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02-22-2011 CC Rpt A11COUNCIL AGENDA STAFF REPORT CITY CLERK USE ONLY Meeting Date: February 22. 2011 RECEIVED Public Hearing: ❑ 2011 FFB 14 AN 9: 31 Discussion Item:it Consent Item: 0FFICL' OF CITY CLERK CHINO HILLS FEBRUARY 15, 2011 TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: CITY MANAGER SUBJECT: RESOLUTIONS APPROVING THE CONTINUING DISCLOSURE ANNUAL REPORTS FOR THE WATER UTILITY 2002 $9,545,000 CERTIFICATES OF PARTICIPATION DEBT ISSUE, WATER UTILITY 2003 $18,210,000 REFUNDING CERTIFICATES OF PARTICIPATION DEBT ISSUE, COMMUNITY FACILITIES DISTRICT NO. 9 $14,860,000 SPECIAL TAX BONDS, SERIES 1998, COMMUNITY FACILITIES DISTRICT NO. 10 $12,390,000 SPECIAL TAX REFUNDING BONDS, SERIES 2010, REASSESSMENT DISTRICT NO. 10-1 $3,505,000 LIMITED OBLIGATION IMPROVEMENT BONDS, AND 2007 $22,040,000 CERTIFICATES OF PARTICIPATION (CIVIC CENTER INTERIM FINANCING PROJECT) RECOMMENDATION: Review (and modify if necessary) the Continuing Disclosure Annual Reports for the Water Utility 2002 $9,545,000 Certificates of Participation (COP), Water Utility 2003 $18,210,000 Refunding Certificates of Participation, Community Facilities Districts (CFD) No. 9 $14,860,000 Special Tax Bonds, Series 1998, CFD No. 10 $12,390,000 Special Tax Refunding Bonds, Series 2010, Reassessment District No. 10-1 $3,505,000 Limited Obligation Improvement Bonds, and 2007 $22,040,000 Certificates of Participation (Civic Center Interim Financing Project) debt issues as required by the Securities and Exchange Commission (SEC). 2. Adopt the resolutions approving the content and the distribution of the annual reports. BACKGROUND/ANALYSIS: The SEC issued amended regulations in 1994 which now require a public agency that issues debt on or after July 3, 1995, to file annual continuing disclosure reports for those debt issues. The City debt issues that are affected by these regulations are the Water Utility 2002 $9,545,000 COP's that were issued in June 2002, the Water Utility 2003 $18,210,000 COP's that were issued in December 2003, the CFD No. 9 $14,860,000 Bonds that were issued in August 1998, the CFD No. 10 $12,390,000 Bonds, that were issued in August 2010, the Reassessment District No. 10-1 $3,505,000 Bonds, that were issued in August 2010, and the 2007 $22,040,000 Certificates of Participation (Civic Center Interim Financing Project) that were issued in May 2007. AGENDA DATE: FEBRUARY 22, 2011 PAGE TWO SUBJECT: RESOLUTIONS APPROVING THE CONTINUING DISCLOSURE ANNUAL REPORTS FOR THE WATER UTILITY 2002 $9,545,000 CERTIFICATES OF PARTICIPATION DEBT ISSUE, WATER UTILITY 2003 $18,210,000 REFUNDING CERTIFICATES OF PARTICIPATION DEBT ISSUE, COMMUNITY FACILITIES DISTRICT NO. 9 $14,860,000 SPECIAL TAX BONDS, SERIES 1998, COMMUNITY FACILITIES DISTRICT NO. 10 $12,390,000 SPECIAL TAX REFUNDING BONDS, SERIES 2010, REASSESSMENT DISTRICT NO. 10-1 $3,505,000 LIMITED OBLIGATION IMPROVEMENT BONDS, AND 2007 $22,040,000 CERTIFICATES OF PARTICIPATION (CIVIC CENTER INTERIM FINANCING PROJECT) The purpose of the amended SEC disclosure requirements is to ensure that the public agencies that issue debt provide, on a continuing basis, complete, accurate, and objective information concerning certain relevant factors that a reasonable investor needs in order to make an informed investment decision when considering purchasing public agency debt issues. The regulations place a significant obligation on the City Council and staff to disclose certain financial information and any significant event that affect the COP's and/or the Bonds. A key element of the annual reports is that Council Members and staff have the responsibility to disclose any additional "material information" that they may have in order to ensure that the statements included in the annual report are not misleading. The term "material" is not defined by the SEC but a general definition has evolved through litigation. The courts have said that "an omitted fact is material if there is a substantial likelihood that, under all the circumstances, the information would have assumed actual significance to a reasonable investor." Stated another way, "there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the `total mix' of information made available." The Continuing Disclosure Annual Report for each of the debt issues (Exhibits 1) is attached to its respective resolution. The content of the annual reports includes a copy of the City's Comprehensive Annual Financial Report (CAFR) and the City's Adopted Budget for Fiscal Year 2010-11. Since copies of the Adopted Budget were distributed to the City Council in September 2010, and a copy of the CAFR was made available to the City Council via the City's website in December 2010, and distributed in December 2010, a copy is not being included with this staff report. However, a copy of the CAFR and Adopted Budget will be included as part of the annual reports when they are forwarded to the City's dissemination agent, U.S. Bank. A dissemination agent's responsibility is to distribute the annual reports to State and national repositories. The repositories provide the annual reports to the public. REVIEW BY OTHERS: This agenda item has been reviewed by the City Attorney, City's Disclosure Counsel (Fulbright & Jaworski L. L. P.), City's Financial Advisor (Harrell & Company Advisors, L. L. C.), and all department heads. AGENDA DATE: FEBRUATY 22, 2011 PAGE THREE SUBJECT: RESOLUTIONS APPROVING THE CONTINUING DISCLOSURE ANNUAL REPORTS FOR THE WATER UTILITY 2002 $9,545,000 CERTIFICATES OF PARTICIPATION DEBT ISSUE, WATER UTILITY 2003 $18,210,000 REFUNDING CERTIFICATES OF PARTICIPATION DEBT ISSUE, COMMUNITY FACILITIES DISTRICT NO. 9 $14,860,000 SPECIAL TAX BONDS, SERIES 1998, COMMUNITY FACILITIES DISTRICT NO. 10 $12,390,000 SPECIAL TAX REFUNDING BONDS, SERIES 2010, REASSESSMENT DISTRICT NO. 10-1 $3,505,000 LIMITED OBLIGATION IMPROVEMENT BONDS, AND 2007 $22,040,000 CERTIFICATES OF PARTICIPATION (CIVIC CENTER INTERIM FINANCING PROJECT) FISCAL IMPACT: There is no fiscal impact caused by this item. Respectfully submitted, Michael S. Fl6a6er, 6ty Manager MSF:JRL:ddk Recommended by: r4*14%,10}' M i RESOLUTION NO. 11R- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS, APPROVING THE ANNUAL REPORT AS REQUIRED BY THE CONTINUING DISCLOSURE CERTIFICATE FOR THE $9,545,000 CERTIFICATES OF PARTICIPATION (2002 WATER SYSTEM PROJECT). WHEREAS, the City of Chino Hills (City) issued in June 2002 the $9,545,000 Certificates of Participation (2002 COP's) to finance the acquisition, construction and installation of certain improvements to the City's water system; and WHEREAS, the City issued a Continuing Disclosure Agreement (CDA) for the 2002 COP's in accordance with Securities and Exchange Commission (SEC) regulations; and WHEREAS, the CDA provides for the issuance of an annual report that discloses financial and operational information relating to the City's water utility; and WHEREAS, the SEC regulations and CDA provisions require the City to distribute its Annual Report to its dissemination agent at least 15 business days prior to April 1, 2011; and WHEREAS, the City's dissemination agent is the City's trustee for the 2002 COP's; and WHEREAS, the City's trustee for the 2002 COP's is U.S. Bank National Association. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHINO HILLS DOES RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1: The Annual Report for the 2009-10 fiscal year, Exhibit I, attached and made a part hereof, which was prepared in accordance with the CDA for the 2002 COP's, is approved as to form and content, and is approved to be released to the City's dissemination agent. 1 of 3 SECTION 2: The City Clerk shall certify as to the adoption of this resolution. PASSED, APPROVED, and ADOPTED this 22th day of February 2011. ATTEST: MARY M. McDUFFEE, CITY CLERK APPROVED AS TO FORM: MARK D. HENSLEY, CITY ATTORNEY 2of3 EXHIBIT I City of Chino Hills $9,545,000 Certificates of Participation (2002 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Provision of Annual Report: This Annual Report is being issued pursuant to the covenants contained in the Continuing Disclosure Certificate executed for the $9,545,000 Certificates of Participation (2002 Water System Project) issued by the City of Chino Hills, San Bernardino, California (City). The Annual Report is being disseminated to the Electronic Municipal Market Access (EMMA) system of the Municipal Securities Rulemaking Board by U.S. Bank National Association on behalf of the City of Chino Hills. Material Events: Payment of principal and interest on the Certificates of Participation (2002 Water System Project) is insured by Ambac Assurance Corporation ("Ambac"). In 2010, the City filed the following Material Event Notices with on the MSRB's Electronic Municipal Market Access website with respect to Ambac's ratings: Filing Date Reoortina Event April 19, 2010 S&P downgrade of Ambac rating Ambac's current ratings are as follows: Ratina Aaencv Rating Last Chanaed Moody's Investors Service Caa2, On review for Upgrade March 26, 2010 Standard & Poor's R March 25, 2010 Standard & Poor's and Moody's have removed their insured financial stability ratings for all issues with Ambac insurance. Standard & Poor's has assigned an underlying rating of "AA-" to the 2002 Certificates of Participation, notwithstanding the bond insurance policy. Content of Annual Report: The content of the Annual Report is presented below pursuant to Section 3 of the Continuing Disclosure Certificate. (a) Audited Financial Statements: The City of Chino Hills' Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2010 has been filed separately on the EMMA website. The general purpose financial statements contained within the Financial Section of the CAFR were prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. The CFD's financial statements are included in the City's CAFR. (b) Financial Information and Operating Data 0) Principal outstanding as of January 1, 2011 2002 Certificates of Participation $ 9,270,000 2003 Certificates of Participation 10,645,000 (ii) Reserve Fund: Amount as of January 1, 2011 891,787 Reserve requirement as of January 1, 2011 $ 891,787 (iii) Acquisition Fund amount as of January 1, 2011 $ Page 2 City of Chino Hills $9,545,000 Certificates of Participation (2002 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 (c) The summary report showing in reasonable detail Gross Revenues, Operation and Maintenance Expenses, Net Revenues and Debt Service may be seen in Exhibit A attached to this report. (d) On January 22, 2008, the City Council approved increases in the Water Utility's rates for the next five years. The rate increases, which consist of both the cost for water and a monthly service charge depending on the meter size, effective January 1, 2011, may be seen on Exhibit B and the approved rate increases for the next year, may be seen on Exhibit C attached to this report. (e) An update of the information contained in the following tables of the Official Statement, for the current fiscal year, is provided as described below: (i) The ten largest water users may be seen in Exhibit D attached to this report. (ii) The water consumption table may be seen in Exhibit E attached to this report. (iii) The Historic Operating Results and Debt Service coverage may be seen in Exhibit F attached to this report. The City supplies water to its residents through a variety of sources including, city - owned groundwater production wells and delivery from the Chino Basin Desalter Authority, Water Facilities Authority (MWD), and Monte Vista Water District. The City's operational plan takes advantage of all of these sources to maintain operational flexibility, efficiency, and cost containment. In the event that one or more of these supply sources should fail, the City has the ability to purchase additional water to meet demand from the Water Facilities Authority (MWD), Monte Vista Water District or increased groundwater production. If the City is forced to make these choices there may be increased costs incurred as a result of the purchase of penalty water or increased assessments for over production of groundwater. (f) The City of Chino ("Chino") has alleged that certain deep aquifer pumping by the City has caused ground subsidence within the city limits of Chino. This claim was raised by motion in connection with Chino Basin Municipal Water District v. City of Chino, et al, San Bernardino Superior Court Number 164327, dated January 27, 1978, in which all groundwater rights in the Chino Basin were adjudicated and where the court has retained continuing jurisdiction. In connection with this claim, the City and Chino entered into an agreement (the "Forbearance Agreement") under which each agreed to reduce pumping in the subsidence area by 1,500 acre feet per year for a period of three successive one year terms. The Forbearance Agreement was extended for an additional one year period that ended in August 2005. During the forbearance period, the Watermaster monitored ground water levels and conducted studies to determine the cause of the subsidence. As of January 31, 2006, the Watermaster asserted that it had concluded the necessary subsidence studies and distributed a draft Guidance Criteria for MZ-1 Producers calling for the voluntary reduction of pumping from the deep aquifer to certain levels based upon the Watermaster's studies. The City disputed the conclusions of the studies and believes additional studies are necessary to determine the amount of water that can be safely drawn from the subsidence area. The City and the Watermaster in the fall of 2007, stipulated to a Long Term Plan ("Stipulation") that provides for (i) continued testing in the subsidence area to determine how much water can be safely pumped from Page 3 City of Chino Hills $9,545,000 Certificates of Participation (2002 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 the deep aquifer, and (ii) to the extent that it is determined it would be prudent for the City to relocate some of its pumping activities, that the parties would work together to review other areas of the Basin from which the City can pump water to replace the amount it had been pumping from the deep aquifer. If it is finally established that pumping from the deep aquifer by the City is contributing to the subsidence, the City along with other pumping entities may be required to permanently reduce its pumping activities in the subsidence area. The City believes the Watermaster is required to provide the City with an alternative source, at no cost to the City, or otherwise provide remuneration to the City if the City relocates its pumping facilities, should it be determined that it would be prudent for the City to reduce its pumping in the subsidence area. The Watermaster believes that it has no such obligation. However, as part of the Stipulation, the parties agreed that this issue would be resolved, if necessary, in the future. Further information may be obtained from Director of Finance, City of Chino Hills, 14000 City Center Drive, Chino Hills, California 91709; (909) 364-2641. Attachments End of Annual Report. Exhibit A City of Chino Hills $9,545,000 Certificates of Participation (2002 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Summary Report and Debt Service (a) Revenues: Water sales $ 18,822,874 Other Revenues 2,107,737 Total Revenues 20,930,611 Operating Maintenance Expenses: Purchased water 10,017,882 Salaries and benefits 2,228,263 Utilities 733,862 Contractual services 544,347 Repairs and maintenance 687,465 Services and supplies 226,544 Other general and administrative 1,768,703 Total Operating and Maintenance Expenses 16,207,066 Net Revenue $ 4,723,545 2002 Certificates Debt Service $ 505,024 2003 Certificates Debt Service 1,610,550 Total Debt Service $ 2,115,574 Debt Service Coverage 2.23 (a) Excludes receipt and expenditure of development fees. Exhibit 8 City of Chino Hills $9,545,000 Certificates of Participation (2002 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Water Rates and Water Service Charges In Effect as of January 1, 2011 Meter Installation Charge. The schedule of regular service meter installation charges is as follows: Meter & Service Size 1 inch 1 1/2 inch 2 inch Service Line and Curb Cock Alreadv Installed $ 330.00 400.00 500.00 No Service Line Installed $ 875.00 1,000.00 1,300,00 All meter installation charges for meter sizes 3 inches or larger are made at cost, plus, ten percent (10%). Water Capital Connection Charge. The schedule of water capital connection charges are shown below. Meter Size Caoitai Connection Fee Meter Size Capital Connection Fee 1 inch $ 5,358.00 6 inch 178,582.00 1 1/2 inch 17,842.00 8 inch 285,742.00 2 inch 28,558.00 10 inch 430,408.00 3 inch 53,580,00 12 inch 582,254.00 4 inch 89,318,00 Monthly Service Charge. The City has a monthly service charge based on meter size ranging from $13.60 per month for a 5/8" meter to $2,340.96 per month for an 12" meter. Meter Size Rates Meter Size Rates 5/8 inch $ 13.60 4 inch $ 345.19 3/4 inch 20.36 6 inch 692.99 1 inch 34.00 8 inch 1,142.94 1 112 inch 67.99 10 inch 1,714.41 2 inch 108,79 12 inch 2,340.96 3 inch 206.59 Commodity Charge. Residential domestic water rates and non-residential water rates are set forth in the following tables. Low, Intermediate and High Zones refer to pumping zones. Residential Rates (per hundred cubic feet) Low Intermediate High Single Family Multi -Family Zone Zone Zone 0-12 hcf 0-12 hcf, 0-5 hcf, 0-5 hcf $ 1.36 $ 1.68 $ 1.71 13-35 hcf 13-25 hcf, 6-25 hcf, 6-11 hcf 1,58 1.88 1.95 36+ hcf 26+ hcf, 26+ hcf, 12+ hcf 1.96 2.27 2.30 Low Zone Intermediate Zone High Zone Non -Residential Rates (per hundred cubic feet) Non -Residential Recycled Water Rates Water Rates 1 A8 1.22 1.80 1.46 1.83 1.51 Agricultural 0.85 0.85 Construction 2.02 1.66 Exhibit C City of Chino Hills $9,545,000 Certificates of Participation (2002 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Water Rate Increases through January 1, 2012* Commoditv Charge Effective Jan. 1, 2011 Jan. 1, 2012 Residential SFR MFR $/ccf $/ccf Low Zone 0-12 ccf 0-12 ccf 1.36 1.47 13-35 ccf 13-25 ccf 1.58 1.71 36+ ccf 26+ ccf 1.96 2.12 Intermediate Zone 0-12 ccf 0-5 ccf 1.68 1.82 13-35 ccf 6-25 ccf 1.88 2.03 36+ ccf 26+ ccf 2.27 2.45 High Zone 0-12 ccf 0-5 ccf 1.71 1.85 13-35 ccf 6-11 ccf 1.95 2.11 36+ ccf 12+ ccf 2.30 2.49 Non -Residential Low Zone 1 A8 1.60 Intermediate Zone 1.80 1.95 High Zone 1.83 1.98 Temporary (Construction Meter) 2.02 2.18 Agricultural 0.85 0,93 Institutional Low Zone 1.48 1,60 Intermediate Zone 1.80 1.95 High Zone 1.83 1.98 Reclaimed Water Low Zone 1.22 1.32 Intermediate Zone 1.46 1.58 High Zone 1.61 1.63 Temporary (Construction Meter) 1.66 1.79 Agricultural Meter 0.85 0.92 Private Fire Protection Private Fire Protection 1.36 1.47 Standard Rates - Monthiv Service Charae Meter Size Jan. 1, 2011 Jan. 1, 2012 5/8" 13,60 14.69 3/4" 20.36 21.99 V. 34.00 36.72 11/2" 67.99 73.43 2" 108,79 117.49 3" 206.59 223,12 4" 345.19 372.81 6" 692.99 748.43 8" 1,142.94 1,234.38 10" 1,714.41 1,851.66 12" 2,340.96 2,528.24 *A Water Rate Study is underway, the 1/1/2012 rates may change pursuant to the results of the Water Rate Study. Exhibit D City of Chino Hills $9,545,000 Certificates of Participation (2002 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Ten Largest Water Users 12 Month Consumption Percentage Customers (100 Cubic Feet) of Total City of Chino Hills 620,565 8.78 % Los Serranos Golf Course 216,032 3.06 Vellano Golf Course 154,925 2.19 Chino Valley Unified School District 129,787 1.84 Western Hills Golf Course Association 100,797 1.43 Vellano Homeowners Association 69,609 0.98 PM Realty Group, L.P. 60,138 0.85 Rancho Monte Vista M.H.P. 57,922 0.82 Boys Republic 53,608 0.76 Pinehurst Hills Community Association 37,959 0.54 Total 1,501,342 21.24 % Total Consumption 7,068,710 Number of Water Connections (') Total Water Consumption (2) Billingsj3l Exhibit E City of Chino Hills $9,545,000 Certificates of participation (2002 Water System project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 2006 20,980 16,293 $14,715,870 Water Consumption Table Fiscal Years Ending June 30, 2009 2007 2008 :. 18,967 $16,275,679 21,179 18,962 $16,213,968 21,185 17,607 $16,826,684 2010 21,224 16,228 $17,337,561 (1) Includes the City's owned landscaping water meters. (2) in acre-feet. (3) Billings amount from is for uesesuch as meter connection�ee,�nterestt income and lease ppayments. Revenues: Charges for Service Permit and Inspection Fees Meter and Installation Fees Interest Earnings Water Rebates* Other Total Revenues Expenses: Purchased water ** Utilities Salaries and benefits Contractual services Repairs and maintenance Services and supplies Other general and administrative Water Purchase Agreement Total Expenses Net Revenues 2002 Installment Sales Agreement 2003 Installment Sales Agreement Total Debt Service Debt Service Coverage Exhibit F City of Chino Hills $9,545,000 Certificates of Participation (2002 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Historic Operating Results and Debt Service Coverage For Fiscal Years Ending June 30 2006 2007 2008 2009 2010 15,959,757 $ 16,481,946 $ 17,781,444 $ 16,901,021 $ 17,650,091 94,397 103,216 81.603 29,399 15,930 491,691 831,094 808,064 472,763 309,105 1,551,059 1,672,138 2,287,314 844,405 2,765,951 528,916 1,290,564 303,073 283,364 189,534 18,625,820 20,378,958 21,261,518 18,530,952 20,930,611 4,403,130 4,274,528 6,072,267 5,539,822 6,380,020 463,049 816,243 749,308 988,289 733,862 1,510,945 1,682,261 1,851,303 2,134,426 2.228,263 402,632 400,560 728,999 546,555 544,347 825,967 899,125 550,780 1,220,956 687,465 177,990 244,025 257,098 309,995 226,544 1,427,265 1,474,157 1,547,594 1,673,520 1,768,703 2,249,090 3,295,815 2,677,570 3,567,829 3.637,862 11,460,068 13, 086, 714 14, 444, 919 15,981,392 16, 207, 066 7,165,752 $ 7,292,244 $ 6,816,599 $ 2,549,660 $ 4.723,545 519,561 $ 513,361 $ 512,259 $ 506,104 $ 505,024 1,598,295 1,607,095 1,605,295 1,615,320 1,610,550 2,117,856 $ 2,120,456 $ 2,117,554 $ 2,121,424 $ 2,115,574 3.38 3.44 3.22 1,20 2.23 * Beginning with the June 30, 2010 financial statements, the City accounts for any rebates on water purchases from Chino Basin Desalter Authority, Water Facilities Authority (MIND), and Monte Vista Water District as revenue, rather than an offset to the cost of purchased water. Pdor years' information has been restated to be consistent with the City's current accounting treatment of the rebates. ** The City purchases a portion of its water from the Chino Basin Desalter Authority (`Desalter Authority'). The cost of water charged by the Desater Authority includes debt service on bonds issued to finance the treatment facilities. The Desalter Authority had issued 2004A Adjustable Rate Desalter Revenue Refunding Bonds as Auction Rate Securities to finance and refinance the cost of the treatment facilities. Between January 2008 and May 2008, interest rates on such Auction Rate Securities went as high as 10%. This increased interest cost was passed through to the participants in the Desalter Authority, including the City of Chino Hills, and accounts for a portion of the increased cost of purchased water shown in 2007108. The Desalter Authority refinanced the 2004A Adjustable Rate Desalter Revenue Refunding Bonds in June 2008 with a fixed rate bond issue, and the City does not expect fluctuations in the portion of the purchased water cost related to the Deserter Authority bonds to occur in future years. RESOLUTION NO. 11R- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS, APPROVING THE ANNUAL REPORT AS REQUIRED BY THE CONTINUING DISCLOSURE CERTIFICATE FOR THE $18,210,000 REFUNDING CERTIFICATES OF PARTICIPATION (2003 WATER SYSTEM REFINANCING PROJECT). WHEREAS, the City of Chino Hills (City) issued in December 2003 the $18,210,000 Refunding Certificates of Participation (2003 COP's) to refinance existing water utility COP's; and WHEREAS, the City issued a Continuing Disclosure Agreement (CDA) for the 2003 COP's in accordance with Securities and Exchange Commission (SEC) regulations; and WHEREAS, the CDA provides for the issuance of an annual report that discloses financial and operational information relating to the City's water utility; and WHEREAS, the SEC regulations and CDA provisions require the City to distribute its Annual Report to its dissemination agent at least 15 business days prior to April 1, 2011; and WHEREAS, the City's dissemination agent is the City's trustee for the 2003 COP's; and WHEREAS, the City's trustee for the 2003 COP's is U.S. Bank National Association, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHINO HILLS DOES RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1: The Annual Report for the 2009-10 fiscal year, Exhibit I, attached and made a part hereof, which was prepared in accordance with the CDA for the 2003 COP's, is approved as to form and content, and is approved to be released to the City's dissemination agent. 1 of 3 SECTION 2: The City Clerk shall certify as to the adoption of this resolution. PASSED, APPROVED, and ADOPTED this 22th day of February 2011. ATTEST: MARY M. McDUFFEE, CITY CLERK APPROVED AS TO FORM: MARK D. HENSLEY, CITY ATTORNEY ED GRAHAM, MAYOR 2of3 EXHIBIT I City of Chino Hills $18,210,000 Refunding Certificates of Participation (2003 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Provision of Annual Report: This Annual Report is being issued pursuant to the covenants contained in the Continuing Disclosure Certificate executed for the $18,210,000 Refunding Certificates of Participation (2003 Water System Project) issued by the City of Chino Hills, San Bernardino, California (City). The Annual Report is being disseminated to the Electronic Municipal Market Access (EMMA) system of the Municipal Securities Rulemaking Board by U.S. Bank National Association on behalf of the City of Chino Hills. Material Events: Payment of principal and interest on the Refunding Certificates of Participation (2003 Water System Project) was insured by Financial Guaranty Insurance Company ("FGIC") and subsequently reinsured by National Public Financial Guarantee Corp ("National"). In addition, National has reinsured the debt service reserve facility in the amount of $1,630,270 with respect to the Refunding Certificates of Participation (2003 Water System Project) ("Surety Bond"). In 2010, no Material Event Notices were filed. On December 22, 2010, Standard & Poor's downgraded National's rating. On January 5, 2011 the City filed a Material Event Notice on the MSRB's Electronic Municipal Market Access website with respect to National's rating. National's current ratings are as follows: Rating Agency Moody's Investors Service Standard & Poor's Rating Baal, Outlook Developing BBB, Outlook Developing Standard & Poor's has assigned an underlying rating of "AA-" to the 2003 Certificates of Participation, notwithstanding the bond insurance policy. Content of Annual Report: The content of the Annual Report is presented below pursuant to Section 3 of the Continuing Disclosure Certificate. (a) Audited Financial Statements: The City of Chino Hills' Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2010 has been filed separately on the EMMA website. The general purpose financial statements contained within the Financial Section of the CAFR were prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. The CFD's financial statements are included in the City's CAFR. (b) Financial Information and Operating Data (i) Principal outstanding as of January 1, 2011 2003 Certificates of Participation 2002 Certificates of Participation (ii) Reserve Fund: Amount as of January 1, 2011 Reserve requirement as of January 1, 2011 $ 10,645,000 9,270,000 Surety Bond in the face amount of $ 1,624,240 $ 1,601,070 Page 2 City of Chino Hills $18,210,000 Refunding Certificates of Participation (2003 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 (c) The summary report showing in reasonable detail Gross Revenues, Operation and Maintenance Expenses, Net Revenues and Debt Service may be seen in Exhibit A attached to this report. (d) On January 22, 2008, the City Council approved increases in the Water Utility's rates for the next five years. The rate increases, which consist of both the cost for water and a monthly service charge depending on the meter size, effective January 1, 2011, may be seen on Exhibit B and the approved rate increases for the next year, may be seen on Exhibit C attached to this report. (e) An update of the information contained in the following tables of the Official Statement, for the current fiscal year, is provided as described below: W The ten largest water users may be seen in Exhibit D attached to this report. (ii) The water consumption table may be seen in Exhibit E attached to this report. (iii) The Historic Operating Results and Debt Service coverage may be seen in Exhibit F attached to this report. The City supplies water to its residents through a variety of sources including, city - owned groundwater production wells and delivery from the Chino Basin Desalter Authority, Water Facilities Authority (MWD), and Monte Vista Water District. The City's operational plan takes advantage of all of these sources to maintain operational flexibility, efficiency, and cost containment. in the event that one or more of these supply sources should fail, the City has the ability to purchase additional water to meet demand from the Water Facilities Authority (MWD), Monte Vista Water District or increased groundwater production. If the City is forced to make these choices there may be increased costs incurred as a result of the purchase of penalty water or increased assessments for over production of groundwater. (f) The City of Chino ("Chino") has alleged that certain deep aquifer pumping by the City has caused ground subsidence within the city limits of Chino. This claim was raised by motion in connection with Chino Basin Municipal Water District v. City of Chino, et at, San Bemardino Superior Court Number 164327, dated January 27, 1978, in which all groundwater rights in the Chino Basin were adjudicated and where the court has retained continuing jurisdiction. In connection with this claim, the City and Chino entered into an agreement (the "Forbearance Agreement") under which each agreed to reduce pumping in the subsidence area by 1,500 acre feet per year for a period of three successive one year terms. The Forbearance Agreement was extended for an additional one year period that ended in August 2005. During the forbearance period, the Watermaster monitored ground water levels and conducted studies to determine the cause of the subsidence. As of January 31, 2006, the Watermaster asserted that it had concluded the necessary subsidence studies and distributed a draft Guidance Criteria for MZ-1 Producers calling for the voluntary reduction of pumping from the deep aquifer to certain levels based upon the Watermaster's studies. The City disputed the conclusions of the studies and believes additional studies are necessary to determine the amount of water that can be safely drawn from the subsidence area. The City and the Watermaster in the fall of 2007, stipulated to a Long Term Plan ("Stipulation") that provides in essence for (i) continued testing in the subsidence area to determine how much water can be safely pumped from the deep aquifer, and (ii) to the extent that it is determined it would be prudent for the City to relocate some of its pumping activities, that the parties would work together to review other Page 3 City of Chino Hills $18,210,000 Refunding Certificates of Participation (2003 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 areas of the Basin from which the City can pump water to replace the amount it had been pumping from the deep aquifer. If it is finally established that pumping from the deep aquifer by the City is contributing to the subsidence, the City along with other pumping entities may be required to permanently reduce its pumping activities in the subsidence area. The City believes the Watermaster is required to provide the City with an alternative source, at no cost to the City, or otherwise provide remuneration to the City if the City relocates its pumping facilities, should it be determined that it would be prudent for the City to reduce its pumping in the subsidence area. The Watermaster believes that it has no such obligation. However, as part of the Stipulation, the parties agreed that this issue would be resolved, if necessary, in the future. Further information may be obtained from Director of Finance, City of Chino Hills, 14000 City Center Drive, Chino Hills, California 91709; (909) 364-2641. Attachments End of Annual Report. Exhibit A City of Chino Hills $18,210,000 Certificates of Participation (2003 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year2009-10 Summary Report and Debt Service (a) Revenues: Water sales $ 18,822,874 Other Revenues 2,107,737 Total Revenues 20,930,611 Operating Maintenance Expenses: Purchased water 10,017,882 Salaries and benefits 2,228,263 Utilities 733,862 Contractual services 544,347 Repairs and maintenance 687,465 Services and supplies 226,544 Other general and administrative 1,768,703 Total Operating and Maintenance Expenses 16,207,066 Net Revenue $ 4,723,545 2002 Certificates Debt Service $ 505,024 2003 Certificates Debt Service 1,610,550 Total Debt Service $ 2,115,574 Debt Service Coverage 2.23 (a) Excludes receipt and expenditure of development fees, Exhibit B City of Chino Hills $18,210,000 Certificates of Participation (2003 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Water Rates and Water Service Charges In Effect as of January 1, 2011 Meter Installation Charge. The schedule of regular service meter installation charges is as follows: Meter & Service Size 1 inch 1 1/2 inch 2 inch Service Line and Curb Cock Already Installed $ 330,00 400.00 500.00 No Service Line Installed $ 875,00 1,000.00 1,300.00 All meter installation charges for meter sizes 3 inches or larger are made at cost, plus, ten percent (10%). Water Capital Connection Charge. The schedule of water capital connection charges are shown below Meter Size Caoital Connection Fee Meter Size Caoital Connection Fee 1 inch $ 5,358.00 6 inch 178,582.00 1 1/2 inch 17,842.00 8 inch 285,742.00 2 inch 28,558.00 10 inch 430,408.00 3 inch 53,580.00 12 inch 582,264.00 4 inch 89,318,00 Monthly Service Charge. The City has a monthly service charge based on meter size ranging from $13.60 per month for a 5/8" meter to $2,340.96 per month for an 12" meter. Meter Size Rates Meter Size Rates 5/8 inch $ 13.60 4 inch $ 345.19 3/4 inch 20.36 6 inch 692.99 1 inch 34.00 8 inch 1,142.94 1 1/2 inch 67.99 10 inch 1,714.41 2 inch 108.79 12 inch 2,340.96 3 inch 206.59 Commodity Charge. Residential domestic water rates and non-residential water rates are set forth in the following tables. Low, Intermediate and High Zones refer to pumping zones. Residential Rates (per hundred cubic feet) Low Intermediate High Single Family Multi -Family Zone Zone Zone 0-12 hcf 0-12 hcf, 0-5 hcf, 0-5 hcf $ 1.36 $ 1.68 $ 1.71 13-35 hcf 13-25 hcf, 6-25 hcf, 6-11 hcf 1.58 1.88 1.95 36+ hcf 26+ hcf, 26+ hcf, 12+ hcf 1.96 2.27 2.30 Non -Residential Rates (per hundred cubic feet) Non -Residential Recycled Water Rates Water Rates Low Zone 1.48 1.22 Intermediate Zone 1.80 1.46 High Zone 1.83 1.51 Agricultural 0,85 0.85 Construction 2.02 1.66 Exhibit C City of Chino Hills $18,210,000 Certificates of Participation (2003 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Water Rate Increases through January 1, 2012* Commodity Charge Effective Jan. 1, 2011 Jan. 1, 2012 Residential SFR MFR $/ccf $/ccf Low Zone 0-12 ccf 0-12 ccf 1.36 1.47 13-35 ccf 13-25 ccf 1.58 1.71 36+ ccf 26+ ccf 1.96 2.12 Intermediate Zone 0-12 ccf 0-5 ccf 1.68 1.82 13-35 ccf 6-25 ccf 1.88 2.03 36+ ccf 26+ ccf 2.27 2.45 High Zone 0-12 ccf 0-5 ccf 1.71 1.85 13-35 ccf 6-11 ccf 1.95 2.11 36+ ccf 12+ ccf 2.30 2A9 Non -Residential Low Zone 1.48 1.60 intermediate Zone 1.80 1.95 High Zone 1.83 1.98 Temporary (Construction Meter) 2.02 2.18 Agricultural 0.85 0.93 Institutional Low Zone 1.48 1.60 Intermediate Zone 1.80 1.95 High Zone 1.83 1.98 Reclaimed Water Low Zone 1.22 1.32 Intermediate Zone 1.46 1.58 High Zone 1.51 1.63 Temporary (Construction Meter) 1.66 1.79 Agricultural Meter 0.85 0.92 Private Fire Protection Private Fire Protection 1.36 1.47 Standard Rates - Monthly Service Charae Meter Size Jan. 1, 2011 Jan. 1, 2012 5/8" 13.60 14.69 3/4" 20.36 21.99 1" 34.00 36.72 11/2" 67.99 73.43 2" 108.79 117,49 3" 206.59 223.12 4" 345.19 372.81 6" 692.99 748.43 8" 1,142.94 1,234,38 10" 1,714.41 1,851.56 12" 2,340.96 2,528.24 'A Water Rate Study is underway, the 1/1/2012 rates may change pursuant to the results of the Water Rate Study. Exhibit D City of Chino Hills $18,210,000 Certificates of Participation (2003 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Ten Largest Water Users Customers City of Chino Hills Los Serranos Golf Course Vellano Golf Course Chino Valley Unified School District, Western Hills Golf Course Association Vellano Homeowners Association PM Realty Group, L.P. Rancho Monte Vista M.H.P. Boys Republic Pinehurst Hills Community Association Total 12 Month Consumption Percentage (100 Cubic Feet) of Total 620,565 8.78 % 216,032 3.06 154,925 2.19 129,787 1.84 100,797 1.43 69,609 0.98 60,138 0.85 57,922 0.82 53,608 0.76 37,959 0.54 1,501,342 21.24 % Total Consumption 7,068,710 Yobp, CAI.1 ,es 0 ?tooA gGk) ton v$ 2 �2' 'Nakev l4 ute �erttcate uin9 � Gonfln Rep° Pnnual 2009.10 FiSCalKear joy GonsumPtton 2g1q ,N V 2pq frsCal,{ears 2Q pg Sune''q' � 21,22� 2136 2"BA 1Z 6p1"'51'561 ater 2q Sbq 18,g82 16,826'6g4 Numberola st'� 18 gg't 15,213,g5$ .orne lotalwater i2i 162g3q 516,275,6�q Go�5Umpttion 51,�J15' gilC�n9s�31 d noa 0 ecati�ne ceye�ues le ay n . yJatec meters er o9eran tge ana ase P s the Owls oy�ned lapsa�s te o g amo6nne�°one purest m°o t11 lnClac e {eel nt is Ror,,es SUCn as me in arnou yenu <<31 ggoss n5 fco� re Co11e 5O Exhibit F City of Chino Hills $18,210,000 Certificates of Participation (2003 Water System Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Historic Operating Results and Debt Service Coverage For Fiscal Years Ending June 30 2006 2007 2008 2009 2010 Revenues: Charges for Service $ 15,959,757 $ 16,481,946 $ 17,781,444 $ 16,901,021 $ 17,660,091 Permit and Inspection Fees - - - _ - Meter and Installation Fees 94,397 103,216 81,603 29,399 15,930 Interest Earnings 491,691 831,094 808,084 472,763 309,105 Water Rebates* 1,551,059 1,672,138 2,287,314 844,405 2,765,951 Other 528,916 1,290,564 303,073 283,364 189,534 Total Revenues 18,625,820 20,378,958 21,261,518 18.530,952 20,930,611 Expenses: Purchased water** 4,403,130 4,274,528 6,072,267 5,539,822 6,380,020 Utilities 463,049 816,243 749,308 988,289 733,862 Salaries and benefits 1,510,945 1,682,261 1,861,303 2,134,426 2,228,263 Contractual services 402,632 400,560 728,999 546,555 544,347 Repairs and maintenance 825,967 899,125 550,780 1,220,956 687,465 Services and supplies 177,990 244,025 257,098 309,995 226,544 Other general and administrative 1,427,265 1,474,157 1,547,594 1,673,520 1,768,703 Water Purchase Agreement 2,249,090 3,295,815 2,677,570 3,56T829 3,637,862 Total Expenses 11,460,068 13,086,714 14,444,919 15,981,392 16,207,066 Net Revenues $ 7,165,752 $ 7,292,244 $ 6,816,599 $ 2,549,560 $ 4,723,545 2002 Installment Sales Agreement $ 519,661 $ 513,361 $ 512,259 $ 506,104 $ 505,024 2003Installment Sales Agreement 1,596,295 1,607,095 1,605,295 1,615,320 1,610,550 Total Debt Service $ 2,117,856 $ 2,120,456 $ 2,117,554 $ 2,121,424 $ 2,115,574 Debt Service Coverage 3.38 3.44 3.22 1.20 2.23 Beginning with the June 30, 2010 financial statements, the City accounts for any rebates on water purchases from Chino Basin Desalter Authority, Water Facilities Authority (MWO), and Monte Vista Water District as revenue, rather than an offset to the cost of purchased water. Prior years' information has been restated to be consistent with the Cily's current accounting treatment of the rebates. " The City purchases a portion of its water from the Chino Basin Desalter Authority ("Desalter Authority'). The cost of water charged by the Desalter Authodty includes debt service on bonds issued to finance the treatmentfacififies. The Desalter Authonty had issued 2004A Adjustable Rate Desalter Revenue Refunding Bonds as Auction Rate securities to finance and refinance the coat of the treatment facilifies. Between January 2008 and May 2008, interest rates on such Auction Rate Securities went as high as 10%. This increased interest cost was passed through to the participants in the Desalter Authority, including the City of Chino Hills, and accounts for a portion of the increased cost of purchased water shown in 2007/08. The Desalter Authority refinanced the 2004A Adjustable Rate Desalter Revenue Refunding Bonds in June 2008 with a fixed rate bond issue, and the City does not expect Fluctuations in the portion of the purchased water cost related to the Desalter Authority bonds to occur in future years. RESOLUTION NO. 11 R- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF THE COMMUNITY FACILITIES DISTRICT NO. 9, APPROVING THE ANNUAL REPORT AS REQUIRED BY THE CONTINUING DISCLOSURE AGREEMENT FOR THE $14,860,000 SPECIAL TAX BONDS, SERIES 1998. WHEREAS, the City of Chino Hills (City), acting in its capacity as the governing body of the Community Facilities District No. 9 (CFD #9), issued in August 1998 the $14,860,000 Special Tax Bonds, Series 1998 (Bonds) to refinance existing CFD bonds; and WHEREAS, the City/CFD issued a Continuing Disclosure Agreement (CDA) for the Bonds in accordance with Securities and Exchange Commission (SEC) regulations; and WHEREAS, the CDA provides for the issuance of an annual report that discloses financial information relating to the CFD; and WHEREAS, the SEC regulations and CDA provisions require the City/CFD to distribute its Annual Report to its dissemination agent at least 15 business days prior to April 1, 2011; and WHEREAS, the City's/CFD's dissemination agent is the City's/CFD's trustee for the Bonds; and WHEREAS, the C4's/CFD's trustee for the Bonds is U. S. Bank National Association. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF THE COMMUNITY FACILITIES DISTRICT NO. 9, DOES RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1: The Annual Report for the 2009-10 fiscal year, Exhibit 1, attached and made a part hereof, which was prepared in accordance with the CDA for the Bonds, is approved as to form and content, and is approved to be released to the City's/CFD's dissemination agent. 1 of 3 SECTION 2: The City Clerk shall certify as to the adoption of this resolution. PASSED, APPROVED, and ADOPTED this 22th day of February 2011, ATTEST: MARY M. McDUFFEE, CITY CLERK APPROVED AS TO FORM: MARK D. HENSLEY, CITY ATTORNEY ED GRAHAM, MAYOR 2 of 3 EXHIBIT I City of Chino Hills Community Facilities District No. 9 (Rincon Village Area) $14,860,000 Special Tax Bonds, Series 1998 Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Provision of Annual Report: This Annual Report is being issued pursuant to the covenants contained in the Continuing Disclosure Agreement executed for the $14,860,000 Special Tax Bonds, Series 1998 issued by the City of Chino Hills, San Bernardino County, California, Community Facilities District No. 9 (CFD). The Annual Report is being disseminated to the Electronic Municipal Market Access (EMMA) system of the Municipal Securities Rulemaking Board by U. S. Bank National Association on behalf of the CFD. Content of Annual Report: The content of the Annual Report is presented below pursuant to Section 3 of the Continuing Disclosure Agreement. (a) Audited Financial Statements: The City of Chino Hills' Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2010 has been filed separately on the EMMA website. The general purpose financial statements contained within the Financial Section of the CAFR were prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. The CFD's financial statements are included in the City's CAFR. (b) Financial Information and Operating Data: (i) Series 1998 Bonds outstanding principal as of September 30, 2010: $ 4,765,000 (ii) Series 1996 Bond Reserve Fund: Amount as of September 30, 2010: $ 714,707 Reserve requirement as of September 30, 2010: $ 714,700 (III) The assessed valuation and assessed value -to -lien ratio information maybe seen in Exhibit A attached to this report. (iv) The Special Tax delinquency information may be seen in Exhibits B-1, B-2, and B-3 attached to this report. (v) As of September 30, 2010, foreclosure proceedings have not been initiated for any parcels within the CFD. (vi) As of September 30, 2010, there are no property owners representing more than 5 percent of the annual Special Tax Levy who are delinquent in payment of such Special Taxes. (vii) As of September 30, 2010, no property owner owned parcels responsible for more than 5 percent of the annual 2010/11 Special Tax levy. The land ownership summary may be seen in Exhibit C attached to this report. (c) Richland Pinehurst v. City of Chino Hills. This matter arises from Richland Pinehurst and two other developers (referred to herein, collectively, as the "Developers") filing an action against the City and Community Facilities Districts ("CFD") Nos. 5, 8, and 9 (referred to herein, collectively, as the "City"), seeking approximately $4.5 million plus interest based upon its contention that it is entitled to reimbursement from 20% of the special tax revenues collected in CFDs 5 and 8 for improvements financed by CFD 9, wherein the Developers projects are located. The City prevailed at trial. The Page 2 City of Chino Hills Community Facilities District No. 9 (Rincon Village Area) $14,860,000 Special Tax Bonds, Series 1998 Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Developers appealed the judgment and the Court of Appeal reversed the decision of the Superior Court and remanded the case to the Superior Court for a determination of damages. The City filed a Petition for Review to the California Supreme Court which was denied. On January 24, 2008, the Superior Court entered judgment in favor of the Developers in the total amount of $6,000,000 to be paid from 20% of the special tax revenues collected in CFDs 5 and 8. Commencing in Fiscal Year 2004-2005, the City began setting aside 20% of the special tax revenues collected in CFDs 5 and 8 and has made payments from such funds in partial satisfaction of the judgment in the amount of $4,559,517 with a remaining liability as of July 1, 2010 of $1,440,483. The City will continue to set aside 20% of the special tax revenues collected in CFDs 5 and 8 and remit such collections in payment of the judgment semi-annually by March 1 and July 1 until such.time as the judgment is satisfied in full. Interest does not accrue on any portion of the unpaid balance of the judgment unless the semi-annual remittances are not made. Attachments End of Report. EXHISITA CITY OF CHINO HILLS COMMUNITY FACILITIES DISTRICT NO.9 IRINCON VILLAGE AREA) $14.860,000 SPECIAL TAX BONDS, SERIES 1598 ASSESSED VALUE TO LIEN RATIOrri 2010/2011 Assessed 201012011 Percentage of Bonded Value to Developed - Single Family pamels Vaiuemm Special Tax Bonded Indebtedness Indebtednesst'l Lien Area 303 $127,940,272.D0 $155,09358 20.63% $982,946.60 130.16 Area 693 30D,666,173.DD 354,718.98 47A8% 2,248,125.38 133.75 Area 319 125,630,438.00 163283.34 21,72% 1.034851.37 124.40 Subtotal 1,315 $554.256.883.00 5673.09C90 89.53% 54.265,92135 129.93 Developed - Neighborhood Commercial Area 1 0 $0.00 $0.00 0J*% $0.00 0,00 Area 32 35,924,748,00 58,663.89 7.83% 373,065.48 9630 Area 0 ROO D.00 00D% 0.00 0.00 Subtotal 32 $35.924.748.00 $58.863.89 7,83% $373.065.48 96.30 Undeveloped - Large Lots Area 1 1 $6,646,998.00 $19.882.59 2.64% $128,011.17 52.76 Area 2151 0 0.00 coo 0,00% 0.00 0.00 Area 3 0 0,00 0.00 COD% 0,00 0.00 Subtotal 1 $61646.998.00 $19.882.59 2.641/6 5126.011.17 52.75 Chaff" Tofal _ 1.348 9598.828.629.00 $751.842.38 _ 100.00% _ $4.769.000.00 125,26 (1) Source: Willdan Financial Services (2) Source. County of San Bem mfinD Secured Property Tax Roil for Fiscal Year 20102011. (3) In comparison to the prior years Annual Continuing Disclosure Information Statement, the reduction In total assessed value in the District Is due to the annual review of the San Serrartlmo County Assessor to reflect taxable values accurately in consideration of recent market declines. Under Proposition 13. real property is reappraised only when a change4n-ownership occurs, or when new construction takes place. Generally, a change in ownership is a sale or transfer of property, while new construction is any improvement to property which is not considered normal maintenance. Except for these two instances, property assessments cannot be increased by more than two percent (2%) annually. Revenue and Taxation Code Section 51 requires the assessor to enroll the lower of either the propertys Faclored8ase-Year Value (established under Proposition 13) or its market value as of the lien date (January 1). This reduction is temporary and the assessor is required to review the market value of the property each lien date after the reduction until such time as the Factored-Dase-Year Value is less than or equal to the market value, When the Factored -Base -Year Value Is again enrolled, the property is no longer subject to the annual review, and will receive indexing not to exceed two percent (2%) per year. (4) Bonded Indebtedness as of September 2, 2010. Bonded Indebtedness is equal to each parcels prorma share of the Fiscal Year 20102011 Special Tax multiplied by the remaining bonded debt. (5) Does not Include APN 1017-241-69-0000. This parcel is currently undeveloped and has discharged the Special Tax'C', thedore It is not currently subject to Special Taxes T' or'C'. This parcel will be subject to Special Tax'e', once this parcal Is developed. Note: Slight differences in totals due to rounding EXHIBIT B-1 CITY OF CHINO HILLS COMMUNITY FACILITIES DISTRICT NO. 9 (RINCON VILLAGE AREA) HISTORICAL SPECIAL TAX DELINQUENCIES (EXCLUDING APN 1017-231.10) Total Special Amount Percent Tax Levy Delinquent as of Delinquent as of Remaining Remaining Number of Fiscal (Excluding June 30 of Each June 30 of Each Amount Percent of Parcels Year 1017-231-10) Fiscal Year Fiscal Year Delinquent in Dollars Delinquent Pi Delinquent 2009110 $717,617 $26,359 3.67% $19,835 2.76% 34 20D8109 703,546 43,606 6.20% 9,555 3A3% 14 2007/08 689,746 67,742 9.82% 7,095 1.03% it 2006107 674,800 42,796 6.34% 1,655 0.25% 4 2005/06 661,557 56,559 8.55% 1,159 0.18% 3 2004/05 645,268 31,588 4.90% 0 0.00% 0 2003/04 611,192 5,700 0.93% 0 0.00% 0 2002/03 793,255 9,392 1.18% 437 0.06% 1 2001/02 846,889 7,561 0.89% 262 0.03% 1 2000/01 1,028,705 5,513 0.54% 0 0,00% 0 1999/00 937,659 - 4,117 0.44% 0 0.00% 0 1998/99 1,062,976 3,738 0.35% 0 0.D0% 0 1997198 1,472,791 36,725 2.49% 0 0.00% 0 1996/97 1,726,949 872 0,05% 0 0,00% 0 1995196 2,080,464 1,121 0.05% 0 0.00% 0 1994/95 1,810,344 478,901 26.45% 0 0.00% 0 1993194 1,721,541 0 0,00% 0 0,00% 0 TOTALS $18,186,299 $822,290 4.62% $39,998 0.22% (1) As of September 8, 2010. Source: San Bernardino County, as compiled by Wilidan Financial Services. Note: Slight differences in totals due to rounding Fiscal Year 2009/10 2008109 2007/08 2005/07 2005106 2004105 2003/04 2002/03 2001/02 2000/01 1999/00 1998/99 1997/98 1996/97 1995/96 1994/95 1993/94 TOTALS Total District Special Tax Levy $742,683 757,490 741,245 725,018 711,998 685,904 654,917 856,259 930,973 1,122,270 1,016,511 1,149,214 1,607,833 1,856,046 2,246,506 1,911,997 1,817,962 $18,792,142 EXHIBIT B-2 CITY OF CHINO HILLS COMMUNITY FACILITIES DISTRICT NO. 9 (RINCON VILLAGE AREA) HISTORICAL SPECIAL TAX DELINQUENCIES APN 1017-231-10 (formerly known as DeVries Parcel) Amount of 1017-231-10 Delinquent as of June 30 of Each Fiscal Year $0 0 0 0 0 0 43,725 63,004 84,083 93,566 78,852 86,237 135,041 129,097 166,043 101,653 96,421 $1,077,722 Percent of 1017-231-10 Delinquent as of June 30 of Each Fiscal Year 0,00% 0,00% 0,00% 0.00% 0.00% 0,00% 6.68% 7.36% 9,03% 8,34% 7.76% 7.50% 8.40% 6.96% 7.39% 5.32% 5.30% 5.73% (1) As of September 8, 2010. Source: San Bernardino County, as compiled by Wilidan Financial Services Remaining Amount of 1017-231-10 Delinquent") $0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 Remaining Percent of 1017-231-10 Delinquentn) 0.00% 0.00% 0.00% 0.00% 0,00% O.OD% 0.00% 0.00% 0.00% 0.00% 0,00% O.OD% 0.00% 0.00% 0.00% 0,00% 0.00% 0.00% EXHIBIT B-3 COMMUNITY FACILITIES DISTRICT NO.9 (RINCON VILLAGE AREA) PARCELS WITH DELINQUENCIES GREATER THAN $2,000.00 Amount of APN Name Date Due Delinquency(l) 1027-581-24-0000 CHINO HILLS PODIATRY GROUP INC 12/10/2007 723.32 04/10/2008 723.32 12/10/2008 737,79 04/10/20D9 737.79 12/10/2009 752.55 04/10/2010 752.54 Subtotal $4,427.31 1027-581-17-0000 HEG L L C 04/10/2008 774.35 12/10/2008 789.85 04/10/2009 789.84 12/10/2009 805.64 04/10/2010 805.64 Subtotal $3,965.32 1027-581-18-0000 HEG L L C 04/10/2008 774,35 12/10/2008 789.85 04/10/2009 789.84 12/10/2009 805,64 04/10/2010 805.64 Subtotal $3,965.32 1017-972-22-0000 COLLINS, DONALD R 12/10/2005 231.80 04/10/2006 231.80 12/10/2006 236.44 04/10/2007 236.44 12/10/2007 241.17 04/10/2008 241.17 12/10/2008 246,00 04/10/2009 245.99 12/10/2009 250.92 04/10/2010 250.91 Subtotal $2,412.64 1033-311-45-0000 BROOKS, NARJ R & ATTERBURY-BROOKS, CHERYL P 0411012006 231.80 12/10/2006 236.44 04/10/2007 236.44 12/10/2007 241.17 04/10/2008 241.17 12/10/2008 246.00 04/10/2009 245.99 12/10/2009 250.92 04/10/2010 2%91 Subtotal $2,180.84 Total $16,951.43 (1) As of September 8, 2010. Source: San Bernardino County, as compiled by Willdan Financial Services. EXHIBIT C CITY OF CHINO HILLS COMMUNITY FACILITIES DISTRICT NO. 9 (RINCON VILLAGE AREA) OWNERSHIP SUMMARY OF LARGEST PROPERTY OWNERS I)) 201012011 Percent of 201012011 Bonded Owner(:) Area(s) Parcels Special Tax Special Tax Indebtedness(3) LPC CHINO HILLS LP 1 1 $19,882.59 2.64% $126,011.17 5651 PINE AVE LLC 2 2 10,642.59 1.42% 67,450.23 INDIVIDUAL OWNERS 1,2,3 1,345 721.317.20 95.94% 4,571,538.60 TOTALS 1,348 $751,842.38 100.00% $4,765,000.00 (1) Source: County of San Bernardino Secured Property Tax Roll for Fiscal Year 2010/2011, (2) Property owners responsible for more than one percent (1 %) of the Special Taxes are listed separately while property owners responsible for less than one percent (1%) of the Special Taxes are listed collectively as 'Individual Owners'. (3) Bonded Indebtedness as of September 2, 2010. Bonded Indebtedness is equal to each parcels prorate share of the Fiscal Year 2010/2011 Special Tax multiplied by the remaining bonded debt. RESOLUTION NO. 11R- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF THE COMMUNITY FACILITIES DISTRICT NO. 10 (FAIRFIELD RANCH), APPROVING THE ANNUAL REPORT AS REQUIRED BY THE CONTINUING DISCLOSURE AGREEMENT FOR THE $12,390,000 SPECIAL TAX REFUNDING BONDS, SERIES 2010. WHEREAS, the City of Chino Hills (City), acting in its capacity as the governing body of the Community Facilities District No. 10 (Fairfield Ranch) (CFD #10), issued in August 2010 the $12,390,000 Special Tax Refunding Bonds, Series 2010 (Bonds) to (i) refund the District's outstanding Special Tax Bonds, (ii) fund a reserve fund for the Bonds, and (iii) pay the costs of issuing the Bonds; and WHEREAS, the City/CFD issued a Continuing Disclosure Agreement (CDA) for the Bonds in accordance with Securities and Exchange Commission (SEC) regulations; and WHEREAS, the CDA provides for the issuance of an annual report that discloses financial information relating to the CFD; and WHEREAS, the SEC regulations and CDA provisions require the City/CFD to distribute its Annual Report to its dissemination agent at least 15 business days prior to April 1, 2011; and WHEREAS, the City's/CFD's dissemination agent is the City's/CFD's trustee for the Bonds; and WHEREAS, the City's/CFD's trustee for the Bonds is U. S. Bank National Association. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF THE COMMUNITY FACILITIES DISTRICT NO. 10, DOES RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1: The Annual Report for the 2009-10 fiscal year, Exhibit I, attached and made a part hereof, which was prepared in accordance with the CDA for the Bonds, is approved as to form and content, and is approved to be released to the City's/CFD's dissemination agent. 1 of 3 SECTION 2: The City Clerk shall certify as to the adoption of this resolution. PASSED, APPROVED, and ADOPTED this 22th day of February 2011. ATTEST: MARY M. MCDUFFEE, CITY CLERK APPROVED AS TO FORM: MARK D. HENSLEY, CITY ATTORNEY ED GRAHAM, MAYOR 2 of 3 EXHIBIT I City of Chino Hills Community Facilities District No. 10 (Fairfield Ranch) $12,390,000 Special Tax Refunding Bonds, Series 2010 Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Provision of Annual Report: This Annual Report is being issued pursuant to the covenants contained in the Continuing Disclosure Agreement executed for the $12,390,000 Special Tax Refunding Bonds, Series 2010 issued by the City of Chino Hills, San Bernardino County, California, Community Facilities District No. 10 (Fairfield Ranch) (CFD #10). The Annual Report is being disseminated to the Electronic Municipal Market Access (EMMA) system of the Municipal Securities Rulemaking Board by U. S. Bank National Association on behalf of the CFD. Material Event: Payment of principal and interest on the Bonds is insured by Assured Guaranty Municipal Corp. (AGM). On October 25, 2010, Standard & Poor's downgraded the rating of AGM from AAA (negative outlook) to AA+ (stable) and the City filed the following a Material Event Notice on the MSRB's Electronic Municipal Market Access website with respect to AGM's ratings: AGM's current ratings are as follows: Ratino Agencv Moody's Investors Service Standard & Poor's Rating Aa3, Negative Outlook AA+, Stable Last Chanoed December 18, 2009 October 25, 2010 Standard & Poor's has assigned an underlying rating of "A" to the Bonds, notwithstanding the delivery of the bond insurance policy. Content of Annual Report: The content of the Annual Report is presented below pursuant to Section 3 of the Continuing Disclosure Agreement. (a) Audited Financial Statements: The City of Chino Hills' Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2010 has been filed separately on the EMMA website. The general purpose financial statements contained within the Financial Section of the CAFR were prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. The CFD's financial statements are included in the City's CAFR. (b) Financial Information and Operating Data: (i) The principal amount of Series 2010 Bonds outstanding as of December 31, 2010: $12,390,000 (ii) The principal amount of Additional Bonds outstanding as of December 31, 2010: $0 (III) Series 2010 Bond Reserve Fund: Balance as of December 31, 2010: $ 981,760 Reserve requirement as of December 31, 2010: $ 981,750 (iv) The assessed valuation and assessed value -to -lien ratio information may be seen in Exhibit A attached to this report. Page 2 City of Chino Hills Community Facilities District No. 10 (Fairfield Ranch) $12,390,000 Special Tax Refunding Bonds, Series 2010 Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 (v) The Special Tax delinquency information may be seen on Exhibit B-1 and B-2 attached to this report. (vi) As of December 31, 2010, foreclosure proceedings have not been initiated for any parcels within the CFD. (vii) As of December 31, 2010, there are no property owners representing more than 5 percent of the annual Special Tax Levy who are delinquent in payment of such Special Taxes. (viii) As of December 31, 2010, no property owner owned parcels responsible for more than 5 percent of the annual 2010/11 Special Tax levy. The land ownership summary and zones may be seen in Exhibit C attached to this report. Attachments End of Report. EXHIBIT A CITY OF CHINO HILLS COMMUNITY FACILITIES DISTRICT NO.10 (FAIRFIELD RANCH) TOTAL ASSESSED VALUE TO BONDED DEBT (1)(4) Total Assessed Value of Taxable Parcels in Zone 1 and 2: $261,750,027 Total Debt Amount Outstanding as of September 2, 2010 for Zone 1 and 2: $12,390,000. Assessed Number Percent of Value to Of 201012011 Assessed Value(2) 2010/2011 2010/2011 Bonded Bonded Categories Parcels Land Structure Total Special Tax Special Tax Indebtedness(') Indebtedness Zone 1 - Developed Single Family Lots 319 $37,643,105 $70,566,901 $108,210,006 $390,082 42.00% $5,203,800 20.79 Zone 2 - Developed Single Family Lots 403 50,156,268 93,383,753 143,540,021 538,685 58.00% 7,186,200 19.97 Total 722 $87,799,373 $163.950,654 $251,760,027 $928,767 100.00% $12,390,000 20.32 (1) Source: Willdan Financial Services. (2) Source: County of San Bernardino Secured Property Tax Roil for Fiscal Year 2010/2011. (3) Bonded Indebtedness as of September 2, 2010. Bonded Indebtedness is the prorate share of Special Tax multiplied by the remaining principal of bonds outstanding by zone, not including overlapping debt. EXHIBIT B-1 CITY OF CHINO HILLS COMMUNITY FACILITIES DISTRICT NO. 10 (FAIRFIELD RANCH) DELINQUENCY SUMMARY Amount Percent Delinquent as of Delinquent as of Remaining Remaining Percent Number of Annual Special June 30 of Each June 30 of Each Amount of Dollars Parcels Fiscal Year Tax Levy Fiscal Year Fiscal Year Delinquent in Delinquent In Delinquent 2000/2001 $926,057 $4,433 0.48% $0 0.00% 0 2001/2002 926,058 20,022 2.16% 0 0.00% a 2002/2003 916,258 19,151 2.09% 0 0.00% 0 2003/2004 947,274 3,933 0.42% 0 0,00% 0 2004/2005 965,285 56,879 5.89% 0 0,00% 0 2005/2006 986,074 77,113 7.82% 1,211 0.12% 1 2006/2007 1,018,841 71,095 6.98% 1,300 0.13% 1 2007/2008 1,039,598 109,214 10.51% 2,951 0.28% 2 2008/2009 1,058,526 64,255 6.07% 5,569 0.53% 5 2009/2010 1,084,256 39,686 3.66% 27,264 2.51% 22 Total $9,868,227 $465,781 412% $38,295 0.39% (1 ) As of September 8, 2010. Source: San Bernardino County, as compiled by Willdan Financial Services EXHIBIT B-2 CITY OF CHINO HILLS COMMUNITY FACILITIES DISTRICT NO. 10 (FAIRFIELD RANCH) PARCELS WITH DELINQUENCIES GREATER THAN $2,000.00 Amount of APN Name Date Due Delinquencytll 1027-541-15 Villegas, Angel 12/10/07 $811,90 04/10/08 811,90 12/10/08 826.62 04/10/09 826.61 12/10/09 846.78 04/10/10 846.78 Subtotal $4,970.69 1027-551-64 Rodriguez, Claudia M 12110/O8 $675.45 04/10/09 675.44 12/10/09 691.92 04/10/10 691.92 Subtotal $2,734.73 1027-561-08 Calderon, Cruz & Calderon, Andrea 12/10/08 $637.92 04/10109 637.92 12/10/09 653.48 04/10/10 653.48 Subtotal $2,682.80 1027-561-11 Kater, Herman & Simpson, Lakisha D 12/10/06 $65018 04/10/07 650.17 12/10/07 663,42 04/10/08 663.42 Subtotal $2,627.19 Total _ $12,915.31 (1) As of September 8, 2010. Source: San Bernardino County, as compiled by Wiildan Financial Services. EXHIBIT C CITY OF CHINO HILLS COMMUNITY FACILITIES DISTRICT NO.10 (FAIRFIELD RANCH) PRINCIPAL TAX PAYERS WITHIN EACH ZONEt" Assessed Percent of Value to Number 201012011 Assessed Value (2) 2010/2011 204012010 Bonded Bonded Property Owner of Parcels Land Structure Total Special Tax Special Tax indebtednessl'I Indebtedness Zone 1 - Richmond American Homes Individual Homeowners 319 $37,643,105 $70,566,901 $108,210,006 $390,082 42,00% $5,203,800 20.79 Zone 1 Subtotal 319 $37,643,106 $70,566,901 $108,210,006 $390,082 42.00% $5,203,800 20.79 Zone 2 - Centex Homes Individual Homeowners 403 $50,156,268 $93,383,753 $143,540,021 $538,685 58.00% $7,166,200 19.97 Zone 2 Subtotal 403 $50,156,268 $93,383,753 $143,540,021 $538,685 58.00% $7,186,200 19.97 Total 722 $87,799,373 $163,950,654 $251,750,027 $928,767 400.00% $12,390,000 20.32 (1) Source: Wilidan Financial Services. (2) Source: County of San Bernardino Secured Property Tax Roil for Fiscal Year 2010/2011. (3) Bonded Indebtedness as of September 2, 2010. Bonded Indebtedness is the prorate share of Special Tax multiplied by the remaining principal of bonds outstanding by zone, not including overlapping debt. RESOLUTION NO. 11R- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS, ACTING IN ITS CAPACITY AS THE GOVERNING BODY OF THE REASSESSMENT DISTRICT NO. 10-1, APPROVING THE ANNUAL REPORT AS REQUIRED BY THE CONTINUING DISCLOSURE AGREEMENT FOR THE $3,505,000 LIMITED OBLIGATION IMPROVEMENT BONDS. WHEREAS, the City of Chino Hills (City), issued in August 2010 the $3,505,000 Limited Obligation Improvement Bonds (Reassessment District No. 10-1) to (i) refund outstanding obligations of the City of Chino Hills Reassessment District 1995, (ii) pay costs related to the issuance of the Bonds, and (iii) make a deposit to a Reserve Fund for the Bonds; and WHEREAS, the City issued a Continuing Disclosure Agreement (CDA) for the Bonds in accordance with Securities and Exchange Commission (SEC) regulations; and WHEREAS, the CDA provides for the issuance of an annual report that discloses financial information relating to the Reassessment District; and WHEREAS, the SEC regulations and CDA provisions require the City to distribute its Annual Report to its dissemination agent at least 15 business days prior to April 1, 2011; and M WHEREAS, the City's dissemination agent is the City's trustee for the Bonds; WHEREAS, the City's trustee for the Bonds is U. S. Bank National Association. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHINO HILLS DOES RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: SECTION is The Annual Report for the 2009-10 fiscal year, Exhibit I, attached and made a part hereof, which was prepared in accordance with the CDA for the Bonds, is approved as to form and content, and is approved to be released to the City's dissemination agent. 1 of 3 SECTION 2: The City Clerk shall certify as to the adoption of this resolution. PASSED, APPROVED, and ADOPTED this 22th day of February 2011. ATTEST: MARY M. McDUFFEE, CITY CLERK APPROVED AS TO FORM: MARK D. HENSLEY, CITY ATTORNEY ED GRAHAM, MAYOR 2 of 3 EXHIBIT I City of Chino Hills Reassessment District No. 10-1 $3,505,000 Limited Obligation Improvement Bonds Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Provision of Annual Report: This Annual Report is being issued pursuant to the covenants contained in the Continuing Disclosure Agreement executed for the $3,505,000 Limited Obligation Improvement Bonds issued by the City of Chino Hills, San Bernardino County, California, Reassessment District No. 10-1 (District). The Annual Report is being disseminated to the Electronic Municipal Market Access (EMMA) system of the Municipal Securities Rulemaking Board by U. S. Bank National Association on behalf of the District. Content of Annual Report: The content of the Annual Report is presented below pursuant to Section 3 of the Continuing Disclosure Agreement. (a) Audited Financial Statements: The City of Chino Hills' Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2010 has been filed separately on the EMMA website. The general purpose financial statements contained within the Financial Section of the CAFR were prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. (b) Financial Information and Operating Data: (i) The principal amount of Bonds outstanding as of December 31, 2010: $3,505,000 (ii) Bond Reserve Fund: Balance as of December 31, 2010: $ 350,503 Reserve requirement as of December 31, 2010: $ 350,500 (iii) The assessed valuation and assessed value -to -lien ratio information may be seen in Exhibit A attached to this report. (iv) The Reassessment delinquency information may be seen on Exhibit B-1 and B-2 attached to this report. (v) As of December 31, 2010, foreclosure proceedings have not been initiated for any parcels within the District. (vi) As of December 31, 2010, there is one property owner, Wang, Chen Wen, at al, whose combined annual installments of Reassessments on three properties represents more than 5 percent of the annual Reassessments. This property owner is not delinquent in payment of such Reassessments. (vii) As of December 31, 2010, the land ownership summary for the property owner responsible for more than 5 percent of the annual installments of Reassessments is as follows:. Number 2010111 Reassessment Value - of Assessed District to % of Owner Parcels Value No.10-1 Lien Assessment Wang, Chang Wen & Yu, Trust 1 452,125 98,021 4.61 2.80% Wang, Cheng Wen & Wang, Shirley 1 101,727 86,919 1.17 2.48% Wang, Chang Wen & Chang, Shih-Ping 1 385,042 67.424 5_71 1,92% Total 3 938,894 262,364 3.72 7.20% Attachments End of Report. EXHIBIT A CHINO HILLS REASSESSMENT DISTRICT 10-1 VALUE TO LIEN TABLE (f) Fiscal Year 201012011 Assessed Value(2)(3) Percent of Remaining Value to Lien Number Assessed Total Assessed Original Remaining Assessment Category of Parcels Assessed Land Structure Value Assessment Assessment Lien Lien Greater than20:1 1,967 $390,290,333 $654,498,818 $1,044,789,151 $2,698,379.55 $2,698,379.55 76.98% 10:1 to 19.99:1 5 1,144,840 0 1,144,840 88,978.85 88,978.85 2.54% 6:1 to 9.99:1 3 303,720 0 303,720 38,621.97 38,621.97 1.10% 5:1 to 5.99:1 1 384,129 0 384,129 67,602.62 67,602.62 1.93% 4:1 to 4.99:1 2 458,237 0 458,237 99,654.01 99,654.01 2.84% 1:1 to 2.99:1 4 260,046 0 260,046 149,860.23 149,860.23 4.28% Less than 1:1 10 108,595 0 108,595 361,902.77 361,902.77 10.33% Grand Total 1,992 $392,949,900 $664,498,818 $1,047,448,718 $3,606,000.00 $3,606,000.00 100.00% (1) Source: Wilidan Financial Services (2) Source: County of San Bernardino Secured Property Tax Roll for Fiscal Year 201012011. (3) in comparison to the prior year's Annual Continuing Disclosure Information Statement, the reduction in total assessed value in the District is due to the annual review of the San Bernardino County Assessor to reflect taxable values accurately in consideration of recent market declines. Under Proposition 13, real property is reappraised only when a change -in -ownership occurs, or when new construction takes place. Generally, a change in ownership is a sale or transfer of property, while new construction is any improvement to property which is not considered normal maintenance. Except for these two instances, property assessments cannot be increased by more than two percent (2%) annually. Revenue and Taxation Code Section 51 requires the assessor to enroll the lower of either the property's Factored -Base -Year Value (established under Proposition 13) or its market value as of the lien date (January 1). The assessor is required to review the market value of the property each lien date after the reduction until such time as the Factored -Base -Year Value is less than or equal to the market value When the Factored -Base -Year Value is again enrolled, the property is no longer subject to the annual review, and will receive indexing not to exceed two percent (4) Bonded Indebtedness as of September 2, 2010. Fiscal Year 2005/06 2006/07 2007108 2008/09 2009/10 Total Total Annual Assessment Levy $1,246,201 1,241,797 1,052,609 1,042,396 1,010,100 $5,593,103 W(:IN-11" CITY OF CHINO HILLS REASSESSMENT DISTRICT 10-1 DELINQUENCY SUMMARY Amount Delinquent as of June 30 of Each Fiscal Year $60,855 101,012 67,272 53,138 54,523 $336,800 Percent Delinquent as of June 30 of Each Fiscal Year 4.88% 8.13% 6,39% 5.10% 5.40% 6.02% Remaining Amount Delinquent I11 $541 955 3,017 6,707 39,037 $50,266 (1) As of November 23, 2010. Source: San Bernardino County, as compiled by Wilidan Financial Services. Remaining Percent of Dollars Delinquent 1�1 0.04% 0.08% 0.29% 0.64% 3.86% 0.90% Number of Parcels Delinquent 2 3 9 19 57 EXHIBIT B-2 CITY OF CHINO HILLS REASSESSMENT DISTRICT 10-1 PARCELS WITH DELINQUENCIES GREATER THAN $2,000.00 Amount of APN Name Date Due Delinquency(l) 1017-713-56 Cordon, Ceasar & Cordon, Gina 04/10/09 $720.35 12/10/09 720.11 04/10/10 720.11 Subtotal $2,160.57 1027-581-24 Chino Hills Podiatry Group Inc 12/10/07 $340.62 04/10/08 340.62 12/10/08 371.66 04/10/09 371.66 12/10/09 375.57 04/10/10 375.57 Subtotal $2,176.70 1028-351-47 Chino Hills Golden Triangle LLC 04/10/10 $22,565.47 Subtotal $22,665.47 Total $26,901.74 (1) As of November 23, 2010. Source: San Bernardino County, as compiled by Willdan Financial Services. RESOLUTION NO. 11 R- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHINO HILLS, APPROVING THE ANNUAL REPORT AS REQUIRED BY THE CONTINUING DISCLOSURE AGREEMENT FOR THE 2007 $22,040,000 CERTIFICATES OF PARTICIPATION (CIVIC CENTER INTERIM FINANCING PROJECT). WHEREAS, the City of Chino Hills issued in May 2007 the $22,040,000 Certificates of Participation (Civic Center Interim Financing Project) to provide funds (a) to finance a portion of the costs of the construction and installation of a new Civic Center, including a new City Hall complex, a new sheriff substation, a new fire administration facility, a new library and related infrastructure, (b) finance a portion of the costs of certain storm drain facilities and street improvements; (c) fund a reserve fund, (d) fund capitalized interest to September 1, 2007, and (e) pay delivery costs incurred in connection with the execution, delivery and sale of the Certificates; and WHEREAS, the City issued a Continuing Disclosure Agreement (CDA) for the 2007 COP's in accordance with Securities and Exchange Commission (SEC) regulations; and WHEREAS, the CDA provides for the issuance of an annual report that discloses financial information relating to the 2007 COP's; and WHEREAS, the SEC regulations and CDA provisions require the City to distribute its Annual Report to its dissemination agent at least 15 business days prior to April 1, 2011; and WHEREAS, the City's dissemination agent is the City's trustee for the 2007 COP's; and WHEREAS, the City's trustee for the 2007 COP's is U.S. Bank National Association. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHINO HILLS DOES RESOLVE, DETERMINE, AND ORDER AS FOLLOWS: SECTION 1: The Annual Report for the 2009-10 fiscal year, Exhibit I, attached and made a part hereof, which was prepared in accordance with the CDA for the 2007 COP's, is approved as to form and content, and is approved to be released to the City's dissemination agent. 1 of 3 SECTION 2: The City Clerk shall certify to the passage and adoption of this resolution. PASSED, APPROVED, and ADOPTED this 22th day of February 2011. ED GRAHAM, MAYOR ATTEST: MARY M. McDUFFEE, CITY CLERK APPROVED AS TO FORM: MARK D. HENSLEY, CITY ATTORNEY 2 of 3 EXHIBIT I City of Chino Hills $22,040,000 Certificates of Participation (2007 Civic Center Interim Financing Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 Provision of Annual Reoort: This Annual Report is being issued pursuant to the covenants contained in the Continuing Disclosure Certificate executed for the $22,040,000 Certificates of Participation (2007 Civic Center Interim Financing Project) issued by the City of Chino Hills, San Bernardino, California (City). The Annual Report is being disseminated to the Electronic Municipal Market Access (EMMA) system of the Municipal Securities Rulemaking Board by U.S. Bank National Association on behalf of the City of Chino Hills. Content of Annual Resort: The content of the Annual Report is presented below pursuant to Section 3 of the Continuing Disclosure Certificate. (a) Audited Financial Statements: The City of Chino Hills' Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2010 has been filed separately on the EMMA website. The general purpose financial statements contained within the Financial Section of the CAFR were prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. The CFD's financial statements are included in the City's CAFR. (b) An update of the information contained in the following tables of the Official Statement for the current fiscal year, is provided as described below: (1) The "Assessed Valuation" table may be seen in Exhibit A attached to this report. (2) The "Property Tax Levies and Collections" table may be seen in Exhibit B attached to this report. (c) The City's fiscal year 2010-11 Midyear Budget Review staff report can be accessed via the following link: htto://www.chinohills.ora/archives/30/Aaenda%2002%2008%2011,.odf. The City's adopted budget for the 2010-11 fiscal year can be accessed via the following link: htto://www. chi nohills. ora/DocumentV iew. asox?DID=2378. (d) The City has adopted an investment policy to cover all funds and investment activities of the City, except investments governed by bond indentures and employee deferred compensation funds. The text of the Investment Policy is attached (see Exhibit C). An update of the information provided in the Official Statement may be seen in Exhibit D attached to this report. (e) Outstanding borrowings and long-term obligations include: (1) General Obligation Bonds N/A Certificates of Participation: i. 2007 Civic Center Interim Financing Project $21,445,000 ii. 2003 Water System Project 10,645,000 iii. 2002 Water System Project 9,270,000 Capital Leases i. Copier Lease -De Lage Landen Public Finance LLC $307,095 Operating Leases: i. McCoy Equestrian Center Trust $12 Page 2 City of Chino Hills $22,040,000 Certificates of Participation (2007 Civic Center Interim Financing Project) Continuing Disclosure Certificate Annual Report Fiscal Year 2009-10 (2) The City has not issued, entered into or incurred any general obligation bonds, certificates of participation, capital leases or operating leases since the beginning of the current fiscal year. (3) The City does not expect to issue, enter into or incur any general obligation bonds, certificates of participation, capital leases or operating leases within the 60 day period following the date of filing the Annual Report. Attachments End of Report. EXHIBIT A CITY OF CHINO HILLS ASSESSED VALUATION FISCAL YEARS 2005 THROUGH 2O10 Year Local Secured Utility Unsecured Total 2004/05 6,160,508,317 23,669 64,882,412 6,225,414,398 2005/06 6,790,326,334 24,135 70,452,994 6,860,803,463 2006/07 7,589,433,739 22,606 67,127,371 7,656,583,716 2007/08 8,474,229,615 - 86,163,878 8,560,393,493 2008/09 8,917,694,424 114,517,484 9,032,211,908 2009/10 8,686,543,196 177,113,071 8,863,656,267 Source: California Municipal Statistics, Inc. CITY OF CHINO HILLS PROPERTY TAX LEVIES AND COLLECTIONS FISCAL YEARS 2005 THROUGH 2O10 Total Current Tax Collections Percent of Current Levy Fiscal Year Tax Levy as of June 30 Collected as of June 30 2005 2,462,079 2,312,787 93.9% 2006 2,720,557 2,537,125 93.3% 2007 3,030,270 2,687,944 88.7% 2008 3,390,298 2,980,778 87.9% 2009 3,571,077 3,194,990 89.5% 2010 3,482,579 3,142,101 90.2% Source: San Bernardino County AuditodControNer-Recorder EXHIBIT C CITY OF CHINO HILLS Statement of Investment Policy - AMENDED Fiscal Year 2010-11 POLICY It is the policy of the City of Chino Hills ("City") to meet the short and long-term cash flow demands of the City in a manner, which will provide for the safety of principal and sufficient liquidity, while providing an investment return. The purpose of this Statement of Investment Policy (hereinafter, this "Investment Policy") is to outline a process of the investment of City funds in a prudent manner in order to meet City objectives. II. SCOPE This investment policy applies to all investment activities and financial assets of the City, held by the City and its agents and trustees, except for funds held by investment providers of deposits made pursuant to provisions of the City's Deferred Compensation Plan (hereinafter, the "Funds"). Bond proceeds shall be invested in accordance with the requirements and restrictions outlined in the bond documents. Bond proceeds are not considered part of the Funds nor subject to this Investment Policy. The following funds are covered by this Investment Policy and are accounted for in the City's Comprehensive Annual Financial Report: a) General Fund b) Special Revenue Fund c) Debt Service Funds d) Capital Project Funds e) Enterprise Funds f) Internal Services Funds g) Fiduciary Funds (Trust and Agency Funds) h) Any new funds created by the City Council Ill. DELEGATION OF AUTHORITY Pursuant to City of Chino Hills Municipal Code Sections 3.12.010 et sec, the City Treasurer is authorized to invest the City's Funds in accordance with California Government Code Sections 53600, 16429.1 and 53684 et seq.11 In accordance with VAll subsequent references to code sections refer to the California Government Code unless otherwise indicated. IN section 53607, the City Council may annually in July of a fiscal year, delegate to the City Treasurer the responsibility to invest the City's funds for the fiscal year. In the absence of the City Treasurer (hereinafter, the "Treasurer"), the investment of the Funds will be delegated to the Assistant Finance Director. Investments made by the Assistant Finance Director will be restricted to the State Pool ("LAIF"), the County of Los Angeles Investment Pool, or to securities maturing within six months. Prior to investing in securities, the Assistant Finance Director will consider the cash flow requirements of the City and may invest in securities maturing over six months if directed by the Treasurer in writing or verbally, if confirmed in writing within 30 days. The Treasurer may delegate to subordinates the execution of daily investment transactions. These investment transactions shall be approved by the Treasurer. The City Council may authorize the delegation of investment authority to an outside investment adviser that is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. IV. PRUDENCE All investments purchased shall have daily liquidity or a finaLsfated-maturity dale, Upon which the full principal value of the security will be received. Although the investment will mature at full principal value, it is recognized that the market will vary throughout the life of the security. In a diversified portfolio it must be further recognized that occasional measured losses are inevitable in a diversified portfolio due to economic, bond market, or individual security credit analysis. These occasional losses must be evaluated and considered within the context of the overall investment return. The "Prudent Investor" standard shall be applied in the context of managing the Funds. The Treasurer and other investment employees, acting within the intent and scope of the investment policy and other written procedures and exercising due diligence, shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely manner and appropriate action is taken to control adverse developments. V. OBJECTIVES The objective of the investment portfolio is to meet the short and long-term cash flow demands of the City. To achieve this objective, the portfolio will be structured to provide Safety of Principal and Liquidity, while then providing a Return on Investments. The following criteria, in priority order, shall govern all investment decisions. A. Safetv of Principal Investments of the City shall be undertaken in a manner that seeks to ensure that capital losses are minimized, whether from institution default, broker -dealer default, or erosion of the market value of securities. The City shall seek to preserve principal by mitigating the two types of risk in order of importance: credit risk and market risk. -2- 1. Credit Risk. Credit risk, defined as the risk of loss due to failure of an issuer of a security, shall be mitigated by purchasing Treasuries or high- grade securities. All investments beyond Treasury securities will be diversified so that the failure of any one issuer would not unduly harm the City's cash flow. Credit risk shall also be mitigated by pre -qualifying financial institutions, broker/dealers, intermediaries and advisors with which the City does business. 2. Market or Interest Rate Risk. Interest rate risk is the risk that the market value of securities in the portfolio will fall due to changes in general interest rates. Interest rate risk may be mitigated by structuring the Funds so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity, and by investing operating funds primarily in shorter -term securities. The cash flow is updated on a daily basis and will be considered prior to the investment of securities, which will reduce the necessity to sell investments for liquidity purposes. Long-term securities shall not be purchased for the sole purpose of short-term speculation: — Securities shall not be sold prior to maturity with the following exceptions: 1) a declining credit security would be sold early to minimize loss of principal, 2) a security swap would improve the quality, yield, or target duration in the portfolio, or 3) liquidity needs of the portfolio require that the security be sold. Purchases of investments will be restricted to securities with a final stated maturity not to exceed three years. B. Liquidity The Funds shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs to meet anticipated demands (static liquidity). Furthermore, since all possible cash demands cannot be anticipated, the Funds will maintain a liquidity buffer and invest primarily in securities with active secondary or resale markets (dynamic liquidity). C. Return on Investments The Funds shall be designed to attain a return on investments through budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of least importance compared to the safety and liquidity objectives described above. The core of investments are limited to relatively low risk securities in anticipation of earning a fair return relative to the risk being assumed. IRE Vl. ETHICS AND CONFLICTS OF INTEREST The Treasurer and other employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program or which could impair their ability to make impartial investment decisions. The Treasurer and investment employees shall disclose any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio and shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of their entity. The Treasurer and investment employees are required to fife annual disclosure statements as required by the Fair Political Practices Commission (FPPC). During the course of the year, if there is an event subject to disclosure that could impair the ability of the Treasurer or investment employees to make impartial decisions, the City Council will be notified in writing within 10 days of the event. Vil. SAFEKEEPING OF SECURITIES To protect against fraud, embezzlement, or losses caused by collapse of individual securities dealers, all securities owned by the City shall be held in safekeeping by the City's custodial bank, a third party bank trust department, acting as agent for the City under the terms of a custody agreement. Such custodial bank must be a federal or state association (as defined by Section 5102 of the Financial Code), a trust company or a state or national bank located within this state or with the Federal Reserve Bank of San Francisco or any branch thereof within this state, or with any Federal Reserve bank or with any state or national bank located in any city designated as a reserve city by the Board of Governors of the Federal Reserve System. Collateral for repurchase agreements will be held by a third party custodian under the terms of a Public Securities Association ("PSA") master repurchase agreement. All securities will be received and delivered using standard delivery versus payment ("DVP") procedures which ensures that securities are deposited with the third party custodian prior to the release of funds. Securities will be held by a third party custodian as evidenced by safekeeping receipts. Investments in the State Pool or money market mutual funds are undeliverable and are not subject to delivery or third party safekeeping. The Treasurer shall not be responsible for securities delivered to and receipted for by a financial institution until they are withdrawn from the financial institution by the Treasurer. On a daily basis, investment trades shall be verified against the bank transactions and broker confirmation tickets to ensure accuracy. On a monthly basis, the custodial asset statement shall be reconciled with the month end portfolio holdings. On an annual basis, the external auditor confirms investment holdings. MIS Vlll. REPORTING In accordance with amended Section 53646 of the Government Code, effective January 1, 1996, the Treasurer will annually render to the City Council in July of each fiscal year, a statement of investment policy. The policy shall be reviewed on an annual basis by the Treasurer. Any investment currently held that does not meet the guidelines of this policy shall be exempted from the requirements of this policy. At maturity or liquidation, such moneys shall be reinvested only as provided by this policy. Pursuant to Section 53607 and Section 53646 of the Government Code, the Treasurer shall render a report to the City Council and City Manager, containing detailed information on all securities, investments, and moneys of the City. The report will be submitted on a monthly basis and be provided to the Council within 30 days following the end of the month. The report will contain the following information on the funds that are subject to this investment policy: 1) the type of investment, name of the insurer, date of maturity, par and cost in each investment, 2) any investments, mcludrng loa ff and security -tending---- programs, that are under the management of contracted parties, 3) the market value and source of the valuation, 4) a description of the compliance with the statement of investment policy, and 5) a statement denoting the City's ability to meet its pool's expenditure requirements for the next six months. To the extent the City has funds invested with county investment pools, the Treasurer shall request copies of all the investment reports generated by the counties pursuant to Government Code Section 27133 and the annual audit required by Government Code Section 27134. The investment report shall reflect a summary of these reports and audits. IX. INTERNAL CONTROLS The Treasurer shall develop a system of internal investment controls and a segregation of responsibilities of investment functions in order to assure an adequate system of internal control over the investment function. The objectives of an internal control structure are to provide management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of general purpose financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. -5- X. EXTERNAL AUDIT On at least an annual basis the City shall have an external auditor review the City's investments and provide an opinion to the City respecting the City's compliance with this Investment Policy. XI. QUALIFIED DEALERS AND INSTITUTIONS The City shall transact business only with banks, savings and loans, and registered investment securities dealers. The purchase of any investment, other than those purchased directly from the issuer, shall be purchased either from an institution licensed by the State as a broker -dealer, as defined in Section 25004 of the Corporation Code, who is a member of the National Association of Securities Dealers, or a member of a Federally regulated securities exchange, a National or State - Chartered Bank, a Federal or State Association (as defined by Section 5102 of the Financial Code), or a brokerage firm designed as a Primary Government Dealer by the ------Federal-Reserve-Bank. _T_he Tr-easur-er's_staff_shall--review_all-institutions_which_wish_to._- do business with the City, in order to determine if they are adequately capitalized, make markets in securities appropriate to the City's needs, and agree to abide by the conditions set forth in this Investment Policy. All financial institutions and broker/dealers who desire to become qualified bidders for investment transactions must provide a current audited financial statement and complete the appropriate City questionnaire (See Attachment "A" and Attachment "B"). XII. COLLATERAL REQUIREMENTS California Government Code, Sections 53652 through 53667 requires depositories to post certain types and levels of collateral for public funds above the Federal Deposit Insurance Corporation ("FDIC") insurance amounts. The collateral requirements apply to bank deposits, both active (checking and savings accounts) and inactive (non- negotiable time certificates of deposit). The bank or savings and loan must secure the active and inactive deposits with eligible securities having a market value of 110% of the total amount of the deposits. State law also allows as an eligible security, first trust deeds having a value of 150% of the total amount of the deposits. A third class of collateral is letter of credit drawn on the Federal Home Loan Bank (FHLB). The City's Treasurer has the authority to waive security for that portion of a deposit which is insured pursuant to federal law. Currently, the first $250,000.00 of a deposit is federally insured. It is the City's policy to waive this collateral requirement for the first because a higher interest rate can be obtained on this increment. This increase expires on December 31, 2013 at which time the insured deposit amount will revert back to the $100,000 limit. M From time to time certain institutions ask to reduce the existing certificate of deposit to below the federally insured limit. This is requested in order that the accrued interest on the deposit will also be insured. It is to the City's advantage to reduce the principal deposit to the lower level for full insurance coverage of principal and accrued interest if the financial institution requests the reduction and if there is no penalty assessed for the reduction. If funds are to be collateralized, the collateral we accept is 110% of the deposit in government securities. Collateral is also required for repurchase agreements. The collateral level shall be valued daily and must be maintained at a level of 102% for the life of the repurchase agreement. XIII. AUTHORIZED INVESTMENTS The investments set forth in this section are authorized investments pursuant to Section 53601 of the Government Code and are authorized investments for the City subject, however, to the prohibitions set forth in Section XIV of this Investment Policy. (af ---Bonds issued by tFie Cffy; includieg bonds--p"ayable solely ouf o -t e revenues from a revenue -producing property owned, controlled, or operated by the City or by a department, board, agency, or authority of the City. The maximum maturity for these investments is five (5) years. (b) United States Treasury notes, bonds, bills, or certificates of indebtedness, or those for which the faith and credit of the United States are pledged for the payment of principal and interest. The maximum maturity for these investments is five (5) years. (c) Registered state warrants or treasury notes or bonds of this state, including bonds payable solely out of the revenues from a revenue -producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state. The maximum maturity for these investments is five (5) years. (d) Registered treasury notes or bonds of any of the other 49 United States in addition to California, including bonds payable solely out of the revenues from a revenue -producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 United States, in addition to California. The maximum maturity for these investments is five (5) years. (e) Bonds, notes, warrants, or other evidences of indebtedness of any local agency within this state, including bonds payable solely out of the revenues from a revenue -producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency. The maximum maturity for these investments is five (5) years. -7- (f) Obligations issued by banks for cooperatives, federal land banks, federal intermediate credit banks, federal home loan banks, the Federal Home Loan Bank Board, the Tennessee Valley Authority, or in obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association; or in guaranteed portions of Small Business Administration notes; or in obligations, participations, or other instruments of, or issued by, a federal agency or a United States government -sponsored enterprises (see Section XIV for prohibited investments in Small Business Administration Notes). The maximum maturity for these investments is five (5) years. (g) Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances. Purchases of bankers' acceptances may not exceed 180 days maturity or 40 percent of the agency's surplus money that may be invested pursuant to this section. However, no more than 30 percent of the agency's surplus funds may be invested in the bankers acceptances of any one commercial bank pursuant to this section (see Section XIV for prohibited investments in bankers acceptances). (h) Commercial paper of "prime" quality of the highest ranking or of the highest letter and number rating as provided for by a nationally recognized statistical -rating organization (NRSRO), such as Moody's Investors Service, Inc. (Moody's), Standard and Poor's Corporation (S&P) or Fitch Financial Services, Inc. (Fitch). Eligible paper is further limited to issuing corporations that are organized and operating within the United States and having total assets in excess of five hundred million dollars ($500,000,000) and having an "A" or higher rating for the issuer's debt, other than commercial paper, if any, as provided for by nationally recognized statistical -rating organization (NRSRO). Purchases of eligible commercial paper may not exceed 270 days maturity. Investments in commercial paper are subject to the following concentration limits: (1) No more than 40 percent of the City's surplus money may be invested in eligible commercial paper, (2) No more than 10 percent of the City's surplus money may be invested in any one issuer's commercial paper. (See Section XIV for prohibited investments in commercial paper). (i) Certificates of deposit at a selected depository institution that is a nationally or state chartered commercial bank, savings bank, or savings and loan association. The selected depository institution may use a private sector entity to assist in the placement of certificates of deposit with one or more depository institutions, provided that the purchases of certificates of deposit are pursuant to Section 53635.8, and subdivision (i) of Section 53601 and the following conditions shall apply: 1) Not to exceed 30 percent of the City's total surplus funds, 2) Certificates of deposit are fully insured by the Federal Deposit Insurance Corporation, 3) The selected depository institution shall serve as a custodian for each certificate of deposit that is issued with the placement service with other SO depository institutions for the City's account, 4) An amount of deposit that is greater or equal to the full principal of the City's initial investment for each certificate of deposit with the selected depository institution, shall be put forth by the other depository institutions if placement service of the certificates of deposit is used, and 5) The City may not invest its surplus funds with a selected depository institution for placement as certificates of deposit after January 1, 2012. The maximum maturity for these investments is five (5) years, subject to limitation as stated in 5) above. (See Section XIV for prohibited investments in certificates of deposit). Q) Negotiable certificates of deposits issued by a nationally or state -chartered bank or a state or federal association (as defined by Section 5102 of the Financial Code) or by a state -licensed branch of a foreign bank. Purchases of negotiable certificates of deposit may not exceed 30 percent of the agency's surplus money which may be invested pursuant to this section. For purposes of this section, negotiable certificates of deposits do not come within Article 2 (commencing with Section 53630), except that the amount so invested shall be subject to the limitations of Section 53638. The maximum maturity for these investments is - —--five.(5).years. . ...... ... _ _..... _...._. _ ...— - (k) (1) Investments in repurchase agreements or reverse repurchase agreements or security lending agreements of any securities authorized by this section, so long as the agreements are subject to this subdivision, including, the delivery requirements specified in this section (see Section XIV for prohibited investments in reverse repurchase agreements). (2) Investments in repurchase agreements may be made, on any investment authorized in this section, when the term of the agreement does not exceed one year. The market value of securities that underlay a repurchase agreement shall be valued at 102 percent or greater of the funds borrowed against those securities and the value shall be adjusted no less than quarterly. Since the market value of the underlying securities is subject to daily market fluctuations, the investments in repurchase agreements shall be in compliance if the value of the underlying securities is brought back up to 102 percent no later than the next business day. (3) Reverse repurchase agreements or security lending agreements may be utilized only when all of the following conditions are met: A. The security to be sold on reverse repurchase agreement or securities lending agreement has been owned and fully paid for by the City for a minimum of 30 days prior to sale. B. The total of all reverse repurchase agreements and securities lending agreements on investments owned by the City does not exceed 20 percent of the base value of the portfolio. M C. The agreement does not exceed a term of 92 days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security. D. Funds obtained or funds with the pool of an equivalent amount to that obtained from selling a security to a counter party by way of a reverse repurchase agreement or securities lending agreement shall not be used to purchase another security with a maturity longer than 92 days from the initial settlement date of the reverse repurchase agreement or securities lending agreement, unless the reverse repurchase agreement or securities lending agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security. ----(A)----Investments--in---reverse- -repurchase-.-agreements,___securities-_lending_.__ agreements, or similar investments in which the City sells securities prior to purchase with a simultaneous agreement to repurchase the security may only be made upon prior approval of the City Council and shall only be made with primary dealers of the Federal Reserve Bank of New York or with a nationally or State -chartered bank that has or has had a significant banking relationship with the City. (See Section XIV for prohibited investments in reverse repurchase agreements). (5) (A) "Repurchase agreement" means a purchase of securities by the City pursuant to an agreement by which the counterparty seller will repurchase the securities on or before a specified date and for a specified amount and the counterparty will deliver the underlying securities to the City by book entry, physical delivery, or by third -party custodial agreement. The transfer of underlying securities to the counterparty bank's customer book -entry account may be used for book -entry delivery. (B) "Securities," for purpose of repurchase under this subdivision, means securities of the same issuer, description, issue date, and maturity. (C) "Reverse repurchase agreement" means a sale of securities by the City pursuant to an agreement by which the City will repurchase the securities on or before a specified date and includes other comparable agreements. (D) "Securities lending agreement" means an agreement under which the City agrees to transfer securities to a borrower who, in turn, agrees to provide collateral to the City. During the term of the agreement, both the securities and the collateral are held by a third party. At the conclusion of the agreement, the securities are transferred back to the City in return for the collateral. M (E) For purposes of this section, the base value of the City's pool portfolio shall be that dollar amount obtained by totaling all cash balances placed in the pool by all pool participants, excluding any amounts obtained through selling securities by way of reverse repurchase agreements or security lending agreements or other similar borrowing methods. (F) For purposes of this section, the spread is the difference between the cost of funds obtained using the reverse repurchase agreement and the earnings obtained on the reinvestment of the funds. (I) Medium -term notes, defined as all corporate and depository institution debt securities with a maximum of five years maturity issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investment under this subdivision shall be rated "A" or better by a nationally recognized rating service. Purchases of medium -term notes may not exceed 30 percent of the City's surplus money which may be invested pursuant to this section (see Section XIV for prohibited investments in - " m%e sum term corporate noses) -The maximum maturity for these mvestmerits "is "--" -- - five (5) years. (m) (1) Shares of beneficial interest issued by diversified management companies that invest in the securities and obligations as authorized by subdivisions (a) to (k), inclusive, and subdivisions (m) to (o) inclusive, and that comply with the investment restrictions of this article and Article 2 (commencing with Section 53630). To be eligible for investment pursuant to this subdivision, these companies shall either: (A)Attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations. (B) Retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years' experience investing in the securities and obligations as authorized by subdivisions (a) to (k), inclusive, and subdivisions (m) to (o) inclusive, and with assets under management in excess of five hundred million dollars ($500,000,000). (2) Shares of benefit interest issued by diversified management companies that are money market fund registered with Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. sec. 80a-1 et seq). To be eligible for investment pursuant to this subdivision, these companies shall either: (A) Attained the highest ranking or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations. -11- (B) Retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years' experience managing money market mutual funds with assets under management in excess of five hundred million dollars ($500,000,000). (3) The purchase price of shares of beneficial interest purchased pursuant to this subdivision shall not include any commission that these companies may charge and shall not exceed 20 percent of the City's surplus money that may be invested pursuant to this section. However, no more than 10 percent of the City's funds may be invested in shares of beneficial interest of any one mutual fund. (n) Moneys held by a trustee or fiscal agent and pledged to the payment or security of bonds or other indebtedness, or obligations under a lease, installment sale, or other agreement of the City, or certificates of participation in those bonds, indebtedness, or lease installment sale, or other agreements, may be invested in accordance with the statutory provisions governing the issuance of those bonds, indebtedness; or lease installment sale, or other agreemm n or to the extentno - inconsistent therewith or if there are no specific statutory provisions, in accordance with the ordinance, resolution, indenture, or agreement of the City providing for the issuance. (o) Notes, bonds, or other obligations that are at all times secured by a valid first priority security interest in securities of the types listed by Section 53651 as eligible securities for the purpose of securing City deposits having a market value at least equal to that required by Section 53652 for the purpose of securing City deposits. The securities serving as collateral shall be placed by delivery or book entry into the custody of a trust company or the trust department of a bank which is not affiliated with the issuer of the secured obligation, and the security interest shall be perfected in accordance with the requirements of the Uniform Commercial Code or federal regulations applicable to the types of securities in which the security interest is granted. The maximum maturity for these investments is five (5) years. (p) Any mortgage pass -through security, collateralized mortgage obligation, mortgage -backed or other pay -through bond, equipment lease -backed certificate, consumer receivable pass -through certificate, or consumer receivable -backed bond of a maximum of five years maturity. Securities eligible for investment under this subdivision shall be issued by an issuer having an "A" or higher rating for the issuer's debt as provided by a nationally recognized rating service and rated in a rating category of "AA" or its equivalent or better by a nationally recognized rating service. Purchase of securities authorized by this subdivision may not exceed 20 percent of the City's surplus money that may be invested pursuant to this section (see Section XIV for prohibited investments in mortgage backed securities). -12- (q) Shares of beneficial interest issued by a joint powers authority organized pursuant to Section 6509.7 that invests in the securities and obligations authorized in subdivisions (a) to (o), inclusive. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria: (1) The adviser is registered or exempt from registration with the Securities and Exchange Commission. (2) The adviser has not less than five years of experience investing in the securities and obligations authorized in subdivisions (a) to (o), inclusive. (3) The adviser has assets under management in excess of five hundred million dollars ($500,000,000). (r) State and County investment pools are defined as the State of California Local Agency Investment Fund, San Bernardino County Pooled Funds of Investments, - -- ----and the-Los--Angeles-County--Pooled-Funds--of-Investments-in-this-Investment Policy. XIV, PROHIBITED INVESTMENTS AND TRANSACTIONS (a) The City shall not invest any funds in inverse floaters, range notes, or interest -only strips that are derived from a pool of mortgages. (b) The City shall not invest any funds in any security that could result in zero interest accrual if held to maturity. However, the City may hold prohibited instruments until their maturity dates. The limitation in this subdivision shall not apply to City investments in shares of beneficial interest issued by diversified management companies registered under the Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1, and following) that are authorized for investment pursuant to subdivision (m) of Section XI11, above. (c) No credit union may act as a selected depository institution under section 53601.8 or Section 53635.8 for certificates of deposit. (d) The City shall not purchase or sell securities on margin. (e) The following types of investments shall not be directly used by the City: (i) Federal Agency Issues: Guaranteed Small Business Administration (SBA) Notes. (ii) Bankers Acceptances (iii) Commercial Paper -13- (iv) Medium Term Corporate Notes (v) Reverse Repurchase Agreements (vi) Mortgage -Backed Securities However, it is acknowledged that investment pools in which the City invests may invest funds in the securities set forth in this subdivision (d). XV. DEFERRED COMPENSATION PLAN The City, offers a deferred compensation plan (Plan) to its employees and has contracted with certain providers to offer investment options in which the employees may invest their contributions to the Plan. The Plan is established in accordance with Section 457 of the Internal Revenue Code (I.R.C). Currently, the assets of the deferred compensation plan are held in the deferred compensation plan trust for the exclusive benefit of the plan's participants and their beneficiaries, and the assets shall not be diverted to any other purpose. The City of Chino Hills serves as the trustee. The trustee's beneficial ownership of plan assets held in the deferred compensation plan -- -trust-shall-be--held--for-the-further-exclusive-benefit-of--the-plan- participants- .and -their--_--._..__ _-_ beneficiaries. However, in accordance with the Plan, the employees have the exclusive responsibility to choose in which investments their contributions will be deposited. The City does not have any responsibility in selecting any investment options offered by the providers. The restrictions on investments contained within this Statement of Investment Policy do not apply to the deposits and investments made in accordance with the Plan. The Plan deposits and investments are governed by I.R.C. Section 457 and the provisions of the Plan, the contracts with the Plan providers, and the prospectus of the issuers of the various investment products offered by the Plan providers. Additionally, the plan deposits are governed by Section 17 of ArticleXVI of the California Constitution and Section 53609 of the Government Code. XVI. MONEY PURCHASE PLAN The City offers a Money Purchase Plan (MPP) to its employees and has contracted with certain providers to offer investment options in which the employees may invest their contributions to the MPP. The MPP is established in accordance with Section 401(a) of the Internal Revenue Code. Currently, Section 401(a) provides that the assets contributed to the MPP by the City's employees are immediately 100% vested to the contributor. Pursuant to the MPP, the employees have the exclusive responsibility to choose in which investments their contributions will be deposited. The City does not have any responsibility in selecting any investment options offered by the providers. The restrictions on investments contained within this Statement of Investment Policy do not apply to the deposits and investments made in accordance with the MPP. The MPP deposits and investments are governed by I.R.C. Section 401(a) and the provisions of the MPP, the contracts with the MPP providers, and the prospectus of the issuers of the various investment products offered by the MPP providers. -14- XVQ. POLICY REVIEW This Investment Policy shall be reviewed at least annually by the Treasurer and City Council to ensure its consistency with the overall objectives of preservation of principal, liquidity, and return, and its relevance to current law, financial and economic trends, and to meet the needs of the City. DATED: July 13, 2010 AMENDED: September 28, 2010 -15- SUBMITTED BY: CITY OF CHINO HILLS CITY TREASURER INVESTMENT PORTFOLIO GUIDELINES These guidelines are established to direct and control investment activities in such a manner to assure that the goals established in the Investment Policy are attained. 1. Cash Forecast. The cash flow of the City shall be updated daily with an analysis of cash receipts and expenditures and a review of the scheduled investment maturities to ensure that adequate cash will be available to meet the disbursement requirements. 2. Pooled Cash. Whenever practical, the City's cash should be consolidated into one bank account and invested on a pooled concept basis. Interest earnings may be allocated according to fund cash and investment balances. 3. Diversification. Diversification will be used as a tool to control risk. - - 4..-- ---Competitive- Bid s--Purchase--and-sale-of-securities-shall-be- made- .on -the -basis -.of-- -..— -. competitive bids and offers with a minimum of three quotes being obtained, when practical. 5. Authorized Institutions. Investment transactions will only be executed with previously approved brokers -dealers, banks, and savings and loans. A list of these institutions shall be authorized and maintained by the Treasurer. 6. Certificate of Deposit Evaluation. (a) Time Certificates of Deposit (TCD) shall be evaluated in terms of financial strength. For deposits in excess of the FDIC insured maximum of $250,000 approved collateral shall be required, as specified by California Government Code Section 53652, 53651, and 53661. (b) Negotiable Certificate of Deposit (NCD) shall be evaluated in terms of the credit worthiness of the issuer, as these deposits are uninsured and uncoilateralized promissory notes. 7. Investment Transaction. Every investment transaction must be reviewed and authorized by the Treasurer. In the absence of the Treasurer, the authority to review and authorize investment transactions is delegated to the Assistant Finance Director, within the scope outlined in the Investment Policy. The daily investment transactions may be delegated to the Assistant Finance Director, Accounting Supervisor, or one of the Department's three Senior Accountants/Accountants. All investment transactions will be reviewed and approved by the Finance Department's Accountant who is not responsible for the -1- daily investment activity. Following the Accountant's review and approval, the Finance Director will review and approve the investment transactions. 8. Safekeeping. Securities purchased from broker -dealers shall be held at the City's custodial bank. Repurchase agreement collateral will be held at a tri-party custodial bank and valued daily. 9. Strategy. Strategy refers to the plan of action for managing financial resources in the most advantageous manner. The Treasurer uses the following elements in developing strategy. (a) Economic Forecast. Economic forecast information developed by economists and financial experts and obtained through bankers, brokers, financial databases, periodicals and universities are used to assist the Treasurer with the formulation of an investment strategy for the City. (b) Investment Implementation. Execute only investment transactions which conform with anticipated cash flow requirements, economic condition and ------ .--interest-rate--trends-and_are_consistent_with--the_-established_lnvestment.-_..- _ Policy Statement. (c) Rapport. A close working relationship with City Departments such as Finance, Utilities, Capital Projects Team, and all other Departments having a significant impact on cash flow, is maintained in order to maximize the efficiency of the City's cash management system and establish cash flow requirements. -2- I CITY OF CHINO HILLS OFFICE OF THE CITY TREASURER BANK/SAVINGS AND LOAN QUESTIONNAIRE AND CERTIFICATION Name of Firm: Address: Telephone No.( } (Local) 4 Primary Representative: Name: Title: (Nat. Headquarters) Manager: Name: Title: Tel. No.( ) Tel. No,( ) 5 What are the Total Assets of the Bank/Savings and Loan? 6 What is the current Net Worth Ratio of your institution? 7 What was the Net Worth Ratio for the Previous Year? 8 What is your required Capital Ratios? A. Tangible Capital Ratio B. Core Capital Ratio C. Risk -Based Capital Ratio 9 What are your Ratings (i.e., S&P, Moody's, Thompson, Fitch)? IRE (ATTACHMENT "A") 10 What is the date of your Fiscal Year -End? A. Has there been a year during the past three years in which the Bank/Savings and Loan did not make a profit? 11 Have you read the California Government Code Section 53630 through 53684 pertaining to the State's requirements governing the deposit of monies by Local Agencies which includes Cities? [ ] YES [ ] NO 12 Amounts above the FDIC insurance coverage must be collateralized as specified in the Government Code. Where is the collateral for Deposits held? Has there ever been a failure to fully collateralize? If Yes, please attach explanation. 13 What is the education level of the Primary Contact(s)? 14 How many years of related experience does the Primary Contact(s) have? 15 What transaction documents and reports would we receive? 16 What information would you provide to our City Treasurer? 17 Describe the precautions taken by your Bank/Savings and Loan to protect the interest of the public when dealing with government agencies as depositors or investors. 18 Please provide your Contract of Deposit of Moneys pre -signed and sealed by your institution, as well as, any signature cards that you may require. 19 Please provide your Wiring Instructions: 159 (ATTACHMENT "A") 20 Please provide your Bank/Savings and Loan most recent certified financial statement. In addition, an audited financial statement must be provided within 120 days of your fiscal year-end. - CERTIFICATION - I hereby certify that I have personally read City of Chino Hills Investment Policy and the California Government Codes pertaining to the investments and deposits of the City of Chino Hills, and have implemented reasonable procedures and a system of controls designed to preclude imprudent investment activities arising out of transactions conducted between our firm and the City of Chino Hills. I understand however, that our firm is not obligated to monitor the percentage limits on the investments as described in the policy. All sales personnel will be routinely informed of City of Chino Hills' investment objectives, horizon, outlook, strategies and risk constraints whenever we are so advised. We pledge to exercise due diligence in informing City of Chino Hills Investment Officers of all foreseeable risks associated with financial transactions conducted with our firm. I attest to the accuracy of our responses to your questionnaire. NOTE: Completion of Questionnaire is only part of City of Chino Hills Certification process and DOES NOT guarantee that the applicant will be approved to do business with the City of Chino Hills. SIGNED: DATE: COUNTERSIGNED: DATE: -5- (ATTACHMENT "A") CITY OF CHINO HILLS OFFICE OF THE CITY TREASURER BROKERIDEALER QUESTIONNAIRE AND CERTIFICATION 1 Name of Firm 2 Address (Local) 3 Tel. No.( ) (Local) 4 Primary Representative: TeL No. ( ) (Nat. Headquarters) (Nat. Headquarters) Manager/Partner-in-Charge: Name: Name: Title: Title: — ..- --------Tel.--No-(—)---------------- Tel -No-(- )------- ---_ _ - - -- - ----- --- No. of Years in Institutional No. of Years in Institutional Sales: Sales: No. of Years with Firm: No. of Years with Firm: 5 Are you a Primary Dealer in U.S. Government Securities? [ ] YES [ ] NO 6 Are you a Regional Dealer U.S. Government Securities? [ )YES [ )NO 7 Are you a Broker instead of a Dealer, i.e., You DO NOT own positions of securities? [ )YES [ ] NO 8 Are you NASD certified and licensed to sell in California municipalities? [ ] YES [ )NO 9 What is the net capitalization of your firm? 10 What is the date of your Firm's fiscal year-end? 11 Is your Firm owned by a Holding Company? If so, what is its name and net capitalization? -1- (ATTACHMENT "B") 12 Please provide your Wiring and Delive Instructions: 13 Which of the following instruments are offered regularly by your local desk? [ ] T-Bills [ ] Treasury Notes/Bonds [ ] Discount Notes [ ] NCUS [ ] Agencies (specify) [ ] BAs (Domestic) [ ]BAs (Foreign) [ ] Mid -Term Notes (] Commercial Paper [ ] Repurchase Agreements [ ] Reverse Agreements 14 Which of the above does your Firm specialize in Marketing? 15 Please identify your most directly comparable City Local Agency clients in our geographical area. -- ----- - Entity -Contact -Person_ -- ----T-elephone-No...... -.Client-Since_-_.._ ___..__..- 16 What reports, transactions, confirmations and paper trail would we receive? 17 Please include samples of research reports or market information that your Firm regularly provides to local agency clients. 18 What precautions are taken by your Firm to protect the interest of the public when dealing with government agencies as investors. 19 Have you or your Firm been censored or punished by a Regulatory State or Federal Agency for improper or fraudulent activities, related to the sale of securities? [ ] YES [ ] NO 20 If yes, please explain. 21 Attach certified documentation of your capital adequacy and financial solvency. In addition, an, audited financial statement must be provided within 120 days of your fiscal year-end. -2- (ATTACHMENT "B") - CERTIFICATION - I hereby certify that I have personally read City of Chino Hills Investment Policy and the California Government Codes pertaining to the investments and deposits of the City of Chino Hills, and have implemented reasonable procedures and a system of controls designed to preclude imprudent investment activities arising out of transactions conducted between our firm and the City of Chino Hills. I understand however, that our firm is not obligated to monitor the percentage limits on the investments as described in the policy. All sales personnel will be routinely informed of City of Chino Hills' investment objectives, horizon, outlook, strategies and risk constraints whenever we are so advised. We pledge to exercise due diligence in informing City of Chino Hills Investment Officers of all foreseeable risks associated with financial transactions conducted with our firm. I attest to the accuracy of our responses to your questionnaire. NOTE: Completion of Questionnaire is only part of City of Chino Hills Certification process and DOES NOT guarantee that the applicant will be approved to do ------------- business--with-the-City-oof-Ghino-Hills.--------------------------- ---- - SIGNED: DATE: COUNTERSIGNED: DATE: (Person in charge of government securities operations.) -3- (ATTACHMENT "B") EXHIBIT D CITY OF CHINO HILLS SCHEDULE OF CASH AND INVESTMENTS* DECEMBER 2010 I. Funds Held by City and Fiscal Agents: A. Funds Held by City: Investments Cost San Bernardino County Pooled Funds of Investments (SBCPFI) $ 48,160,798.85 Los Angeles County Pooled Funds of Investments (LACPFI) 36,826,724.98 State of California Local Agency Investment Fund (LAIF) 39,810,111.12 Total Investments 124,797,634.95 Cash Bank of America - Checking 1,359,009.00 Bank of America - Payroll 10,000.00 Wells Fargo Bank - Credit Card 107,266.77 Total Cash in Bank 1,476,275.77 Petty Cash 2,900.00 Total Cash 1,479,175.77 Total Funds Held by City 126,276,810.72 Does not Include employee deferred compensation funds or funds held by fiscal agents persuant to bond indentures. source: City of Chino Hills Market Value 48,243,636,11 36,767,668.27 39,868,286.56 124,879,590.94 1,359,009.00 10,000.00 107,266.77 1,476,275.77 2,900.00 1,479,175.77 126,358,766.71