Fiduciary Net Position. These activities were excluded from the City's other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. NOTES TO THE BASIC FINANCIAL STATEMENTS The notes provide additional information that is essential to a full understanding of the data provided in the government -wide and fund financial statements. OTHER INFORMATION In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the comparison of budget and actual results for the major governmental funds, other post -employment benefits schedule of funding progress, schedule of changes in the City's net pension liability and related ratios, and a schedule of the City's pension contributions. This section is located after the Notes to Financial Statements. The combining statements referred to earlier in connection with the other governmental funds, internal service funds and fiduciary funds are presented immediately following the required supplementary information described in the previous paragraph in the supplementary information section. THE CITY AS A WHOLE The analysis below focuses on the net position (Table 1) and changes in net position (Table 2) of the City's governmental and business -type activities. The City's net position may be analyzed and used as an indicator of the City's overall financial condition. The City's combined net position increased by $43.2 million, increasing from $1.01 billion to $1.05 billion net of prior year restatements. See independent auditor's report THE CITY AS A WHOLE (CONTINUED) ASSETS: Current and Other Assets Capital Assets, net Noncurrent Assets TOTALASSETS LIABILITIES: Noncurrent Liabilities Other Liabilities TOTAL LIABILITIES NET POSITION: Net Investment in Capital Assets Restricted Unrestricted TOTAL NET POSITION TABLE 1 CITY OF SANTA CLARITA'S NET POSITION Governmental Activities Business -type Activities - Total 102,096,195 2015 2014 2015 2014 2015 1,062,599,528 2014 89,597,526 29,089,526 1,191,854,887 1,152,197,054 4,406,572 $ 228,301,801 $ 210,971,600 $ 7,302,688 $ 6,300,981 $ 235,604,489 $ 217,272,581 847,862,095 830,373,009 78,495,871 83,296,545 926,357,966 913,669,554 29,892,432 21,254,919 - 26,714 102,096,195 29,892,432 21,254,919 1,106,056,328 1,062,599,528 85,798,559 89,597,526 29,089,526 1,191,854,887 1,152,197,054 3,608,702 131.436 3,740,138 101,114,219 82,004,957 981,976 26,714 102,096,195 82,031,671 29,826,359 26,169,470 3,424,596 2,920,056 33,250,955 29,089,526 130,940,578 108,174,427 4,406,572 2,946,770 135,347,150 111,121,197 7,154,505 - 260,580 - 7,415,085 - 818,817,043 799,926,613 78,495,871 83,296,545 897,312,914 883,223,158 73,541,304 71,643,713 - - 73,541,304 71,643,713 79,211,600 52,551,033 2,766,972 2,250,491 81,978,572 54,801,524 $ 971,569,947 $ 924,121,359 $ 81,262,843 $ 85,547,036 $ 1,052,832,790 $ 1,009,668,395 The City's net position is made up of three components: Net Investment in Capital Assets, Restricted Net Position and Unrestricted Net Position. Net position for governmental As of June 30, 2015, assets exceeded liabilities by $1.05 billion. The largest component of the City's net position, 85.2°/x, is represented by its $897.3 million net investment in capital assets (e.g., infrastructure, land, buildings and improvements, equipment, and construction in progress) less accumulated depreciation and any related outstanding debt used to acquire the capital assets. These capital assets are used to provide services to the citizens, and therefore are not available to finance future operations. In addition, resources necessary to repay the related debt must be provided by sources other than the capital assets, as the assets themselves cannot be used to satisfy these liabilities. An additional portion of the City's net position, 7.0°/x, represents resources subject to external restrictions on how they may be used. The remaining 7.8%x of unrestricted net position, $82.0 million, may be used to meet the City's ongoing obligations to citizens and creditors. Consistent with the prior year, at the end of the current fiscal year, the City is able to report positive balances in both categories of governmental and business -type net position. Net position for governmental activities increased by $47.4 million over the prior year. The unrestricted net position of the business -type activities increased by $516,481. See independent auditor's report. THE CITY AS A WHOLE (CONTINUED) Governmental Activities Revenues from governmental activities increased by $29.4 million, or 16.5%, due in part to capital contributions of $15.8 million, the reversal of the allowance for doubtful accounts for the notes to the Redevelopment Successor Agency in the amount of $12.6 million, and an increase in property tax revenues of $2.9 million. The cost of all governmental activities this year was $152.8 million, an increase of 10.4% over the past year. As shown in the Statement of Activities, the governmental activities expenditures were ultimately financed in part by the taxpayers, as $47.7 million in revenues were generated by service revenues received from the performance of these activities; another $12.6 million was received from government agencies and other organizations that subsidized certain programs with operating grants and contributions; and another $30.1 million in revenues was generated from capital grants and contributions. Overall, the City's governmental program and general revenues amounted to $207.6 million, which funded the expenditures and resulted in a $47.4 million increase in net position. TABLE 2 CITY OF SANTA CLARITA'S CHANGES IN NET POSITION Business -Type Activities Business -type activities decreased the City's net position by $4.3 million for the current year. Business -type activities revenues decreased by $10.9 million during the year for a total of $16.4 million in revenues, not including the $7.3 million of transfers in from other governmental activities. The decreased revenue was largely due to a decrease in capital grants and contributions. The purchase of five CNG buses funded with capital grants will be completed in the next fiscal year. Related transit activity expenses increased by $1.2 million. See independent auditor's report. Governmental Activities Business -type Activities Total 2015 2014 2015 2014 2015 2014 Program Revenues: Charges for services $ 4],]45,405 $ 52,632,526 $ 6,]]9,579 $ 7,587,497 $ 54,524,984 $ 60,220,023 Operating gives; and contributions 12,561,608 19,421,199 8,228,348 8,984,127 20,789,956 28,405,326 Capital grants and contributions 30,107,231 22,53,841 1,423,440 10,804,747 31,61;] 33,335,588 General Revenues: Taxes: Propertytaxes 38,556,890 35,652,080 - - 38,558890 35,652,080 Other tares 47,248,617 45,092,120 - - 4],248,61] 45,092,120 Other 2,946,941 2,890,482 17,592 4,791 2,961 2,895,273 Capital Contributions 15,780,230 - - - 15,780,230 - Reversal ofAllratncefor Notes to RDA Successor Agency 12,633,832 12,633,832 Total Revenues 20],580.]50 178,219,246 18448,959 27,381,162 224,029,713 205,600,410 General government 46,224,813 41,001 - - 46,224,013 41,807,284 Public safety 22,235,368 22,187,434 - - 22,235,388 22,187,434 Public works 36,103.140 26,183,862 - - 38,103,144 26,183,862 Parks, recreation and community services 22,458,629 22,558301 - - 22,458629 22,51 Community development 5,880,945 6,193,101 - - 5,880,945 6,193,101 Unallocated infrastructure depreciation 18,0]2,65] 17,561,539 - - 18,0]2,65] 17,561,539 Interest and fiscal charges 1,827,094 1,072,832 - - 1,827,094 1,872,832 Transit 28,061 26,819,161 28,061 26,819,161 Total Expenses 152,802,650 136,356,353 28,062,668 26,819,161 180,865,318 165,175,514 acrease/Decrease in Net Position Before Transfers 5,]]8,104 39,862,895 (11,613,709) 562,001 43,164,395 40,424,896 Transfers (7,329,516) (5,692,032) 7,329,516 5,692,032 Changes in Net Position 47,448,588 3,170,863 (4,284,193) 6,254,033 43,164,395 40,424,896 Net Position— Beginning of Year 954,425,101 920,254,238 86,650,756 80,396,723 1,041,0]5,85] 1,000,650,961 Restatements (30,303,742) (1,103,720) (31,41 NetPosition — Beginning of Year, as restated 924,121,359 920,21 85,547,036 80,396,723 1,009,668,395 1,000,650,961 Net Position — End of Year $ 971,569,947 $ 954,425,101 $ 81.262.843 $ 86650756 $ 1052,832799 S 1,941,075,857 Business -Type Activities Business -type activities decreased the City's net position by $4.3 million for the current year. Business -type activities revenues decreased by $10.9 million during the year for a total of $16.4 million in revenues, not including the $7.3 million of transfers in from other governmental activities. The decreased revenue was largely due to a decrease in capital grants and contributions. The purchase of five CNG buses funded with capital grants will be completed in the next fiscal year. Related transit activity expenses increased by $1.2 million. See independent auditor's report. THE CITY'S FUNDS The governmental funds reported a combined fund balance at the end of the current fiscal year of $196.9 million, an increase of $8.5 million over the prior year. Approximately $85.8 million is restricted and already committed for specific restricted purposes. The total governmental fund balance includes the general fund balance of $116.5 million, which increased by $7.6 million over the prior year. The General Fund is the chief operating fund of the City of Santa Clarita. The fund balance increase of $7.6 million is due in part to an increase in tax revenues of $4.4 million. The unassigned fund balance of $50.1 million is available for spending at the City's discretion. More detailed information about the City's classification of fund balances are presented in Note 12 to the financial statements. Other major fund balance changes are noted below: • The Bridge and Thoroughfare Fund has realized a decrease of $2.0 million from the prior year due in part to capital project expenditures of $1.9 million that included the widening of McBean Parkway over the river and the widening of the Golden Valley Road Bridge at SR -14. • The Public Library Fund has realized an increase of $1.1 million in its fund balance from the prior year due to an increase in tax revenue of $963,914. • The Landscape Maintenance District's fund balance increased $1.7 million from the prior year in part due to a reduction in water utility expenditures of $1.0 million in response to drought emergency water conservation requirements imposed by the State. In addition to the major funds, the fund balances for the other governmental funds experienced an aggregate increase of $10,913. The City's proprietary funds provide the same type of information found in the government -wide financial statements, but in more detail. The total net position for the Transit Enterprise Fund decreased over the prior year by $4.3 million, or 5.0%. The unrestricted portion of the business -type activities net position increased by $516,481 from the prior year, net of restatements. The Internal Service Funds net position decreased by $136,238, or 1.6%, net of restatements. The ending fund balance for Internal Service Funds is $8.4 million, of which $7.5 million is unrestricted. General Fund Budgetary Highlights Comparison of the fiscal year 2014-2015 original (adopted) general fund budgeted expenditures and transfers of $84.0 million to the final budgeted expenditures of $94.8 million results in a net increase of $10.8 million. Included in this net increase is $378,989 in committed purchase orders and contracts from the prior June 30 balance, as well as $421,308 of prior fiscal year operating and capital improvement projects approved for carryover into fiscal year 2014-2015. The resulting beginning budget balance was equal to $84.8 million. Original Cont. Encumbrances Beg. Supplemental Final Budget + Appropriations + = Balance + Changes= Budget $83,993,532 + $4217308+ $3783989 = $8437933829 + $9,966,054 = $94,7593883 See independent auditor's report. THE CITY'S FUNDS (CONTINUED) Comparing the beginning budget of $84.8 million with the final budget of $94.8 million indicates the General Fund had supplemental budgetary appropriations of $10.0 million during the fiscal year. Included in the supplemental appropriations are the results of this year's budget review. During the mid -year budget review, budgeted general fund revenue had a net increase of $2,497,247. Included in the net increase are $1 million in development revenue; $500,000 increase in property tax; $438,134 in 2005 flood federal mitigation funds; $312,703 in transient occupancy tax; $229,000 in animal licensing; $127,958 in parks and recreation revenue; and $67,500 in real property transfer tax. Revenue decreases in the general fund included $225,000 for traffic citations and $124,000 in waste haulers franchise fees. At year-end, the City's actual revenues were $4.8 million more than the final budgetary estimates. Actual expenditures were less than the final budgetary estimates by $4.5 million. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City had $926.4 million (net of accumulated depreciation) invested in a broad range of capital assets. This investment in capital assets includes land, buildings and related improvements, vehicles and equipment, and infrastructure (including infrastructure placed in service prior to July 1, 2002), such as streets, bridges, traffic signals, medians, sidewalks, trails, sewers, curbs and gutters, and drainage systems (see Table 3). TABLE 3 CITY OF SANTA CLARITA'S CAPITAL ASSETS (net of depreciation) Governmental Activities Business Type Activities Total 2015 2014 2015 2014 2015 2014 Land $141,193,369 $125,250,547 $15,087,880 $15,087,880 $156,281,249 $140,338,427 Construction in progress 18,351,762 13,438,221 - 83,252 18,351,762 13,521,473 Infrastructure, net 600,894,423 609,950,994 - - 600,894,423 609,950,994 Depreciable site improvements, net 30,173,283 26,079,903 10,814,127 10,570,218 40,987,410 36,650,121 Depreciable buildings and improvements, net 53,534,783 52,365,869 31,324,760 32,208,106 84,859,543 84,573,975 Depreciable equipment, net 3,714,475 3,287,475 21,269,104 25,347,089 24,983,579 28,634,564 TOTALS $847,862,095 $830,373,009 $78,495,871 $83,296,545 $926,357,966 $913,669,554 Major capital asset events during the year included: • Acquisitions and contributions of land totaling $15.9 million • Infrastructure additions totaling $9.2 million that included $6.3 million for sewers and $2.1 million for pavement projects • Equipment deletions in the Transit fund of $3.0 million for retirement of buses. Additional information on the City of Santa Clarita's capital assets can be located in Note 7 to the financial statements. See independent auditor's report. R CAPITAL ASSETS AND DEBT ADMINISTRATION (CONTINUED) Debt Administration At year-end, the City's total debt amounted to $40.9 million in bonds, notes, capital leases, contracts, claims payable and compensated absences as shown in Table 4. A summary of debt activity for the year follows. Refunding Certificates of Participation, net Certificates of Participation Lease Revenue Bonds Contract and Leases Loans Compensated Absences Claims Payable TOTAL TABLE 4 CITY OF SANTA CLARITA'S OUTSTANDING DEBT Governmental Activities Business -type Activities million in Total activities long-term 2015 2014 2015 2014 2015 Principal payments totaled $1.8 2014 $8,128,138 $9,323,138 15,175,988 15,291,374 11,673,964 12,002,622 217,615 154,705 300,000 580,000 3,313,500 3,197,040 1,993,915 2,157,763 $40,803,120 $42,706,642 75,251 66390 $75,251 $66,390 $8,128,138 $9,323,138 15,175,988 15,291,374 11,673,964 12,002,622 217,615 154,705 300,000 580,000 3,388,751 3,263,429 1,993,915 2,157,763 $40,878,371 $42,773,031 The City's governmental activities had $40.8 million in debt at year-end. Governmental activities long-term debt decreased overall by $1.9 million during the year. Principal payments totaled $1.8 million. No new debt related to business -type activities was issued or refinanced during the current fiscal year. During the fiscal year ended June 30, 2015, the City was able to meet its current year debt obligation in a timely manner. State statutes limit the amount of general obligation debt a governmental entity may issue to 15% of its adjusted assessed valuation. The debt limitation for the City as of June 30, 2015 was $961,696,007. The calculation of the debt limitation is included in the statistical section. Additional information on the City of Santa Clarita's debt can be located in Note 8 to the financial statements. See independent auditor's report. 11 ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS Our long history of conservative and strategic budget practices has allowed the City to maintain a balanced budget during every year of the Great Recession without layoffs or drastic cuts in services. The economy continues to show positive signs. It has taken seven years from the start of the Great Recession for the City of Santa Clarita to recover our revenues losses. General Fund sales tax revenue continues to be the largest revenue source to operate general governmental functions, accounting for 34.8%, or $35.5 million, as projected in the 2015-2016 budget. This is 3.2% higher than 2014-2015 receipts. Property tax revenues account for 32.2% of the General Fund budget, or $32.8 million, in 2015- 2016. The County Assessor's office makes changes to the City's property tax roll daily to reflect transfers in ownership, new construction, assessment appeals, parcel splits and other dynamic changes. Budgeted General Fund revenues for fiscal year 2015-2016 are $101.9 million, and operating and capital expenditures are budgeted at $92.9 million. The City's 2015-2016 operating and capital budget for all funds is $221.9 million. The City remains dedicated to service excellence, teamwork and creativity. City staff continues to do more with less, find creative ways to maintain services revered by our community, and provide award- winning programs. The 2015-2016 budget remains to be a reflection of the City's commitment to the residents of Santa Clarita. This is consistent with the City's long tradition of ensuring that programming for Santa Clarita's youth and children is a priority to help promote growth and curb teen crimes. A copy of the City's 2015-2016 budget can be obtained by contacting the City Finance Division or visiting the web at www.santa-clarita.com/citvhall/dei)artments/cmo/citybudget. See independent auditor's report. 12 13 City of Santa Clarita Statement of Net Position June 30, 2015 Liabilities Current liabilities Accounts payable and accrued liabilities Governmental Business -Type 16,612,372 Interest payable Activities Activities Total Assets 3,070,803 - 3,070,803 Current assets 7,734,479 - 7,734,479 Cash and investments $ 212,464,217 $ 4,235,110 $ 216,699,327 Receivables: 1,605,963 37,755 1,643,718 Accounts, net 728,780 - 728,780 Interest 453,272 8,749 462,021 Taxes 8,679,920 - 8,679,920 Prepaid costs 577,754 340,784 918,538 Due from other governments 5,397,858 2,718,045 8,115,903 Total current assets 228,301,801 7,302,688 235,604,489 Noncurrent assets Restricted assets: Cash and investments 4,253,009 - 4,253,009 Cash and investments with fiscal agents 2,259,033 - 2,259,033 Loans receivable 2,402,815 - 2,402,815 Land held for resale 1,188,969 - 1,188,969 Notes to RDA Successor Agency 12,633,832 - 12,633,832 Other post -employment benefits asset 7,154,774 - 7,154,774 Capital assets: Nondepreciable assets 159,545,131 15,087,880 174,633,011 Depreciable assets, net 688,316,964 63,407,991 751,724,955 Total noncurrent assets 877,754,527 78,495,871 956,250,398 Total assets 1,106,056,328 85,798,559 1,191,854,887 Deferred outflows of resources Deferred outflows of net pension liability 3,608,702 131,436 3,740,138 Total deferred outflows of resources 3,608,702 131,436 3,740,138 Liabilities Current liabilities Accounts payable and accrued liabilities 13,225,531 3,386,841 16,612,372 Interest payable 458,725 - 458,725 Deposits payable 3,070,803 - 3,070,803 Due to other governments 7,734,479 - 7,734,479 Unearned revenues 598,658 - 598,658 Compensated absences 1,605,963 37,755 1,643,718 Claims and judgments 1,233,572 - 1,233,572 Bonds, loans and capital leases 1,898,628 - 1,898,628 Total current liabilities 29,826,359 3,424,596 33,250,955 Noncurrent liabilities Compensated absences 1,707,537 37,496 1,745,033 Claims and judgments 760,343 - 760,343 Bonds, loans and capital leases 33,597,077 - 33,597,077 Developer credits 39,117,582 - 39,117,582 Net pension liability 25,931,680 944,480 26,876,160 Total noncurrent liabilities 101,114,219 981,976 102,096,195 Total liabilities 130,940,578 4,406,572 135,347,150 Deferred inflows of resources Deferred inflows of net pension liability 7,154,505 260,580 7,415,085 Total deferred inflows of resources 7,154,505 260,580 7,415,085 See Notes to Financial Statements. 14 City of Santa Clarita Statement of Net Position June 30, 2015 Net position Net investment in capital assets Restricted Landcape maintenance Transportation Open space preservation Public safety Public library Air quality improvement Stormwater Public education and government Tourism marketing Low- and moderate -income housing Community Development Unrestricted Total net position See Notes to Financial Statements. 15 Governmental Business -Type Activities Activities Total $ 818,817,043 $ 78,495,871 $ 897,312,914 34,647,671 - 34,647,671 15,309,948 - 15,309,948 7,156,136 - 7,156,136 1,492,080 - 1,492,080 454,198 - 454,198 512,186 - 512,186 5,453,491 - 5,453,491 1,434,532 - 1,434,532 595,231 - 595,231 4,063,016 - 4,063,016 2,422,815 - 2,422,815 79,211,600 2,766,972 81,978,572 $ 971,569,947 $ 81,262,843 $ 1,052,832,790 City of Santa Clarita Statement of Activities For the Year Ended June 30, 2015 Business -Type Activities: Transit Enterprise Total business -type activities Total See Notes to Financial Statements. 28,062,668 67779,579 8,228,348 Program Revenues 28.062.668 6.779,579 8.228.348 1.423.440 Operating Capital Charges for Contributions Contributions Functions/Programs Expenses Services and Grants and Grants Governmental Activities: General government $ 463224,813 $ 26,783,616 $ 4,079,593 $ 516152030 Public safety 22,235,368 1,605,059 1,053,265 879,070 Parks, recreation and community service 22,458,629 47525,662 65,181 169,132 Public works 361103,144 1370567586 6,3102046 21,7253774 Community development 51880,945 1,774,482 1,053,523 117183225 Unallocated infrastructure depreciation 18,072,657 - - - Interest and fiscal charges 11827,094 - - - Total governmental activities 152,802,650 477745,405 12,561,608 30,1073231 Business -Type Activities: Transit Enterprise Total business -type activities Total See Notes to Financial Statements. 28,062,668 67779,579 8,228,348 1,423,440 28.062.668 6.779,579 8.228.348 1.423.440 General revenues Taxes: Property taxes Sales taxes Franchise taxes Transient occupancy taxes Property transfer tax Motor vehicle in lieu - unrestricted Investment income Miscellaneous Gain on sale of capital asset Transfers Capital contributions Reversal of Allowance for Notes to RDA Successor Agency Total general revenues and transfers Change in net position Net position, beginning of year, as restated Net position, end of year 16 Net (Expense) Revenue and Changes in Net Position Governmental Business -Type Activities Activities Total $ (91746,574) $ - $ (91746,574) (18,697,974) - (18,697,974) (17,698,654) - (172698,654) 41989,262 - 4,989,262 (11334,715) - (1,334,715) (18,072,657) - (18,072,657) (11827,094) - - (1,827,094) (62,388,406) 85,703 - (62,388,406) 38,556,890 (11,631,301) 38556,890 34,355,412 (11,631,301) 34,355,412 (11,631,301) - 8512,818 (11,631,301) - (62,388,406) (11,631,301) 1,169,780 - (74,019,707) 85,703 38,556,890 - 38556,890 34,355,412 - 34,355,412 8,512,818 - 8512,818 3,124,904 - 3,124,904 1,169,780 - 1,169,780 85,703 - 85,703 21240,594 17,592 21258,186 678,937 678,937 27,410 - 27,410 (7,329,516) 7,329,516 - 15,780,230 15,7807230 12,633,832 12,633,832 109,836,994 7,347,108 117,1841102 47,448,588 (41284,193) 43,164,395 17 924,121,359 85,547,036 1,009,668,395 $ 971,569,947 $ 81,262,843 $ 1,052,832,790 17 City of Santa Clarita Balance Sheet Governmental Funds June 30, 2015 Assets Cash and investments Receivables: Accounts, net Interest Taxes Loans Notes to RDA Successor Agency Prepaid costs Due from other governments Due from other funds Advances to other funds Land held for resale Restricted assets: Cash and investments Cash and investments with fiscal agents Total assets Liabilities, deferred inflows of resources and fund balances (deficit) Liabilities Accounts payable and accrued liabilities Deposits payable Due to other governments Unearned revenues Due to other funds Advances from other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances (deficit). See Notes to Financial Statements. 18 Special Revenue Funds Bridge and Public General Thoroughfare Library $ 113,799,150 $ 373,279 258,503 7,986,753 7,225,964 118,400 975,587 2,040,570 11,036,236 91341,070 $ 1,368,033 160,617 - 18,602 2,727 127,509 53,243 - 225,682 825,698 - $ 144,640,140 $ 91520,289 $ 1 77 ,7,194 $ 71448,001 $ 394,723 $ 244,050 3,070,803 7,700,000 598,658 1,614,862 9,540,318 18,817,462 2,0091585 9,784,368 9,320,047 160,617 - %320,047 160,617 11,024,338 - - 71350,087 55,336,807 50,1411486 (8,007,174) 116,502,631 7,350,087 (8,007,174) $ 144,640,140 $ 91520,289 $ 1,777,194 City of Santa Clarita Balance Sheet Governmental Funds June 30, 2015 Special Revenue Funds Liabilities, deferred inflows of resources and fund balances (deficit) Liabilities Accounts payable and accrued liabilities Deposits payable Due to other governments Unearned revenues Due to other funds Advances from other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances (deficit). See Notes to Financial Statements. 19 $ 2,133,441 $ 2,752,759 $ 121972,974 - - 31070,803 34,479 71734,479 598,658 2,0401570 21040,570 11,155,180 2,133,441 4,8271808 371572,664 10,393,563 191874,227 10,393563 19,874,227 25201 Landscape Non -Major Total 48,625,581 Maintenance Governmental Governmental 14,000 District #1 Funds Funds Assets (626,129) Cash and investments $ 31,598,414 $ 46,730,953 $ 202,837,620 Receivables: Accounts, net 38,199 101,055 673,150 Interest 62,993 89,879 432,704 Taxes 221,460 344,198 81679,920 Loans - 224022815 21402,815 Notes to RDA Successor Agency - 52407,868 12,633,832 Prepaid costs 252,661 13,437 437,741 Due from other governments - 4,422,271 51397,858 Due from other funds - - 27040,570 Advances to other funds - 118,944 11,155,180 Land held for resale - 1,188,969 11188,969 Restricted assets: Cash and investments - 42027,327 41253,009 Cash and investments with fiscal agents - 1,433,335 21259,033 Total assets $ 321173,727 $ 66,2811051 $ 2541392,401 Liabilities, deferred inflows of resources and fund balances (deficit) Liabilities Accounts payable and accrued liabilities Deposits payable Due to other governments Unearned revenues Due to other funds Advances from other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances (deficit). See Notes to Financial Statements. 19 $ 2,133,441 $ 2,752,759 $ 121972,974 - - 31070,803 34,479 71734,479 598,658 2,0401570 21040,570 11,155,180 2,133,441 4,8271808 371572,664 10,393,563 191874,227 10,393563 19,874,227 25201 1,202,406 12,479,405 29,787,625 48,625,581 85,763,293 - 14,000 14,000 1,843,822 57,180,629 - (626,129) 41,508,183 301040,286 51,059,680 1961945,510 $ 32,173,727 $ 66,281,051 $ 254,392,401 20 City of Santa Clarita Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2015 Fund balances of governmental funds $ 196,945,510 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Those capital assets consist of: Nondepreciable assets $ 159,5451131 Depreciable assets, net of accumulated depreciation 687,4341044 846,979,175 Revenues reported as deferred inflows in the governmental funds do not provide current financial resources and are recognized in the Statement of Activities. 19,8741227 Other post -employment benefit assets are not available to pay for current -period expenditures and therefore are not reported in the governmental funds. 7,154,774 Amounts reported for net pension liability are not due in the current period and therfore are not reported in the governmental funds. Related components that will affect the net pension liability in future measurement years are reported as deferred outflows and deferred inflows of resources are therefore not reported in the governmental funds. Net pension liability (25,832,976) Deferred outflows of resources related to pensions 3,594,966 Deferred inflows of resources related to pensions (7,127,273) (29,3651283) Long-term liabilities are not due and payable in the current period and therefore are not reported in the governmental funds. Those long-term liabilities consist of: Lease revenue bonds (11,673,964) Certificates of participation bonds (23,3041126) Capital leases (217,615) Loans payable (300,000) Compensated absences (3,3111047) Bridge and Thoroughfare developer payables (397117,582) (77,9241334) Accrued interest payable on long-term liabilities do not require the use of current financial resources and therefore are not reported in the governmental funds. (458,725) Internal service funds are used by management to charge the costs of certain activities, such as insurance, and vehicle and computer replacement, to individual funds. These assets and liabilities of the internal service funds are included in governmental activities in the Statement of Net Position. 8,364,603 Net position of governmental activities $ 971,569,947 See Notes to Financial Statements. 21 City of Santa Clarita Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30. 2015 Revenue Funds Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Interest and fiscal charges Redemption of district credits Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances Bridge and Public Fund General Thoroughfare Library Revenues - - 5,84%555 1,038,855 337387 Taxes $ 781232,263 $ - $ 6,107,578 Special assessments - - - Licenses and permits 51567,280 Intergovernmental 111252699 - Charges for services 91139,349 - 85,000 Investment income 11073,899 283,790 6,078 Fines and forfeitures 4522052 - - Developer fees - 5,290,874 - Other revenue 14,501 - 186,042 Total revenues 95,605,043 5,574,664 6,3841698 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Interest and fiscal charges Redemption of district credits Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year See Notes to Financial Statements. 22 21,366,674 4,991,505 21,069,111 - - 20,673,945 - - 12,079,362 1,188,641 101,176 51270,770 - - 5,84%555 1,038,855 337387 222422 - 50,057 - 192,897 102,472 - 5,105,402 - 86,331,839 7,525,795 5,278,597 9,2731204 (1,951,131) 1,106,101 2,2172935 - - (3,880,387) (7,284) (11591) (11662,452) (7,284) (1,591) 7,610,752 (11958,415) 11104,510 108,891,879 9,308,502 (9,111,684) $ 116,502,631 $ 7,350,087 $ (8,007,174) City of Santa Clarita Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2015 Special Revenue Funds Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Interest and fiscal charges Redemption of district credits Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund Landscape Non -Major Total Fund Maintenance Governmental Governmental 20,846,943 District #1 Funds Funds Revenues 6122671 5031441 4,931,378 Taxes $ 901,701 $ 548,014 $ 85,789,556 Special assessments 17,661,944 101226,182 27,888,126 Licenses and permits - - 52567,280 Intergovernmental 301827,993 31,953,692 Charges for services - 626,279 9,8501628 Investment income 290,063 372,677 2,0261507 Fines and forfeitures - 809,700 1,261,752 Developer fees - 5,473,680 10,7641554 Other revenue - 310,574 511,117 Total revenues 18.853,708 491195,099 175,6131212 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Interest and fiscal charges Redemption of district credits Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year See Notes to Financial Statements. 11,832,237 5,005,752 43,196,168 - 1,119530 22,188,641 3,696 169,302 20,846,943 186,951 22,519,057 36,075,187 - 6122671 5031441 4,931,378 11,539J51 23, 392, 326 1,920,000 1,9921479 1,555,334 1,8501703 - 51105,402 16,954,262 44,440,797 160,531,290 1,8991446 41754,302 15,0811922 23 285354,440 51,048,767 188,491,904 $ 30,040,286 $ 51,059,680 $ 196,945,510 5,632,705 7,850,640 (213,600) (10,376,094) (14,478,95(3) (213,600) (41743,389) (6,628,316) 105,846 10,913 8,453,606 23 285354,440 51,048,767 188,491,904 $ 30,040,286 $ 51,059,680 $ 196,945,510 24 City of Santa Clarita Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities For the Year Ended June 30, 2015 Net change in fund balances - total governmental funds Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlay as expenditures. However, in the Statement of Activities, the costs of those assets are allocated over the estimated useful lives as depreciation expense. The following were the amounts of capital outlay and depreciation expense in the current period: Capital outlay Capital contributions Capital leases Depreciation expense Disposal of capital assets Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the governmental funds. Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position. Also, governmental funds report the effect of premiums and discounts when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. There was an issuance of debt pertaining to two capital leases in the current period, and the following includes the issuance of debt for the capital leases and the amounts of repayment of long-term liabilities: Changes in compensated absences Lease revenue bonds Certificates of participation bonds Purchased assets from capital leases Loans payable Amortization of premiums of long-term liabilities Amortization of discounts of long-term liabilities The issuance of Bridge and Thoroughfare district credits provide current financial resources to governmental funds, but increases long-term liabilities in the Statement of Net Position. Redemptions of district credits is an expenditure in the governmental funds, but reduces long-term liabilities in the Statement of Net Position. Issuance of district credits Some expenses reported in the Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. These expenses consist of the following: Changes in interest payable for long-term liabilities Changes and amortization of other post -employment benefit asset Changes in net pension liabilities Internal service funds are used by management to charge the costs of certain activities, such as insurance, and vehicle and computer replacement, to individual funds. The net revenue (expense) of the internal service funds is reported with governmental activities. Change in net position of governmental activities See Notes to Financial Statements. 25 $ 23,392,326 15,780,230 135,389 (21,589,226) (501,339) $ 8,453,606 17,217,380 13,281,043 (116,261) 325,000 1,315,000 (62,910) 280,000 3,658 (4,614) 1,739,873 5,105,402 24,565 939,844 823,113 1,787,522 (136,238) $ 47,448,588 City of Santa Clarita Statement of Net Position Proprietary Funds June 30, 2015 Business -Type Governmental Activities Activities Noncurrent assets Capital assets: Land Site improvements, net of accumulated depreciation Building and improvements, net of accumulated depreciation Equipment, net of accumulated depreciation Total noncurrent assets Total assets Deferred outflows of resources Deferred outflows of net pension liability Total deferred outflows of resources Liabilities Current liabilities Accounts payable and accrued liabilities Compensated absences Claims and judgments Total current liabilities Noncurrent liabilities Net pension liability Compensated absences payable Claims and judgments Total noncurrent liabilities Total liabilities Deferred inflows of resources Deferred inflows of net pension liability Total deferred inflows of resources Net position Net investment in capital assets Unrestricted Total net position See Notes to Financial Statements. 26 15,087,880 Transit Internal - Enterprise Service Funds Assets 882,920 78,4951871 Current assets 85, 798, 559 10, 725, 728 Cash and investments $ 4,235,110 $ 93626,597 Receivables: Accounts - 55,630 Interest 81749 20,568 Prepaid costs 340,784 140,013 Due from other governments 21718,045 - Total current assets 7,3021688 9,842,808 Noncurrent assets Capital assets: Land Site improvements, net of accumulated depreciation Building and improvements, net of accumulated depreciation Equipment, net of accumulated depreciation Total noncurrent assets Total assets Deferred outflows of resources Deferred outflows of net pension liability Total deferred outflows of resources Liabilities Current liabilities Accounts payable and accrued liabilities Compensated absences Claims and judgments Total current liabilities Noncurrent liabilities Net pension liability Compensated absences payable Claims and judgments Total noncurrent liabilities Total liabilities Deferred inflows of resources Deferred inflows of net pension liability Total deferred inflows of resources Net position Net investment in capital assets Unrestricted Total net position See Notes to Financial Statements. 26 15,087,880 10,814,127 - 31,324,760 21,269,104 882,920 78,4951871 882,920 85, 798, 559 10, 725, 728 131,436 13,736 131,436 13,736 3,386,841 252557 37,755 2,453 - 1,233,572 3,4241596 11488,582 944,480 98,704 37,496 - 760,343 981,976 859,047 4,4061572 21347,629 260,580 27,232 260,580 27,232 78,4951871 882,920 2,7661972 7,481,683 $ 81,262,843 $ 8,364,603 City of Santa Clarita Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds For the Year Ended June 30. 2015 Business -Type Governmental Activities Activities Transit Internal Enterprise Service Funds Operating revenues Charge for services $ 6,469,205 $ 25782,531 Other revenues 310,374 - Total operating revenues 61779,579 2,7825531 Operating expenses Administration and personnel services Transportation services Services and supplies Depreciation expense Total operating expenses Operating income (loss) Nonoperating revenues (expenses) Intergovernmental revenue Investment income Gain on disposal of capital assets Total net nonoperating revenues (expenses) Income (loss) before transfers and capital contributions Transfers and capital contributions Transfers in Transfers out Capital contributions Total transfers and capital contributions Changes in net position Net position Net position, beginning of year, as restated Net position, end of year See Notes to Financial Statements. 27 21218,483 3595716 18,291,568 - 2,006,871 1,802,498 51545,746 1755333 28,062,668 2,3375547 (21,283,089) 4445984 8,228,348 - 17,592 965328 - 23,650 85245,940 1195978 (135037,149) 5645962 75559,230 835031 (229,714) (784,231) 1,423,440 85752,956 (701,200) (45284,193) (136,238) 85,5475036 8,500,841 $ 8152625843 $ 8,364,603 City of Santa Clarita Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2015 Business -Type Governmental Activities Activities Transit Internal Enterprise Service Funds Cash flows from operating activities Cash received from customers and users Cash paid to suppliers for goods and services Cash paid to employees for services Cash received from other sources Net cash provided by (used in) operating activities Cash flows from non -capital financing activities Cash transfers out Cash transfers in Intergovernmental revenues Net cash provided by (used in) non -capital financing activities Cash flows from capital and related financing activities Capital contributions Acquisition and construction of capital assets Proceeds from disposal of capital assets Net cash provided by (used in) capital and related financing activities Cash flows from investing activities Interest received Net cash provided by investing activities equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation (Increase) in accounts receivable (Increase) in prepaid expense Increase in accounts payable (Decrease) in claims and judgments (Decrease) in salaries and benefits payable Total adjustments Net cash provided by (used in) operating activities Non-cash investing, capital and financing activities Disposal of capital assets See Notes to Financial Statements. 28 6,469,205 $ 2,730,312 (19,891,664) (1,878,254) (2,239,718) (523,581) 310,374 (15,351,803) 328,477 (229,714) (784,231) 7,559,230 83,031 10,094,278 - 17,423,794 (701,200) 1,057,418 - (745,072) (452,108) 28,719 312,346 (423,389) 13,361 98,976 13,361 98,976 2,397,698 (697,136) 1,837,412 10, 323,733 $ 4,235,110 $ 9,626,597 $ (21,283,089) $ 444,984 5,545,746 175,333 - (52,219) (99,686) (79,700) 506,461 6,874 - (163,848) (21,235) (2,947) 5,931,286 (116,507) $ (15,351,803) $ 328,477 (5,069) 29 City of Santa Clarita Statement of Net Position (Deficit) Fiduciary Funds June 30, 2015 Liabilities Accounts payable Due to other governments Interest payable Due to external parties Bonds, due within one year Bonds and notes, due in more than one year Total liabilities Net position (deficit) Trust deficit Total net position (deficit) 30 $ 11952 11,672 635 - - 412,244 1335337971 - - 654,470 47,107,166 $ 13,536,558 483185552 (322172,258) $ (32,172,258) Private - Purpose Trust Fund Agency RDA Successor Funds Agency Assets Cash and investments $ 170313896 $ 115753499 Receivables: Interest 23022 33278 Taxes 21167 Prepaid costs 13847 - Due from other governments 7153000 727347479 Land held for resale - 1,011,031 Restricted assets: Cash and investments - 37888 Cash and investments with fiscal agents 1,7597112 1,1657384 Capital assets: Land 929373976 5327878 Site improvements, net of accumulated depreciation - 942867 Building and improvements, net of accumulated depreciation 867538 - Infrastructure, net of accumulated depreciation - 3,891,990 Total assets $ 13,5365558 1630137294 Liabilities Accounts payable Due to other governments Interest payable Due to external parties Bonds, due within one year Bonds and notes, due in more than one year Total liabilities Net position (deficit) Trust deficit Total net position (deficit) 30 $ 11952 11,672 635 - - 412,244 1335337971 - - 654,470 47,107,166 $ 13,536,558 483185552 (322172,258) $ (32,172,258) City of Santa Clarita Statement of Changes in Net Position (Deficit) Fiduciary Funds For the Year Ended June 30. 2015 Deductions Administrative expenses 246,464 Contractual services 37,036 Interest expense 15713,968 Depreciation expense 90,159 Total deductions 25087,627 Changes in net position 85996,090 Net position (deficit) Trust deficit, beginning of year (4151685348) Trust deficit, end of year $ (325172,258) 31 Private - Purpose Trust Fund RDA Successor Agency Additions Property taxes $ 25548,666 Investment income 61424 Miscellaneous 85528,627 Total additions 115083,717 Deductions Administrative expenses 246,464 Contractual services 37,036 Interest expense 15713,968 Depreciation expense 90,159 Total deductions 25087,627 Changes in net position 85996,090 Net position (deficit) Trust deficit, beginning of year (4151685348) Trust deficit, end of year $ (325172,258) 31 32 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Financial Reporting Entity These financial statements present the financial results of the City of Santa Clarita, California (the City) and its component unit as required by accounting principles generally accepted (GAAP) in the United States of America. Component units are legally separate entities for which the primary government is financially accountable. The City has one component unit, the Santa Clarita Public Financing Authority (the Authority). The City is considered to be financially accountable for the Authority, which is governed by the City Council, which serves as the Board of the Authority. Therefore, the entity is reported as a blended component unit with the City's comprehensive annual financial report (CAFR). The City and the component unit have a June 30 year-end. The City was incorporated on December 15, 1987 as a general law city. The City operates under a council-manager form of government and provides its citizens with a full range of municipal services, either directly or under contract with the County of Los Angeles. Such services include public safety (police and fire protection), building permit/plan approval, planning, community development, recreation, animal control, and street maintenance. Component Unit The Santa Clarita Public Financing Authority was established in July 1991 as a joint powers authority between the City and the former redevelopment agency for the purpose of providing financing and funding of public capital improvements and the acquisition of property. The Authority's financial data and activity are reported within the debt service and capital projects fund types of the City. Separate financial statements for the Authority are not prepared. B. Government -Wide and Fund Financial Statements The City's government -wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all the activities of the City. The effect of interfund activity has been removed from these statements, except for the interfund services provided and used. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges for support. Fiduciary activities of the City are not included in these statements. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not included among program revenues are reported as general revenues. Separate financial statements are provided for governmental funds, proprietary funds and fiduciary funds, even though the latter are excluded from the government -wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. 33 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Accounting and Measurement Focus The government -wide financial statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all of the City's assets and liabilities, including capital assets, infrastructure assets, long-term liabilities, and deferred inflows and deferred outflows of resources are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which the liability is incurred. Certain types of transactions are reported as program revenues for the City in three categories: • Charges for services • Operating grants and contributions • Capital grants and contributions Certain eliminations have been made as prescribed by Governmental Accounting Standards Board (GASB) Statement No. 34 in regard to interfund activities. All internal balances in the Statement of Net Position have been eliminated, except those representing balances between the governmental activities and the business -type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal service fund transactions have been eliminated; however, those transactions between governmental and business -type activities have not been eliminated. The following interfund activities have been eliminated: Due to and from other funds Advances to and from other funds Transfers in and out The City has conformed to the pronouncements of the GASB, which are acknowledged as the primary authoritative statements of GAAP in the United States of America applicable to state and local governments. Governmental Fund Financial Statements Governmental fund financial statements are reported using the "current financial resources" measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period for property and sales tax, and 90 days for all other revenues. Expenditures generally are recorded when a liability is incurred. However, debt service expenditures, expenditures related to compensated absences, pension, and other post -employment benefits, and the redemption of district credits are recorded only when payment is due. 34 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Accounting and Measurement Focus (Continued) Property taxes when levied for, taxpayer -assessed tax revenues (e.g., franchise taxes, sales taxes, motor vehicle fees, etc.), net of estimated refunds and uncollectible amounts, intergovernmental revenues when eligibility requirements are met, charges for services and interest associated with the current fiscal period are all considered susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered measurable only when cash is received by the City. The City reports the following major governmental funds: The General Fund is the primary operating fund of the City. It is used to account for all financial resources of the City that are not required to be accounted for in another fund. The Bridge and Thoroughfare Special Revenue Fund is used to account for restricted district fees received from developers as set by the State Subdivision Law and the Los Angeles County and City of Santa Clarita, which are used for the construction of street, highway, bridge and other thoroughfare in the Bouquet Canyon, Eastside Canyon, Via Princessa and Valencia districts. This fund also accounts for the issuance and redemption of district credits associated with the contribution of infrastructure. At June 30, 2015, the Bridge and Thoroughfare Special Revenue Fund was elected as a major fund for public interest purposes. The Public Library Special Revenue Fund is used to account for property tax receipts and disbursements associated with the operation of the City of Santa Clarita Public Library. The Landscape Maintenance District #1 Special Revenue Fund is used to account for property tax receipts and disbursements related to the landscape maintenance district. Proprietary Fund Financial Statements Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) and deferred inflows and deferred outflows of resources are included in the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned, while expenses are recognized in the period in which the liability is incurred. Operating revenues and expenses result from the operating and maintenance of the local public transit services. The operating revenues consist of charges to customers for the service provided. Operating expenses include the costs of providing these services, administrative expenses and depreciation expense. All revenues and expenses not meeting these definitions and which are not capital in nature are reported as non-operating revenues and expenses. The City reports the following major enterprise fund: The Transit Enterprise Fund is used to account for the operation of the City's local public transit bus system. 35 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Accounting and Measurement Focus (Continued) Fiduciary Fund Financial Statements Fiduciary fund financial statements include a Statement of Net Position (Deficit) and a Statement of Changes in Net Position (Deficit). The fiduciary funds represent a private -purpose trust fund and agency funds. Fiduciary fund types are accounted for according to the nature of the fund. Agency funds are reported on the accrual basis of accounting and are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Private -purpose trust funds are reported using the "economic resources" measurement focus and the accrual basis of accounting. The RDA Successor Agency Private Purpose Trust Fund is used to account for monies received from the L.A. County Auditor Controller for the repayment of the enforceable obligations of the former Santa Clarita Redevelopment Agency. These funds are restricted for the sole purpose of payment of items on an approved Recognized Obligation Payment Schedule (ROPS). The City reports the following agency funds: The Assessment District No. 92-2 Fund is used to account for assets and liabilities held by the City as an agent and related to the debt service activity on no -commitment special assessment debt. The Assessment District No. 99-1 Fund is used to account for assets and liabilities held by the City as an agent and related to the debt service activity on no -commitment special assessment debt. The Community Facilities District No. 2002-1 Fund is used to account for assets and liabilities held by the City as an agent and related to the debt service activity on no -commitment special assessment debt. The Santa Clarita Watershed Recreation and Conservancy Authority is used to account for assets and liabilities held by the City as an agent and related to the park and open space lands for the Santa Clarita Watershed Recreation and Conservancy Authority (the Watershed Authority). The Santa Clarita Public Television Authority is used to account for assets and liabilities held by the City as an agent and related to the operations of the Santa Clarita Public Television Authority (the SCPTA). Fund Types Reported by the City Additionally, the City reports the following fund types: The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes. The Debt Service Funds are used to account for the accumulation of resources for, and payment of, interest and principal on long-term debt. The Capital Projects Funds are used to account for financial resources used for the acquisition or construction of major capital facilities (other than those financed by the proprietary funds). 36 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Basis of Accounting and Measurement Focus (Continued) The Internal Service Funds are used to account for the financing of special activities that provide services within the City. Such activities include self-insurance, computer replacement and vehicle replacement. D. Cash and Cash Equivalents and Investments The City pools its available cash for investment purposes. The City's cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Cash and cash equivalents are combined with investments and displayed as cash and investments. For purposes of the statement of cash flows of the proprietary fund types, cash and cash equivalents include all investments, as the City operates an internal cash management pool that maintains the general characteristics of a demand deposit account. In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Fair value is the amount at which an investment could be exchanged in a current transaction between willing parties, other than a forced or liquidation sale. The unexpended bond proceeds of the City's bonds are classified as restricted assets because their use is completely restricted to the purpose for which the bonds were originally issued. The City's cash and investments held by fiscal agents are pledged to the payment or security of certain long-term debt issuances. The California Government Code provides that these monies, in the absence of specific statutory provisions governing the issuance of the bonds, may be invested in accordance with the ordinance, resolutions, or indentures specifying the types of investments its trustees or fiscal agents may make. The City also participates in the Los Angeles County Pooled Investment Fund. In accordance with GASB Statement No. 40, Deposit and Investment Risk Disclosures (an amendment of GASB Statement No. 3), certain disclosure requirements, if applicable, are provided for deposit and investment risk in the following areas: Interest Rate Risk • Credit Risk - Overall - Custodial Credit Risk - Concentration of Credit Risk • Foreign Currency Risk E. Land Held for Resale Land parcels held for resale are recorded at the lower of cost or fair value. The cost of the land includes all costs incurred that are directly associated with the acquisition of the land, including purchase price, escrow costs, clearing land for use costs, demolition costs, etc. 37 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) F. Interfund Transactions Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as "due to/from other funds" (i.e., current portion of interfund loans) or "advances from/to other funds" (i.e., noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and business -type activities are reported in the government -wide financial statements as "internal balances." During the course of operations, numerous transactions occur between individual funds involving goods provided or services rendered. There are also transfers of revenues from funds authorized to receive the revenue to funds authorized to expend it. Any residual balances outstanding between governmental and business -type activities are reported in the government -wide financial statements as "transfers." G. Property Taxes Property taxes and special assessment taxes are attached as enforceable liens on real property on July 1, the beginning of the fiscal year, and are due in two installments on November 1 and February 1; however, no penalties or interest are assessed until December 10 and April 10, respectively. These taxes are determined annually based on property values, subject to limits based on Proposition 13, as of January 1 of the levy year, which is prior to the end of the previous fiscal year. The County of Los Angeles bills and collects these taxes for the City and are remitted on a monthly basis. Remittance of property taxes to the City is accounted for in the City's General Fund and Public Library Special Revenue Fund. Property taxes on certain registered motor vehicles are assessed and collected throughout the year. H. Allowances for Uncollectible Accounts Allowances for uncollectible accounts are maintained on customer and other trade receivables that historically experience uncollectible amounts. Allowances are based on collection experience and management's evaluation of the current status of existing receivables. L Prepaid Costs Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government -wide and fund financial statements. These are accounted for using the consumption method, and accordingly, the expenditure is recorded in the period in which the goods or services are received. KE City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) J. Capital Assets Government -Wide Financial Statements, Proprietary Funds and Fiduciary Funds Capital assets, which include land, site improvements, buildings and improvements, equipment and infrastructure assets, are reported in the applicable governmental or business -type activities columns in the government -wide financial statements and in the proprietary funds and fiduciary funds. General infrastructure assets consist of roads, curbs and gutters, sidewalks, medians, street signs, bus shelters, bridges, trails, traffic signals, and storm drains/catch basins. Capital assets are defined by the City as assets with an initial cost of more than $5,000 ($25,000 for site improvements and building improvements and $100,000 for infrastructure) and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets are depreciated using the straight-line method over the following estimated useful lives: Site Improvements 5-25 financed obligations, such years Buildings and Improvements 5-50 liabilities in years Equipment 5-25 financial statements. years Infrastructure 20-60 years Governmental Fund Financial Statements The governmental fund financial statements do not present capital assets. Instead, capital assets purchases are reported as capital outlay expenditures. As such, capital assets are shown as a reconciling item in the Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position. K. Long -Term Debt Government -Wide Financial Statements, Proprietary Funds, and Fiduciary Funds Long-term debt and other financed obligations, such as developer district credits, are reported as liabilities in the government -wide, proprietary fund, and fiduciary fund financial statements. Bond premiums, discounts, and deferred gains and losses on refundings are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable premium or discount. Deferred gains and losses on refundings are reported as a deferred inflow or deferred outflow of resources. 39 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) K. Long -Term Debt (Continued) Governmental Fund Financial Statements The governmental fund financial statements do not present long-term debt and other financed obligations. Governmental funds recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuances costs are reported as debt service expenditures. Principal payments and reductions in the obligation are reported as debt service expenditures. As such, long-term debt and other financed obligations are shown as reconciling items in the Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position. L. Compensated Absences It is the City's policy to permit employees to accumulate earned but unused vacation (compensated absences). For proprietary fund types and governmental activities, this accumulation is recorded as an expense and liability of the appropriate fund in the fiscal year earned. For the governmental funds, the amount of accumulated unpaid vacation, which is payable from available resources, is recorded as a liability of the fund when it has matured (i.e., when due and payable). M. Claims and Judgments When it is probable that a claim liability has been incurred at year-end and the amount of the loss can be reasonably estimated, the City records the estimated loss, net of any insurance coverage, under its self-insurance program. Claims payable, which include an estimate for incurred but not reported (IBNR) claims, is recorded in the Self -Insurance Internal Service Fund. N. Pensions and Other Post -Employment Benefits The net pension liability, deferred outflows and inflows of resources related to pensions, pension expense, information about the fiduciary net position of the California Public Employees' Retirement System (CaIPERS) and additions to/deductions from CaIPERS' fiduciary net position have been determined on the same basis as they are reported by CaIPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. Deferred outflows and inflows of resources represent the effects on the net pension liability that have occurred after the liability was measured. Therefore, these will affect the net pension liability in future years. As noted in Note 13, deferred outflows and inflows of resources will be recognized as pension expense in future years; however, contributions subsequent to the measurement period will be recognized during the fiscal year ending June 30, 2016. The City also provides other post -employment benefits (OPEB) to eligible employees. The OPEB are measured based on the funding and when contributions exceed the annual required contribution an OPEB asset is reported on the Statement of Net Position (see Note 14). all City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) O. Net Position and Fund Balances Government -Wide Financial Statements, Proprietary Funds, and Fiduciary Funds Net position represents the difference between assets and deferred outflows and liabilities and deferred inflows, and is classified into three categories: Net Investment in Capital Assets — This amount consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction, or improvement of those assets, and excludes unspent debt proceeds. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt also should be included in this component of net position. Restricted — This amount represents the net position that is not accessible for general use because its use is subject to restrictions enforceable by third parties and enabling legislation, reduced by liabilities and deferred inflows of resources related to those assets. Unrestricted — This amount represents the residual of amounts not classified in the other two categories and represents the net equity available for the City. Governmental Fund Financial Statements In the governmental fund financial statements, fund balances are classified in the following categories: Nonspendable — Items that cannot be spent because they are not in spendable form, such as prepaid items and inventories; advances, which are long-term interfund borrowings; and items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds. Restricted — Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation. Committed — Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision-making, City Council through Council Resolution, and that remain binding unless removed in the same manner. The City Council is considered the highest authority for the City. Assigned — Assigned fund balances encompass the portion of net fund resources reflecting the government's intended use of resources. Assignment of resources can be done by the highest level of decision-making or by a committee or official designated for that purpose. The Deputy City Manager authorizes assigned amounts for specific purposes pursuant to the policy-making powers granted to him through a resolution adopted by the City Council. 41 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) O. Net Position and Fund Balances (Continued) Unassigned — This includes the excess residual amounts in the General Fund and the residual deficit of all other governmental funds, which have not been restricted, committed, or assigned to specific purposes. The City Council has approved an operating reserve to be used for one-time unanticipated expenditure requirements and local disaster. This reserve did not meet the qualifications of a stabilization arrangement. At June 30, 2015, the balance totaled $14,460,000, which is included in the unassigned fund balance in the General Fund. P. Spending Policy Government -Wide Financial Statements and Proorietary Fund Financial Statements When an expense is incurred for purposes for which both restricted and unrestricted resources are available, the City's policy is to apply restricted resources first. Governmental Fund Financial Statements When expenditures are incurred for purposes for which all restricted, committed, assigned, and unassigned fund balances are available, the City's policy is to apply in the following order, except for instances wherein an ordinance specifies the fund balance: Restricted Committed Assigned • Unassigned Q. Estimates The preparation of the basic financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and the disclosure of contingent assets and liabilities at the date of the basic financial statements and the related reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management believes that the estimates are reasonable. R. Deferred Inflows of Unavailable Revenue and Unearned Revenue Government -Wide Financial Statements Unearned revenue represents money received during the current or previous years that has not been earned because certain performance criteria have not been met. M City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) R. Deferred Inflows of Unavailable Revenue and Unearned Revenue (Continued) Fund Financial Statements In addition to unearned revenue, deferred inflows of resources represent funds that have been earned but have not been received within the availability period. This does not provide an available financial resource in the current period; therefore, recognition is deferred until these criteria have been met. S. Pronouncements Issued But Not Yet Adopted The GASB has issued pronouncements that have an effective date subsequent to June 30, 2015, which may impact future financial presentations. Except as noted below, management has not determined what, if any, impact implementation of the following Statements may have on future financial statements of the City: GASB Statement No 72, Fair Value Measurement and Application: Effective for the City's fiscal year ending June 30, 2016. Management has not yet determined the financial impact of this pronouncement. GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans: Effective for the City's fiscal year ending June 30, 2016. Management has not yet determined the financial impact of this pronouncement. GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits other than Pensions: Effective for the City's fiscal year ending June 30, 2018. GASB Statement No 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments: Effective for the City's fiscal year ending June 30, 2016. GASB Statement No. 77, Tax Abatement Disclosures: Effective for the City's fiscal year ending June 30, 2016. GASB Statement No. 78, Pensions Provided through Certain Multiple -Employer Defined Pension Plans: Effective for the City's fiscal year ending June 30, 2016. T. Significant Change in Accounting Policy The accompanying financial statements reflect the implementation of GASB Statement No. 68, Accounting and Financial Reporting for Pensions, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date. The implementation impacts the accounting and reporting of net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, for the year ended June 30, 2015. The retroactive effect of implementing this change in reporting pension expenses and obligations resulted in a restatement of the beginning net position as described further in Note 12. 43 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 2. CASH AND INVESTMENTS A. Cash and Investments Cash and investments at June 30, 2015, are classified in the accompanying financial statements as follows: Governmental Business -Type Activities Activities Fiduciary Funds Total Cash and investments $ 212,464,217 $ 4,235,110 $ 2,607,395 $ 219,306,722 Restricted: Cash and investments 4,253,009 - 3,888 4,256,897 Cash and investments with fiscal agent 2,259,033 - 2,924,496 5,183,529 Total $ 218,976,259 $ 4,235,110 $ 5,535,779 $ 228,747,148 Cash and investments consisted of the following at June 30, 2015 Cash on hand and deposits Cash on hand $ 43354 Deposits with financial institutions 4,9563291 Certificates of deposit 6993998 Total cash on hand and deposits 5,6603643 Investments U.S. Treasury Securities 2836567955 U.S. Government -Sponsored Enterprise Securities 8134517856 Commercial Paper 43236,252 Medium -Term Notes 463009,348 Money Market Funds 137727897 State of California Local Agency Investment Fund (LAIF) 5030087261 L.A. County Pooled Investment Fund (LACPIF) 135107510 Total investments 2133646,079 Restricted investments: Money Market Funds 4,2561897 Total restricted investments 42256,897 Restricted investments with fiscal agent: Money Market Funds 5,1833529 Total investments with fiscal agent 5,1837529 Total cash and investments $ 228,7475148 The carrying amounts of the City's deposits were $5,660,643 at June 30, 2015. Bank balances before reconciling items were $4,169,504 at that date, the total amount of which was collateralized or insured with securities held by the pledging financial institutions in the City's name. Er City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 2. CASH AND INVESTMENTS (Continued) No Limit No Limit U.S. Treasury Obligations B. Investments Authorized by the California Government Code and the City's Investment Policy The following table identifies the investment types that are authorized for the City by the California Government Code (or the City's investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City's investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy. Maximum Percentage or Maximum Maximum Amount of Investment in Authorized Investment Type Maturity Portfolio* One Issuer ** Local Agency Bonds 5 years No Limit No Limit U.S. Treasury Obligations 5 years No Limit No Limit State of California Obligations 5 years No Limit No Limit California Local Agency Obligations 5 years No Limit No Limit U.S. Government -Sponsored Enterprise Securities 5 years No Limit No Limit Banker's Acceptances 180 days 40% 30% Commercial Paper 270 days 25% 10% Negotiable Certificates of Deposit 5 years 30% No Limit Repurchase Agreements 1 year No Limit No Limit Medium -Term Notes 5 years 30% No Limit Money Market Funds 5 years 15% 10% Mortgage Pass -Through Securities 5 years 20% No Limit Los Angeles County Pooled Investment Fund (LACPIF) Not Applicable No Limit No Limit State of California Local Agency Investment Fund (LAIF) Not Applicable $ 50,000,000 No Limit * Excluding amounts held by bond trustees that are not subject to California Government Code restrictions. ** Banker's acceptances may have no more than 30 percent in any one commercial bank, commercial paper may not represent more than 10 percent of the City's surplus funds for any single issuer, and money market mutual funds may have no more than 10 percent invested in any one mutual fund. 45 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 2. CASH AND INVESTMENTS (Continued) C. Investments Authorized by Debt Agreements Investments of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City's investment policy. The table below identifies the investment types that are authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk. Authorized Investment U.S. Treasury Obligations U.S. Government -Sponsored Enterprise Securities Money Market Funds State of California Local Agency Investment Fund (LAIF) Maximum Percentage or Maximum Maximum Amount of Investment in Maturity Portfolio* One Issuer 5 years No Limit No Limit 5 years No Limit No Limit 5 years 15% 10% Not Applicable $ 50,000,000 No Limit Excluding amounts held by bond trustees that are not subject to California Government Code restrictions. D. Disclosures Relating to Interest Rate Risk As a means of limiting its exposure to fair -value losses arising from rising interest rates, the City's investment policy limits investments to a maximum maturity of five years from the date of purchase. Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter -term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time, as necessary, to provide the cash flow and liquidity needed for operations. EE City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 2. CASH AND INVESTMENTS (Continued) D. Disclosures Relating to Interest Rate Risk (Continued) At June 30, 2015, the City had the following investment maturities: Restricted Investments: Money Market Funds 4,256,897 4,256,897 Total restricted investments 4,256,897 4,256,897 Restricted Investments With Fiscal Agent Money Market Funds 5,183,529 5,183,529 Total restricted investments with fiscal agent 5,183,529 5,183,529 Total investments subject to interest rate risk $ 223,086,505 $ 62,732,094 $ 30.201 714 $ 30,976047 $ 45,740,984 $ 36,964,681 $ 16,470.985 E. Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating, as reported by Standard & Poor's, as of year-end for each investment type: Minimum 4,256,897 Investment Maturities (In Years) Total restricted investments Crack Ratings Investment Type Fair Value Less Than 1 1 to 2 2 to 3 3 to 4 410 5 More than 5 Investments: Unrated Investments: with fiscal agent 5,183,529 U.S. Treasury Securities $ 28,656,955 $ - $ - $ 11,704,531 $ ],999,80] $ 6,751,824 $ 2,200,793 U.S. Government -Sponsored $ - U.S. Government -Sponsored Enterprise Securities 81,451,856 - 23,925,633 13,163,473 20,648,863 14,552,061 9,161,826 Commercial Paper 4,236,252 - 4,236,252 - - - - Medium -Tenn Notes 46,009,348 - 2,039,829 6,108,043 17,092,314 15,660,796 5,108,366 Money Market Funds 1,772,897 1,772,897 - - - - - LAIF 50,008,261 50,008,261 - - - - - LACPIF 1,510,510 1,510,510 None 1,510,510 Total investments 213,646,079 53,291,668 30,201,714 30,976,047 45,740,984 36,91 16,470,985 Restricted Investments: Money Market Funds 4,256,897 4,256,897 Total restricted investments 4,256,897 4,256,897 Restricted Investments With Fiscal Agent Money Market Funds 5,183,529 5,183,529 Total restricted investments with fiscal agent 5,183,529 5,183,529 Total investments subject to interest rate risk $ 223,086,505 $ 62,732,094 $ 30.201 714 $ 30,976047 $ 45,740,984 $ 36,964,681 $ 16,470.985 E. Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating, as reported by Standard & Poor's, as of year-end for each investment type: Restricted Investments Money Market Funds Minimum 4,256,897 Total restricted investments Crack Ratings 4,256,897 Investment Type Rating Fair Value AAA AA+to AA- A+ to A- A-1 Unrated Investments: with fiscal agent 5,183,529 5,183,529 U.S. Treasury Securities None $ 28,658,955 $ - $ 28,656,955 $ - $ - $ - U.S. Government -Sponsored Enterprise Securities None 81,451,856 963,710 64,491,416 15,996,730 - - Commercial Paper A-1 4,238,252 - - - 4,236,252 - Medium -Term Notes' A 46,009,348 8,111,359 14,545,718 19,321,693 - 4,030,578 Money Market Funds None 1,772,897 - - - - 1,]72,89] LAIF None 50,008,261 - - - - 50,008,261 LACPIF None 1,510,510 1,510,510 Total investments 213,646,079 9,075,069 107,694,089 35,318,423 4,236,252 57,322,246 Restricted Investments Money Market Funds None 4,256,897 4,256,897 Total restricted investments 4,256,897 4,256,897 Restricted Investments with Fiscal Agent: Money Market Funds None 5,183,529 5,183,529 Total restricted investments with fiscal agent 5,183,529 5,183,529 Total investments subject to credit rate risk $ 223,086,505 $ 9,075,069 $ 107,694,089 $ 35,318,423 $ 4,236,252 $ 66,762,6]2 47 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 2. CASH AND INVESTMENTS (Continued) E. Disclosures Relating to Credit Risk (Continued) Included in the medium-term notes is an investment in Lehman Brothers, which is not rated as of June 30, 2015. Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008, and the company's assets are still in the process of being liquidated. The value of the investment reported is the amount the City estimates it will receive when the investment is redeemed. As of June 30, 2015, this investment is recorded at $2273800. F. Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Investments in any one issuer that represent 5 percent or more of the City's total investments are as follows: Issuer Investment Type Amount % of Total Investments Federal National Mortgage U.S. Government -Sponsored Association Federal Home Loan Bank Enterprise Securities U.S. Government -Sponsored Enterprise Securities Federal Home Loan Mortgage U.S. Government -Sponsored Corporation Enterprise Securities G. Custodial Credit Risk $ 21,924,230 9.83% $ 17,028,401 7.63% $ 182459,316 8.27% Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk associated with investments that are uninsured, are not in the name of the City, or are held by counterparty or counterparty's trust department or agent but not in the City's name. In the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, the counterparty is then unable to deliver securities that are in the possession of another party. As of June 30, 2015, none of the City's deposits or investments were exposed to custodial credit risk. City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 2. CASH AND INVESTMENTS (Continued) H. Investment in State Investment Pool The City is a participant in LAIF, which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. Each City may invest up to $50,000,000 without limitation in special bond proceeds accounts. Investments in LAIF are highly liquid, as deposits can be converted to cash within 24 hours without loss of interest. The City's investments with LAIF at June 30, 2015 included a portion of the pool funds invested in structured notes and asset-backed securities: Structured Notes — Debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options. Asset -Backed Securities — Generally mortgage-backed securities that entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (for example, collateralized mortgage obligations) or credit card receivables. As of June 30, 2015, the City had $50,008,261 invested in LAIF, which had invested 2.08 percent of the pool investment funds in structured notes and asset-backed securities. The LAIF fair -value factor of 1.000375979 was used to calculate the fair value of the investments in LAIF from their amortized cost basis. As a result of the LAIF fair value factor, the amount reported exceeded the $50,000,000 limit. LAIF is overseen by the Local Agency Investment Advisory Board, which consists of five members, in accordance with State statute. L Investment in County Investment Pool The Los Angeles County Pooled Investment Fund (LACPIF) is a pooled investment fund program governed by the Los Angeles County Board of Supervisors and administered by the Los Angeles County Treasurer and Tax Collector. Investments in the LACPIF are highly liquid, as deposits and withdrawals can be made at any time without penalty. The LACPIF does not impose any maximum investment limit. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's prorated share of the fair value provided by the LACPIF for the entire LACPIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by the LACPIF, which are recorded on an amortized cost basis. As of June 30, 2015, the City had $1,510,510 invested in the LACPIF. The LACPIF fair value factor of 0.998957228 was used to calculate the fair value of the investments in the LACPIF from their amortized cost basis. M City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 3. LAND HELD FOR RESALE As of June 30, 2015, the City had $1,188,969 of land held for resale, which is reported at fair value. There were no changes in fair value during the current year. District #1 Non -Major Governmental Funds Land held for resale, cost $ 323513588 Less: allowance for the decline in value (2,1621619) Land held for resale, net $ 1,188,969 4. ACCOUNTS RECEIVABLE Accounts receivable as of June 30, 2015, including allowances for uncollectible accounts, is as follows: Gross receivables $ Landscape Non -Major $ 113,114 $ General Bridge and Maintenance Governmental Internal Fund Thoroughfare District #1 Funds service Funds Total Gross receivables $ 896,432 $ 160,617 $ 84,607 $ 113,114 $ 55,630 $ 1,310,400 Less: allowance for uncollectibles 523,153 46,408 12,059 581,620 Net total receivables $ 373,279 $ 160,617 $ 38,199 $ 101,055 $ 55,630 $ 728,780 5. LOANS RECEIVABLE The City has provided deferred -payment rehabilitation loans to qualified homeowners in connection with CDBG and HOME rehabilitation programs. In the governmental funds, the loans receivable balance totaling $2,402,815 at June 30, 2015, has been offset by deferred inflows of resources for unavailable revenues in the non -major governmental funds, since these loans are not available to finance current expenditures. 6. NOTES TO RDA SUCCESSOR AGENCY Prior to the dissolution of the former redevelopment agency, the General Fund and Developer Fees Special Revenue Fund advanced the former redevelopment agency funding for various redevelopment activities. These advances were made in the form of promissory notes and were transferred to the RDA Successor Agency upon dissolution. As of June 30, 2015, the California Department of Finance (DOF) approved final loan amounts from the General Fund and Developer Fees Special Revenue Fund to the former redevelopment agency for $7,225,964 and $5,407,868, respectively. As such, the City reported amounts in the General Fund and Developer Fees Special Revenue Fund of $7,225,964 and $5,407,868, respectively. The loans accrue interest based on the LAW rate of 0.26 percent, which was in effect when the Oversight Board reinstated the loans on February 25, 2015. The unpaid accrued interest of these notes are $910,244 and $183,958, respectively. 50 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 7. CAPITAL ASSETS A. Governmental Activities The following is a summary of changes in the capital assets for governmental activities during the fiscal year ended June 30, 2015: 10,857,786 (175,005) Governmental activities: Non -depreciable assets: Land Construction in progress Total non -depreciable assets Depreciable assets: Site improvements Building and improvements Equipment Infrastructure Total depreciable assets Less accumulated depreciation: Site improvements Building and improvements Equipment Infrastructure Total accumulated depreciation Total depreciable assets, net Total capital assets, net Governmental Activities Balance Balance June 30, 2014 Additions Deletions Transfers June 30, 2015 $ 125,250,547 $ 15,955,322 $ (12,500) $ - $ 141,193,369 13,438,221 10,857,786 (175,005) (5,769,240) 18,351,762 138,688,768 26,813,108 (187,505) (5,769,240) 159,545,131 38,252,932 2,296,410 - 3,156,307 43,705,649 68,464,638 613,729 - 2,098,196 71,176,563 12,622,593 1,221,623 (513,932) - 13,330,284 895,352,264 8,694,484 (289,704) 514,737 904,271,781 1,014,692,427 12,826,246 (803,636) 5,769,240 1,032,484,277 12,173,029 1,359,337 16,098,769 1,543,011 - 9,335,118 789,554 (508,863) 13,532,366 17,641,780 9,615,809 $ 830,373,009 $ 17,874,795 $ (385,709) $ S 847,862,095 Depreciation expense was charged to functions/programs of governmental activities for the fiscal year ended June 30, 2015, as follows: Public works 2873173 Governmental Activities General government $ 170513508 Public safety 483140 Parks, recreation and community service 271273110 Public works 2873173 Community development 23638 Internal service funds depreciation 1753333 Allocated depreciation 316913902 Unallocated infrastructure depreciation 18,0722657 Total depreciation expense $ 21,764,559 51 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 7. CAPITAL ASSETS (Continued) B. Business -Type Activities The following is a summary of changes in the capital assets for business -type activities during the fiscal year ended June 30, 2015: Business -type activities: Non -depreciable assets: Land Construction in progress Total non -depreciable assets Depreciable assets: Site improvements Building and improvements Equipment Total depreciable assets Less accumulated depreciation: Site improvements Building and improvements Equipment Total accumulated depreciation Total depreciable assets, net Capital assets, net Business -Type Activities Balance Balance June 30. 2014 Additions Deletions Transfers June 30. 2015 $ 15,087,880 $ - $ - $ - $ 15,087,880 15.171,132 (83,252) 15,087,880 12,160.382 697,642 - 83.252 12,941,276 41,483,799 - - - 41,483,799 48,880,303 47,430 (3,050,600) 45,877,133 102,524,484 745,072 (3,050,600) 83,252 100,302,208 1,590,164 536,985 9,275,693 883,346 2,127,149 10,159,039 $ 83,296,545 $ (4,800,674) $ $ $ 78,495,871 Depreciation expense for business -type activities for the fiscal year ended June 30, 2015 was charged as follows: Business -Type Activities: Transit Enterprise Total depreciation expense 52 $ (535453746) .L.L City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT A. Governmental Activities The following is a summary of long-term debt transactions of the City for the year ended June 30, 2015: Classification Balance Balance Due Within Due More June 30. 2014 Additions Deletions June 30. 2015 One Year Than One Year Lease Revenue Bonds: 154,705 135,389 (72,479) 217,615 78,628 Series 2007 $ 11,920,000 $ - $ (325,000) $ 11,595,000 $ 335,000 $ 11,260,000 Plus deferred amount for issuance premium 82,622 (3,658) 78,964 1,794,182 78,964 Total Lease Revenue Bonds 12,002,622 (328,658) 11,673,964 335,000 11,338,964 (1,192,138) 1,993,915 1,233,572 760,343 Total Certificates of Participation: $ 2,957,861 $ (4,861,383) $ 40,803,120 $ 4,738,163 $ 36,064,957 Refunding, Series 2005 9,325,000 - (1,195,000) 8,130,000 1,235,000 6,895,000 Series 2007 15,340,000 - (120,000) 15,220,000 150,000 15,070,000 Less deferred amount for issuance discount (50,488) 4,614 (45,874) (45,874) Total Certificates of Participation 24,614,512 (1,310,386) 23,304,126 1,385,000 21,919,126 Capital leases 154,705 135,389 (72,479) 217,615 78,628 138,987 Loans 580,000 - (280,000) 300,000 100,000 200,000 Compensated absences 3,197,040 1,794,182 (1,677,722) 3,313,500 1,605,963 1,707,537 Claims and judgments 2,157,763 1,028,290 (1,192,138) 1,993,915 1,233,572 760,343 Total $ 42,706,642 $ 2,957,861 $ (4,861,383) $ 40,803,120 $ 4,738,163 $ 36,064,957 Lease Revenue Bonds — Series 2007 On January 16, 2007, the Authority issued $13,785,000 Lease Revenue Bonds, Series 2007. The bonds were issued by the Authority for the purpose of financing the costs of acquiring right-of-way for a portion of Golden Valley Road in connection with the payment of a judicial order by the City. Concurrent with this bond issuance, the Authority entered into a lease and lease -back arrangement with the City, whereby the Authority used the proceeds of the bond issuance to make a lump -sum lease payment to the City. In return, the City will make lease -back payments to the Authority sufficient to cover the principal and interest due on the Series 2007 Bonds. The property subject to the lease and lease -back arrangement is City Hall. Principal amounts on serial bonds mature annually each February 1 in the years 2008 through 2018 and bear interest at rates ranging from 4.0 percent to 5.0 percent. Term bonds totaling $2,495,000 mature on February 1, 2033, and bear interest at 4.3 percent. Term bonds totaling $2,965,000 mature in February 2037 and bear interest at 4.375 percent. Interest is payable semi-annually on February 1 and August 1 of each year. The term bonds maturing on February 1, 2033, are subject to mandatory redemption commencing on February 1, 2030. The term bonds maturing on February 1, 2037, are subject to mandatory redemption commencing on February 1, 2034. Bonds maturing on or after February 1, 2018, are subject to optional redemption on or after February 1, 2017. The total principal and interest remaining to be paid on the bonds is $18,098,771 as of June 30, 2015. For the current year, principal and interest paid on the bonds was $825,654 and was equal to the base lease payments as required to be paid to the Authority. The outstanding balance of the bonds was $11,595,000 at June 30, 2015. 53 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT (Continued) A. Governmental Activities (Continued) The annual debt service requirements on these bonds are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2037 Total Principal Interest Total 33500 $ 4873654 $ 8223654 3507000 4742254 8243254 3653000 4602254 8253254 3753000 4452654 8203654 3903000 4303654 820,654 222103000 139052069 4,115,069 276953000 13413,263 431083263 373303000 784,813 431143813 17545,000 102,156 116472156 $ 11,595,000 $ 6,503,771 $ 18,098,771 Refunding Certificates of Participation — Series 2005 On July 12, 2005, the Authority issued $17,700,000 in Certificates of Participation, with an average interest rate of 3.4 percent, to advance refund $17,640,000 of outstanding 1997 Series certificates with an average interest rate of 4.9 percent. The defeased 1997 Series certificates have since been retired. The certificates are backed by lease payments to be made by the City to the Authority for the use and occupancy of certain real property. Principal amounts mature annually each October 1 in the years 2006 through 2020 and bear interest at rates ranging from 3.0 percent to 4.0 percent. Interest is payable semi-annually on April 1 and October 1. The certificates maturing on or after October 1, 2016, are subject to optional prepayment on any date on or after October 1, 2015, at a price equal to the principal amount plus accrued interest to the prepayment date, without premium. The total principal and interest remaining to be paid on the bonds is $9,116,016 as of June 30, 2015. For the current year, principal and interest paid on the bonds was $1,524,359 and was equal to the base lease payments as required to be paid to the Authority. The outstanding balance of the bonds was $8,130,000 at June 30, 2015. 54 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT (Continued) A. Governmental Activities (Continued) The annual debt service requirements on these bonds are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 2021 Total Certificates of Participation — Series 2007 Principal Interest Total $ 132352000 $ 2873581 $ 125223581 13280,000 2423769 15223769 123252000 1943725 1,519, 725 12375,000 1433241 15183241 134302000 88,000 15181000 1,485,000 29,700 1,514,700 $ 8,130,000 $ 986,016 $ 9,116,016 On December 12, 2007, the Authority issued $15,525,000 in Certificates of Participation to provide financing for the costs of acquiring open -space lands, parks, and parkland in accordance with the City's open space, park and parkland programs, purchase a reserve fund surety and fund the costs of delivery of the certificates. The certificates are secured by a pledge of special assessment revenues received by the City. Additionally, there is a backed -up pledge of lease payments to be made by the City to the Authority for the use and occupancy of the Aquatic Center and Sports Complex. This issuance is composed of $6,000,000 serial certificates maturing annually on October 1 from 2011 to 2028 and two term certificates (totaling $9,525,000) maturing on October 1, 2033, and October 1, 20377 that are payable in annual sinking fund installments commencing October 1, 2029. Interest on the certificates is payable semi-annually on October 1 and April 1 at rates ranging from 4.00 percent to 4.60 percent for the serial certificates and 4.75 percent for the term certificates. The City has pledged the future special assessment revenues received to repay the certificates. The certificates are payable solely from all or a portion of the annual special assessment collected for the City. The total principal and interest remaining to be paid on the certificates is $26,021,596 as of June 30, 2015. For the current year, principal and interest paid on the certificates was $823,851, and total special assessment revenues were $2,146,498. The outstanding balance of the certificates was $15,220,000 at June 30, 2015. 55 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT (Continued) A. Governmental Activities (Continued) The annual debt service requirements on these certificates are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2038 Total Loans Principal Interest Total 1502000 $ 6983451 $ 8483451 185,000 6913751 8763751 2202000 6833651 9033651 255,000 674,151 9293151 2902000 663,251 953,251 220702000 330863313 571563313 3,300,000 234883341 517883341 405,000 1,5323231 614173231 3,8651000 2832456 451482456 $ 15,220,000 $ 10,801,596 $ 26,021,596 Balance Balance Due Within Due in More June 30, 2014 Additions Deletions June 30, 2015 One Year Than One Year HUD Loans: agreement with the Secretary of Housing and Urban Development in the amount of $2,000,000. The purpose of 1999 West Newhall $ 180,000 $ - $ (180,000) $ - $ - $ - Boys & Girls Club 97,000 - (23,000) 74,000 23,000 51,000 Scherzinger Lane 303,000 (77,000) 226,000 77,000 149,000 Total loans $ 580,000 $ - $ (280,000) $ 300,000 $ 100,000 $ 200,000 In December 1999, the City entered into a loan agreement with the Secretary of Housing and Urban Development in the amount of $2,000,000. The purpose of this loan was to provide financing for the installation of curbs, gutters, and sidewalks in the West Newhall area. Payments are due semi- annually, commencing on August 1, 2001, and continuing through August 1, 2014. This loan has been paid off as of June 30, 2015. In August 2002, the City entered into a loan agreement with the Secretary of Housing and Urban Development in the amount of $350,000. The purpose of this loan was to assist the Boys & Girls Club in financing the construction of a new gymnasium. Payments are due semi-annually, commencing on February 1, 2003, and continuing through August 1, 2017. Future CDBG grant funding will be used to repay the loan. The interest rate on this loan is fixed at 0.56 percent. The amount outstanding at June 30, 2015, is $74,000. In August 2002, the City entered into a loan agreement with the Secretary of Housing and Urban Development in the amount of $1,150,000. The purpose of this loan was to provide financing for the construction of improvements to Scherzinger Lane. Payments are due semi-annually, commencing on February 1, 2003, and continuing through August 1, 2017. Future CDBG grant funding will be used to repay the loan. The interest rate on this loan is fixed at 0.56 percent. The amount outstanding at June 30, 2015 is $2263000. 56 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT (Continued) A. Governmental Activities (Continued) Future payment requirements for the loans are combined as follows: Year Ending June 30, Principal Interest Total 2016 $ 1002000 $ 213335 $ 1213335 2017 100,000 143220 1143220 2018 1002000 83605 1083605 Total $ 3002000 $ 443160 $ 3443160 Capital Leases On February 28, 2012, the City Council approved a lease -purchase agreement with One Source Financial Corp. for two seven -bin sorters for the Canyon Country and Valencia Library branches in the amount of $251,455. The lease agreement has 60 monthly payments of $4,825 with an interest rate of 6 percent. The final payment is due May 153 2017. The lease was assigned by One Source Financial Corp. to Bank of the West. The assets acquired through the capital lease are as follows: Equipment $ 2523068 Less: accumulated depreciation (1592643) Total $ 92,425 Future capital lease payment requirements are as follows: Year Ending June 30, Total 2016 $ 577900 2017 537075 Net minimum lease payments 1107975 Less: amount representing interest (61326) Present value of net minimum lease payments $ 104,649 57 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT (Continued) A. Governmental Activities (Continued) On August 1, 2014, the City Council approved a lease -purchase agreement with Canon Financial Services, Inc. to install a Canon Image Runner C5045 for the Canyon Country and Valencia Library branches in the amount of $13,433. The lease agreement has 60 monthly payments of $279 with an interest rate of 9.024 percent. The final payment is due August 1, 2019. The lease was assigned by Canon Financial Services, Inc. The assets acquired through the capital lease are as follows: Equipment Less: accumulated depreciation Total Future capital lease payment requirements are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 Net minimum lease payments Less: amount representing interest Present value of net minimum lease payments $ 13,433 (2,463) $ 10,970 Total 3,348 3,348 3,348 3,348 279 13,671 (2,271) $ 11,400 On August 1, 2014, the City Council approved a lease -purchase agreement with Canon Financial Services, Inc. to install a Canon Image Runner C5045 for the Canyon Country and Valencia Library branches in the amount of $121,956. The lease agreement has 60 monthly payments of $2,270 with an interest rate of 4.43 percent. The final payment is due August 1, 2019. The lease was assigned by Canon Financial Services, Inc. The assets acquired through the capital lease are as follows: Equipment Less: accumulated depreciation Total RE $ 121,956 (22,359) $ 99,597 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 8. LONG-TERM DEBT (Continued) A. Governmental Activities (Continued) Future capital lease payment requirements are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 Net minimum lease payments Less: amount representing interest Present value of net minimum lease payments Compensated Absences Total $ 27,235 27,235 27,235 27,235 2,270 111,210 (9,644) $ 101,566 The City's liability for accrued and unpaid compensated absences in the governmental activities totaled $3,313,500 at June 30, 2015. The majority of compensated absences are liquidated through the General Fund. Claims and Judgments The City's liability for outstanding claims and judgments is $1,993,915 at June 30, 2015 (see Note 17). B. Business -Type Activities Compensated Absences The City's liability for accrued and unpaid compensated absences in the business -type activities at June 30, 2015, is as follows: Balance $ 66,390 Balance Due Within Due in More June 30, 2014 Additions Deletions June 30, 2015 One Year Than One Year Compensated absences $ 66,390 $ 46,616 $ (37,755) $ 75,251 $ 37,755 $ 37,496 Total $ 66,390 $ 46,616 $ (37,755) $ 75,251 $ 37,755 $ 37,496 59 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 9. DEPOSITS PAYABLE The City collects deposits for a) improvements within the City; b) donations received for specified services; and c) deposits received in advance for recreation programs or other department services. These balances represent amounts that have been collected for which the eligibility requirements for revenue recognition have not been met. As of June 30, 2015, deposits payable were as follows: General Fund: Deposits from developers $ 238132195 Other deposits payable 2577608 Total deposits payable $ 3,0705803 10. DEVELOPER CREDITS The City and the County of Los Angeles have established the Santa Clarita Valley Bridge and Major Thoroughfare Districts to accommodate the needs of future development anticipated by the County of Los Angeles and the City of Santa Clarita General Plans. Included in the formation documents are provisions for district fees to be paid by developers, which are to be used to assist the City in constructing and maintaining the infrastructure within the areas of benefit. In lieu of paying the district fees, developers are allowed to donate infrastructure (roadways, bridges, intersections, and interchanges) necessary for the future development of the districts. In certain cases, the developer may donate infrastructure with a value that exceeds the district fees collected. If this occurs, the developer can receive a credit toward future district fees or request a cash withdrawal of the excess amount, subject to City approval if funding is determined to be available. As of June 30, 2015, the City accrued a liability of $39,117,582 for the value of infrastructure donated in excess of the district fees that were owed. There is no maturity schedule for the developer payables, and it has been determined that current financial resources will not be used to repay the liability; therefore, the liability has been recorded as a long-term obligation in the governmental activities in the Statement of Net Position. The following is a summary of developer credits by district for the year ended June 30, 2015: Balance Balance June 30, 2014 Additions Deletions Transfers June 30, 2015 Bridge and Thoroughfare Districts: Bouquet District $ 13,280,489 $ - $ (3,372,768) $ - $ 9,907,721 Eastside District 15,171,320 - (417,890) (1,150,000) 13,603,430 Via Princessa District 200,000 - (1,314,744) 1,150,000 35,256 Valencia District 15,571,175 - - - 15,571,175 Total $ 44,222,984 $ $ (5,105,402) $ $ 39,117,582 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 11. INTERFUND TRANSACTIONS A. Due To/Due From At June 30, 2015, the City had the following short-term interfund receivables and payables: Due To Other Funds: Non -Major Governmental Funds Total Due From Other Funds General $ 270403570 $ 25040,570 The interfund payables balance represents routine temporary cash flow assistance until the amounts receivable from other governments are collected to reimburse eligible expenditures. B. Advances At June 30, 2015, the City had the following interfund advances: In March 2006, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $430,000 for acquisition of land. The advance accrues interest at a rate equal to the yield of the average monthly investment portfolio and will be repaid with future available resources of the Bridge and Thoroughfare Special Revenue Fund. There is no fixed repayment schedule. At June 30, 20157 the amount of the advance outstanding is $5437335. In December 2007, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $3,000,000 to pay outstanding developer payables at the time. The advance accrues interest at a rate equal to the yield of the average monthly investment portfolio and will be repaid with future available resources of the Bridge and Thoroughfare Special Revenue Fund. There is no fixed repayment schedule. At June 30, 2015, the amount of the advance outstanding is $952,583. 61 Advances To Other Funds Non -Major Governmental General Funds Total Advances From Other Funds: Major Governmental Funds: Bridge and Thoroughfare $ 124957918 $ 118,944 $ 116143862 Public Library 9,5407318 - 975403318 Total $ 11,036,236 $ 118,944 $ 115155,180 In March 2006, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $430,000 for acquisition of land. The advance accrues interest at a rate equal to the yield of the average monthly investment portfolio and will be repaid with future available resources of the Bridge and Thoroughfare Special Revenue Fund. There is no fixed repayment schedule. At June 30, 20157 the amount of the advance outstanding is $5437335. In December 2007, the General Fund advanced the Bridge and Thoroughfare Special Revenue Fund $3,000,000 to pay outstanding developer payables at the time. The advance accrues interest at a rate equal to the yield of the average monthly investment portfolio and will be repaid with future available resources of the Bridge and Thoroughfare Special Revenue Fund. There is no fixed repayment schedule. At June 30, 2015, the amount of the advance outstanding is $952,583. 61 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 11. INTERFUND TRANSACTIONS (Continued) B. Advances (Continued) In July 2010, the Developer Fees Special Revenue Fund advanced the Bridge and Thoroughfare Special Revenue Fund $111,242 for the design and construction costs of the Newhall Avenue Pedestrian, Facilities, and Sidewalk project. The advance accrues interest at a rate equal to the yield of the average monthly investment portfolio and will be repaid with future available resources of the Bridge and Thoroughfare Special Revenue Fund. There is no fixed repayment schedule. At June 30, 2015, the amount of the advance outstanding is $118,944. The General Fund advanced the Public Library Special Revenue Fund $9,540,318, which consists of the following individual advances: In November 2010, the General Fund advanced the Public Library Special Revenue Fund $622,600 for the completion of the expansion of the Canyon Country Jo Anne Darcy Library. The advance accrues interest at a rate equal to the rate of return on investments and shall be repaid with future available resources of the Public Library Special Revenue Fund. At June 30, 2015, the principal amount has been paid off. In January 2011, the General Fund advanced the Public Library Special Revenue Fund $93,040 for the purchase and installation of the integrated library system software. The advance accrues interest at a rate equal to the rate of return on investments and shall be repaid with future available resources of the Public Library Special Revenue Fund. At June 30, 2015, the principal amount has been paid off. In March 2011, the General Fund advanced the Public Library Special Revenue Fund $1,348,000 for the acquisition of opening -day library materials and library furnishings and equipment. The advance accrues interest at a rate equal to the rate of return on investments and shall be repaid with future available resources of the Public Library Special Revenue Fund. At June 30, 2015, the principal amount of the advance of $1,080,399 is outstanding. In May 2011, the General Fund advanced the Public Library Special Revenue Fund $8,071,596 for the acquisition of library facilities, real property, personal property and collections from the County of Los Angeles. The advance accrues interest at a rate equal to the rate of return on investments and shall be repaid with future available resources of the Public Library Special Revenue Fund. At June 30, 2015, the principal amount of the advance of $8,071,596 is outstanding. In April 2011, the General Fund advanced the Public Library Special Revenue Fund $388,323 for the acquisition of a radio frequency identification system and related software for the Santa Clarita Public Library. The advance accrues interest at a rate equal to the rate of return on investments and shall be repaid with future available resources of the Public Library Special Revenue Fund. At June 30, 2015, the principal amount of the advance of $388,323 is outstanding. CEA City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 11. INTERFUND TRANSACTIONS (Continued) C. Transfers At June 30, 2015, the City had the following transfers: Transfers Out Landscape Non -Major Transit Internal General Bridge and Public Maintenance Governmental Enterprise Service Fund Thoroughfare Library District#1 Funds Fund Funds Transfers In: General Fund $ - $ 7,284 $ 1,591 $ 103,842 $ 1,094,963 $ 226,024 $ 784,231 $ 2,217,935 Non -Major Governmental Funds 3,789,996 - - 109,758 1,729,261 3,690 - 5,832,705 Transit Enterprise 7,360 - - - 7,551,870 - - 7,559,230 Internal Service Funds 83,031 83,031 Total $ 3,880,387 $ 7,284 $ 1,591 $ 213,600 $ 10,376,094 3 229,714 $ 784,231 S 15,492,901 The General Fund made transfers to non -major governmental funds for operating and capital improvement projects for $1,439,983 and current year debt service payments for $2,350,013, totaling $3,789,996. The General Fund also made transfers for $7,360 to the Transit Enterprise Fund for prior year cost reimbursements. Transfers from the General Fund to the Self -Insurance Internal Service Fund of $83,031 were for risk management operations. Transfers to the General Fund from the Self - Insurance Internal Service Fund for $784,231 consist primarily of Phase I of Edwards billboard removal settlement for $523,301 and $250,000 for Cemex mining opposition efforts. The Bridge and Thoroughfare, Public Library, and Landscape Maintenance District #1 Special Revenue Funds, non -major governmental funds, Transit Enterprise Fund, and Self -Insurance Internal Service Fund made transfers to the General Fund for current year post -employment benefits, totaling $360,204. The Landscape Maintenance District #1 Special Revenue Fund made transfers to the General Fund and the non -major governmental fund for operating costs for $149,750. The non -major governmental funds made transfers to the General Fund for operating and replacement costs for $894,438. Transfers from the non -major governmental funds to the Transit Enterprise Fund totaling $7,551,870 were to transfer Proposition A and Proposition C non-operating revenues in the current year. The Transit Enterprise Fund made transfers to the General Fund for $150,000 to support the senior center transit operations. Transfers to non -major governmental funds for $3,690 were for the proportional share of Metrolink station maintenance. 63 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 12. FUND BALANCES AND NET POSITION A. Fund Balance Classification The details of fund balance of the governmental funds as of June 30, 2015, are presented below: Nonspendable: Prepaid items Land held for resale Advances to other funds' Total nonspendable Restricted: Landcape maintenance Capital improvements Transportation Open space preservation Public safety Public library Air quality improvement Stormwaler Public education and government Tourism marludng Low -and moderate -income housing Total restricted Committed: Capital improvements Total committed Assigned: Capital projects Claims and settlements Public facilities replacement Total assigned Unassigned Total fund balances Major Governmental Funds Landscape Non -Major General Bridge and Public Maintenance Governmental Fund Thoroughfare Ubrary District#1 Funds Total $ 118,400 $ - $ - $ 252,661 $ 13,438 $ 384,499 - - - - 1,188,968 1,188,968 10,905,938 10,905,938 11,024,338 252,661 1,202,406 12,479,405 - - - 29,787,625 4,860,046 34,647,671 - 7,350,087 - - 7,443,660 14,793,747 - - - - 15,309,948 15,309,948 - - - - 7,156,136 7,156136 - - - - 1,373,137 1,373,137 - - - - 454,198 454,198 - - - - 512,186 512,186 - - - - 5,453,491 5,453,491 - - - - 1,404,532 1,404,532 - - - - 595,231 595,231 4,063,016 4,063,016 7,350,087 29,787,625 48,625,581 85,763,293 15,500,000 - - - 1,843,822 17,343,822 6156328 - - - - 5,156328 34,680,479 34,680,479 55,336,807 1,843,822 57,180,629 Accrued interest on General Fund advances to other funds of $130,298 do not provide current financial resources and are reported as deferred inflows of resources for unavailable revenues. B. Net Position Restatements As a result of the implementation of GASB Statement of No. 68 and GASB Statement No. 71, the beginning net position was restated for the net pension liability that was measured at June 30, 2014. The following is a summary of the effect of this restatement: Net position, as previously reported at June 30, 2014 Restatement due to implementation of GASB 68 and 71 Net position, as restated at June 30, 2014 CA Governmental Activities $ 9543425,101 Business -Type Activities $ 86,6503756 (30,303,742) (1,103,720) $ 924,121,359 $ 85,547,036 50,141,486 (8,007.174) (626,129) 41,508,183 $ 116502,631 $ 7,350.007 $ (8,007,174) $ 30,040.286 $ 51059,680 $ 196,945,510 Accrued interest on General Fund advances to other funds of $130,298 do not provide current financial resources and are reported as deferred inflows of resources for unavailable revenues. B. Net Position Restatements As a result of the implementation of GASB Statement of No. 68 and GASB Statement No. 71, the beginning net position was restated for the net pension liability that was measured at June 30, 2014. The following is a summary of the effect of this restatement: Net position, as previously reported at June 30, 2014 Restatement due to implementation of GASB 68 and 71 Net position, as restated at June 30, 2014 CA Governmental Activities $ 9543425,101 Business -Type Activities $ 86,6503756 (30,303,742) (1,103,720) $ 924,121,359 $ 85,547,036 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 12. FUND BALANCES AND NET POSITION (Continued) B. Net Position Restatements (Continued) These changes had the effect of decreasing net position of the governmental activities by $30,303,742 and the business -type activities by $1,1033720 as of June 30, 2014, as compared to the amounts previously reported. The deferred outflows of resources and deferred inflows of resources were not determinable at the time of implementation, except for the contributions during the fiscal year ended June 30, 2014 of $3,562,246, which is included in the restatement. Beginning net position in the Transit Enterprise Fund has been restated as follows: Net position, as previously reported at June 30, 2014 Restatement due to implementation of GASB 68 and 71 Net position, as restated at June 30, 2014 Beginning net position in the internal service funds has been restated as follows: Net position, as previously reported at June 30, 2014 Restatement due to implementation of GASB 68 and 71 Net position, as restated at June 30, 2014 13. AGENT MULTIPLE -EMPLOYER PLAN General Information about the Pension Plan A. Plan Description Transit Enterprise Fund $ 86,6501756 (1,103,720) $ 852547,036 Internal Service Funds $ 826167187 (115,346) $ 8,500,841 The City's defined benefit pension plan, California Public Employees' Retirement System (CaIPERS), provides pensions for all permanent full-time general and public safety employees of the City. CalPERS is an agent -multiple employer defined benefit pension plan administered by the California Public Employees' Retirement System. CalPERS issues a publicly available financial report that can be obtained at https://www.calpers.ca.gov. 65 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 13. AGENT MULTIPLE -EMPLOYER PLAN (Continued) B. Benefits Provided The City contributes to CaIPERS, an agent multiple -employer public employee defined benefit pension plan. CaIPERS provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan members and beneficiaries. A classic CalPERS member or California Public Employees' Pension Reform Act (PEPRA) Safety member becomes eligible for Service Retirement upon attainment of age 50 with at least 5 years of credited service (total service across all CaIPERS employers, and with certain other Retirement Systems with which CaIPERS has reciprocity agreements). For employees hired into a defined benefit pension plan with the 1.5 percent at 65 formula, eligibility for Service Retirement is age 55 with at least five years of service. PEPRA miscellaneous members become eligible for Service Retirement upon attainment of age 52 with at least five years of service. The Service Retirement benefit is a monthly allowance equal to the product of the benefit factor, years of service, and final compensation based on a three-year average. The benefit factor depends on the benefit formula specified in the agency's contracts. Beginning the second calendar year after the year of retirement, retirement and survivor allowances may be annually adjusted on a compound basis up to 2 percent. Copies of CaIPERS' annual financial report may be obtained from its executive office: 400 P Street, Sacramento, CA 95814. C. Employees Covered by Benefit Terms At June 30, 2013, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefits 127 Employees entitled to but not yet receiving benefits 335 Active employees 384 846 This information was obtained from the CaIPERS Annual Valuation Report as of June 30, 2013 and is the most recent information available. D. Contributions Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CaIPERS' annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. For the year ended June 30, 20157 the average active employee contribution rate is 7.803 percent of annual pay, and the employer's contribution rate is 13.733 percent of annual payroll. Employer contribution rates may change if plan contracts are amended. It is the responsibility of the employer to make necessary accounting adjustments to reflect the impact due to any Employer Paid Member Contributions or situations where members are paying a portion of the employer contribution. The employer contributions as of June 30, 2015, were $33740,138. Me] City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 13. AGENT MULTIPLE -EMPLOYER PLAN (Continued) E. Actuarial Assumptions For the measure period ended June 30, 2014 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2013 total pension liability. The June 30, 2013 and the June 30, 2014 total pension liabilities were based on the following actuarial methods and assumptions: Inflation 2.75 percent Salary increases 3.3 to 14.2 percent by Entry, Age and Service Investment rate of return 7.5 percent of net pension, investment and administrative expenses, including inflation The actuarial assumptions used in the June 30, 2013, valuation were based on the results of an actuarial experience study for the period from 1997 to 2011, including updates to salary increase, mortality, and retirement rates. Global Fixed Income Years Mortality rates were based on the 2014 CaIPERS actuarial experience study, which assumed future mortality improvements using Society of Actuaries (SOA) Scale 1313. The Experience Study report can be obtained at CaIPERS' website under Forms and Publications. On October 8, 2015, the SOA issued an updated Mortality Improvement Scale MP -15. The SOA's preliminary estimates suggest that updating to this recently release scale might reduce a plan's liabilities up to 2 percent or less. Management has not yet evaluated the impact of this recent update with its actuary and, accordingly, no adjustment has been made to the plan's obligations as of the June 30, 2013 valuation date. The long-term expected rate of return on pension plan investments was determined using a building- block method in which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table: New Strategic Expected Real Rate Expected Real Rate Asset Class Allocation of Return 1-10 Global Fixed Income Years of Return 11+ Years Global Equity 47.0% 5.25% 5.71% Private Equity 19.0 0.99 2.43 Global Fixed Income 6.0 0.45 3.36 Liquidity 12.0 6.83 6.95 Real Assets 11.0 4.50 5.13 Inflation Sensitive Assets 3.0 4.50 5.09 Asbolute Return Strategy (ARS) 2.0 -0.55 -1.05 67 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 13. AGENT MULTIPLE -EMPLOYER PLAN (Continued) F. Discount Rate The discount rate used to measure the total pension liability was 7.5 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that City contributions will be made at rates equal to the difference between actuarially determined contribution rates and the employee rate. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. G. Changes in the Net Pension Liability Balances at June 30, 2013 Changes recognized for the measurement period: Service cost Interest Changes of benefit terms Differences between expected and actual experience Changes of assumptions Contributions from the employer Contributions from employees Net investment income Benefit payments, including refunds of employee contributions Net changes during 2013-14 Balances at June 30, 2014 Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability (a) Net Position (b) Liability (a) - (b) $1263898,794 $ 9139293025 $ 34,9691769 43462,544 - 4,462,544 935883693 935882693 375627246 (335622246) 273397435 (2,3392435) 16,2437165 (163243,165) (235613655) (275613655) 111489,582 19,583,191 (8,0931609) $138,388,376 $111,512,216 $ 26,876,160 The City has allocated the proportion of the net pension liability and related components based on the share of contributions to the pension plan relative to the total contributions to the City. At June 30, 20153 the total net pension liability was proportionately allocated as follows: Governmental Transit Total Net Activities Enterprise Fund Pension Liability Net pension liability $ 25,9311680 $ 944,480 $ 2678763160 Co: City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 13. AGENT MULTIPLE -EMPLOYER PLAN (Continued) H. Sensitivity of the Net Pension Liability to Changes in the Discount Rate: The following presents the net pension liability of the City, calculated using the discount rate of 7.5 percent, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1 -percentage point lower (6.5 percent) or 1 -percentage point higher (8.5 percent) than the current rate: Discount Rate - 1% Current Discount Discount Rate + 1% (6.50%) Rate (7.50%) (8.50%) Net pension liability $ 4839747390 $ 26,8767160 $ 878213514 L Pension Plan Fiduciary Net Position Detailed information about the pension plan's fiduciary net position is available in the separately issued CalPERS financial report. J. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions For the year ended June 30, 2015, the City recognized pension expenses of $2,883,723. At June 30, 2015, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Net difference between projected and actual earnings on pension plan investments City contributions subsequent to the measurement date Total Deferred Outflows Deferred Inflows of Resources of Resources $ $ 71415,085 3,740,138 - $ 3,740,138 $ 7,415,085 At June 30, 2015, the total deferred outflow of resources and deferred inflow of resources related to the net pension liability was proportionately allocated as follows: Governmental Transit Activities Enterprise Fund Total Deferred outflows of resources $ 3,6083702 $ 131,436 $ 317403138 Deferred inflows of resources 7,1541505 2603580 714153085 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 13. AGENT MULTIPLE -EMPLOYER PLAN (Continued) J. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions (Continued) Amounts reported as deferred outflows and inflows of resources are amortized in pension expense for the year the gain or loss occurs, except for contributions subsequent to the measurement period, which are recognized during the fiscal year ending June 30, 2016. The amortization period differs depending on the source of the gain or loss. Differences between projected and actual earnings are amortized on a 5 -year straight-line basis and all other amounts are amortized over the average expected remaining service lives of all members that are provided with benefits. At June 30, 2015, the expected average remaining service lifetime is 4.7 years. Deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Deferred Outflows/(Inflows) Fiscal Year Ending June 30, of Resources 2016 $ (138533771) 2017 (1, 853,771) 2018 (1, 853,771) 2019 (1, 853,772) 14. POST -EMPLOYMENT HEALTH BENEFITS A. Plan Description The City has elected through resolution to provide healthcare benefits as a single -employer defined benefit plan to retirees, spouses, and eligible dependents of the City. This plan provides post - employment medical insurance benefits through the CalPERS Health Plan (the Plan). A separate financial report is not issued. B. Eligibility City employees who have a service retirement from the City at age 50 with five or more years of service are eligible to receive post -employment medical benefits. Employees who have a disability retirement are also eligible. The benefit for employees hired before January 1, 2008 is up to $1,016.58 per month. The maximum benefit will be adjusted when the lowest cost employee rate, plus one, exceeds $1,016.58. No minimum years of service were required for the employees hired before January 1, 2008 and retired before January 1, 2012 and represented employees hired before January 1, 2008 and retired after January 1, 2012 and before January 1, 2014 70 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 14. POST -EMPLOYMENT HEALTH BENEFITS (Continued) B. Eligibility (Continued) The City implemented the following vesting schedule on January 1, 2012 effective for unrepresented employees hired before January 1, 2008 who retire after January 1, 2012, and for represented employees hired before January 1, 2008 who retire after January 1, 2014: Years of Service Vested 0 to 5 years 0% 5 to 9 years 50% 10 to 14 years 75% 15 years and greater 100% Employees hired after January 1, 2008 receive the PERS minimum and are not subject to a vesting schedule. As of the most recent valuation, the total participants in the Plan are as follows: Participants Total Active employees Retirees Total C. Funding Policy 359 67 426 The City pays an allowance toward the healthcare benefits paid to retirees, spouses, and eligible dependents under a City resolution that can be amended by the City Council. During the year ended June 30, 2015, the City contributed $2,377,844 to the irrevocable OPEB Trust fund. The City conducted an actuarial valuation to determine the City's obligation to fund OPEB and determined that it served the City's interests to prefund those benefits. In December 2011, the City Council approved Resolution 11-89 adopting the Public Agencies Post -Retirement Health Care Plan Document and Trust Agreement. The OPEB Trust is a tax -qualified irrevocable trust, organized under Internal Revenue Code (IRC) Section 115, established to pre -fund OPEB as described in GASB Statement No. 45. The Plan Trustee is U.S. Bank, and Public Agencies Retirement Services (PARS) is the Trust Administrator. The City elected a discretionary investment approach with a blended investment objective strategy. The primary objective is to maximize total Plan return, subject to the risk and quality constraints established. The Plan's targeted rate of return is 6.5 percent. The asset allocation ranges for this objective are 0 percent to 20 percent cash source, 30 percent to 50 percent fixed income, and 50 percent to 70 percent equity. For fiscal year 2014-2015, the City contributed, on an individual basis, for employees and retirees up to the following amounts: Unrepresented SEIU Local 347 71 Retirees Employees 123199 $ 143107 123199 143107 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 14. POST -EMPLOYMENT HEALTH BENEFITS (Continued) D. Annual OPEB Cost and Net OPEB Obligation The City's annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excesses) over a period not to exceed 30 years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the Plan, and changes in the City's OPEB asset for the Plan: Total Annual required contribution $ 113883000 Interest on OPEB asset (4043000) Adjustment to annual required contribution 4543000 Annual OPEB cost (expense) 174383000 Contributions made 233773844 Decrease in OPEB asset 9393844 OPEB asset - beginning of year 672143930 OPEB asset - end of year $ 731543774 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB asset as of June 30, 2015, were as follows: % of Annual Annual OPEB OPEB OPEB Annual Cost Asset Fiscal Year Ended Cost Contribution Contributed (Obligation) June 30, 2013 June 30, 2014 June 30, 2015 $ 1,625,000 $ 226797000 273123000 223037000 1,438,000 223777844 E. Funded Status and Funding Progress 164.9% $ 632233930 99.6% 632143930 165.4% 731543774 As of the most recent actuarial valuation date on June 30, 2014, the Plan was 93.6 percent funded. The actuarial accrued liability for benefits was $28.9 million, and the actuarial value of assets was $27.0 million, resulting in a UAAL of $1.9 million. The covered payroll (annual payroll of active employees covered by the Plan) was $27.4 million, and the ratio of UAAL to the covered payroll was 6.73 percent. The schedule of funding progress, presented as required supplementary information following the notes to financial statements, presents multi-year trend information that shows whether the actuarial value of Plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 72 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 14. POST -EMPLOYMENT HEALTH BENEFITS (Continued) F. Actuarial Methods and Assumptions Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend rate. Amounts determined regarding the funded status of the Plan and the ARC are subject to continual revision, as actual results are compared with past expectations, and new estimates are made about the future. In the June 30, 2014 actuarial valuation, the entry -age actuarial cost method was used. The actuarial assumptions include a 6.50 percent investment rate of return, which is based on the expected return on funds invested by PARS, and an annual healthcare cost trend rate of 7.70 percent initially and reduced by decrements of 0.6 percent to an ultimate rate of 5.0 percent thereafter. The actuarial assumption for inflation was 3.00 percent, and the aggregate payroll increase was 3.25 percent used in the actuarial valuation. The actuarial value of assets was determined using techniques that spread the effects of short-term volatility in the market value of investments over a five-year period. The UAAL is being amortized as a level percentage of projected payroll on an open basis. The remaining amortization period at June 30, 2014 was 19 years. 15. INDIVIDUAL FUND DISCLOSURES A. Deficit Fund Balances and Net Position Funds that have a deficit fund balance at June 30, 2015, are as follows: Deficit Fund Fund Balance Major Funds: Public Library Special Revenue Fund $ (8,0073174) Non -Major Governmental Funds Proposition A (1) Surface Transportation Program (143191) BJA Law Enforcement Special Revenue Fund (846) Proposition C (6113091) The City plans to eliminate the deficit in the Public Library Special Revenue Fund with future property tax receipts. The non -major governmental fund deficits will be eliminated when the intergovernmental receivables are collected in future periods. 73 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 15. INDIVIDUAL FUND DISCLOSURES (Continued) B. Expenditures in Excess of Appropriations For the year ended June 30, 2015, expenditures exceeded appropriations in the following programs/functions (legal level of budgetary control) of the respective funds: Excess Expenditures Over Fund Appropriations Expenditures Appropriations Major Governmental Funds General Fund General Government Non -Major Governmental Funds: Supplemental Law Grant Special Revenue Fund: Public Safety OSPD Special Revenue Fund: Interest and fiscal charges Public Financing Authority Debt Service Fund: Interest and fiscal charges $ 17,7141271 $ 21,366,674 $ (31652,403) 348,607 353,043 (4,436) - 93 (93) 1,533,866 1,5335907 (41) 16. DEFERRED COMPENSATION PLAN/DEFINED CONTRIBUTION PLAN The City has established deferred compensation/defined contribution plans for certain classifications of management under IRC Section 401(a). City participation in contributions to the plans is mandatory. The City is obligated to contribute amounts ranging from $2,000 to $17,500 per participant per year. Employee contributions to certain plans are voluntary. During the year ended June 30, 2015, there were 713 participants in the plans. The City's contributions totaled $182,876, and employees' contributions totaled $2,110,412. 17. SELF-INSURANCE The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors, and omissions; injuries to employees; and natural disasters. The City joined Special Districts Risk Management Authority (SDRMA) in the fall of 2005. SDRMA is a self-insurance risk pool that serves as a not-for-profit public agency to its members. Through SDRMA, the City currently holds a $500 general liability deductible. All general liability claims above $500 and up to a limit of $10,000,000 are handled by SDRMA. The City's workers' compensation coverage is also administered by SDRMA. The City is self-insured for workers' compensation up to $250,000, but has purchased coverage through SDRMA for individual claims exceeding $250,000 up to a maximum of $530003000. 74 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 17. SELF-INSURANCE (Continued) The annual member contribution is $596,288 for the property/liability program and the workers' compensation program (based on estimated wages). At June 30, 2015, $260,000 was accrued by the City for general liability claims, and $1,733,915 was accrued for workers' compensation claims and judgments. These accruals represent estimates of amounts to be paid for incurred and reported claims, as well as IBNR claims based upon past experience and modified for current trends and information. Changes in the reported claims liability since June 30, 2013, resulted in the following: Claims liability as of June 30, 2013 $ 1,114,117 Claims and changes in estimates during the year ended June 30, 2014 17613,412 Claims and payments during the year ended June 30, 2014 (5693766) Claims liability as of June 30, 2014 2,1577763 Claims and changes in estimates during the year ended June 30, 2015 110283290 Claims and payments during the year ended June 30, 2015 (111923138) Claims liability as of June 30, 2015 $ 1,993,915 Settled claims have not exceeded any of these coverage amounts in any of the last three fiscal years, and there were no reductions in the City's insurance coverage during the year ended June 30, 2015. SDRMA has published its own financial report for the year ended June 30, 2014, which can be obtained from SDRMA, 1112 1 Street, Suite 300, Sacramento, CA 95814. 18. NON -COMMITMENT DEBT A. 1915 Act Limited Obligation Improvements Bonds On July 24, 1996, $879,432 of 1915 Act Limited Obligation Improvement Bonds (1915 Golden Valley Road Bonds) for the Golden Valley Road Improvement Assessment District (the Golden Valley Assessment District) were issued. The 1915 Golden Valley Road Bonds are not a general obligation of the City, and neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. The source of the debt service is from the property assessments within the Golden Valley Assessment District. The principal amount of debt outstanding at June 30, 2015, was $360,000. B. 1915 Act Limited Obligation Improvements Bonds On January 27, 20003 $790,000 of 1915 Act Limited Obligation Improvement Bonds (1915 Vermont Drive/Everett Drive Bonds) for the Vermont Drive/Everett Drive Improvement Assessment District (the Vermont/Everett Assessment District) were issued. The 1915 Vermont Drive/Everett Drive Bonds are not a general obligation of the City, and neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. The source of the debt service is from the property assessments within the Vermont/Everett Assessment District. The principal amount of the debt outstanding at June 30, 2015, was $450,000. 75 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 18. NON -COMMITMENT DEBT (Continued) C. Community Facilities District No. 2002-1 Special Tax Bonds On October 29, 2002, $17,370,000 of Special Tax bonds were issued for Community Facilities District No. 2002-1 (the Community Facilities District). On October 12, 2012, these bonds were refunded with the issuance of Community Facilities District No. 2002-1 (Valencia Town Center) Special Tax Refunding bonds for $16,485,000. The Special Tax Refunding bonds are not a general obligation of the City, and neither the faith and credit nor the taxing power of the City is pledged to the payment of the bonds. The source of the debt service is from the property assessments within the Community Facilities District. The principal amount of the debt outstanding at June 30, 2015 was $15,830,000. 19. SANTA CLARITA WATERSHED RECREATION AND CONSERVANCY AUTHORITY In June 1992, the City entered into a joint powers agreement with the Santa Monica Mountains Conservancy (the Conservancy) to create the Watershed Authority. The purpose of the Watershed Authority is to acquire, develop, and conserve additional park and open space lands, including water - oriented recreation and conservation projects. The governing board consists of two representatives from the Conservancy and two from the City. The City performs administrative functions for the Watershed Authority. As a result, the Watershed Authority is reported as an agency fund in these financial statements. The Watershed Authority may request the City to make annual contributions. For the year ended June 30, 2015, the City did not make any contributions. Separate financial statements for the Santa Clarita Watershed Recreation and Conservancy Authority can be obtained from the City's administrative offices at 23920 Valencia Boulevard, Santa Clarita, CA 91355. 20. SANTA CLARITA PUBLIC TELEVISION AUTHORITY In July 2009, the City entered into a joint powers agreement with the William S. Hart School District (the District) to create the Santa Clarita Public Television Authority (SCPTA). As a result, the SCPTA is reported as an Agency fund in these financial statements. The purpose of the SCPTA is to provide a forum for public, educational, and governmental television programs by the members, individuals, and organizations in the community. The governing board consists of one representative from the District and one from the City. The City performs administrative functions for the SCPTA, and may, at the SCPTA's request, make annual contributions. For the year ended June 30, 2015, the City contributed $108,945. Separate financial statements for the Santa Clarita Public Television Authority are prepared biannually and can be obtained from the City's administrative offices at 23920 Valencia Boulevard, Santa Clarita, CA 91355. 76 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 21. COMMITMENTS AND CONTINGENCIES A. Construction Commitments The City has active construction projects as of June 30, 2015. At year-end, the City's commitments with contractors for infrastructure projects 233,814 are as follows: 33592,395 Expenditures Contract to Date as of Remaining Project Amount June 30, 2015 Commitments Pavement $ 995,396 $ 6993938 $ 295,458 Bridges 11,161,410 1030432522 1,117, 888 Sidewalk 641,778 4073964 233,814 Medians 5,6333404 33592,395 230413009 Trails 2193618 40,025 1793593 B. Encumbrances The City utilizes encumbrance accounting as a means of controlling expenditures. Under this method, funds are encumbered when purchase orders, contracts, and other commitments are signed or approved by authorized City officials. Such outstanding commitments at year-end do not constitute expenditures or liabilities. GASB Statement No. 54 provides additional guidance on the classification within the fund balances section of amounts that have been encumbered. Encumbrances of balances within the governmental funds are classified as either restricted or assigned and are included in the respective categories. These encumbrances are not separately classified in the financial statements and are summarized at June 30, 2015, as follows: General Fund Other governmental funds C. Contingencies Amount 350,855 28,448,515 The City has received Federal grants for specific purposes that are subject to review and audit by the Federal government. Although such audits could result in expenditure disallowance under grant terms, any required reimbursements are not expected to be material. In addition, the City is a defendant in certain other legal actions arising in the normal course of operations. In June 2013, a lawsuit was filed against the City alleging voting rights dilution, and the City has settled the dispute with the plaintiff. The maximum exposure to liability is $800,000, and management and the City's legal counsel have reasonably estimated a $600,000 liability for plaintiff attorney fees. The City has paid out $400,000, and the remaining $200,000 remains accrued in the Self -Insurance Internal Service Fund at June 30. 2015. In the opinion of management and legal counsel, there are no other liabilities that would have a substantial adverse effect on the financial position of the City as of June 30, 2015. 77 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 22. SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 27 (the Bill), which provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City that had previously reported a redevelopment agency within the reporting entity of the City as a blended component unit. The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the "successor agency" to hold the assets until they are distributed to other units of state and local government. On January 24, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of the City Resolution No. 12-3. Each year, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. A. Cash and Investments The balance of cash and investments at June 30, 2015, is classified in the accompanying financial statements as follows: RDA Successor Agency Cash and investments pooled with City $ 175753499 Restricted: Cash and investments 33888 Cash and investments with fiscal agent 1,165,384 Total $ 25744,771 B. Land Held for Resale As of June 30, 2015, the City has $1,011,031 of land held for resale, which is reported at fair value. There were no changes in fair value during the current year. Cost of land held for resale Less: allowance for the decline in value Land held for resale, net W RDA Successor Agency $ 278503000 (128383969) $ 1,0117031 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 22. SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (Continued) C. Capital Assets RDA Successor Agency: Non -depreciable assets: Land Total non -depreciable assets Depreciable assets: Site improvements Infrastructure Total depreciable assets Less accumulated depreciation: Site improvements Infrastructure Total accumulated depreciation Total depreciable assets, net Total capital assets, net Balance Balance June 30. 2014 Additions Deletions June 30. 2015 $ 532,878 $ - $ - $ 532,878 532,878 532,878 110,310 - - 110,310 4,287,341 - - 4,287,341 4,397,651 - - 4,397,651 11,031 4,412 - 15,443 309,604 85,747 - 395,351 320,635 90,159 - 410,794 4,077,016 (90,159) - 3,986,857 $ 4,609,894 $ (90,159) $ M $ 4,519,735 The total depreciation expense charged to the RDA Successor Agency as of June 30, 2015, was $90,159. Classification Balance D. Long -Term Debt Loans from the City of Santa Clarita At June 30, 2015, the California Department of Finance (DOF) approved the advances to the former redevelopment agency consisting of the promissory notes outstanding between the City and the former redevelopment agency entered into between the periods of July 1996 and June 2010. These consist of notes outstanding from the General Fund and the Developer Fees Special Revenue Fund in the amounts of $7,225,964 and $5,407,868, respectively. The loans accrue interest based on the LAIF rate of 0.26 percent which was in effect when the Oversight Board reinstated the loans on February 25, 2015. The unpaid accrued interest of these notes at June 30, 2015, are $910,244 and $183,958, respectively. 79 Classification Balance Balance Due Within Due More June 30, 2014 Additions Deletions June 30, 2015 One Year Than One Year RDA Successor Agency: Loans from the City of Santa Clarita $ 13,393,468 $ 34,512 $ (794,148) $ 12,633,832 $ $ 12,633,832 Tax Allocation Bonds: Series 2008 27,685,000 - (490,000) 27,195,000 510,000 26,685,000 Housing Set -Aside 8,205,000 - (145,000) 8,060,000 150,000 7,910,000 Less deferred amounts for unamortized discounts (132,726) 5,530 (127,196) (5,530) (121,666) Total Tax Allocation Bonds 35,757,274 5.530 (635,000) 35,127,804 654,470 34,473,334 Total S 49,150,742 $ 40,042 $ (1,429,148) $ 47,761,636 $ 654,470 $ 47,107,166 Loans from the City of Santa Clarita At June 30, 2015, the California Department of Finance (DOF) approved the advances to the former redevelopment agency consisting of the promissory notes outstanding between the City and the former redevelopment agency entered into between the periods of July 1996 and June 2010. These consist of notes outstanding from the General Fund and the Developer Fees Special Revenue Fund in the amounts of $7,225,964 and $5,407,868, respectively. The loans accrue interest based on the LAIF rate of 0.26 percent which was in effect when the Oversight Board reinstated the loans on February 25, 2015. The unpaid accrued interest of these notes at June 30, 2015, are $910,244 and $183,958, respectively. 79 City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 22. SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (Continued) D. Long -Term Debt (Continued) Tax Allocation Bonds The former redevelopment agency issued Tax Allocation Bonds, which are special obligations of the Successor Agency secured by pledged property tax revenues. The bonds are not a debt of the City and are not payable out of any funds or properties other than those of the Successor Agency. Tax Allocation Bonds — Series 2008 On June 12, 2008, the former redevelopment agency issued the Santa Clarita Redevelopment Agency Tax Allocation Bonds, Series 2008, in the amount of $29,860,000. Proceeds of the bonds were used to finance certain projects of the former redevelopment agency, fund a debt service reserve account, and pay for costs of the bond issuance. The bonds were issued at a net discount of $165,906, which will be amortized and recognized as interest expense over the life of the debt on a straight-line basis. This bond issue comprises $12,065,000 serial bonds maturing annually, commencing on October 1, 2011, through 2028, and three term bonds (totaling $17,795,000) maturing on October 1, 2032, October 1, 2037, and October 1, 2042, that are payable in annual sinking fund installments commencing on October 1, 2029. Interest on the bonds is payable semi- annually on October 1 and April 1 at rates ranging from 4.00 percent to 4.75 percent for the serial bonds and from 4.75 percent to 5.00 percent for the term bonds. The annual debt service requirements on these bonds are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2040 2041-2043 Total Interest Total $ 5107000 $ 132713348 $ 177813348 530,000 132503548 17780,548 550,000 132283948 137783948 5753000 132063448 137813448 5953000 131833048 177783048 3,3653000 535102319 878753319 471953000 436572309 818523309 512903000 335352372 838253372 677103000 23082,663 837923663 4,875,000 373,625 5,248,625 $ 27,195,000 $ 22,299,628 $ 49,494,628 ME City of Santa Clarita Notes to Financial Statements For the Year Ended June 30, 2015 22. SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (Continued) D. Long -Term Debt (Continued) Tax Allocation Bonds — Housing Set -Aside On June 12, 2008, the former redevelopment agency issued the Santa Clarita Redevelopment Agency Housing Set -Aside Tax Allocation Bonds, Series 2008, in the amount of $8,850,000. Proceeds of the bonds were used to finance low- and moderate -income housing projects and programs, fund a reserve fund, and pay for costs of the bond issuance. The bond issue comprises $3,550,000 serial bonds maturing annually on October 1 through 2028, and three term bonds (totaling $5,300,000), maturing on October 1, 2032, October 1, 2037, and October 1, 2042, that are payable in annual sinking fund installments commencing on October 1, 2029. Interest on the bonds is payable semi-annually on October 1 and April 1 at rates ranging from 4.00 percent to 4.875 percent for the serial bonds and at 5.00 percent for the term bonds. The annual debt service requirements on these bonds are as follows: Year Ending June 30, 2016 2017 2018 2019 2020 2021-2025 2026-2030 2031-2035 2036-2040 2041-2043 Total E. Deficit Net Position Interest Total 1502000 $ 3823956 $ 5327956 1553000 3763856 5317856 160,000 3703556 5307556 1702000 3633956 5337956 175,000 3573056 5327056 985,000 176663488 226517488 132353000 124133653 236483653 135752000 170683125 2,6433125 23000,000 6233750 226233750 11455,000 111,625 1,566, 625 $ 8,060,000 $ 6,735,021 $ 14,795,021 As of June 30, 2015, the RDA Successor Agency Private -Purpose Trust Fund had a deficit net position of $26,067,990. This will be reduced with future receipt of distributions from the Redevelopment Property Tax Trust Fund from the County and potential asset sales. 23. SUBSEQUENT EVENTS A. Change in Interest Rates for Notes to RDA Successor Agency -Senate Bill 107 On September 22, 2015, the Committee on Budget and Fiscal Review of the California State Senate approved SB 107. A mandate of this legislation is to recalculate the notes to the RDA Successor Agency using a 3 percent simple interest from the origination of the notes. As a result, the reported amounts in the General Fund and Developer Fees Special Revenue Fund of $7,225,964 and $5,407,868, respectively, will be increased to $9,146,941 and $6,272,669, respectively. 91 99 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget and Actual General Fund For the Year Ended June 30, 2015 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) 17,334,980 17, 714,271 21,653,144 21,694,942 Variance From 21,532,334 13, 966, 011 17, 866, 754 5,807,672 Final Budget 1682550 Original Final Positive/ $ (1,770,206) Budget Budget Actual (Negative) Revenues Taxes $ 721308,793 $ 75,376,473 $ 781232,263 $ 2,855,790 Licenses and permits 4,530,752 5,389,819 5,567,280 177,461 Intergovernmental 301,572 782,102 1,125,699 343,597 Charges for services 71068,659 7,763,229 %13%349 11376,120 Investment income 808,366 808,366 1,073,899 265,533 Fines and forfeitures 5162500 551,500 4522052 (99,448) Other revenue 38,940 204,937 14,501 (190,436) Total revenues 85,573,582 90,876,426 95,605,043 41728,617 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) 17,334,980 17, 714,271 21,653,144 21,694,942 21,413,338 21,532,334 13, 966, 011 17, 866, 754 5,807,672 61047,517 1682550 6,0011256 21,366,674 (3,652,403) 21,069,111 625,831 20,673,945 858,389 12,079,362 51787,392 5,2701770 776,747 52849,555 151,701 - 22,422 22,422 - 80,343,695 90,879,496 86,331,839 4,5477657 5,229,887 (3,070) 92273,204 91276,274 Transfers in 2,243,179 2,113,251 21217,935 104,684 Transfers out (31649,837) (3,880,387) (31880,387) - Total other financing sources (uses) (1,406,658) (1,767,136) (1,662,452) 104,684 Net change in fund balances $ 3,823,229 $ (1,770,206) 79610,752 $ 9,380,958 Fund balances, beginning of year Fund balances, end of year EK 1085891,879 $ 116,502,631 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Bridge and Thoroughfare Special Revenue Fund For the Year Ended June 30, 2015 Revenues Investment income Developer fees Total revenues Expenditures Current: Public works Capital outlay Debt service: Interest and fiscal charges Redemption of district credits Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers out Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) $ 295,649 $ 295,649 $ 283,790 $ (11,859) 11694,744 516,362 51290,874 41774,512 11990,393 812,011 51574,664 41762,653 1,585,829 7,527,640 228,880 27206,326 202,800 202,800 1,188,641 6,338,999 1,038,855 1,167,471 192,897 9,903 - 51105,402 (51105,402) 2,0171509 9,936,766 75251795 21410,971 (27,116) (9,1241755) (1,951,131) 71173,624 (7,284) (7,284) (7,284) - (7,284) (7,284) (71284) - $ (34,400) $ (9,132,039) (1,958,415) $ 7,173,624 EE 9,308,502 $ 7,350,087 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Public Library Special Revenue Fund For the Year Ended June 30, 2015 Revenues Taxes Charges for services Investment income Other revenue Total revenues Expenditures Current: General government Public works Capital outlay Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) $ 5,5463065 $ 5,6003716 85,000 853000 $ 61107,578 $ 506,862 85,000 - 6,078 6,078 1503000 1503000 1863042 36,042 5,7813065 5,8353716 6,3843698 548,982 4,8993560 510423723 419913505 512218 - 147,733 1013176 462557 333387 333387 - 4523959 4523959 503057 402,902 104,945 1043945 1023472 2,473 5,4571464 51781,747 512783597 503,150 3233601 533969 1,1063101 1,052,132 (11591) (11591) (13591) (1,591) (1,591) (13591) $ 322,010 $ 52,378 1,104,510 $ 1,052,132 ER (9,111,684) _L( City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Landscape Maintenance District #1 Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From Current: (213,600) (213,600) Total other financing sources (uses) Final Budget General government Original Final 11,832,237 Positive/ Parks, recreation and community service Budget Budget Actual (Negative) Revenues 4393006 1,604,918 186,951 11417,967 Taxes $ 8403301 $ 8403301 $ 901,701 $ 61,400 Special assessments 17,7613695 17,8653387 17,6613944 (203,443) Investment income 1843981 184,981 290,063 105,082 Total revenues 18,7861977 187890,669 18,8531708 (362961) Expenditures Transfers out Current: (213,600) (213,600) Total other financing sources (uses) (2133600) General government 14,1353318 14,4703441 11,832,237 21638,204 Parks, recreation and community service 4,092 43,542 33696 39,846 Public works 4393006 1,604,918 186,951 11417,967 Capital outlay 6,8433462 9,2813334 4,9313378 41349,956 Total expenditures 21,421,878 25,400,235 16,954,262 814452973 Excess (deficiency) of revenues over(under)expenditures (2,6341901) (6,5091566) 11899,446 81409,012 Other financing sources (uses) Transfers out (213,600) (213,600) (213,600) Total other financing sources (uses) (2133600) (213,600) (2133600) - Net change in fund balances $ (2,848,501) $ (6,723,166) 1,685,846 $ 8,409,012 Fund balances, beginning of year 28,354,440 Fund balances, end of year $ 30,040,286 ER City of Santa Clarita Schedule of Funding Progress For the Year Ended June 30, 2015 Other Post -Employment Benefits $ $ 417425 $ (413425) The schedule of funding progress presents multiyear trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. 233880 -45.86% 7/1/2014 The funded status of the City's other post -employment benefits plan is as follows (in thousands): (13841) (A) (B) (C) (D) (E) (F) (Unfunded) (Unfunded) Actuarial Actuarial Actuarial Liability as Actuarial Actuarial Accrued Accrued Funded Percentage of Valuation Asset Liability Liability Ratio Covered Covered Payroll Date* Value Entry Age [(B) -(A)] [(A)/(B)] Payroll [(C)/(E)] 7/1/2010 $ $ 417425 $ (413425) 0.00% $ 253094 -165.08% 7/1/2012 197928 30,879 (103951) 64.54% 233880 -45.86% 7/1/2014 27,035 287876 (13841) 93.62% 273368 -6.73% * Based on most recent actuarial valuation available. 0 City of Santa Clarita Schedule of Changes in the City's Net Pension Liability and Related Ratios For the Year Ended June 30, 2015 The Schedule of Changes in the City's Net Pension Liability and Related Ratios during the measurement period is as follows: Measurement Period June 30, 2014 Total Pension Liability Service Cost Interest Changes of Benefit Terms difference between Expected and Actual Experience Changes of Assumptions Benefit Payments, Including Refunds of Employee Contributions Net Change in Total Pension Liability Total Pension Liability - Beginning Total Pension Liability - Ending (a) Plan Fiduciary Net Position Contributions - Employer Contributions - Employee Net Investment Income Benefit Payments, Including Refunds of Employee Contributions Other Changes in Fiduciary Net Position Net Change in Fiduciary Net Position Plan Fiduciary net Position - Beginning Plan Fiduciary net Position - Ending (b) Plan Net Pension Liability/(Asset) - Ending (a) -(b) Plan Fiduciary Net Position as a Percentage of the Total Pension Liability Covered -Employee Payroll Plan Net Pension Liability/(Asset) as a Percentage of Covered -Employee Payroll 16,243,165 (2,561, 655) 4,462,544 9,588,693 (2561,655) 11,489,582 126,8987794 $ 138,388,376 $ 3562,246 2,339,435 16,243,165 (2,561, 655) 19,583,191 91, 929, 025 $ 111,512,216 $ 26,876,160 80.58% $ 2678797556 99.99% Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes that occurred after June 30, 2013. This applies for voluntary benefit changes as well as any offers of two years' Additional Service Credit (a.k.a. Golden Handshakes). Changes of Assumptions: There were no changes in assumptions. This schedule is presented to illustrate the requirement to show information for 10 years. However, until a full 10 -year trend is compiled, the City will present information for those years for which information is available. E% no] City of Santa Clarita Schedule of City Contributions For the Year Ended June 30, 2015 The Schedule of City Contributions during the measurement period is as follows: June 30, 2015 June 30, 2014 June 30, 2013 Actuarially determined contribution $ 3,740,138 $ 3,562,246 $ 3,319,326 Contributions in relation to the actuarially determined contribution (3,740,138) (3,562,246) (3,319,326) Contribution deficiency (excess) $ $ $ Covered -Employee Payroll Contributions as a Percentage of Covered Employee Payroll $ 27,234,699 $ 26,879,556 $ 25,256,659 13.73% 13.25% 13.14% Valuation Date: The actuarial methods and assumptions used to set the actuarially determined contributions for fiscal year 2013-14 were from June 30, 2013 public agency valuations: Actuarial Cost method Amortization method Remaining amortization period Asset valuation method Inflation Salary increases Investment rate of return Retirement age Entry Age Normal Level Percentage of Payroll, Closed 19 Years Actuarial Value of Assets 2.75% Varies by Entry Age and Service 7.50% Net of Pension Plan Investment and Administrative Expenses; includes Inflation. The probabilities of Retirement are based on the 2010 CaIPERS Experience Study for the period from 1997 to 2007. Mortality The probabilities of mortality are based on the 2010 CaIPERS Experience Study for the period from 1997 to 2007. Pre -retirement and post-retirement mortality rates include 5 years of projected mortality improvement using Scale AA published by the Society of Actuaries. City of Santa Clarita Schedule of City Contributions For the Year Ended June 30, 2015 June 30, 2012 June 30, 2011 June 30, 2010 June 30, 2009 June 30, 2008 June 30, 2007 June 30, 2006 26,145,818 $ 23,355,540 $ 21,540,546 $ 20,281,908 $ 3,224,628 $ 2,916,852 $ 2,919,550 $ 2,865,328 $ 2,659,975 $ 2,470,285 $ 2,007,921 (3,224,628) (2,916,852) (2,919,550) (2,865,328) (2,659,975) (2,470,285) (2,007,921) $ 24,807,314 $ 24,940,516 $ 25,336,721 $ 26,145,818 $ 23,355,540 $ 21,540,546 $ 20,281,908 13.00% 11.70% 11.52% 10.96% 11.39% 11.47% 9.90% 91 City of Santa Clarita Notes to Required Supplementary Information For the Year Ended June 30, 2015 BUDGETARY INFORMATION Annual budgets are legally adopted on a basis consistent with generally accepted accounting principles in the United States of America for the General Fund and each of the special revenue funds. All annual appropriations lapse at fiscal year-end. On or before the last day in January of each year, all operational units submit requests for appropriations to the city manager for budget preparation purposes. Before April 30, the proposed budget is presented to the City Council for review. The City Council holds public hearings, and a final budget must be prepared and adopted no later than June 30. The appropriated budget is prepared by fund, function, and department. The City's department heads, with approval of the city manager, may make transfers of appropriations within a department and between functions within a fund. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the fund level. Under encumbrance accounting, purchase orders, contracts, and other commitments for expenditures are recorded to reserve that portion of the applicable appropriation. Encumbrance accounting is employed as an extension of formal budgetary accounting. Since encumbrances do not yet constitute expenditures or liabilities, encumbrances outstanding at year-end are classified as either restricted, committed, or assigned fund balances. Unexpended appropriations lapse at year-end. EE City of Santa Clarita Non -Major Governmental Funds As of and for the Year Ended June 30, 2015 The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. Developer Fees — To account for monies received from developers restricted to fund specific projects and infrastructure maintenance throughout the City. Bikeway — To account for monies received from the State of California restricted for bicycle and pedestrian facilities available under Article 3 of the Transportation Development Act (SB821). Gas Tax — To account for monies received and expended from the state and county gas tax allocation restricted to fund various street highway improvements, including maintenance. Proposition A — To account for the City's share of the one-half percent (0.5 percent) increased sales tax in Los Angeles County as a result of "Proposition A." This revenue is to be used for transportation - related purposes. Special Assessment — To account for special assessments received for small assessment districts. These funds may be used for maintenance expenses within the districts. State Park — To account for grant monies received from the State of California Department of Parks and Recreation for construction or improvements of parkland within the City. TDA (Transportation Development Act) — To account for monies received from the State of California under Article 8 of the TDA. These funds may be used for local streets and road expenditures when the City's unmet transportation needs have been satisfied. Traffic Safety — To account for monies received from vehicle code fines. This fund is used to finance law enforcement expenditures. CDBG (Community Development Block Grant) — To account for Federal entitlements under the Housing and Community Development Act of 1974, as amended. The City Council annually allocates CDBG funds to various programs. AQMD (Air Quality Management District) — To account for revenues and expenditures for Air Quality Management. Stormwater —To account for monies received from assessments restricted for the use of the stormwater and run-off programs. Surface Transportation Program — To account for receipts and disbursements associated with the Surface Transportation Program restricted for construction, reconstruction, and improvement of highways and bridges on eligible Federal -Aid highway routes. BJA Law Enforcement — To account for receipts and disbursements for the BJA law enforcement grant restricted for police department programs. Supplemental Law Grant — To account for receipts and disbursements for the supplemental law grant restricted for police department programs. HOME — To account for receipts and disbursements for the activity for the HOME grant program restricted to expand the supply of affordable housing for very low- and low-income families. 93 City of Santa Clarita Non -Major Governmental Funds As of and for the Year Ended June 30, 2015 Special Revenue Funds (Continued) Library Facilities Fees — To account for monies received from the library facilities developer fees, which are restricted for use on library facilities. Public Education and Government — To account for the 1 percent PEG Capital Grant funds received from video service providers pursuant to the Digital Infrastructure and Video Competition Act of 2006. Proposition C — To account for the City's share of the one-half percent (0.5 percent) increased sales tax in Los Angeles County as a result of Proposition C. This revenue is to be used for transportation - related purposes. Federal Grants — To account for receipts and disbursements of miscellaneous federal grant monies not accounted for in other funds. These receipts are restricted for planning, design, improvements, and maintenance of streets, roads and bridges, facility construction and improvements, transit operations, and other transit -related expenditures. Measure R — To account for the half -cent sales tax revenues that Los Angeles County voters approved in November 2008 to meet the transportation needs of Los Angeles County. Tourism Marketing District — To account for receipts and disbursements associated with promoting local businesses and tourism in the City of Santa Clarita through the Tourism Marketing District. The Tourism Marketing District was formed to provide financing for public programs to attract tourist visits to areas where tourism is economically important and desired. The Tourism Marketing District was established and is levied pursuant to the Parking and Business Improvement Area Law of 1989, Part 6 of Division 18 of the California Streets and Highways Code (the 1989 Law) and the provisions of the California Constitution Article XIIID (Proposition 218). OPSD (Open Space Preservation District) — To account for monies received from special assessments for the costs of acquiring open space lands, parks, and parkland in accordance with the City's programs. Miscellaneous Grants — To account for receipts and disbursements of non-federal miscellaneous grants, which are restricted for planning, design, improvements, and maintenance of streets, roads, and bridges, facility construction and improvements, transit operations, and other transit -related expenditures. Park Dedication — This fund accounts for monies received from developers restricted to finance the acquisition and develop new parkland space. These monies are restricted under the Quimby Act by ordinance and require the dedication of land or impose a requirement of the payment of fee in lieu. Housing Successor Agency — To account for the transactions of the Housing Successor Agency for the continuation of the low- and moderate -income programs of the former redevelopment agency. Tourism Marketing Bureau — To account for monies received from local and regional tourism -related organizations restricted for tourism and business development within the City's boundaries. M City of Santa Clarita Non -Major Governmental Funds As of and for the Year Ended June 30, 2015 The Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for capital outlays, including the acquisition or construction of capital facilities and other capital assets. General Capital Projects — To account for major capital improvement projects not accounted for in other funds. Public Financing Authority — To account for the construction of all capital projects that utilize public financing authority funds. The Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest. Public Financing Authority — To account for principal and interest payments for obligations issued by the Santa Clarita Public Financing Authority. 95 City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Developer Revenue Funds Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 43,847 $ 10,839 $ 357,088 $ 400 43,847 10,839 357,088 400 2 2 249,510 - - 3,293,995 175,797 3,133,139 14,000 53,674 3,611,179 175,797 3,133,139 (1) $ 9,181,838 $ 186,636 $ 31490,227 $ 399 Fees Bikeway Gas Tax Proposition A Assets Cash and investments $ 31398,740 $ 1862265 $ 32464,635 $ 398 Receivables: Accounts, net - - 19,021 - Interest 61776 371 61571 1 Taxes - - - Loans - Notes to RDA Successor Agency 51407,868 - - - Prepaid costs - - - - Due from other governments - - - Advances to other funds 118,944 - - - Land held for resale 249,510 - - - Restricted assets: Cash and investments - Cash and investments with fiscal agents - - - - Total assets $ 9,181,838 $ 186,636 $ 3,490,227 $ 399 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 43,847 $ 10,839 $ 357,088 $ 400 43,847 10,839 357,088 400 2 2 249,510 - - 3,293,995 175,797 3,133,139 14,000 53,674 3,611,179 175,797 3,133,139 (1) $ 9,181,838 $ 186,636 $ 31490,227 $ 399 City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Special Revenue Funds Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 415,712 $ 4,125 $ 246,797 $ - 165,007 - 55,074 415,712 169,132 246,797 55,074 13,437 5,672,217 7,466,620 5,685,654 7,466,620 - $ 6,101,366 $ 169,132 $ 7,7131417 $ 55,074 97 (Continued) Assessment State Park TDA Traffic Safety Assets Cash and investments $ 519392684 $ - $ 71698,071 $ Receivables: Accounts, net 48,658 - Interest 12,989 - 15,346 Taxes 86,598 - Loans Notes to RDA Successor Agency - - - - Prepaid costs 13,437 Due from other governments - 169,132 - 55,074 Advances to other funds - - - Land held for resale - - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - - Total assets $ 6,101,366 $ 169,132 $ 7,713,417 $ 55,074 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 415,712 $ 4,125 $ 246,797 $ - 165,007 - 55,074 415,712 169,132 246,797 55,074 13,437 5,672,217 7,466,620 5,685,654 7,466,620 - $ 6,101,366 $ 169,132 $ 7,7131417 $ 55,074 97 (Continued) City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Special Revenue Funds Liabilities, deferred inflows of resources. and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 104,867 $ 180 $ 294,579 $ 129,168 15,459 234,035 180 294,579 15,459 89,775 - - 14,191 89,775 - - 14,191 512,186 5,453,491 - 114.19 512,186 524532491 (14,191) $ 323,810 $ 512,366 $ 52748,070 $ 15,459 Surface Transportation CDBG AQMD Stormwater Program Assets Cash and investments $ - $ 444,480 $ 5,684,931 $ - Receivables: Accounts, net - - 7,021 - Interest - 886 11,341 - Taxes - - 442777 - Loans 89,775 - - - Notes to RDA Successor Agency - - - - Prepaid costs - - - Due from other governments 234,035 67,000 - 15,459 Advances to other funds - - - - Land held for resale - - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - - Total assets $ 323,810 $ 512,366 $ 5,748,070 $ 15,459 Liabilities, deferred inflows of resources. and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 104,867 $ 180 $ 294,579 $ 129,168 15,459 234,035 180 294,579 15,459 89,775 - - 14,191 89,775 - - 14,191 512,186 5,453,491 - 114.19 512,186 524532491 (14,191) $ 323,810 $ 512,366 $ 52748,070 $ 15,459 City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Revenue Funds Liabilities, deferred inflows of resources. and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 719 $ 59,169 $ - $ - 6,059 - - - 6,778 59,169 - - 2,313,040 - 2,313,040 - 15,950 15,318 454,198 (846) - - - (846) 15,950 15,318 454,198 $ 5,932 $ 75,119 $ 2,328,358 $ 454,198 S (Continued) BJA Law Supplemental Library Enforcement Law Grant HOME Facilities Fees Assets Cash and investments $ - $ 24,167 $ 15,318 $ 453,294 Receivables: Accounts, net - - - - Interest - 48 - 904 Taxes - - Loans - - 2,313,040 - Notes to RDA Successor Agency - - - - Prepaid costs - - - - Due from other governments 5,932 50,904 - - Advances to other funds - - - - Land held for resale - - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - - Total assets $ 5,932 $ 75,119 $ 2,328,358 $ 454,198 Liabilities, deferred inflows of resources. and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 719 $ 59,169 $ - $ - 6,059 - - - 6,778 59,169 - - 2,313,040 - 2,313,040 - 15,950 15,318 454,198 (846) - - - (846) 15,950 15,318 454,198 $ 5,932 $ 75,119 $ 2,328,358 $ 454,198 S (Continued) City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Revenue Funds Liabilities, deferred inflows of resources. and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 6,807 $ 317,206 $ 517,597 $ 50,641 11444,018 225,785 - 6,807 1,761,224 743,382 50,641 1,752,593 387,392 1,752,593 387,392 1,404,532 2667879 4,5341392 - (611,091) - - 1,404,532 (611,091) 266,879 4,534,392 $ 1,411,339 $ 21902,726 $ 1,397,653 $ 4,585,033 100 Public Education and Government Proposition C Federal Grants Measure R Assets Cash and investments $ 1,275,458 $ 111392230 $ - $ 4,575,911 Receivables: Accounts, net 13355 - - Interest 2,543 2,271 - 9,122 Taxes 131,983 - Loans - Notes to RDA Successor Agency - - - - Prepaid costs - - Duefromothergovernments - 1,761,225 1,397,653 - Advances to other funds - - - - Land held for resale - - - - Restricted assets: Cash and investments - - - - Cash and investments with fiscal agents - - - - Total assets $ 1,411,339 $ 2,902,726 $ 1,397,653 $ 4,585,033 Liabilities, deferred inflows of resources. and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 6,807 $ 317,206 $ 517,597 $ 50,641 11444,018 225,785 - 6,807 1,761,224 743,382 50,641 1,752,593 387,392 1,752,593 387,392 1,404,532 2667879 4,5341392 - (611,091) - - 1,404,532 (611,091) 266,879 4,534,392 $ 1,411,339 $ 21902,726 $ 1,397,653 $ 4,585,033 100 City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Revenue Funds Liabilities, deferred inflows of resources. and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 16,139 $ 25,103 $ 76,796 $ 16,139 25,103 76,796 289,760 Tourism 590,230 6,972,741 Marketing 4,225,348 Miscellaneous Park 385,846 District OSPD Grants Dedication Assets Cash and investments $ 5492497 $ 51507,527 $ 86,545 $ 4,2161941 Receivables: Accounts, net - - - - Interest 1,095 10,979 8,407 Taxes 55,777 25,063 - Loans - - Notes to RDA Successor Agency - - - - Prepaid costs - - - Due from other governments - - 665,857 - Advances to other funds - - - - Land held for resale - - - - Restricted assets: Cash and investments - 20,941 - - Cash and investments with fiscal agents - 1,433,334 - - Total assets $ 606,369 $ 6,997,844 $ 752,402 $ 4,225,348 Liabilities, deferred inflows of resources. and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ 16,139 $ 25,103 $ 76,796 $ 16,139 25,103 76,796 289,760 101 (Continued) 590,230 6,972,741 385,846 4,225,348 590,230 61972,741 385,846 4,225,348 $ 6062369 $ 61997,844 $ 752,402 $ 4,225,348 101 (Continued) City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ - $ 45,975 $ 158,173 $ 34,479 34,479 45,975 158,173 - 20,000 20,000 939,459 - 4,047,698 5,001 11790,138 10 41987,157 5,001 11790,138 10 $ 5,021,636 $ 70,976 $ 1,948,311 $ 10 102 Special Revenue Funds Capital Projects Funds Housing Tourism General Public Successor Marketing Capital Financing Agency Bureau Projects Authority Assets Cash and investments $ 75,640 $ 45,898 $ 1,948,311 $ 10 Receivables: Accounts, net - 25,000 - - Interest 151 78 - - Taxes - - - - Loans - - - - Notes to RDA Successor Agency - - - - Prepaid costs - - - - Due from other governments - - - - Advances to other funds - - - - Land held for resale 939,459 - - Restricted assets: Cash and investments 4,006,386 - - - Cash and investments with fiscal agents - - - Total assets $ 5,021,636 $ 70,976 $ 1,948,311 $ 10 Liabilities, deferred inflows of resources and fund balances Liabilities Accounts payable and accrued liabilities Due to other governments Due to other funds Total liabilities Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances $ - $ 45,975 $ 158,173 $ 34,479 34,479 45,975 158,173 - 20,000 20,000 939,459 - 4,047,698 5,001 11790,138 10 41987,157 5,001 11790,138 10 $ 5,021,636 $ 70,976 $ 1,948,311 $ 10 102 City of Santa Clarita Combining Balance Sheet Non -Major Governmental Funds June 30, 2015 Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances 103 10,393,563 10,393,563 - 1,202,406 3 48,625,581 14,000 - 1,843,822 - (626,129) 3 51,059,680 $ 3 $ 66,281,051 Debt Service Funds Total Public Non -Major Financing Governmental Authority Funds Assets Cash and investments $ 2 $ 46,730,953 Receivables: Accounts, net - 101,055 Interest - 89,879 Taxes - 344,198 Loans - 2,402,815 Notes to RDA Successor Agency - 5,407,868 Prepaid costs - 13,437 Due from other governments - 4,422,271 Advances to other funds - 118,944 Land held for resale - 1,188,969 Restricted assets: Cash and investments - 4,027,327 Cash and investments with fiscal agents 1 1,433,335 Total assets $ 3 $ 66,281,051 Liabilities, deferred inflows of resources. and fund balances Liabilities Accounts payable and accrued liabilities $ - $ 2,752,759 Due to other governments - 34,479 Due to other funds - 2,040,570 Total liabilities - 4,827,808 Deferred inflows of resources Unavailable revenues Total deferred inflows of resources Fund balances (deficit) Nonspendable Restricted Committed Assigned Unassigned Total fund balances (deficit) Total liabilities, deferred inflow of resources and fund balances 103 10,393,563 10,393,563 - 1,202,406 3 48,625,581 14,000 - 1,843,822 - (626,129) 3 51,059,680 $ 3 $ 66,281,051 City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Developer Special Revenue Funds Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) 554,658 562520 65597 4,914,577 169574 112560 414,361 18,161 1,286,752 178,157 5,328,938 18,161 (366,861) 98,254 (72,910) 31610,558 Transfers in - - 235,401 - Transfers out (8,424) (176,696) (31610,553) Total other financing sources (uses) (8,424) 58,705 (3,610,553) Net change in fund balances (375,285) 98,254 (14,205) 5 Fund Fees Bikeway Gas Tax Proposition A Revenues 3,147,344 (6) Fund balances Taxes $ - $ - $ - $ - Special assessments - - Intergovernmental - 275,478 51202,706 3,624,617 Charges for services - - - - Investment income 40,821 933 27,848 41102 Fines and forfeitures - - - - Developer fees 879,070 - - - Other revenue - - 25,474 - Total revenues 919,891 276,411 5,256,028 3,628,719 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) 554,658 562520 65597 4,914,577 169574 112560 414,361 18,161 1,286,752 178,157 5,328,938 18,161 (366,861) 98,254 (72,910) 31610,558 Transfers in - - 235,401 - Transfers out (8,424) (176,696) (31610,553) Total other financing sources (uses) (8,424) 58,705 (3,610,553) Net change in fund balances (375,285) 98,254 (14,205) 5 Fund balances (deficit), beginning of year 3,986,464 77,543 3,147,344 (6) Fund balances (deficit), end of year $ 3,611,179 $ 175,797 $ 3,133,139 $ (1) 104 City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Special Special Revenue Funds Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) 3,381,756 169,132 1,364,877 - 6,430,407 1,311,143 4,746,633 169,132 7,741,550 469556 282,758 810,343 Transfers in 195,105 - - Transfers out (17,654) - - (810,813) Total other financing sources (uses) 177,451 - - (810,813) Net change in fund balances 647,007 - 282,758 (470) Fund Assessment State Park TDA Traffic Safety Revenues Fund balances (deficit), end of year Taxes $ - $ - $ - $ - Special assessments 5,140,723 Intergovernmental - 169,132 71968,453 Charges for services 10,000 - Investment income 55,379 55,855 643 Fines and forfeitures 809,700 Developer fees - - - Other revenue 10,087 Total revenues 5,216,189 169,132 81024,308 8102343 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) 3,381,756 169,132 1,364,877 - 6,430,407 1,311,143 4,746,633 169,132 7,741,550 469556 282,758 810,343 Transfers in 195,105 - - Transfers out (17,654) - - (810,813) Total other financing sources (uses) 177,451 - - (810,813) Net change in fund balances 647,007 - 282,758 (470) Fund balances (deficit), beginning of year 5,038,647 - 7,183,862 470 Fund balances (deficit), end of year $ 5,685,654 $ - $ 7,466,620 $ - (Continued) 105 City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) 170 - 3,823 16,781 612,671 205,059 4,330 3,580,237 1,732,416 112,720 280,000 - - 21,334 1,123,057 16,781 3,697,287 1,732,416 244,370 (437,719) (14,191) Transfers in - - 3,690 - Transfers out - - (70,478) - Total other financing sources (uses) - - (66,788) - Netchangeinfund balances - 244,370 (504,507) (14,191) Fund balances Special Revenue Funds - 267,816 5,957,998 - Fund balances (deficit), Surface $ - $ 512,186 $ 5,453,491 $ (14,191) Transportation CDBG AQMD Stormwater Program Revenues Taxes $ - $ - $ - $ - Special assessments - - 2,938,961 - Intergovernmental 1,123,057 258,386 - 1,718,225 Charges for services - - - - Investment income - 2,765 55,594 - Fines and forfeitures - - - - Developer fees - - - Other revenue - - 265,013 Total revenues 1,123,057 261,151 3,259,568 1,718,225 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) 170 - 3,823 16,781 612,671 205,059 4,330 3,580,237 1,732,416 112,720 280,000 - - 21,334 1,123,057 16,781 3,697,287 1,732,416 244,370 (437,719) (14,191) Transfers in - - 3,690 - Transfers out - - (70,478) - Total other financing sources (uses) - - (66,788) - Netchangeinfund balances - 244,370 (504,507) (14,191) Fund balances (deficit), beginning of year - 267,816 5,957,998 - Fund balances (deficit), end of year $ - $ 512,186 $ 5,453,491 $ (14,191) 106 City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Special Revenue Funds Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 32,032 353,043 32,032 353,043 - - (2,396) 15,318 296,897 (2,396) 15,318 296,897 (846) 18,346 - 157,301 $ (846) $ 15,950 $ 15,318 $ 454,198 107 (Continued) BJA Law Supplemental Library Enforcement Law Grant HOME Facilities Fees Revenues Taxes $ - $ - $ - $ - Special assessments - - - - Intergovernmental 32,032 350,631 15,318 - Charges for services - - - - Investment income - 16 - 2,573 Fines and forfeitures - - - Developer fees - - - 294,324 Other revenue - - - - Total revenues 32,032 350,647 15,318 296,897 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 32,032 353,043 32,032 353,043 - - (2,396) 15,318 296,897 (2,396) 15,318 296,897 (846) 18,346 - 157,301 $ (846) $ 15,950 $ 15,318 $ 454,198 107 (Continued) City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 267,947 - - - %403 840,528 802,618 66,148 756,739 1,162,644 - 267,947 1,597,267 1,974,665 66,148 290515 2,241,107 7,047 2,219,760 (4,023,244) - - - (4,023,244) - - 290,515 (1,782,137) 7,047 2,219,760 1,114,017 1,171,046 Special Revenue Funds $ 1,404,532 $ (611,091) Public 266,879 $ 4,534,392 Education and Federal Government Proposition C Grants Measure R Revenues Taxes $ 548,014 $ - $ - $ - Special assessments - - - Intergovernmental - 3,812,847 1,981,712 2,255,405 Charges for services - - - - Investment income 107448 25,527 30,503 Fines and forfeitures - - - - Developer fees - - - Other revenue - - - - Total revenues 558,462 3,838,374 1,981,712 2,285,908 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 267,947 - - - %403 840,528 802,618 66,148 756,739 1,162,644 - 267,947 1,597,267 1,974,665 66,148 290515 2,241,107 7,047 2,219,760 (4,023,244) - - - (4,023,244) - - 290,515 (1,782,137) 7,047 2,219,760 1,114,017 1,171,046 259,832 2,314,632 $ 1,404,532 $ (611,091) $ 266,879 $ 4,534,392 City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 379,926 3783853 50008 170,394 444,955 5,728566 350,000 12700 93 379,926 6,107,512 1,466,037 127,600 200,212 (3,902,032) 573,957 4,177,799 (834,565) - (834,565) 200,212 (4,736,597) 573,957 4,177,799 390,018 11,709,338 Special Revenue Funds $ 590,230 Tourism $ 6,972,741 $ 385,846 $ 4,225,348 Marketing Miscellaneous Park District OSPD Grants Dedication Revenues Taxes $ - $ - $ - $ - Special assessments - 2,146,498 - - Intergovernmental - - 2,039,994 - Chargesforservices 5765067 - - - Investment income 41071 48,982 - 5,113 Fines and forfeitures - - - - Developer fees - - - 4,300,286 Other revenue - 10,000 - - Total revenues 580,138 2,205,480 2,039,994 4,3052399 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 379,926 3783853 50008 170,394 444,955 5,728566 350,000 12700 93 379,926 6,107,512 1,466,037 127,600 200,212 (3,902,032) 573,957 4,177,799 (834,565) - (834,565) 200,212 (4,736,597) 573,957 4,177,799 390,018 11,709,338 (188,111) 47,549 $ 590,230 $ 6,972,741 $ 385,846 $ 4,225,348 109 (Continued) City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) 34,479 57,773 - 166,000 - 1,527,573 1,070,024 200,479 57,773 2,597,597 - (181,879) (34,701) (2,597,597) - Transfers in 223,191 - 977,971 823,667 Transfers out - - - (823,667) Total other financing sources (uses) 223,191 - 977,971 - Netchangeinfund balances 41,312 (34,701) (1,619,626) - Fund Special (deficit), beginning of year Revenue Funds Capital Projects Funds 10 Housing Tourism General Public (deficit), Successor Marketing Capital Financing 5,001 Agency Bureau Projects Authority Revenues Taxes $ - $ - $ - $ - Special assessments - - - - Intergovernmental - - - - Charges for services 17,550 22,662 - - Investment income 1,050 410 - - Fines and forfeitures - - - - Developer fees - - - Other revenue - - - Total revenues 18,600 23,072 - - Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other financing sources (uses) 34,479 57,773 - 166,000 - 1,527,573 1,070,024 200,479 57,773 2,597,597 - (181,879) (34,701) (2,597,597) - Transfers in 223,191 - 977,971 823,667 Transfers out - - - (823,667) Total other financing sources (uses) 223,191 - 977,971 - Netchangeinfund balances 41,312 (34,701) (1,619,626) - Fund balances (deficit), beginning of year 4,945,845 39,702 3,409,764 10 Fund balances (deficit), end of year $ 4,987,157 $ 5,001 $ 1,790,138 $ 10 110 City of Santa Clarita Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non -Major Governmental Funds For the Year Ended June 30, 2015 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 111 - 5,005,752 1,119,530 - 169,302 - 22,519,057 - 612,671 11,539,151 1,640,000 Debt Service 1,533,907 1,555,334 Funds Total (183) Public Non -Major Financing Governmental Authority Funds Revenues Taxes $ - $ 548,014 Special assessments - 10,226,182 Intergovernmental - 30,827,993 Charges for services - 626,279 Investment income 44 372,677 Fines and forfeitures - 809,700 Developer fees - 5,473,680 Other revenue - 310,574 Total revenues 44 49,195,099 Expenditures Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year 111 - 5,005,752 1,119,530 - 169,302 - 22,519,057 - 612,671 11,539,151 1,640,000 1,920,000 1,533,907 1,555,334 3,173,907 44,440,797 (3,173,863) 4,754,302 3,173,680 5,632,705 - (10,376,094) 3,173,680 (4,743,389) (183) 10,913 186 51,048,767 $ 3 $ 51,059,680 City of Santa Ciarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Developer Fees Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From Current: (81424) (81424) - Totalotherfinancing sources (uses) Final Budget Public safety Original Final 554,658 Positive/ Public works Budget Budget Actual (Negative) Revenues 11569,361 1,703,287 169,574 11533,713 Investment income $ 14,393 $ 14,393 $ 40,821 $ 26,428 Developer fees - 631,167 879,070 2472903 Total revenues 14,393 645,560 919,891 274,331 Expenditures Transfers out Current: (81424) (81424) - Totalotherfinancing sources (uses) (23,613) Public safety - 554,658 554,658 - Public works 18,499 612,829 562,520 50,309 Capital outlay 11569,361 1,703,287 169,574 11533,713 Total expenditures 11587,860 21870,774 1,286,752 11584,022 Excess (deficiency) of revenues over(under)expenditures (1,573,467) (2,225,214) (366,861) 11858,353 Other financing sources (uses) Transfers out (23,613) (81424) (81424) - Totalotherfinancing sources (uses) (23,613) (8,424) (8,424) - Net change in fund balances $ (1,597,080) $ (212332638) (375,285) $ 1,858,353 Fund balances, beginning of year 3,986,464 Fund balances, end of year $ 3,611,179 112 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Bikeway Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Investment income Total revenues Expenditures Current: Public works Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) $ 280,638 $ 280,638 $ 2753478 $ (5,160) - - 933 933 280,638 280,638 2763411 (4,227) 65,597 652597 653597 - 215,041 2922584 112,560 180,024 280,638 358,181 1783157 180,024 (77,543) 983254 175,797 $ $ (77,543) 98,254 $ 175,797 113 77,543 $ 175,797 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Gas Tax Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Investment income Other revenue Total revenues Expenditures Current: Public works Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers in Transfers out Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) $ 51081,091 $ 5,4983720 $ 5,2021706 $ (2963014) - - 27,848 27,848 1,110 366 25,474 25,108 51082,201 514993086 5,2563028 (2433058) 51345,792 61535,140 4,9141577 1,620,563 11458,352 11723,795 414,361 113093434 618042144 812582935 51328,938 21929,997 (1,721,943) (21759,849) (72,910) 21686,939 235,401 235,401 235,401 (176,696) (176,696) (1763696) 58,705 58.705 58.705 114 3,147,344 $ 3,133,139 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Proposition A Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Investment income Total revenues Expenditures Current: Public works Capital outlay Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers out Total other financing sources (uses) Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) $ 3,5883822 $ 3,5883822 $ 3,624,617 $ 35,795 - - 41102 4,102 3,5881822 3,5881822 3,6281719 39,897 35,890 - - 5,753 183161 183161 413643 183161 183161 315473179 3,5703661 3,610558 39,897 115 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Special Assessment Special Revenue Fund For the Year Ended June 30, 2015 Expenditures 1133178 195,105 195,105 Variance From Current: (173654) (173654) Total other financing sources (uses) Final Budget General government Original Final 3,3813756 Positive/ Public works Budget Budget Actual (Negative) Revenues - 223023 - 223023 Special assessments $ 5,0323102 $ 510323102 $ 511402723 $ 108,621 Charges for services 10,000 53000 103000 5,000 Investment income 36,067 363067 553379 19,312 Other revenue - - 10,087 102087 Total revenues 5,0783169 5,0733169 5,2163189 143,020 Expenditures 1133178 195,105 195,105 Transfers out Current: (173654) (173654) Total other financing sources (uses) 95,524 General government 319043456 318853843 3,3813756 504,087 Public works 114523030 115493679 1,364,877 184,802 Capital outlay - 223023 - 223023 Total expenditures 5,3561486 51457,545 4,7461633 710,912 Excess (deficiency) of revenues over(under)expenditures (2783317) (3843376) 469,556 853,932 Other financing sources (uses) Transfers in 1133178 195,105 195,105 Transfers out (173654) (173654) (173654) Total other financing sources (uses) 95,524 177,451 1773451 Net change in fund balances $ (182,793) $ (206,925) 647,007 $ 853,932 Fund balances, beginning of year 51038,647 Fund balances, end of year $ 5,685,654 116 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual State Park Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Total revenues Expenditures Current: Parks, recreation and community service Total expenditures Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) 169.132 173,978 174,045 169,132 4,913 173,978 174,045 169,132 4,913 117 (67) 67 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual TDA Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From Public works Final Budget 6,4301407 Original Final 11457,353 21891,795 Positive/ 1,580,652 Budget Budget Actual (Negative) Revenues over(under)expenditures Intergovernmental $ 91468,530 $ 917263795 $ 7,9681453 $ (11758,342) Investment income - - 55,855 55,855 Total revenues 91468,530 91726,795 8,0241308 (1,702,487) Expenditures Current: Public works 810112177 14,015,096 6,4301407 71584,689 Capital outlay 11457,353 21891,795 1,311,143 1,580,652 Total expenditures 91468,530 16,906,891 717413550 911653341 Excess (deficiency) of revenues over(under)expenditures - (71180,096) 282,758 7,4623854 Net change in fund balances $ $ (71180,096) 2822758 $ 714623854 Fund balances, beginning of year 71183,862 Fund balances, end of year $ 7,466,620 118 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Traffic Safety Special Revenue Fund For the Year Ended June 30, 2015 Fund balances, beginning of year 470 Fund balances, end of year $ 119 Original Budget Final Budget Actual Variance From Final Budget Positive/ (Negative) Revenues Investment income $ $ - $ 643 $ 643 Fines and forfeitures 1,100,000 875,000 809,700 (65,300) Total revenues 1,100,000 875,000 810,343 (64,657) Other financing sources (uses) Transfers out (1,100,000) (706,000) (810,813) (104,813) Total other financing sources (uses) (1,100,000) (706,000) (810,813) (104,813) Net change in fund balances $ $ 169,000 (470) $ (169,470) Fund balances, beginning of year 470 Fund balances, end of year $ 119 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual CDBG Special Revenue Fund For the Year Ended June 30, 2015 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Intergovernmental $ 11428,181 $ 1,428,181 $ 1,1231057 $ (3053124) Total revenues 1,428,181 1,428,181 1,123,057 (305,124) Expenditures Current: Parks, recreation and community service Public works Community development Capital outlay Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year - 176 100,000 1003000 8163841 8303269 210,005 220,005 170 6 33823 96,177 6123671 2173598 2053059 14,946 280,000 2803000 2803000 21,335 21,334 21,334 - 1,428,181 11451,784 11123,057 328,727 120 23 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual AQMD Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From Current: Final Budget Public works Original Final 16,781 Positive/ Capital outlay Budget Budget Actual (Negative) Revenues 458,499 509,217 16,781 492,436 Intergovernmental $ 237,322 $ 244,000 $ 258,386 $ 14,386 Investment income 656 656 2,765 2,109 Total revenues 237,978 244,656 261,151 16,495 Expenditures Current: Public works 20,370 22,063 16,781 5,282 Capital outlay 438,129 487,154 - 487,154 Total expenditures 458,499 509,217 16,781 492,436 Excess (deficiency) of revenues over(under)expenditures (220,521) (264,561) 244,370 508,931 Total other financing sources (uses) - - Netchangeinfund balances $ (220,521) $ (264,561) 244,370 $ 508,931 Fund balances, beginning of year 267,816 Fund balances, end of year $ 512,186 121 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Stormwater Special Revenue Fund For the Year Ended June 30, 2015 Other financing sources (uses) Transfers in Original Budget Final Budget Actual Variance From Final Budget Positive/ (Negative) Revenues (703607) (703478) 129 Total other financing sources (uses) (66,957) Special assessments $ 33137,750 $ 311373750 $ 2,9381961 $ (1983789) Investment income 47,663 47,663 55,594 7,931 Other revenue 2992496 299,496 2653013 (34,483) Total revenues 31484,909 314843909 3,2591568 (2253341) Expenditures Current: General government 122000 123000 43330 71670 Public works 3,763,687 415393955 3,580,237 959,718 Capital outlay 49,200 1213732 112,720 91012 Total expenditures 3,8243887 4,6733687 3,6971287 9763400 Excess (deficiency) of revenues over (under) expenditures (339,978) (11188,778) (437,719) 751,059 Other financing sources (uses) Transfers in 32690 31690 31690 - Transfers out (70,647) (703607) (703478) 129 Total other financing sources (uses) (66,957) (66,917) (66,788) 129 Net change in fund balances $ (406,935) $ (1,255,695) (504,507) $ 751,188 Fund balances, beginning of year 5,957,998 Fund balances, end of year $ 5,453,491 122 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Surface Transportation Program Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Total revenues Expenditures Current: Public works Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year Original Final Actual 2,050.423 $ 1 Variance From Final Budget Positive/ 2,050,448 1,732,416 318,032 736,440 25050,448 15732,416 318,032 (25) (14,191) (14,166) $ $ (25) (14,191) $ (14,166) 123 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual BJA Law Enforcement Special Revenue Fund For the Year Ended June 30, 2015 Original Final Revenues Intergovernmental $ 59,490 $ 77 Total revenues 59,490 77 Expenditures Current: Public safety Public works Total expenditures Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund balances (deficit), beginning of year Fund balances (deficit), end of year Variance From Final Budget Positive/ Actual 70,917 32,032 38,885 77,472 32,032 45,440 $ 59,490 $ $ 124 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Supplemental Law Grant Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Investment income Total revenues Expenditures Current: Public safety Total expenditures Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) 125 330,259 $ 350,631 $ 20,372 - 16 16 330,259 350,647 20,388 348,607 353,043 (4,436) 348,607 353,043 (4,436) 18,346 $ 15,950 15 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual HOME Special Revenue Fund For the Year Ended June 30, 2015 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Intergovernmental $ $ $ 15,318 $ 15,318 Total revenues 15,318 15,318 Net change in fund balances $ $ 15,318 $ 15,318 Fund balances, beginning of year - Fund balances, end of year $ 15,318 126 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Library Facilities Fees Special Revenue Fund For the Year Ended June 30, 2015 127 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Investment income $ - $ - $ 2,573 $ 2,573 Developer fees 100,000 200,000 294,324 94,324 Total revenues 100,000 200,000 296,897 96,897 Net change in fund balances $ 100,000 $ 200,000 296,897 $ 96,897 Fund balances, beginning of year 157,301 Fund balances, end of year $ 454,198 127 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Public Education and Government Special Revenue Fund For the Year Ended June 30, 2015 Revenues Taxes Investment income Total revenues Expenditures Current: General government Total expenditures Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year Original Final Actual Variance From Final Budget Positive/ $ 450,000 $ 6,166 450,000 $ 6,166 548,014 $ 10,448 98,014 4,282 456,166 456,166 558,462 102,296 287,979 297,008 267,947 29,061 287,979 297,008 267,947 29,061 168,187 159,158 290,515 131,357 $ 168,187 $ 159,158 290,515 $ 131,357 128 1,114,017 $ 1,4045532 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Proposition C Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From Current: Final Budget Public works Original Final 8403528 Positive/ Capital outlay Budget Budget Actual (Negative) Revenues 3,9361001 8,6703301 1,597,267 7,073,034 Intergovernmental $ 71660,871 $ 9,8573526 $ 31812,847 $ (61044,679) Investment income - - 25,527 25,527 Total revenues 71660,871 91857,526 3,838,374 (6,019,152) Expenditures Current: Public works 5723112 4,5803623 8403528 31740,095 Capital outlay 3,3633889 4,0893678 7563739 32332,939 Total expenditures 3,9361001 8,6703301 1,597,267 7,073,034 Excess (deficiency) of revenues over(under)expenditures 3,7243870 1,187,225 2,241,107 12053,882 Other financing sources (uses) Transfers out (31767,690) (5,0021356) (4,0233244) 979,112 Total other financing sources (uses) (3,767,690) (55002,356) (410233244) 979,112 Net change in fund balances $ (42,820) $ (3,815,131) (11782,137) $ 2,032,994 Fund balances, beginning of year 11171,046 Fund balances (deficit), end of year $ (611,091) 129 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Federal Grants Special Revenue Fund For the Year Ended June 30, 2015 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Intergovernmental $ 31532,623 $ 4,1523911 $ 1,981,712 $ (21171,199) Total revenues 3,532,623 4,152,911 1,981,712 (2,171,199) Expenditures Current: Public safety Public works Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Net change in fund balances Fund balances, beginning of year Fund balances, end of year - 103180 91403 777 112062675 11791,291 802,618 988,673 2,3251948 377413815 1,1621644 2,5791171 31532,623 5,5433286 11974,665 31568,621 130 7,047 1 7,047 $ 1 259,832 $ 266,879 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Measure R Special Revenue Fund For the Year Ended June 30, 2015 Revenues Intergovernmental Investment income Total revenues Expenditures Current: Public works Total expenditures Excess (deficiency) of revenues over(under)expenditures Other financing sources (uses) Transfers out Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) $ 2,232,652 $ 212323652 $ 2,255,405 $ 223753 - - 30,503 30,503 2,2322652 2,2323652 2,2853908 533256 21724,022 217243022 663148 2,6573874 2,724,022 21724,022 66,148 2,6571874 (4912370) (4912370) 2,2191760 21711,130 (118252024) (558,489) 558,489 131 2,219,760 2,314,632 $ 4,534,392 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Tourism Marketing District Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Current: General government 406,920 4063920 3793926 Variance From Total expenditures 406,920 406,920 379,926 Final Budget Excess (deficiency) of revenues Original Final Positive/ over(under)expenditures Budget Budget Actual (Negative) Revenues $ 91,694 $ 135,995 2003212 $ 64,217 Charges for services $ 496,350 $ 5403651 $ 5763067 $ 353416 Investment income 2,264 23264 43071 1,807 Total revenues 498,614 542,915 580,138 37,223 Expenditures Current: General government 406,920 4063920 3793926 26,994 Total expenditures 406,920 406,920 379,926 26,994 Excess (deficiency) of revenues over(under)expenditures 912694 135,995 200,212 64,217 Net change in fund balances $ 91,694 $ 135,995 2003212 $ 64,217 Fund balances, beginning of year 390,018 Fund balances, end of year $ 590,230 132 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual OSPD Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From General government Final Budget 3783853 Original Final - 62556,662 Positive/ 828,096 Budget Budget Actual (Negative) Revenues - - 93 (93) Total expenditures Special assessments $ 2,1533400 $ 2,1533400 $ 2,146,498 $ (62902) Charges for services 103000 103000 - (103000) Investment income 23892 21892 48,982 463090 Other revenue - - 10,000 10,000 Total revenues 2,166,292 2,166,292 2,205,480 39,188 Expenditures Current: General government 4773942 525,100 3783853 1463247 Capital outlay - 62556,662 517283566 828,096 Debt service: Interest and fiscal charges - - 93 (93) Total expenditures 477,942 7,0811762 6,1073512 9743250 Excess (deficiency) of revenues over(under)expenditures 1,688,350 (4,9151470) (329023032) 1,013,438 Other financing sources (uses) Transfers out (834,750) (834,565) (834,565) Total other financing sources (uses) (834,750) (834,565) (834,565) - Netchangeinfund balances $ 853,600 $ (5,750,035) (4,7361597) $ 1,013,438 Fund balances, beginning of year 11,709,338 Fund balances, end of year $ 6,972,741 133 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Miscellaneous Grants Special Revenue Fund For the Year Ended June 30, 2015 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Intergovernmental $ 5653725 Total revenues 565,725 Expenditures Current: General government 493,702 5023503 5003688 11815 Public safety - 189,316 170,394 18,922 Public works 5643725 5643789 4443955 1193834 Capital outlay - 351,039 3503000 11039 Total expenditures 110582427 11607,647 1,466,037 141,610 Excess (deficiency) of revenues over (under) expenditures (492,702) 6473701 5733957 (73,744) Net change in fund balances $ (4922702) $ 6473701 5733957 _L __E31744)_ Fund balances (deficit), beginning of year (188,111) Fund balances, end of year $ 385,846 134 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Park Dedication Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Capital outlay 140,416 127,600 12,816 Variance From - 140,416 127,600 12,816 Excess (deficiency) of revenues Final Budget Original Final 629 2,258,220 Positive/ 1,919,579 Budget Budget Actual (Negative) Revenues Fund balances, beginning of year Investment income $ 629 $ 629 $ 5,113 $ 4,484 Developer fees - 2,398,007 4,300,286 1,902,279 Total revenues 629 2,398,636 4,305,399 1,906,763 Expenditures Capital outlay 140,416 127,600 12,816 Total expenditures - 140,416 127,600 12,816 Excess (deficiency) of revenues over (under) expenditures 629 2,258,220 45177,799 1,919,579 Net change in fund balances $ 629 $ 2,258,220 4,177,799 $ 1,919,579 Fund balances, beginning of year 47,549 Fund balances, end of year $ 4,225,348 135 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Housing Successor Agency Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Current: General government - - 343479 (34,479) Public works - 3,8663000 1663000 31700,000 Total expenditures - 3,8661000 2003479 31665,521 Excess (deficiency) of revenues over(under)expenditures - (32842,600) (1813879) 31660,721 Other financing sources (uses) Transfers in 223,191 2233191 Total other financing sources (uses) 223,191 2233191 Net change in fund balances $ $ (3,619,409) 413312 $ 3,660,721 Fund balances, beginning of year 41945,845 Fund balances, end of year $ 4,987,157 136 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Revenues Charges for services $ $ 23,400 $ 173550 $ (52850) Investment income 13050 1,050 Total revenues 233400 18,600 (4,800) Expenditures Current: General government - - 343479 (34,479) Public works - 3,8663000 1663000 31700,000 Total expenditures - 3,8661000 2003479 31665,521 Excess (deficiency) of revenues over(under)expenditures - (32842,600) (1813879) 31660,721 Other financing sources (uses) Transfers in 223,191 2233191 Total other financing sources (uses) 223,191 2233191 Net change in fund balances $ $ (3,619,409) 413312 $ 3,660,721 Fund balances, beginning of year 41945,845 Fund balances, end of year $ 4,987,157 136 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Tourism Marketing Bureau Special Revenue Fund For the Year Ended June 30, 2015 Expenditures Variance From Current: Final Budget General government Original Final 57,773 Positive/ Total expenditures Budget Budget Actual (Negative) Revenues Charges for services $ 40,500 $ 38,500 $ 22,662 $ (15,838) Investment income 593 593 410 (183) Total revenues 41,093 39,093 23,072 (16,021) Expenditures Current: General government 41,810 66,810 57,773 9,037 Total expenditures 41,810 66,810 57,773 9,037 Excess (deficiency) of revenues over(under)expenditures (717) (27,717) (34,701) (6,984) Net change in fund balances $ (717) $ (27,717) (34,701) $ (6,984) Fund balances, beginning of year 39,702 Fund balances, end of year $ 5,001 137 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual General Capital Projects Fund For the Year Ended June 30, 2015 Expenditures Current: Public works Capital outlay Total expenditures Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (Uses) Transfers in Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) $ 11132,021 $ 118013187 $ 115273573 $ 2733614 1,485,445 213743692 110703024 1,304,668 21617,466 411753879 215973597 1,578,282 (21617,466) (4,1751879) (215973597) 1,578,282 138 3,409,764 $ 1,790,138 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Public Financing Authority Capital Projects Fund For the Year Ended June 30, 2015 Fund balances, beginning of year Fund balances, end of year 139 10 $ 10 Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) Other Financing Sources (Uses) Transfers in $ 823,852 $ 823,667 $ 823,667 $ Transfers out (823,852) (823,667) (823,667) Total other financing sources (uses) Net change in fund balances $ $ $ Fund balances, beginning of year Fund balances, end of year 139 10 $ 10 City of Santa Clarita Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual Public Financing Authority Debt Service Fund For the Year Ended June 30, 2015 Revenues Investment income Total revenues Expenditures Debt service: Principal retirement Interest and fiscal charges Total expenditures Excess (deficiency) of revenues over (under) expenditures Other Financing Sources (Uses) Transfers in Total other financing sources (uses) Net change in fund balances Fund balances, beginning of year Fund balances, end of year Variance From Final Budget Original Final Positive/ Budget Budget Actual (Negative) 1,640,000 1,640,000 11640,000 1,5335866 1,533,866 15533,907 (41) 3,173,866 3,173,866 35173,907 (41) (3,173,866) (3,173,866) (3,173,863) 3 3,173,866 3,173,681 3,173,680 (1) 3,173,866 3,173,681 35173,680 (1) $ $ (185) (183) $ 2 140 186 $ 3 City of Santa Clarita Internal Service Funds As of and for the Year Ended June 30, 2015 The Internal Service Funds are used to account for goods or services provided by a central service department to other City departments. Self -Insurance — To account for the City's self-insurance program. Computer Replacement — To account for the financing of the replacement of the City's computer equipment. Vehicle Replacement — To account for the financing of the replacement of the City's automotive equipment. 141 City of Santa Clarita Combining Statement of Net Position Internal Service Funds June 30, 2015 Noncurrent assets Capital assets: Equipment, net of accumulated depreciation 138,918 7442002 8823920 Total noncurrent assets - 138,918 744,002 882,920 Total assets 32247,316 23359,047 51119,365 102725,728 Deferred Outflows of Resources Self- Computer Vehicle Deferred outflows of net pension liability Insurance Replacement Replacement Totals Assets 13,736 Current assets Cash and investments $ 3,183,963 $ 21075,976 $ 4,366,658 $ 9,626,597 Receivables: Accounts 553630 - - 55,630 Interest 73723 41140 82705 20,568 Prepaid costs - 140,013 - 140,013 Total current assets 3,247,316 23220,129 41375,363 9,8421808 Noncurrent assets Capital assets: Equipment, net of accumulated depreciation 138,918 7442002 8823920 Total noncurrent assets - 138,918 744,002 882,920 Total assets 32247,316 23359,047 51119,365 102725,728 Deferred Outflows of Resources Deferred outflows of net pension liability 13,736 13,736 Total deferred outflows of resources 13,736 13,736 Liabilities Current liabilities Accounts payable and accrued liabilities Compensated absences Claims and judgments Total current liabilities Noncurrent liabilities Net pension liability Claims and judgments Total noncurrent liabilities Total liabilities Deferred Inflows of Resources Deferred inflows of net pension liability Total deferred inflows of resources Net position Net investment in capital assets Unrestricted Total net position 1002156 99,713 522688 2523557 2,453 - 2,453 1,233,572 - 13233,572 1,336,181 99,713 52,688 134883582 98,704 98,704 760,343 760,343 8592047 859,047 2,195,228 99,713 522688 23347,629 272232 27,232 27,232 27,232 - 138,918 7442002 882,920 1,038,592 23120,416 4,3222675 734813683 $ 12038592 $ 2,259,334 $ 5,066,677 $ 8,3643603 142 City of Santa Clarita Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds For the Year Ended June 30. 2015 Self- Computer Vehicle Insurance Replacement Replacement Totals Operating revenues Charge for services $ 251135721 $ 411,010 $ 257,800 $ 25782,531 Total operating revenues 2,113,721 411,010 257,800 25782,531 Operating expenses Administration and personnel services Services and supplies Depreciation expense Total operating expenses Operating income (loss) Nonoperating revenues (expenses) Investment income Gain (loss) on disposal of fixed assets Total net nonoperating revenues(expenses) Income (loss) before transfers Transfers Transfers in Transfers out Total transfers Changes in net position Net position Net position, beginning of year, as restated Net position, end of year 3555246 1,540 21930 3595716 1,398,089 404,409 - 1,802,498 - 64,206 111,127 1755333 1,753,335 470,155 114,057 2,3375547 3605386 (59,145) 143,743 4445984 30,745 21,265 44,318 965328 - (3,760) 27,410 235650 305745 17,505 71,728 1195978 3915131 (41,640) 215,471 564,962 83,031 835031 (7845231) (7845231) (7015200) - (701,200) (3105069) (41,640) 215,471 (1365238) 1,348,661 25300,974 45851,206 8,5005841 $ 1,038,592 $ 2,259,334 $ 55066,677 $ 8,364,603 143 City of Santa Clarita Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2015 Cash flows from operating activities Cash received from customers and users Cash paid to suppliers for goods and services Cash paid to employees for services Net cash provided by (used in) operating activities Cash flows from non -capital financing activities Cash transfers out Cash transfers in Net cash provided by non -capital financing activities Cash flows from capital and related financing activities Acquisition and construction of capital assets Proceeds from sales of capital assets Net cash (used in) capital and related financing activities Cash flows from investing activities Interest received Net cash provided by investing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Reconciliation of operating income (loss) to net cash provided by (used in) operating activities Operating income (loss) Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation (Increase) decrease in accounts receivable (Increase) decrease in prepaid expense Increase (decrease) in accounts payable (Decrease) in claims and judgments (Decrease) in salaries and benefits payable Total adjustments Net cash provided by (used in) operating activities Non-cash investing, capital and financing activities Disposal of capital assets Self- Computer Vehicle Insurance Replacement Replacement Totals $ 2,058,091 $ 411,010 $ 261,211 $ 2,730,312 (1,412,133) (515,597) 49,476 (1,878,254) (522,041) (1,540) - (523,581) 123,917 (106,127) 310,687 328,477 (784,231) - - (784,231) 83,031 - - 831031 (701,200) - - (701,200) (18,784) (433,324) (452,108) 1,309 27,410 28,719 - (17,475) (405,914) (423,389) 31,276 22,066 45,634 98,976 31,276 22,066 45,634 98,976 (546,007) (101,536) (49,593) (697,136) 3,729,970 2,177,512 4,416,251 10,323,733 $ 3,183,963 - $ 2,075,976 $ 4,366,658 $ 9,626,597 (79,700) - (79,700) (14,044) (31,488) $ 360,386 $ (59,145) $ 143,743 $ 444,984 - 64,206 111,127 175,333 (55,630) - 3,411 (52,219) - (79,700) - (79,700) (14,044) (31,488) 52,406 6,874 (163,848) - - (163,848) (2,947) - - (2,947) (236,469) (46,982) 166,944 (116,507) $ 123,917 $ (106,127) $ 310,687 $ 328,477 144 (2,451) $ (2,618) $ (5,069) City of Santa Clarita Fiduciary Funds As of and for the Year Ended June 30, 2015 Agency Funds are used to account for assets held by the City as an agency for individuals. Assessment District No. 92-2 — To account for monies held to account for debt service requirements of Assessment District No. 92-2. Assessment District No. 99-1 —To account for monies held to account for debt service requirements of Assessment District No. 99-1. Community Facilities District No. 2002-1 — To account for monies held to account for debt service requirements of Community Facilities District No. 2002-1. Santa Clarita Watershed and Recreation Conservancy Authority — To account for monies held for the operations of the Watershed Authority, for which the City performs administrative functions. Santa Clarita Public Television Authority — To account for monies held for the operations of the SCPTA, for which the City performs administrative functions. 145 City of Santa Clarita Combining Statement of Assets and Liabilities Agency Funds June 30, 2015 Assets Cash and investments Receivables: Interest Taxes Prepaid costs Due from other governments Restricted assets: Cash and investments with fiscal agents Capital assets: Land Building, net of accumulated depreciation Total assets Liabilities Accounts payable Due to other governments Due to external parties Total liabilities Assessment Assessment District District No. 92-2 No. 99-1 Community Facilities District No. 2002-1 $ 1343597 $ 763552 $ 8023888 268 153 13601 417 1,750 - 944 903 553909 593715 136433488 $ 192,135 $ 139,073 $ 2,447,977 146 $ 965 $ 987 $ - 635 1912170 138,086 27447,342 $ 192,135 $ 139,073 $ 27447,977 City of Santa Clarita Combining Statement of Assets and Liabilities Agency Funds June 30, 2015 Liabilities Accounts payable $ $ $ 1,952 Due to other governments - 635 Due to external parties 10,7572370 3 1375337971 Total liabilities $ 10,757,370 $ 3 $ 13,536,558 147 Santa Clarita Watershed and Santa Clarita Recreation Public Conservancy Television Authority Authority Totals Assets Cash and investments $ 17,856 $ 3 $ 17031,896 Receivables: Interest 23022 Taxes 23167 Prepaid costs - 13847 Due from other governments 7152000 7153000 Restricted assets: Cash and investments with fiscal agents 1,759,112 Capital assets: Land 939372976 97937,976 Building, net of accumulated depreciation 86,538 86,538 Total assets $ 10,757,370 $ 3 $ 135536,558 Liabilities Accounts payable $ $ $ 1,952 Due to other governments - 635 Due to external parties 10,7572370 3 1375337971 Total liabilities $ 10,757,370 $ 3 $ 13,536,558 147 City of Santa Clarita Combining Statement of Changes in Assets and Liabilities Agency Funds For the Year Ended June 30, 2015 Assessment District No. 92-2 Assets Cash and investments Receivables: Taxes Interest Prepaid costs Restricted assets: Cash and investments with fiscal agents Total assets Liabilities Accounts payable Due to external parties Total liabilities Assessment District 99-1 Assets Cash and investments Receivables: Taxes Interest Prepaid costs Restricted assets: Cash and investments with fiscal agents Total assets Liabilities Accounts payable Due to external parties Total liabilities Balance Balance June 30, 2014 Additions Deductions June 30, 2015 $ 113,314 $ 84,666 $ 63,383 $ 134,597 408 416 407 417 257 268 257 268 - 944 - 944 58,697 48.955 51.743 55.909 $ $ 7,626 $ 6,661 $ 965 153 172.676 127.623 - 109.129 59.712 191.170 $ 855416 $ 62,053 $ 70,917 $ 76,552 1,187 1,750 1,187 1,750 194 153 194 153 - 903 - 903 59.712 52.707 52.704 59.715 $ $ 10,173 $ 9,186 $ 987 146.509 107.393 115.816 138.086 City of Santa Clarita Combining Statement of Changes in Assets and Liabilities Agency Funds For the Year Ended June 30, 2015 Liabilities Accounts payable Balance $ 393 $ - Balance - 635 June 30, 2014 Additions Deductions June 30, 2015 Community Facilities District $ 2.413.494 $ 3.426.217 No. 2002-1 $ 2.447.977 Total liabilities $ 10.776,395 Assets 3 $ 19.028 $ 10.757.370 Cash and investments $ 768,335 $ 1,174,640 $ 1,140,087 $ 802,888 Receivables: Interest 11740 1,601 1,740 1,601 Restricted assets: Cash and investments with fiscal agents 1,6435419 2,249,341 2,249,272 1,643,488 Total assets $ 2,413,494 $ 3,425,582 $ 3,391,099 $ 2,447,977 Liabilities Accounts payable $ $ 393 $ 393 $ - Due to other governments - 635 - 635 Due to external parties 22413,494 33425,189 3,391,341 214473342 Total liabilities $ 2.413.494 $ 3.426.217 $ 3.391.734 $ 2.447.977 Santa Clarita Watershed and Recreation Conservancy Authority Assets Cash and investments $ 33,119 $ 3 $ 15,266 $ 173856 Due from other governments 715,000 - 715,000 Capital assets: Land 9,9377976 - 9,9377976 Building, net of accumulated depreciation 90,300 3,762 86,538 Total assets $ 10,776,395 $ 3 $ 19,028 $ 10,757,370 Liabilities Due to external parties $ 10,776,395 $ 3 $ 19,028 $ 10,757,370 Total liabilities $ 10.776,395 $ 3 $ 19.028 $ 10.757.370 (Continued) 149 City of Santa Clarita Combining Statement of Changes in Assets and Liabilities Agency Funds For the Year Ended June 30, 2015 Liabilities Due to external parties Total liabilities Total Agency Funds Assets Cash and investments Receivables: Interest Taxes Prepaid costs Due from other governments Restricted assets: Cash and investments with fiscal agents Capital assets: Land Building, net of accumulated depreciation Total assets Liabilities Accounts payable Due to other governments Due to external parties Total liabilities $ 8 $ 115,300 $ 115,305 Balance June 30, 2014 Additions Deductions Balance June 30, 2015 Santa Clarita Public Television Authority $ 115,305 $ Assets Cash and investments $ 8 $ 115,300 $ 115,305 $ 3 Total assets $ 8 $ 115,300 $ 115,305 $ 3 Liabilities Due to external parties Total liabilities Total Agency Funds Assets Cash and investments Receivables: Interest Taxes Prepaid costs Due from other governments Restricted assets: Cash and investments with fiscal agents Capital assets: Land Building, net of accumulated depreciation Total assets Liabilities Accounts payable Due to other governments Due to external parties Total liabilities $ 8 $ 115,300 $ 115,305 3 $ 8 $ 115,300 $ 115,305 $ 3 $ 1,000,192 $ 134362662 $ 1,4042958 $ 130313896 21191 2,022 2,191 23022 11595 22166 1,594 23167 - 1,847 - 13847 715,000 - - 715,000 1,761,828 23351,003 2,353,719 117593112 9,9371976 - 9,9373976 903300 - 32762 86,538 $ 132509,082 $ 32793,700 $ 33766,224 $ 13,536558 $ $ 18,192 $ 16,240 $ 635 - 150 9 1 1,952 635 This part of the City of Santa Clarita's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplementary information say about the government's overall financial health. CONTENTS PAGE Financial Trends These tables contain trend information that may assist the reader in the City's current financial performance by placing it in historical perspective. 152-161 Revenue Capacity These tables contain information that may help in assessing the viability of the City's most significant revenue sources, the property and sales tax. 162-177 Debt Capacity These tables present information that may assist the reader in analyzing the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future. 178-184 Demographic and Economic Information These tables offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. 185-186 Operating Information These tables contain service and infrastructure indicators that can inform one's understanding of how the information in the City's financial statements relates to the services the City provides and the activities it performs. 187-189 151 City of Santa Clarita Net Position by Component Last Ten Fiscal Years Ended June 30, 2015 (accrual basis of accounting) Governmental Activities Investment in capital assets, net of related debt Restricted for: Capital projects Debt service Specific projects and programs Total restricted Unrestricted Total governmental activities net position Business -Type Activities Net investment in capital assets Unrestricted Total business -type activities net position Primary Government Net investment in capital assets Restricted Unrestricted Total primary government net position FISCAL YEAR 14.15 13-14 12-13 11.12 $ 818,8171043 $ 799,926,613 $ 738,271,282 $ 743,281,558 14,292,447 3,2751312 73,541,304 71,643,713 541229,493 46,9151965 73,541,304 71,643,713 68,521,940 50,191,277 79,211,600 52,551,033 655706,424 79,1411211 $ 971,569,947 $ 924,121,359 $ 872,499,646 $ 872,614,046 $ 781495,871 $ 83,296,545 $ 76,561,407 $ 73,778,640 21766,972 2,250,491 31835,316 3,0991419 $ 81,262,843 $ 85,547,036 $ 80,396,723 $ 76,878,059 $ 8971312,914 $ 883,223,158 $ 8141832,689 $ 817,060,198 73,541,304 712643,713 68,521,940 50,191,277 81,978,572 54,801,524 69,541,740 82,240,630 $ 1,052,832,790 $ 1,009,668,395 $ 952,896,369 $ 949,492,105 Note: (1) Accounting standards require that net position be reported in three components in the financial statements: net investment in capital assets, restricted and unrestricted. Net position is considered restricted only when (a) an external party, such as the State of California or the federal government, places a restriction on how the revenues may be used, or (b) enabling legislation is enacted by the City. (2) The City implemented the GASB 34 reporting module for the fiscal year ended June 30, 2003. The fiscal year 2005- 06 balance was restated as a result of the City's valuation of the estimated historical cost of infrastructure placed in service prior to July 1, 2002. Source: City of Santa Clarita, Administrative Services Department - Finance Division 152 FISCAL YEAR 05-06''- 10-11 09-10 08-09 07-08 06-07 As Restated $ 751416,868 $ 717,613,095 $ 66,4781547 $ 657,644,168 $ 62,246,621 $ 629,621,720 503,446 $ 672,3061820 (176,196) $ 661,2101117 3,6031396 $ 614,300,517 1,553,088 (406,224) 102,116,100 69,207,512 89,290,905 70595,199 31452,815 4,769,573 4,769,573 45,9931804 18,134,924 32,0301928 - - - 6327680 - 174,028 30,201,655 85,895,468 92,6441739 61,018,399 34,441,539 30547,345 33,654,470 90,665,041 97,414,312 107,644,883 52576,463 62,752,301 67,397,688 63,218,255 98,5121704 66,2491901 87,737,817 71,001,423 $ 818,665,253 $ 811,527,464 $ 825,548,736 $ 846,201,604 $ 801,524,397 $ 748,054,241 $ 751416,868 $ 67,911,725 $ 66,4781547 $ 63,5261242 $ 62,246,621 $ 63,7411429 503,446 9005,041 (176,196) 107,644,883 3,6031396 2,9571611 1,553,088 (406,224) 102,116,100 $ 75,920,314 $ 67,735,529 $ 70,081,943 $ 66,483,853 $ 63,799,709 $ 63,335,205 $ 793,029,963 $ 72555503 $ 696,100,267 $ 735,833,062 $ 7232456,738 $ 678,0411946 33,654,470 9005,041 97,414,312 107,644,883 52576,463 62,752,301 67,901,134 63,042,059 102,116,100 69,207,512 89,290,905 70595,199 $ 894,585,567 $ 879,262,993 $ 895,630,679 $ 912,685,457 $ 865,324,106 $ 811,389,446 153 City of Santa Clarita Changes in Net Position'' Last Ten Fiscal Years Ended June 30, 2015 (accrual basis of accounting) Expenses Governmental Activities General government Public safety Parks, recreation and community service Public works Community development Unallocated infrastructure depreciation Interest on long-term debt Total governmental activities expenses Business -Type Activities Transit Total business -type activities expenses Total primary government expenses Program Revenues Governmental Activities Charges for services: General government Public safety Public works Parks, recreation and community service Community development Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business -Type Activities Charges for services: Transit Operating grants and contributions Capital grants and contributions Total business -type activities program revenues Total primary government revenues FISCAL YEAR 14-15 13-14 12.13 11.12 $ 46,224,813 $ 41,807,284 $ 35,921,943 $ 332664,470 22,235,368 22,187,434 19,940,098 27,391,075 22,458,629 22,550,301 21,809,820 19,282,538 36,103,144 26,183,862 28,651,261 301623,718 5,880,945 6,193,101 71214,293 51896,640 18,072,657 17,561,539 151163,864 161844,238 1,827,094 11872,832 11992,574 3,391,058 152,802,650 1381356,353 130,693,853 137,093,737 28,06208 26,819,161 25,653,753 24,930,635 28,06208 26,819,161 25,653,753 24,930,635 $180,865,318 $165,175,514 $156,347,606 $162,024,372 $ 26,783,616 $ 31,970,148 $ 24,323,027 $ 13,719,117 1,605,059 1,847,403 2,284,334 2,079,109 13,056,586 12,463,046 9,943,014 7,209,724 42525,662 42390,686 4,371,888 421562386 12774,482 1,961,243 1,611,184 521522484 12,561,608 19,421,199 9,061,950 162032,433 30,107,231 221530,841 331585,797 281616,388 901414,244 941584,566 85,181,194 761965,641 62779,579 72587,497 61863,086 6,616,778 82228,348 81984,127 81579,209 71385,264 1,423,440 10,804,747 8,513,238 5,041,992 16,431,367 27,376,371 23,955533 191044,034 $106,845,611 $121,960,937 $109,136,727 $ 96,009,675 Note: (1) The City implemented the GASB 34 reporting module for the fiscal year ended June 30, 2003. Source: City of Santa Clarita, Administrative Services Department - Finance Division 154 FISCAL YEAR 10.11 09-10 08-09 07-08 06.07 05.06 $ 471048,462 $ 321116,335 $ 301094,380 $ 27,4881731 $ 26,0291070 $ 24,225,414 211280,904 171912,704 17,489,870 16,482,917 14,3981408 13,8211626 11,281,552 27,835,763 32,747,618 21,817,251 20,5731077 20,9881533 25,799,166 26,758,527 48,5141645 30,549,888 19,273,980 6,4171841 111547,650 13,831,341 9,7611681 9,257,881 8,9851449 16,9391976 16,392,901 15,545,626 14,405,047 13,1281617 12,9203310 1,268,939 4,6501566 5,4761918 5,7861174 3,127,998 2,0871949 1,669,701 138,001,201 139,477,214 158,799,415 121,853,283 104,2681243 85,3321030 241127,043 23,3481708 22,2991379 21,506,317 18,315,106 16,5081457 24,1271043 23,348,708 22,2991379 21,506,317 18,315,106 16,5081457 $ 162,128,244 $ 162,825,922 $ 181,098,794 $ 143,359,600 $ 122,583,349 $ 101,840,487 $ 398,181 $ 396,651 $ 621,624 $ 2,737,355 $ 3022075 $ 186,171 2,305,608 2,1943038 1,898,022 2,2911100 2,131,060 2,032,652 4,929,602 3,1623052 260,524 355,817 3,575,546 2,512,093 4,220,977 3,9563933 3,849,699 3,875539 305,422 3,794,662 12,059509 15,937,913 35,138,334 26,341,684 20,182,722 19,068,982 14,09006 161224,269 9,931,109 2200,793 26,6411145 23,465,852 31,325,725 15,249,634 38,785576 39,003,536 24,770,306 60,971,404 69,330,288 57,1211490 90,484,888 97,205,824 81,498,276 112,0311816 6,573,879 3,181,614 3,2991263 3,216,239 5,8271778 4,950,584 6,913534 10,2601579 13,653,177 11,876,720 12,616,641 3,3511941 131043,418 - - 617,421 750,200 - 26,530,831 13,442,193 16,952,440 15,710,380 19,194,619 8,302,525 $ 95,861,119 $ 70,563,683 $ 107,437,328 $ 112,916,204 $ 100,692,895 $ 120,334,341 (Continued) 155 City of Santa Clarita Changes in Net Position Last Ten Fiscal Years Ended June 30, 2015 (accrual basis of accounting) Net Revenues (expenses): Governmental activities Business -type activities Total net revenues (expenses) General Revenue and Other Changes in Net Position Governmental activities Taxes: Sales taxes Property taxes Franchise taxes Real property transfer taxes Transient occupancy taxes Unrestricted revenue in lieu of motor vehicle taxes Unrestricted revenue in lieu of sales taxes Grants and contributions not restricted to specific programs Unrestricted investment earnings Miscellaneous revenue Gain on sale of capital asset Transfers Reversal of Allowance for Notes to RDA Successor Agency Capital Contributions Total governmental activities Business -type activities Unrestricted investment earnings Miscellaneous revenue Transfers Total business -type activities Total primary government Extraordinary Item Gain from dissolution of former redevelopment agency of the City of Santa Clarita Change in Net Position Governmental activities Business -type activities Total primary government FISCAL YEAR 14-15 13-14 12-13 11-12 $ (62,388,406) 11$ ( ) (74,019,707) $ (43,771,787) 557,210 (43,214,577) $ (45,512,659) 1$ ( ) (47,210,879) $ (60,128,096) 5 () (66,014,697) $ 34,355,412 $ 33,4801522 $ 32,057,358 $ 28,828,139 38,556,890 35,652,080 32,341,369 34,818,426 8,512,818 7,796,070 71141,953 6,920,244 1,169,780 947,470 706,180 590,474 3,124,904 2,781,527 2,556,774 2,380,547 85,703 86,531 91,062 - 12,633,832 15,780,230 109,836,994 77,942,650 69,935,278 73,663,605 17,592 41791 29,660 147 7,329,516 - - 87,883 2,240,594 2,0901322 (82,870) 1,509,201 678,937 781,986 310,676 5,372,890 27,410 18,174 - - (7,32%516) (51692,032) (5,187,224) (6,844,199) 12,633,832 15,780,230 109,836,994 77,942,650 69,935,278 73,663,605 17,592 41791 29,660 147 7,329,516 5,692,032 51187,224 6,844,199 7,347,108 5,696,823 5,216,884 3,518,664 6,844,346 117,184,102 83,639,473 $ 75,152,162 80,507,951 54,906,538 $ - $ - $ - $ 40,413,284 $ 47,448,588 $ 34,170,863 $ 24,422,619 $ 53,948,793 (4,284,193) 6,254,033 3,518,664 957,745 43,164,395 40,424,896 27,941,283 54,906,538 Note: (1) The City implemented the GASB 34 reporting module for the fiscal year ended June 30, 2003. Source: City of Santa Clarita, Administrative Services Department - Finance Division 156 FISCAL YEAR 10-11 09-10 08-09 07-08 06-07 05-06 $ (68,670,913) $ (82,355,724) $ (68,314,527) $ (24,647,459) $ (22,769,967) $ 26,699,786 2,403,788 (9,906,515) (5,346,939) (5,795,937) 879,513 5,560,153 (8,205,932) 4,564,687 $ (66,267,125) 836,824 $ (92,262,239) 1,544,534 $ (73,661,466) $ (30,443,396) $ (21,890,454) $ 18,493,854 1,804,923 1,824,394 - - - - - 603,990 3,316,058 3,221,498 $ 27,701,757 $ 24,511,238 $ 27,751,506 $ 29,076,388 $ 23,790,825 $ 22,204,192 24,996,219 25,126,278 26,820,068 24,482,930 27,891,202 23,106,806 6,697,241 6,407,923 6,704,074 6,028,903 6,248,912 5,560,153 3,082,456 4,564,687 4,816,638 836,824 1,073,774 1,544,534 2,106,521 2,050,857 2,260,708 2,433,651 1,804,923 1,824,394 - - - - - 603,990 3,316,058 3,221,498 3,083,353 8,490,865 8,156,017 6,965,521 812,475 896,708 1,015,413 1,252,281 1,862,901 223,241 3,756,112 4,871,133 6,020,940 4,566,884 4,970,193 1,891,292 9,148,163 4,161,677 3,193,421 - - - (5,808,300) (7,477,547) (8,006,128) (8,431,120) 441,376 (12,054,795) 75,808,702 68,334,452 73,659,993 68,737,606 76,240,123 51,869,328 (27,303) 82,554 - - 938,901 608.300 7.477.547 8.006.128 48,961 26,367 1,050 - - 883,615 $ 7,137,789 $ (14,021,272) $ 5,345,466 $ 44,090,147 $ 53,470,156 $ 78,569,114 8,184,785 (2,346,414) 3,598,090 2,684,144 464,504 4,733,528 $ 15,322,574 $ (16,367,686) $ 8,943,556 $ 46.774,291 $ 53,934,660 $ 83,302,642 157 City of Santa Clarita Fund Balances of Governmental Funds Last Ten Fiscal Years Ended June 30, 2015 (modified accrual basis of accounting) General Fund Reserved Unreserved Nonspendable Restricted Committed Assigned Unassigned Total general fund All Other Governmental Funds Reserved Unreserved: Special revenue funds Debt service fund Capital projects fund Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds FISCAL YEAR 14-15 13-14 12-13 11-12 10.11 11,024,338 11,519,143 11,910,059 18,902,350 23,845,861 - - - 66,257 12,356,339 55,336,807 51,718,096 47,106,536 309,078 572,781 50,141,486 45,654,640 35,320,706 50,664,338 46,915,238 (8,633,303) (9,300,647) (10,665,597) (56,718,519) (72,692,440) $ 116,502,631 $ 108,891,879 $ 94,337,301 $ 69,942,023 $ 83,690,219 $ 80,442,879 $ 79,600,025 $ 64,146,207 $ 22,358,741 $ 16,963,194 1,455,067 606,996 670,612 28,885,983 28,813,152 85,763,293 84,268,720 68,957,999 46,915,965 57,205,072 14,000 612,829 716,826 - - 1,843,822 3,412,127 4,466,367 3,275,312 3,637,410 (8,633,303) (9,300,647) (10,665,597) (56,718,519) (72,692,440) $ 80,442,879 $ 79,600,025 $ 64,146,207 $ 22,358,741 $ 16,963,194 FUND BALANCES Fiscal Year Ended June 30, 2015 ■ All Other Governmental ■ General Fund Funds 41% 59% Note: (1) Balance as restated; see financial statements for the applicable year. Source: City of Santa Clarita, Administrative Services Department - Finance Division 158 FISCAL YEAR 09-10 08-09 07-08 06-07 05-06111 $ 19,546,015 $ 32,617,139 $ 34,920,547 $ 34,699,034 $ 20,786,040 58,211,508 41,674,470 31,153,879 28,500,824 18,232,779 33,725,531 34,502,270 38,050,255 4,592,332 (249,111) $ 77,757,523 $ 74,291,609 $ 66,074,426 $ 63,199,858 $ 39,018,819 $ 62,981,221 $ 81,117,198 $ 102,527,186 $ 46,262,108 $ 68,247,519 $ 51,195,454 $ 70,667,494 $ 51,972,970 $ 48,303,588 $ 80,399,389 2,109,198 (7,048,095) 28,377,796 3,827,570 (7,159,062) (24,048,962) (17,004,471) (15,873,835) (10,461,382) (4,743,697) 33,725,531 34,502,270 38,050,255 4,592,332 (249,111) $ 62,981,221 $ 81,117,198 $ 102,527,186 $ 46,262,108 $ 68,247,519 120 100 80 N 0 60 40 20 0 FUND BALANCES ALL OTHER GOVERNMENTAL FUNDS Last Ten Fiscal Years $102.53 $79.60 $80.44 $68.24 $81.1 $62.98 $64.15 $22.36 $16.96 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 Fiscal Year 159 City of Santa Clarita Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years Ended June 30, 2015 (modified accrual basis of accounting) Revenues: Taxes Licenses and permits Developer fees Investment income Intergovernmental Fines and forfeitures Service charges Other revenues Total Revenues Expenditures: Current: General government Public safety Parks, recreation and community service Public works Community development Capital outlay Debt service: FISCAL YEAR 14-15 13-14 12.13 11-12 $ 85,789,556 $ 80,285,660 $ 73,972,006 $ 73,625,713 5,567,280 5,366,972 4,246,957 41097,709 10,764,554 2,600,997 15,828,388 7,181,986 2,026,507 1,911,491 1,702,006 2,739,794 31,953,692 34,355,734 27,452,216 28,375,142 1,261,752 1,661,157 2,114,166 11674,085 37,738,754 42,156,582 36,311,324 28,145,012 511,117 5,943,608 332,146 6,425,792 175,613,212 174,282,201 161,959,209 152,265,233 43,196,168 36,294,205 35,433,288 50,816,449 22,188,641 22,137,338 19,894,859 25,412,420 20,846,943 20,498,108 19,824,550 19,523,584 36,075,187 24,385,865 27,968,407 201753,607 5,883,441 6,185,263 71252,424 5,923,872 23,392,326 36,580,589 23,837,533 27,403,439 Principal 1,992,479 1,837,174 1,750,538 2,338,787 Interest, professional services and fiscal charges 1,850,703 1,885,546 21039,144 3,743,134 Redemption of district credits 5,105,402 - 14,368,419 - TotalExpenditures 160,531,290 149,804,088 152,369,162 155,915,292 Excess of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Revenue bonds issued/issuance premium Proceeds of long-term debt Escrow payment, costs of bonds issuance and others Proceeds from capital lease Transfers in Transfers out Issuance of district credits Total Other Financing Sources (Uses) Extraordinary Item: Dissolution of Santa Clarita Redevelopment Agency Net change in fund balances Fund balances - Beginning of Year Fund balances - End of Year Debt service as percentage of noncapital expenditures 15,081,922 24,478,113 9,590,047 (31650,059) - - - 252,068 7,850,640 9,757,447 9,069,495 16,538,674 (14,478,956) (15,524,498) (14,256,719) (29,810,448) - 11,297,334 12,270,335 - (6,628,316) 5,530,283 7,083,111 (13,019,706) 116 8,453,606 30,008,396 16,673,158 (8,352,649) 188,491,904 158,483,508 141,810,350 100,653,413 $ 196,945,510 $ 188,491,904 $ 158,483,508 $ 92,300,764 2.80% 3.26% 2.95% 4.40% Source: City of Santa Clarita, Administrative Services Department - Finance Division 160 FISCAL YEAR 10-11 09-10 08-09 07-08 06-07 05.06 $ 72,474,882 $ 80,714,829 $ 87,659,599 $ 88,088,786 $ 70,576,755 $ 66,164,485 31675,424 4,093,250 3,697,218 5,256,748 4,203,933 61907,826 282,776 3,053,363 15,763,070 22,290,808 6,747,767 28,028,933 3,798,498 5,485,925 10,749,728 8,287,441 7,926,763 2,881,133 19,780,700 33,881,145 28,882,884 24,247,611 37,300,213 38,526,364 1,891,500 1,936,318 1,759,371 2,121,570 1,918,954 1,904,273 23,608,272 10,812,521 8,375,771 9,931,041 13,463,673 13,081,649 7,685,141 7,234,923 5,077,400 3,368,879 4,356,961 12,651,674 133,197,193 147,212,274 161,965,041 163,592,884 146,495,019 170,146,337 42,213,597 27,951,510 27,250,056 25,965,196 23,411,750 24,668,150 21,230,594 17,862,129 17,439,295 16,342,979 14,347,833 13,658,723 21,853,319 20,048,430 20,126,412 20,156,343 18,943,146 17,376,609 34,210,327 20,594,575 42,937,168 25,977,763 19,511,097 6,802,081 11,575,365 10,849,942 7,095,386 7,583,236 9,051,652 17,164,505 21,311,885 46,183,268 41,826,511 44,906,802 57,926,955 49,435,744 21246,218 2,611,372 2,072,341 1,927,198 2,374,870 11367,359 4,796,695 5,411,152 51279,549 4,632,979 2,298,974 2,878,536 159,438,000 151,512,378 164,026,718 147,492,496 147,866,277 133,351,707 (26,240,807) (4,300,104) (2,061,677) 16,100,388 (1,371,258) 36,794,630 - - - - 13,894,752 - - - - 54,235,000 - 17,700,000 - - - (226,682) - (17,225,304) 50,869,852 18,953,115 12,150,426 43,112,541 27,468,089 7,865,612 (64,714,376) (28,930,662) (23,281,554) (54,668,661) (29,881,193) (19,409,716) (13,844,524) (9,977,547) (11,131,128) 42,452,198 11,481,648 (11,069,408) (40,085,331) (14,277,651) (13,192,805) 58,552,586 10,110,390 25,725,222 140,738,744 155,016,395 168,601,612 110,049,026 99,351,576 74,551,009 $ 100,653,413 $ 140,738,744 $ 155,408,807 $ 168,601,612 $ 109,461,966 $ 100,276,231 5.96% 6.84% 5.54% 5.16% 4.27% 4.85% 161 City of Santa Clarita Assessed Values 111 and Actual Values of Taxable Property Last Ten Fiscal Years ASSESSED VALUATION by CATEGORIES (Total Secured and Unsecured) Fiscal Year Ended June 30, 2015 • PERSONAL PROPERTY 2.50% W LAND Note: (1) Assessed valuation is based on 1W% of full value in accordance with Section 135 of the California Revenue and Taxation Code. (2) Direct Rale includes Redevelopment Agency areas. Source: HdL Coren & Cone, County of Los Angeles, Auditor -Controller Office, Combined Tax Rolls 2013-14 162 STATE ASSESSED LOCALLY ASSESSED SECURED (UTILITY) SECURED Fiscal IMPROVE- PERSONAL IMPROVE- PERSONAL OTHER Year LAND MENTS PROPERTY TOTAL LAND MENTS PROPERTY EXEMPTIONS TOTAL 2005-06 2,098,608 10,833,957 239,620 13,172,185 7,440,682,741 8,94],08],936 89,939,825 (211,472,197) 16,266,238,305 2006-07 2,15,981 8,312,011 197,013 10,666,005 8,556,960,792 9,766,997,767 104,509,489 (253,946,364) 18,174,521,684 2007-08 1,515,305 6,727,866 - 8,243,171 9,899,005,161 10,912,016,138 98,10],60] (214,371,451) 20,694,757,455 2008-09 1,515,305 330,866 - 1,846,171 10,259,253,083 11,386,047,165 95.4 ,322 (203,1]4,3]2) 21,537,566,198 2009-10 1,75,395 2,264,780 - 4,015,175 9,416,163,697 11,115,441,327 105,29,475 (323,630,904) 20,313,270,595 2010-11 1,750,395 2,264,780 - 4,015,175 9,160,567,699 11,280,024,994 112,335,544 (330,372,395) 20,222,555,842 2011-12 1,431,971 2,264,780 - 3,696,751 9,09],382,]03 11,485,]]3,659 107,089,927 (372,583,638) 20,317,662,651 2012-13 1,431,971 2,264,780 - 3,696,751 8,882,930,332 11,516,988,299 111,202,431 (400,45,608) 20,111,075,454 2013-14 1,431,971 2,264,780 - 3,696,751 9,989,545,816 13,726,755,146 107,166,367 (412,668,046) 23,410,799,283 2014-15 1,431,971 2,264,780 - 3,696,751 10,820,572,961 14,749,259,449 103,844,310 (453,562,893) 25,22,1 13,827 ASSESSED VALUATION by CATEGORIES (Total Secured and Unsecured) Fiscal Year Ended June 30, 2015 • PERSONAL PROPERTY 2.50% W LAND Note: (1) Assessed valuation is based on 1W% of full value in accordance with Section 135 of the California Revenue and Taxation Code. (2) Direct Rale includes Redevelopment Agency areas. Source: HdL Coren & Cone, County of Los Angeles, Auditor -Controller Office, Combined Tax Rolls 2013-14 162 AM TOTAL ASSESSED VALUATION (Taxable Values) Last Ten Fiscal Years 05-00 0647 07-08 0849 09.10 10-11 11.12 13-13 13-14 1415 Fiscal Year 163 UNSECURED BEFORE TAXABLE % TOTAL OWNER IMPROVE- PERSONAL OTHER OTHER ASSESSED INCR. DIRECT PROPERTY MENTS PROPERTY EXEMPTIONS TOTAL EXEMPTIONS VALUE (DECR.) RATE (2) TAX RELIEF 216,098,046 453,406,084 (9,513,134) 659.990,996 17,160,386,817 16,939,401,486 14.90% 0.06909% 206,658,586 256,417,833 482,574,856 (7,299,585) 730,693,104 19,177,126,742 18,915,880,793 11.67% 0.08039% 206,464,204 264,708,723 556,804,055 (32,916,267) 790,596,511 21,740,884,855 21,493,597,137 13.63% 0.08327% 220,192,568 293,355,474 611,636,166 (33,951,806) 871,039,834 22,173.326,025 22,410,452,203 4.27% 0.08339% 223,396,120 359,543,253 600,420,921 (15,127,698) 944,836,476 21,600,880,848 21,262,122,246 -1.08% 0.08313% 224,731,598 346,874,191 553.829.644 (13,331,377) 887,372,458 21,457,646,707 21,113,942,935 -0.70% 0.07432% 223,277,279 314,286,482 546,430,090 (15,137,342) 847,579,230 21,556,659,612 21,168,938,632 0.26% 0.07392% 220,496,294 349,415,601 634,947,944 (13,693,787) 870,669,758 21,399,181,358 20,985,441,963 -0.87% 0.07291% 216,163,460 329,350,845 541,533,568 (15,907,716) 854,976,697 24,698,048,493 24,269,472,731 15.65% 0.07291% 236,577,388 339,544,656 561,740,289 (13,152,888) 888 132,057 25,645,226,854 26,111,942,635 7.59% 0.09136% 232,799,644 AM TOTAL ASSESSED VALUATION (Taxable Values) Last Ten Fiscal Years 05-00 0647 07-08 0849 09.10 10-11 11.12 13-13 13-14 1415 Fiscal Year 163 25,000 30,000 0 15,000 10.000 AM TOTAL ASSESSED VALUATION (Taxable Values) Last Ten Fiscal Years 05-00 0647 07-08 0849 09.10 10-11 11.12 13-13 13-14 1415 Fiscal Year 163 City of Santa Clarita Redevelopment Agency M Assessed Values "land Actual Values of Taxable Property Last Ten Fiscal Years (1) The Redevelopment Agency of the City was established on November 28, 1989, pursuant to the State of California and Safety Code, Section 33000. However, the Agency was not active until fiscal year 1998-99 and the Base Year was calculated in fiscal year 1996-97, which included the Homeowners Tax Relief of that year. Redevelopment agencies were dissolved by the State of California effective February 1, 2012. (2) Assessed valuation is based on 100% of full value in accordance with Section 135 of the California Revenue and Taxation Code. Source: County of Los Angeles, Auditor-Controller/Tax Division 164 STATE ASSESSED LOCALLY ASSESSED SECURED (UTILITY) SECURED FISCAL IMPROVE -PERSONAL IMPROVE- PERSONAL OTHER YEAR LAND MENTS PROPERTY TOTAL LAND MENTS PROPERTY EXEMPTIONS TOTAL 2005-06 $61,007 $45,801 $ 26,219 $133,027 $273,260,130 $ 176,564,344 $2,435,378 $ (4,859,824) $447,400,028 2006-07 50,158 37,657 21,558 109,373 295,792,467 185,299,271 2,545,972 (5,085,710) 478,552,000 2007-08 - - - - 335,974,647 205,086,767 2,346,546 (4,630,171) 538,777,789 2008-09 - - - - 348,100,511 217,393,278 2,064,527 (3,754,719) 563,803,597 2009-10 - - - - 343,043,150 214,695,279 1,775,246 (3,779,814) 555,733,861 2010-11 - - - - 319,869,014 213,093,295 1,850,279 (3,196,475) 531,616,113 2011-12 - - - - 322,803,745 214,686,716 1,933,165 (7,016,751) 532,406,875 2012-13 N/A N/A N/A N/A N/A N/A N/A N/A N/A 2013-14 N/A N/A N/A N/A N/A N/A N/A N/A N/A 2014-15 N/A N/A N/A N/A N/A N/A N/A N/A N/A (1) The Redevelopment Agency of the City was established on November 28, 1989, pursuant to the State of California and Safety Code, Section 33000. However, the Agency was not active until fiscal year 1998-99 and the Base Year was calculated in fiscal year 1996-97, which included the Homeowners Tax Relief of that year. Redevelopment agencies were dissolved by the State of California effective February 1, 2012. (2) Assessed valuation is based on 100% of full value in accordance with Section 135 of the California Revenue and Taxation Code. Source: County of Los Angeles, Auditor-Controller/Tax Division 164 165 LOCALLY ASSESSED TOTALS HOME - UNSECURED TOTALS TAXABLE OWNER IMPROVE- PERSONAL OTHER BEFORE ASSESSED VALUE PROPERTY MENTS PROPERTY EXEMPTIONS TOTAL BASE YEAR BASE YEAR VALUE GROWTH TAX RELIEF $5,901,959 $23,034,914 $ (91,000) $28,845,873 $476,378,928 $(266,351,517) $210,027,411 $102,814,621 $2,053,943 26,593,269 25,569,962 (16,300) 52,146,931 530,808,304 (266,351,517) 264,456,787 54,429,376 1,971,567 28,204,577 48,299,529 (217,300) 76,286,806 615,064,595 (266,351,517) 348,713,078 84,256,291 2,034,432 39,771,667 48,437,084 (77,000) 88,131,751 651,935,348 (266,351,517) 385,583,831 36,870,753 2,002,848 34,102,838 46,361,945 (84,500) 80,380,283 636,114,144 (266,351,517) 369,762;627 (15,821,204) 1,921,661 21,240,432 62,307,206 (84,500) 83,463,138 615,079,251 (266,351,517) 348,727,734 (21,034,893) 1,871,456 34,353,633 46,665,422 (102,000) 80,917,055 613,323,930 (266,351,517) 346,972,413 (1,755,321) 1,865,922 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 165 City of Santa Clarita Assessed Values—Taxable Property Last Ten Fiscal Years FISCAL YEAR CATEGORY 14-15 13-14 12-13 11-12 10-11 Residential Commercial Industrial Irrigated Dry farm Recreational Institutional Government Miscellaneous Vacant land SBE Nonunitary Possessory Int. Unsecured Unknown $ 19,755,522,402 2,952,772,231 1,642,718,866 2,834,466 101,870,300 142,862,940 216,042 341,421 507,997,067 3,696,751 112,978,072 888,132,057 20 $ 18,138,258,224 2,847,760,176 1,561,091,316 2,827,311 100,138,918 136,824,169 215,066 1,017,342 509,125,263 3,696,751 113,541,478 854,976,697 20 $ 14,971,655,728 2,794,405,083 1,413,623,056 2,796,388 104,981,278 132,119,758 210,850 864,299 565,1 17,297 3,696,751 125,301,717 870,669,758 $ 15,212,586,674 2,748,247,727 1,455,126,754 3,016,072 106,506,146 125,982,002 206,717 847,359 533,608,937 3,696,751 131,534,263 847,579,230 $ 15,239,936,469 2,820,296,027 1,463,696,151 3,004,749 121,791,852 127,363,481 205,173 841,034 308,820,538 4,015,175 136,599,828 887,372,458 TOTALS: $ 26,111,942,635 $ 24,269,472,731 $ 20,985,441,963 $ 21,168,938,632 $ 21,113,942,935 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 ASSESSED VALUE -TAXABLE PROPERTY Last Ten Fiscal Years 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 Fiscal Year 166 e Residential ■Commercial Dlndustrial NVacant land DAII others FISCAL YEAR 09-10 08-09 07-08 06-07 05-06 $ 15,094,074,637 $ 16,493,025,013 $ 16,165,919,271 $ 13,962,275,972 $ 12,569,640,999 2,729,669,423 2,541,908,257 2,081,576,763 1,836,340,797 11588,835,810 1,451,053,867 11420,480,569 1,293,080,539 1,148,469,489 980,395,598 31630,743 3,5591558 3,489,768 29,374,674 28,272,540 - - - 49,088,244 48,512,253 121,511,353 119,4591165 1141868,032 90,435,287 94,916,719 125,868,861 136,418,924 130,907,129 94,705,673 91,312,643 206,850 201,629 197,676 194,922 190,000 843,038 - 810,312 795,449 779,859 636,182,476 664,562,300 664,792,342 656,660,955 554,551,820 31573,175 1,073,171 8,243,171 10,666,005 13,172,185 150,671,347 158,723,783 2391115,623 222,6541730 205,526,182 944,836,476 871,039,834 790,596,511 730,697,804 659,990,996 - - - 83,525,492 103,303,882 $ 21,262,122,246 $ 22,410,452,203 $ 21,493,597,137 $ 18,915,885,493 $ 16,939,401,486 Notes: In 1978 the voters of the State of California passed Proposition 13, which limited taxes to a total maximum rate of 1 % based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitation just mentioned. 167 City of Santa Clarita Assessed Values—Use Category Summary Fiscal Year 2014-15 NET ASSESSED TAXABLE CATEGORY PARCELS VALUE PERCENT EXEMPTIONS VALUE PERCENT Residential 55,178 $ 19,809,106,842 74.5% $ 53,584,440 $ 19,755,522,402 75.70% Commercial 911 3,007,379,681 11.3% 54,607,450 2,952,772,231 11.30% Industrial 711 1,645,710,771 6.2% 2,991,905 1,642,718,866 6.30% Irrigated 6 2,834,466 0.0% - 2,834,466 0.00% Recreational 34 104,684,532 0.4% 2,814,232 101,870,300 0.40% Institutional 94 480,601,815 1.8% 337,738,875 142,862,940 0.50% Government 5 217,287 0.0% 1,245 216,042 0.00% Miscellaneous 6 341,421 0.0% - 341,421 0.00% Vacant land 3,831 509,201,601 1.9% 1,204,534 507,997,067 2.00% SBE Nonunitary (14) 3,696,751 0.0% - 3,696,751 0.00% Possessory Int. (2,196) 113,598,284 0.4% 620,212 112,978,072 0.40% Unsecured (6,415) 901,284,945 3.4% 13,152,888 888,132,057 3.40% Unknown 23 20 0.0% - 20 0.00% TOTALS: 52,174 $ 26,578,658,416 100.00% $466,715,781 $ 26,111,942,635 100.00% ASSESSED VALUE by USE CATEGORY NET TAXABLE VALUE by USE CATEGORY Fiscal Year 2014-15 Fiscal Year 2014-15 ■ All Others Industrial 8.10% 6.20% D Commercial 11.30% Residential 74.40% Industrial • All Others 6.30% 7% 13 Commercial 11.30% 13 Residential 75.70% Source: HdL Coren & Cone, Los Angeles County Assessor 2014/15 Combined Tax Rolls. 169 City of Santa Clarita Direct and Overlapping Property Tax Rates (rate per $100 of assessed value) Last Ten Fiscal Years Fiscal Year GENERAL LOS ANGELES COUNTY CASTAIC LAKE WATER AGENCY SCHOOL DISTRICTS COUNTY SANITATION DISTRICTS COUNTY FLOOD CONTROL TOTAL 2005-06 1.000000 0.000795 0.049327 0.064422 - 0.000049 1.114593 2006-07 1.000000 0.000660 0.040000 0.060360 - 0.000050 1.101070 2007-08 1.000000 - 0.040000 0.074050 - - 1.114050 2008-09 1.000000 - 0.040000 0.077110 - - 1.117110 2009-10 1.000000 - 0.060750 0.089815 - - 1.150565 2010-11 1.000000 - 0.070600 0.086830 - - 1.157430 2011-12 1.000000 - 0.070600 0.091457 - - 1.162057 2012-13 1.000000 - 0.070600 0.112835 - - 1.183435 2013-14 1.000000 - 0.070600 0.120330 - - 1.190930 2014-15 1.000000 - 0.070600 0.118570 - - 1.189170 1.200000 1.000000 0.800000 0.800000 0.400000 0.200000 0.000000 DIRECT and OVERLAPPING PROPERTY TAX RATES Fiscal Year 2014-15 LA COUNTY FLOOD CONTROL 170 City of Santa Clarita Direct and Overlapping Property Tax Rates (rate per $100 of assessed value) One Year Detail of Rates Producing Revenue for City and Associated Redevelopment Agencies City General Fund Direct Rates RDA Incremental Rate Total Direct Rate City Share Prop. 13 Notes: General fund tax rates are of 1% Total City plus applicable representative and based upon the direct Roll Year per Prop. 13 Debt Rates Rates voter -approved debt and overlapping rates for the largest 2014-15 0.122750 0.000000 0.122750 0.00000% 0.09163% Agency 2014.15 Newhall Elementary School District Debt Services 1999 Ser. B (581.53) City of Santa Clarita Tax District 1 (249.01) 0.05730 Notes: General fund tax rates are Castaic Lake Water Agency (302.01) 0.05780 representative and based upon the direct Children's Institutional Tuition Fund (400.21) 0.00283 and overlapping rates for the largest Consolidated Fire Protection District of LA Co. (007.30) 0.16340 General Fund tax rates area (TRA) by net County School Service Fund Newhall (581.06) 0.00801 taxable value. Total Direct Rate is the County School Service Hart William S. Hart (757.06) 0.00034 weighted average of all individual direct County School Services (400.15) 0.00143 rates applied by the government preparing Development Center Handicapped Minor Newhall (581.07) 0.00088 the statistical section information. Educational Augmentation Fund Impound (400.01) 0.13380 The percentages presented in the columns Educational Revenue Augmentation Fund (ERAF) (400.00) 0.08260 above do not sum across rows. In 1978 Greater LA Co. Vector Control (061.80) 0.00032 California voters passed Proposition 13, Santa Clarita Library (249.56) 0.02360 which set the property tax at a 1.00% fixed LA County Fire - Ffw (007.31) 0.00323 amount. This 1.00% is shared by all the LA County Flood Control Improvement District (030.10) 0.00176 taxing agencies for which the subject LA County Flood Control Maintenance (030.70) 0.00996 property resides within. In addition to the LA County General (001.05) 0.14050 1.00% fixed amount, property owners are LA County Accum Cap Outlay (001.20) 0.00009 charged taxes as a percentage of assessed Newhall School District (581.01) 0.08350 property values for the payment of any Santa Clarita Community College (814.04) 0.03740 voter -approved bonds. Santa Clarita Street Light Maintenance #2 (249.32) 0.02250 Santa Clarita Valley Sanitation Dist. LA Co. 0.02500 Valencia Areawide Landscape T1A S.C. 0.01924 William S. Hart Elementary School Fund (757.07) 0.04290 William S. Hart Union High (757.02) 0.08150 Total Prop. 13 Rate: 1.00000 Castaic Lake Water Agency (302.01) 0.07060 Newhall Elementary School District Debt Services 1999 Ser. B (581.53) 0.01820 Newhall Elementary School District Debt Services 1999 Ser. A (581.52) 0.01979 Santa Clarita Community College Debt Services 2001 Ser. 2005 (814.54) 0.00753 Santa Clarita Community College Debt Services 2006 Ser. 2007 (814.55) 0.00694 Santa Clarita Community College Debt Services 2005 Refunding Bonds (814.53) 0.00787 Santa Clarita Community College Debt Services 2001 Ser. 2003 (814.52) 0.00555 Santa Clarita Community College Debt Services 2006 Ser. 2012 0.00151 William S. Hart Un.Hsd Debt Services (757.51) 0.01265 William S. Hart Un.Hsd Debt Services 2008 Ser. B 0.01011 William S. Hart Un.Hsd Debt Services 2008 Ser. C 0.01059 William S. Hart Unified Debt Services 2001 Ser. B (757.52) 0.01120 William S. Hart Unified Debt Services 2008 Ser. A (757.53) 0.00663 Total Tax Rate 0.18917 Source: HdL Coren & Cone, Los Angeles County Assessor 2014/15 Tax Rate Table 171 City of Santa Clarita Principal Property Taxpayers Current Fiscal Year and Nine Fiscal Years Ago Valencia Town Center FISCAL YEAR 2014-15 360,706,327 1.38 % PERCENT of NUMBER TOTAL TOTAL CITY of ASSESSED ASSESSED OWNER/TAXPAYER PARCELS VALUE VALUE Valencia Town Center 17 $ 360,706,327 1.38 % Packard Humanities Institute 1 167,592,530 0.64 VTC Business Center LLC 9 138,845,199 0.53 Park Sierra Properties 15 132,347,680 0.51 Saugus Colony Limited 19 111,948,627 0.43 EQR Valencia LLC 218 99,428,019 0.38 EQR The Oaks LLC 28 97,365,194 0.37 RREEF America Reit II Corporatim 2 79,368,053 0.30 Walmart/SAM's 5 77,852,110 0.30 Time Warner Cable 4 65,680,355 0.25 Total 318 1,331,134,094 5.10 % All Others 24,780,808,541 94.90 TOTAL CITY Total Assessed Valuation $ 26,111,942,635 100.00 % Valencia Town Center Venture Newhall Land and Farming Cc Casden Santa Clarita LLC Thomas Properties Group LLC CPF Promenade LLC Prado Town Center West LLC EQR Valencia LLC EQR Town Center LLC Palmer Saugus Limited Lexington Lion Clarita LP NOTE: The amounts shown above include assessed value data for both the City and the Redevelopment Agency. Source: HdL Corso & Cone, LA County Assessor 2014/15 Combined Tax Rolls 172 29 $ FISCAL YEAR 2005.06 1.34 % 139 PERCENT of NUMBER TOTAL TOTAL CITY of ASSESSED ASSESSED OWNERITAXPAYER PARCELS VALUE VALUE Valencia Town Center Venture Newhall Land and Farming Cc Casden Santa Clarita LLC Thomas Properties Group LLC CPF Promenade LLC Prado Town Center West LLC EQR Valencia LLC EQR Town Center LLC Palmer Saugus Limited Lexington Lion Clarita LP NOTE: The amounts shown above include assessed value data for both the City and the Redevelopment Agency. Source: HdL Corso & Cone, LA County Assessor 2014/15 Combined Tax Rolls 172 29 $ 226,942,988 1.34 % 139 112,433,973 0.66 25 74,999,960 0.44 28 73,940,222 0.44 16 63,386,867 0.37 10 61,399,861 0.36 217 54,881,437 0.32 3 50,687,860 0.30 22 49,074,973 0.29 6 48,643,800 0.29 495 816,391,941 4.82 % 16,123,009,545 95.18 $ 16,939,401,486 100.00 % City of Santa Clarita Property Tax Levies, Tax Collections and Delinquencies Last Ten Fiscal Years FISCAL YEAR TAXES LEVIED PERCENT COLLECTIONS COLLECTIONS COLLECTIONS IN SUBSEQUENT YEARS TOTAL COLLECTIONS TO DATE PERCENT COLLECTIONS TO DATE 2005-06 11,593,852 11,292,337 97.4% 20,076 11,312,413 97.57% 2006-07 12,804,630 12,317,614 96.2% 2,689 12,3201303 96.22% 2007-08 14,483,825 13,754,184 95.0% 32,577 13,7861761 95.19% 2008-09 111925,285 11,361,604 95.3% 16,722 11,378,326 95.41% 2009-10 14,202,626 13,711,940 96.5% - 13,7111940 96.55% 2010-11 14,172,030 13,829,640 97.6% 50,605 13,880,246 97.94% 2011-12 14,299,999 13,999,770 97.9% 49,862 14,049,633 98.25% 2012-13 18,634,850 18,297,746 98.2% - 18,297,746 98.19% 2013-14 21,446,963 21,128,332 98.5% - 21,128,332 98.51% 2014-15 23,131,317 22,795,838 98.5% - 22,795,838 98.55% 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 TAX COLLECTIONS & DELINQUENCY - LAST TEN FISCAL YEARS 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 FISCAL YEAR ■LEVIES oCOLLECTIONS ■DELINQUENT AMOUNT NOTES: Article XIII -A of the Constitution of the State of California, adopted by the electorate in June 1978, precludes the City from a local property tax levy. All general-purpose property taxes are levied by the County and allocated to other governmental entities on a predetermined formula. The above figures include secured property taxes only. Prior to the implementation of GASB 44 in FY 2006, collections in subsequent years were not required to be reported by tax year. Beginning in FY 2007, collections in subsequent years are included. Source: County of Los Angeles, Department of Auditor -Controller 173 City of Santa Clarita Successor Agency Top Property Owners Based on Net Values Fiscal Year 2014-15 174 Secured Unsecured Combined Owner Parcels Value ° or Net AV Parcels Values ° Or Net AV Valu Net AV Prima Primary Use 1) Casden Santa Clarita LLC 24 $ 61,766,314 10.79% $ 61,766,314 9.61% Vacant (Pending Appeals On Parcels) 2) Time Warner Cable 5 $41,787,456 59.20% 41,787,456 6.50% Unsecured 3) Saugus Station LLC 6 $17,633,797 3.08% 17,633,797 2.74% Industrial 4) Lyons Properties Limited 1 9,923,399 1.73% 9,923,399 1.54% Commercial (Pending Appeals On Parcels) 5) Peter and Barbara Coeler, at. al. 3 9,090,299 1.59% 1 9,009 0.01% 9,099,308 1.42% Residential (Pending Appeals On Parcels) 6) Telfair Corporation 2 8,538,579 1.49% 8,538,579 1.33% Commercial 7) David Weiswasser Trust 2 7,943,931 1.39% 7,943,931 1.24% Residential 8) 25805 San Fernando LLC 1 7,923,793 1.38% 7,923,793 1.23% Commercial 9) RFT Sprouts LLC, at. al. 3 7,585,341 1.33% 7,585,341 1.18% Residential 10) 23801 San Fernando Road Landco LLC 1 7,162,169 1.25% 7,162,169 1.11% Institutional Top Ten Total 43 137,567,622 24.03% 6 41,796,465 59.21% 179,364,087 27.90% Agency Total 572,366,311 70,583,512 642,949,823 Incremental Net AV Total $ 326,191,749 42.17% $52,651,860 79.38% $ 378,843,609 47.35% 174 City of Santa Clarita Successor Agency Project Area Assessment Appeals Summary and Tax Collection History Fiscal Years 2009-10 Through 2014-15 Project Area Assessment Appeals Summary—FY 2014.15 212 143 121 65% 69 / $279,879,202 58 $ 1531990,789 Tax Collection History For Fiscal Years 2009-10 Through 2014-15 Current Year Current Year Prior Year Collection Total Collection Year Tax Levy Collection Collection Total Percentage Percentage 2009-10 $4,068,572 $3,885,719 Estimated No. of No. of Estimated No. Reduction on Total No. of Resolved Successful Average No. & Value of of Appeals Pending Appeals Appeals Appeals Appeals Reduction Appeals Pending Allowed Allowed 212 143 121 65% 69 / $279,879,202 58 $ 1531990,789 Tax Collection History For Fiscal Years 2009-10 Through 2014-15 Current Year Current Year Prior Year Collection Total Collection Year Tax Levy Collection Collection Total Percentage Percentage 2009-10 $4,068,572 $3,885,719 $ 42,260 $ 319273979 96% 97% 2010-11 31618,835 2,744,263 (204,741) 215393523 76% 70% 2011-121'1 3,762,457 2,934,904 218,094 3,152,998 78% 84% 2012-131'1 31485,808 21786,791 275,290 3,062,081 80% 88% 2013-141'1 31526,463 2,828,495 815,124 3,643,619 80% 103% 2014-151'1 31836,835 31185,967 158,652 3,344,619 83% 87% Source: Los Angeles County Auditor/Controller, Disbursement/Tax Division "CRA Remittance Advice" from Fiscal Years 1997-98 through 2010-11, and for Fiscal Year 2011-12, November 2011 through January 2012. (1) Sources: Ledgers and special reports from Los Angeles County Auditor -Controller commencing February 2012 pursuant to AB X 1 26. 175 City of Santa Clarita Successor Agency Charge Detail Report for CFD 2002-1 (Valencia Town Center) Fiscal Year 2014-15 LAND STRUCTURE TOTAL ASSESSOR'S ASSESSED ASSESSED ASSESSED TAXABLE PARCEL NUMBER PROPERTY OWNER VALUES ($) VALUES ($) VALUES ($) ACREAGE 2861-058-071 Valencia Town Center Venture LP $ 1,193,943 $ 181,932 $ 1,375,875 0.84 2861-058-072 Valencia Town Center Venture LP 3,309,416 17,204,970 20,514,386 4.81 2861-058-073 Valencia Town Center Venture LP 26,153,181 3,222,804 29,375,985 15.68 2861-058-076 Valencia Town Center Venture LP 833,129 82,745 915,874 1.18 2861-058-077 Valencia Town Center Venture LP 4,498,529 384,782 4,883,311 6.70 2861-058-081 Valencia Town Center Venture LP 15,213,057 160,862,154 176,075,211 14.34 2861-058-084 Valencia Town Center Venture LP 3,138,371 9,096,737 12,235,108 2.05 2861-058-085 Valencia Town Center Venture LP 409,350 204,674 614,024 0.33 Totals: $ 54,748,976 $ 191,240,798 $ 245,989,774 45.94 176 MAX TAX RATE APPLIED CLASS ($) MAX TAX RATE ($) CHARGE 1 $ 34,246 $ 28,907 $ 25,344 $ 21,393 1 34,246 164,725 25,344 121,906 1 34,246 537,051 25,344 397,448 1 34,246 40,548 25,344 30,008 1 34,246 229,450 25,344 169,806 1&2 34,246 & 230,678 491,156 25,347 363,483 1 34,246 70,205 25,344 51,956 1 34,246 11,233 25,344 8,313 $ 1,164,311 177 City of Santa Clarita Ratio of Outstanding Debt by Type Last Ten Fiscal Years FISCAL YEAR CERTIFICATES OF PARTICIPATION (1) (3) LOANS GOVERNMENTAL ACTIVITIES TAX ALLOCATION BONDS (2) BONDS (4) CAPITAL LEASES TOTAL 2005-06 $17,700,000 $ 710,000 $5,029,113 $ - $ - $ - $ 12,211 $23,451,324 2006-07 16,760,000 - 4,328,207 13,785,000 - - 36,401 34,909,608 2007-08 15,790,000 15,525,000 3,593,734 13,575,000 29,860,000 8,850,000 23,676 87,217,410 2008-09 14,790,000 15,525,000 2,823,907 13,330,000 29,860,000 8,850,000 11,370 85,190,277 2009-10 13,760,000 15,525,000 2,017,793 13,075,000 29,460,000 8,730,000 1,624 82,569,417 2010-11 12,700,000 15,525,000 1,413,786 12,805,000 29,040,000 8,605,000 - 80,088,786 2011-12 11,610,000 15,490,000 1,040,000 12,525,000 - - 242,417 40,907,417 2012-13 10,480,549 15,379,349 810,000 12,316,280 - - 201,880 39,188,058 2013-14 9,323,138 15,291,374 580,000 12,002,622 - - 154,705 37,351,839 2014-15 8,128,138 15,175,988 300,000 11,673,964 - - 217,615 35,495,705 NOTES: (1) In 1991 the Santa Clarita Public Financing Authority issued $22,940,000 aggregate principal amount of Local Agency (Redevelopment) Revenue Bonds Series 1991. Simultaneously with the receipt of the Bond proceeds, the Authority acquired $22,940,000 Certificates of Participation issued by the Santa Clarita Redevelopment Agency, of which the proceeds were transferred to the City to finance and/or refinance the design, acquisition, improvement or construction of land, the City Hall Building and certain road improvements, and to refinance certain debt. The Agency leased back the facilities to the City for lease payments to be made by the City to the Authority equal to the principal and interest due on the revenue bonds. At this point in time, the Agency is not active. -The 1991 Series certificates were later refunded in fiscal year 1997-98 by the Certificates of Participation Series 1997 of $19,670,000. As a result, the 1991 Series certificates are considered to be defeased and the liability for those certificates was removed from the general long-term debt. -On July 1, 2005, the Santa Clarita Public Financing Authority issued $17,700,000 in Certificates of Participation to advance refund $17,640,000 of outstanding 1997 Series certificates. As a result, the 1997 Series were considered defeased and the liability for those certificates was removed from the long-term liability. -In November 2001, the Santa Clarita Public Financing Authority issued $3,200,000 in Certificates of Participation for the acquisition of parkland. In 2006 the COP Series 2001 were considered defeased and the liability for those certificates was removed from the general long-term debt. (2) On January 16, 2007, the Santa Clarita Public Financing Authority issued $13,785,000 Lease Revenue Bonds, Series 2007 for the acquisition of right-of-way. (3) On December 1, 2007, the Santa Clarita Public Financing Authority issued $15,525,000 in Certificates of Participation for the acquisition of open space and parkland. (4) On June 1, 2008, the Santa Clarita Redevelopment Agency issued $29,860,000 in Non -Housing Tax Allocation Bonds and $8,850,000 in Low/Mod Housing Tax Allocations Bonds to fund certain redevelopment projects within the Redevelopment Project area. Upon the dissolution of redevelopment agencies in the State of California effective February 1, 2012, the bonds were transferred to the RDA Successor Agency. Sources: City of Santa Clarita, Administrative Services Department - Finance Division 178 500 300 200 100 i OUTSTANDING DEBT PER CAPITA Last Ten Fiscal Years Fiscal Year 179 PERCENTAGE BUSINESS -TYPE ACTIVITIES OF OUTSTANDING TOTAL TAXABLE DEBT DEBTTO LEASE PRIMARY ASSESSED PER PERSONAL PAYABLE TOTAL GOVERNMENT VALUE CAPITA INCOME $ 1,586,319 $ 1,586,319 $25,037,643 0.15% $150 2% 1,236,869 1,236,869 36,146,477 0.19% 206 3% 870,149 870,149 88,087,559 0.41% 500 6% 485,304 485,304 85,675,581 0.38% 484 5% 248,304 248,304 82,817,721 0.39% 466 5% - - 80,088,786 0.38% 454 N/A - - 40,907,417 0.19% 231 N/A - - 39,188,058 0.19% 191 N/A - - 37,351,839 0.15% 179 N/A - - 35,495,705 0.14% 166 N/A 500 300 200 100 i OUTSTANDING DEBT PER CAPITA Last Ten Fiscal Years Fiscal Year 179 City of Santa Clarita Ratio of General Bonded Debt Outstanding Last Ten Fiscal Years 350 300 250 200 150 100 50 0 GENERAL BONDED DEBT OUTSTANDING PER CAPITA Last Ten Fiscal Years 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 Fiscal Year Source: (1) State of California, Finance Department IID PERCENTAGE OUTSTANDING GENERAL BONDED DEBT OF TAXABLE DEBT FISCAL REVENUE CERTIFICATES OF ASSESSED PER YEAR POPULATION (1) BONDS PARTICIPATION TOTAL VALUE CAPITA 2005-06 167,412 - 18,410,000 18,410,000 0.11% 110 2006-07 175,676 13,893,228 16,760,000 30,653,228 0.16% 174 2007-08 176,030 13,575,000 31,315,000 44,890,000 0.21% 255 2008-09 177,150 13,330,000 30,315,000 43,645,000 0.19% 246 2009-10 177,641 13,075,000 29,285,000 42,360,000 0.20% 238 2010-11 176,320 12,805,000 28,225,000 41,030,000 0.19% 233 2011-12 177,445 12,525,000 27,100,000 39,625,000 0.19% 223 2012-13 204,951 12,316,280 25,859,898 38,176,178 0.18% 186 2013-14 209,130 12,002,622 24,614,512 36,617,134 0.15% 175 2014-15 213,231 11,673,964 23,304,126 34,978,090 0.13% 164 350 300 250 200 150 100 50 0 GENERAL BONDED DEBT OUTSTANDING PER CAPITA Last Ten Fiscal Years 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 Fiscal Year Source: (1) State of California, Finance Department IID City of Santa Clarita Direct and Overlapping Tax and Assessment Debt June 30, 2015 2014-15 Assessed Valuation: $26,111.942,635 (Net of Redevelopment Agency Incremental Value of $378,643,6091 $1,885,330,518 2.174% $ 40,987,085 2014-15 Population: 213,231 2.174% $ 189,554 Los Angeles County Sanitation District No. 32 Authority 19,165,306 Percent $ City's Share Santa Clarita Community College District - Certificates of Participation Total Debt Applicable $ of Debt William S. Hart Union High School District - Certificates of Participation 06/30/2015 To City $ 06/30/2015 DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: 3,870,000 27.232% $ 1,053,878 Los Angeles County Flood Control District $ 15,105,000 2.195% $ 331,555 Santa Clarita Community College District 191,916,361 71.219% $ 136,680,914 William S. Hart Union High School District 376,152,328 71.208% $ 267,850,550 William S. Hart Union High School District - Community Facilities District No. 87-1 295,000 100.000% $ 295,000 William S. Had Union High School District - Community Facilities District No. 90-1 465,000 100.000% $ 465,000 Los Angeles County Community College and Unified School Districts 14,178,930,000 0.000% $ 1,418 Castaic Union School District 14,814,428 27.232% $ 4,034,265 Newhall School District 17,700,000 60.035% $ 10,626,195 Newhall School District School Facilities Improvement District No. 2011-1 55,992,354 61.210% $ 34,272,920 Saugus Union School District 36,604,684 84.185% $ 30,815,653 Saugus Union School District School Facilities Improvement District No. 2011-1 20,000,000 85.357% $ 17,071,400 Saugus Union School District Community Facilities District No. 2006-2, Improvement Area No. 1 7,785,000 100.000% $ 7,785,000 Saugus Union School District Community Facilities District No. 2006.2, Improvement Area No. 2 8,535,000 100.000% $ 8,535,000 Saugus Union School District Community Facilities District No. 2006.2, Improvement Area No. 3 8,110,000 100.000% $ 8,110,000 Sulphur Springs Union School District 34,291,036 92.330% $ 31,660,914 City of Santa Clarita Open Space and Parkland Assessment District 15,175,988 100.000% $ 15,175,988 City of Santa Clarita Community Facilities District No. 2002-1 15,830,000 100.000% $ 15,830,000 City of Santa Clarita 1915 Act Bonds 810,000 100.000% $ 810,000 Los Angeles County Regional Park and Open Space Assessment District 82,880,000 2.174% $ 1,801,811 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $ 592,153,582 DIRECT AND OVERLAPPING GENERAL FUND DEBT: Los Angeles County General Fund Obligations $1,885,330,518 2.174% $ 40,987,085 Los Angeles County Superintendent of Schools - Certificates of Participation 8,719,113 2.174% $ 189,554 Los Angeles County Sanitation District No. 32 Authority 19,165,306 73.470% $ 14,080,750 Santa Clarita Community College District - Certificates of Participation 17,700,000 71.219% $ 12,605,763 William S. Hart Union High School District - Certificates of Participation 6.000,000 71.208% $ 4,272,480 Castaic Union School District - Certificates of Participation 3,870,000 27.232% $ 1,053,878 Saugus Union School District - Certificates of Participation 26,510,000 84.185% $ 22,317,444 Sulphur Springs Union School District - Certificates of Participation 24,272,492 92.330% $ 22,410,792 Los Angeles Unified School District - Certificates of Participation 307,180,000 0.00001% $ 31 City of Santa Clarita Obligations 20,319,717 100.000% $ 20,319,717 Total Grass Direct and Overlapping General Fund Debt $ 138,237,494 Less: Los Angeles County General Fund Obligations supported by landfill revenues 98,806 Total Net Direct and Overlapping General Fund Debt $ 136,138,688 OVERLAPPING TAX INCREMENT DEBT (Successor Agency): 35,255,000 100.000% 35,255,000 Total Direct Debt $ 35,495,705 Gross Total Overlapping Debt 745,326.359 Net Total Overlapping Debt $ 745,227,553 GROSS COMBINED TOTAL DEBT $ 765,646,076 NET COMBINED TOTAL DEBT $ 765,547,270 (1) Percentage of overlapping debt applicable to the city is estimated using taxable eased property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable Valu (2) Includes $217,615 Capital Lease obligations and $300,000 CDBG Loan. (3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non -bonded capital lease obligations. Ratios to 2014-15 Assessed Valuation: Direct Debt ($15,220,000)...........................................................................0.06% Total Overlapping Tax and Assessment Debt ......................................................2.27% Total Direct Dept ($35,349,720)...................................................................0.14% Gross Combined Total Debt...........................................................................2.93% Net Combined Total Debt..............................................................................2.93% Ratios to Redevelopment Successor Agency Incremental Valuation ($378.843.609): Total Overlapping Tax Increment Debt..............................................................9.31% Source: MuniServices, LLC 181 City of Santa Clarita Legal Debt Margin Information Last Ten Fiscal Years Debt limit percentage 15% 15% 15% FISCAL YEAR 14.15 13.14 12-13 11-12 10.11 Assessed valuation $25,645,226,854 $24,698,048,493 $21,399,181,358 $21,556,659,612 $21,457,646,707 Conversion percentage 25% 25% 25% 25% 25% Adjusted assessed valuation 6,411,306,714 6,174,512,123 5,349,795,340 5,389,164,903 5,364,411,677 Debt limit percentage 15% 15% 15% 15% 15% Debt limit 961,696,007 926,176,818 802,469,301 808,374,735 804,661,752 Total net debt applicable to limit: General obligation bonds - - - - - Legal debt margin $ 961,696,007 $ 926,176,818 $ 802,469,301 $ 808,374,735 $ 804,661,752 Total debt applicable to the limit as a percentage of debt limit 0% 0% 0% 0% 0% Section 43605 of the Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from current full valuation perspective to the 25% level that was in effect at the time the legal debt margin was enacted by the State of California for local governments located within the State. Source: City of Santa Clarita, Administrative Services Department - Finance Division MA FISCAL YEAR 09-10 08-09 07-08 06-07 150/ 05-06 810,033,032 831,499,726 $21,600,880,848 $22,173,326,025 $21,740,884,855 $19,177,126,742 $17,160,386,817 5,400,220,212 5,543,331,506 5,435,221,214 4,794,281,686 4,290,096,704 15% 15% 15% 15% 150/ 810,033,032 831,499,726 815,283,182 719,142,253 643,514,506 $ 810,033,032 $ 831,499,726 $ 815,283,182 $ 719,142,253 $ 643,514,506 0% 0% 0% 0% 0% 1,000 900 800 700 600 500 400 300 200 100 0 LEGAL DEBT MARGIN Last Ten Fiscal Years 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 FISCAL YEAR 183 City of Santa Clarita Pledged Revenue Coverage Last Ten Fiscal Years TRANSIT LESS NET Fiscal TRANSIT OPERATING AVAILABLE DEBT SERVICE Year REVENUES (1) EXPENSES (2) REVENUES Principal Interest COVERAGE 2005-06 $22,041,436 $ 17,242,035 $ 4,799,401 2006-07 19,468,288 195033,240 4355048 2007-08 24,888,921 22,204,777 2,684,144 2008-09 26,612,418 23,014,324 3,598,094 2009-10 21,179,438 23,525,855 (2,346,417) 2010-11 32,507,582 24,270,533 85237,048 2011-12 26,133,433 25,175,688 957,745 2012-13 29,4205486 25,901,822 3,518,664 2013-14 33,2985907 27,044,874 6,254,034 2014-15 24,008,186 28,292,380 (45284,194) $ 332,993 $ 86,230 1.90% 349,449 69,388 2.15% 366,720 605298 1.72% 384,846 425172 1.60% 236,999 23,149 1.23% 248,304 115844 0.80% - - 0.00% NOTE: (1) Includes Other revenues, Transfers in and Capital contributions (2) Includes Transfers out and Other expenses 10 City of Santa Clarita Demographic and Economic Statistics Last Ten Calendar Years YEAR CITY OF SANTA CLARITA POPULATION (1) AVERAGE ANNUAL PERCENTAGE INCREASE LOS ANGELES COUNTY POPULATION (1) AVERAGE ANNUAL PERCENTAGE INCREASE PER CAPITA PERSONAL INCOME (2) TOTAL PERSONAL INCOME (2) UNEMPLOYMENT RATE (3) 2006 165,243 -0.11% 9,798,609 -0.18% 36,917 385,732,651 4.20% 2007 173,979 5.29% 9,780,808 -0.18% 39,066 402,107,608 2.70% 2008 174,355 0.22% 9,785,474 0.05% 44,727 567,707,000 4.70% 2009 175,103 0.43% 9,801,096 0.16% 43,119 550,832,000 7.70% 2010 176,056 0.54% 9,822,121 0.21% 43,999 565,365,000 7.70% 2011 176,320 0.15% 9,818,605 -0.04% 44,423 575,044,998 7.60% 2012 177,445 0.64% 9,884,632 0.67% 46,337 604,831,837 6.90% 2013 204,951 15.50% 9,958,091 0.74% 48,425 635,891,798 6.60% 2014 209,130 2.04% 10,041,797 0.84% N/A N/A 4.70% 2015 212,231 1.48% 10,136,559 0.94% N/A N/A 6.40% 17.00% 15.00% 13.00% 11.00% 9.00% 7.00% 5.00% 3.00% 1.00% -1.00% 15.50% 5.29% -0.11°/ 0.22% 0.43% 0.54% ° 0 2.04% o 0.15 /0 0.64% 1.48% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YEAR Sources: (1) State of California, Finance Department, as of 1/1/2015 (2) U.S. Department of Commerce, Bureau of Economic Analysis (BEA) Personal Income and Unemployment rates are for the regional area, Los Angeles. The City's related information is not available. Information lags two years. (3) State of California, Department of Employment Development (EDD), September 18, 2015 185 City of Santa Clarita Principal Employers Current Fiscal Year and Nine Fiscal Years Ago 2015• PERCENT NUMBER of of TOTAL EMPLOYER EMPLOYEES EMPLOYMENT Six Flags Magic Mountain 3,200 11.35% Princess Cruises 1,885 6.69% Henry Mayo Newhall of Memorial Hospital 1,640 5.82% Quest Diagnostics (formerly EMPLOYMENT Speciality Laboratories) 850 3.02% Boston Scientific 780 2.77% The Master's College 760 2.70% Woodward HRT (formerly 9.11% Henry Mayo Newhall HR Textron) 728 2.58% Advanced Bionics 700 2.48% Cal Arts 690 2.45% Walmart 624 2.21% Largest firms "' 11,857 42.07% All others 16,329 57.93% Grand total 28,186 100.00% As of February 2015 NOTE: (1) Non-governmental employers Source: 2015 Santa Clarita Valley - Real Estate and Economic Outlook, 2006 CAFR IRE 2006 PERCENT NUMBER of of TOTAL EMPLOYER EMPLOYEES EMPLOYMENT Six Flags Magic Mountain 3,876 19.09% Princess Cruises 1,850 9.11% Henry Mayo Newhall Memorial Hospital 1,355 6.67% The Master's College 741 3.65% Speciality Laboratories 700 3.45% HR Textron 668 3.39% Cal Arts 510 2.51% Arvato Services 505 2.49% Aerospace Dynamics 437 2.15% Fanfare Media Works 407 2.00% Largest firms 11,071 54.50% All others 9,243 45.50% Grand total 20,314 100.00% Source: 2015 Santa Clarita Valley - Real Estate and Economic Outlook, 2006 CAFR IRE City of Santa Clarita Full -Time and Part -Time City Employees by Function Last Ten Fiscal Years FISCAL YEAR Function 14-15 13-14 12-13 11-12 10-11 09-10 08-09 07-08 06-07 05-06 General government 87.60 87.60 89.60 84.35 85.75 89.75 95.75 91.75 86.00 96.00 Public safety (1) - - - - - - - - - - Public works 125.00 122.00 129.00 126.00 127.00 128.00 135.50 136.50 133.50 115.00 Community development 41.00 41.00 32.00 30.50 33.00 33.00 36.00 35.00 33.00 36.00 Parks and Recreation 111.15 109.15 108.15 105.90 106.50 110.50 111.50 110.50 108.00 106.00 Transit 11.00 11.00 11.00 13.00 12.00 12.00 14.00 11.00 11.00 8.00 Totals 375.75 370.75 369.75 359.75 364.25 373.25 392.75 384.75 371.50 361.00 395.00 390.00 385.00 380.00 375.00 370.00 365.00 360.00 355.00 350.00 345.00 340.00 CITY OF SANTA CLARITA - EMPLOYEES Last Ten Fiscal Years 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 Fiscal Year (1) Police and Fire services have been provided by the County Source: City of Santa Clarita, Administrative Services Department - Finance Division 187 City of Santa Clarita Operating Indicators by Function Last Ten Fiscal Years Function 14-15 13-14 12-13 11-12 10-11 09-10 08.09 07-08 0647 05-06 Police: Parking citations issued or 4,765 4,786 5,726 5,521 6,577 5,114 4,126 5,257 4,587 6,042 Parking revenue collected $ 320,682 $ 323,040 $ 341,607 $ 335,663 $ 323,408 $ 238,478 $ 235,634 $ 288,076 $ 334,927 $ 27,257 Public works: Street resurfacing (miles) 80.0 20.9 18.0 24.0 24.0 33.8 14.0 15.4 15.4 16.5 Parks and Recreation: Number of recreation classes 2,189 2,557 2,548 2,106 2,080 2,447 2,284 2,393 2,535 2,357 Number of facility rentals(times) 19,018 14,604 13,000 11,042 10,754 10,239 9,801 9,767 19,645 19,435 Transit: Number of customers sewed (21 3,422,015 3,540,969 3,661,302 3,612,060 3,724,490 3,922,052 4,210,842 3,821,299 3,733,299 3,718,640 NOTE: (1) The City contracts the Los Angeles County Sheriff Department for its Police services. The number of citations issued and money collected are within the City's boundaries. (2) Number of customers served includes those outside of the City boundaries. Source: City of Santa Clarita, Administrative Services Department- Finance Division City of Santa Clarita Capital Asset Statistics by Function Last Ten Fiscal Years (1) All of the above referred streetlights aretwere owned and maintained by Edison Company. The Highway Safety Lights (HSL) are the streetlights attached to traffic signals (817) and those are City owned and maintained through a contract with the County. The City took over the streetlights from the County in 1998 and the City Engineering division established the inventory reports since 2001. Source: City of Santa Clarita, Administrative Services Department - Finance Division IMO FISCAL YEAR Function 14-15 13-14 12-13 11-12 10-11 09-10 08-09 07-08 06-07 05-06 Public works: Streets (miles) 497 496 496 496 496 496 496 496 496 496 Streetlights"' 17,843 17,843 17,843 15,081 14,963 14,939 14,739 14,429 14,000 13,200 Traffic signals (City Jurisdiction) 180 177 177 171 170 166 172 176 166 167 Traffic signals(Joint Jurisdiction) 5 5 5 6 1 6 5 4 4 5 Parks and recreation: Number of parks 32 29 29 24 23 20 20 20 19 18 Community centers 2 2 1 1 1 1 1 1 1 1 Transit: Stations 4 4 4 4 4 4 4 4 4 4 (1) All of the above referred streetlights aretwere owned and maintained by Edison Company. The Highway Safety Lights (HSL) are the streetlights attached to traffic signals (817) and those are City owned and maintained through a contract with the County. The City took over the streetlights from the County in 1998 and the City Engineering division established the inventory reports since 2001. Source: City of Santa Clarita, Administrative Services Department - Finance Division IMO APPENDIX F FISCAL CONSULTANT'S REPORT F-1 DRAFT SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA Newhall Redevelopment Project PROJECTED TAXABLE VALUES AND ANTICIPATED TAX INCREMENT REVENUES October 24, 2016 L Introduction On June 29, 2011, the California Legislature and Governor enacted Assembly Bill lx 26 ("AB lx 26"), which generally dissolved redevelopment agencies statewide as of February 1, 2012. The bill was challenged by a suit filed before the California Supreme Court, but was upheld by the Court on December 29, 2012. On June 27, 2012, Assembly Bill 1484 ("AB 1484") was signed into law, modifying and supplementing AB lx 26. In accordance with Section 34177.5(g) of the California Health and Safety Code, a successor agency's bonds shall be considered indebtedness incurred by the dissolved redevelopment agency, with the same legal effect as if the bonds, indebtedness, financing agreement, or amended enforceable obligation had been issued, incurred, or entered into prior to June 29, 2011, in full conformity with the applicable provisions of the California Community Redevelopment Law (being Part 1 of Division 24 of the Health and Safety Code and referred to herein as the "Law") that existed prior to that date, shall be included in a successor agency's Recognized Obligation Payment Schedule (the "ROPS"), and shall be secured by a pledge of, and lien on, and shall be repaid from moneys deposited from time to time in the Redevelopment Property Tax Trust Fund (the "RPTTF"). The Successor Agency to the Redevelopment Agency of the City of Santa Clarita (the "Successor Agency") is proposing to issue Tax Allocation Refunding Bonds (the "Bonds") to be secured by the pledge of tax revenues, as defined below, generated by the former Newhall Redevelopment Project (the "Project Area") and deposited from time to time in the RPTTF. The Bonds will be used to refund the outstanding Tax Allocation Bonds Series 2008 (Newhall Redevelopment Project Area) (the "2008 Non -Housing Bonds"), and outstanding Housing Set -Aside Tax Allocation Bonds, Series 2008 (the "2008 Housing Bonds") and together with the 2008 Non -Housing Bonds the "Prior Bonds" issued by the former Redevelopment Agency of the City of Santa Clarita (the "Prior Agency"). The Law provided for the creation of redevelopment agencies by cities and counties for the purpose of the elimination of blight. The Law, together with Article 16, Section 16 of the California Constitution, authorized redevelopment agencies to receive that portion of property tax revenue generated by project area taxable values that were in excess of the Base Year value. The Base Year value is defined as the amount of the taxable values within the project area boundaries on the last equalized tax roll prior to adoption of the project area. The amount of current year taxable value that is in excess of the Base Year value is referred to as incremental taxable value. Tax revenues generated from the incremental taxable value are, for purposes of this report, referred to as Tax Increment Revenues. The Law provides that the Tax Increment Revenues may be pledged by the redevelopment agency to the repayment of agency indebtedness. Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 2 In this report, Tax Increment Revenues combined with Unitary Tax Revenue (see Section IV, Allocation of State Assessed Unitary Taxes) are referred to as Gross Tax Revenues. For purposes of this report, Tax Revenues are defined as Gross Tax Revenues less the SB 2557 County Administrative charges (see Section IV, County Collection Charges). Net Tax Revenues are defined as Tax Revenues less amounts owed, if any, to taxing entities pursuant to the subordinated statutory tax sharing obligations (see Section VII). Allocation of tax increment revenue has been significantly altered by the passage of ABIx 26 and AB 1489 by the California Legislature. This legislation has been designed to dissolve redevelopment agencies formed pursuant to the Law while assuring that the enforceable obligations incurred by the former redevelopment agencies are repaid (see Section VI Legislation). While Tax Increment Revenues were previously allocated by the County Auditor -Controller over the period from November through July of each fiscal year, beginning with fiscal year 2012-13, revenues are only allocated on January 2 and June 1 of each year. The purpose of this fiscal consultant report (the "Report") is to examine property tax information for the current fiscal year and to project the amount of tax increment revenues anticipated to be received by the Successor Agency from the Project Area for the current fiscal year and nine subsequent fiscal years. Provisions of the Law and the Redevelopment Plan for the Project Area determine the amount of Tax Revenue that the Successor Agency may utilize for purposes of making debt service payments and any payments on other obligations with a superior lien on Tax Revenues (see Section VII, Tax Sharing Agreements and Other Obligations, below). As a result of our research, we project that the Tax Revenues for the Project Area will be as shown in Table A below: The taxable values of property and the resulting Tax Revenue for the Project Area summarized above are reflected on Tables 1 and 2 of the projection (attached). These projections are based on assumptions determined by our review of the taxable value history of the Project Area and the property Table A Project Area Tax Revenue 000's omitted Subordinate Statutory Payments Gross Tax County Admin. Tax Net Tax Fiscal Year Revenue Charges Revenue Tier 1 Tier 2 Revenue 2016-17 $3,892 ($52) $39840 ($778) ($ 62) $2,999 2017-18 3,412 ( 45) 39366 ( 682) ( 0) 2,684 2018-19 39523 ( 47) 39476 ( 705) ( 0) 2,771 2019-20 3,636 ( 48) 39588 ( 727) ( 19) 2,841 2020-21 39752 ( 50) 39702 ( 750) ( 39) 2,913 2021-22 3,870 ( 51) 39818 ( 774) ( 59) 21986 2022-23 3,990 ( 53) 39937 ( 798) ( 79) 3,060 2023-24 4,113 ( 55) 49058 ( 823) ( 99) 31136 2024-25 49238 ( 56) 49182 ( 848) ( 120) 3,214 2025-26 4,365 ( 58) 49308 ( 873) ( 142) 31293 The taxable values of property and the resulting Tax Revenue for the Project Area summarized above are reflected on Tables 1 and 2 of the projection (attached). These projections are based on assumptions determined by our review of the taxable value history of the Project Area and the property Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 3 tax assessment and property tax apportionment procedures of the Los Angeles County Assessor (the "Assessor") and the Los Angeles County Auditor -Controller (the "Auditor -Controller"). Future year assessed values and Tax Revenue are projections based on the assumptions described in this Report and are not guaranteed as to accuracy. This Report is not to be construed as a representation of such by HdL Coren & Cone. H. The Project Area The City Council of the City of Santa Clarita (the "City") adopted the redevelopment plan establishing the Project Area by Ordinance No. 97-12 on July 8, 1997. The Project Area is approximately 913.6 acres in size and consists of a single, very irregular area within the City. The Project Area is located between Interstate 5 and State Highway 14 and includes the commercial corridors along Lyons Avenue and San Fernando Road. The Project Area is generally bounded on the west by Interstate 5, on the east by State Highway 14 and on the north by the intersection of San Fernando Road and Magic Mountain Parkway. The Project Area extends approximately four blocks to the east and west of San Fernando Road between its intersection with Lyons Avenue and its intersection with 16th Street. It also includes a large area on the north side of San Fernando Road between its intersections with Lyons Avenue and with Pine Street. Large areas that are beyond the immediate San Fernando Road corridor exist southeast of the intersection with Pine Street and at the intersection with State Highway 14. Several areas that extend beyond the immediate Lyons Avenue corridor exist near the intersection with Valley Street and near the Lyons Avenue intersection with Interstate 5. A. Land Use Tables B represents the breakdown of land use in the Project Area by the number of parcels and by assessed value for fiscal year 2016-17. Unsecured and SHE non -unitary values are connected with parcels that are already accounted for in other categories. It should be noted that the Exempt category below includes parcels exempt from property taxes such as those owned by the City, Agency, State or other governmental agencies. Values shown in Table 3 (attached) for the Project Area projections do not include values for such exempt parcels. This information is based on County land use designations as provided by the County. Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 4 Table B Land Use Summary Category No. Parcels Assessed Value % of Total Residential 716 $27090519116 41.41% Commercial 212 20692119786 31.62% Industrial 39 4597279691 7.01% Vacant Land 165 4092779034 6.18% Irrigated 1 1859956 0.03% Recreational 5 298949765 0.44% Institutional 13 9,337,547 1.43% Exempt 131 0 0.00% 1 19282 $5741685,895 88.12% Subtotal: Possessory Interest 390559821 0.47% Unsecured 7494199812 11.41% Subtotal: $779475,633 11.88% Totals: 11 14282 $652,161,528 100.00% There is a total of 165 privately held, vacant secured parcels within the Project Area. These parcels account for 210.8 acres. This is 23.07% of the 913.6 total acres within the Project Area. Not all of this acreage may be readily developable. B. Redevelopment Plan Limits Chapter 942, Statutes of 1993, established limits on redevelopment plans adopted after December 31, 1993. The redevelopment plan for the Project Area (the "Redevelopment Plan") was adopted after December 31, 1993. Chapter 942 specified that the effectiveness of a redevelopment plan adopted after 1993 shall expire 30 years from the date of adoption of the Redevelopment Plan. The time limit for establishing indebtedness is 20 years from the date of adoption of the redevelopment plan and the Agency may repay indebtedness for a total of 45 years from the date of the adoption of the redevelopment plan. Any eminent domain proceedings undertaken by the Agency must be initiated within 12 years of the adoption date of the redevelopment plan. The City Council adopted the Project Area Redevelopment Plan (the Plan) through Ordinance 97-12 on July 8, 1997 containing the limitations provided in Chapter 942. Pursuant to Senate Bill 1045 (see Section VI) the City Council was allowed to extend the term of the Redevelopment Plan by one year. On May 13, 2008 the City Council adopted and approved Ordinance No. 08-6 extending the expiration date of the redevelopment plan by one year pursuant to Section 33333.2 of the Law. Pursuant to Senate Bill 1096 (see Section VI) the City Council was allowed, as described below, to extend the term of effectiveness for certain redevelopment plans and the periods within which the Prior Agency would be allowed to repay indebtedness by up to two additional years. This two-year extension of the time limits was predicated upon the payment by the Prior Agency of its ERAF obligations for 2005 and 2006 (See Section VI). The ERAF obligations for 2005 and for 2006 were Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 5 paid in a timely manner. For project areas that had less than 10 years of plan effectiveness remaining after June 30, 2005 a two-year extension was authorized. For project areas that had more than 10 years and less than 20 years of plan effectiveness remaining after June 30, 2005 a two-year extension was authorized if the City Council could make certain findings. For those project areas with more than 20 years of plan effectiveness remaining after June 30, 2005 no extension of time was authorized. The Redevelopment Plan could not be extended under Senate Bill 1096. On September 22, 2015, the Governor signed Senate Bill 107 ("SB 107"). This legislation implemented a number of revisions to the Health and Safety Code including an amendment to Section 34189 that impacts the time and tax increment limits of former redevelopment project areas. The legislation eliminated the effectiveness of both annual and cumulative tax increment limits and time limits on repayment of indebtedness for all enforceable obligations (as defined under Health and Safety Code Sections 34171(d)(1) and 34191.4), except in cases where contractual agreements that contain specific terms to terminate payment based on a project area reaching its tax increment and/or time limits. The Auditor Controller has informed HdLCC that, in light of the amended Section 34189, the Auditor Controller will not limit the amount of tax increment revenue deposited into the RPTTF due to the time limits or due to the annual tax increment limit contained in the Plan. Pursuant to SB 107, Tax Revenues will continue to be allocated from the Project Area until such time as all authorized enforceable obligations, including the Bonds, have been repaid. III. Project Area Assessed Values A. Assessed Values Taxable values are prepared and reported by the County Auditor -Controller each fiscal year and represent the aggregation of all locally assessed properties that are part of the Project Area. The assessments are assigned to Tax Rate Areas (TRA) that are coterminous with the boundaries of the Project Area. The historic reported taxable values for the Project Area were reviewed in order to ascertain the rate of taxable property valuation growth over the ten most recent fiscal years beginning with 2007-08. Assessed values within the Project Area grew steadily through 2009-10. Due to the impact of general economic stress in California, taxable values in the Project Area declined by -2.43 percent in 2010-11. The Project Area also experienced declines in incremental value of -3.31 percent for 2011-12 and -0.29 percent for 2012-13. Values increased for 2013-14 by $3.1 million (0.51%) and this was followed by growth of $26.4 million (4.29%) for 2014-15. Values dropped by $16 million (- 2.49%) in 2015-16. This drop in value was the result of assessment appeals reductions of land value on 16 vacant parcels owned by Casden Santa Clarita LLC. The total reduction in value on these parcels for 2015-16 totaled $40,106,300 and was, in most cases, a 66% reduction in value relative to 2014-15. The reductions in value on the Casden Santa Clarita LLC parcels were based on Prop 8 assessment appeals and the owner's argument that the enrolled values were greater than the actual market value of the parcels. In future years, the value reductions granted must be restored by the Assessor as the market value of the parcels increases. We have no way to project any timetable for this value recovery. In the event that these parcels are sold, the Assessor is obligated to enroll the values that are consistent with the sales price. Absent these large appeals losses, the remaining parcels in the Project Area grew by $24.1 million, an amount of growth comparable to that of 2014-15. Growth in taxable values in the Project Area from 2007-08 to 2016-17 was $37.1 million (6.03%). Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 6 Taxable values in the Project Area is primarily residential and commercial with residential property values making up 41.41% of all value and commercial uses accounting for 31.62%. Another 7.01% of taxable value is based on industrial land uses and 6.18% of the Project Area's value is in vacant land. Unsecured values account for 11.41% of all taxable values. The Project Area taxable value reached a peak in fiscal year 2009-10 prior to experiencing reductions in value during the economic downturn. As of fiscal year 2016-17 assessed values within the Project Area are at their highest historic values of $652.2 million, slightly higher than the peak value of 2009- 10. For 2016-17 there are only 46 residential properties that have values that were reduced in pursuant to Proposition 8 (Prop 8) and that have not been sold or fully restored to their inflation adjusted base values. Proposition 8 amended the Revenue and Taxable Code to allow for reduction of a property's taxable value when the property's market value drops below the inflation adjusted base value for that property. Once reduced, the Assessor is required to revalue the property each year and enroll the lesser of the current market value of the property or its original inflation adjusted base value. If a property that has been reduced in value under Prop 8 is sold, its value is reset based upon the sales price and this new value is no longer subject to annual revaluation under Prop 8. The 46 single family residential properties in the Project Area that are still enrolled at reduced values are enrolled at values that are a combined $5.0 million below the inflation adjusted base value for these properties. For 2016-17, there were 20 Prop 8 reduced properties that recovered $558,217 in taxable value. Residential property sales for the full calendar year 2015 totaled 13 in the Project Area and reflected an increase in median sales price of 19.71% above sales for calendar year 2014. Sales of residential property through July, 2016 reflect a decrease of -9.21% in median sales prices based on only 8 sales. The current median sales price is $369,500. Through July, 2016, the median price of single family homes within the Project Area is currently 12.02% below the peak median price of $420,000 in 2007. B. Top Ten Taxable Property Owners A review of the top ten taxpayers in the Project Area for fiscal year 2016-17 was conducted and broken down by secured and unsecured value. Within the Project Area, the aggregate total taxable value for the ten largest taxpayers totaled $136,085,581. This amount is 35.075% of the $388,055,314 Project Area incremental value. The top taxpayer in the Project Area is Time Warner Cable which controls 3 unsecured assessments with a combined value of $43.04 million. This taxpayer's property accounts for 11.09% of the Project Area incremental value and consists of telecommunications facilities. Saugus Station LLC, which controls 6 secured parcels with a combined amount of $18,260,394 is the second largest taxpayer in the Project Area. Saugus Station LLC owns properties containing industrial and warehousing buildings. The value of this taxpayer's parcels is 4.71% of the Project Area total incremental value. Table C below illustrates the percentage of incremental value for the top ten taxpayers in the Project Area and their relative importance to the Project Area's incremental value. Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 7 Table C Project Area Top Ten Taxpayers Fiscal Year 2016-17 % of Combined Total % of Inc. Property Owner Value Value Value Property Use Time Warner Cable (2) Saugus Station LLC Casden Santa Clarita LLC (1) Lyons Properties Limited (1) Telfair Corporation (1) David Weiswasser Trust 25805 San Fernando LLC RFT Sprouts LLC et al 23801 San Fernando Road LandCo LLC Peter & Barbara Coeler et al (1) Top Property Owner Total Value Project Area Assessed Value Project Area Incremental Value $43,041,370 6.60% 11.09% Cable Television/Internet Facilities 18,260,394 2.80% 4.71% Industrial & Warehousing Buildings 16,904,000 2.59% 4.36% Vacant Industrial/Commercial Land 10,276,022 1.58% 2.65% Santa Clarita Medical Center - Offices 8,841,991 1.36% 2.28% Retail Strip Center 8,247,025 1.26% 2.13% Mulberry Mobile Home Park 8,205,360 1.26% 2.11% Plaza Clarita—Mixed Use Commercial 7,854,588 1.20% 2.02% Walnut Village Apartments 7,416,673 1.14% 1.91% Santa Clarita Convalescent Hospital 7,038,158 1.08% 1.81% Villa La Paz Apartments/Offices $13690859581 $65291619528 20.87% $38890559314 35.07% (1) These taxpayers have pending assessment appeals on parcels owned (see Section IV F). (2) Combined Values include unsecured values. The values indicated for Time Warner Cable are for the combined value of the company's underground cable and internet facilities within the City of Santa Clarita. The practice of the Assessor, and all assessor's in the State, is to aggregate these values and assign the unsecured values to single secured parcel within the City. The values for Time Warner Cable and its predecessor cable companies have been assigned to this parcel in the Project Area since its adoption. Properties owned by Casden Santa Clarita LLC have declined in value by $61.1 million (-78.34%) since 2008-09. These vacant parcels constitute a major part of the City's effort to develop the North Newhall Specific Plan. Ultimate development of the Casden properties will be dictated by the terms of the specific plan once it is adopted. It is anticipated that the specific plan will envision some combination of commercial, industrial and residential uses. The owner of the Casden parcels was delinquent in payment of property taxes in 2013-14 and in 2015-16. According to the Tax Collector all parcels are now current on their property taxes. The City Staff is aware of changes that may be occurring in the ownership of the Casden Santa Clarita LLC partnership but any such changes have not been reflected in any recorded transfers of ownership on the parcels Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 8 IV. Tax Allocation and Disbursement A. Property Taxes The taxable values of property are established each year on the January 1 property tax lien date. Real property values reflect the reported assessed values for secured and unsecured land and improvements. The base year value of a parcel is the value established as the full market value upon a parcel's sale, improvement or reassessment for other reasons. Article XI1IA of the California Constitution (Proposition 13) provides that a parcel's base year value is established when locally assessed real property undergoes a change in ownership or when new construction occurs. Following the year that a parcel's base year value is first enrolled, the parcel's value is factored annually for inflation. The term base year value does not, in this instance, refer to the base year value of the Project Areas. Pursuant to Article XIIIA, Section 2(b) of the State Constitution and California Revenue and Taxation Code Section 51, the percentage increase in the parcel's value cannot exceed 2% of the prior year's value. Secured property includes property on which any property tax levied by a county becomes a lien on that property. Unsecured property typically includes value for tenant improvements, fixtures, inventory and personal property. A tax levied on unsecured property does not become a lien against the taxed unsecured property, but may become a lien on certain other secured property owned by the taxpayer. The taxes levied on unsecured property are levied at the previous year's secured property tax rate. Utility property assessed by the State Board of Equalization (the Board) may be revalued annually and such assessments are not subject to the inflation limitations established by Proposition 13. The taxable value of Personal Property is also established on the lien dates and is not subject to the annual 2% limit of locally assessed real property. Each year the Board announces the applicable adjustment factor. Since the adoption of Proposition 13, inflation has, in most years, exceeded 2% and the announced factor has reflected the 2% cap. Through fiscal year 2010-11 there were six occasions when the inflation factor has been less than 2%. Until 2010-11 the annual adjustment never resulted in a reduction to the base year values of individual parcels, however, the factor that was applied to real property assessed values for the January 1, 2010 assessment date was a -0.237% and this resulted in a reduction to the adjusted base year value of parcels. The changes in the California Consumer Price Index (CCPI) from October of one year and October of the next year are used to determine the adjustment factor for the January assessment date. The table below reflects the inflation adjustment factors for the current fiscal year and ten prior fiscal years. Historical Inflation Adjustment Factors Fiscal Year Inflation Adj. Factor 2005-06 2.000% 2006-07 2.000% 2007-08 2.000% 2008-09 2.000% 2009-10 2.000% 2010-11 -0.237% 2011-12 0.753% 2012-13 2.000% 2013-14 2.000% Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 9 2014-15 0.454% 2015-16 1.998% 2016-17 1.525% On December 4, 2015, the Board determined that the inflationary adjustment for fiscal year 2016-17 will be 1.525%. The inflationary adjustment for 2017-18 has not been determined. For purposes of the projection we have assumed that the inflation adjustment factor for fiscal year 2017-18 and future years will be 2.00%. This assumption is based on the fact that the inflation adjustment factor has been at the maximum allowed amount of 2.00% in 31 of the 40 years since the adoption of Proposition 13. B. Supplemental Assessment Revenues Chapter 498 of the Statutes of 1983 provides for the reassessment of property upon a change of ownership or completion of new construction. Such reassessment is referred to as the Supplemental Assessment and is determined by applying the current year's tax rate to the amount of the increase or decrease in a property's value and prorating the resulting property taxes to reflect the portion of the tax year remaining as determined by the date of the change in ownership or completion of new construction. Supplemental Assessments become a lien against Real Property. Since 1984-85, revenues derived from Supplemental Assessments have been allocated to redevelopment agencies and taxing entities in the same manner as regularly collected property taxes. The receipt of Supplemental Assessment Revenues by taxing entities typically follows the change of ownership by a year or more. We have not included revenues resulting from Supplemental Assessments in the projections. C. Tax Rates Tax rates will vary from area to area within the State, as well as within a community and a project area. The tax rate for any particular parcel is based upon the jurisdictions levying the tax rate for the area where the parcel is located. The tax rate consists of the general levy rate of $1.00 per $100 of taxable value and the over -ride tax rate. The over -ride rate is that portion of the tax rate that exceeds the general levy tax rate and is levied to pay voter approved indebtedness or contractual obligations that existed prior to the enactment of Proposition 13. A Constitutional amendment approved in June 1983 allows the levy of over -ride tax rates to repay indebtedness for the acquisition and improvement of real property, upon approval by a two-thirds vote. A subsequent amendment of the Constitution prohibits the allocation to redevelopment agencies of tax revenues derived from over -ride tax rates levied for repayment of indebtedness approved by the voters after December 31, 1988. Tax rates that were levied to support any debt approved by voters after December 31, 1988 were not allocated to redevelopment agencies. The over -ride tax rates typically decline each year as a result of (1) increasing property values (which would reduce the over -ride rate that must be levied to meet debt service) and (2) the eventual retirement of debt over time. Section 34183(a)(1) of the Law as amended by ABlx 26 requires the Auditor Controller to allocate all revenues attributable to tax rates levied to make annual repayments of the principal and interest on any bonded indebtedness for the acquisition or improvement of real property to the taxing entity levying the tax rate. This has been interpreted by the County to include none of the revenues resulting from all over -ride tax rates that were previously being allocated to redevelopment agencies based on their determination that these tax rates are not being levied for repayment of indebtedness for acquisition or improvement of real property. As a result, the tax increment revenues being deposited into the RPTTF Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 10 include all revenues derived from the general levy tax rate and all revenues derived from over -ride tax rates that had been included in tax increment revenues prior to the dissolution of redevelopment agencies. The Castaic Lake Water Agency levies an override tax rate that received voter approval prior to January 1, 1989. The Castaic Lake Water Agency is a State Water Contractor as defined in Section 33607.8 of the Law and the revenue from the Water Agency's override rate is used to purchase water from the California Water Project. Prior to the dissolution of redevelopment agencies, revenue derived from this override tax rate is received by the Agency but was subject to being passed through to the Water Agency pursuant to Section V, subsection B of the Redevelopment Plan. SB 107 was recently approved and it has amended a number of the provisions of ABlx 26 and AB 1484. With regard to debt service override tax rates levied for pension fund programs and state water contracts, the revenue generated from these tax rates, including that revenue generated by the Castaic Lake Water Agency state water contract override tax rate, is no longer allocated to the Successor Agencies unless these revenues have been pledged to the payment of debt service on bonds. Any debt service override tax rate revenues that have been pledged to debt service but are not needed to make the debt service payments on the bonds will be allocated directly to the entities that have levied the override tax rate. Because these revenues were, by the terms of the Redevelopment Plan, not available for use in paying debt service, these amounts were not pledged to the payment of debt service. The Project Area contains a total of 69 Tax Rate Areas (TRAs). A Tax Rate Area is a geographic area within which the taxes on all property are levied by a certain set of taxing entities. These taxing entities each receive a prorated share of the general levy and those taxing entities with voter approved over -ride tax rates receive the revenue resulting from that over -ride tax rate. The tax increment projections are based only on the 1% general levy tax rate. School Districts within the Project Area levy over -ride tax rates that were approved by voters after January 1, 1989. Revenue from these tax rates are paid directly to the districts by the Auditor -Controller and have no effect on the revenues of the Successor Agency. D. Allocation of Taxes Taxes on secured property values paid by property owners are due in two equal installments on November I and on February 1 and become delinquent on December 10 and April 10. Taxes on unsecured property are due March 1 and become delinquent August 31. Prior to dissolution of redevelopment agencies, the County disbursed secured tax increment revenue to all redevelopment agencies from November through August with approximately 35% of secured revenues apportioned by the end of December and a total of 75% of the secured revenues by the end of the following April. Unsecured revenues are disbursed from October through August of each fiscal year with approximately 95% of the unsecured revenues being apportioned in October. The Los Angeles County Auditor - Controller apportions tax increment revenue based on collections and does not utilize the alternative allocation method known as the Teeter Plan. The apportionment schedule described above and the apportionment of tax increment revenue based on collections was in use by Los Angeles County for many years prior to redevelopment dissolution and continues to be the pattern of tax increment revenue allocation. As of February 1, 2012, the apportionment of tax increment revenue was dictated by the legislation adopted as ABxl 26 (See Legislation, Section VI). Revenue is now apportioned to Successor Agencies Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 11 on January 2 and June 1 of each fiscal year. All tax increment revenue is accumulated by the County Auditor -Controller in the RPTTF for allocation on these two dates. The tax increment revenue available for allocation on January 2 consists of revenues collected after June 1 of the previous fiscal year and for collections in November and December of the current fiscal year. The tax increment revenues available for allocation on June 1 include revenues collected from January 1 to June 1 of the current fiscal year. From the amounts accumulated in the RPTTF for each allocation date, the County Auditor -Controller is to deduct its own County administrative charges and is to calculate and deduct amounts owed, if any, to taxing entities for tax sharing agreements entered into pursuant to Section 33401 of the Law and for statutory tax sharing obligations required by Sections 33607.5 and 33607.7 of the Law. The amount remaining after these reductions, if any, is what is available for payment by the Successor Agency of debt obligations of the Prior Agency. Prior to receiving revenues on January 2 and June 1, the Successor Agency must adopt a Recognized Obligation Payment Schedule (ROPS) that lists the debt obligations of the Prior Agency that must be paid during the upcoming six month periods of January 1 through June 30 and July 1 through December 31. There is a provision in the legislation for a Successor Agency to request additional amounts in one ROPS payment to allow it to make payments that may be beyond the revenues available in the upcoming allocation cycle. The ROPS was to be submitted at least 90 days prior to each RPTTF allocation date and approved by the Successor Agency's Oversight Board that is established in the legislation with membership consisting of representatives from various taxing entities. The ROPS had to receive approval from the State Department of Finance (the "DOF"). Filing ROPS statements is mandated by statute and penalties are incurred if they are filed late or if they are not filed at all. This process was revised by the passage of SB 107 so that a single ROPS document is approved by the Successor Agency and the Oversight Board by February 1 of each year and submitted to the DOE This single ROPS form includes the payment obligations for both the next June RPTTF allocation for payments to be made from July 1 through December 31 and the next January RPTTF allocation for payments to be made from January 1 through June 30. The Successor Agency is entitled to receive an amount to cover the administrative costs of winding down the business of the Prior Agency. This amount is set by ABxl 26 at the greater of $250,000 per year or a maximum of 3% of the amount allocated from the RPTTF. AB 1484 added language that allowed the Oversight Board to reduce the amount of the minimum administrative allowance. To the extent that revenues are insufficient to pay all of the approved ROPS obligations, the Successor Agency's administrative allowance will be reduced or eliminated. Successor Agency administrative allowance amounts that have been approved but cannot be paid due to a lack of RPTTF revenue will be carried over to the next RPTTF allocation for payment as funds become available. As a result of passage of SB 107, commencing July 1, 2016 the administrative cost allowance will be 3% of the actual property taxes allocated to the Successor Agency in the preceding fiscal year less the Successor Agency's administrative cost allowance and City loan repayment amounts. If, however, 3% of the actual property taxes allocated in the preceding fiscal year is greater than 50% of the total RPTTF amounts distributed to pay enforceable obligations as reduced by the administrative allowance and City loan repayment amounts, then the administrative cost allowance shall not exceed 50% of the total RPTTF amounts distributed to pay enforceable obligations as reduced by the administrative allowance and City loan repayment amounts. Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 12 If there are RPTTF amounts remaining after reductions for County administrative charges, amounts owed, if any, to taxing entities for tax sharing agreements entered into pursuant to Section 33401 of the Law, enforceable obligations and Successor Agency administrative allowance, these remainder amounts are referred to as Residual Revenue. Residual Revenue for each allocation cycle is proportionately allocated to the taxing entities and to the Educational Revenue and Augmentation Fund (ERAF). The legislation stipulates that the combination of tax sharing payments and Residual Revenue payments to taxing entities may not exceed that taxing entity's full share of tax increment revenue. In circumstances where a taxing entity receives all or most of its share of tax increment revenue as a result of its tax sharing agreement, that taxing entity's share of the Residual Revenue distribution may be reduced and the portions of Residual Revenue allocated to the other taxing entities will be proportionately increased. (See Section VII — Tax Sharing Agreements and Other Obligations) The forms and procedures used by a successor agency to submit its ROPS to its Oversight Board and to the DOF are dictated by the legislation as interpreted by DOF. E. Annual Tax Receipts to Tax Levy The Los Angeles County Auditor -Controller apportions tax revenues to the RPTTF based upon the amount of the tax levy that is received from the taxpayers. Collection rates for the Project Area have been relatively consistent with collection rates experienced throughout the County. Calculation of collection rates after 2010-11 may be impacted by revised reporting by the County Auditor -Controller that occurred as a result of the dissolution of redevelopment agencies. The following table illustrates the final tax revenue collections for the most recent seven full years of tax increment collections. Table D Project Area Property Tax Collections History Fiscal Adjusted Current Year Current Year Prior Year Total Total Year Tax Levy Apportioned Collection % Collections' Apportioned Collection % 2008-09 31978,489 397739188 94.84% 229,455 4,002,642 100.61% 2009-10 4,068,572 398859719 95.51% 42,260 3,9271979 96.54% 2010-11 31618,835 2,744,263 75.83% (204,741) 2,539,523 70.18% 2011-12 3,762,457 2,867,475 76.21% 116,381 2,9839855 79.31% 2012-13 3,485,808 29786,791 79.95% 342,729 3,129,519 89.78% 2013-14 3,526,463 29828,495 80.21% 835,488 3,663,983 103.90% 2014-15 3,8369835 391859967 83.04% 341,817 3,527,784 91.95% 2015-16 3,579,829 394309748 95.84% 518,292 3,704,259 103.48% Source: Los Angeles County Auditor -Controller's Office. F. Assessment Appeals Assessment appeals data from Los Angeles County has been reviewed to determine the potential impact that pending appeals may have on the projected Tax Revenues. We have determined that there are 124 pending appeals within the Project Area. In order to estimate the potential reduction in assessed value that may occur as a result of these pending appeals, we have reviewed the historical averages for the number of appeals allowed and the amount of assessed value removed. We have then applied those averages to the currently pending appeals and estimated the number of pending appeals ' Prior Year Collections include Supplemental Revenue, reductions for taxpayer refunds and revenue from prior years. Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 13 that may be allowed and the amount of assessed value that may be removed as a result of these pending appeals. Four of the Project Area's top ten taxpayers have pending appeals of their assessed value. Casden Santa Clarita LLC, Lyons Properties Limited, Telfair Corporation and Peter & Barbara Coeler all have assessment appeals pending. Table E Pending Assessment Appeals Among Top Ten Taxpayers FY of No. Of Parcels Value Under Owner Opinion Max. Potential Taxpayer Appeal Under Appeal Appeal of Value Value Reduction Casden Santa Clarita LLC 2014-15 18 $5051963814 $16,254,027 $3399429787 2015-16 18 $1659049000 $ 8,1289000 $ 897769000 2016-17 18 $1659049000 58 $ 7,3179000 $ 9,5879000 Lyons Properties Limited 2014-15 1 $ 959239399 $ 554609000 $ 494635399 2015-16 1 $1051219667 $ 5,9549000 $ 491675667 2016-17 1 $10.276.022 $ 6.073.000 $ 4.203.022 Peter & Barbara Coeler 2015-16 1 $ 3.735.781 $ 0 $ 3.735.781 The estimated impact of value losses resulting from these pending appeals has been incorporated into the projected revenues of the Project Area. The following table shows the amount of assessed value that is presently under appeal within the Project Area and the estimated reduction of value that has been factored into the projections for 2017- 18. The assessment appeals data below reflects appeals filed for fiscal years 2010-11 through 2015-16. Table F Estimated Assessment Appeals Loss for FY 2017-18 Total No. No. of No. of No. & Value of Est. No. of Est. Reduction on Pending of Resolved Successful Average Appeals Appeals Appeals Allowed Appeals Appeals Appeals Reduction Pending Allowed (2017-18 Value Adjustment) 124 75 58 65.56% 49 38 $65,402,955 ($128,991,780) G. County Collection Charges Chapter 466 (SB 2557) allows counties to recover charges for property tax administration in an amount equal to their 1989-90 property tax administration costs, as adjusted annually. For fiscal year 2015-16, the County collection charges were 1.33% of Gross Revenue within the Project Area. Based on the collection charges for 2015-16, we have projected the charge for 2016-17 and future years as a percentage of Gross Revenue to remain at 1.33%. For purposes of these projections, we have assumed that the County will continue to charge the Agency for property tax administration and that such charge will increase proportionally with any increases in revenue. This collection charge has been projected and included within the calculation of Tax Revenue. Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 14 H. Allocation of State Assessed Unitary Taxes Legislation enacted in 1986 (Chapter 1457) and 1987 (Chapter 921) provided for a modification of the distribution of tax revenues derived from utility property assessed by the State Board of Equalization, other than railroads. Prior to the 1988-89 fiscal year, property assessed by the SBE was assessed statewide and was allocated according to the location of individual components of a utility in a tax rate area. Commencing in 1988-89, tax revenues derived from unitary property and assessed by the SBE are accumulated in a single Tax Rate Area for the County. It is then distributed to each taxing entity in the County in the following manner: (1) each taxing entity will receive the same amount as in the previous year plus an increase for inflation of up to two percent; (2) if utility tax revenues are insufficient to provide the same amount as in the previous year, each taxing entity's share would be reduced pro -rata county wide; and (3) any increase in revenue above two percent would be allocated in the same proportion as the taxing entity's local secured taxable values are to the local secured taxable values of the County. To administer the allocation of unitary tax revenues to redevelopment agencies, the County no longer includes the taxable value of utilities as part of the reported taxable values of a project area, therefore, the base year values of project areas have been reduced by the amount of utility value that existed originally in the base years. The Auditor Controller allocated an aggregate total of $11,168 of unitary tax revenue to the Project Area for 2015-16. For purposes of this projection, we have assumed that the aggregate amount of unitary revenue for 2015-16 will continue to be allocated to the Project Area in the same amount for the life of the projection. V. Low and Moderate Income Housing Set -Aside Sections 33334.2 and 33334.3 of the Law required redevelopment agencies to set aside not less than 20 percent of all tax increment revenues from project areas adopted after December 31, 1976 into a low and moderate income housing fund (the "Housing Set -Aside Requirement"). Sections 33334.3, 33334.6 and 33334.7 of the Law extend this requirement to redevelopment projects adopted prior to January 1, 1977. With the adoption of ABlx 26, the Housing Set -Aside Requirement was eliminated. The housing fund into which these set-aside amounts were formerly deposited has been eliminated and any unencumbered amounts remaining in that fund have been identified through a mandated Due Diligence Review. The amounts found to be unencumbered through this Due Diligence Review have been paid to the County and these funds have been allocated to the taxing entities within the former project area. VI. Legislation Affecting Tax Revenues ht order to address State Budget deficits, the Legislature enacted SB 614, SB 844 and SB 1135 that required payments from redevelopment agencies for the 1992-93, 1993-94 and 1994-95 fiscal years into a countywide ERAF. The Prior Agency could have used any funds legally available and not legally obligated for other uses, including agency reserve funds, bond proceeds, earned income, and proceeds of land sales, but not moneys in the Low and Moderate Income Housing Fund (the "Housing Fund") to satisfy this obligation. From 1995-96 to 2001-02, state budgets were adopted with no additional shifting of tax increment revenues from redevelopment agencies, however, the 2002-03 State Budget required a shift of $75 million of tax increment revenues statewide from redevelopment Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 15 agencies to ERAF to meet the state budget shortfall. AB 1768 (Chapter 1127, Statutes of 2002) was enacted by the Legislature and signed by the Governor and based upon the methodology provided in the 2002-03 budget, the shift requirement for the former redevelopment agencies to make payments into the ERAF was limited to fiscal year 2002-03 only. As part of the State's 2003-04 budget legislation, SB 1045 (Chapter 260, Statutes of 2003) required redevelopment agencies statewide to contribute $135 million to local County ERAF which reduced the amount of State funding for schools. This transfer of funds was limited to fiscal year 2003-04 only. Under the Law as amended by SB 1045, the redevelopment agencies were authorized to use a simplified methodology to amend the individual redevelopment plans to extend by one year the effectiveness of the plan and the time during which the agencies could repay debt with tax increment revenues. hi addition, the amount of this payment and the ERAF payments made in prior years were to be deducted from the cumulative tax increment amounts applied to a project area's cumulative tax increment revenue limit. The passage of SB 107 has clarified that these redevelopment plan time limits are no longer applicable to the Successor Agency's enforceable obligations generally. See the discussion in the last paragraph of Section H — Redevelopment Plan Limits. After the State's budget for 2004-05 was approved by the legislature and signed by the Governor, Senate Bill 1096 was adopted. Pursuant to SB 1096, redevelopment agencies within the State were required to pay a total of $250 million to ERAF for fiscal year 2004-05 and for 2005-06. The payments were due on May 10 of each fiscal year. As in previous years, payments were permitted to be made from any available funds other than the Housing Fund. If an agency was unable to make a payment, it was allowed to borrow up to 50% of the current year Housing Tax Set -Aside Requirement, however, the borrowed amount was required to be repaid to the Housing Fund within 10 years of the last ERAF payment (May 10, 2006). Under SB 1096, redevelopment plans with less than ten years of effectiveness remaining from June 30, 2005, could be extended by one year for each year that an ERAF payment is made. For redevelopment plans with 10 to 20 years of effectiveness remaining after June 30, 2005, the plans may be extended by one year for each year that an ERAF payment is made if the city council could find that the former redevelopment agency was in compliance with specified state housing requirements. These requirements are: 1) that the agency is setting aside 20% of gross tax increment revenues; 2) that housing implementation plans are in place; 3) that replacement housing and inclusionary housing requirements are being met; and, 4) that no excess surplus exists. The PriorAgency did not borrow from the Housing Fund as authorized in order to make the required payments for ERAF. As outlined below, the method by which ERAF loans from the Housing Fund may be repaid has been modified by the adoption of AB 1484. The requirement for repayment of these loans by certain dates has been eliminated. In July, 2009, the Legislature adopted AB 26 4x as a means of implementing a package of 30 bills that were adopted in order to close the State's budget deficit. Under this legislation the former redevelopment agencies statewide were required to pay into their county's "Supplemental" ERAF (the "SERAF"), $1.7 billion in fiscal year 2009-10 and were required to pay another $350 million in fiscal year 2010-11. Based on a State Controller formula, the former redevelopment agencies were required to pay the required amounts by May, 2010 and May, 2011, respectively. Under this legislation, the former redevelopment agencies could use any available funds to make the SERAF payments. If Housing Set -Aside Requirement or Housing Fund amounts were borrowed to make the SERAF payment, the borrowed amounts were required to be repaid to the Housing Fund by Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 16 June 30, 2015 and June 30, 2016, respectively. Under the requirements of Section 34191.4 amended by AB 1484, however, redevelopment agencies that borrowed from the Housing Fund to make the required SERAF payments for 2010 and for 2011 may only repay the borrowed amounts from annual amounts that are 50% of the increase in annual residual revenues that are above the residual revenue for fiscal year 2012-13. Repayment amounts are, under current legislation, to be repaid to the Successor Housing Agency established pursuant to AB lx 26 and AB 1484 (see below). Repayment of SERAF payment amounts borrowed from the Housing Fund may only be repaid from growth in residual revenue. As a result, the repayment of these amounts will have no impact on the Successor Agency's ability to repay indebtedness. The Prior Agency did not borrow from the Housing Fund to make the required SERAF payments. AB lx 26 and AB Ix 27 were introduced in May 2011 as placeholder bills and were substantially amended on June 14, 2011. These bills proposed to dramatically modify the Law as part of the fiscal year 2011-12 State budget legislation. AB lx 26 would dissolve redevelopment agencies statewide effective October 1, 2011 and suspend all redevelopment activities as of its effective date. AB lx 27 would allow redevelopment agencies to avoid dissolution by opting into a voluntary program requiring them to make substantial annual contributions to local school and special districts. The bills were signed by the Governor in late June, 2011 and were challenged by a suit filed before the California Supreme Court by the CRA. On December 29, 2011, the Supreme Court ruled that AB lx 27 was unconstitutional and that AB lx 26 was not unconstitutional. On June 27, 2012 the legislature passed and the Governor signed Assembly Bill 1484. This legislation made certain revisions to the language of AB lx 26 based on experience after its implementation. Once the obligations of the Prior Agency are recognized as Enforceable Obligations, the Successor Agency is obliged to manage the repayment of those Enforceable Obligations through the semiannual adoption of ROPS by the Oversight Board that is made up of representatives of taxing entities within the Prior Agency. Membership of the Oversight Board is dictated by Section 34179 of the Law. After 2018, there will be a single Oversight Board in each county that will be responsible for adoption of ROPS for all successor agencies in the county. The ROPS establishes the amounts that may be paid by the Successor Agency on the former redevelopment agency's debts during the six month periods following payments to the Successor Agency from the RPTTF by the County Auditor -Controller on January 2 and June 1 of each year. The legislature has recently approved SB 107. Among the changes to the dissolution statutes that were included in SB 107 was an amendment to Health and Safety Code Section 34189(a). This amendment makes it clear that the effectiveness of time and tax increment limits from the redevelopment plans of the former project areas are no longer applicable to the Successor Agency's receipt of tax increment revenue for payment of enforceable obligations (as defined under Health and Safety Code Sections 34171(d)(1) and 34191.4). Section 34189(a) provides, however, that the elimination of these limits will not result in the restoration or continuation of funding for projects whose contractual terms specified that project funding would cease once the limitations in the redevelopment plans had been reached. It doesn't appear that the Successor Agency's ability to make payments on its enforceable obligations will be affected by this change to the law. Numerous lawsuits have been filed on various aspects of ABxl 26 and AB 1484 which could impact the dissolution of redevelopment agencies. Our projections could be impacted as a result of future court decisions. Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 17 VII. Tax Sharing Agreements and Other Obligations As required by the Law as modified by AB lx 26 and AB 1484, the County Auditor -Controller is responsible for administering all pass through payment calculations and payments. AB 1484 further requires that the calculation of pass through amounts be done as it was done prior to January 1, 2011. This means that where the payments are based on revenue reduced for the Housing Set -Aside Requirement, this reduction is to continue despite the fact that the Housing Set -Aside is no longer required. Based upon the flow of funds required after the dissolution of redevelopment agencies the payment of debt service on the Bonds, all tax sharing obligations are paid prior to the distribution of Tax Revenues to the Successor Agency for payment of debt service on the Bonds. Statutory Tax Sharing Payments The Project Area was adopted after January 1, 1994 and is therefore, subject to the Law as it was amended by passage of AB 1290. As amended, the Law requires that for project areas adopted after January 1, 1994, a prescribed portion of tax increment revenue must be shared with all taxing entities within the project area. This defined tax -sharing amount has three tiers. The first tier began with the first year that the project area received tax increment revenue and continues for the life of the project area. This first tier tax -sharing amount is 25 percent of gross tax increment revenue net of the Housing Set -Aside Revenues. The second tier began in 2008-09, the eleventh year after the Prior Agency first received tax increment revenue. This second tier is 21 percent of the tax increment revenue, net of the Housing Set -Aside Revenues, that is derived from the growth in assessed value that is in excess of the assessed value of the project area in year ten. The third tier payments will begin in 2030-31, the 31st year after the PriorAgency first received tax increment revenue. This third tier is 14 percent of the tax increment revenue, net of the Housing Set - Aside Revenues that is derived from the growth in assessed value that is in excess of the assessed value of the project area in the 30th year. These three tiers of tax sharing are calculated independent of one another and continue from their inception through the life of the project area. Because the tax sharing amounts are net of the Housing Set -Aside Revenues, making these tax sharing payments should have no impact on the amount of tax increment revenue available to pay debt service on the Bonds. Subordination of Statutory Tax Sharing Payments Section 33607.5(e) of the Law as it existed prior to the dissolution of redevelopment and Section 34177.5(c) of the Law as amended by the dissolution legislation specifies a procedure whereby the Successor Agency may request subordination of the statutory tax sharing payments to payment of debt service on the Bonds by all of the Project Area's taxing entities. As part of this request, the Successor Agency must provide substantial evidence to the taxing entities that it will have sufficient funds to make the debt service payments on the Bonds as well as making the required statutory tax sharing payments. The taxing entities may respond and agree to the subordination request, they may do nothing and after 45 days be deemed to have agreed to the subordination or they may disapprove the subordination request. A taxing entity may disapprove a subordination request only if it believes based on substantial Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 18 evidence that the Agency's financial estimates are incorrect and that the Agency will not be able to make debt service and the tax sharing payments. It is the Agency's belief that sufficient evidence can be provided to warrant subordination of the tax sharing payments and that no later than 45 days from receipt of the notice by the taxing entities, the tax sharing payments will be subordinate to the payment of debt service on the Bonds. Subordination of the statutory tax sharing payments has been requested pursuant to Section 34177.5(c) and is expected to be achieved prior to the closing of the Bonds. Tax Sharing Payments to Castaic Lake Water Agency Section 33607.8 of the Law provides that notwithstanding the tax sharing requirements outlined above, the Agency may make payments to a taxing entity that is a state water supply contractor. These payments may not exceed the amounts that the taxing entity would have received from an override tax approved by voters prior to July 1, 1978 absent the existence of the Project Area. In addition, the payments made shall be made for the purpose of funding the payments of the state water supply contractor pursuant to its water supply contract with the Department of Water Resources. The section further stipulates that payments made to the water supply contractor were not to cause any reduction in the statutory tax sharing amounts that are required to be paid to the other taxing entities. The Castaic Lake Water Agency requested and the Agency agreed to make such payments. Because the Castaic Water Agency's revenue from this state water contract tax rate are no longer allocated to the RPTTF, no payments relative to these revenues are required or made. VIII. Transfers of Ownership Since January 1, 2016, the lien date for fiscal year 2016-17, within the Project Area, there were 21 transfers of real property ownership where the sales price can be confirmed. These transfers of ownership represent a combined increase of $6.63 million in assessed value that is expected to be added to the tax rolls for 2017-18. New development continues to occur within the Project Area but no additional value has been included in the projections of Tax Revenues for new construction. IX. Trended Taxable Value Growth In accordance with Proposition 13, growth in real property land and improvement values may reflect the year-to-year inflationary rate not to exceed 2% for any given year. A 2% growth rate is the maximum inflationary growth rate permitted by law and this rate of growth has been realized in all but ten years since 1981. The years in which less than 2% growth was realized included fiscal years 1983- 84 (1.0%), 1995-96 (1.19%), 1996-97 (1.11%), 1999-00 (1.85%), 2004-05 (1.867%), 2010-11 (- 0.237%), 2011-12 (0.753%), 2014-15 (0.454%), 2015-16 (1.998%) and 2016-17 (1.525%). We have assumed a resumption of 2% annual inflationary growth for 2017-18 and in all subsequent fiscal years. Future values will also be impacted by changes of ownership and new construction not reflected in our projections. In addition, the values of property previously reduced due to assessment appeals based on reduced market values could increase more than 2% when real estate values increase more than 2% (see Section W A above). Seismic activity and environmental conditions such as hazardous substances that are not anticipated in this Report might also impact taxable assessed values and Gross Revenues. HdL Coren & Cone makes no representation that taxable assessed values will actually grow at the rate projected. Successor Agency to the City of Santa Clarita Redevelopment Agency DRAFT Fiscal Consultant Report October 24, 2016, Page 19 Anticipated revenues could be adjusted as a result of unidentified assessment appeal refunds, other Assessor corrections discussed previously, or unanticipated increases or decreases in property tax values. Estimated valuations from developments included in this analysis are based upon our understanding of the general practices of the County Assessor and County Auditor -Controller's Office. General assessment practices are subject to policy changes, legislative changes, and the judgment of individual appraisers. While we believe our estimates to be reasonable, taxable values resulting from actual appraisals may vary from the amounts assumed in the projections. Santa Clarita 2016 Refunding FCR ds v2 City of Santa Clarita Successor Agency 2024.25 2025.26 625,702 638,216 Newhall Redevelopment Project 48 547 48 547 48547 674,249 Projection of Incremental Taxable Value & Tax Increment Revenue 699,528 410,143 422,657 435,422 (000's Omitted) 4,227 4,354 11 11 Table 1 4,113 4,238 4,365 Taxable Values (1) 2016-17 2017-18 2018.19 2019.20 2020-21 2021.22 2022.23 Real Property (2) 603,614 555,606 566,718 578,052 589,613 601,406 613,434 Personal Property (3) 48547 48 547 48547 48547 48547 48547 48547 Total Projected Value 652,162 604,153 615,265 626,599 638,160 649,953 661,981 Taxable Value over Base 264,106 388,055 340,047 351,159 362,493 374,054 385,846 397,875 Gross Tax Increment Revenue (4) 3,881 3,400 3,512 3,625 3,741 32858 33979 Unitary Tax Revenue 11 11 11 11 11 11 11 Gross Revenues 3,892 3,412 3,523 3,636 3,752 3,870 31990 LESS: SB 2557 Admin. Fee (5) 521 146 47 (48) L0 (51) (53) Tax Revenues 3,840 3,366 3,476 3,588 3,702 31818 31937 Subordinate Tax Sharing: All Taxing Entities Statutory Payments Tier 1 (778) (682) (705) (727) (750) (774) (798) All Taxing Entities Statutory Payments Tier: (62) 0 (0) (19) (39) (59) (79) All Taxing Entities Statutory Payments Tier ; 0 0 0 0 0 0 0 Net Tax Revenues 2168_4 2771 � 2i 2" 3 6Q (1) Taxable values as reported by Los Angeles County (2) Real property consists of land and improvements. Real property values for 2017-18 are increased for 21 transfers of ownership in the amount of $6.6 million and decreased for losses due to appeals by $65.4 million. Values are adjusted for inflation at 2.0% for 2017-18 and at 2% annually thereafter. (3) Personal property is held constant at 2016-17 level. (4) Projected Gross Tax Increment is based upon incremental values factored against the general levy tax rate of $1.00 per $100 of taxable value. Per ABx 1 26, all revenue derived from debt service override tax rates will be directed to the levying entities. (5) L.A. County Administrative fee is estimated at 1.33% of Gross Revenue. (6) All Taxing Entities receive their shares of 25% of total tax increment revenue net of Housing Set -Aside. In addition, after year 10, Taxing Entities receive 21 % of tax revenue on incremental value above the year 10 value net of Housing Set -Aside. After year 30, Taxing Entities also receive 14% of tax revenue on incremental value above the year 30 value net of Housing Set -Aside. Santa Clarita 2016 TARB - Projection v3 HdEy CORENLCONL 10/24/2016 2023-24 2024.25 2025.26 625,702 638,216 650,981 48 547 48 547 48547 674,249 686,764 699,528 410,143 422,657 435,422 4,101 4,227 4,354 11 11 11 4,113 4,238 4,365 1551 (56) (58) 4,058 4,182 41308 (823) (848) (873) (99) (120) (142) 0 0 0 33� 33� 3293 City of Santa Clarita Successor Agency Newhall Redevelopment Project PROJECTION OF INCREMENTAL VALUE AND TAX INCREMENT REVENUE (000s Omitted) Table 2 WE, fO0.tNLC6NL 10/24/16 Santa Clarita 2016 TARS - Projection v3 Taxable Value Total Over Base Gross Tax County Admin. Tax Statutory Tax Sharing Payments Net Tax Taxable Value 264,106 Revenue Charges Revenues Tier? Tier Tier Revenues 1 2016-17 652,162 388,055 3,892 (52) 3,840 (778) (62) 0 2,999 2 2017-18 604,153 340,047 3,412 (45) 3,366 (682) 0 0 2,684 3 2018-19 615,265 351,159 3,523 (47) 37476 (705) (0) 0 2,771 4 2019-20 626,599 362,493 3,636 (48) 3,588 (727) (19) 0 2,841 5 2020-21 638,160 374,054 3,752 (50) 37702 (750) (39) 0 2,913 6 2021-22 649,953 385,846 3,870 (51) 3,818 (774) (59) 0 2,986 7 2022-23 661,981 397,875 3,990 (53) 3,937 (798) (79) 0 3,060 8 2023-24 674,249 410,143 4,113 (55) 47058 (823) (99) 0 3,136 9 2024-25 686,764 422,657 4,238 (56) 4,182 (848) (120) 0 3,214 10 2025-26 699,528 435,422 4,365 (58) 4,308 (873) (142) 0 3,293 11 2026-27 712,547 448,441 4,496 (60) 4,436 (899) (164) 0 3,373 12 2027-28 725,827 461,721 4,628 (61) 4,567 (926) (186) 0 3,455 13 2028-29 739,373 475,267 4,764 (63) 4,701 (953) (209) 0 3,539 14 2029-30 753,190 489,083 4,902 (65) 4,837 (980) (232) 0 3,625 15 2030-31 767,282 503,176 5,043 (67) 4,976 (1,009) (256) (16) 3,696 16 2031-32 781,657 517,551 5,187 (69) 5,118 (1,037) (280) (32) 3,769 17 2032-33 796,319 532,213 5,333 (71) 5,263 (1,067) (305) (48) 3,843 18 2033-34 811,275 547,169 5,483 (73) 5,410 (1,097) (330) (65) 3,919 19 2034-35 826,529 562,423 5,635 (75) 5,561 (1,127) (355) (82) 3,996 20 2035-36 842,089 577,983 5,791 (77) 5,714 (1,158) (381) (100) 4,075 21 2036-37 857,960 593,854 5,950 (79) 5,871 (1,190) (408) (117) 4,155 22 2037-38 874,148 610,042 6,112 (81) 6,031 (1,222) (435) (135) 4,238 23 2038-39 890,660 626,554 6,277 (83) 6,194 (1,255) (463) (154) 4,321 24 2039-40 907,502 643,396 6,445 (85) 6,360 (1,289) (491) (173) 47407 25 2040-41 924,681 660,575 6,617 (88) 6,529 (1,323) (520) (192) 4,494 26 2041-42 942,204 678,098 6,792 (90) 6,702 (1,358) (550) (212) 4,582 27 2042-43 960,077 695,971 6,971 (92) 6,878 (1,394) (580) (232) 4,673 135,214 (1,792) 133,422 (27,043) (6,764) (1,558) 98,057 Santa Clarita 2016 TARS - Projection v3 City of Santa Clarity Successor Agency Newhall Redevelopment Project HISTORICAL ASSESSED VALUES (1) Table 3 Secured (2) Land Improvements Personal Property Exemptions Unsecured Land Improvements Personal Property Exemptions GRAND TOTAL COMEHdLEDUl WL 09116/16 Annual Incremental Value 348)13,0]8 3]5,684,5]1 386,02],]43 Base Year 350,063,850 Base Year 352,409,188 Base Year 362,826,958 Bass Year Change in Value from Prior Year 26,971,493 Base Year (15,821,204) (21,034,893) (1,755,321) 3,191,472 2007-08 2008-09f2009-10) 25,228,356 2009=1012010-11) 1.54% 2010-1120( 11121 2011.1220( 1213) 2012=131201344) -2.49% 2013-14 2014-15 2015-16 20151] 335,9]4,64] 349,186,180 120,464,527 348,100,511 120,345,046 343,043,150 119,975,436 319,869,014 119,213,240 322,803,745 119,173,032 327,858,620 364,185,541 314,440,384 326,414,902 205,086,767 214,401,053 125,963,531 21],393,2]8 125,]46,]22 214,695,279 125,552,918 213,093,295 125,450,197 214,696,716 125,431,865 224,158,005 235,296,919 248,411,443 261,321,551 2,346,546 2,243,311 3,392,830 2,064,527 3,392,830 1,]]5,246 3,392,830 1,850,279 3,392,830 1,933,165 3,392,830 1,935,296 1,834,594 1,800,473 1,805,385 (4,630,171) (4,839,522) (1,844,935) (3,]54,]19) (1,843,101) (3,]]9,814) (1,837,435) (3,196,475) (1,825,751) (7,016,751) (1,825,165) (8,905,512) (8,950,743) (7,252,816) (11,800,122) 538,]]],]89 560,991,022 24],9]5,953 563,803,597 247.641,497 555.733,861 24],003,]49 531,616,113 246,230,516 532,406,875 246,174,562 545,046,409 572.366,311 557,399,484 5]],]41,]16 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 28,204,5]] 42,030,315 6,557,624 39,771,667 6,557,624 34,102,838 6,557,624 21,240,432 6,557,624 34,353,633 6,557,624 29,032,248 29,680,032 25,613,074 27,679,090 48,299,529 39,049,251 11,376,128 48,437,084 11,376,128 46,361,945 11,376,128 62,307,206 11,376,128 46,665,422 11,376,128 42,521,245 40,942,980 43,953,114 46,]41,]22 211 ].3001 (3Q.So01 12.1 oat 7( 7.6o9t 2( .1001 8f 4.5001 fii 4.s9ot iz.l o9t 1i oz.9aot tz.l oat(e4sa9tI39.SOo1 Si�.�]6,20fi,806 81,045,O6fi 1],831,652 88,1, 1],931,65280,300283 E21 1 83,4fi3,138 1],931,652 80,81],055 11,991,652 ]1,4fi0,993 ]0,503,512 69,533,688 ]4,419,812 615.Ofi4.595 fi42.03fi.088 265,907,605 651.935.348 265.5]3.149 636.114.164 26 615.0]9.251 264,162,168 613.323.930 264,106,214 616.515.402 642,949,823 626.933.172 652J61,528 Annual Incremental Value 348)13,0]8 3]5,684,5]1 386,02],]43 370,540,995 350,063,850 349,161,762 352,409,188 378,843,609 362,826,958 388,055,314 Change in Value from Prior Year 26,971,493 9,899,260 (15,821,204) (21,034,893) (1,755,321) 3,191,472 26,434,421 (16,016,651) 25,228,356 % Change in Total Value 4.39% 1.54% -2.43% -3.31% -0.29% 0.52% 4.29% -2.49% 4.02% (1) Source: County of Los Angeles (2) Secured values include state assessed non -unitary utility property. Santa Cladta 2016 TARB- Projection v3 City of Santa Clarita Successor Agency Newhall Redevelopment Project TOP TEN TABLE PROPERTY OWNERS Fiscal Year 2016-17 Table 4 1. Time Wainer Cable 2. Saugus Station LLC 3. Casden Santa Clarita LLC (Pending APPeals On Pi 4. Lyons Properties Limited (Pending APPeals On Parcel 5. Telfair Corporation (Pending APPeals On Parcel 6. David Weiswasser Trust 7. 25805 San Fernando LLC 8. RFT Sprouts LLC et al 9. 23801 San Fernando Road Lani LLC 10. Peter and Barbara Coster at at (Pending APPeak On Parcel Secured Total Assessed Values: $577,741,716 Incremental Assessed Value: 331567154 SsinRa Ciente 2016 TARB - Pmjeelion v3 16.10% 28.06% Unsecured Assessed Value Parcels %of Prolct $43,041,370 Assessed Value Parcels Secured Value 0 0.00% $0 0 0.00% $0 0 0.00% $0 $18,260,394 6 3.16% 0 $16,904,000 20 2.93% 0.00% $10,276,022 1 1.78% $0 $8,841,991 2 1.53% 0 $8,247,025 2 1.43% $8,205,360 1 1.42% $7,854,588 3 1.36% $7,416,673 1 1.28% $7,038,158 3 1.22% Total Assessed Values: $577,741,716 Incremental Assessed Value: 331567154 SsinRa Ciente 2016 TARB - Pmjeelion v3 16.10% 28.06% Unsecured Assessed Value Parcels %of Projct Unsecured Value $43,041,370 3 57.84% $0 0 0.00% $0 0 0.00% $0 0 0.00% $0 0 0.00% $0 0 0.00% $0 0 0.00% $0 0 0.00% $0 0 0.00% $0 0 0.00% $43,041,370 3 $74,419,812 57.84% 56488160 76.20% Total Assessed Value %of Projct Taxable Value %of Praia Inc. Value $43,041,370 6.60% 11.09% $18,260,394 2.80% 4.71% $16,904,000 2.59% 4.36% $10,276,022 1.58% 2.65% $8,841,991 1.36% 2.28% $8,247,025 1.26% 2.13% $8,205,360 1.26% 2.11% $7,854,588 1.20% 2.02% $7,416,673 1.14% 1.91% $7,038,158 1.08% 1.81% $136,085,581 $652,161,528 20.87% 388055314 35.07% HdE, 10/24/2016 Property Uses Cable Television/Internet Facilities Industrial and Warehousing Buildings Vacant Industrial/Commercial Land Santa Clarita Medical Center- Offices Relail Strip Center (Newhall Ave & Carl Ct) Mulberry Mobile Home Park Plaza Clarita - Mixed Use Commercial Walnut Village Apartments Santa Clarita Convalescent Hospital Villa La Paz Apartments/Commercial Office Building City of Santa Clarita Successor Agency Newhall Redevelopment Project Transfers of Ownership/New Development Table 5 Real Property Value Transfers of Ownership after Jan. 1, 2016 Total Real Property Value Santa Clarita 2016 TARS - Projection v3 WE C60.lntC6eL 10/24/16 000's omitted SgFt/ Total Less Total Value Units Value Value Existing Added Start Complete 2016-17 2017-18 2018-19 2019-20 0 $0.00 $0 $0 $0 0 0 0 0 0 $0.00 $0 $0 $0 0 0 0 0 0 $0.00 $0 $0 $0 0 0 0 0 21 lumpsum $19,233,000 ($12,602,895) $6,630 0 6,630 0 0 $19,233,000 ($12,602,895) $6,630 F 0 6,630 0 0 Total Real Property Inc. Inflation Adj. @ 2% per year $0 $6,630 $0 $0 APPENDIX G SUPPLEMENTAL INFORMATION—THE CITY OF SANTA CLARITA The following information concerning the City of Santa Clarita (the "City') is included only for the purpose of supplying general information regarding the City. The City is not obligated in any manner to pay principal of or interest on the Bonds or to cure any delinquency or default on the Bonds. The Bonds are payable solely from the sources described in the Official Statement. The Project Area is located within the boundaries of the City. General Background The City is located in the Santa Clarita Valley (the "Valley"), which is comprised of the communities of Canyon Country, Newhall, Saugus, and Valencia, all located in Los Angeles County (the "County"). The following information specifically relates to the City and generally to the Santa Clarita Valley. The first discovery of gold in 1842 was the beginning of a transformation of the area of the City, where the once -ancient Alliklik Indians, wild horses, Spanish explorers and European colonists lived. After purchasing Rancho San Francisco (later known as Newhall Ranch) in 1875, Henry Mayo sold a right-of-way to the Southern Pacific Railroad for $1 and a town site known as Newhall for another $1. Not only did it become a rail center, but the first commercially producing oil well began operation in Pico Canyon in 1875, followed by the state's first oil refinery in Railroad Canyon. The City was officially incorporated on December 15, 1987, after a ballot measure was passed by the City's residents. The City is a general law city and operates under a Council -Manager form of government and provides, either directly or under contract with the County, a full range of municipal services including public safety, public works (including the sewer system), parks and recreation, community development, etc. Geography and Climate Santa Clarita Valley is located 35 miles northwest of Los Angeles and 40 miles east of the Pacific Ocean. It covers 150 square miles and forms an inverted triangle with the San Gabriel and Santa Susana mountain ranges, separating it from the San Fernando Valley and the Los Angeles Basin on the south, and the San Joaquin Valley, Mojave Desert and Angeles National Forest to the north. The Santa Clara River and its tributaries drain over 490,000 acres of mountains and canyons forming Santa Clarita Valley. The City of Santa Clarita covers approximately 64 square miles and is located 40 miles from Los Angeles International Airport, 25 miles from the Burbank Airport; and 50 to 60 miles from the ports of Los Angeles and Long Beach, respectively. The City is accessible via Highway 126, the Golden State and the Antelope Valley Freeways. Three Metrolink stations serve rail passengers from the San Fernando Valley and Downtown Los Angeles. In general, the climate in the City is sunny, warm and dry in the summer and semi -moist and mild in the winters. The annual rainfall of 15 to 18 inches occurs primarily between November and March. Municipal Government The City provides general government services either with its own employees or through contracts. The City has a Council Manager form of municipal government. The City Council appoints the City Manager who is responsible for the day-to-day administration of City business and the coordination of all departments. The City Council is composed of five members elected biannually at large to four-year staggered terms. The Mayor is selected by the City Council from among its members. Beginning in 2016, the City's General G-1 Municipal Election was consolidated with Los Angeles County General Election held on November 8, 2016. As of July 1, 2016, the City had a staff of 398.4 funded equivalent full time positions. The current members of the City Council, term expiration and their principal occupations are as follows: City Council Term Expires Robert C. Kellar, Mayor November 2016 Dante Acosta, Mayor Pro Tem November 2018 Marsha A. McLean, Councilmember November 2018 TimBen Boydston, Councilmember November 2016 Laurene F. Weste, Councilmember November 2018 Current City Management Staff includes the following: Occupation Retired Police Officer/Realtor Congressional District Representative Business Owner Executive Director Community Advocate Mr. Ken Striplin has been the City Manager for the City since January 1, 2013. He has worked for the City since 1995, serving in a leadership capacity in every City department during his tenure. Previously Mr. Striplin has served the City as Assistant City Manager, Assistant to the City Manager, Technology Services Manager, Management Analyst and Administrative Analyst. In addition, Mr. Striplin has served as Interim Director of two departments: Field Services and Planning and Economic Development. He holds Bachelor of Arts and Master of Public Administration degrees from California State University, Northridge, and a Doctor of Education in Organizational Leadership from Pepperdine University. Mr. Darren HernSndez, Deputy City Manager, leads the Department of Neighborhood Services. Darren joined the City of Santa Clarita in January 2004 as Director of Administrative Services and was named Deputy City Manager in July 2007. Previously Mr. Hernandez has served as the Director of Finance & City Treasurer of La Habra, California; Village Manager of Walden, New York; Assistant to the City Manager of Kalamazoo, Michigan; and, Executive Assistant to the Controller of the State of New York. He has a Bachelor of Arts degree from the State University of New York and studied public administration as a graduate student at the Maxwell School of Syracuse University. Mr. Frank Oviedo has been the Assistant City Manager since January 7, 2013. Mr. Oviedo brings over 15 years of experience in city government. Prior to joining the City, he was the Deputy City Manager for the City of Elk Grove from 2002-2009 and was the City Manager of Wildomar from 2009-2012. During Frank's career, he has worked in every city department in three cities, with a steady progression of management responsibilities in local government. Frank Oviedo earned a Bachelor's degree from California State University Fresno and a Master's degree in Public Administration from Arizona State University. Ms. Carmen Magana is the recently appointed Director of Administrative Services for the City. In this position she provides leadership to the Department of Administrative Services and serves as the Chief Financial Officer of the City and the Successor Agency. Ms. Magana began her career with the City in 1998 and prior to this position, she served as the Administrative Services Manager overseeing Finance and Technology Services. She is a member of the City's Leadership Team and serves as a member of the City's Budget Team. Ms. Magana received a Bachelor's degree from California State University, Northridge in Business Administration and Finance and a Master's degree in Public Administration, Public Sector Management and Leadership. Mr. Thomas Cole joined the City as Community Development Director in December 2012. In this position, he manages the City's Planning, Economic Development, Community Preservation and Redevelopment operations. Prior to joining the City, he served as Chief Operations Officer for the William S. Hart Union School District, and has held several local leadership roles, including Business Development/Project Management with Wimsatt Contracting Company; Vice President/Director of Construction at Highland Development Company; Director of Development at LNR Property; and Senior G-2 Project Manager with Newhall Land and Farming. Mr. Cole received a Bachelor's degree in Geography, with an emphasis in Urban Planning, from California State University, Fullerton. Municipal Services The City provides park and recreation services, transit services, trash collection, street maintenance, building inspection and planning services. As a "contract city," the City purchases certain public services through contracts with other agencies and private companies. Contracting for services enables the City to accomplish the essential administrative and operational functions of a municipality with a relatively small workforce and payroll, and a minimum of facilities and equipment. The primary example of the contract arrangement is the Santa Clarita Police Department, whose sworn and civilian personnel are provided by the Los Angeles County Sheriffs Department. Fire protection is provided by the Los Angeles County Fire Protection District. Other regularly contracted services include refuse and recycling collection, landscaping and public transit services. Population The following table shows the City's and County's population as of January 1, 2011 through January 1, 2016. CITY OF SANTA CLARITA AND LOS ANGELES COUNTY Population Year Los Angeles County City of Santa Clarita 2011 9,818,605 1765320 2012 9,884,632 177,445 2013 9,958,091 2043951 2014 10,041,797 209,130 2015 10,136,559 2125231 2016 10,241,335 2195611 Source: California State Department of Finance, as ofdanuary 1. Housing As of January 1, 2015, the California Department of Finance reported that there were 42,793 single family detached units in the City, 8,032 single family attached units, 17,946 multifamily housing units and 2,603 mobile home units. The vacancy rate is approximately 4.4%. In Mach 2016, the median price within the City of a single family home was $520,000 and of a condominium was $330,000. G-3 Construction Activity The following table shows the valuation of building permits issued in the City for the last five calendar years in which the data is available. CITY OF SANTA CLARITA Building Permits and Valuations Year Residential Permits Residential Value Non -Residential Value Total 2011 15370 $ 51,379,263 $13393909664 $18497699927 2012 1,645 6594115571 4456789839 11090909410 2013 25555 151,254,506 8195339565 232,7889071 2014 23733 149,9119340 5193299822 201,241,162 2015 25896 179,744,814 4792699711 227,014,525 Source. City of Santa Clarita Permit System Employment The following table summarizes the City's employment and unemployment rates for 2011 through 2015 calendar years. Source.: California Employment Development Department .E CITY OF SANTA CLARITA Civilian Labor Force, Employment and Unemployment Annual Averages 2011 2012 2013 20140 2015 Civilian Labor Force Employment 829300 82,800 85,200 88,400 89,700 Unemployment 6,800 6,000 5,500 7,200 5,900 Total $Q 1 () $$Q QQQ Qom( Q Unemployment Rate (a) 7.6% 6.7% 6.0% 7.6% 6.1% t'i The unemnlovment rate is calculated using unrounded data. Source.: California Employment Development Department .E Largest Employers Major non-governmental employers within the Santa Clarita Valley are as follows: SANTA CLARITA VALLEY Major Non -Governmental Employers Company Six Flags Magic Mountain Princess Cruises Henry Mayo Newhall Memorial Hospital Quest Diagnostics (formerly Specialty Labs) Boston Scientific The Master's College Woodward HRT (formerly H.R. Textron) Advanced Bionics California Institute of the Arts Walmart Product/Service Employees Amusement Park 35200 Travel 1,885 Hospital 15640 Medical R&D 850 Medical Device 780 Education 760 Aerospace 728 Medical Device 700 Education 690 Retail 624 Subtotal 11,857 Other 16,329 Total 28,186 Source: 2015 Santa Clarita Valley - Real Estate and Economic Outlook. Commercial Activity and Sales Tax The following tables show total taxable transactions and sales tax revenues within the City over the last five calendar years in which data is available. Year CITY OF SANTA CLARITA Taxable Transactions (Thousands of Dollars) Permits Taxable Transactions 2010 6,025 29403,176 2011 5,934 29601,240 2012 6,021 29764,693 2013 6,012 298969147 2014 6,232 3,004,553 Source.: State Board of Equalization. G-5 The following table shows a breakdown of the taxable sales within the City for 2014 calendar year (the latest calendar year in which information is available). CITY OF SANTA CLARITA Taxable Sales — 2014 Type of Business Permits Taxable Transactions Retail and Food Services Motor Vehicle and Parts Dealers 156 $ 592,624,000 Home Furnishings and Appliance Stores 244 10294749000 Bldg. Material and Garden Equip. & Supplies 94 1819882,000 Food and Beverage Stores 123 125,809,000 Gasoline Stations 46 329,482,000 Clothing and Clothing Accessories Stores 413 138,834,000 General Merchandise Stores 125 449,420,000 Food Services and Drinking Places 453 366,409,000 Other Retail Stores 2,444 188,264,000 Retail and Food Total 4,248 $2,475,198,000 All Other Outlets 1,764 529,355,000 Totals All Outlets 61232 $3,00495531000 Source: State Board of Equalization. G-6 Industry The City is part of the Los Angeles -Long Beach -Glendale Metropolitan Statistical Area ("MSA"), which is comprised of parts of Los Angeles County. LOS ANGELES -LONG BEACH-GLENDALE MSA Historical Civilian Labor Force Calendar Years 2011 through 2015 Annual Averages Wage and Salary Employment: (2) 2011 2012 2013 2014 2015 Agriculture 59600 5,400 59500 5,200 55000 Mining and Logging 4,100 4,300 49500 49300 39900 Construction 1059100 1099200 1165200 1199600 1265100 Manufacturing 366,900 367,400 3689200 3649100 3609800 Wholesale Trade 2059800 2119900 2185700 2229500 2275000 Retail Trade 3935000 4009900 405,600 4139000 4209500 Transportation, Warehousing, Utilities 1519800 1545500 157,500 1639400 1705400 Information 1929000 1919500 1969400 1989000 2025700 Finance and Insurance 1389500 1409200 138,300 1349500 1345300 Real Estate and Rental and Leasing 71,600 72,200 749700 765700 79,900 Professional and Business Services 5429500 5709100 593,200 5995100 600,300 Educational and Health Services 6775300 6999500 702,100 7209700 742,200 Leisure and Hospitality 3949700 4159800 440,500 4669600 488,100 Other Services 1379000 1419700 145,700 1509500 1515700 Federal Government 495000 485100 47,200 46,700 47,400 State Government 82,700 835100 83,600 855300 87,400 Local Government 4339800 4259600 4205500 424,200 4315600 Total all Industries 111 399519300 4,0419400 491189100 49194,200 49279,200 Totals may not add due to rounding. Source: State of California Employment Development Department. Income The U.S. Census Bureau American FactFinder reports that the median income of households in the City for 2014 is $83,178 compared to $61,489 for the nation. Eighty-five percent of the households received earnings and seventeen percent received retirement income other than Social Security, with over twenty-four percent of the households receiving Social Security. These income sources are not mutually exclusive, with some households receiving income from more than one source. As reported by The Neilsen Company (US) Inc. - Quick Market Insights, as of April 2016, the 2016 median household income for the County is $57,864 and for the City is $86,685. "Effective Buying Income" is defined as personal income less personal tax and nontax payments, a number often referred to as "disposable" or "after-tax" income. Personal income is the aggregate of wages and salaries, other labor -related income (such as employer contributions to private pension funds), proprietor's income, rental income (which includes imputed rental income of owner -occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments G-7 (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as "disposable personal income." As reported by The Neilsen Company (US) Inc. — Quick Market Insights, as of April 2016, (i) the total effective buying income for the County of Los Angeles is $231,719,110,000 and for the City is $5,395,572,500, and (ii) the median effective buying income for the County is $48,950 and for the City is $70,101. Education The City is served by 48 elementary schools, 6 middle schools, 7 high schools and numerous private and parochial schools. Three colleges are located in the Santa Clarita Valley, California Institute of the Arts, The Masters College and College of the Canyons. California State University — Northridge in the northern part of the San Fernando Valley is nearby and serves as an additional resource for higher-level education. Recreational Activities There are a number of recreational and historical facilities located in the Santa Clarita Valley. Among them are Six Flags Magic Mountain Amusement Park and Gene Autry's Melody Ranch. For water enthusiasts there are Castaic Lake, Lake Hughes, Lake Elizabeth, Lake Pim and Lake Pyramid. The Angeles National Forest, Placerita Canyon Nature Center, Saugus Train Station, Vasquez Rocks County Park and the City's community parks are also available for hiking and picnicking. William S. Hart Park features a magnificent Spanish colonial mansion museum. Frazier Park and Mountain High are within a 40 mile drive for ski enthusiasts. Also located in the City are the Canyon Theatre Guild, Disney Studios, Santa Clarita Repertory Theater, as well as the Friendly Valley, Valencia Country Club, Robinson's Ranch and Vista Valencia golf courses. Santa Clarita residents enjoy the City's distinctive trail system. There are three libraries located in the valley. me APPENDIX H SPECIMEN MUNICIPAL BOND INSURANCE POLICY 1:51 Stradling Yocca Carlson & Rauth Draft of 1114116 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA TAX ALLOCATION REFUNDING BONDS SERIES 2016 BOND PURCHASE CONTRACT November , 2016 Successor Agency to the Redevelopment Agency of the City of Santa Clarita 23920 Valencia Boulevard Santa Clarita, California 91355 Ladies and Gentlemen: Stifel, Nicolaus & Company, Incorporated (the "Representative"), as representative of itself and Hilltop Securities Inc. (collectively, the "Underwriters") offers to enter into this Bond Purchase Contract (this "Purchase Contract") with the Successor Agency to the Redevelopment Agency of the City of Santa Clarita (the "Agency"). This offer is made subject to the Agency's acceptance by execution of this Purchase Contract and delivery of the same to the Underwriters on or before 11:59 p.m., California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriters upon notice delivered to the Agency at any time prior to such acceptance. Upon the Agency's acceptance hereof, the Purchase Contract will be binding upon the Agency and the Underwriters. Capitalized terms that are used in this Purchase Contract and not otherwise defined have the respective meanings given to such terms in the Indenture (as such term is defined herein). Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations set forth in this Purchase Contract, the Underwriters agree to purchase from the Agency, and the Agency agrees to sell and deliver to the Underwriters, all (but not less than all) of the $ Successor Agency to the Redevelopment Agency of the City of Santa Clarita Tax Allocation Refunding Bonds, Series 2016 (the "Bonds") at a purchase price of $ (being an amount equal to the principal amount of the Bonds plus/less a net original issue premium/discount of $ and less an Underwriters' discount of $ ). [The Agency acknowledges that the Representative will at Closing (as such term is defined herein), on behalf of the Agency, wire a portion of the purchase price in the amounts of: (a) $ as the premium for the Policy (as such term is defined herein); and (b) $ , as the premium for the Reserve Policy (as such term is defined herein), directly to the Insurer (as such term is defined herein).] The obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds shall be conditioned on the sale and delivery of all of the Bonds by the Agency to the Underwriters at Closing. Section 2. Bond Terms; Authorizing Instruments. (a) The Bonds shall be dated their date of delivery and shall mature and bear interest as set forth on Exhibit A. The Bonds shall be as described in, and shall be issued and secured under, an Indenture of Trust (the "Indenture"), dated as of December 1, 2016, by and between the Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"). The Bonds are payable and subject to redemption as provided in the Indenture and as described in the Official Statement (as such term is defined herein). (b) The Bonds will be issued pursuant to Part 1 (commencing with Section 33000) and Part 1.85 of Division 24 (commencing with Section 34170) of the California Health and Safety Code and Article 11 (commencing with Section 53580) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (collectively, the "Law"). The Bonds are payable from and secured by the Agency's pledge of Pledged Tax Revenues under and as defined in the Indenture. (c) The net proceeds of the sale of the Bonds will be used: (i) to refund the Redevelopment Agency of the City of Santa Clarita Tax Allocation Bonds, Series 2008 (Newhall Redevelopment Project Area) (the "2008 Non -Housing Bonds"); (ii) to refund the Redevelopment Agency of the City of Santa Clarita Housing Set -Aside Tax Allocation Bonds, Series 2008 (the "2008 Housing Bonds," and together with the 2008 Non -Housing Bonds, the "2008 Bonds"); (iii) [to obtain a municipal bond insurance policy (the "Policy") issued by (the "Insurer") insuring the payment of principal of and interest on the Bonds; (iv) to obtain a municipal bond debt service reserve insurance policy (the "Reserve Policy") issued by the Insurer for deposit in the Reserve Fund (as such term is defined in the Indenture) for the Bonds]; and (v) to pay costs incurred in connection with the issuance of the Bonds. Section 3. Public Offering. The Underwriters agree to make an initial bona fide public offering of all of the Bonds, at not in excess of the initial public offering yields or prices set forth on Exhibit A. Following the initial public offering of the Bonds, the offering prices may be changed from time to time by the Underwriters. The Agency acknowledges and agrees that: (a) the purchase and sale of the Bonds pursuant to this Purchase Contract is an arm's-length commercial transaction between the Agency and the Underwriters, and the only obligations that the Underwriters have to the Agency with respect to the transaction contemplated hereby expressly are set forth in this Purchase Contract; (b) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriters are and have been acting solely as principals and are not acting as Municipal Advisors (as such term is defined in Section 15B of The Securities Exchange Act of 1934, as amended) to the Agency; (c) the Underwriters have not assumed an advisory or fiduciary responsibility in favor of the Agency with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriters have provided other services or is currently providing other services to the Agency on other matters); (d) the Underwriters have financial and other interests that may differ from and be adverse to those of the Agency; and (e) the Agency has consulted its own legal, financial, accounting, tax and other advisors to the extent that it has deemed appropriate. Section 4. Official Statement; Continuing Disclosure. (a) The Agency has delivered to the Underwriters the Preliminary Official Statement dated November 2016 (the "Preliminary Official Statement") and will deliver to the _, Underwriters the final Official Statement dated the date of this Purchase Contract (as amended and supplemented from time to time pursuant to Section 5(i) of this Purchase Contract, the "Official Statement') within seven business days. (b) The Agency authorizes the use of the Official Statement and the information contained therein by the Underwriters in connection with the public offering and the sale of the Bonds. The Agency consents to the use by the Underwriters prior to the date hereof of the Preliminary Official Statement in connection with the public offering of the Bonds. The Representative agrees that it will not send any confirmation requesting payment for the purchase of any Bonds unless the confirmation is accompanied by or preceded by the delivery of a copy of the Official Statement. The Underwriters agree: (i) to provide the Agency with final pricing information on the Bonds on a timely basis prior to the Closing; and (ii) to take any and all other actions necessary to comply with applicable rules of the Securities and Exchange Commission (the "SEC") and the Municipal Securities Rulemaking Board (the "MSRB") governing the offering, sale and delivery of the Bonds to ultimate purchasers. (c) In connection with the issuance of the Bonds, and in order to assist the Underwriters in complying with the provisions of SEC Rule 15c2-12 ("Rule 15c2-12"), the Agency will enter into a Continuing Disclosure Certificate (the "Continuing Disclosure Undertaking") dated the date of the Closing, under which the Agency will undertake to provide certain financial and operating data as required by Rule 15c2-12. The form of the Continuing Disclosure Undertaking is attached as an appendix to the Preliminary Official Statement. Section 5. Representations, Warranties and Covenants of the Agency. The Agency hereby represents, warrants and agrees with the Underwriters that: (a) The Governing Board (the "Board") of the Agency has taken official action by one or more resolutions (collectively, the "Agency Resolution") adopted by a majority of the members of the Board at regular meetings that were duly called, noticed and conducted, at which a quorum was present and acting throughout, authorizing the execution, delivery and due performance of: (i) the Indenture; (ii) the Continuing Disclosure Undertaking; (iii) the Irrevocable Refunding Instructions, dated the date of the Closing (the "Escrow Instructions"), by and between the Agency and The Bank of New York Mellon Trust Company, N.A., as escrow agent (the "Escrow Agent'), related to the 2008 Bonds; and (iv) this Purchase Contract (collectively, the "Agency Agreements") and the Official Statement, and the taking of any and all such action as may be required on the part of the Agency to carry out, give effect to and consummate the transactions that are contemplated hereby. (b) The Agency is a redevelopment successor agency that is duly organized and existing under the laws of the State of California (the "State") and has all necessary power and authority to adopt the Agency Resolution and to enter into and perform its duties under the Agency Agreements. (c) By all necessary official action, the Agency has: (i) duly authorized the preparation and delivery of the Preliminary Official Statement and the preparation, execution and delivery of the Official Statement; (ii) duly authorized and approved the execution and delivery of, and the performance of its obligations under, the Bonds and the Agency Agreements; and (iii) duly authorized the consummation by the Agency of all other transactions contemplated by the Agency Resolution, the Agency Agreements, the Preliminary Official Statement and the Official Statement. When executed and delivered, the Agency Agreements (assuming due authorization, execution and delivery by and enforceability against the other parties thereto) will be in full force and effect and each will constitute legal, valid and binding agreements or obligations of the Agency, enforceable in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally, the application of equitable principles, the exercise of judicial discretion and the limitations on legal remedies against public entities in the State. (d) At the time of the Agency's acceptance hereof and at all times subsequent thereto up to and including the time of the Closing, the information and statements in the Official Statement do not and will not contain any untrue statement of a material fact or omit to state a material fact that is 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 (except that no representation is made with respect to information relating to DTC (as such term is defined herein), DTC's book -entry system)[, the Policy, the Reserve Policy or the Insurer]). (e) As of the date hereof, except as described in the Preliminary Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body that is pending against, and notice of which has been served on and received by, the Agency, or, to the best knowledge of the Agency, threatened, wherein an unfavorable decision, ruling or finding would: (i) affect the creation, organization, existence or powers of the Agency, or the titles of its members or officers; (ii) in any way question or affect the validity or enforceability of the Agency Agreements, the Bonds or the exclusion of the interest on the Bonds from taxation; or (iii) in any way question or affect the Purchase Contract or the transactions contemplated by the Purchase Contract, the Official Statement, or any other agreement or instrument to which the Agency is a party relating to the Bonds. (f) There is no consent, approval, authorization or other order of, filing or registration with, or certification by, any regulatory authority that has jurisdiction over the Agency that is required for the execution and delivery of this Purchase Contract and the other Agency Agreements or the consummation by the Agency of the other transactions that are contemplated by the Official Statement or the Agency Agreements. (g) Any certificate that is signed by any official of the Agency who is authorized to do so shall be deemed a representation and warranty by the Agency to the Underwriters as to the statements made therein. (h) The Agency is not in default, and at no time has the Agency defaulted in any material respect, on any bond, note or other obligation for borrowed money or any agreement under which any such obligation is or was outstanding. (i) If any event occurs of which the Agency has knowledge between the date of this Purchase Contract and the date of the Closing that might or would cause the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact that is 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, the Agency will notify the Representative and if, in the opinion of the Representative, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Agency will cooperate with the Underwriters in causing the Official Statement to be amended or supplemented in a form and in a manner that is approved by the Representative. All expenses that are thereby incurred will be paid 0 by the Agency, and the Representative will file, or cause to be filed, the amended or supplemented Official Statement with the MSRB's Electronic Municipal Market Access database ("EMMA"). 0) The Agency will furnish such information, execute such instruments and take such other action in cooperation with the Underwriters as the Underwriters may reasonably request in order: (i) 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 Underwriters may designate; and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions. The Agency will not be required to execute a general or special consent to service of process or to qualify to do business in connection with any such qualification or determination in any jurisdiction. (k) The Agency is not in any material respect in breach of or default under: (i) any applicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either; (ii) any applicable judgment or decree; or (iii) any loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the Agency is a party, which breach or default has or may have an adverse effect on the ability of the Agency to perform its obligations under the Agency Agreements, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the adoption, execution and delivery of the Agency Agreements, if applicable, and compliance with the provisions on the Agency's part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the Agency is a party, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Agency or under the terms of any such law, regulation or instrument, except as may be provided by the Agency Agreements. (1) Except as set forth in the Official Statement under the caption "CONCLUDING INFORMATION Continuing Disclosure," the Agency has complied in all material respects with its continuing disclosure undertakings in the past five years. (m) The financial statements relating to the receipts, expenditures and cash balances of the Agency as of June 30, 201 [5] attached as an appendix to the Official Statement fairly represent the receipts, expenditures and cash balances of the Agency as of such date. Except as disclosed in the Official Statement or otherwise disclosed in writing to the Representative, there has not been any materially adverse change in the financial condition of the Agency or in its operations since June 30, 201[5] and there has been no occurrence, circumstance or combination thereof that is reasonably expected to result in any such materially adverse change. (n) The Agency will refrain from taking any action, or permitting any action to be taken, with regard to which the Agency may exercise control, that results in the loss of the tax-exempt status of the interest on the Bonds. Section 6. The Closing. 5 (a) At 8:00 A.M., California time, on December _, 2016, or on such earlier or later time or date as may be agreed upon by the Representative and the Agency (the "Closing"), the Agency shall deliver, or cause to be delivered, to the Trustee the Bonds in definitive form, registered in the name of Cede & Co., as the nominee of The Depository Trust Company, New York, New York ("DTC") (so that the Bonds may be authenticated by the Trustee and credited to the account that is specified by the Representative under DTC's FAST procedures). Prior to the Closing, the Agency shall deliver, at the offices of Norton Rose Fulbright LLP ("Bond Counsel") in Los Angeles, California, or at such other place as is mutually agreed upon by the Representative and the Agency, the other documents that are described in this Purchase Contract. On the date of the Closing, the Underwriters shall pay the purchase price of the Bonds as set forth in Section 1 of this Purchase Contract in immediately available funds to the order of the Trustee. (b) The Bonds shall be issued in fully registered form and shall be prepared and delivered as one Bond for each maturity registered in the name of a nominee of DTC. It is anticipated that CUSIP identification numbers will be inserted on the Bonds, but neither the failure to provide such numbers nor any error with respect thereto shall constitute a cause for failure or refusal by the Underwriters to accept delivery of the Bonds in accordance with the terms of this Purchase Contract. Section 7. Conditions to Underwriters' Obligations. The Underwriters have entered into this Purchase Contract in reliance upon the representations and warranties of the Agency contained herein and to be contained in the documents and instruments to be delivered on the date of the Closing, and upon the performance by the Agency of its obligations to be performed hereunder and under such documents and instruments to be delivered at or prior to the date of the Closing. The Underwriters' obligations under this Purchase Contract are and shall also be subject to the following conditions: (a) The representations and warranties of the Agency that are contained in this Purchase Contract shall be true and correct in all material respects on the date of this Purchase Contract and on and as of the date of the Closing as if made on the date of the Closing. (b) As of the date of the Closing, the Official Statement shall not have been amended, modified or supplemented, except in any case as may have been agreed to by the Representative. (c) (i) As of the date of the Closing, the Agency Resolution and the Agency Agreements shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to by the Agency and the Representative; and (ii) the Agency shall perform or shall have performed all of its obligations that are required under or specified in the Agency Resolution and the Agency Agreements to be performed at or prior to the date of the Closing. (d) As of the date of the Closing, all necessary official action of the Agency relating to the Agency Agreements, the Agency Resolution and the Official Statement shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect. (e) Subsequent to the date of this Purchase Contract, up to and including the date of the Closing, there shall not have occurred any change in the financial affairs of the Agency, as described in the Official Statement, which in the reasonable professional judgment of the Representative materially impairs the investment quality of the Bonds. 0 (f) As of or prior to the date of the Closing, the Underwriters shall have received each of the following documents: (A) Certified copies of the Agency Resolution. (B) Duly executed copies of the Agency Agreements. (C) The Preliminary Official Statement and the Official Statement, with the Official Statement duly executed on behalf of the Agency. (D) An approving opinion of Bond Counsel, dated the date of the Closing, as to the validity of the Bonds and the exclusion of interest on the Bonds from federal and State income taxation, addressed to the Agency, substantially in the form attached as an appendix to the Official Statement, and a reliance letter with respect thereto addressed to the Underwriters. (E) A supplemental opinion or opinions of Bond Counsel, dated the date of the Closing, addressed to the Underwriters, to the effect that: (1) The Purchase Contract has been duly executed and delivered by the Agency and (assuming due authorization, execution and delivery by and enforceability against the Underwriters) is valid and binding upon the Agency, subject to laws relating to bankruptcy, insolvency, reorganization or creditors' rights generally and to the application of equitable principles; (2) The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; (3) The statements contained in the Official Statement on the cover and under the captions "INTRODUCTORY STATEMENT," "REFUNDING PLAN," "THE BONDS" (excluding therefrom the statements pertaining to DTC), "SECURITY FOR THE BONDS" and "TAX MATTERS," and in Appendices A and B. excluding any material that may be treated as included under such captions by cross-reference, insofar as such statements expressly summarize certain provisions of the Bonds, the Agency Agreements and the form and content of Bond Counsel's final approving opinion, are accurate in all material respects; and (4) The 2008 Bonds have been defeased in accordance with the provisions of the indenture pursuant to which they were issued. (F) An opinion of the Agency's General Counsel, dated the date of the Closing, addressed to the Agency and the Underwriters, substantially in the form attached hereto as Exhibit D. (G) An executed Rule 15c2-12 certificate of the Agency, dated the date of the Preliminary Official Statement, substantially in the form attached hereto as Exhibit B. (H) An executed closing certificate of the Agency, dated the date of the Closing, substantially in the form attached hereto as Exhibit C. (I) The opinion of counsel to the Trustee, addressed to the Agency and the Underwriters, substantially to the effect that: (1) The Trustee is a national banking association that is duly organized, validly existing and in good standing under the laws of the United States of America, having full powers and authority and being qualified to enter into, accept and administer the trust created under the Indenture and to enter into the Indenture; and (2) The Indenture has been duly authorized, executed and delivered by the Trustee, and, assuming due authorization, execution and delivery by the Agency, the Indenture constitutes the legal, valid and binding agreements of the Trustee, enforceable in accordance with its terms, subject to laws relating in bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and the application of equitable principles if equitable remedies are sought. (7) The opinion or opinions of counsel to the Escrow Agent, addressed to the Agency and the Underwriters, substantially to the effect that: (1) The Escrow Agent is a national banking association that is duly organized, validly existing and in good standing under the laws of the United States of America, having full powers and authority and being qualified to enter into, accept and administer the trust created under the Escrow Instructions and to enter into the Escrow Instructions; and (2) The Escrow Instructions have been duly authorized, executed and delivered by the Escrow Agent and, assuming due authorization, execution and delivery by the Agency, the Escrow Instructions constitute the legal, valid and binding agreements of the Escrow Agent, enforceable in accordance with their respective terms, subject to laws relating in bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and the application of equitable principles if equitable remedies are sought. (K) A certificate, dated the date of the Closing, in form and substance acceptable to the Underwriters, of an authorized officer of officers of the Trustee to the effect that the Trustee is duly authorized to enter into the Indenture, has accepted the duties imposed by the Indenture and is authorized to carry out such duties, and that the Trustee has duly authenticated the Bonds. (L) A certificate or certificates, dated the date of the Closing, in form and substance acceptable to the Underwriters, of an authorized officer of officers of the Escrow Agent to the effect that the Escrow Agent is duly authorized to enter into the Escrow Instructions, has accepted the respective duties imposed by the Escrow Instructions and is authorized to carry out such duties. (M) Evidence of required filings with the California Debt and Investment Advisory Commission. (N) A copy of the executed Blanket Issuer Letter of Representations by and between the Agency and DTC relating to the book -entry system. (0) An executed verification report relating to the 2008 Bonds, among other matters. (P) Evidence that the ratings that have been assigned to the Bonds as of the date of the Closing are as set forth in the Official Statement. (Q) A certified copy of the general resolution of the Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee, which resolution authorizes the execution and delivery of the Indenture and the authentication and delivery of the Bonds by the Trustee. (R) A certified copy of the general resolution of the Escrow Agent authorizing the execution and delivery of certain documents by certain officers of the Escrow Agent, which resolution authorizes the execution and delivery of the Escrow Instructions. (S) An opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, counsel to the Underwriters, addressed to the Underwriters and in form and substance satisfactory to the Underwriters. (T) A report of Lumesis as to compliance by the Agency and related entities with their respective continuing disclosure undertakings. (U) A Tax Certificate with respect to maintaining the tax-exempt status of the Bonds, duly executed by the Agency, together with Form 8038-G, duly executed by the Agency. (V) A letter of Norton Rose Fulbright LLP, as Disclosure Counsel, to the effect that, based upon an examination that they have made, and without having undertaken to determine independently or assuming any responsibility for the accuracy or completeness or fairness of the statements contained in the Official Statement, as a matter of fact and not opinion, such counsel advises that, in its capacity as Disclosure Counsel, no facts came to the attention of the attorneys in such firm rendering legal services in connection with such representation that caused such counsel to believe that the Official Statement as of its date and as of the Closing (except for: (1) the expressions of opinion, the assumptions, the projections, the financial statements, or other financial, numerical, economic, demographic or statistical data contained in the Official Statement; (2) any CUSIP numbers or information relating thereto; (3) any information with respect to DTC and DTC's book - entry system; [and (4) any information with respect to the Policy, the Reserve Policy and the Insurer]) contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (W) [Evidence satisfactory to the Underwriters of the issuance of the Policy and the Reserve Policy by the Insurer. (X) Evidence satisfactory to the Underwriters that the Trustee shall have received the Reserve Policy from the Insurer, which Reserve Policy constitutes a Qualified Reserve Account Credit Instrument under and as defined in the Indenture. (Y) An opinion of counsel to the Insurer, in form and substance satisfactory to the Underwriters and Bond Counsel, with respect to, among other matters, the Policy and the Reserve Policy, and disclosures relating thereto and to the Insurer in the Official Statement. (Z) A certificate of the Insurer, in form and substance satisfactory to the Underwriters and Bond Counsel, with respect to, among other matters, the Policy and the Reserve Policy.] (AA) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriters or Bond Counsel may reasonably request to evidence compliance by the Agency with legal requirements, the truth and accuracy, as of the date of the Closing, of the representations of the Agency contained herein and of the Official Statement and the due performance or satisfaction by the Agency at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Agency. All of the opinions, letters, certificates, instruments and other documents that are mentioned in this Purchase Contract shall be deemed to be in compliance with the provisions of this Purchase Contract if, but only if, they are in form and substance satisfactory to the Underwriters. If the Agency is unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds as set forth in this Purchase Contract, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriters nor the Agency shall be under any further obligations hereunder, except that the respective obligations of the Agency and the Underwriters that are set forth in Section 12 of this Purchase Contract shall continue in full force and effect. Section 8. Conditions to Agency's Obligations. The performance by the Agency of its obligations under this Purchase Contract is conditioned upon: (i) the performance by the Underwriters of their obligations hereunder; and (ii) receipt by the Agency of opinions addressed to the Agency, receipt by the Underwriters of opinions addressed to the Underwriters and the delivery of certificates on the date of the Closing by persons and entities other than the Agency. Section 9. Termination Events. The Underwriters shall have the right to terminate the Underwriters' obligations under this Purchase Contract to purchase, accept delivery of and pay for the Bonds by notifying the Agency of its election to do so if, after the execution hereof and prior to the Closing, any of the following events occurs: (a) the marketability of the Bonds or the market price thereof, in the reasonable opinion of the Representative, has been materially and adversely affected by any decision that is issued by a court of the United States (including the United States Tax Court) or of the State, by any ruling or regulation (final, temporary or proposed) that is issued by or on behalf of the Department of the Treasury of the United States, the Internal Revenue Service, or other governmental agency of the United States, or any governmental agency of the State, or by a tentative decision or announcement by any member of the House Ways and Means Committee, the Senate Finance Committee, or the Conference Committee with respect to contemplated legislation or by legislation enacted by, pending in, or favorably reported to either the House of Representatives or either House of the Legislature of the State, or formally proposed to the Congress of the United States by the President of the United States or to the Legislature of the State by the Governor of the State in an executive communication, affecting the tax status of the Agency or the City of Santa Clarita, their property or income, their debt or contractual obligations (including the Bonds) or the interest thereon or any tax exemption granted or authorized by the Internal Revenue Code of 1986, as amended; (b) the United States becomes engaged in hostilities that result in a declaration of war or a national emergency, or any other outbreak of hostilities occurs, or a local, national or international calamity or crisis occurs, financial or otherwise, the effect of such outbreak, calamity or crisis being such as, in the reasonable opinion of the Representative, would affect materially and adversely the ability of the Underwriters to market the Bonds; 10 (c) there occurs a general suspension of trading on the New York Stock Exchange or the declaration of a general banking moratorium by the United States, New York or State authorities; (d) a stop order, ruling, regulation or official statement by, or on behalf of, the SEC is issued or made to the effect that the issuance, offering or sale of the Bonds or obligations similar to the Bonds is or would be in violation of any provision of the Securities Act of 1933, as then in effect, the Securities Exchange Act of 1934, as then in effect, or the Trust Indenture Act of 1939, as then in effect; (e) legislation is enacted by the House of Representatives or the Senate of the Congress of the United States of America, a decision by a court of the United States of America is rendered or a ruling or regulation by or on behalf of the SEC or other governmental agency having jurisdiction of the subject matter is made or proposed to the effect that the Bonds are not exempt from registration, qualification or other similar requirements of the Securities Act of 1933, as then in effect, or of the Trust Indenture Act of 1939, as then in effect; (f) in the reasonable judgment of the Representative, the market price of the Bonds, or the market price of obligations of the general character of the Bonds, might be materially and adversely affected because additional material restrictions that are not in force as of the date hereof are imposed upon trading in securities generally by any governmental authority or by any national securities exchange; (g) the Office of the Comptroller of the Currency, The New York Stock Exchange, or other national securities exchange, or any governmental authority, imposes, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increases materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, or financial responsibility requirements of the Underwriters; (h) a general banking moratorium is established by federal, New York or State authorities; (i) any legislation, ordinance, rule or regulation is introduced in or enacted by any governmental body, department or agency in the State or a decision of a court of competent jurisdiction within the State is rendered, which, in the reasonable opinion of the Representative, after consultation with the Agency, materially adversely affects the market price of the Bonds; 0) any federal or State court, authority or regulatory body takes action materially and adversely affecting the collection of revenues that are pledged under the Indenture; (k) any rating of the Bonds or the Insurer is downgraded, suspended, withdrawn or placed on credit watch or similar status by a national rating service, which, in the reasonable opinion of the Representative, materially adversely affects the marketability or market price of the Bonds; (1) an event occurs which in the reasonable opinion of the Representative requires a supplement or amendment to the Official Statement and: (i) the Agency refuses to prepare and furnish such supplement or amendment; or (ii) in the reasonable judgment of the Representative, 11 the occurrence of such event materially and adversely affects the marketability of the Bonds or renders the enforcement of the sale contracts of the Bonds impracticable; (m) an order, decree or injunction that is issued by any court of competent jurisdiction, or order, ruling, regulation (final, temporary or proposed), official statement or other form of notice or communication that is issued or made by or on behalf of the SEC, or any other governmental authority having jurisdiction of the subject matter, to the effect that: (i) obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under the Trust Indenture Act of 1939, as amended; or (ii) the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying obligations, as contemplated hereby or by the Official Statement, is or would be in violation of the federal securities laws as amended and then in effect; (n) additional material restrictions that are not in force as of the date hereof shall have been imposed upon trading in securities generally by any domestic governmental authority or by any domestic national securities exchange, which are material to the marketability of the Bonds; or (o) the commencement of any action, suit or proceeding described in Section 5(e). Section 10. Changes in Official Statement. After the Closing, the Agency will not adopt any amendment of or supplement to the Official Statement to which the Underwriters shall reasonably object in writing. Within 90 days after the Closing or within 25 days following the "end of the underwriting period" (as such term is defined below), whichever occurs first, if any event relating to or affecting the Bonds, the Trustee or the Agency occurs as a result of which it is necessary, in the opinion of the Representative, to amend or supplement the Official Statement in order to make the Official Statement not misleading in any material respect in the light of the circumstances existing at the time that it is delivered to a purchaser, the Agency will forthwith prepare and furnish to the Underwriters an amendment or supplement that will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time that the Official Statement is delivered to a purchaser, not misleading. The Agency will cooperate with the Underwriters in the filing by the Underwriters of such amendment or supplement to the Official Statement with the MSRB. As used herein, the term "end of the underwriting period" means the later of such time as: (i) the Agency delivers the Bonds to the Underwriters; or (ii) the Underwriters do not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Notwithstanding the foregoing, unless the Representative gives notice to the contrary, the "end of the underwriting period" will be the date of the Closing. Any notice that is delivered pursuant to this provision will be written notice delivered to the Agency at or prior to the date of the Closing and will specify a date (other than the date of the Closing) to be deemed the "end of the underwriting period." Section 11. Payment of Expenses. (a) The Underwriters shall be under no obligation to pay, and the Agency shall pay the following expenses incident to the performance of the Agency's obligations hereunder: 12 (i) the fees and disbursements of Bond Counsel; (ii) the cost of printing and delivering the Bonds, the Preliminary Official Statement and the Official Statement (and any amendment or supplement that is prepared pursuant to Section 10 of this Purchase Contract); (iii) the fees and disbursements of accountants, advisors and any other experts or consultants retained by the Agency, including the Agency's general counsel; and (iv) any other expenses and costs of the Agency that are incident to the performance of its obligations in connection with the authorization, issuance and sale of the Bonds, including out-of-pocket expenses and regulatory expenses, reimbursement to the Underwriters for any meals and travel for Agency employees or officers that were paid for by the Underwriters, costs relating to the issuance of the Policy and the Reserve Policy and any other expenses agreed to by the parties. (b) The Underwriters shall pay all expenses incurred by it in connection with the public offering and distribution of the Bonds including, but not limited to: (i) all advertising expenses in connection with the offering of the Bonds; and (ii) all out-of-pocket disbursements and expenses incurred by the Underwriters in connection with the offering and distribution of the Bonds (including, without limitation, the fees and expenses of its counsel and MSRB, CUSIP Bureau, California Debt and Investment Advisory Commission and California Public Securities Association fees, if any), except as provided in clause (a) above or as otherwise agreed to by the Underwriters and the Agency. Section 12. Notices. Any notice or other communication to be given to the Agency under this Purchase Contract may be given by delivering the same in writing to the Agency at the address that is set forth on the first page of this Purchase Contract, and any notice or other communication to be given to the Underwriters under this Purchase Contract may be given by delivering the same in writing to: Stifel, Nicolaus & Company, Incorporated One Montgomery Street, 35th Floor San Francisco, California 94104 Attention: Ralph Holmes Section 13. Survival of Representations, Warranties, Agreements. All of the Agency's representations, warranties and agreements that are contained in this Purchase Contract shall remain operative and in full force and effect regardless of. (a) any investigations made by or on behalf of the Underwriters; or (b) delivery of and payment for the Bonds pursuant to this Purchase Contract. The agreements contained in this Section and in Section 11 shall survive the termination of this Purchase Contract. Section 14. Benefit; No Assignment. This Purchase Contract is made solely for the benefit of the Agency and the Underwriters (including their successors and assigns), and no other person shall acquire or have any right hereunder or by virtue hereof. The rights and obligations 13 created by this Purchase Contract are not subject to assignment by the Underwriters or the Agency without the prior written consent of the other parties hereto. Section 15. Severability. In the event that any provision of this Purchase Contract is held to be invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this Purchase Contract. Section 16. Counterparts. This Purchase Contract may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute the Purchase Contract by signing any such counterpart. Section 17. Governing Law. This Purchase Contract shall be governed by the laws of the State. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 14 Section 18. Effectiveness. This Purchase Contract shall become effective upon the execution of the acceptance hereof by an authorized officer of the Agency, and shall be valid and enforceable as of the time of such acceptance. Very truly yours, STIFEL, NICOLAUS & COMPANY, INCORPORATED By: Title: Accepted: SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA Title: Executive Director Authorized Officer Time of Execution: California Time 15 EXHIBIT A SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA TAX ALLOCATION REFUNDING BONDS SERIES 2016 MATURITY SCHEDULE Principal Payment Date (October 1) Principal Coupon Yield * Term Bond. (c) Priced to first optional redemption date of 1, 20_ at par. A-1 Price EXHIBIT B SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA TAX ALLOCATION REFUNDING BONDS SERIES 2016 RULE 15c2-12 CERTIFICATE The undersigned hereby certifies and represents that the undersigned is the duly appointed and acting representative of the Successor Agency to the Redevelopment Agency of the City of Santa Clarita (the "Agency"), and as such is duly authorized to execute and deliver this Certificate on behalf of the Agency, and further hereby certifies and reconfirms on behalf of the Agency as follows: (1) This Certificate is delivered in connection with the offering and sale of the above captioned bonds (the "Bonds") in order to enable the underwriters of the Bonds to comply with Securities and Exchange Commission Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (the "Rule"). (2) In connection with the offering and sale of the Bonds, there has been prepared a Preliminary Official Statement, setting forth information concerning the Bonds and the Agency (the "Preliminary Oficial Statement'). (3) As used herein, "Permitted Omissions" means the offering price(s), interest rate(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters, all with respect to the Bonds. (4) The Preliminary Official Statement is, except for the Permitted Omissions, deemed final within the meaning of the Rule, and the information therein is accurate and complete except for the Permitted Omissions. Dated: November , 2016 * Preliminary; subject to change. SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA By: Executive Director B-1 EXHIBIT C SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA TAX ALLOCATION REFUNDING BONDS SERIES 2016 CLOSING CERTIFICATE OF THE AGENCY The undersigned hereby certifies and represents that the undersigned is the duly appointed and acting representative of the Successor Agency to the Redevelopment Agency of the City of Santa Clarita (the "Agency"), and is duly authorized to execute and deliver this Certificate and further hereby certifies and reconfirms on behalf of the Agency as follows: (i) The representations, warranties and covenants of the Agency that are contained in the Bond Purchase Contract, dated November _, 2016 (the "Purchase Contract"), by and between the Agency and Stifel, Nicolaus & Company, Incorporated, as representative of the underwriters, are true and correct and in all material respects on and as of the date of the Closing, with the same effect as if made on the date of the Closing. (ii) The Agency Resolution is in full force and effect at the date of the Closing and has not been amended, modified or supplemented, except as agreed to by the Agency and the Underwriters. (iii) The Agency has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied on or prior to the date of the Closing. (iv) The statements and descriptions in the Official Statement that pertain to the Agency do not contain any untrue or misleading statement of a material fact and do not omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading. Capitalized terms used but not defined herein have the meanings given to such terms in the Purchase Contract. Dated: December , 2016 SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA By: Executive Director C-1 EXHIBIT D December , 2016 Successor Agency to the Redevelopment Agency of the City of Santa Clarita 23920 Valencia Boulevard Santa Clarita, California 91355 Stifel, Nicolaus & Company, Incorporated One Montgomery Street, 35th Floor San Francisco, California 94104 Opinion of General Counsel with reference to SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARITA TAX ALLOCATION REFUNDING BONDS SERIES 2016 Ladies and Gentlemen: In my capacity as the General Counsel to the Successor Agency to the Redevelopment Agency of the City of Santa Clarita (the "Agency"), in connection with the issuance by the Agency of the above -referenced bonds (the "Bonds"), I have examined such documents, certificates and records as I have deemed relevant and necessary as the basis for the opinion set forth herein. Capitalized terms that are used and not otherwise defined herein have the same meanings as assigned to them in the Bond Purchase Contract, dated November _, 2016 (the "Purchase Contract"), by and between Stifel, Nicolaus & Company, Incorporated, as representative of the underwriters, and the Agency. Relying on my examination described above and pertinent law and subject to the limitations and qualifications set forth hereinafter, I am of the following opinion: I. The Agency is duly organized and existing under the laws of the State of California, and has all necessary power and authority to adopt the Agency Resolution and to enter into and perform its duties under the Agency Agreements. 2. Resolution Nos. 16-03 and of the Agency (collectively, the "Agency Resolution") have been duly adopted at a meeting of the Board of Directors of the Agency that was duly called and held on September 13, 2016 and November 22, 2016 pursuant to law, with all required public notice and at which a quorum was present and acting throughout. The Agency Resolution is in full force and effect and has not been amended or repealed. 3. The Agency has duly authorized, executed and delivered the Agency Agreements. Assuming due authorization, execution and delivery by the other parties thereto, as necessary, the Agency Agreements constitute legal, valid and binding agreements of the Agency enforceable against the Agency in accordance with their terms, except as the enforceability thereof may be D-1 limited by applicable bankruptcy, insolvency, debt adjustment, fraudulent conveyance or transfer, moratorium, reorganization or other laws affecting the enforcement of creditors' rights generally and equitable remedies if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and limitations on remedies against public agencies. 4. Except as disclosed in the Official Statement, there is no action, suit or proceeding before or by any court, public board or body pending (with service of process having been accomplished on the Agency) or, to the best of my knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the Agency or the titles of its officers to their respective offices; (b) in any way question or affect the validity or enforceability of the Agency Agreements or the Bonds; (c) render illegal, invalid or unenforceable the Agency Agreements or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds to which the Agency is a party; or (d) have a material adverse effect on the ability of the Agency to make payments of principal of and interest on the Bonds when due. 5. The execution and delivery of the Agency Agreements and compliance with the provisions of each thereof will not 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 or any department, division, agency or instrumentality of either thereof, any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, trust agreement, contract, agreement or other instrument to which the Agency is a party or is otherwise subject or bound in a manner that would materially adversely affect the Agency's performance under the Agency Agreements. The opinion is based on such examination of the laws of the State of California as I have deemed relevant for the purposes of this opinion. I have not considered the effect, if any, of the laws of any other jurisdiction upon matters covered by this opinion. I have assumed the genuineness of all documents and signatures, presented to me. I have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in such documents. I express no opinion as to the status of the Bonds, the interest thereon or the Agency Agreements under any federal securities laws or any state securities or "Blue Sky" law or any federal, state or local tax law. Without limiting any of the foregoing, I express no opinion as to any matter other than as expressly set forth above. I am furnishing this opinion as General Counsel to the Agency. Except for the Agency, no attorney-client relationship has existed or exists between me and the addressees hereof in connection with the Bonds or by virtue of this opinion. This opinion is rendered solely in connection with the financing described herein, and may not be relied upon by you for any other purpose. I disclaim any obligation to update this opinion. This opinion shall not extend to, and may not be used, quoted, referred to, or relied upon by any other person, firm, corporation or other entity without my prior written consent. Respectfully submitted, D-2