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Reso 91-137 - Reso approving preliminary official statement - Churn Creek Rd Extension No. 2, Assessment Dist No 1990-5
1 A RESOLUTION NO. !� RESOLUTION APPROVING PRELIMINARY OFFICIAL STATEMENT CHURN CREEK ROAD EXTENSION NO. 2, ASSESSMENT DISTRICT NO. 1990-5 The City Council of the City of Redding resolves: As a part of the proceedings for the sale of improvement bonds in Churn Creek Road Extension No. 2, Assessment District No. 1990-5, City of Redding, Shasta County, California, this City Council hereby approves the Preliminary Official Statement dated April 2 , 1991, and a Final Official Statement derived substantially therefrom. Distribution of the Preliminary j Official Statement and the Final Official Statement is hereby authorized. This Preliminary Official Statement is final except for certain information which will not be known until the time of sale and is therefore "deemed final" within the meaning of Rule 15c2-12 of the Securities and Exchange Commission. The Mayor is authorized to sign the Preliminary Official Statement and the Final Official Statement. I HEREBY CERTIFY that the foregoing resolution was duly and regularly adopted by the City Council of the City of Redding, Shasta County, California, at a regular meeting thereof, held on the 2nd day of April, 1991. AYES: Councilmembers Arness, Dahl, Fulton, Moss & Buffum NOES: Councilmembers None ABSENT: Councilmembers None ETHEL A. NICHOLS, City Clerk, City of Redding, Shasta County, California I By w ORIGINAL PRELIMINAR*FICIAL STATEMENT DATED AFW 2, 1991 NEW ISSUE In the opinion of Sturgis, Ness, Bntnsell&Spern, Ennenn,ille, California, assuming continuing compliance with the provisions of the Internal Revenue Code of 19Sd as aritended (the "1956 Code' as described herein, the interest on the Bonds is not includable in the gross income of the owners thereof for Federal income tai-puthoses. Interest on the Bonds nnav be included in the calculation for certain tares, including the alternative nninimurtn tar of corporations.See"TAX EXEMPTION"Iterein for certain provisions of the 1986 Code that inav affect the tat treatment ol'uiterest on die Bonds(orcertaitt Bondliolders. Interest on the Bonds will be ererttpt front Stdte i f California personal iiiconte tares. See "TAX EXEMPTION"herein. $269,560.51 CITY OF REDDING CHURN CREEK ROAD EXTENSTION NO. 2 ASSESSMENT DISTRICT NO. 1990-5 (SHASTA COUNTY, CALIFORNIA) LIMITED OBLIGATION IMPROVEMENT BONDS Dated: April 18,1991 Due: September 2,as shown below I The acquisition of the improvements will be undertaken as authorized under the provisions of the Municipal Improvement Act of 1913(Division 12 of the California Streets and Highways Code).The Bonds are issued pursuant ito the provisions of the Improvement Bond Act of 1915(Division 10 of said Code). The Bonds are issued only as fully registered Bonds in the denomination of$5,000 or any integral multiple thereof,except for one Bond due to 1992 which will include the amount by which the principal amount of the issue exceeds the largest rote ral multiple of$5,000 contained therein. Interest is payable on March 2, 1992.and semi- annually thereafter on Aarch 2 and September 2 of each year. Principal of and premium,if any,on the Bonds,will I be paya-ble at maturity or at an earlier redemption date upon presentation by the registered owner or his duly i authorized representative at Bankers Trust Company of California NationalAssociation San Francisco,California, the•Registrar,Transfer Agent and Payin Agent. Interest on the fonds is payable by cAeck or draft mailed to the registered owners thereof as of the 15th ay immediately preceding the interest payment date. The Bonds are subject to redemption on any March 2 or September in advance of their fixed maturity date upon giving 30 days prior notice and upon payment of the principal and interest accrued thereon to the date of redemption,plus a redemption premium of three percent(3`70) f the remamm/�principal amount of the Bonds to be redeemed. The Bonds may be refunded pursuant to the Refunding Act of 1984 for 1915 Act Improvement Bonds. Under the provisions of the Improvement Bond Act of 1915,installments of principal and interest sufficient to meet annual debt service on the Bonds shall be included on the re ular county tax bilis for parcels of property against which there are unpaid assessments. These annual installments are to be paid into the Redemption Fund, to be held by the City Treasurer and used to pay debt service on the Bonds as it becomes due. IF A DELIN UENCY OCCURS IN THE PAYMENT OF ANY ASSESSMENT INSTALLMENT THE CITY WILL HAVE A UTY ONLYTO TRANSFER INTO THE REDEMPTION FUND THE AMOUNT OP THE DELINQUENCY OUT OF THE RESERVE FUND. THIS DUTY OF THE CITY IS CONTINUING DURING THE PERIOD OF DELINQUENCY ONLY TO THE EXTENT OF FUNDS AVAILABLE FROM THE RESERVE FUND UNTIL REINSTATEMENT REDEMPTION OR SALE OF THE DELINQUENT PROPERTY. THERE IS NO ASSURANCE THAT FUND SiWILLBEAVAILABLE FROM THE RESERVE FUND FORTHIS PURPOSE AND IF DURING THE PERIOD OF DELINQUENCY, THERE ARE INSUFFICIENT AVAILABLE FUNDS,A DEUVMAY OCCUR IN PAYMENTS TO THE OWNLRS OF THE BONDS. To provide funds for payment of the Bonds and the interest thereon as a result of any delinquent install- ments, the City will establish a special Reserve Fund and deposit therein Bond proceeds in the amount of seven percent l( of the amregate principal amount of the Bonds. Additionally, the City has covenanted to initiate judicial Iorec osure in thhe event of a delinquency by October 1 following such delinquency. The Bonds are not a general obligation of the City of Redding. Neither the faith and credit nor the taxing p i ower of the City, the State of California or any political subdivision thereof, is pledged to the payment of the onds. The information set forth in this Official Statement, including information in the section herein entitled "Bondowners Risks",should be read in its entirety. MATURITY SCHEDULE Due Interest Due Interest Sept.2 Amount Rate Sept.2 Amount Rate 1992 2000 1993 2001 1994 2002 1995 2003 1996 2004 1997 2005 1998 2006 1999 PRICE: 100% (Plus accrued interest) The Bonds are offered when as and if issued,subject to approval as to their legality by Stutr s, Ness,Bnsell &Spetn;Ennen,ville, Calt ostia(tlie Bond Counsel'). Tlie Bonds are expected to be available for delnt ivery on or about Aprt118,1991 ih Elneiyvi le, California. i CITY OF REDDING SHASTA COUNTY, CALIFORNIA Mayor and City Council Nancy Buffum, Mayor Mike Dahl,Vice Mayor Carl Arness Lee D. Fulton, M.D. } Charles Moss I City Staff Robert M. Christofferson, City Manager I Peggie Linville,City Treasurer Linda R.Downing,Director of Finance Robert W. Galusha, Director of Public Works Randall A.Hayes, City Attorney Ethel A. Nichols, City Clerk Bond Counsel Sturgis,Ness,Brunsell&Sperry Emeryville, California Transfer Agent.Registrar and Paying Agent Bankers Trust Company of California San Francisco, California Engineer of Work i Sharrah Dunlap &Associates Redding,California Underwriter M.L.Stern& Co.Inc. Beverly Hills, California I i i No dealer, broker, salesman, or other person has been authorized by the City of Redding or the Underwriter to give any information or to make representations, other than those contained herein, and, if given or.made, such other information or representations must not be relied upon as having been authorized by the City or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds described herein by any person in any jurisdiction in which it is unlawful for such a person to make such offer, solicitation or sale. The information set forth herein has been compiled by M.L. Stern & Co. Inc. and obtained from the City and from certain other sources which are believed to be reliable, but is not guaranteed as to accuracy or completeness. Neither this information nor any statement which may have been made orally or in writing is to.be construed as a contract with the purchasers of any of the Bonds to ' be presently issued. i The summaries and references to any Code, Act, or Indenture and to other statutes and documents in this Official Statement do not purport to be comprehensive or definitive, and are qualified in their entireties by reference to each statute and document. The information herein is subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the recitals herein. All statements made herein are made as of January 15, 1991, the date of this Official Statement, except statistical information or other statements where some other date is indicated in the text. The Bonds will not be rated. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended. The Bonds will not be listed on any stock or other securities exchange. Neither the Securities and Exchange Commission nor any other federal, state, or other governmental entity or agency will have passed upon the accuracy or adequacy of the Official Statement or approved the Bonds for sale. IN CONNECTION WITH THIS BOND OFFERING, THE UNDERWRITER MAY OVER ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS DESCRIBED HEREIN AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE BONDS DESCRIBED HEREIN TO CERTAIN DEALERS AND DEALER BANKS ACTING AS AGENT AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES AND SAID PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER. I 1 I { 1 P G u p N n I� 0 N THIS PAGE INTENTIONALLY LEFT BLANK h I' TABLE OF CONTENTS INTRODUCTORY STATEMENT 1 THE BONDS 2 jPurpose of the Bonds 2 Authority for Issuance 2 Description of the Bonds 3 Transfer and Exchange 3 Mutilated,Lost or Stolen Bonds 4 Optional Redemption and Prepayment of Bonds 4 Refunding Bonds 4 Disposition of Surplus from the Improvement Fund 4 Security for the Bonds 5 Limited Obligation of the City Upon Delinquency 5 Articles XIII A and XIII B of the California Constitution 6 Reserve Fund 6 Covenant to Commence Superior Court Foreclosure 8 Price Realized Upon Foreclosure 8 Priority of Lien 9 Arbitrage Covenant 9 Debt Service Schedule 10 SPECIAL RISK FACTORS 11 General 11 Limited Obligation of the City Upon Delinquency 11 Property Ownership 12 Bankruptcy 12 No City Obligation 12 Factors Which May Affect Land Development and Property Values 12 Ballot Initiatives 13 Other Indebtedness 13 Estimated Land Values 13 Loss of Tax Exemption 14 THE ASSESSMENT DISTRICT 14 Description of the District 14 District Valuation 14 Project Description 14 Statement of Method of Determining Benefit 15 Tax Delinquencies and Prior Assessment Liens 16 MISCELLANEOUS 16 Legal Opinion 16 Tax Exemption 16 No Litigation 17 No Rating 17 Underwriting 17 Additional Information 17 I k h 4 THIS PAGE INTENTIONALLY LEFT BLANK I INTRODUCTORY STATEMENT THIS INTRODUCTION DOES NOT PURPORT TO DESCRIBE IN DETAIL ALL PERTINENT MATTERS RELATING TO THE BONDS, THE PROJECT, THE DISTRICT, PROPOSED DEVELOPMENT OR PROPERTY OWNERSHIP. THIS INTRODUCTORY STATEMENT IS SUBJECT IN ALL RESPECTS TO THE MORE COMPLETE INFORMATION IN THIS OFFICIAL STATEMENT, INCLUDING THE COVER PAGE AND APPENDICES HERETO. Purpose Proceeds from the City of Redding, Churn Creek Road Extension No. 2, Assessment District No. 1990-5 Limited Obligation Improvement Bonds (the 'Bonds"), will be used to finance the acquisition of completed jpublic improvements, together with incidental expenses(including bond issuance costs), as more fully described in the section herein entitled "THE ASSESSMENT DISTRICT - The Project". The methodology used by the Assessment Engineer to apportion the assessment is described under the heading "THE ASSESSMENT DISTRICT- Method of Assessment Spread". Security for the Bonds The Bonds are issued upon and secured by the unpaid assessments and, together with interest thereon, constitute a trust fund for the redemption and payment of the principal of the Bonds and the interest thereon. All the Bonds, including principal and interest, are secured by the monies in the Redemption Fund created pursuant to the assessment proceedings and by the unpaid assessments and are payable exclusively out of the Redemption Fund. The unpaid assessments represent fixed liens on the parcels of land assessed under the proceedings.They do not, however,constitute the personal indebtedness of the owners of said parcels. Under the provisions of the Improvement Bond Act of 1915, installments of principal and interest sufficient to meet annual debt service on the Bonds are to be included on the regular County of Shasta property tax bill sent to each owner of property against which there is an unpaid assessment.These annual installments are to be paid into the Redemption Fund which will be held by the City Treasurer and used to pay Bond principal and interest as the same shall become due. The installments billed against the assessed property each year represent the total principal and interest on the Bonds coming due that year. A reserve fund in the amount of seven percent (7%) of the principal amount of Bonds issued (the 'Reserve Fund") will be established from Bond proceeds. The Reserve Fund will be a source of available funds to advance to the Redemption Fund in the event of delinquent assessment installments. Additionally, the City has covenanted with the Bondowners that, not later than October 1 in any year, the City shall file an action in the Superior Court to foreclose the lien of each delinquent assessment if the sum of uncured assessment j delinquencies for the preceding fiscal year exceeds five percent (5%) of the assessment installments posted to the tax roll for that fiscal year, and if the amount of the special reserve fund is less than the Reserve Requirement, and thereafter to prosecute diligently to completion court foreclosure proceedings upon the lien of any and all delinquent unpaid assessments and interest. If a delinquency occurs in the payment of any assessment installment, the City has a duty only to transfer into the Redemption Fund the amount of the delinquency out of the Reserve Fund. This duty of the City is continuous during the period of delinquency only to the extent of funds available from the Reserve Fund, until reinstatement, redemption or sale of the delinquent property.There is no assurance that funds will be available for such purpose and if, during the period of delinquency, there are insufficient monies in the Reserve Fund, a delay may occur in payments to the owners of the Bonds. If there are additional delinquencies after depletion of funds in the Reserve Fund, the City is not obligated to transfer into the Redemption Fund the amount of such delinquencies out of any other available monies of the City. 1 I 1 i • h THE CITY'S LEGAL RESPONSIBILITIES WITH RESPECT TO SUCH DELINQUENT INSTALLMENTS r ARE LIMITED TO ADVANCING THE AMOUNT THEREOF SOLELY FROM ANY AVAILABI E MONIES IN THE RESERVE FUND AND TO UNDERTAKING JUDICIAL FORECLOSURE PROCEEDINGS TO RECOVER SUCH DELINQUENCIES AS COVENANTED BY THE CITY. N The Bonds are not general obligations of the City, County, the State of California or any political subdivision thereof and neither the City nor the State nor any political subdivision thereof has pledged its full faith and credit or taxing power for the payment of the Bonds. For a more complete description of the above, see the sections under the heading "THE BONDS" entitled "Security for the Bonds", 'Reserve Fund" and"Covenant to Commence Superior Court Foreclosure" herein. The District The Assessment District proceedings are being conducted pursuant to the Municipal Improvement Act of 1913 and Resolution of Intention No. 90-593, approved by the City Council on December 4, 1990. The total assessment for the work as confirmed by the City is $269,560.51 and is represented by the Bonds of this issue. See"THE ASSESSMENT DISTRICT-The Project"for a further discussion of the work. Churn Creek Road Extension No. 2, Assessment District No. 1990-5, (the "District") is composed of approximately 26.4 acres of land, all of which is planned to be zoned for residential purposes. The District is located south of College View Drive, approximately one mile east of I-5 and one mile south of Highway 299, about four miles northeast of centrad downtown Redding. Bondowners Risks For a discussion of certain of the investment qualities of this issue, refer to the section herein entitled "SPECIAL RISK FACTORS". Information contained in this Official Statement does not purport to be comprehensive or definitive. All references to the Bonds and the Project are qualified in their entirety by reference to the Engineer's Report and to the City's resolutions setting forth the terms and descriptions thereof. THE BONDS Purpose of the Bonds Proceeds from the sale of the Bonds will be used to finance the acquisition of public improvements, incidental expenses and issuance costs, all as described in the Section entitled "THE ASSESSMENT DISTRICT - The Project". Authority for Issuance The improvement proceedings for the District were initiated by adoption of the Resolution of Intention No. 90- 593 by the City Council (the "Council") of the City of Redding on December 4, 1990, and were conducted pursuant to Division 12 of the California Streets and Highways Code, the Municipal Improvement Act of 1913 (the "1913 Act"). The Bonds are authorized pursuant to a resolution providing for issuance of the Bonds (the "Resolution of Issuance") adopted by the Council on April 2, 1991. The Bonds, which are secured by and represent the unpaid assessments levied against private property in the District, are issued pursuant to the provisions of the Improvement Bone Act of 1915 (the'Bond Law" or the"1915 Act"). 2 The Assessment Engineer prepared a written report (the "Engineer's Report") dated February 19, 1991, which contains, among other things, the list of improvement costs and the amount of the assessment to be levied against the parcels in the District. The assessment was levied on the basis of the special benefit to be derived by such parcels from the improvements. (See "THE ASSESSMENT DISTRICT- Method of Assessment Spread" herein.) 1 On April 2, 1991, a public hearing was held at which the public had the right to protest the levy of the proposed assessment in writing, prior to or at the commencement of the hearing and to be heard at the hearing. No protests were received at the hearing. The Engineer's Report will be recorded in the office of the Director of Public Works as soon as practical after April 2, 1991, at which time the assessments will become a lien against the assessed parcels. The cash collection period was waived. I Description of the Bonds i The Bonds are dated April 18, 1991, and will bear interest from the date at the rates and mature in the amounts 1 and on the dates set forth on the cover page of this Official Statement.The Bonds are issued as fully registered bonds without coupons in denominations of$5,000 or any integral multiple thereof except for one Bond due in 1992 which will include the amount by which the principal amount of the issue exceeds the largest integral 1 multiple of$5,000 contained therein.Principal, interest and premium,if any,on the Bonds is payable at Bankers Trust Company of California, National Association, the Registrar, Transfer Agent and Paying Agent (the "Paying Agent"), San Francisco, California. Interest on the Bonds is payable by check or draft mailed to the respective registered owners thereof as of the 15th day immediately preceding the payment date. MATURITY SCHEDULE Due Amount Due Amount September 2 Maturing September 2 Maturine 1992 $ 1999 $ 1993 2000 1994 2001 1995 2002 1996 2003 1997 2004 1998 2005 Transfer and Exchanee Transfer of ownership of a Bond shall be made by exchanging the same for a new fully registered Bond of the same maturity in the same aggregate principal amount. All of such exchanges shall be made in such manner and upon such reasonable terms as may from time to time be determined and prescribed by the City;provided, however, that no such exchange is required to be made by the Fiscal Agent between the fifteenth day of the J month next preceding any Interest Payment Date, nor during the fifteen days preceding the selection of any 1 Bond for redemption prior to maturity thereof, nor with respect to any Bond which has been selected for redemption prior to the maturity thereof. Such registration and transfer shall take place at the principal corporate trust office of the Fiscal Agent. The Fiscal Agent may make a charge for every exchange or transfer and shall require the Bondholder to pay for any tax or governmental charge required to be paid with respect to j such exchange or transfer. a I i I 1 I� f 3 I . P Mutilated.Lost or Stolen Bonds l If any Bond is mutilated, lost, stolen or destroyed, the City may execute and the Fiscal Agent may authenticate and deliver a new Bond or Bonds in replacement thereof in the same aggregate principal amount and of the same maturity. Mutilated Bonds :must be surrendered to the Fiscal Agent. In the case of a lost, stolen or destroyed Bond, the City and the Fiscal Agent may require satisfactory evidence of the loss, theft or destruction of the Bond and indemnification prior to authenticating and delivering a new Bond. The City and Fiscal Agent may charge the owners of mutilated, lost, stolen or destroyed Bonds for their reasonable fees and expenses in connection with the replacing of such Bonds. Optional Redemption and Prepayment of Bonds Any Bond may be called for redemption by the Treasurer of City of Redding prior to maturity on any March 2 or September 2 upon payment of the principal balance thereof, plus accrued interest to the date of redemption together with a premium of three percent (3%) of said principal amount. No interest will accrue on a Bond beyond the March 2 or September 2 on which said Bond is called for redemption. Notice of redemption must be given to the registered owner of the Bond by personal service or registered or certified mail at least 30 days prior to the redemption date, as provided in the Bond Law. The determination as to which Bond or Bonds are to be called will be made by the Paying Agent in accordance with the Bond Law. A transfer of property ownership could result in prepayment of all or part of the assessment. Such prepayment would result in redemption of a portion of the Bonds prior to their stated maturities. Refundine Bonds Pursuant to the Refunding Act of 1984 for 1915 Act Improvement Bonds (Division 11.5 of the Streets & Highways Code of the State of California),the City may issue refunding bonds for the purpose of redeeming the Bonds. The City may issue and sell refunding bonds without giving notice to and conducting a hearing for the owners of property in the assessment district, or giving notice to the holders of the Bonds, if the City finds that (i) each estimated annual installment of principal and interest on the reassessment to secure the refunding bonds is less than the corresponding annual installment of principal and interest on the original assessment, (ii) the number of years to maturity of the refunding bonds does not exceed that of the Bonds, and(iii) the amounts of any reassessments are computed by reducing each original assessment by the same percentage. Upon issuing refunding bonds, the City could require that the Bonds be exchanged for refunding bonds on any basis which the City determines is for the City's benefit, if the Bondholders consent to the exchange. As an alternative to exchanging the refunding bonds for the Bonds, the City could sell the refunding bonds and use the proceeds to pay the principal of and interest and redemption premium,if any,on the Bonds as they become due, or advance the maturity of the Bonds and pay the principal of and interest and redemption premium thereon. Disposition of Surplus from the Improvement Fund The amount of any surplus remaining in the Improvement Fund after completion of the acquisition of the Project (as hereinafter defined) and payment of all claims may, at the discretion of the City Council: A) Be transferred to the General Fund of the City if the surplus does not exceed the lesser of one thousand dollars ($1,000) or five percent(5%) of the total amount expended from the Improvement Fund; B) Be applied as a credit on the assessment or refunded to the payer if such assessment has been paid in cash, all as provided in the Act; or C) Be utilized for maintenance of the Improvements. 4 i Security for the Bonds The Bonds are issued upon and secured by the unpaid assessment against the property in the District together Iwith interest thereon, and said unpaid assessment together with interest thereon constitutes a trust fund for the redemption and payment of the principal of the Bonds and the interest thereon. All the Bonds are secured by the monies in the Redemption Fund and the Reserve Fund created pursuant to the assessment proceedings and by the unpaid assessments levied to provide for purchase by the City of the Project. Principal of and interest on the Bonds are payable exclusively out of the Redemption Fund. The assessment and each installment thereof and any interest and penalties thereon constitute a lien against the parcels of land on which it is levied until the same is paid. Such lien is subordinate to all fixed special assessment liens previously imposed upon the same property,but has priorityover all existing and future private liens and over all fixed special assessment liens which may thereafter be created against the property. Such lien is co-equal to and independent of the lien for general property taxes. The City reports that there are no prior special assessment liens against various parcels in the District. The Bonds are not secured by the general taxing power of the City, or the State or any political subdivision of the State, and neither the County nor the State nor any political subdivision of the State has pledged its full faith i and credit for the payment thereof. Although the unpaid assessment constitutes a fixed lien on the parcels assessed,it does not constitute a personal indebtedness of the owner of said parcel. Furthermore, there can be no assurance as to the ability or the I willingness of such owner to pay the unpaid assessment. The unpaid assessment will be collected in annual installments, together with interest on the declining balance, on the County of Shasta tax roll on which general taxes on real property are collected and are payable and become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do said general taxes, and the property upon which the assessment was levied is subject to the same provisions for sale and redemption as are properties for nonpayment of general taxes. These annual installments are to be paid into the Redemption Fund which will be held by the City Treasurer and used to pay the principal of and interest on the Bonds as they become due. The installments billed against the parcels of property in the District will be equal to the total principal and interest coming due on all of the Bonds that year. Limited Obligation of the City Upon Delinquency If a delinquency occurs in the payment of any assessment installment, the City has a duty only to transfer into the Redemption Fund the amount of the delinquency out of the Reserve Fund. This duty of the City is continuing during the period of delinquency,until reinstatement, redemption or sale of the delinquent property. There is no assurance that funds will be available for this purpose and if,during the period of delinquency,there are insufficient monies in the Reserve Fund, a delay may occur in payments to the owners of the Bonds.If there are additional delinquencies after exhaustion of funds in the Reserve Fund, the City is not obligated to transfer into the Redemption Fund the amount of such delinquencies out of any other available monies of the City. 1 THE CITY'S LEGAL RESPONSIBILITIES WITH RESPECT TO SUCH DELINQUENT INSTALLMENTS ARE LIMITED TO ADVANCING THE AMOUNT THEREOF SOLELY FROM ANY AVAILABLE MONIES IN THE RESERVE FUND AND TO UNDERTAKING JUDICIAL FORECLOSURE PROCEEDINGS TO RECOVER SUCH DELINQUENCIES. THIS DUTY OF THE CITY IS CONTINUING DURING THE PERIOD OF DELINQUENCY ONLY TO THE EXTENT OF FUNDS AVAILABLE FROM THE RESERVE FUND UNTIL REINSTATEMENT,REDEMPTION OR SALE OF THE DELINQUENT PROPERTY. 5 i Articles XIII A and XIII B of the California Constitution On June 6, 1978, California voters approved an amendment to the California Constitution, commonly known as Proposition 13 (the Jarvis/Gann Initiative) which added Article XIII A to the California Constitution. The effect of Article XIII A is to limit ad valorem taxes on real property. On November 7, 1978, the California voters approved Proposition 8,which made certain clarifications to Article XIII A. Enactment of Article XIII A has reduced the amount of general property tax revenues received by the City. This reduction in such revenues makes it less likely that the City will have surplus funds, other than monies in the Reserve Fund, to pay delinquent assessment installments if the City Council with the exercise of its discretion choose to do so. If there; are additional delinquencies after exhaustion of funds in the Reserve Fund, the City has no obligation to transfer into the Redemption Fund the amount of any such delinquencies out of any surplus monies of the City. On July 2, 1979,the Fifth District Court of Appeal (94 Cal.App. 3d 974) rendered a 3-0 decision in the case of County of Fresno v. Malmstrom that determined that special assessments are not subject to the limitations of Article XIIIA (Proposition 13). The Court held the one percent tax limitation imposed by California Constitution Article XIIIA on ad valorem taxes does not apply to special assessments levied pursuant to the Improvement Act of 1911 (Streets and Highways Code, Section 5000 et seq. and 10000 et seq.) and the 1913 Act. The Court further held that because special assessments pursuant to such acts are not within the definition of"special taxes"in Article XIIIA, the Constitution does not require the levy of assessments and the issuance of Bonds to be approved by a two-thuds vote of the qualified electors of the District. On September 12, 1979, the California Supreme Court refused to hear an appeal of the lower court's decision. At the November 6, 1979 general election, Proposition 4 (the Gann Initiative) was approved by the voters of California. Such proposition added Article XIII B to the California Constitution. Article XIII B limits the annual appropriations of the City to the amount of appropriations for the prior year adjusted for changes in the cost of living and population. On December 17, 1980, the Third District Court of Appeal (113 Cal.App. 3d 443) rendered a 3-0 decision in the case of County of Placer v. Corin that determined that special assessments are not subject to the limitation of Article XIIIB (Proposition 4). The Court held that the definition of "proceeds of taxes" imposed by California Constitution Article XIIIB does not apply to special assessments and improvement Bonds issued pursuant to the Bond Law and the 1913 Act. The decision of the Court was not appealed. The enactment of Article XIIIA of the California Constitution (Proposition 13) and subsequent legislative enactments effectively repeal the otherwise mandatory duty on the part of the City,under the Bond Law, to levy and collect a special tax (in an amount necessary to meet delinquencies, but not to exceed ten cents on each $100 of assessable property within the City in any one year) if other funds are not available to cover delinquencies. A Reserve Fund will be established from the Bond proceeds as a source of monies to advance to the Redemption Fund in the event of a delinquent assessment installment. Additionally, the City has covenanted to commence judicial foreclosure proceedings by October 1 of any year following such delinquency and to prosecute diligently to completion the foreclosure upon the lien of each and every delinquent assessment installment. Reserve Fund Pursuant to Part 16 of the Act, there shall be created a special reserve fund for the Bonds to be designated by the name of the Assessment District and specified as the special "Reserve Fund". An amount equal to seven percent (7%) of the original principal amount of the Bonds shall be deposited in the Reserve Fund out of said Bond proceeds. 6 1 Monies in the Reserve Fund shall be applied as follows: A) Amounts in said Reserve Fund shall be transferred to the Redemption Fund for the Bonds if, as a result of delinquencies in the payment of assessments, there are insufficient monies in said Redemption Fund to pay principal of and interest on the Bonds when due. Amounts so transferred shall be repaid to the Reserve Fund from proceeds from the redemption or foreclosure of property with respect to which an assessment is unpaid and from payments of the delinquent assessments; B) As provided by Section 5.4 of the Resolution of Issuance, interest earned on the investment of Iamounts in the Reserve Fund will be deposited initially in the investment earnings fund. As of September 2 of each year during the term of the Bonds, the Treasurer shall determine whether any portion of investment earnings must be rebated to the United States pursuant to ! Secton 148 of the 1986 Code. Any amounts required to be rebated will be transferred to the { arbitrage rebate fund, and the balance will be transferred as follows: i (a) To the extent that the balance in the Reserve Fund is less than the Reserve Requirement, as defined in the Resolution of Issuance, a transfer will be made from the investment earnings fund to the Reserve Fund. (b) The remaining balance in the investment earnings fund, if any, will be transferred to the Improvement Fund until the improvement is completed and the Improvement Fund is closed; thereafter the balance in the investment earnings fund will be transferred to the Redemption Fund to be used, in the discretion of the City Treasurer, as a credit upon the annual installments of assessment or for the advance retirement of Bonds. Annual Debt Service on the Bonds for each year ending September 2nd shall equal the sum of: 1) The interest falling due on the outstanding bonds in such 12 month period, assuming that the outstanding bonds are retired as scheduled; and 2) The principal amount of outstanding bonds falling due during such 12 month period. "Average Annual Debt Service" shall mean the average Annual Debt Service during the term of the Bonds. "Maximum Annual Debt Service' shall mean, as computed from time to time, the largest Annual Debt Service during the period from the date of such computation through the final maturity of any outstanding bonds. C) On July 15 of each fiscal year the amount on deposit in the Reserve Fund in excess of the Reserve Requirement shall be transferred from the Reserve Fund to the Redemption Fund and shall be credited to the unpaid assessment installments payable during such fiscal year. The Auditor's record, prepared pursuant to Section 8682 of the Streets and Highways Code, shall reflect the credits against each of the unpaid assessments in the manner provided in Streets and Highways Code Section 10427.1 in amounts equal to each parcel's proportionate share of such transfer. Notwithstanding the above, interest earnings on monies on deposit in the Reserve Fund in excess of the "yield" on the Bonds, as that term is defined in the Internal Revenue Code of 1986 (the "Code"), shall be subject to transfer and rebate to the United States. i D) Whenever monies in the Reserve Fund are sufficient to retire all of the Bonds outstanding, plus accrued interest thereon, such money shall be transferred to the Redemption Fund for the Bonds and collection of the remaining unpaid assessments shall cease. i I 7 I I F E) In the event assessments are paid in cash in advance of their final maturity date,_the City is required to credit the prepaid assessment with a proportionate share of the Reserve Fund and to transfer an amount equal to such credit to the Redemption Fund to be utilized for the advance retirement of Bonds. The need to make advances from the Reserve Fund may result in its total depletion prior to reimbursement from resales of property or delinquency redemptions. In that event, there could be a default in payments to holders of the Bonds,the curing of which would be dependent upon reimbursement of the Reserve Fund. If there are not sufficient funds in the Reserve Fund to fully cover a Redemption Fund deficiency and it is determined by the City Treasurer that there will not be an ultimate loss to the holders of the Bonds, the City Treasurer is required to direct the Paying Agent to redeem matured Bonds and pay interest on the Bonds as long as there are available funds in the Redemption Fund, after transfer from the Reserve Fund. This procedure could result in some matured Bonds not being redeemed and interest on the Bonds not being fully paid on the due dates. Such matured Bonds would not be fully redeemed and such delayed interest would not be paid until funds are available from a foreclosure sale of the property having the delinquent assessment installments. Covenant to Commence Superior Court Foreclosure The Bond Law provides that in the event any assessment or installment thereof or any interest thereon is not paid when due, the City may order the institution of a court action to foreclose the lien of the unpaid assessment. In such an action, the real property subject to the unpaid assessment may be sold at judicial foreclosure sale. This foreclosure sale procedure is not mandatory. However, by the Resolution providing for the issuance of the Bonds, the City has covenanted with the Bondowners that, not later than October 1 in any year,the City shall file an action in the Superior Court to foreclose the lien of each delinquent assessment if the sum of uncured assessment delinquencies for the preceding fiscal year exceeds five percent (5%) of the assessment installments posted to the tax roll for that fiscal year, and if the amount of the special reserve fund is less than the Reserve Requirement. The City will thereafter diligently prosecute to completion court foreclosure proceedings upon the lien of any and all delinquent unpaid assessments and interest. In the event such Superior Court foreclosure or foreclosures are necessary,there may be a delay in payments to Bondowners pending prosecution of the foreclosure proceedings and receipt by the City of the proceeds of the foreclosure sale. It is also possible that no bid for the purchase of the applicable property would be received at the foreclosure sale.See also the section herein entitled"SPECIAL RISK FACTORS". Prior to July 1, 1983,the right of redemption from foreclosure sales was limited to a period of one year from the date of sale. Under legislation effective July 1, 1983, the statutory right of redemption from such foreclosure sales has been repealed. However, a period of 140 days must elapse after a court adjudges and decrees a lien against the lot or parcel of land covered by an assessment before the sale of such parcel can be given. Furthermore,if the purchaser at the sale is the judgment creditor, i.e. the City, an action may be commenced by the delinquent property owner within 6 months after the date of sale to set aside such sale.The constitutionality of the aforementioned legislation which repeals the one year redemption period has not been tested and there can be no assurance that,if tested, such legislation will be upheld. Price Realized Upon Foreclosure Amendments to the 1915 Act enacted in 1988 and effective January 1, 1989 provide that under certain circumstances property may be sold upon foreclosure at a lesser Minimum Price or without a Minimum Price. "Minimum Price" as used in this section is the amount equal to the delinquent installments of principal and interest on the assessment or reassessment, together with all interest, penalties, costs, fees, charges and other amounts more fully detailed in the 1915 Act. The court may authorize a sale at less than the Minimum Price if the court determines,based on the evidence introduced at the required hearing, any of the following: 8 I A) Sale at the lesser Minimum Price or without a Minimum Price will not result in an ultimate loss to the Bondowners. , B) Bondowners of 75%or more of the outstanding bonds,by principal amount, have consented to such sale and the sale will not result in an ultimate loss of the non-consenting Bondowners. C) Bondowners of 75% or more of the outstanding bonds,by principal amount, have consented to j the petition and all of the following apply: i 1) By reason of determination pursuant to the 1915 Act, the City is not obligated to 1 advance funds to cure a deficiency (the City made such a determination not to be so obligated with respect to the Bonds). 2) No bids equal to or greater than the Minimum Price have been received at the foreclosure sale. I 3) No funds remain in the Reserve Fund. I j 4) The City has reasonably determined that a reassessment and refunding proceeding is not practical, or has in good faith endeavored to accomplish a reassessment and refunding and has not been successful, or has completed reassessment and refunding arrangement which will,to the maximum extent feasible,minimize the ultimate loss to the Bondowners. 5) No other remedy acceptable to Bondholders of 75% or more of the outstanding bonds,by principal amount,is reasonably available. The assessment or reassessment lien upon property sold pursuant to this procedure at a lesser price than the Minimum Price shall be reduced by the difference between the Minimum Price and the sale price. In addition, the court shall permit participation by the Bondholders in its consideration of the petition as necessary to its determinations. Implementation of the above-described Minimum Price provision by the court upon foreclosure could result in nonpayment of amounts due to Bondholders who are not in agreement with the 75% of such Bondholders required to approve the sale at less than the Minimum Price. Reference should be made to the 1915 Act for a complete presentation of this provision. Priority of Lien The assessment (and any reassessment) and each installment thereof, and any interest and penalties thereon, constitute a lien against the parcel of land on which it was imposed until the same is paid. Such a lien is subordinate to all fixed special assessment liens previously imposed upon the same property, but has priority over all private liens and over all fixed special assessment liens which may thereafter be created against the property. Such a lien is co-equal to and independent of the lien for general property taxes. There are no prior special assessment liens against any parcels in the District other than the lien imposed under these proceedings. Arbitrage Covenant The City covenants and agrees to take no action which, in the opinion of Bond Counsel,would result in interest on the Bonds becoming "arbitrage bonds" subject to federal income taxation by reason of Section 148 of the I Internal Revenue Code of 1986, as amended (the "Code"), "private activity bonds" subject to federal income taxation by reason of Section 141(a) of the Code or obligations subject to federal income taxation because they are "federally guaranteed" as provided in Section 149(b) of the Code. The City represents and covenants in the +t 1 9 i i I Indenture, for the benefit of the Bondowners, that it will comply with all applicable requirements of the Code together with any amendments thereto and regulations promulgated thereunder necessary to preserve the N exclusion from gross income for purposes of federal income taxation of interest on the Bonds. I' Debt Service Schedule N I Table 1, following, indicates the principal and interest due on March 2 and September 2 of each year as debt service on the Bonds. TABLE 1 CITY OF REDDING �I CHURN CREEK ROAD EXTENSION NO.2 h ASSESSMENT DISTRICT NO. 1990-5 DEBT SERVICE SCHEDULE Principal -----Interest Due----- Year Due Sept.2 March 2 September 2 Total 1992 $ $(1) $ $ 4� 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 (1) Represents interest from April 18, 1991 to March 2, 1992. I 10 1 SPECIAL RISK FACTORS General In order to pay debt service on the Bonds,it is necessary that unpaid installments of assessments on land within the District are paid in a timely manner. Should the installments not be paid on time, the City will draw on the Reserve Fund to fund such delinquency, to the extent of monies held therein. If the Reserve Fund becomes depleted, the City is not obligated to provide any available funds of the City for I deposit into the Redemption Fund. i The assessments are secured by monies in the Redemption Fund and the Reserve Fund and by a lien on the parcels of land in the District. The City has covenanted with the Bondholders to institute superior court foreclosure proceedings to sell property with delinquent installments for the amount of such delinquent installments not later than October 1 following such delinquency, in order to obtain monies to pay debt service on the Bonds. No assurance can be given, should any parcel become delinquent due to unpaid assessment installments, that it could be foreclosed upon and sold for the amount of the delinquency, that any bid would be received for such property or, if a bid is received, that such bid would be sufficient to pay such delinquent installments. However, as the Bond Law requires that a property be sold only for the amount delinquent and not for the entire outstanding assessment, it is likely that, based on the Shasta County Assessor's valuation of the land and improvements subject to the balance of the assessment lien, property values should be sufficient to secure any delinquent installments. Failure by owners of the parcels to pay installments of assessments when due, depletion of the Reserve Fund, or the inability of the City to sell parcels which have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of assessments levied against such parcels,may result in the inability of the City to make full or punctual payment of debt service on the Bonds, and Bondowners would therefore be adversely affected. Unpaid assessments do not constitute a personal indebtedness of the owners of the lots and parcels within the District. There is no assurance that the owners will be financially able to pay the assessment installments or that they will pay such installments even though financially able to do so. Limited Oblivation of the City pon Delinquency If a delinquency occurs in the payment of any assessment installment, the City will have a duty only to transfer into the Redemption Fund the amount of the delinquency out of available funds of the Reserve Fund. This duty of the City is continuing during the period of the delinquency, only to the extent of funds available from the Reserve Fund, until reinstatement, redemption or sale of the delinquent property. There is no assurance that funds will be available from the Reserve Fund for this purpose and if, during the period of the delinquency, there are insufficient available funds,a delay may occur in payments to the owners of the Bonds. I i i I 11 i Property Ownership M I Because subdivision of large parcels of land, sale of lots and construction and sale of homes within the District is yet to fully take place, property ownership is undiversified. In view of this concentration of ownership, the timely payments on the Bonds depends on the willingness and ability of the limited number of owners to pay the assessments on the undeveloped land or unsold lots when due. A slowdown or stoppage in the continued development of the District might reduce the willingness of the landowners, or any successors, to pay assessment installments. There is no assurance that the owners will pay such installments even if financially able to do so. Bankruptcy The payment of property owner's assessment installments and the ability of the City to foreclose the lien of a delinquent unpaid assessment may be limited by the bankruptcy, insolvency, or other laws generally affecting creditors'rights or by the laws of the State relating to court foreclosure. r Payment of the assessment installments is dependent upon the timely payment by the existing landowner,or any other subsequent owners of the property within the District. Although bankruptcy proceedings would not in themselves cause the assessment liens to become extinguished, bankruptcy of a property owner could result in a delay by the City in prosecuting its Superior Court foreclosure proceedings. Such delay would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds, and the possibility of delinquent assessment installments not being paid in full. Moreover, amounts received upon foreclosure sales may not be sufficient to fully discharge delinquent installments. The final legal opinion to be delivered concurrently with the delivery of the Bonds will be qualified, as to the enforceability of the various legal instruments, by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. No City Obligation As discussed in the section herein entitled "Limited Obligation of the City upon Delinquency", if a delinquency occurs in the payment of any assessment installment, the City has only the duty to transfer the amount of such delinquent installment from the special Reserve Fund into the Redemption Fund. If there are additional delinquencies, after depletion of the Reserve Fund, the City, pursuant to the Resolution of Intention, has elected not to obligate itself to advance available funds from the City Treasury to cure any deficiency which may occur in the Redemption Fund. A determination not to obligate itself shall not prevent the City from,in its sole discretion, so advancing funds. There is no assurance that funds will be available to cure delinquencies and a delay may occur in payments to the owners of the Bonds. Factors Which May Affect Land Development and Property Values Future development in the District may be affected by changes in general economic conditions, fluctuation in the real estate market and other factors. In addition, development may be subject to future federal, state and local regulations. Approval may be required from various public agencies in connection with the design, nature, and extent to required public improvements, or such matters as land use and zoning. Failure to meet any such future regulations or obtain any such approvals in a timely manner could delay or adversely affect any proposed development in the District. Consequently,no assurance can be given that such development will be partially or fully completed, and in assessing the investment quality of the Bonds, prospective purchasers should evaluate the risks of non-completion. i r G' 12 Ballot Initiatives i Constitutional initiatives or other initiative measures from time to time may be adopted by California voters. This might result in placing limitations on the ability of the State, counties or other local agencies to increase revenues or appropriations,or on the ability of the landowners to complete development. 1 Other Indebtedness The ability of an owner of land within the District to pay, in a timely manner, the assessments on the property could be affected by the existence of other taxes and assessments imposed upon the property subsequent to the 1 levy of this lien. Additionally, other public agencies whose boundaries overlap those of the District could, without the consent of the District, and in certain cases without the consent of the owners of the land within the District, impose additional taxes or assessment liens on the property within the District to finance public improvements to be located inside or outside of the District. Estimated Land Values The value of the land within the District is a critical factor in determining the investment quality of the Bonds. If a property owner defaults in the payment of assessment installments, one of the City's remedies is to commence foreclosure proceedings in an attempt to obtain funds to pay the delinquent assessment installment. On January 13, 1991, Appraisal Tech, Redding, California, updated an appraisal originally done for BHS. Investments on November 2, 1988. This appraisal was made of approximate 16.0 gross (13.5 net) acres of property;the purpose was to estimate the market value of the fee simple interest of these properties. The appraised property makes up two assessment parcels, Nos. 1 and 2; each has an assessment lien of $35,348.49. Subject to the terms and conditions as stated in the appraisal (portions of which appear in Appendix D of this Official Statement), the appraiser found the estimated market value of this land to be $350,000. This excludes the assessment amounts, and takes into consideration that all utilities are readily available but not yet constructed and paid for and that there is as of yet no final map setting forth the actual densities of the land. The parcels comprising Assessment Nos. 3 and 4 (assessed at $132,415.69 and $37,833.05, respectively, and being 3.0 and 6.0 gross acres in size) have been sold for$400,000 (the sale is still in escrow), plus the amount of the assessments. The buyer has processed a PD through the City for 72 units and has completed the engineering drawings; the subdivision map has been recorded. The utility costs will be in addition to the Churn Creek Road Extension No. 2 project costs. No appraisal has been done for the parcels securing Assessments 5 and 6 (assessed at $21,281.09 and$7,093.70, respectively, and being 1.1 and 0.3 gross acres in size). These parcels,owned by BHS Investments, are presently suitable for multi-family use, and planned for 16 units. To determine the value of these parcels, the lowest comparable price of$8,333.00 per unit was used from the adjacent parcel to the south (Assessments 3 and 4, + now in escrow). This would give these two parcels an estimated value of $133,000, excluding the assessment liens. NO REPRESENTATIONS ARE BEING MADE REGARDING THE ACCURACY OF THE APPRAISAL, i WHETHER OR NOT THE ESCROW WILL BE CLOSED AT THE SALES PRICE INDICATED ABOVE, OR THE ASSUMPTIONS REGARDING THE VALUE OF ASSESSMENTS 5 AND 6. PROSPECTIVE PURCHASERS ARE CAUTIONED NOT TO RELY ON THE VALUATIONS IN DETERMINING WHETHER OR NOT THE BONDS DESCRIBED HEREIN ARE A SUITABLE INVESTMENT. PROSPECTIVE PURCHASERS OF THE BONDS SHOULD NOT ASSUME THAT THE PROPERTY WITHIN THE ASSESSMENT DISTRICT COULD BE SOLD FOR THE VALUATION AMOUNTS AT A FORECLOSURE II SALE FOR DELINQUENT ASSESSMENTS. 1 I 13 I F N The actual value of the property is subject to future events which might render invalid the basic assumptions of r the appraiser. Additionally, reductions in District land values could occur due to a downturn in the economy, occurrences such as earthquakes or floods or other events, all of which may adversely impact the value of the security underlying the assessment. Loss of Tax Exemption As discussed under the section "MISCELLANEOUS-Tax Exemption" herein, interest on the Bonds could become includable in gross income for purposes of federal income taxation, retroactive to date the Bonds were issued, as a result of future acts or omissions of the City in violation of its covenants in the Resolution of Issuance. THE ASSESSMENT DISTRICT Description of the District Churn Creek Road Extension No. 2, Assessment District No. 1990-5, (the 'District") is composed of approximately 26.4 acres of land, all of which is planned to be zoned for residential purposes. The District is located south of College View Drive, approximately one mile east of 1-5 and one mile south of Highway 299, about four miles northeast of central downtown Redding. District Valuation The Assessment Roll in Appendix A tabulates the assessment lien, shows the fair market value according to the appraisal on those properties appraised, the sales price of the property in escrow,an estimate of the fair market value of the unappraised properties based on the comparable value of the appraised properties, and gives the value/lien ratios based upon the assessment lien to the various values discussed above. Project Description The information in this Section has been taken from the Engineer's Report prepared by Sharrah Dunlap and Associates,Inc., Redding,California. Churn Creek Road. The construction of approximately 12,100 lineal feet of roadway from Golden Gate Avenue on the north to STA 108+00 on the south. I All of this work has been completed. The $269,560.51 Bonds presently being sold represent the acquisition costs of the improvements,including issuance and financing expenses. 14 Statement of Method of Determining Benefit Inasmuch as all properties within the District are planned to be zoned 'Residential", the following observations a were made: i 1) Parcels range in size from 1/3 acre to 9.0 acres. From these observations, the following method of assessment was derived: Churn Creek Road. The improvements for Churn Creek Road were spread between Parcels 1-6 based on the number of household equivalents assigned to each parcel. CONSTRUCTION COSTS Earthwork $20,000.00 Asphalt concrete 44,341.70 Aggregate base 40,930.80 Aggregate base shoulders 9,593.25 Striping/markers 11,937.80 Waterline relocation 10,000.00 Culverts 97,644.00 Miscellaneous 6,152.50 Total $240,600.05 Less: property owner contribution 83,437.55 Portion assessed to this District $157,162.50 Plus: prior lien payoff 186.74 Subtotal $157,349.24 Incidental Expenses Total Engineering $29,625.00 City Fees 4,695.61 Total Legal Fees 8,239.01 Bond Charges 15,500.00 Loan Fee & Construction Interest 14,000.00 Appraiser&Title Company 5,500.00 Publication& Miscellaneous 5,000.00 Provision for Bond Discount 10,782.42 Bond Reserve Fund 18,869.23 I Total Incidentals 11.2,211.27 Total to Bond $269,560.51 i i 15 i f, Tax Delinquencies and Prior Assessment Liens f All Shasta County property taxes for Fiscal Year 1990/91 and prior Fiscal Years are current. MISCELLANEOUS Legal Opinion All legal matters relating to the authorization, issuance, sale and delivery of the Bonds are subject to the approval of Sturgis, Ness, Brunsell & Sperry, Emeryville, California, Bond Counsel for the City of Redding in connection with the Churn Creek Road Extension No. 2 Assessment District No. 1990-5. The opinion of Sturgis, Ness, Brunsell & Sperry approving the validity of the Bonds and the proceedings leading to their issuance will be printed on each Bond.The opinion of Bond Counsel will be qualified as to the enforceability of certain of the proceedings by limitations imposed by bankruptcy, insolvency,moratorium and other similar laws affecting creditors' rights, heretofore or hereafter enacted and by the exercise of judicial discretion in accordance with general principles of equity. Tax Exemption In the opinion of Sturgis, Ness, Brunsell & Sperry, Emeryville, California, Bond Counsel, based on existing statutes, regulations, rulings and court decisions, interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from State of California personal income taxes.A complete copy of the opinion of Bond Counsel is printed on the Bonds. The Internal Revenue Code of 1986, as amended (the "Code"), imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds.The City of Redding has covenanted to comply with certain restrictions designed to assure that interest on the Bonds will not be included in federal gross income. Failure to comply with these covenants may result in interest on the Bonds being included in federal gross income, possibly from the date of issuance of the Bonds.The opinion of Bond Counsel assumes compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds may affect the tax status of interest on the Bonds. Bond Counsel is further of the opinion that interest on the Bonds is not a specific preference item for purposes of the federal individual or corporate alternative minimum taxes. However, Bond Counsel observes that interest on the Bonds is included in adjusted net book income and adjusted current earnings in calculating corporate alternative minimum taxable income. Certain requirements and procedures contained or referred to in the resolution authorizing issuance of bonds and other relevant documents may be changed and certain actions may be taken, under the circumstances and subject to the terms and conditions set forth in such documents, upon the advice or with the approving opinion of nationally recognized bond counsel. Sturgis,Ness, Brunsell&Sperry expresses no opinion as to any Bond or the interest thereon if any such change occurs or action is taken upon the advice or approval of bond counsel other than Sturgis,Ness,Brunsell&Sperry. Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded from federal gross income, the accrual or receipt of interest on the Bonds may otherwise affect a Bondholder's federal tax liability. The nature and extent of these other tax consequences will depend upon the Bondholder's particular tax status and the Bondholder's other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences. 16 i No Litigation There is no action, suit, or proceeding known by the City to be pending at the present time restraining or enjoining the delivery of the Bonds or in any way contesting or affecting the validity of the Bonds or any proceedings of the City taken with respect to the execution or delivery thereof. A no litigation certificate, executed by the City Attorney, will be delivered to the Underwriter simultaneously with the delivery of the Bonds. No Rating The City has not made, and does not contemplate making, application to any rating agency for the assignment of a rating to the Bonds. Underwriting i M.L.Stern & Co. Inc., the Underwriter,has purchased the Bonds from the City at an aggregate discount of two and one-half percent (2.50%) from the total par value of Bonds as set forth on the cover page of this Official Statement. The public offering prices may be changed from time to time by the Underwriter. The Underwriter may offer and sell Bonds to certain dealers and others at a price lower than the offering price stated on the 1 cover page hereof. Additional Information i Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers,holders or owners of any of the Bonds. Copies of this Official Statement in reasonable quantity and other documents referred to herein may be obtained from the office of M.L.Stern& Co. Inc.,Beverly Hills, California. The execution and delivery of this Official Statement by the City has been duly authorized. BY /s/Nancy Buffum,Mayor i i 1 1 I i 17 i i r, a THIS PAGE INTENTIONALLY LEFT BLANK I I i i i i I APPENDIX A CITY OF REDDING Churn Creek Road Extension No.2 Assessment District No. 1990-5 Parcel Data i f� i i i 1 i 1 I i PI p h THIS PAGE INTENTIONALLY LEFT BLANK I II 1 a i Assessment Roll City of Redding Churn Creek Road Extension No. 2 Assessment District No. 1990-5 ------------------------------------------------ Assessor's Size Assmt. Parcel (Gross Amount of Fair Market Value/Lien No. Number Acres) Assessment Value Ratio ------ ------------- ------- ----------- ------------- ------------ 1 072-23-08 6.8 $35,468.49 ( $420,936.98 (1) 5.93 2 Por 072-030-1 9.2 $35,468.49 ( Part of 1 (1) Part of 1 3 072-26-22 3 $132,415.69 ( $570,248.74 (2) 3.35 4 Por 072-26-22 6 $37,833.05 ( Part of 3 (2) Part of 3 5 072-28-29 1.1 $21,281.09 ( $161,374.79 (3) 5.69 6 Por 072-28-63 0.3 $7,093.70 ( Part of 5 (3) Part of 5 ------- ----------- ------------- 26.40 $269,560.51 $1,152,560.51 ----- ----------------------- ----- ----------------------- (1) Appraised value of$350,000 plus the amount of the assessments. (2) Sale price of$400,000 plus the amount of the assessments. (3) Based on $8,333.00 per dwelling unit plus the amount of the assessments. J� i 1 1 1 I I i M • i. (I THIS PAGE INTENTIONALLY LEFT BLANK i 1 , t 1 1 1 APPENDIX B CITY OF REDDING Churn Creek Road Extension No.2 Assessment District No. 1990-5 Assessment Diagram 1 i i t 1 i II i i i I r I. I� 'r l r THIS PAGE INTENTIONALLY LEFT BLANK . . & / r }& - � k � \ \ / \ �_ 0 2§/ [§ 2 ® �` /)� �\ \ \ / ( 3 [ \ LOQ ® . . % « © . . \ ( � Ef ) ` Lo ` ƒ 7 , Lo , / u b \ o / . � q _ �| |_ � q a� \\u I i � � � � 5 , � -�| ■ _)\ � �■ �K -a � 4� Rte . - . . 2- . O , .»& I G �I r b h� THIS PAGE INTENTIONALLY LEFT BLAND a a APPENDIX C CITY OF REDDING Appraisal Excerpts I I i 1 I i 4 THIS ]PAGE INTENTIONALLY LEFT BLANK �,a• a - .�. • r estate appraisers r�; PPAAISAL ECH 3442 Fawn Hill Court • Redding, CA 96002 • (916) 223-6439 °January 13 , 1991 Alan Hill B. H. S . Investments 405 Redcliff Drive f Redding, CA 96002 I Re: Estimation of current market value of the B.H.S. Investments i 13 . 5+ acres located fronting along the westerly side of the right o= way of the new extension of Churn Creek Road in the northeast= erly rortion of the City of Redding, Shasta County, California. Dear Mr. Hill : In response to your recent request, I have reinspected the subject property and made investigations and analyses and estimated the current market value of the fee simple interest of the above-mentioned property. A narrative appraisal report which included the estimation of the market value of the subject property as of November 2 , 1988 was prepared by me and submitted to you on November 14, 1988 . For the purpose and function of this current appraisal, I have reviewed the previous narrative appraisal, reinspected the subject property, and made current investigations and analyses for estimation of the current market value of the fee simple interest of the subject. This letter report is intended as an update valuation, and you requested I report my findings and conclusions in letter form in lieu of a new narrative appraisal report, and I do not anticipate completing a full narrative appraisal report unless requested by you in the future. I understand the purpose of this appraisal is to estimate the market value of the fee simple interest of the subject real estate, and the function of the appraisal is for use by North Valley Bank in potential financing of the subject and for use by the property owners in manage- ment decisions, particularly regarding allocation of assessments . As stated in the Certification included as addenda with this letter report, the analyses, opinions, and conclusions developed and the report have been prepared in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Practice of the American Institute of Real Estate Appraisers . Regulation 10 of the Code of Professional Ethics of the American Institute of Real Estate Appraisers defines an appraisal assignment to be an assignment where the appraiser is acting as a disinterested third party or would ' be so perceived by third parties or the public in rendering an unbiased estimate or opinion of the nature, quality, value, or utility + of specified interest in or aspects of identified real estate. This j i Donald E. Hayden Member, American Institute of Real Estate Appraisers ] • 7 •-=Alan Hill g;g;S : InvestmenQ _2_ January 13, 1991 x,7r,ir� I ' }- ^ `appraisal is intended to be an appraisal assignment under this M definition and all data and techniques considered appropriate in completing the appraisal assignment have been analyzed and applied and the conclusions are submitted by this letter appraisal report. As this letter report is intended as an update of the November, 1988 narrative appraisal report, the definitions, descriptions, area and market data, certifications , and assumptions and limiting conditions as contained in the narrative appraisal report are referenced and considered herein. Thorough investigations and analyses of the subject property and market data were performed for the purposes of this update report, and a portion of the information obtained in my investigation is included h herein, and other information will be retained in my files for future reference and may be inspected by you upon your request. The property was reinspected by me on January 11, 1991, and the property is unim- proved, vacant residential land. Since the November, 1988 appraisal date, the improvements for Churn Creek Road have been extended along the subject frontage. The following is a summary of facts and conclusions for the current appraisal : SUMMARY OF FACTS AND CONCLUSIONS Property Identification and Legal Description: The subject property is shown as a portion of the designated remainder lands on the Parcel Map for the Planned Development No. 4-86, Shasta Hills Estates . The map was recorded on October 21, 1988 in Book 18 of Maps at page 109 , Shasta County Records , and the subject property is the southerly about 13 . 53 acres of the designated remainder land shown as 33 . 89 acres on the parcel map. The parcel map is included in the addenda of this report, and the property is indicated to be a separate parcel from the lands developed to the Shasta Hills Estates . " The subject is also identified as Assessor ' s Parcels 072-230-08 and a portion of 072-230-10, and a copy of the assessor ' s plat map is also included in the addenda of this report. I' Size of Site: The subject is a portion of a larger ownership consisting of about 85 . 0 acres, in which a large portion has been approved for and construction has begun for development to a planned development known as Shasta Hills Estates . Shasta Hills Estates is an approved o _ w+ w,h n an Hi11 _3_ January 13, 1991 -,aY S. `Investments 212-unit mobile home or manufactured home park as a planned development and itis being developed in phases . The subject is identified as Phase 4 on the Shasta Hills Estates Phase Map, which map is included in the addenda of this report. The phase map is included for identification of the subject property only and it is not a parcel map, and the lots as shown in Phase 4 which would be in the subject property are not a portion of the Shasta Hills Estates as approved and recorded. The approval of Shasta Hills Estates includes about 212 lots and does not include the fourth phase as shown on the phase map. As of the effective appraisal date, this subject portion is unimproved, vacant residential land in which the highest and best use is estimated to be for single- family residential subdivision development, but it has not been submitted for nor received final approval for subdivision. The subject fronts along the northerly side of Boulder Creek, a small, seasonal drainage which enters the subject in about the southwest corner and runs along and essentially forms the southerly boundary for a distance of about 600 feet and then turns northerly and runs through and exits the subject property near the mid point of the easterly boundary. The northerly portion of the 13 . 53+ acres lies in a gentle to moderately sloping hillside and it is roughly estimated about half the site lies in a fairly flat to gently sloping area between the base of the hillside and the northerly bank of Boulder Creek. The site has a fairly heavy cover of native vegetation, including oak trees and manzanita brush, and the soils have a gravelly to rocky characteristic. Federal Emergency Management Agency Flood Insurance Rate Map, Community-Panel Number 0603600005C, as revised September 29 , 1989 , indicates the creek bed or areas between the banks of Boulder Creek and some adjacent area northerly of the creek to be within the 100- year floodplain. Location of -the 100-year flood boundary by engineering would be required with subdivision mapping and, thus , the exact amount of the land subject to the 100-year floodplain is not known as of the date of this appraisal report, but it has been previously estimated the 100-year floodplain boundaries would be confined to an area just outside and along the creek bed and the larger, northerly portion of the site would most probably be outside the 100-year floodplain. However, engineering and mapping would be required to locate the exact area considered subject to 100-year flood. Currently, and although it is believed to be subject to some negotiation, city planning staff indicate the city prefers not to allow density credit in those areas within the 100- year floodplain and they recommend development not be permitted within -50 feet of the native riparian habitat of creeks . The General Plan designation for the subject is 3 .5 residential units per acre for the developable portions , and several years ago l `Alan Hill H.S Investmen _4_ January 13, 1991 B x ,� - '`- s_ .: the engineering firm of Sharrah Dunlap & Associates estimated the 36 residential lots . subject has potential for a density of about ° T The rough layout of the potential lots is shown as Phase 4 on the Phase Map for Shasta Hills, and the layout includes the southerly lots located in fairly close proximity to the creek and it was indicated some of the lots in this layout might require some importation and compaction of fill material if portions were determined to be within the 100-year floodplain. However, it is also indicated the 36-lot layout could be reconfigured and moved northerly in the site so that all of the lots would most likely be out of the 100-year floodplain. Although it appears probable the subject has potential for a density development of up to 36 single- family residential lots, it is not possible to estimate with any certainty as of the date of this appraisal report the exact density potential as it will be determined as the result of future engineering, location of the floodplain, and map approval . Recently, Churn Creek Road has been extended from Highway 44 on the south to Highway 299 on the north, a distance of several miles, and the subject fronts along the westerly side of the Churn Creek Road right of way and the road crosses Boulder Creek at the subject southeasterly corner. Although also subject to engineering and u city approval, it is believed the primary access for the subject u land would be provided at the Churn Creek Road frontage. Frank Sawyer, Engineer with Sharrah Dunlap & Associates , was contacted regarding the potential Churn Creek Road access for the purposes of this appraisal . Mr. Sawyer reviewed the plans of Churn Creek Road in the immediate area of the subject and informed me his analysis indicated sight distance along Churn Creek Road from the subject should not be a problem for accessing Churn Creek Road from the subject property for subdivision development. He stated, however, it is probable the access would be at the very northerly portion of the frontage and may require some cutting away of the hillside to increase sight distance. A City of Redding sewer main line runs through the subject and Bella Vista water is in service to the adjacent Shasta Hills Estates . All utilities are available to the subject property, including City of Redding electrical service, Pacific Gas & Electric Company natural gas , Pacific Bell telephone service, Viacom cable television, Bella Vista Water District service, and city sewer service. Highest and Best Use: The highest and best use of the subject unimproved land is estimated to be for development to a detached single-family residential subdivision or planned development compatible with developing lands in the neighborhood and consistent with the General Plan requirements . It is not possible to estimate with any certainty the density potential until engineering and mapping is : Alan -Hill g H,g. Investments • -5- January 13, 1991 completed, but it is roughly estimated the subject land has a potential for development to a maximum of 36 single-family residen- tial dwelling units based upon the Sharrah Dunlap & Associates estimates . VALUATION The subject immediate neighborhood is located north of and about three-quarters of a mile . from the predominant retail commercial' district of east Redding, and with the readily available public utilities, developing major thoroughfares through the neighborhood, and the close proximity to major traffic arterials and employment and shopping centers, the area has become one of the principal residential growth areas of Redding. Where previous sales activity of single-family residential subdivi- sions indicated an average of one to two dwelling units sold per month, or 12 to 25 per year per subdivision, in the past about two years this average number had substantially increased, with many subdivisions selling over four units per month and several selling over 15 units per month. Lot prices and new home prices also substantially increased in the past about two years, and whereas the housing market in most of the rest of the nation, including California, had seen a substantial slowdown in the past one year and in many cases a softening of prices, the Redding housing market until very recently continued to be very active with increasing prices . In the past about four months, most subdivisions in the Redding area have seen a slowdown of sales activity, and discussions with developers and real estate agents indicate 40% to 50% of the new home sales in Redding are to buyers relocating from other areas, and primarily from the metropolitan areas of California to the south. It is indicated 40% to 50% of new home sales in the Redding market are attributable to relocatees, many of which are retired or semi-retired,, and it is believed the Redding area will continue in this growth trend for the foreseeable future, with periodic down cycles . It is believed probable the growth and highly active residential market will not continue at the escalating pace of the past about two years, but cycle into more moderate but steady rates as has been evident for the past half dozen months . The residential market in the local area has recently seen a softening of demand for both improved residential properties and single-family residential lots . The slowdown has been particularly evident in the upper price range homes (the over $200, 000 range) , and although several of the subdivisions continue to see very strong demand, the overall consensus is that there has been a substantial softening of demand. The slowed single-family residential markets in other parts of the nation, and specifically in the metropolitan areas of California to the south, are having an effect upon the local market, with a slowdown of demand and stabilizing of I prices, and it is anticipated there will be some softening of prices as the prospective relocatees see longer selling periods and softening of prices in marketing of their homes in the metropolitan areas . I I I I QQQQLn Ln fn H N I') O U) U) Il U 1 • Ili IN'1 f'1 .. ::,:•p. . 411 -'T C4 C14 00 cn ko w 3: Oki 1-4 1-4 11 h 'O U) M O O O N h N U) aJ f•) cv O O r to I') `D N I I+) I O I N H (O CO a) d' I•) r •.1 u 1 H I 1 In r U) N N Ip Ib lD L4 U N H H (n N N d' en aQ � 0 0 1 0 o u m O I I I 1 1 1 I I I i C a) m m 1 I 1 1 I 1 I 1 I I 3 m a) 11 O 1LO IN a m C v ,.,I .-1m a) N Q E N O O O O O O O O O O O O 0 O O O O O O 0 O O O O O O V' O C V' O O O O O C O O O N UI M v m O m m N I`') Ib U) U) O N d cr N v as U) N I') I•) N r r U) a) 4 a) r m (a .a N m m N N I+1 IT at a '-i to 04 •1 U 0 ro C1. 0 u al m a) N 0 E .a J Q d m m w > m m to b -4 S4 m C N ❑ U 4 b u b .a m O a y,, C u U d 0 ❑ U ❑ a In U m m H h N W H a m OQC m a) 0 C LI b u u O la .� N C al ✓T G W x a x A 3 C NJ a) a) m .0 0 m C m 4 m a m u -a (n C to v H u u m m --I m a 01 Q C a) U m 41 -+ A Q U A ro ti 0 p --4 ro� ro x b RFT5y7 � h 0I h ❑ a w H X a ❑ m U U G. 1 •^1 O m•1 C 11 a1 .•�H N Ib r O r r H r W O N d' N C m--+ co ON m v H m r) r1 H w0 v r ID >4 a J❑ m H N a m +I � Ln 0 +I a+ o o v o o v a r r o $4 N i I.1 1' U) 1 h N I+1 O (a T m N U-.1 1 I•) 1 O 1 H N 1-1 Q V1 I H al . all O co) O a) O Oto O O O O O O O -1 Q 1 O 0 O a) ON a) 0 a4 T a1 ON a) ro fuV) ❑ H H N h U) H N I'1 coocooN --1 H H ar x U U X N N •N C 0 > m U a 4 ri J-1 C H H > H m u 1> > O m m m C a) m 0 > 410 C A m •a m u > •.1 •a m m In m C N b .1 > m ar a-A > .1 u L u A > C C C C b O v) 'Q A 41 +1 A m ,- A a C C m a) 3 a 0 C b C O 0 a) a) 7 to a) O.A b a) U) a 0 A 01 I I 1 3 •-I > b > •A > -A•'1 -,� a•4 m (1) •d m ro m m> m x c�tl N C O O O O 'O >❑ ,1 mN a) v N > E V Q ) C v U 3 a) .,.I ..1 ..4 ..1 -,4 •.1 TO a) 11 C m a -A 0 m 01 •.1 u -11 O 41 In m m ma a a) m rd 41 m v a m y u U w r1 x -.I •a -.1 •.1 A C u 41 a m A a).-1 a -.1 .-I () > > > > I a C U m W(2) :3 G) I HO En u C > m� W,� C 11 '0 U >1 a HI, m A A A A H 41 a d C W m m 41 rd ❑ a) a v + 0 a a a a 0 >. m a al O 0 a w u U H -.I a W m U) m a1 .4'Ca J-) ro >() m u •a a 0 (1) ro -.4 I O -A 3 lI E 11 1 a 41 W a x a) a) a) al C r 0 C x •t O -+ (o 0-14 Cw A C 0 d al 0) tT Im CP D a) 3 D >+ C7 m Q a al 11 O ar v v a b a) m O u v a x a) a u + •-+ •-1 •-+ b b-4 v Cl, 'a a '0 Q) o u v 0 a N U a a a a a) m a, Q) m a) U a) U a1 N --.I m m m Cm C m C m m m m ('- m O C H •-1 •a •4 0 O (Is 0 a) O m O.-1 0 C 0 I s 1i -A -.t -a •a GL QL F O..-1 04> QL a O,W S.'d 41 1O 4 :.1 rd a � 7 a 4 4w 4 7 4 a 43 4-aa 4 0 C b aU o1 a o1 a s a O ax act az III as o w g .l Q m Q m 0 'L H N N d' U)I') M ID r co a% 0 Alan Hill B.H. S . Investments • -6- January 13, 1991 It is not possible to predict with any certainty the future of the residential market in the Redding area in the foreseeable future, but it appears inevitable demand will soften and prices will stabilize or perhaps even soften. This change in supply and demand has begun in the past several months and the length of this market slowdown is dependent upon a number of factors, including changes in interest rates , changes in the industrial or economic base of the community, and the residential home market in other areas of the nation, and particularly in the metropolitan areas of California to the south. Overall, in the past two years, there has been a substantial increase in the level of lot sales per month on a citywide basis until the very recent slowdown. Until very recently, demand had exceeded supply and thus the resulting increased sales activity of lands for development of single-family residential subdivisions . It had become a seller' s market with a developing short supply of lands that have good access characteristics , readily available utilities , and particularly for those properties that had approved tentative maps for subdivision. Prices of these residential lands increased significantly in the past about two years, with current values typically over $8, 000, with the most recent sales over $10, 000 per dwelling unit (paper lot) , compared to previously established prices of $4, 000 to $6, 000 per paper lot. The lard comparables summarized on the facing page include some of the most recent sales of single-family residential lands within the Redding area considered reasonably comparable for estimating the market value of the subject. The comparables range in size from about 6 . 0 acres to 105 . 0 acres and sold in a price range between about $13, 000 and $47 , 000 per acre and $6, 000 and $16, 000 per dwelling unit or paper lot. Those sales setting the higher end of the range included approved subdivision maps in place and several also included some off-site work completed. The most recent comparable is Comparable 11 which is located directly across Churn Creek 'Road from the subject. This is the second phase of the Monterey Springs subdivision and the 21 . 0 acres are net of floodplain and dedicated areas . This included an approved subdivision map for 64 lots, and some of the off-site work, including drainage, street improvements, and underground utilities , has been completed by the seller. i The subject consists of unimproved land that has all utilities readily available but has not been engineered, mapped, nor received final approval for subdivision, and although the exact density potential is not known as of the appraisal date, it is believed to have a maximum density potential of 36 single-family residential dwelling units based upon the previous estimates by Sharrah Dunlap & Associates . Based upon comparisons of the individual comparables to the subject and consideration of all factors anticipated to affect the value, the estimated market value of the fee simple estate of the subject i property as unimproved residential land, as of the effective appraisal date of January 11, 1991, is : t ---------------THREE HUNDRED FIFTY THOUSAND DOLLARS---------------- ( $350, 000 ) j; I I f Alan Hill B.H. S . Investmes -7- January 13, 1991 I' r The $350, 000 value estimate equals about $26, 000 per acre and about j $9 , 720 per dwelling unit for the maximum estimated density potential of 36 units or lots . The subject property is well located in an area seeing some of the most rapid development of lands to single-family G residential subdivisions of the Redding area. Comparables 1 through 4, 6, 9 , and 11 as shown on the Summary of Land Comparables facing page 6 sold with approved tentative subdivision maps and, generally, these sales set the higher end of the range. Comparable 10 is the current sale of an about 8 . 78-acre parcel located fronting on the easterly side of Churn Creek Road, just northerly of the subject, and the seller is also the owner of the subject property. The sold land has a substantially higher density potential than the subject and it is not considered directly comparable on a per dwelling unit or per acre basis . Comparable 11 is located directly across Churn Creek Road from the subject and, similar to the subject, fronts along the north- erly side of Boulder Creek. This comparable, however, included an approved tentative subdivision map and some improvements in place, and the sale was slightly over $15, 000 per dwelling unit. The comparable is superior to the subject on a per dwelling unit or per acre basis due to the improvements and map in place, but it is one of the highest sales on a per unit basis and is reflective of the location benefits which the subject also enjoys . Comparable 5 is located just south- westerly of the subject across Boulder Creek and it was raw, unim- proved land without mapping at the time of sale and it sold at $8, 577 per dwelling unit. Similar to the subject, it is without mapping and off-site improvements and it is probable the development costs for the comparable will be substantially higher than what would be expected for the subject due to substantial excavation and grading that will be required. Thus, the value of the subject is indicated to be higher than the $8, 577 per dwelling unit of this comparable. In final analysis and after review, the market value of the subject land as unimproved and without mapping is indicated to be higher than $9 , 000 and lower than $11, 000 per potential dwelling unit or lot. This appraisal has been completed in accordance with the current Code of Professional Ethics and Standards of Professional Practice of the American Institute of Real Estate Appraisers and is subject to review by its duly authorized representatives . Sincerely, APPRAISAL TECH Don d ff.tXayd n, I AT-1197 DEH/ns 1 CERTIFICATION 1 I certify that, to the best of my knowledge and belief, . . > the statements of fact contained in this report are true and correct, 11 > the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, unbiased iprofessional analyses, opinions, and conclusions; > I have no present or prospective interest in the property that is the subject. of this report, and I have no personal interest or bias with respect to the parties involved; > my compensation is not contingent upon an action or event resulting from the, � analyses, opinions, or conclusions, or the use of this report, and my, compensation is not contingent upon the reporting of a predetermined value or j direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event; > my analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice and in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Practice of the American Institute of Real Estate Appraisers; > the estimate of market value in the appraisal report is not based in whole or in part upon the race, color, or national origin of the prospective owners or occupants of the property appraised or upon the race, color, or national origin of the present owners or occupants of the properties in the vicinity of the property appraised; > the use of this report is subject to the requirements of the American Institute of Real Estate Appraisers relating to review by it's duly authorized representatives; > I have made both inside and outside personal inspections of the property subject of this report, where applicable, and an exterior inspection of all comparable properties listed in the report; > no one provided significant professional assistance to the person or persons signing this report, and all conclusions and opinions concerning the real estate as set forth in the report were prepared by me; > all contingent and limiting conditions affecting the analyses, opinions, and conclusions are contained within the report, and no one other than me is authorized to change any item in the appraisal report and I assume no responsibility for any such unauthorized changes; > my value conclusion as well as other opinions expressed herein are not based on a requested minimum value, a specific value, or approval of a loan; > as of the date of this report, I, Donald E. Hayden, have completed the i requirements under the continuing education program of the American Institute 1 of Real Estate Appraisers; 4{ o ald ay en MAI I i I i S U BJ ECT PLAT MAP N cJ 6 N a m p !D o am 6Z +oJ 91/1 J �+ p C ut N O CD V Q n N � v P'7 CD , o n :19 O ` cl� IT �— rn N Lu vI \ • ` 1 `� r�r `\ 91/1 LLj _ 1 LL o r co V I I s z N� NM J - PARCEL GAAP cc I m 1 of z = a �t _ : .• moi � z i; 3662 ^o A7MN95•r ^ s � � =- i• ni ni f \ � `�j sl�99tf9 30.K]lill s tu CL z LLA ilk - h9•>•ft 1.9c-errl v '�I \ I"`000 \o'' � c 1 < <ti 'e .. 5 �c " �cw � I � N I y- 1 Z � o a' e��� No• �c a:' 'a �4•^ � t' � a i i � ill \^ � � �• — /I _304 -99'0[9 r•ll.iii9�+1• s L �. �r:s tt 9= I Il9'OC9 's rC.fL3eM� 4tYC9 .,l 1.9439^ 13 OEu. 1 19991 09,991. 740.61395( �J I 09(,991 J,S.lLroi 1 I �I� I h _ Ul L-: E— I t cn W I•_ cn --------------- N t .f _t ,I Syyy I -I I UALIFICAT_TONS OF D014ALD E HAY.:)--N.,.. PROFESSIONAL DESIGNATIONS LICENSES • Member, American Institute of Real Estate Appraisers (MAI) Real Estate Broker, State of California EDUCATION College Sacramento State College Bachelor of Science Degree 1969 - General Management Shasta College Associate of Arts Degree 1967 � Other California State Board of Equalization Courses Completed: Residential Unit Appraisal, The Income Approach to Value, Appraisal of Rural Property, Appraisal of Possessory Interests, Appraisal of Income-Producing Properties American Institute of Real Estate Appraisers Courses Completed: Basic Appraisal Principles, Methods and Techniques (!A) ; Capitalization Theory and Technique (IB) ; Urban Principles (2) ; Litigation Valuation (4) ; Standards of Professional Practices Anthonv Schools Courses Completed: Real Estate Law, Real Estate Practices PROFESSIONAL EXPERIENCE Shasta County Assessor' s Office, Redding, California Appraiser I - III November, 1969 - October, 1975 Senior Commercial Appraiser October, 1975 - November, 1977 (Benson) -Stathem-Shaw & Associates , Redding, California Associate Appraiser December, 1977 - January, 1987 Haedrich & Cox, Inc. , Redding, California Real Estate Broker February, 1987 - May, 1988 Appraisal Tech, Redding, California Principal Appraiser July, 1987 - Present APPRAISAL ASSIGNMENTS COMPLETED FOR THE FOLLOWING CLIEi:TS Churches: St. James Lutheran Church of Redding, Evangelical Methodist Church Financial Institutions: Central Bank, Bank of America, Tri-Counties Bank, Crocker National Bank, Peninsula Mortgage, Coldwell Company, Riggs National Bank, Heart Federal Savings and Loan, Old National Financial, Security National Bank, Lloyds Bank, Wells Fargo Bank, First Deposit Savings, i investors Mortgage Insurance Company, Coldwell Banker, Borge-Warner Acceptance Corporation, North Valley Bank, Sacramento Savings and Loan, Bank of California Governmental: Shasta County Assessor's Office, Shasta Community College, Shasta County Department of Public Works, Shasta County Economic Develop- ment Corporation, Siskiyou County, City of Redding, City of Anderson, City of Red Bluff, Tehama County, Federal Deposit Insurance Corporation Other: Merrill Lynch Relocation Management, Homequity/Homerica, Transamerica Relocation Service, Lutz Relocation Service, New York Life Insurance i� Company, First American Title Insurance, California State Automobile Association, Texaco, Inc . , Pacific Telephone and Telegraph CompGny, Continental Telephone Company, Southern Pacific Railroad, Simpson Paper Company, Equitable Relocation Service, Employee Transfer Corporation, Cal Farm Insurance Company, Title Insurance and Trust Company, Mortgage Guaranty Insurance Corporation, Shell Oil Company, Chevron, Citizens Utilities Company, Bella Vista Water District, Kimberly-Clark Corporation, various corporations, attorneys, doctors , accountants, realtors , brokers, developers, construction firms , and private individuals 51 I B P I. C THIS PAGE INTENTIONALLY LEFT BLANK y I i APPENDIX D CITY OF REDDING General Information and Economic Data (Source: City of Redding and Chamber of Commerce) i I i I I i u THE cry G General Description The City of Redding (the "City"). comprising approximately 50.2 square miles, is located at the northern end of the Sacramento Valley, 160 miles north of Sacramento and 230 miles north of San Francisco. It is the county seat of Shasta County and the major trade, recreational and commerce center for the northern central and northeastern portion of California. The City is situated in the midst of a vast recreational area that includes nine national forests, six wilderness areas, two state parks and one national park. The City experiences hot summers and mild winters. Annual precipitation is approximately 38 inches. Elevation within the area varies from 400 feet above sea level to 10,456 feet at Lassen Park,just outside Shasta County. Municipal Government The City was incorporated on October 4, 1887 and operates as a general law city with the council-manager form of government. The City Council consists of five members elected "at large" for four-year overlapping terms. The Mayor is selected by the City Council from among its members. The current members of the City Council are as follows: NANCY KAY BUFFUM, Mayor, was elected to the City Council in 1988. Education: Attended Shasta College, Redding, California, and the University of California. Berkeley, California. where she majored in Political Science. Prior to her position on the City Council, tits. Buffum served nearly six years on the Planning Commission for the City. Ms. Buffum currently sits on the Forward Redding Foundation Board, the Private Industry Council, the Board of Directors of the Chamber of Commerce and the Transportation Committee, Regional Transportation Planning Agency, Redding Area Bus Authority, Redding Redevelopment Agency, Superior California Development Council, and serves as City Council liaison to the Convention and Visitors Bureau, Redding Museum and Art Center, Carter House Science Museum, Planning Department, and Traffic and Parking Commission. N= DAHL, Vice Mayor, was elected to the City Council in 1986. Education: Bachelor's Degree in Political Science and a Master's Degree in Public Administration from California State University, Chico. California. Mr. Dahl is currently Marketing Director for SECO Surveying Company and SECO Manufacturing Company, Inc. Mr. Dahl's community involvement has included Chairman of the Shasta County Economic Development Task Force, Regional Transportation Planning Agency, Regional Wastewater Planning Commission. Chairman, Redding Area Bus Authority, Redding Redevelopment Agency, and he currently serves as City Council liaison to the Public Works, Personnel, Finance, and Recreation and Parks Departments. CARL ARNESS, member, was elected to the City Council in 1990. Education: Bachelors and Master degree in Civil Engineering. University of Washington. Mr. Arness is a registered professional Civil Engineer in California and recently retired as Director of Public Works for the City. Currently, Mr. Arness is a representative on the Redding Area Bus Authority, Norther, California Power Agency, MSR Power Agency. Central California Power A;--ncy, Transmission Agency of Northern California, and serves as a liaison to the Electric Utility. LEE D. FULTON, M.D., member, was elected to the City Council in 1964 and is currently in his 25th year of service on the City Council. Education: Bachelor's Degree from the University of California, Berkeley, California, and M.D. Degree from the University of California School of I Medicine, San Francisco. California. Dr. Fulton works for the California State Health Department in Redding. Presently, Dr. Fulton is a representative on the 'Regional Transportation Planning Agency and Shasta County Community Action Agency Advisory Board, Redding Area Bus Authority, Redding Redevelopment Agency, Shasta County Air Pollution Control Board, and serves as liaison to the Police and Fire Departments. CHARLES MOSS, member, was elected to the City Council in 1990. Education: Bachelor of Science degree in Business Administration with emphasis in accounting and economics. Mr. Moss started and managed, with other members of his family, two successful lumber companies. He is currently a representative on the Airport Land Use Commission, Local Agency Formation Commission, and serves as liaison to the airports. The City Manager is appointed by the Council and is responsible for implementation of Council policies and for day-to-day operation of the City. The offices of City Clerk and City Treasurer are elective, for four-year terms, and the City Attorney is appointed by the Council. The City is regarded as a full service city and municipally provided services include planrung and building regulation, police protection, fire protection, parks, recreation, electric, water, sewer, solid waste and operation of two airports. A full-time staff of 638 employees and 276 part-time workers carry out the functions of municipal government. City employees have been represented by various unions since 1965. Population Characteristics The City was one of the fastest growing cities in California between 1970 and 1980, growing to 41.995 residents in 1980 from 16,659 in 1970. This represents an average annual growth rate of 9.7%. The average annual increase for the State of California as a whole during the same time period was 1.6%. A January 1989 estimate by the California Department of Finance placed the City's population at 59,886, an increase of 43% over the 1980 U.S. Census tabulation. The City's population represents approximately 42% of Shasta County's population of 143,106 in 1989, according to estimates by the California State Department of Finance. The following table indicates population growth for the City and Shasta County from 1950 to 1989. City of Redding and Shasta County Population fi om 1950 to 1989 City of Redding Shasta Countv Annualized Annualized Percent Change Percent Change Year Numbe Over Interval Num r Over Interval 1950 10,256 36.413 1960 12,773 2.22% 39,468 0.81% 1970 16.659 2.69 77,640 6.95 1 1980 41.995 9.69 119,449 4.40 1985 48,500 2.92 128.100 1.40 1988 55,439 4.56 137,032 2.27 1989 59,886 7.35 143,106 3.86 i Source: 1950-1980 flgures from U.S.Census.1985. 1988 and 1989 estimates from the California State Department of Finance. It is estimated that the City will add approximately 800 new households per year for the next ten years. The following table sets forth a projection of the City's population growth over the next forty years. i t N City of Redding Estimated Population Growth 1990-2010 p b Annualized Year Population Growth Rate 1990 64,912 4.2% 1995 78.591 3.6 2000 92,284 2.9 2005 105,487 2.8 2010 116,656 2.4 Source: City of Redding Population Forecast prepared by Economic Sciences Corporation April 28, 1989. The Redding area is expected to have 40 or more percent of the total Shasta County population because of a variety of factors that will support urban development, including sewers, public water supply,jobs, shopping, recreation opportunities and reduced commute costs. Hous Housing in the City is less costly than in other urban areas in the State of California. The following table sets forth the median price of homes in urban areas of California. Comparison of Housing Costs Single Family (1989) Redding Sacramento San Jose San Diego Los Ange!es San Joaquin Valley Median priced three-bedroom $83,500 $107,895 $268,903 $177,736 $220.253 $96,510 home Comparison of Housing Costs Multi-Family (1989 Redding Sacramento San Jose San Diego Los Angeles San Joaquin Vallev :Median rental rate of a two-bedroom i apartment $300-465 $375-525 $650+ $500+ $500+ $375-525 Source: California Association of Realtors. Industry and Emplo3=ent Extractive timber and the processing of wood by-products. together with agriculture. tourism and government, have historically been the major sectors of employment in the City. Over the last decade, the City's economic base has diversified to a regional services economy supported by retail and wholesale trade plus educational, recreational, medical and government services for an area covering several counties. The major employers in the City and the County include those in medical services, heavv forest products, government and telephone services. Major employers. their products or services, and the number of their respective employees in 1988 are listed in the following table. A l � City of Redding/Shasta County i Major Employers 1988 Company Product/Services. Emplovees i :Mercy Medical Center Medical facilities and services 1.025 Simpson Pager Co. Paper products 650 Redding Medical Center Medical facilities and services 616 Shasta Community College Education 520 Roseburg Lumber Co. Plywood and lumber 500 Citizens Utilities Telephone company 370 United States Post Office Postal services 256 Pacific Bell Telephone company 244 Coopervision Electronic medical equipment 231 Sierra Pacific Industries Lumber 225 Source: "Economic Profile for Redding, Shasta County California", prepared by the greater Redding Chamber of Commerce 1988. The City has attracted new manufacturing industries through a combination of industrial development policies, the availability of a growing labor pool, comparatively low development and living costs and inexpensive power. A consistent factor in the growth of the labor force continues to be the out-migration of all types of workers from the population centers of Southern California and the San Francisco Bay area to Shasta County and other Northern California counties. A large portion of the in-migrants possess high technical and administrative skills. The following table summarizes employment by industry of workers in the County in 1984 through 1988. The figures presented are annual averages which are estimated by the State Department of Employment Development. i i i I Shasta County Labor Market Survey h Average Annual Employment 1984 to 1988 1984 1985 1586 1987 1988 Agriculture, forestry and fishing 1,325 1,175 1,025 1,150 1,025 Construction and mining 2,225 2,378 2,750 3,025 3,250 Manufacturing: Lumber and wood products 2,100 1,800 1,875 2,125 2,500 Other manufacturing 2,625 2,575 2,375 2,525 2,675 Transportation and public utilities 2,775 2,850 2,925 3,025 3,275 Wholesale trade 1,825 1,925 2,075 2,125 2,175 Retail trade 7,950 8,275 8,625 9,550 9,975 Finance, insurance and real estate 1,500 1,525 1,500 1,525 1,550 Services (1) 7,750 8,325 9,075 10,700 11,325 Government: (1) Federal 1,125 1,150 1,175 1,200 1,225 State 1,100 1,075 1,100 1,150 1.200 Local and education(2) 5.550 5,750 5.975 5,250 5.200 Total 37,850 38,803 40,475 44,375 46,475 Source: State of California Department of Employment Development (1) Includes hotels and other lodging, business services, health service and other service. (2) Local government includes employees of counties, cities and special districts. Education includes employees of public schools at both the state and local levels. According to the State Department of Labor, the unemployment rate of the City's metropolitan area was 8.1% in September 1988. Since 1984, unemployment within the City's metropolitan area has decreased 6.0%, from 14.1% in 1983 to 8.14% in 1988. The followuig table sets forth the number and rate of unemployed persons living within the City's metropolitan area in 1984 through 1988. Civilian Labor Force and Unemployment Redding Metropolitan Statistical Area (Shasta County) 1963 to 1988 Labor(1) Unemplovment(2) Year Force Nurnber Rate 1984 52,975 7,475 14.1 1985 51,900 6.925 13.3 1986 52,875 5.975 11.3 1987 55,150 5.150 9.3 1988 58.775 5,275 9.0 (1) Civilian labor force and unemployment 5y place of residence. (2) The number includes all persons without jobs who are actively seektim, work. The unemplovment rate is computed from unrounded data: therefore, it may differ from rates computed from rounded figures in this table. Source: State Department of Employment Development. Construction Activity For the ten years ending December 1988, the City issued commercial and residential building permits valued at a total of$655,514,321. In calendar year 1988 alone, 1.735 commercial and residential building permits were issued with a total value of$90,512,932. The 1988 total value I of commercial and residential construction permits represents a 21.79% decrease over the prior fiscal year. This is the result of 1987 being a record setting year for building activities in the City. New residential construction over the ten-year period represents 56% of the total construction activity. Over the same period the City has seen continual growth in its stock of commercial buildings. The annual number of commercial construction permits over the ten- year period has ranged from a low of 24 in 1982, a period of high interest rates and a nationwide recession in the building industry, to a high of 80 in 1979. The following table sets forth the value and number of permits for single family, multiple dwellings and businesses located in the City for the five fiscal years ended June 30, 1988. City of Redding Value and Number of Permits for Single Family and Multiple Dwellings and Businesses for Fiscal Years 1984 through 1988 1984 1985 1986 1987 1988 Value-Single Family $25,306,375 $331,360,634 $44,497,412 $51,913,764 $46,359.828 Number of permits 413 530 653 725 687 Value-Multiple Dwellings $12.951,176 516,627,338 $ 9,804,808 $ 9.098,682 $ 6,268.944 Number of Permits 34 87 20 30 13 Value-Business 518,937,390 $13,573,377 311,842,331 $21,053.060 $19.820,780 Number of Permits 53 44 38 60 55 Value-Total All Permits $57,194,941 $361.561.349 $66,144.551 $82,065,506 $72,449,552 Source: 1989 City of Redding Planning and Progress Guide. Commerce The City is a regional center of commerce for several Northern California counties. This is evidenced by its many shopping centers and malls, including two new regional shopping centers located in the Canby-Hilltop-Cypress Redevelopment Project area. Support for retail sales is derived from a retail trade area population of approximately 220,000 people for appliance commodities and approximately 80,000 to 100.000 people for convenience commodities. Large portions of this trade is drawn from Trinity, Tehama. Siskiyou and Lassen Counties. The City has the highest retail sales for taxable items per capita of anv i California city north of Sacramento. I Taxable transactions in the City topped $823,235,000 in 1988. The number of outlets reporting taxable sales to the Cali`ornia State Board of Equalization increased from 1.883 in 1980 to 2,404 in 1988. These trends are reflected in the following table. 1 i � a. h City of Redding Taxable Transactions For Fiscal Years 1980 through 1988 Fiscal Year Number of Outlets Taxable Transactions 1980 1,883 $478.456,000 1981 2,014 472,586,000 1982 2,030 446,063,000 1983 2.025 525,097,000 1984 2,136 593,327,000 1985 2,195 645,807,000 1986 2,273 679,130,000 1987 2,321 750.949.000 1988 2,404 823,235.000 Source: California State Board of Equalization. The following table sets forth a breakdown of taxable sales by type of business for the City for fiscal year 1988. City of Redding Taxable Transactions by Type of Business for Fiscal Year 1988 (in thousands of dollars) Number of Taxable Business Outlets Transactions Apparel Stores 64 S22,235 General Merchandise Stores 22 90.303 Drug Stores 17 29,882 Food Stores 62 53,679 Package Liquor Stores 13 7,519 Eating and Drinking Places 217 62,886 Home Furnishings, Appliances 92 28,227 Building Materials, Farm Implements 69 94.580 Auto Dealers and Auto Supplies 91 153.850 Service Stations 45 47,064 Other Retail Stores 382 %7.482 Total Retail 1,074 $867,725 j All Other Outlets 1.330 $155,510 Total Outlets 2.404 $823.235 Source: California State Board of Equalization. Trans,portation The City enjoys a strategic location on U.S. Interstate Highway 5. the principal transportation artery running north-south from Mexico to Canada which conr.:cts the Citv to an estimated Pacific Coast marketplace of 31 million people. The City is also bisected by State Highway 299, the key east-west transportation artery in northern California. i , The City is served by the Southern Pacific and Amtrak for rail transportation, and Greyhound and Continental Trailways for bus service. United Express Airlines and Ameri,an Eagle Airlines provide air service from the Redding Municipal Airport to cities throughout California and the Pacific Northwest. Eight truck terminals are located in Shasta County and daily service is provided by six major carriers. "THE RIDE" is the City's multi-bus transportation system and offers eight different fixed routes and demand response services. For fiscal year 1989, 'THE RIDE" had an average total monthly ridership of 36,090, of which 30,680, or 85 percent, were paid riders. Utilities Electricity, solid waste collection, water and wastewater services are provided by utilities owned and operated by the City. Natural gas is provided by Pacific Gas and Electric Company. Telephone service is provided by Pacific Bell. Community Services The City has 12 elementary schools, two middle schools, three private schools and three high schools. The school system employs 505 teachers. Shasta College, a two-year institution, offers both day and evening courses to approximately 10.000 students. In addition. Simpson College, a four-year liberal arts institution located in the City, will commence operations in September 1989. The City's parks system includes 23 improved parks, 19 open space parks, and 13 unimproved parks. Total park lands encompass 3,078 acres. City operated cultural facilities include the Redding Museum and Art Center, the Carter House Science Museum, the Martin Luther King, Jr. Memorial Center, the Teen Center, and a senior citizens center. The Redding Convention Center hosts the Shasta Symphony, conferences and conventions. The City serves as the primary medical center for Northern California. The City's two hospitals serve approximately 220,000 people in Tehama. Trinity, Siskiyou and Lassen Counties. The two general care hospitals have a total of 418 beds and employ over 1,083 full- time staff members, plus another 533 part-time employees. i i I, CITY FINANCIAL DATA The following financial data is included only for the purpose of Drovidina general information. i. Assessed Valuations The assessment and collection of taxes is the responsibility of Shasta County. City taxes are collected at the same time and on the same tax rolls as are Shasta County, school district, and special district taxes. Assessed valuations are the same for both City and Shasta County taxing purposes. I California law exempts $7,000 of the full cash value of an owner-occupied dwelling, but this exemption does not result in any loss of revenue to local agencies, since an amount equivalent to the taxes which would have been payable on such exempt values is paid by the State of California. b The following table shows the taxable valuation of the City by tax roll for the last ten fiscal I; years. City of Redding Actual Value of'Taxable Property a) For Fiscal Years 1979 through 1989 Fiscal Year Secured Roll Unsecured Roll Total 1978- 1979 $ 55,966,156 $ 85,740,000 S 641,706.156 1979- 1980 652,138,000 106,500,000 758.638,000 1980- 1981 821,316,212 74,407,796 895.724.008 1981 - 1982 947,094,550 90,930,910 1.038,025.460 1982 - 1983 1,140,137,915 82,170,805 1,222.308,720 1983- 1984 1.242,597,390 84,866,370 1,327,463.760 1984- 1985 1.345,884,050 109.236,275 1,455.120,325 1985- 1986 1,469,779,770 123,715,455 1,593.495,155 1986- 1987 1,585,752,950 131.776,665 1.717,529.615 1987- 1988 1,722,844,792 146,982,677 1.869.827.469 1988- 1989 1.933,990.443 152.238,603 2,086.229.046 Q) All valuations shown are "full cash value", before deduction of State-reimbursed exemptions. Includes redevelopment incremental valuation. i Source: 1989 City of Redding Comprehensive Annual Financial Report and City Finance Department. City Property Tax Lew Procedures The rate of tax that the City receives is determined by a formula prepared by the County Tax Assessor, in accordance with the laws of the State of California. The City receives its proportionate share of property taxes in several installments commencing November 30 of each calendar year. The following table shows the record of tax collections over the last ten fiscal years. i i o 0 City of Redding Taxable Valuations - Tangible Property Tax Levies and Collections for Fiscal Years 1979 through 1989 Total Tax Delinquent Percent of Fiscal Total Tax Current Tax Tax Total Collections Year Lew Collections Collections Collections To Tax Lew 19178/79 $1,277,587 $944,476 $156,644 $1,101,120 86.19% 1979/80 1.695,775 1.554,132 109,143 1.663.275 98.08 1980/81 1.921,948 1.682,766 109,584 1,792,350 93.25 1981/82 2,188,291 1,982,393 283,562 2,265,955 103.56 1982/83 2,673,106 2,248,393 157.467 2,405.860 90.00 1983/84 2,895.432 2,482,454 189.561 2,672.015 92.28 1984/85 3,013,756 2,693,582 204,470 2,898.002 9616 1985/86 3,155.295 3.066.434 250.485 3,316,719 105.13 1986/87 3,375,031 3,315,276 300,224 3,615,500 10712 1987/88 3,665,800 3.548.597 250,977 3,799.574 103.67 1988/89 3,890,515 3,798,606 207,161 4.005,767 102.96 Source: 1989 City of Redding Comprehensive Annual Financial Report. Revenues Expenditures and Fund Balances The following table presents a summary of revenues, expenditures and fund balances of the City for the past five fiscal years, as reported in the City's annual financial statements. Copies of the City's audited financial statements are available upon written request directed to: Director of Finance. City of Redding. 760 Parkview Avenue, Redding. California. i Pension Plan All full-time City employees are members of the State of California Public Employee's Retirement System. The City's policy is to fund all pension costs accrued. Such costs to be funded are determined annually as of July 1 by such System's actuary. Outstanding Indebtedness The following table sets forth the total outstanding indebtedness of the City of Redding as of June 30, 1989. Type of Outstanding Anticipated Source Obligation Princii)al Amount of Payment i General Obligation Debt $ 999,154 Enterprise funds General Obligation Debt 34.766 Government funds Revenue Bonds 29.083.359 Enterprise funds Certificates of Participation (1) 68,414,581 Proprietary funds Capital Leases 685,100 Enterprise funds Capital Loan 1.063,944 Internal service and government funds. TOTAL $109.235.904 1 i i I I r a •• CITY OF REDDING G GENERAL FUND I' Statement of Revenues. Expenditures and Changes in Fund Balance ! For the Five Fiscal Years Fended June 30. 1989 Revenue 1983-1984 1984-1985 1985-1986 1986-1987 1987-1988 1988-1989 Property Taxes $2,474,315 53.003,480 53,184,463 $3,545,080 S3,403,313 53.842,475 Sales &Use Taxes $7,551,818 S8,366,311 $8.507,087 $9,023,246 S10.035,710 S10,832,990 Licenses&Permits 5375,302 $404,501 5502,547 $699,618 $491.088 $1.030.571 Intergovernmental Revenue $957,867 51,949,408 $2,048,067 S2,613,639 S2,967,680 S3,282,759 Charges for Services $232,027 $286,134 S309,083 S405,837 S436,834 5764.970 Fines, Forfeitures&Penalties $150,499 $199,646 S241,268 5229,016 5231,147 S244,942 Use of Money& Property $440,156 S1,268,458 S802,900 S695,886 S693,612 S1,840,207 Other $320,971 S239,647 5386,012 S580.311 S307,675 S526.678 I' I. Total Revenue $12,502,955 S15,717,585 $15,981,427 S17,792,633 S18,567,059 S22,365,592 i Expenditures Current: General Government S1,182,203 $958.627 $1,182,172 51,344,472 S1,577,570 S2,531,851 . Public Safety S6,930,096 $7,302,533 $8,394,821 S9,947,103 S9,581,123 S10,856,495 Planning S879,853 $959,340 S1,133,248 51.303,096 S1.257,061 S3,806.751 Public Works S2,919,720 S3,512,838 S4,060,628 S4,500,004 S4,061.705 S1,486,855 Parks,Recreation&Culture S1.295,246 S1,418.043 51.542,953 S1.873,316 S1,962,089 52,143.347 Midtown Mall $225,070 S215,980 S188.753 S193.437 S227,134 5287,922 Non-Departmental S560.569 Capital Outlay S1,161,685 S2.080,371 S 1.392.782 S2,479.386 S2.734.297 S3,471,022 Debt Service: Principal Retirement S90,680 S195,691 S17,908 S23,643 S119,534 Interest&Fiscal Charges S24.953 $68,346 $35,120 S49.079 S89.908 Total Expenditures S15.154.442 S16.563,365 S 18,159,394 $21.693.842 S21.473.701 S24.793.685 (Excess) of Expenditures Over Revenue (S2,651,4871 ($845,780) (S2,177,9671 (S3,901.209) (S2,906.642) (S2,428.093) Other Financing Sources (Uses) $3,545.107 S1.752,100 S2.261,375 S1,910,855 52,928,321 S1,637,86-1 i Excess of Expenditures and Other Uses Over Revenue and Other Sources S893.620 S906,320 $83,408 ($1.990,354) S21,679 (S790,2291 Fund Balance. Beginning of Year S3.840,380 S4.652,684 55,640.328 S5,723,736 S3.733,382 S3.755.061 Fund Balance, End of Year S4,652.684 $5,640,328 $5,723,736 S3,733,382 S3,755,061 S2,964.832 Source: Comprehensive Annual Ftnancial Report of the City 6 I IIk r