Closing Memo/Index/Documents (CFD No. 2)
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NEW ISSUE - BOOK-ENTRY ONLY RATING: Standard & Poor’s: “AAA” (MBIA Insured) See “RATINGS” STATE OF CALIFORNIA COUNTY OF RIVERSIDE In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions and assuming certain representations and compliance with certain covenants and requirements discussed herein, interest and original issue discount on the Bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from California personal income tax. The difference between the issue price of a Bond (the first price at which a substantial amount of a maturity is to be sold to the public) and the stated redemption price at maturity with respect to such Bond constitutes original issue discount. See “TAX MATTERS.” $10,435,000 COMMUNITY FACILITIES DISTRICT NO. 89-1 OF THE COUNTY OF RIVERSIDE SPECIAL TAX REFUNDING BONDS, SERIES 2006 Dated: Delivery Date Due: September 1, as shown herein The Special Tax Refunding Bonds, Series 2006 (the “Bonds”) are authorized pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, and are payable from certain special taxes to be levied on property within Community Facilities District No. 89-1 of the County of Riverside (the “District”), according to the Rate and Method of Apportionment of Special Tax approved by the voters within the District and by the Board of Supervisors of the County of Riverside (the “County”). Payment of the principal of and interest on the Bonds is secured by a pledge of and lien upon the special taxes as described herein. The Bonds will be issued pursuant to a Bond Indenture (the “Indenture”) dated as of September 1, 2006 between the District and The Bank of New York Trust Company, N.A., as trustee (the “Trustee”). The Bonds are limited obligations of the District and are payable solely from revenues derived from the Special Taxes (as defined herein) that will be levied annually on and collected from the owners of the taxable land within the District and from certain other funds pledged pursuant to the Indenture, all as further described herein. The Bonds are being issued to provide for the defeasance and refunding of outstanding bonds of the District, to fund a reserve account, and to pay costs of issuing the Bonds. See “REFUNDING PLAN.” The Bonds will be issued as fully registered bonds in the name of Cede & Co., as nominee of The Depository Trust Company, New York, N.Y. (“DTC”), and will be available to ultimate purchasers in the denomination of $5,000 each or any integral multiple thereof pursuant to the book-entry system maintained by DTC. Ultimate purchasers of the Bonds will not receive certificates representing their interests in the Bonds. Interest on the Bonds is payable semiannually on March 1 and September 1 of each year, commencing March 1, 2007. Payments of the principal of, premium, if any, and interest on the Bonds will be made directly to DTC, or its nominee, Cede & Co., by the Trustee, so long as DTC or Cede & Co. is the registered owner of the Bonds. Disbursements of such payments to DTC’s Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC’s Participants and Indirect Participants, as more fully described herein. See “THE BONDS - Book-Entry System.” The Bonds are subject to optional and extraordinary redemption as discussed herein. See “THE BONDS – Optional Redemption” and “- Extraordinary Redemption From Prepayments.” The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under a financial guaranty insurance policy to be issued concurrently with the delivery of the Bonds by MBIA Insurance Corporation. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE DISTRICT, THE COUNTY, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. EXCEPT FOR THE SPECIAL TAXES, NO OTHER TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE DISTRICT OR THE COUNTY BUT ARE LIMITED OBLIGATIONS OF THE DISTRICT PAYABLE SOLELY FROM THE SPECIAL TAXES AND OTHER FUNDS PLEDGED PURSUANT TO THE INDENTURE AS MORE FULLY DESCRIBED HEREIN. MATURITY SCHEDULE (See Inside Cover Page) The purchase of the Bonds involves certain risks. See the section of this Official Statement entitled “SPECIAL RISK FACTORS” for a discussion of certain risk factors which should be considered, in addition to other matters set forth herein, in evaluating the investment quality of the Bonds. This cover page contains information for quick reference only. It is not a complete summary. Investors should read the entire Official Statement to obtain information essential to making an informed investment decision. The Bonds are offered, when, as and if issued, subject to approval as to their legality by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel, and certain other conditions. Certain legal matters will be passed on for the District by Best Best & Krieger LLP, Riverside, California, as Disclosure Counsel, and by the County Counsel of the County of Riverside, and for the Underwriter by Nossaman Guthner Knox & Elliott LLP, Irvine, California. It is anticipated that the Bonds in book-entry form will be available for delivery through the book-entry system of DTC in New York, New York on or about September 26, 2006. Dated: September 13, 2006 MATURITY SCHEDULE (SERIAL BONDS) Maturity Date Principal Interest (September 1) Amount Rate Yield CUSIP No.(1) 2007 $495,000 4.000% 3.400% 76911FQA5 2008 385,000 4.000 3.460 76911FQB3 2009 405,000 4.000 3.490 76911FQC1 2010 420,000 4.000 3.520 76911FQD9 2011 435,000 4.000 3.550 76911FQE7 2012 455,000 4.000 3.600 76911FQF4 2013 470,000 4.000 3.650 76911FQG2 2014 490,000 4.000 3.700 76911FQH0 2015 510,000 4.000 3.750 76911FQJ6 2016 530,000 3.700 3.820 76911FQK3 2017 550,000 4.000 3.900(2) 76911FQL1 2018 570,000 4.000 3.970(2) 76911FQM9 2019 595,000 4.000 4.050 76911FQN7 2020 620,000 4.125 4.150 76911FQP2 2021 645,000 4.125 4.220 76911FQQ0 2022 670,000 4.125 4.270 76911FQR8 2023 700,000 4.250 4.320 76911FQS6 2024 730,000 4.250 4.370 76911FQT4 2025 760,000 4.250 4.400 76911FQU1 (1) Copyright 1995-2006, American Bankers Association. CUSIP data herein is provided by Standard & 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 Services. CUSIP numbers are provided only as a convenience for reference. Neither the District nor the Underwriter assumes any responsibility for the accuracy of such numbers. (2) Priced to call on September 1, 2016. THE COUNTY OF RIVERSIDE BOARD OF SUPERVISORS Bob Buster, Chairman 1st District Supervisor John F. Tavaglione, Vice Chairman 2nd District Supervisor Marion Ashley 3rd District Supervisor Jeff Stone 4th District Supervisor Roy Wilson 5th District Supervisor OFFICERS Larry Parrish Joe S. Rank County Executive Officer County Counsel Dean Deines Paul McDonnell Deputy County Executive Officer Treasurer-Tax Collector PROFESSIONAL SERVICES Bond Counsel Special Tax Consultant Stradling Yocca Carlson & Rauth Albert A. Webb Associates a Professional Corporation Riverside, California Newport Beach, California Financial Advisor Disclosure Counsel Fieldman, Rolapp & Associates Best Best & Krieger LLP Irvine, California Riverside, California Appraiser Verification Consultant Bruce W. Hull & Associates, Inc. Grant Thornton LLP Ventura, California Minneapolis, Minnesota Trustee The Bank of New York Trust Company, N.A. Los Angeles, California TABLE OF CONTENTS INTRODUCTION .........................................................1 THE DISTRICT .......................................................... 25 General......................................................................1 Location.................................................................. 25 The District ...............................................................1 Development Status and Property Ownership........ 25 Sources of Payment for the Bonds............................2 Summary of Formation Proceedings...................... 27 Property Values ........................................................3 Rate and Method of Apportionment of Description of the Bonds ..........................................4 Special Tax............................................................. 27 Bond Insurance .........................................................4 Fiscal Year 2006-07 Special Tax Levy .................. 28 Tax Matters...............................................................4 Special Tax Delinquencies..................................... 30 Professionals Involved in the Offering .....................4 SPECIAL RISK FACTORS........................................ 30 Special Risks.............................................................5 Insufficiency of Special Taxes ............................... 30 Continuing Disclosure ..............................................5 Adjustable Rate Home Loans................................. 31 Other Information .....................................................5 Undeveloped Property...........................................