CITY OF ELK GROVE Community Facilities District No. 2005-1 (Laguna Ridge) $67,670,000 SPECIAL TAX BONDS, SERIES 2007 Elk Grove, California Dated: July 12, 2007 Base CUSIP + : 287272 2010/11 ANNUAL CONTINUING DISCLOSURE INFORMATION STATEMENT AS OF JANUARY 12, 2012 27368 Via Industria Suite 110 Temecula, CA 92590 T 951.587.3500 800.755.6864 F 951.587.3510 + Copyright, American Banker s Association. CUSIP data is provided by Standard and Poor s, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP service. The issuer takes no responsibility for the accuracy of such number. www.willdan.com/financial
CITY OF ELK GROVE LIST OF PARTICIPANTS AGENCY Andrew Keys Accounting Manager 8401 Laguna Palms Way Elk Grove, California 95758 (916) 478-2273 www.elkgrovecity.org DISTRICT ADMINISTRATOR DISCLOSURE CONSULTANT & DISSEMINATION AGENT Willdan Financial Services* Temecula, California 92590 (951) 587-3500 www.willdan.com/financial BOND COUNSEL Kronick, Moskovitz, Tiedemann and Girard A Professional Corporation Sacramento, California DISCLOSURE COUNSEL Jones Hall, A Professional Law Corporation San Francisco, California FISCAL AGENT Nancy D. Stahl U.S. Bank National Association 1420 5 th Avenue, 7 th Floor Seattle, Washington 98101 Nancy.stahl@usbank.com UNDERWRITER Piper Jaffray San Francisco, California 94104 * In its role as Disclosure Consultant, Willdan Financial Services has not passed upon the accuracy, completeness or fairness of the statements contained herein.
I. INTRODUCTION Pursuant to an Official Statement dated June 26, 2007, the City of Elk Grove (the City ) issued $67,670,000 Special Tax Bonds (the Bonds ) to assist the City in the refinancing of costs of certain improvements of benefit to properties within the City s Community Facilities District No. 2005-1 Laguna Ridge (the CFD 2005-1 ). On March 8, 2006 the City Council adopted Resolution 2006-62 (the Resolution of Formation ), which formed the District. The District was established and authorized to incur bonded indebtedness in an aggregate principal amount not to exceed $225,000,000 at a special election in the District held on the same day. The Bonds are the first series to be issued under the authorization; additional bonds are expected to be issued as development in the District proceeds. Approval of the annual levy of Special Taxes to be collected within the District, for the purpose of paying for the Improvements, include repaying of any indebtedness of the District, replenishing the Reserve Fund and paying the administrative expenses of the District. The City of Elk Grove incorporated on July 1, 2000. The City is located in the southern portion of Sacramento County and is halfway between Sacramento and Stockton. The District is located in southeast quadrant of Bruceville Road and Elk Grove Boulevard, west of West Stockton Boulevard, about 12 miles south of the Sacramento Central Business District, west of State Highway 99. Property in the District comprises a portion of, but not all, of the land comprising the City s Laguna Ridge Specific Plan ( LRSP ). The LSRP is located in the southwestern portion of the City of Elk Grove, west of Highway 99, south of Elk Grove Boulevard, east of Bruceville Road and the East Franklin Specific Plan area, and north of Bilby Road and the area referred to as the Southeast Study Area. The LRSP is comprised of approximately 1,900 acres. The LRSP is anticipated to contain approximately 7,825 residential units. The Specific Plan also includes approximately 250 acres of commercial land use consisting of approximately 124 acres of shopping commercial use, 51 acres of office park use, and approximately 72 acres of auto commercial use. The auto commercial use includes Phases II and III of the Elk Grove Automall ( EGAM ). EGAM Phase I (not in the LRSP) and EGAM Phase II are almost entirely built out as they were approved for development before the LRSP was approved. A portion of EGAM Phase III is in the District but it is not subject to the Special Tax securing payment of the Bonds. The Bonds are secured by and payable from a pledge of the Net Special Taxes collected by the City from real property within the boundaries of the Districts and from the proceeds of any foreclosure actions brought following a delinquency in the payment of the Special Taxes. Neither the full faith and credit, nor the taxing power of the City, the County of Sacramento (The County ), the State of California or any political subdivision of any of the foregoing is pledged to the payment of the Bonds. The Bonds are Limited Obligations of the City payable solely from Net Special Taxes and other amounts held in the Fiscal Agent Agreement. 2010/2011 City of Elk Grove, CFD 2005-1 Special Tax Bonds Series 2007 1
This Annual Information Statement is being provided pursuant to a covenant made by the Authority for the benefit of the holders of the Bonds and includes the information specified in Continuing Disclosure Agreements. For further information and a more complete description of the Districts, the City and the Bonds, reference is made to the Official Statement. The information set forth herein has been furnished by the City and by sources, which are believed to be accurate and reliable but is not guaranteed as to accuracy or completeness. Statements contained in this Annual Information Statement which involve estimates, forecasts, or other matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. Further, the information and expressions of opinion contained herein are subject to change without notice and the delivery of this Annual Information Statement will not, under any circumstances, create any implication that there has been no change in the affairs of the City or any other parties described herein. II. BOND INFORMATION A. PRINCIPAL OUTSTANDING Bond Issue As of September 2, 2011 City of Elk Grove Community Facilities District No. 2005-1, Series 2007 $66,840,000.00 B. FUND BALANCES Fund Balances As of September 30, 2011 Acquisition and Construction Fund $2,528,078.70 Reserve Fund $6,284,711.19 Reserve Requirement (1) $6,284,697.66 (1) The Bond Reserve Requirement means, as of any date of calculation, the least of the (i) Maximum Annual Debt Service as of such date, (ii) 125% of average Annual Debt Service on all Bonds Outstanding as of such date and (iii) 10% of the original principal amount of the Bonds. Source: US Bank National Association, per the Fiscal Agent Agreement. III. FINANCIAL INFORMATION The audited financial statements for the City for the Fiscal Year Ended June 30, 2011 will be separately filed with the MSRB s Electronic Municipal Market Access system ( EMMA ) and are hereby incorporated by reference into this Annual Information Statement. THE FOLLOWING FINANCIAL STATEMENT IS PROVIDED SOLELY TO COMPLY WITH THE SECURITIES EXCHANGE COMMISSION STAFF S INTERPRETATION OF 2010/2011 City of Elk Grove, CFD 2005-1 Special Tax Bonds Series 2007 2
RULE 15C1-12. NO FUNDS OR ASSETS OF THE CITY ARE REQUIRED TO BE USED TO PAY DEBT SERVICE ON THE BONDS AND THE CITY IS NOT OBLIGATED TO ADVANCE AVAILABLE FUNDS FROM THE CITY TREASURY TO COVER ANY DELINQUENCIES. INVESTORS SHOULD NOT RELY ON THE FINANCIAL CONDITION OF THE CITY IN EVALUATING WHETHER TO BUY, HOLD OR SELL THE BONDS. IV. OPERATING INFORMATION A. ASSESSED VALUATION The following table sets forth the total assessed value of the District for the fiscal year 2011/12 for all parcels subject to the Maximum Facilities Special Tax. FY 2011/12 Assessed Land FY 2011/12 Assessed Structure FY 2011/12 Total Assessed Value Outstanding Bond Debt Value to Bond Debt $157,602,563 $175,361,933 $332,964,496 $66,840,000 4.98 Source: Sacramento Assessor s Office, 2011/2012 Secured Roll, as compiled by Willdan Financial Services The Official Statement sets forth the estimated bulk sale discounted value, subject to the Special Tax lien, of all taxable property within the District to be $550,260,000 subject to the limiting conditions stated therein the Official Statement (See The Appraisal and Appendix B of the Official Statement). The principal amount of bonds issued was $67,670,000. Consequently, the estimated bulk sale discounted value, subject to the Special Tax lien, of the real property within the District, was approximately 8.13 times the principal amount of the Bonds. Please see the Official Statement dated June 26, 2007 for complete details. B. PRINCIPAL PROPERTY OWNERS DEBT BURDEN The following table sets forth information regarding Property Owners responsible for 5 percent or more of the FY 2011/12 Debt Burden. The District consists of both a bonded facilities component as well as an on-going maintenance component which are levied together on the County tax roll. The debt associated with bonds issued by the district is secured only by the facilities component of the Special Taxes levied. The debt burden is calculated as the prorata share of the Maximum Facilities Tax times the principal outstanding on the Bonds. 2010/2011 City of Elk Grove, CFD 2005-1 Special Tax Bonds Series 2007 3
Property Owner Parcel Count FY 11/12 Assessed Land Value FY 11/12 Assessed Structure Value FY 11/12 Total Assessed Value FY 11/12 Maximum Facilities Tax (1) Debt Burden (2) Value to Debt Burden Percent of Debt Burden REYNEN/BARDIS (LAGUNA RIDGE) LP 1 $3,471,752 $0 $3,471,752 $506,773 $8,010,751 0.43 11.98% TL INVESTMENTS LP 3 $1,609,024 $0 $1,609,024 $374,283 $5,916,437 0.27 8.85% PULTE HOME CORPORATION 286 $4,518,789 $2,261,024 $6,779,813 $338,953 $5,357,949 1.27 8.02% MBK HOMES NORTHERN CA LIMITED 107 $4,160,111 $0 $4,160,111 $256,699 $4,057,731 1.03 6.07% ELK GROVE BOULEVARD/BRUCEVILLE IINVESTORS 2 $11,654,622 $0 $11,654,622 $237,929 $3,761,039 3.10 5.63% All Other Property Owners 1,329 $132,188,265 $173,100,909 $305,289,174 $2,513,770 $39,736,093 7.68 59.45% Grand Total 1,728 $157,602,563 $175,361,933 $332,969,496 $4,228,407 $66,840,000 4.98 100.00% Source: FY 11/12 Sacramento County Secured Roll, as compiled by Willdan Financial Services (1) The maximum tax listed only includes the parcels that are currently being levied. The maximum tax for the District includes tentative map & undeveloped parcels that are not being levied at this time. (2) Calculated as the prorata share of the Maximum Facilities Tax times the principal outstanding on the Bonds. C. PRINCIPAL PROPERTY OWNERS Currently there are no property owners subject to 20% or greater of the total annual Special Tax levy. D. DELINQUENCY INFORMATION The following tables show delinquency information for FY 2011/12. The bonds are secured by the Facilities Special Taxes which is listed independently from the Maintenance Special Taxes. Since the Facilities and Maintenance Special Taxes were levied together prior to FY 2009/10, both are shown in the tables below in order to provide the complete delinquency information for the entire District. Number of Parcels Levied Number of Parcels Delinquent Annual Facilities Special Tax Annual Maintenance Special Tax Amount Delinquent Facilities (1) Amount Delinquent Maintenance Facilities (1) Percent Delinquent Facilities (1) Fiscal Year 2006/07 15 0 $0 $723,238 $0 $0 0.00% 2007/08 1,432 0 $4,048,457 $1,847,464 $0 $0 0.00% 2008/09 1,501 0 $4,049,237 $1,678,538 $0 $0 0.00% 2009/10 1,498 4 $4,056,132 $750,014 $3,980 $0 0.08% 2010/11 1,552 45 $4,164,806 $762,531 $35,449 $6,636 0.85% (1) Amount Delinquent as of September 16, 2011, except the Reynen/Bardis delinquencies are excluded from the report since they were cured on January 11, 2012 per a settlement agreement. Source: Sacramento County Tax Collector and the City of Elk Grove, as compiled by Willdan Financial Services 2010/2011 City of Elk Grove, CFD 2005-1 Special Tax Bonds Series 2007 4
E. DELINQUENT PROPERTY OWNERS There are no delinquent parcel owners who owe more than 5% of the annual Special Tax levy. F. FORECLOSURE PROCEEDINGS AND STATUS The City removed all delinquent parcels from the county tax roll on August 10, 2011 and sent payment demand letters to all the parcel owners. Pending City Council direction, the remaining delinquent parcels will be sent to a foreclosure attorney for continued collection efforts. All Reynen/Bardis delinquencies were cured per the settlement agreement that was reached on January 11, 2012. 2010/2011 City of Elk Grove, CFD 2005-1 Special Tax Bonds Series 2007 5
V. DEBT SERVICE SCHEDULE City of Elk Grove CFD 2005-1 Series 2007 ORIGINAL DEBT SERVICE SCHEDULE Dated Date: 07/12/07 First Coupon: 09/01/07 First Maturity: 09/01/08 INTEREST RATE PRINCIPAL INTEREST SEMI-ANNUAL TOTAL ANNUAL 09/01/07 3.85000% $0.00 $476,087.40 $476,087.40 $476,087.40 03/01/08 $1,748,892.50 $1,748,892.50 09/01/08 3.85000% $90,000.00 $1,748,892.50 $1,838,892.50 $3,587,785.00 03/01/09 $1,747,160.00 $1,747,160.00 09/01/09 4.00000% $165,000.00 $1,747,160.00 $1,912,160.00 $3,659,320.00 03/01/10 $1,743,860.00 $1,743,860.00 09/01/10 4.10000% $245,000.00 $1,743,860.00 $1,988,860.00 $3,732,720.00 03/01/11 $1,738,837.50 $1,738,837.50 09/01/11 4.25000% $330,000.00 $1,738,837.50 $2,068,837.50 $3,807,675.00 03/01/12 $1,731,825.00 $1,731,825.00 09/01/12 4.37500% $420,000.00 $1,731,825.00 $2,151,825.00 $3,883,650.00 03/01/13 $1,722,637.50 $1,722,637.50 09/01/13 4.40000% $515,000.00 $1,722,637.50 $2,237,637.50 $3,960,275.00 03/01/14 $1,711,307.50 $1,711,307.50 09/01/14 4.55000% $615,000.00 $1,711,307.50 $2,326,307.50 $4,037,615.00 03/01/15 $1,697,316.25 $1,697,316.25 09/01/15 4.62500% $725,000.00 $1,697,316.25 $2,422,316.25 $4,119,632.50 03/01/16 $1,680,550.63 $1,680,550.63 09/01/16 4.70000% $840,000.00 $1,680,550.63 $2,520,550.63 $4,201,101.26 03/01/17 $1,660,810.63 $1,660,810.63 09/01/17 4.80000% $965,000.00 $1,660,810.63 $2,625,810.63 $4,286,621.26 03/01/18 $1,637,650.63 $1,637,650.63 09/01/18 5.00000% $1,095,000.00 $1,637,650.63 $2,732,650.63 $4,370,301.26 03/01/19 $1,610,275.63 $1,610,275.63 09/01/19 5.00000% $1,240,000.00 $1,610,275.63 $2,850,275.63 $4,460,551.26 03/01/20 $1,579,275.63 $1,579,275.63 09/01/20 5.00000% $1,390,000.00 $1,579,275.63 $2,969,275.63 $4,548,551.26 03/01/21 $1,544,525.63 $1,544,525.63 09/01/21 5.10000% $1,550,000.00 $1,544,525.63 $3,094,525.63 $4,639,051.26 03/01/22 $1,505,000.63 $1,505,000.63 09/01/22 5.12500% $1,725,000.00 $1,505,000.63 $3,230,000.63 $4,735,001.26 03/01/23 $1,460,797.50 $1,460,797.50 09/01/23 5.20000% $1,905,000.00 $1,460,797.50 $3,365,797.50 $4,826,595.00 03/01/24 $1,411,267.50 $1,411,267.50 09/01/24 5.20000% $2,100,000.00 $1,411,267.50 $3,511,267.50 $4,922,535.00 03/01/25 $1,356,667.50 $1,356,667.50 09/01/25 5.20000% $2,310,000.00 $1,356,667.50 $3,666,667.50 $5,023,335.00 03/01/26 $1,296,607.50 $1,296,607.50 09/01/26 5.20000% $2,530,000.00 $1,296,607.50 $3,826,607.50 $5,123,215.00 03/01/27 $1,230,827.50 $1,230,827.50 09/01/27 5.20000% $2,765,000.00 $1,230,827.50 $3,995,827.50 $5,226,655.00 03/01/28 $1,158,937.50 $1,158,937.50 09/01/28 5.25000% $3,010,000.00 $1,158,937.50 $4,168,937.50 $5,327,875.00 03/01/29 $1,079,925.00 $1,079,925.00 09/01/29 5.25000% $3,275,000.00 $1,079,925.00 $4,354,925.00 $5,434,850.00 2010/2011 City of Elk Grove, CFD 2005-1 Special Tax Bonds Series 2007 6
INTEREST RATE PRINCIPAL INTEREST SEMI-ANNUAL TOTAL ANNUAL 03/01/30 $993,956.25 $993,956.25 09/01/30 5.25000% $3,560,000.00 $993,956.25 $4,553,956.25 $5,547,912.50 03/01/31 $900,506.25 $900,506.25 09/01/31 5.25000% $3,855,000.00 $900,506.25 $4,755,506.25 $5,656,012.50 03/01/32 $799,312.50 $799,312.50 09/01/32 5.25000% $4,170,000.00 $799,312.50 $4,969,312.50 $5,768,625.00 03/01/33 $689,850.00 $689,850.00 09/01/33 5.25000% $4,505,000.00 $689,850.00 $5,194,850.00 $5,884,700.00 03/01/34 $571,593.75 $571,593.75 09/01/34 5.25000% $4,860,000.00 $571,593.75 $5,431,593.75 $6,003,187.50 03/01/35 $444,018.75 $444,018.75 09/01/35 5.25000% $5,235,000.00 $444,018.75 $5,679,018.75 $6,123,037.50 03/01/36 $306,600.00 $306,600.00 09/01/36 5.25000% $5,630,000.00 $306,600.00 $5,936,600.00 $6,243,200.00 03/01/37 $158,812.50 $158,812.50 09/01/37 5.25000% $6,050,000.00 $158,812.50 $6,208,812.50 $6,367,625.00 Totals: $67,670,000.00 $78,315,298.72 $145,985,298.72 $145,985,298.72 2010/2011 City of Elk Grove, CFD 2005-1 Special Tax Bonds Series 2007 7