AgdaPkt 2012-01-09 - Laserfiche WebLink

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8.A. - Page 53 (2) Estimated, based uponBond principal of $6,340,000 and an average amlual interest rate of 2.70%. " Preliminary, subject to change. SPECIAL RISK FACTORS Tlie folloz��in� is a clescription of ce�tain risk fc�ctors affecti��ig tlie L�istrict, tlie pro}�ert� ou�ne�s in the L�istrict, the Taxable Parcels rrnci the pa�rnent of anc� security for the Boncis. The follo�uin� ciiscussion of risics is not ynecrnt to be c� cofiTplete list of the risks associ�rte�� zuith the pz-u�chcrse of the Bo�TCls a�2cl cloes �TOt necessaril� reflect t}ie relative i�flportance of tlre various risks. Potentic�l investors cire c�clvisecl to eo�2sic�er the following fc�etors alo�ig with all otlier inforrnation i�T this Offieic�l Stc�te�nent in e the i�ivestment qi�c�lit� of the Bonc�s. There can be no rrssurrrnce thc�t other risk factors zuill riot becoirTe �naterial in tlle fi�tt�re. Concentration of Property Ownership Failure of any significant owner of the Taxable Parcels to pay the annual Special Taxes when due could result in the rapid, total depletion of the Reserve Fund prior to replenishment from the resale of the property upon a foreclosure or otherwise or prior to delinquency redemption after a foreclosure sale, if any. See, however, "SECURITY FOR THE BONDS— County Teeter Plan." In thlt event, there could be a default in payments of the principal of and interest on the Bonds. The 11 Taxable Parcels in the District are currently owned by only two different owners, with one owner's nine Taxable Parcels responsible for 73.57% of the Fisc11 Year 2011 /2012 Special Tax levy and the other owner's two Taxable Parcels responsible for 26.43% of the Fiscal Year 2011/2012 Special Tax levy. See "THE DISTIZICT—Land Ownership and Current Special Tax Levy." While there is an ability to increase the Special Tax levied on any particular Taxable Parcel up to the maximum Special Tax rate allowed under the Rate and Method (see "SECURITY FOR THE BONDS—Summary of Rate and Method") in order to cover delinquencies in the payment of Special Taxes on other Taxable Parcels, there could be a delay in collections of Special Taxes or an unwillingness by property owners to pay Special Taxes when due. See "THE DISTRICT—Development in the District." Payment of the Special Tax is not a Personal Obligation The owners of the Taxable Parcels in the District are not personllly obligated to p1y the Special Tax. Rather, the Special Tax is an obligatioil that is secured only by a lien against the Taxable Parcels on which it is levied. If the value of the Taxable Parcels is not sufficient to secure fully the payment of the Special Tax, the City has no recourse against the landowners. No General Obligation of the City or the District The City's obligations under the Bonds and under the Fiscal Agent Agreement are limited obligations of the City on behalf of the District 1nd are payable solely from and secured solely by the Special Tax Revenues (other than the Annual Administrative Expense Deposit) and amounts in the Special Tax Fund, the Bond Fund and the Reserve Fund. The Bonds are neither general or special obligations of the City nor general obligations of the District, but are limited obligations of the City for the District payable solely from the revenues and funds pledged therefor under the Fiscal Agent Agreement. None of the faith and credit of the District, the City or the State of California or of any of their respective political subdivisions is pledged to the payment of the Bonds. -29-