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7.B. - Page 20 Attachment C <br /> significant events and key credit information. The continuing disclosure agreement <br /> requires the City to annually collect and disseminate to bond investors via an on-line, <br /> electronic filing system, known as the Electronic Municipal Market Access system, or <br /> "EMMA" (http://emma.msrb.org/), maintained by the Municipal Securities Rulemaking <br /> Board (MSRB), information regarding refunding bonds outstanding and fund balances, <br /> assessed valuation of parcels securing the refunding bonds value-to-lien ratios, special <br /> tax collections, delinquencies and delinquency rates and information regarding <br /> delinquent parcels, identity of any delinquent taxpayer representing more than 5% of <br /> levy and value-to-lien ratios of applicable properties, the status of foreclosure <br /> proceedings for any parcels within the CFD on which special taxes are levied, if any, <br /> and a summary of results of any foreclosure sales, if available, City audited financial <br /> statements, and the occurrence of certain significant events (all of which are listed in the <br /> agreement) relating to the security provided to bond investors. <br /> Official Statement — This is the City's primary disclosure document for the refunding <br /> bonds. It discloses to investors all material information relating to the making of an <br /> informed decision to invest in the refunding bonds. It includes such information as the <br /> authority for the issuance of the refunding bonds, the application of bond proceeds, the <br /> nature and value of the security for the repayment of the bonds, bond owner's risks in <br /> purchasing the bonds, a description of the real estate project on the land securing the <br /> bonds and its location, information regarding property values and value to lien ratios, <br /> the terms of the bonds and the rights of the owners of the bonds, the procedure for <br /> taxing property securing the bonds, a complete copy of the special tax rate and method <br /> of apportionment, and other important information. The preliminary official statement is <br /> used as a marketing document and is sent to potential investors prior to the bond sale. <br /> After the bond sale all the blanks (usually relating to the final principal amount of bonds <br /> sold, the application of bond proceeds, the amount of the underwriter's discount, final <br /> interest rates and reoffering yields or prices of the bonds, and the amount of debt <br /> service on the bonds) are filled in and a final official statement is delivered to each <br /> purchaser of the bonds. The Official Statement is filed using the EMMA electronic filing <br /> system and is thereby available to the public. <br /> The Securities and Exchange Commission (the "SEC") has issued guidance as to the <br /> duties of the City Council with respect to its approval of a Preliminary Official Statement. <br /> In its "Report of Investigation in the Matter of County of Orange, California as it Relates <br /> to the Conduct of the Members of the Board of Supervisors" (Release No. 36761 / <br /> January 24, 1996) ("Orange County Release"), the SEC indicated that, if a member of a <br /> city council has knowledge of any facts or circumstances that an investor would want to <br /> know about prior to investing in obligations to be issued by the city, whether relating to <br /> their repayment, tax-exempt status, undisclosed conflicts of interest with interested <br /> parties, or otherwise, he or she should endeavor to discover whether such facts are <br /> adequately disclosed in the Preliminary Official Statement. In the Orange County <br /> Release, the SEC indicated that the steps that a member of a city council could take <br /> include becoming familiar with the Preliminary Official Statement and questioning city <br /> staff and consultants about the disclosure of such facts. If the city council concludes <br /> C-2 <br />