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HomeMy Public PortalAbout19960626 - Agendas Packet - Board of Directors (BOD) - 96-15 w Regionale MIDPENINSULA REGIONAL OPEN SPACE DISTRICT I Meeting 96-I5 REGULAR MEETING BOARD OF DIRECTORS AGENDA* 7:30 P.M. 330 Distel Circle Wednesday Los Altos, California June 26, 1996 (7:30) ROLL CALL ** ORAL COMMUNICATIONS -- Public SPECIAL ORDER OF THE DAY Pledge of Allegiance ADOPTION OF AGENDA *** ADOPTION OF CONSENT CALENDAR -- N. Hanko *** APPROVAL OF MINUTES June 12, 1996 (Consent Item) *** WRITTEN COMMUNICATIONS (Consent Item) BOARD BUSINESS (7:45) 1. Authorization for the General Manager to Submit an Application to the Town of Woodside for a Lot Line Adjustment to Create Four Residential Parcels at Pinto Way and One Residential Parcel at Summit Springs as Part of the Process to Sell Surplus Property at Teague Hill Open Space Preserve -- R. Anderson (8:05) 2. Authorization to Implement Four-Year Grassland Management Action Plan for the Russian Ridge Open Space Preserve Based on Determination that Proposed Project is Categorically Exempt from CEQA -- R. Anderson (8:25) 3. Authorization for General Manager to Execute Fifth Amendment to Agreement between District and City of Mountain View Extending Deer Hollow Farm Agreement for 90 Days -- J. Escobar (8:35) 4. Authorization of the Issuance of Midpeninsula Regional Open Space District 1996 Refunding Promissory Notes in a Principal Amount Not to Exceed $18,700,000; Authorization to Execute and Deliver a Site Lease, Project Lease, Purchase Contract, and Other Items Required to Allow for the Issuance and Sale of$30,200,000 of Midpeninsula Regional Open Space District Authority 1996 Revenue Bonds; and Approval of Agreement for Bond Counsel Services with Orrick, Herrington & Sutcliffe -- M. Foster 330 Distel Circle * Los Altos, CA 94022-1404 * Phone:415-691-1200 * FAX:415-691-0485 * E-mail: mrosd@netcom.com Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton Meeting 96-15 Page 2 Resolution Authorizing the Issuance of Midpeninsula Regional Open Space District 1996 Refunding Promissory Notes in a Principal Amount Not to Exceed $18,700,000 and Providing for the Form, Execution and Repayment of Said Notes Resolution Authorizing the Execution and Delivery of a Site Lease, a Project Lease, a Purchase Contract and a Continuing Disclosure Agreement, and Approving a Preliminary Official Statement and Approving Certain Other Matters in Connection Therewith THE REGULAR MEETING OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT WILL RECESS AT THE CONCLUSION OF THIS AGENDA ITEM IN ORDER TO CONVENE A SPECIAL MEETING OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY. THE DISTRICT'S REGULAR MEETING WILL RECONVENE AFTER THE ADJOURNMENT OF THE AUTHORITY'S MEETING 5. Final Adoption of the Trail Use Plan for El Corte de Madera Creek Open Space Preserve as an Amendment to the Preserve's Comprehensive Use and Management Plan -- M. de Beauvieres (9:10) 6. Authorization with Eugene R. Sheehan for $24,200 for Trail Construction Services at El Corte de Madera Creek Open Space Preserve -- M. de Beauvieres 7. Authorization to Solicit Bids for Picchetti Ranch Homestead House Restoration Based on Determination that Recommended Action is Categorically Exempt from CEQA -- J. Law 8. Cancellation of July 10 Meeting -- J. Fiddes, (9:15) INFORMATIONAL REPORTS -- Directors and Staff REVISED CLAIMS (Consent Item) CLOSED SESSION - (Continued, if necessary) ADJOURNMENT *NOTE. Times are estimated and items may appear earlier or later than listed. Agenda is subject to change of order. TO ADDRESS THE BOARD: The Chair will invite public comment on agenda items at the time each item is considered by the Board of Directors. You may address the Board conceming other matters during oral communications. Each speaker will ordinarily be limited to 3 minutes. Alternately, you may comment to the Board by a written communication, which the Board appreciates. f Meeting 96-15 Page 3 j ***All items on the consent calendar shall be a,0proved without discussion by one motion. Board members, the General Manager, and members of the public may request that an item be removed ,from the Consent Calendar during consideration of the Consent Calendar, NOTICE OF PU,h'LIC MEETINGS The Legislative, Knance, and Public Affairs Committee will meet on Monday, July 15 at 9:30 A.M. at the District office. i i Regional Open c MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Meeting 96-13 SPECIAL AND REGULAR MEETING BOARD OF DIRECTORS June 12, 1996 MINUTES I. ROLL CALL President Nonette Hanko called the meeting to order at 6:08 p.m. Members Present: Peter Siemens, David Smernoff, Mary Davey, Betsy Crowder, Nonette Hanko, and Wim de Wit Members Absent: Teena Henshaw Personnel Present: Craig Britton and George Sipel II. CLOSED SESSION N. Hanko stated that the Board would adjourn to the Special Meeting Closed Session for the purpose of discussing Closed Session agenda item 1. The Board recessed to Closed Session at 6:08 p.m. and the Closed Session commenced at 6:09 p.m. The Board adjourned the Special Meeting at 7:32 p.m. and N. Hanko called the Regular Meeting to order at 7:38 p.m. Additional Personnel Present: Jean Fiddes, Michael Williams, Randy Anderson, Sue Schectman, Julie McCullough, Malcolm Smith, Annette Coleman, John Escobar, and Lisa Zadek III. ORAL COMMUNICATIONS B. Crowder complimented staff on the June 9 event at Skyline Ridge Open Space Preserve and thanked them. The Board gave a standing ovation for M. Smith. IV. ADOPTION OF AGENDA C. Britton requested that a Special Order of the Day be added. The Board adopted the amended agenda by consensus. V. SPECIAL ORDER OF THE DAY M. Williams introduced Lisa Zadeck who is the new Planning Team Secretary. Board members welcomed her. 330 Distel Circle Los Altos,CA 94022-1404 Phone:415-691-1200 FAX:415-691-0485 E-mail: mrosd@netcom.com Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko, Betsy Crowder,Wim de Wit Genera(Manager:L.Craig Britton Meeting 96-13 Page 2 VI. ADOPTION OF CONSENT CALENDAR Motion; P. Siemens moved that the Board adopt the Consent Calendar including the minutes of the May 22 Special and Regular Meeting; a response to a written communication from Mr. William R. Estrada, H, P. O. Box 153, New Almaden; agenda item 7, Authorization to Purchase Two All Terrain Vehicles at Estimated Cost of$12, ; and revised claims 96-13. D. Smernoff seconded the motion. The motion passed 6 to 0. VI. BOARD BUSINESS A. Agenda Item No. I - Tentative Adoption of Trails Plan Element of Fremont Older Q= Space Preserve Comprehensive Use and Management Plan and Determination that Recommended Actions Categorically Exempt from CEOA - W=rt R-96-M J. McCullough presented an overview of the plan and consultant Sheryl Cochran discussed the process of formulating the plan and some of the problems that were considered. S. Cochran showed slides depicting trail use conflicts on Prospect Road, the new trail, Seven Springs trail conflicts, and erosion on Toyon Trail. In summary, S. Cochran said the plan provides for the majority of the trail system to remain multi-use. The major changes are improvements and seasonal closures on the Toyon Trail, construction of a new trail to take cyclists off Prospect Road and minimize trail use conflicts, and improvements to the Seven Springs Trail to reduce trail use conflicts there. She talked about the two cooperative projects with Santa Clara County Parks which are to make Stevens Canyon Trail a multi-use trail and to work with them on a trail connection through the former Kaiser property connecting Fremont Older to the county park. In answer to N. Hanko's question, J. McCullough said the Use and Management Plan as a whole is not yet scheduled. The parking issue will be coming back to the Board as an amendment to the Use and Management Plan. Regarding benches being placed on the trail, she said that could be added into the work program, perhaps for next year. N. Hanko said she would like to be able to see where the potential alignment for the new trail is proposed to be. Following further discussion regarding Board members visiting the site, C. Britton said that if the Board tentatively adopted the plan at this time, staff could set up a tour for those who are interested. Regarding the reference to the "former Kaiser property", D. Woods said Kaiser has transferred the property and the new owner will propose a development plan to the City of Cupertino. He said staff is following the process closely. B. Crowder said it was not mentioned in the site description that the Picchetti Ranch Area is just to the west of Stevens Creek Reservoir. She showed on a map possible alignments using two new trails (Bear Meadow and Zinfandel) and requested that Meeting 96-13 Page 3 staff include something about the Picchetti Ranch Area in the site description. In answer to her question regarding equestrian use of Segment 3, S. Cochran said it would be open to multi-use; however, equestrian use is very low. D. Smernoff asked why Segment Se 3 e is listed as a Class A trail. He said it �g could be Class B or C since the primary motive is to get bicycles off the road and a four-foot wide trail would be adequate. Following discussion, J. Escobar said there are two considerations: (1) The trail could be built narrower but it will become the main trail to the parking area. It would be advantageous if user groups going in opposite directions could pass one another which could be done on a six-foot trail. The new trail will be built to a lot better walking grade than the road is. (2) Part of making this traill attractive is getting the traffic off the neighborhood driveway that is now serving as the trail through the preserve. I D. Smernoff said Class A trails are 6-10 feet in width and he would prefer that it be closer to 6 feet than 10 feet. N. Hanko said she and B. Crowder tend to favor the 6 foot width as well. P. Siemens suggested including a code for level of maintenance of trails in the data base staff utilizes. He asked if staff had considered closing Toyon Trail because of the level of maintenance required. S. Cochran said closing had been considered but staff does not think now is the right time as it would be best to exhaust all other possibilities first. It is a historic equestrian trail. N. Hanko asked about the county draft master plan for the east side of the Stevens Creek Reservoir (page 19 of the report). She asked if the trail as proposed has a specific alignment that coincides with the District's or is there room for negotiation. She said she liked B. Crowder's suggestion. J. McCullough said there have been discussions with the County but no permanent alignment has been set. District staff will be working with them to find alignments that will have the least impact and accommodate multiple use. Regarding B. Crowder's suggestion, staff will talk to the County about incorporating those ideas into their master plan. D. Woods said a number of connections on both sides of the reservoir have been built into the plan but the plan has not been refined and adopted. N. Hanko asked about connecting county land on segment 37. J. McCullough said people are using it but it is private property; rangers also use it to access the preserve for patrol purposes. N. Hanko asked when staff would be able to come to the Board with some solutions to the parking problem. i J. McCullough said it is a high priority but will depend on what possible solutions are. They hope to provide the Board with alternatives, possibly by the end of the fiscal year. Meeting 96-13 Page 4 Jan Garrod, Garrod Farms, congratulated the District on the plan and encouraged the Board to accept it. He said the District has been a good neighbor and he hoped he had been. In the past, he has maintained Toyon Trail. He said his customers and neighbors use the trail a lot and he hoped the District would see fit to keep it open. He said he has been working with staff regarding the fence and gates. Regarding trail conflicts with bikes, some customers won't use the trail because they are afraid they will be hit by a bike. However, most bikers are aware of the problem and avoid conflicts. Steve Stuckey, 22600 Prospect Road, Saratoga, said he had concerns about both out of control bikes and the parking issue, adding there is a continuing issue of paramedics and emergency vehicles being blocked out. N. Hanko asked if he could think of ways to resolve the problem. Mr. Stuckey said there are just too many cars. Betty Normandin said her property is adjacent to the new trail. She said Board members could visit her property at any time. She expressed confusion as to exactly where the trail will be and said it sounds like the District is dumping bicycles on a trail that goes right by her house. She said she would like to know more about the trail and how it will be put in. She suggested locating a parking area on Regnart Road but she had not heard from staff as to the feasibility. Following discussion of how close the trail will be to Mrs. Normandin's house, C. Britton suggested that when the matter comes back to the Board for second reading, staff provide a plot plan showing distances. Motion: P. Siemens moved that the Board determine that the actions are categorically exempt under the California Environmental Quality Act as set out in the staff report and tentatively adopt the attached Trails Plan as an element of the Comprehensive Use and Management Plan for Fremont Older Open Space Preserve, amended to add a sentence under site description referring to the Picchetti property (page 4), staff to work out wording. M. Davey seconded the motion. The motion passed 6 to 0. B. ' Agenda Item No. 2 - Tentative Adoption of Proposed Amendments to District's Public Notification Policy and Good Neighbor Policy-Meport R796-62,) I M. Davey reviewed the staff report. N. Hanko referred to page 3 of the Public Notification Policy and suggested that in paragraph 5.a), first sentence, the word "final" be deleted. In the Good Neighbor Policy, page 3, she said she thought the word "selected" was more in keeping with what the Board had in mind rather than "identified." She asked that the first sentence of paragraph 6 be amended to read, ". . . reasonable efforts to address the neighbors' concerns and to resolve the situation. . . " Meeting 96-13 Page 5 I Motif M. Davey moved that the Board tentatively adopt amendments to the District's Public Notification Policy with the first sentence of paragraph 5.a) amended to delete the word "final"; and tentatively adopt amendments to the District's Good Neighbor Policy amended so that the first sentence of paragraph 6 would read, ". . . reasonable efforts to address the neighbors' concerns and to resolve the situation. . . " P. Siemens seconded the motion. The motion passed 6 to 0. C. Agenda Item No. 3 - Proposed Acquisition of 62.68-Acre Peninsula Open Spy I Trust PrQM y for $255,000 as an Addition to Cathedral Oaks Area of Sierra Azul Preserve, n of PrelimiaM Use and Management Plan Recommendations for the ProWiy. Including Dedication as Public Oren Spm, and Determination that Recommended Actions Categorically Exempt from CEOA - (R ort R-96-66) M. Williams located the property on a map. M. Williams and R. Anderson reviewed the staff report, noting the property's purchase price is $255,000. R. Anderson showed slides of the property. He said staff feels that the property is an important link, both as a trail and as habitat protection to Soda Springs Creek corridor. Motion: P. Siemens moved that the Board determine that the recommended actions are categorically exempt from the California Environmental Quality Act as set out in the staff report. B. Crowder seconded the motion. Them n otlo passed 6 to 0. � ,Motion: P. Siemens moved that,the Board adopt Resolution 96-18, a Resolution of the Board of Directors of the Midpeninsula Regional Open Space District Authorizing Acceptance of Agreement to Purchase Real Property, Authorizing Officer to Execute Certificate of Acceptance of Grant to District, and Authorizing General Manager to Execute Any and All Other Documents Necessary or Appropriate to the Transaction (Sierra Azul Open Space Preserve - Lands of Peninsula Open Space Trust). B. Crowder seconded the motion. The motion passed 6 to 0. Motion: P. Siemens moved that the Board tentatively adopt the Preliminary Use and Management Plan recommendations contained in the staff report, including naming the property as an addition to the Cathedral Oaks Area of Sierra Azul Open Space Preserve; and indicate their intention to dedicate the property as public open space at this time. B. Crowder seconded the motion. The motion passers 6 to 0. D. Agenda Item No. 4 - Calling of November 5, 1996 District Elections in Wards 3, 4 and 7 Requests for Election Consolidation Services from Santa Clara and San Mateo Counties, Establishment of 200 Word Maximum for Candidates' Statements, and Recommendation Not to List Any Unopposed Candidate on the Ballot - fflgport R-96- Meeting 96-13 Page 6 J. Fiddes presented staffs recommendations, including not listing any unopposed candidate on the ballot. N. Hanko stated that sometimes the only way the public knows who their representative is comes from seeing the person's name on the ballot, but election costs needed to be taken into consideration in deciding not to list an unopposed candidate on the ballot. Motion: M. Davey moved that the Board adopt Resolution 96-19, a Resolution of the Board of Directors of the Midpeninsula Regional Open Space District Calling Election and Requesting Election Consolidation Services - Santa Clara County for Wards 3 and 4; adopt Resolution 96- 20, a Resolution of the Board of Directors of the Midpeninsula Regional Open Space District Calling Election and Requesting Election Consolidation Services - San Mateo County for Ward 7; reconfirm Section 2.12 of Rule of Procedure regarding a maximum of 200 words per candidate statement and payment of candidates' statements in those wards where two or more candidates have qualified to appear on the ballot; adopt Resolution 96-21, a Resolution of the Board of Directors of the Midpeninsula Regional Open Space District Authorizing Not Listing Any Unopposed Candidate for Election on the November 5 Ballots of Santa Clara County and San Mateo County. P. Siemens seconded the motion. The motion passed 6 to 0. E. Agenda Item No. 5 - Rom,nest for Board Authorization for General Manager to Issue Permits to Enter District Land to Third Parties for Performance of Minor and/or Emugency Work - al=rt R-96-0 C. Britton reviewed the staff report. Motion: P. Siemens moved -ed that the Board adopt Resolution 96 22, a Resolution i of the Board of Directors of the Midpeninsula Regional Open Space District Authorizing the General Manager to Approve Certain Permits to Enter District Property. Discussion: Discussion followed regarding notification of Board members. C. Britton explained the proposed process and said he thinks there are adequate protections. S. Schectman said she had a concern about notifying the whole Board, adding that notifying a representative of the Board would be preferable. She suggested that this decision was up to the Board if they want the notification process to be a formal criterion. They can make it clear to staff that it would be C. Britton's responsibility to call the President and Board member in whose ward the permit is being issued. I I i Meeting 96-13 Page 7 P. Siemens amended the motion to add item 4 on page 2 of the report as follows: Prompt notification of Board President and the Director of affected ward. D. Smernoff seconded the amended motion. The motion passed 6 to 0. F. Agenda Item No. 6 - AZLrgyai of 1995-1996 Sakes Adjustment and Meritorious Pay Award and Amendment to General Manager's Em—p-1gyment Agreement - M=g-q R- 96-631 P. Siemens said he had no addition to the report. Motion: P. Siemens moved that the Board adopt Resolution 96-23, a Resolution of the Board of Directors of the Midpeninsula Regional Open Space District Approving 1995-1996 Salary Adjustment and Meritorious Pay Award for the General Manager and Approving Amendment to General Manager Employment Agreement. W. de Wit seconded the motion. The motion passed 6 to 0. VIL INFORMATIONAL REPORTS B. Crowder said she had walked on the new trail at Windy Hill Open Space Preserve connecting Hamm's Gulch with Spring Ranch Trail, noting it has been beautifully realigned by field staff and the volunteer trail builder. She said she had encountered dogs off leash on the trail. The Use and Management Committee will conduct a hearing in the fall on expanded use by dogs at Windy Hill Open Space Preserve. B. Crowder said the Use and Management Committee had a workshop at Long Ridge Open Space Preserve to review the Devils Canyon climbing area. She complimented staff on the workshop and said it was a very interesting demonstration. B. Crowder reported that on June 3 the San Mateo County tax funding group met and discussed Senator Sher's bill. C. Britton said he and M. Smith will attend a meeting in Sacramento to support that bill, adding that Assemblyman Cunneen has indicated he will continue his support. B. Crowder said she, C. Britton and M. deBeauvieres had met with a member of the Portola Valley Trails Committee about completing the Ridge Trail from Russian Ridge to Windy Hill Open Space Preserves. M. Davey reported on the Bay Area Ridge Trail Council meeting on May 30 which included an orientation on objectives of the Ridge Trail. She said each Board member had been asked to raise $500 for a total of$25,000 and staff has been asked to raise $25,000. P. Siemens said he, C. Britton, and J. Fiddes had attended a meeting of the Santa Clara County Special Districts Association. The discussion topic was the ramifications of the constitutional revision commission on special districts. The meeting was held at a Saratoga cemetary that was part of a special district. C. Britton said amendments are starting to come Meeting 96-13 Page 8 through and staff will attend a hearing when one occurs. N. Hanko said in reading the legislation it looked like the key for special districts was to put together a charter citizens group to look at reorganizing special districts. She said the whole purpose of the charter is to cut down or eliminate as much government as possible. S. Schectman suggested an informational agenda item in the near future giving the Board the current status of the legislation. C. Britton reported as follows: 1. He noted a letter in the informational packet from the Santa Cruz Bioregional Council regarding Sierra Azul. 2. He noted a letter from the Trail Center which included copies of the new trail map of the Southern Peninsula for the Board. 3. He announced that the mounted bobcat on long-term loan from Wildlife Rescue is on display in the lobby. 4. In regard to the Jarvis initiative, he had not heard that it has qualified for the ballot. 5. He referred to a newspaper article regarding Peninsula Open Space Trust's acquisition of the Crummer property. 6. P. Siemens and T. Henshaw were part of a team that met with the Portola Park Heights group to talk about the Ridge Trail crossing. J. Escobar thanked the Board for attending the volunteer recognition event. He said some staff members had completed leadership training on working with volunteers and interviews for the volunteer coordinator and resource management specialist will be in late June or early July. M. Smith thanked those who volunteered to work on the June 9 event, noting approximately 950 people attended and the event went smoothly for the most part. If Board members have detailed comments or criticism, he asked that they provide them in writing to staff. Board members expressed appreciation to District staff for their work on the event. N. Hanko shared her experience with a mountain bicyclist on the trail to the lake. D. Smernoff talked about a ride he had taken with J. Escobar and others on a section of the Leaf Trail at El Corte de Madera Creek Open Space Preserve. J. McCullough announced there would be an on-site meeting Wednesday with the Rhus Ridge neighbors. N. Hanko requested a report from that meeting. C. Britton said Board members had a copy of the letter sent to the neighbors. VIII. ADJOURNMENT At 9:32 p.m., N. Hanko adjourned the meeting. Roberta Wolfe Recording Secretary Claims No. 96-11 Meeting 96-13 Date: June 12, 1996 Revised MIDPENINSULA REGIONAL OPEN SPACE DISTRICT # Amount Name Description 321 671.59 A-1 Sanitation Sanitation Services 322 54.70 *1 Accessories Plus Truck Part 323 25.00 Allen Equipment Co. Inc. Tool Repair 324 877.35 Almaden RV Service Refrigerator-Barlow house 325 61.09 American Welding Supply Welding Service 326 72.90 Randy Anderson Vehicle Expense 327 916. AT & T Telephone Service 321.87 328 30.00 Best Internet Communications Monthly Internet Fee 329 41.05 Black Mountain Spring Water Water Service 330 1,150-00 Louis Bordi General Engineering Grading and Training Services 331 100.27 Craig Britton Reimbursement-CARPOSA Meeting 332 50.53 Butler's Uniforms Uniform Expense 333 17.59 Clark's Auto Parts/Machine Shop Vehicle Repair Parts 334 103.21 California Water Service Co. Water Service 335 52.91 Continuing Education of the Bar Resource Document 336 211.86 Annette Coleman Reimbursement--Field Supplies 337 75.00 Comm-Sery Projection Screen Service 338 56.57 Contemporary Engraving Co., Inc. Name Tags 339 199.60 Country Home Products Field Supplies 340 99.00 Cupertino Chamber of Commerce Annual Membership 341 200.00 Jim Davis Automotive Vehicle Smog Inspections 342 127.20 Decatur Electronics Radar Unit Repair 343 4,543.17 Design Concepts Graphic Design for Events 344 451.25 Divine Catering Volunteer Recogniton Event 345 167.33 Dorfman-Pacific Co., Inc. District Caps 346 96.50 John Escobar Reimbursement--CARPOSA Meeting 347 150.00 Falore Jeep Vehicle Repairs 348 321.50 Farrelle Communications Vehicle Amber Light Bar 349 14.67 Film To Frame Photocopies 350 10.67 Foster Bros. Security Systems, Inc. Locks for Vehicle 351 602.32 *2 Fry's Electronics Office Fax Machine 352 24.10 G & K Services Shop Towel Supply Service 353 914.41 Garcia Well & Pump Company Pump SystemRepair-Smith House 354 10,000.00 General Convention of the New Jerusalem Defeasance Fee 355 41.50 Mary Gilman Reimbursement--Deer Hollow Farm Supplies 356 120.01 Goodco Press Incorporated Printing Service 357 419.14 Goodyear Auto Service Center Tires 358 133.23 GTE Mobilnet Cellular Phone Service 359 625.61 Guy Plumbing & Heating, Inc. Incerpi House Plumbing 360 446.64 Phillip Hearin Reimbursement--Bicycle Patrol Training 361 8,436.00 House of Printing Printing--Annual Report/Newsletter 362 216.00 Jobs Available Inc. Recruitment Advertisement 363 106.40 Kinko's June Newsletter Printing •1 Urgent Check Issued May 30, 1996 *2 Urgent Check Issued May 29, 1996 Page 1 Claims No. 96-11 Meeting 96-13 Date: June 12, 1996 Revised MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Amount Name Description 364 507.50 Dennis Kobza & Associates, Inc. Architectural Consultant Skyline Ranger Office 365 243.46 John Kowaleski Reimbursement--Field Supplies, Uniform Expense and Pesticide Training Class 366 1000.00 *3 Judy Law Grant Cabin Artifacts 367 54.90 Judy Law Vehicle Expense 368 65.00 Lawyer's Title Reconveyance Fee--Gastronics 369 5000.00 *4 Lucille and William Ming Sing Lee Defeasance Fee 370 517.50 Town of Los Gatos Construction Management Services-- Skyline Ranger Office 371 151.79 Marin Supply Company Restroom Supplies 372 250.00 *5 Juliette McDonald June 9 Event Entertainment 373 846.00 Milstone Geotechnical Geotechnical Consulting Services-- Weeks Road & Schilling Lake Spillway 374 544.38 Minton's Lumber & Supply Paint, Lumber and Field Supplies 375 35-56 Mountain View Garden Center Gravel 376 ()().ee NetStart, Inc. Computer Upgrade and Servicing 824.52 377 33.19 Northern Energy Propane Service 378 125.00 Frank Olson Reimbursement--Tuition 379 280.61 Pacific Bell Telephone Service 380 145.00 Padgett Thompson Seminar-J. Fiddes 381 560.51 Peninsula Blueprint, Inc. Bluelines, Enlargements and Maps 382 986.05 Pine Cone Lumber Co., Inc. Lumber and Supplies 383 161.37 PIP Printing Photocopying 384 1068.56 Pouncing Pachyderm Productions Restoration Consulting Services 385 149.00 Fred Pryor Seminars Seminar--S. Shipley 386 2070.62 Quicksilver Printing Factsheets, Letterhead and Labels 387 78.44 Reed & Graham. Inc. Asphalt 388 2837.66 Roy's Repair Service Vehicle Repair 389 798.43 Russ Enterprises, Inc. Signs 390 708.40 Sandis Humber Jones Engineering Consulting Services-- Grading Plan-Skyline Ranger Office 391 321.03 San Jose Mercury News Recruitment Advertisement 392 42.22 San Mateo County Times Subscription Renewal 393 9:76.46 San Francisco Newspaper Agency Recruitment Advertisement 386.46 394 843.11 Sears Refrigerator--Ranger Residence 395 1025.00 Security Alarm, Inc. Alarm Installation-Grant Cabin 396 300.00 *6 Sertoma Club of Los Altos Volunteer Event Pancake Griddle 397 823.87 Signs of the Times Signs 398 285.25 Shell Oil Company Fuel 399 5550.00 George Sipel Associates Consulting Services-Organizational Management *3 Urgent Check Issued May 1, 1996 *4 Urgent Check Issued May 31, 1996 *5 Urgent Check Issued June 6, 1996 *6 Urgent Check Issued May 31, 1996 Page 2 Claims No. 96-11 Meeting 96-13 Date: Junel 2, 1996 Revised MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Amount Name Description 400 183.25 Skyline County Water District Water Services 401 18.00 * Sonoma County Health Department Medical Services 402 100.00 * Gulliver Spring June 9--Event Entertainment 403 49.88 Summit Uniforms Uniform Expense 404 1935.00 Paul Sykes Construction Company McDonald Property—Repairs 405 1395.00 TAC/Temps Temporary Receptionist 406 47700.00 Tag Group Corporation Construction Services—Skyline Ranger Office 407 1135.69 Target Specialty Products Weed Abatement Chemicals 408 193.95 Teater & Etc. Maps 409 186.42 Therma Corp. Pump Fuse Repair 410 2690 U.S. Rentals Equipment Rental 2131.33 411 255,000.00 Valley Tidle Company POST Aquisition 412 220.00 WAC Corporation Aerial Photos 413 825.00 *7 Wildlife Associates June 9—Program Presentation 414 112.62 Michael Williams Business Meeting and Vehicle Expense 415 300.00 Roberta Wolfe Recording Services 416 96.13 Workingman's Emporium Uniform Expense 417 79.83 Joan Young Reimbursement—Volunteer Event Supplies 418 5,353.13 Zumwalt Engineering Group Engineering Services—Weeks Road and Schilling Lake Spillway 419R 660.00 *8 Town of Woodside Permit—Schilling Lake Spillway 420R 5.00 *9 Secretary of State Filing Fee—MROSD Joint Powers 421 R 172.40 *10 Winchester Hardware Pulaski Handles 422R 920.71 Petty Cash June 9th Event Supplies, Local Business Meetings, Grant Cabin Artifacts, Resource Documents, Photocopies, Office Supplies Vehicle Expense, Volunteer Recognition Event Supplies and Postage. *7 Urgent Check Issued June 6, 1996 *8 Urgent Check Issued May 28, 1996 *9 Urgent Check Issued May 28, 1996 *10 Urgent Check Issued June 10, 1996 Total 380,833.47 Page 3 Claims No. W12 Meeting 96-15 Date: June 26, 1996 REVISED MIDPENINSULA REGIONAL OPEN SPACE DISTRICT # Amount Name Description 424 219.82 Acme & Sons Sanitation Sanitation Services 425 96.87 All Laser Service Copier Cartridge Refill Service 426 100.00 Randy Anderson Reimbursement-Professional Dues 427 470-17 A T & T Telephone Service 428 268.46 Baron Welding & Iron Works, Inc. Sign Brackets 429 41.05 Black Mountain Spring Water Water Service 430 153.40 Bowerman Electric Electrical Repair-Daniels Nature Center 431 310.50 Breon, O'Donnell, Miller, Brown & Dannis Legal Services 432 49.68 Brian Kangas Foulk Engineering Consultant-Teague Hill 433 47.98 Carleen Bruins Reimbursement--Volunteer Event Supplies 434 235.00 California Park & Recreation Society Recruitment Advertisement 435 565.28 State of CA, Department of General Services GSA Vehicle Purchase Fee 436 340.26 California Water Service Company Water Service 437 8,743.82 Cascade Fire Equipment Company Two Water Pumper Units and Parts 438 2,970-50 Sheryl Marioni Cochran Trail Use Consulting-Fremont Older, Mt. Umunhum and Devils Canyon 439 49.68 Commercial Landscape Supply, Inc. Chemical Spray Suits 440 458.19 Communications & Control, Inc. P G & E pump-Mt Umunhum 441 110.28 Dennis Danielson Reimbursement-Medical Supplies 442 78.00 Mary DeBeauvieres Vehicle Expense 443 106.30 Decatur Electronics, Inc. Radar Unit Repairs 444 2,729.51 Design Concepts Graphic Design for June 9th Event 445 50.00 Chris Di Leonardo Docent Training 446 39.00 Federal Express Corporation Express Mail 447 79.17 Film to Frame Film Developing 448 126.83 Foster Bros. Security Systems, Inc. Keys 449 34.82 G & K Services Shop Towel Service 450 1,002.08 Sharon Hall Photography Photography-June 9th Event 451 249.85 Hengehold Motor Co., Inc. Van Rental-June 9th Event 452 106.37 Home Depot Field Supplies Burglar Alarm Service 453 219.00 Honeywell Inc. Website Domain Registration Fee 454 100.00 InterNIC Registration Services Fremont Older Brochures 455 1,582.84 Jeda Publications, Inc. Foothills and Skyline Discing 456 11,500.00 Joe's Rototilling Consulting-Russian Ridge Grassland 457 2,873.90 Tamara Kan Study 458 30.71 Kinko's Copy Services 459 31.28 Dennis Kobza & Associates, Inc. Architectural Consulting Services-Skyline Ridge Field Office 460 75.92 Langley Hill Quarry Baserock 461 946.46- Lanier Worldwide Inc. Photocopier Lease Agreement 2,770.70 462 614.17 Los Altos Garbage Company Garbage Service 463 20.30 Town of Los Gatos Construction Management Services- Skyline Field Office 464 190.74 Magnusen Buick-Pontiac-GMC, Inc. Vehicle Repairs 465 1,688.48 MetroMobileCommunications Radio Repairs and Batteries 466 249.98 McGrath RentCorp Skyline Ranger Office Rental Page I Claims No. 96-12 Meeting 96-15 Date: June 26, 1996 REVISED MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Amount Name Description 467 200.00 Mobile Radio Resources FCC Radio System Tone Report 468 228.21 Moffett Supply Company Restroom Supplies 469 594.16 Monogram Sanitation Sanitation Services 470 382.94 Monterey County Fire Training Officers' Assn. Wildland Fire School Registration- P. Congdon 471 19.50 Netcorn Monthly Internet Fee 472 9.73 Noble Ford Vehicle Part 473 215.00 National Recreation and Park Association Renewal Membership 474 647.26 Office Depot Office Supplies 475 768.41 Orchard Supply Hardware Field Supplies 476 1,129.80 Pacific Bell Telephone Service 477 3,722.70 Page & Turnbull Consulting Services-Picchetti Ranch Homestead Stabilization 478 363.57 PIP Printing Program Printing-June 9th Event 479 725.00 Glen A. Phillips Landscape Architectural Services- Fremont Older and Monte Bello Parking 480 467.64 Pitney Bowes Credit Corporation Postage Reset Charges 481 190.00 Peninsula Open Space Trust Pezzoli Acquisition Settlement 482 4,000.00 Postage By Phone System Postage 483 18.48 Precision Engravers Name Tags 484 631.44 Quicksilver Printing Notecards, Programs and Envelopes 485 186.06 Rabbit Copiers, Inc. Field Offices Copier Maintenance Plan 486 8,290.00 Randazzo Enterprises Black Mountain Cabin Demolition 487 34.13 Rayne Water Conditioning Water Service 488 1,820.84 Roy's Repair Service Vehicle Repair 489 37.53 Russ Enterprises Signs 490 80.12 San Jose Mercury News Subscription 491 219.71 Sears Field Tools 492 378.50 Sequoia Analytical Water Sample Testing 493 404.18 Malcolm Smith Vehicle Expense and Event Supplies 494 250.00 Suburban Propane Honda Generator Conversion to Propane 495 577.50 TAC/TEMPS Temporary Receptionist 496 2,402.55 Teater & Etc. Maps and Visitor Guides 497 342.73 Therma Corp. Quarterly Maintenance 498 60.23 TSI Time Systems Office Supplies 499 420.75 U.S. Rentals Water Truck Rental-June 9th Event 500 42.58 Western Tree & Landscape Supply Field Supply 501 960.00 West Valley College Leadership Training Course 502 180.89 Wheelsmith, Inc. June 9th Bicycle Raffle 503 300.00 Roberta Wolfe Recording Services 504 1,208.36 Del Woods Reimbursement-Professional Conference 505 85.34 Yardbird Equipment Sales Field Supplies 506R 40.00 Caltrans Highway Design Manual 507R 132.00 Department of Fish and Game Permit for Installation of Culvert 508R 420.00 Petty Cash Field and Office Supplies, Local and Out- of-Town Meeting Expenses, Docent and Volunteer Expenses, Postage and Private Vehicle Expense TOTAL 75,915.13 Page 2 Robert Zatkin X 406 Maple Way • Woodside, CA 94062 telephone: (415) 369-6462• e-mail: RZatkin@worldnet.att.net RESPONSE ACTION PROPOSED BY STAFF Board President Acknovledge/RespondII June 22, 1996 Director Acknovledge/Respond Staff Acknowledge/Respond Board of Directors Draft Response Attached Staff to be Directed to Prepare Draft '... Mid Peninsula Open Space District Reapnns. fer Board Coosideracion par Board Directive(.) 330 Distel Circle No Response Necessary Los Altos, CA 94022-1404 Members of the Board: In early March 1996 1 filled complaints against the District with the State of California, Regional Water Quality Control Board - San Francisco Bay Region; and, Department of Fish and Game. The complaints concern erosion in El Corte de Madera Open Space Preserve and potential impacts to anadromous fisheries in El Corte de Madeira Creek, and the main stem La Honda Creek. Prior to registering these complaints I expressed these concerns to you in a letter dated February 6, 1996 regarding the Draft Trail Plan for the El Corte de Madera Creek Open Space Preserve. I judged by your reception to my concerns that you had no intention of addressing them, judgment that proved correct with time; hence, the complaint. A letter dated June 11, 1996 was sent to John Escobar, Operations Manager, by Loretta Barsamian of the Regional Water Quality Control Board. I have attached a copy of this letter for Your review. Th e letter is a formal request and contains the followingstatement. "Since the magnitude of that request could be large, the g q g � proposal to study the site, as well as the proposal to do the work, could be spread over several years on the condition that af/ areas known to pose a severe threat of impact are given higher priority over t6# use needs." (emphasis added) It is, therefore curious that in lieu of this formal communication from the Regional Board, you Y ou full intend to move forward with the Tentative Trail Use Plan for El Corte de Madera Creek Open Space Preserve. This posture is evidenced by agenda items for the forthcoming Board meeting (Wednesday, June 26, 1996). These items are 5) Final Adoption of the Trial Use Plan, and 6) Authorization with Euguene R. Sheehan for $24,200 for Trail Construction Services. Moving forward with the trail plan will likely conflict with the request of the Regional Board. This follows from the District not having executed the study requested by the Board; study that will identify areas in the El Carte de Madeira Preserve that are sources of erosion. Further, authorizing a trail construction contract may place the District in the awkward position of identifying erosion source areas after trails have been constructed in such areas; a position that would likely require moving newly constructed trails to facilitate mitigation of erosion. I strongly urge that yoL. able a vote on the Trail Use Plan and authorization for Trail Construction Services in El Corte de Madera Creek Open Space Preserve until the dictate of the Regional Board is met and areas of erosion identified. Following attainment of this dictate a trail use plan and trail construction can be executed which does not impact areas of erosion. Sincerely, Robert Zatkin STATF. 2E CALIFORMA - CALIEUMA EnZQN>\'IENTAL PROTECTION A. ICY FETE WILSON, Govemar CALIFORNIA REGIONAL WATER QUALITY CONTROL.BOARD SAN FRANCISCO BAY REGION 2101 WEBSTER STREET, Suite 500 1�b OAKLAND, CA 94612 JUN 1 1 lop �+ Tel: (510) 286.1255 FAX: (510) 286.1380 File No. 2170.p 1 BBS: (510) 286-0404 Mr. John Escobar Operations Manager Mid-Peninsula Regional Open Space District 330 Distel Circle Los Altos, CA 94022-1404 Subject: Erosion Potential - El Corte de Madera Creek Open Space Preserve Site Visit June 5, 1996 Dear Mr. Escobar: This letter transmits staff'concerns discussed during the subject site visit. This Board has authority to place limits on any discharge to waters of the State which could impair that water body; El Corte de Madera Creek, being a perennial stream associated with the subject site, is subject to that authority. There appears to be several areas within that site where there exists a potential for erosion and for sediment to be discharged to the creek in violation the California Water Code and the San Francisco Bay Basin Water Quality Control Plan. As discussed, rather than identify specific sites in need of repair, we request that the District propose to this Board how best to manage the site with respect to protection of its water resources) in conjunction with your trail construction plans. We request that you submit a report by June 28, 1996 proposing to study the site identifying important areas that are in need of mitigative work to minimize or eliminate erosion and silt discharges. In addition, the submittal should propose a time schedule to both identify what areas are in need of mitigative work and a time schedule to do that work. Since the magnitude of that request could be large, the proposal to study the site, as well as the proposal to do the work, could be spread over several years on the condition that all areas known to pose a severe threat of impact are given higher priority over trail use needs. All eroding areas which b October 1 1996 should, at a minimum, be stabilized with an interim solution. will not be protected , P y Staffcen assist you inidentifying erosion control and stonnwater control optionsavailable. lable. You should be aware that this is a formal request for a technical report pursuant to California Water Code Section 13267. Failure to respond or late response to this request may subject you to civil liability imposed by the Board to a maximum amount of$1,000 per day. Any extensions of the time deadline set forth above must be confirmed in writing by Board staff. If you have any questions please call George Leyva at S 10/286-3976. Sincerely, /.��GGvf-- Loretta K. Barsamian Executive Officer cc: Robert Zatkin, 406 Maple Way, Woodside, CA 94062 From:Robert Zatkin To:MPROSD Date:615196 Time:9:13:34 AM Page 1 of 1 Robert Zatkin 406 Maple Way a Woodside,CA 94062 telephone: (415)369-6462-e-mail: RZatkin@worldnet.att.net June 5, 199E RESPORSE AMON PROPOSED BY STAFF Board Prtsideac Aeknovled;e/Respond '.. Board of Directors Diraetor Acknovled$*/Rae pond Staff Acknovled=e/Respond MidPeninsula Open Space District 330 Distel Circle Draft Reapons♦ Attached Staff to b• Directed to Prepare Draft Los Altos, CA 94022-1404 Response tot Board Consideration par Board Direttive(s) NO Response Recessary sent via fax: 415/691-0485 Members of the Board: I have received notification that the District has initiated a process for formulating a"rock climbing management plan" for the Devil's Canyon portion of Long Ridge Open Space Preserve. This process is premature as you have evidently not addressed in a public forum the fundamental question - Is rock climbing an appropriate activity in lands of the District? The Public Workshop notice states that: "Since District acquisition of Devil's Canyon, there has been a noticeable increase in the climing use. New climbing routes have been established on the more unique and fragile sandstone formations. The development of these routes has included the placmenet of permanent bolts, and the scraping and removal of mosses and lichens from the rock outcroppings." This statement is a synopsis of permanent damage done to outcrop of the same formation (Vaqueros) in Castle Rock State Park. I began visiting Castle Rock shortly after its dedication in the late 1960s and I witnessed a progressive, and irresversible, degradation of the Vaqueros outcrop as described above. It is noteworthy the some of the damage thus far incurred in Devil's Canyon is permanent; the abrasive removal of lichen colonies. I do not believe the District has the resources to effectively patrol and enforce climbing restrictions in Devil's Canyon. As we all know from the mountain bike problem in El Corte de Madera Open Space Preserve, lack of patrol and enforcement in District lands can levy a heavy toll on the biogeologic integrity of these lands. I recommend you put a hold on the planning process and hold public debate to address the fundamental question - Is rock climbing an appropriate activity in lands of the District? Yours, Robert Zatkin Regional Open Sioce --------------------- MIDPENINSULA REGIONAL OPEN SPACE DISTRICT DRAFT RESPONSE June 27, 1996 PREPARED BY STAFF FOR BOARD CONSIDERATION Mr. Robert Zatkin 406 Maple Way Woodside, CA 94062 Dear Mr. Zatkifi: Thank you for your June 5, 1996 letter concerning rock climbing at Long Ridge Open Space Preserve. Your letter was received too late to be distributed to the Board at their June 12 meeting. However, the letter was given to the Use and Management Committee at their June 8 workshop so that they could consider your concerns regarding rock climbing on District lands. On June 8, the Use and Management Committee held a public workshop on the Long'Ridge Open Space Preserve at the climbing area. A geologist made a presentation on tafoni, and several climbers demonstrated a climb. The District has hired a consultant to help in the formulation of a rock climbing management plan. She also attended the meeting. Within the next several months, the consultant will be compiling information from other climbing management plans. She will present her findings at the next committee meeting, which we anticipate will occur within the next several months. We will add your name to the mailing list and notify you of the meeting. Sincerely, Nonette Hanko, President Board of Directors NH:mdb 330 Distel Circle • Los Altos,CA 94022-1404 • Phone:415-691-1200 • FAX:415-691-0485 • E-mail:mrosd@netcom.com (9 Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonefte Hanko,Betsy Crowder,Wim de Wit General Manager:L Craig Britton IESPONSI ACTION PIOPOSID BY STAPP _ Eoard Presldenc Acknovlad/e/lespoad Date: Wed, 12 Jun 1996 12:07:25 /00 Director Aeknevlodjo/laspood From: Kent Ferris <kferris@ppmarketing.com> Staff Acknoviodp/lespond To: mrosd@netcom.com Draft lesponse Attached Staff to D• Direetad ce Prepare Draft Subject: don't mess up El Corte ..:Pena* %r Board Coneidoracion per Beard Direeciw(:) No lespoase Necessary Please forward this to the Board of Directors-----------> In the last year and a half, I have returned to my mountain biking/hiking roots. I have frequented every park on the western side of the Bay, and feel that El Corte de Madera is one of the best (legal) areas to ride in the Bay Area. It is also a wonderful place to hike and ride horses. The reason that ECDM is such a great place is because of the technical nature of the region. It is steep and rocky. It provides great challenge (and risk.) I've only recently become aware of efforts to change and/or close major portions of ECDM. It seems to me that these efforts are more to "sanitize" the area; to make it less dangerous or less appealing. This is crazy. I thought park lands were meant to preserve nature, to capture the beauty of the untamed land...How does widening and "unsteepening" (my word) a trail maintain beauty?I keep forgeting that I vote and that everyone else I know votes. It seems that there should be something we can do with our votes to make something happen. Maybe to get more understanding people involved in wilderness protection/preservation. I want to know what I can do to help preserve ECDM or to stop the changes that are going in to effect. Is there anything I can do? Do you care? How do we create peaceful co-existance in ECDM? How do we do it without closing/destroying trails? Do I put all of my skills (and contacts) as a marketing executive in to play? Do I get the local world to flood your offices with mail etc.? Your response(s) are greatly welcome. I can be contacted by E-mail or by snail mail @ Kent Ferris 370 Distel Circle, suite A-100 Los Altos, CA 94022 415-964-0927 or 408-354-3523 Regional Open S :e 1 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT DRAFT RESPONSE PREPARED BY STAFF June 27, 1996 FOR BOARD CONSIDERATION Mr. Kent Ferris 370 Distel Circle, Suite A-100 Los Altos, CA 94022 Email: kferris(c�r�ppmarketing.com Dear Mr. Ferris: Thank you for your recent email regarding El Corte de Madera Creek Open Space Preserve. The Board reviewed your comments at its regular meeting last night. I understand that staff has contacted you and provided a copy of the draft trails plan for the preserve. Since the Board's agenda for its June 26 meeting included the second reading of the draft plan, we had staff contact you earlier to ensure that you are informed of the decision-making process. As you know, we are a property tax-funded public agency encompassing 16 cities and unincorporated parts of three counties. As such, we have a very wide.diversity of constituents, and the Board makes every effort to try to balance and accommodate the interests of all types of user groups. This property had formed been used as a motorcycle ark which obviousl- p p Y Y Y p � Y contributed to the degrading and erosion of the land. The huge increase in mountain bike usage has, unfortunately, resulted in some of the old motorcycle trails being reopened, and the resource damage began to reappear. In an effort to forestall further damage while still providing for mountain bike usage, the Use and Management Committee convened several workshops and meetings to work with the user groups in reaching a compromise solution. In attendance at these meetings and workshops were mountain bicyclists and other trail users. Representatives from Responsible Organized Mountain Pedalers (ROMP) alocal mountain bike advocacy group, has also been closely involved in the development of the draft trail plan. The Board granted tentative adoption of that plan at its meeting on May 22, 1996, and scheduled final adoption for the June 26 meeting. 330 Distel Circle • Los Alios,CA 94022-1404 • Phone:415-691-1200 • FAX:415-691-0485 • E-mail:mrosd®netcom.com Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton June 27, 1996 Mr. Kent Ferris Page -2- As you can see from the trails plan, far from trying to "sanitize" the trails and Y p rY g make the preserve less appealing, our goal is to restore the area and minimize or prevent resource damage from occurring. This is to the benefit of all user groups and constituents within the District, and we believe we've reached a suitable compromise that meets the District's resource protection needs, as well as the desires of mountain bicyclists. Again, thank you for your comments and concerns on this issue. Please feel free to write or call if we can provide any further information. Sincerely, Nonette Hanko, President Board of Directors NH/mcs cc: Board of Directors i J Regional Open S. ce R-90-72 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Meeting 96-15 June 26, 1996 AGENDA ITEM Authorization to File for Lot Line Adjustment for Surplus Property at Teague Hill Open Space Preserve GENERAL MANAGER'S RECOMMENDATION ' ' m Authorize the General Manager to submit an application to the Town of Woodside for a lot line adjustment to create four residential parcels at Pinto Way and one residential parcel at Summit Springs. DISCUSSION At your October 24, 1994 Regular Meeting, you authorized the General Manager and Legal Counsel to work with the Town of Woodside to use a lot line adjustment mechanism to establish up to.six legal lots while preserving the maximum possible amount of public open space at Teague Hill Open Space Preserve (see report R-94-105). The background of this project is summarized in attachment 1. Based on initial civil engineering, geotechnical, and septic system investigations, you authorized at your November 29, 1995 meeting (see report R-95-136) a total additional budget of$80,000 for engineering and planning consulting services to focus on up to four potential lots on the surplus property area at Pinto Way (see attachment 2 for regional location). Since November, 1995 District staff and the District's consultants for this project have studied potential configurations for the lot line adjustment and focused on a preferred alternative. District staff have communicated with Woodside staff to confirm the general acceptability of this approach. An informational meeting regarding this proposal, for neighbors of the sites, was held on Wednesday, June 19 at the Woodside Elementary School. Approximately 100 nearby residents or property owners received notice of this meeting. In addition, the same group was mailed the agenda for this June 26 meeting. Approximately 30 people attended the June 19 meeting. Concern and opposition was generally expressed about the project, focusing on the drainage impacts and geological stability. The attendees were extremely concerned about having an opportunity to review the plans and studies for the project and to be assured that these issues are resolved. They also questioned the lot line adjustment process and the approach for the fourth, "split-zoning" lot. The lot line adjustment proposal, shown conceptually in attachment 3, creates four conforming 10 acre lots at Pinto Way by incorporating approximately 4.5 acres of residentially zoned land from the Summit Springs area into one of the lots. The Summit Springs area would remain as a single residentially-zoned parcel of approximately 30 acres capable of being developed as one lot. The net effect for the District would be a reduction of total saleable lot density from 6 lots 3 at each site to 5 lots 1 lot at Summit Springs and 4 lots at Pinto Way). You have ( ) ( y 330 Distel Circle Los Altos,CA 94022-1404 # Phone:415-691-1200 * FAX:415-691-0485 a E-mail:mrosd@netcom.com Board of Directors:Pete Siemens,Mary C. Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton R-96-72 Page 2 determined that the District,will not invest more money on investigations or engineering for the Summit Springs portion, therefore if this parcel were to be sold or,exchanged as surplus property, the buyer would be responsible for demonstrating development feasibility. District staff have discussed this parcel with several owners of desirable open space lands elsewhere in the District area and staff has determined that this parcel, even as only one site, could very well be exchanged for priority open space lands that help to further the District's goals. The lot line adjustment application will require preliminary design of the roads, drainage, septic systems, and utilities for the proposed residential lots. An environmental document will be prepared by the Town, which will conduct the CEQA review process. All of the parcel area outside of the immediate building envelope would be protected by open space easements to the District and/or the Town, so that the area impacted by construction or use will be very small in relation to the size of the parcels. Trail easements will be established through the Summit Springs and Pinto Way areas to provide neighborhood public access to the rest of the preserve. CEQA Compliance Project Description The project consists of a lot line adjustment application to the Town of Woodside to relocate property lines for seven existing parcels on the 655 acre Teague Hill property to create four 10 acre residential lots and one 30 acre residential lot, conforming to zoning, for sale as surplus property. The remainder of the Teague Hill property would be dedicated as permanent open space. One 30 acre lot would be created with access at Summit Springs Road and four 10 acre lots would be created at Pinto Way. Construction of access roads, building pads, septic, water, and utility systems, and residential structures would ultimately occur based on completion of the site development and building permit processes by the purchasers of the property. CEQA Determination The Town of Woodside is responsible for review and approval of the lot line adjustment and as such is the responsible agency for compliance with the California Environmental Quality Act (CEQA). The District is the applicant and project proponent in this case and will provide information for and comment on the environmental documentation. Prepared by: Randy Anderson, Senior Planner Contact person: L. Craig Britton, General Manager ATTACHMENT 1 Background Summary Teague Hill Surplus Property When the Teague Hill property in Woodside was originally purchased by the District in 1988, it was completed with the understanding that the District could not afford the total purchase price of$7,500,000 without recapture of a significant portion of the purchase price (see report R-88- 59, dated May 15, 1988, and report R-88-87, dated July 18, 1988). Two parcels of approximately 35 acres each were created by the District in the portions of the 624 acre property closest to existing development. These sites were to be sold as surplus property for residential development. An important factor in the decision to seek recapture of part of the purchase price was the commitment made by the District of $6 million toward the purchase of the nearby Phleger estate. This committment and purchase has since been completed and the estate property is owned and operated by the Goldengate National Recreation Area in an effort to preserve these surplus properties. The Town of Woodside placed an advisory measure on the ballot in November, 1991 to ask if citizens would be willing to fund an assessment district to buy the surplus property at a below market rate price of $2.5 million (the appraised value was $3.5 million). The advisory vote failed by a margin of 24 votes, and the District and Town were forced to fall back to the surplus property sales alternative. A public auction on the new parcels was held April 14, 1993, but no bids were received. Subsequently, the lack of interest was determined to be related to questions regarding the developability of the parcels. At the Board of Directors' regular meeting of October 26, 1994 the Board of Directors authorized the General Manager and Legal Counsel to work with the Town of Woodside to use a lot line adjustment mechanism to establish up to six legal lots while preserving the maximum possible amount of public open space. The Board also authorized the General Manager to enter into a contract with Enshallah Real Estate and Development Consultants in the amount of $10,000 to assist and represent the District in its dealings with the Town of Woodside and in marketing the property (see report R-94-105). Based on the current zoning, the potential residential development would be a maximum total of six 10-acre lots. The remainder of the preserve would be dedicated as permanent public open space and the area of the lots outside of the building envelope would be protected by open space easements to the District and/or the Town. Local trail access would be provided through the development areas to the preserve. At the regular meeting on April 12, 1995, the Board authorized the General Manager to expand the budget and scope of services of Enshallah to continue the planning and coordination and to contract for preliminary civil engineering by Brian, Kangas, Foulk, and percolation testing in order to provide documentation necessary for the lot line adjustment process (see report R-95- 08). An additional budget authorization of$25,000 was approved at that time. The first stage of this work was concluded in July, 1995 with the recordation of certificates of compliance from the Town of Woodside for seven existing legal parcels. Page 2 At the July 26, 1995 regular meeting the Board authorized the General Manager to contract for geotechnical engineering services for the two surplus property areas, in addition to the work authorized on April 12 (see report R-95-53). In November, 1995, preserve neighbors on Pinto Way, Roan Place, and Patrol Road expressed concerns, in person and in a joint letter, about fire and erosion hazards from the recent access and testing work at Pinto Way, and about the project in general. To address the neighbors' concerns, District staff, Enshallah, and Acting Woodside Planning Director George DeRwo invited the signers of the letter to an informational meeting at Woodside Town Hall on November 9. This meeting was well attended, and many of the neighbors most immediate concerns seemed to have been addressed, although questions remained about the overall project and process. All the owners of properties near to the proposed surplus parcels were notified of a Board meeting held November 29, 1995. Several of the property owners attended the meeting to express their concerns about the project, partly as a result of the neighbors concerns. At the November 29 meeting, the Board made the decision not to invest additional funds in studies on the Summit Springs area, due to geological constraint identified there, and decided to proceed with engineering studies and planning for up to four lots at the Pinto Way area. ensrorKowi�ron rrG'.. ` III _. QoEDG��J Eual srATE Ys _. -----'---- _ /. �Q = 1r3L , \� � Ord °�"` 1 nrr s+.ERc.'.-�� P° 4� ��•N i RA \D) STATE FISH COUNTY o€ a •' - �a An y". ATTACHMENT 2- REGIONAL CONTEXT SM'`k� 3 �' $��`� = �;;. lawA+ J �M VrV I T � s PARK I �.[�/�� '� �u.o+n 4 M� p ��� '� e �w000� rUPPr' 8 4 f ,+ _ EMfnl)d �/ � 1" MEj!�'k\ �f q! wRIR•w. V lE j\.� pa y':N�yn./, Z GAib11 �+„y REFU E cIV- IF ✓ EM'ERALD,` ` e RKcs CC a co""" c i to us °°tc EDEN eDM'EK �.. f GOLDEN GATE G .0 �.\ of �� COLLEGE ti NATIONAL — �q KS \ JUJIIPEAD RD C NI � RECRE4710N AREA JMLEGLR ESTATE) HUDDART ! COUNTY OOR� MIOUNTAIN P FWE 0� PURI9/AU CREEK PARK wrMprrM H REDKDOD9 P one '\ q0 J r C Aj0 J OPEN SPACE .;`\... Pinto Way Area 0 13 PRESERVE KINGS ` 'q F\ cr. A'\p! w tl a D TEAGUE HILL ' O ao 0 D 5 D �VNGS Summit Springs Area OPEN SPACE PRESERVE DR�4 4EL 4 GATE f "I" �- SIERRA MGA A I G SKE Pe Pr. 4 {V�,1PE p0 (.' \ ? Cy WUNDERLICH }e EL i�-09FE 1 COUNTY K ..t....r; PARK / � G JK , THORNEWOOOP G OPEN SPACE'I PRESER � � Nc\ �� SPACE irk \ PRESERVE k l Cur'. A7lEy Unndu , r Summit-springs Pinto j 10 AC D o 1 unit -q O10 AC > E7 a 0 18 AC a 31.53 AC 35.98 acre O (535 AGE , (8 AGE S\ i C�P� z 10 AC , 5.55 A SCP-10 r 552.5 Acres m OSN o (net 548 acres) C- c 3 m Z -. s Ac n m �wc M O SOD 1000 0��� Alternative 4 Lot Line Adjustment r r Regional Open S, ce R-96-74 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Meeting 96-15 June 26, 1996 AGENDA ITEM Grassland Management Plan for Russian Ridge Open Space Preserve GENERAL MANAGER'S RECOMMENDATIONS: 1. Determine that the proposed project is categorically exempt from the California Environmental Quality Act (CEQA) based on the findings contained in this report. 2. Authorize staff to proceed with implementation of the Management Action Plan recommended in the report. DISCUSSION Russian Ridge Open Space Preserve includes 1580 acres situated southwest of Skyline Boulevard and northwest of Alpine Road in San Mateo County. The preserve is noted for its picturesque grasslands stretching along the spine of the Santa Cruz Mountains parallel to Skyline Boulevard. These grassland areas are popular with visitors because they offer dramatic views from San Francisco Bay to the Pacific Ocean and spectacular wildflower displays in Spring. The patchwork of oak and Douglas fir forest, coastal scrub, and grassland also offers high quality and diverse habitat for native plants and animals. Over the past several years, increasing concern has been expressed by visitors, neighbors, and District staff about the spread of several species of non-native thistle in the preserve grasslands. At your regular meeting on September 27, 1995, staff proposed that the District enter into a cooperative agreement with the California Department of Forestry (CDF)to conduct a controlled burn at Russian Ridge. CDF's primary objective in conducting a burn is fuel load reduction for wildfire safety. This is an objective shared by the District. The District and CDF also believe that controlled burns are a natural part of the ecosystem and are beneficial for maintenance of habitat for native species and regeneration of the wildflower displays that visitors enjoy. At the September 27 meeting, several preserve neighbors expressed concerns that the proposed burn would worsen the existing thistle problem. You continued the item to your meeting of October 25, at which time you tabled the item to provide an opportunity for staff to further investigate these concerns. Staff determined that a scientific study should be conducted to address this and other grassland management issues at the preserve before proceeding with a controlled burn. Such a study could also become the basis for appropriate grassland management at other District preserves where similar problems and opportunities exist. A study was prepared by Tamara Kan, a consulting plant biologist specializing in grassland management. The study includes the potential effects of burning as well as other management techniques, based on a review of other research. Ms. Kan coordinated her studies with Dr. Joseph DiTomaso, weed ecologist with the U.C.-Agricultural Extension Service. Dr. DiTomaso had previously consulted with District staff about grassland management techniques for Russian Ridge. A Management Action Plans includin monitoring protocols, is contained in the report. 330 Distel Circle * Los Altos, CA 94022-1404 1 Phone:415-691-1200 * FAX:415-691-0485 * E-mail:mrosd@netcom.com Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton R-97-74 Page 2 Ridge. A Management Action Plan, including monitoring protocols, is contained in the report. Ms. Kan will be present at your June 26 meeting to answer questions about the study. The study notes that although these grasslands are composed mainly of exotic annual grasses, there are areas of beautiful spring wildflowers and one large area of native perennial bunchgrasses. However, these positive features will deteriorate if current problems are not addressed. Wildfire suppression and removal of cattle grazing have resulted in a thick layer of thatch that hinders the survival of native species and favors non-native species. Two highly invasive plant species are threatening the grasslands. Yellow starthistle dominates two large areas and is widely dispersed in patches throughout the preserve, while french broom is spreading from locations along Skyline Boulevard. While not as invasive, italian thistle and bullthistle have dominated large patches in the preserve and have become a concern to adjacent property owners. Other weed species discussed are purple starthistle, harding grass, and spanish broom. The study recommends that a number of management techniques, including controlled burning, herbicides, goat grazing, hand pulling, and mowing, be used and monitored to control the different types of weeds in the preserve. The study concludes that with proper timing relative to the seed production cycle of the thistle, or pre-treatment of the thistles, controlled burns are an appropriate management technique. A chart summarizing the Action Plan is attached for your review. The full report may be reviewed upon request at the Administrative offices. The Action Plan is a four year program combining proven techniques with experimentation and monitoring. It is intended to result in an ongoing management program that is well-suited to site conditions and to the District's financial and staff resources and policies. While this study has been underway, staff has continued with weed management activities at the preserve that are already a part of the District's typical. procedures. Key features of the Action Plan and some differences between the Action Plan and current District practices are summarized below: 1. More extensive and coordinated use of volunteer and contract labor to pull, cut, and mow weeds is proposed than is currently practiced. In addition to a modest future increase in the budget for such services, the pending hire of a Resource Management Specialist and additional half time Volunteer Coordinator is expected to facilitate this application of labor. 2. The study recommends more extensive use of herbicides than has previously taken place in the preserves, if the invasive weed situation is to be stabilized or controlled. Due to the large scale and remote location of some of the areas of invasive weeds, it may be necessary to contract with a pest control specialist to do the application. Staff is investigating the cost and approaches for such contract herbicide application. 3. Some herbicides that are not currently approved for use by District staff are recommended in the report. Currently, Round-up(glyphosate),a non-selective herbicide, is the only herbicide authorized for use by District staff. Because Round-up kills all vegetation it touches non-selectively, it is not appropriate for widespread use to manage weeds that are invading desirable vegetation. The study notes that Weedar (2,4-D), R-97-74 Page 3 Banvil (dicamba), and Garlon-4 (triclopyr) are broadleaf selective herbicides that are recommended for yellow starthistle control. Although there is controversy about the use of these, and other, pesticides, these materials have been recommended as safe and effective for this application by Dr. DiTomaso, and Joel Trumbel, Pesticide Use Coordinator with the California Department of Fish and Game, as well as by local pest control applicators. Staff would like Board approval to use these materials. 4. The study recommends experimenting with the use of short-term intensive goat grazing for weed management. Goats have been used by East Bay Regional Park and other agencies for grassland management. Goats have advantages over cattle in that they are more inclined to eat yellow starthistle, are easier to manage, and cause less interference with preserve users. The goats are provided by contractors who are knowledgeable about their use for grassland management. The goats are kept within a movable enclosure to control their grazing. A goatherd remains on site fun time to look after the goats. The use of goats is relatively expensive, and may not be an economically feasible means of managing the grasslands. However, staff would like to try using goats and investigate ways of reducing the costs for long-term use of goats. 5. Cattle grazing is an option that should be investigated. As demonstrated by the East Bay Regional Park District, cattle grazing, if properly managed, can be compatible with environmentally sensitive grassland management (although not as appropriate for solving a existing weed problem as goats). Constraints to cattle grazing include the cost of installing and maintaining the perimeter and internal fencing, the siting and impacts of a central area for collecting the cattle, legal liability, the compatibility with other preserve use, and the cost and availability of the expertise and oversight to ensure that the grazing is properly managed. In 1987 the District retained Rodney Tripp, a grazing management consultant to East Bay Regional Parks, to prepare a pilot grazing plan for a portion of Russian Ridge Open Space Preserve (see report R-87-65). The net cost to the District of implementing the program was estimated at $22,700 over a five year period. The District was unable to find a tenant interested in taking on the grazing lease under the prescribed conditions. In the 1991 Comprehensive Use and Management Plan (see report R-91-60), it was determined that the program wasn't appropriate for the proposed area because of shallow soils, concentrated location of water sources, liability, and conflict with public access and recreational use. The current study did not identify any contractors that offer managed cattle grazing for the purpose of grassland enhancement. If such a program is to be pursued, it would have to be developed by the District. Further investigation of a pilot cattle grazing program is proposed as a follow-up study to take place in parallel with the Action Plan. 4. Controlled bums are a management technique that has been used by the District previously, however, concerns were raised recently about impact on thistle propagation. The study has determined that controlled bums are compatible with grassland/thistle management objectives with proper timing and pre-treatment. Staff would like to pursue the opportunity to conduct a controlled bum in the preserve during summer or fall 1996, in cooperation with CDF. To help explain more about how the bum agreement with R-97-74 Page 4 CDF would work, we expect to have CDF Forester David Wachtel and Battalion Chief Craig Herrett present at your June 26 meeting. Based on your acceptance of the proposed Action Plan, staff would return to you with a specific bum plan and agreement. The estimated annual cost range for the additional management efforts and experiments outlined in the grassland management Action Plan for this preserve is $10,000 to $15,000 per year. Based on Board approval, staff would develop more detailed cost estimates for inclusion in the next fiscal year's budget. CEOA Complian PLqject Description The project consists of a four year plan of actions to manage invasive non-native plants within the 1580 acre Russian Ridge Open Space Preserve situated southwest of Skyline Boulevard and northwest of Alpine Road in San Mateo County. The management actions will include hand pulling,hand or machine mowing and cutting, herbicide applications, controlled goat grazing, and controlled burning. CEQA Determination The District concludes that this project will not have a significant effect on the environment. It is categorically exempt from CEQA (the California Environmental Quality Act)under Sections 15301, 15304 and Section 15307 of the CEQA guidelines. Section 15301 exempts the maintenance on minor alteration of topographic features involving no expansion of use. Section 15304 exempts minor public or private alterations in the condition of land, water, and/or vegetation which do not involve the removal of mature, scenic trees. Section 15307 exempts actions taken by regulatory agencies as authorized by state law or local ordinance to assure the maintenance, restoration, or enhancement of a natural resource where the regulatory process involves procedures for the protection of the environment. Prepared by: Randy Anderson, Senior Planner Contact person: Same as above TABLE 1. ACTION PLAN SCHEDULE 1996 1997 1998 1999 SPECIES TASK Summer Fall Spring Summer Fall Spring Summer Fall Spring Summer Fall A. French Broom ierbicide onitor along Skyline and pull b B. Starthistle/wildflowers re-burn monitor fall burn ipray yellow starthistle onduct burn ost-bum monitor ray, mow, or pull C. Starthistle/wildflowers re-burn monitor summer burn onduct bum ost-bum monitor ray, mow, or pull Yellow Starthistle oat graze J (large area onitor Bullthistle/Italian thistle onitor ray or hand pull 11 II Regional Open ce b MIDPENINSULA REGIONAL OPEN SPACE DISTRICT R-96-71 Meeting 96-15 June 26, 1996 AGENDA ITEM Amendment to the Agreement with the City of Mountain View for Deer Hollow Farm _q GENERAL MANAGER'S RECOMMENDATION sj Authorize the General Manager to execute the attached Fifth Amendment to the Agreement between the City of Mountain View and the Midpeninsula Regional Open Space District. DISCUSSION At your May 25, 1995 meeting, you approved the fourth amendment to the District's agreement with the City of Mountain View for the operation of Deer Hollow Farm (see report R-95-71). In accordance with the amended agreement, the District has provided Deer Hollow Farm with maintenance staffing, supplies, materials, and services valued at approximately $50,000. Santa Clara County and the City of Mountain View have made equal contributions. Also, the Friends of Deer Hollow Farm contributed $13,000 during the past year. The term of the current agreement expires June 30, 1996. Several months ago, District, City, and County staff met to discuss the possibility of establishing a long-term partnership for the operation of Deer Hollow Farm. The terms of this partnership are still being negotiated. Staff anticipates completing a three-year agreement between the three parties on or before October 1. To ensure continued operation of the farm in the interim, City and District staff have prepared the attached fifth amendment, which extends the current agreement for 90 days. During this period, the District and the City of Mountain View will share equally the costs of operating the farm. Any additional costs incurred during this initial period are expected to be recovered after the proposed three-party agreement is in place. Prepared by: Carleen Bruins, Visitor Services Supervisor Contact person: John Escobar, Operations Manager 330 Distel Circle * Los Altos,CA 94022-1404 a Phone:415-691-1200 * FAX:415-691-0485 a E-mail: mrosd@netcom.com f Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko, Betsy Crowder,Wim de Wit General Manager:L.Craig Britton FIFTH AMENDMENT TO AGREEMENT BETWEEN THE CITY OF MOUNTAIN VIEW AND THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT THIS FIFTH AMENDMENT TO AGREEMENT is entered into this I st day of July, 1996, by and between the CITY OF MOUNTAIN VIEW, a municipal corporation, whose address is 500 Castro Street, P.O. Box 7540, Mountain View, California, 94039, hereinafter referred to as "CITY," and MIDPENINSULA REGIONAL OPEN SPACE DISTRICT, a public District under the laws of California, whose address is 330 Distel Circle, Los Altos, California, 94022-1404, hereinafter referred to as "DISTRICT." RECITALS On November 12, 1981, CITY and DISTRICT entered into an agreement allowing CITY to provide activities for its citizens at DISTRICT'S Rancho San Antonio Open Space Preserve ("the 1981 agreement") and amended said agreement on June 12, 1986; November 19, 1991; July 1, 1994; and July 1, 1995 ("the 1986 amendment, the 1991 amendment, the 1994 amendment, and the 1995 amendment"). WHEREAS, since July 1, 1994, the DISTRICT has assisted the CITY with the operation of Deer Hollow Farm, which is located on Rancho San Antonio Open Space Preserve property owned by DISTRICT; and WHEREAS, the County of Santa Clara has provided $100,000 to fund the Deer Hollow Farm program since July 1, 1994; and WHEREAS, continued participation by the County of Santa Clara will be postponed pending funding approval, which the parties anticipate to occur on or before October 1, 1996; and WHEREAS, the CITY and DISTRICT anticipate entering into a multiple-year agreement with the County of Santa Clara for the joint operation of Deer Hollow Farm by October 1, 1996; and WHEREAS, the term of the Agreement, as amended, expires June 30, 1996; and WHEREAS, the parties to this Agreement have determined that continuation of Deer Hollow Farm is a mutually agreed upon goal; NOW, THEREFORE, CITY and DISTRICT agree as follows: A. The term of this Agreement as amended herein shall commence on July 1, 1996 and shall terminate on September 30, 1996, unless terminated earlier or extended pursuant to the provisions of this Agreement. B. CITY and DISTRICT shall share equally the costs to operate Deer Hollow Farm incurred during the remaining term of this agreement. C. The DISTRICT and CITY agree to apply all funds received as grants, contributions, and registration fees to the costs of operating Deer Hollow Farm, and to share equally the remaining net costs of operation. D. Except as referenced herein, all other terms and conditions contained in the agreement dated November 12, 1981, as amended from time to time, shall remain in full force and effect. IN WITNESS WHEREOF, this agreement is executed by CITY and DISTRICT. This agreement is dated 1996. APPROVED AS TO CONTENT: "CITY": CITY OF MOUNTAIN VIEW, a municipal corporation Community Services Director By: City Manager APPROVED AS TO FORM: "DISTRICT": City Attorney MIDPENINSULA REGIONAL OPEN SPACE DISTRICT District Legal Counsel By: General Manager m Regional Open S, ce _ MIDPENINSULA REGIONAL OPEN SPACE DISTRICT R_ 96 69 Meeting 96-15 June 26, 1996 AGENDA ITEM Issuance of 1996 Revenue Bonds CONTROLLER'S RECOMMENDATIONS 1. Approve the following attached resolutions required for the District to issue refunding notes and complete a lease financing, which will allow the Midpeninsula Regional Open Space District Financing Authority to complete the issuance and sale of$30.2 million of Midpeninsula Regional Open Space District Financing Authority 1996 Revenue Bonds. a. Resolution of the Board of Directors of the Midpeninsula Regional Open Space District authorizing the issuance of Midpeninsula Regional Open Space District 1996 refunding promissory notes in a principal amount not to exceed $18,700,000 and providing for the form, execution and repayment of said notes. b. Resolution of the Board of Directors of the Midpeninsula Regional Open Space District authorizing the execution and delivery of a site lease, a project lease, a purchase contract and a continuing disclosure agreement, and approving a preliminary official statement and approving certain other matters in connection therewith. 2. Authorize the President to execute the attached Agreement for Bond Counsel Services with Orrick, Herrington & Sutcliffe of San Francisco, (Completed copies of the resolutions and all of the documentation are available for public review at the District office.) DISCUSSION The 1996-1997 budget you adopted on March 27, 1996 included the issuance of$29.1 million of note and lease debt. Of this amount, $19.6 million would be used to pre-pay existing land contract debt and to refinan ce (and fix the int erest rate on the outstanding 1988 Variable Rate Demand Notes. The Notes issued by the District will be sold to, and the District will enter into the lease with, the Midpeninsula Regional Open Space District Financing Authority (the "Authority"), )� which you approved roved at your April 24 1996 meeting. The District will make paymentsPY on the Notes and a rental under the Lease to the Authority, which will, in turn, issue its 1996 Revenue Bonds (using the District's payments as security for payment of the Bonds). By utilizing this joint powers financing authority, this 330 Distel Circle ® Los Altos, CA 94022-1404 - Phone:415-691-1200 * FAX:415-691-0485 m E-mail:mrosd@netcom.com e Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton R-96-69 Page 2 issue has been structured to significantly reduce the District's near-term debt service. As shown below in the Sources and Uses table, the issue would yield $7.6 million of immediate new land acquisition funds. Despite this additional cash, the District's debt service payments would actually decline by $3.4 million over the next six years. The downside is that total annual debt service would gradually rise each year through the year 2017. Estimated Sources and Use Sources: 1996 Notes $ 7,435,000 1996 Refunding Notes 10,685,000 1996 Lease 11,078,000 1988 Note Reserve Fund 750,000 $29,948,000 Uses. Refund 1988 Notes $10,400,000 Pre-Pay Contract Notes 8,590," Accrued Interest on Prepaid Notes 570,000 New Reserve Fund 2,336,000 Underwriter Discount 292,000 Other Cost of Issuance 160,000 Land Acquisition Funds 7,600.000 $29,948,000 The proposed issue is consistent with long-term cash projections (see attached) and is accommodated within our statutory debt limit. At the end of March 1996, the District had bonded indebtedness equal to approximately 95% of its debt limit. After the proposed debt issue and refinancing, the District's bonded indebtedness would be about 89% of the projected March 1997 debt limit. The reason why the percentage declines is that we would be replacing notes with a lease which does not count against the limit. The proposed bond counsel is Orrick, Herrington & Sutcliffe. This firm has served in this role for virtually all of the District's debt issues and staff desires to maintain this successful relationship. The fee for Orrick, Herrington & Sutcliffe's services relative to this bond issuance is $75,000, payable at the closing of the financing. The agreement for bond counsel services is to be executed by both the District and the Financing Authority. The proposed underwriter is Stone & Youngberg LLC. The Midpeninsula Regional Open Space District Funding Authority is responsible for executing an underwriting agreement with Stone & Youngberg LLC, since the Authority will be issuing the actual revenue bonds. R-96-69 Page 3 Summary of Proposed Transaction: 1. Amount: Approximately $29.2 million 2. Term: Twenty years on the note portion ($18.1 million) and thirty years on the lease portion ($11.1 million) 3. Average Life: 18 years 4. Purpose: (1) Refinance 1988 Notes ($10.4 million) and prepay certain land contract debt ($8.6 million) in order to achieve significant near-term cash flow savings; and (2) provide $7.6 million of new land acquisition funds 5. Interest Rates: To be priced on or about July 9, 1996. Estimated net interest cost of 6.3% (if uninsured) 6. Reserve Fund: 8% of issue ($2.3 million) 7. Underwriting Fee: 1% of issue, or about $292,000 8. Closing Schedule: Late July, 1996 Preparation for this issue is now substantially complete and ready for your review and approval. Representatives from the underwriter and bond counsel will be at the meeting to answer any questions you may have. Parties to the Transaction: 1. Issuing Authority: Nfidpeninsula Regional Open Space District Financing Authority 2. Issuer: Midpeninsula Regional Open Space District 3. Trustee: Wells Fargo Bank 4. Underwriter: Stone and Youngberg 5. Bond Counsel: Orrick, Herrington and Sutcliffe Duties of the Parties: 1. Issuing Authority: Act as the issuing authority for the District 2. Issuer: Issues notes and lease debt, receives net proceeds, makes principal and interest payments, as required 3. Trustee: Administers notes and lease debt for the benefit of the holders, collects principal and interest from District and makes payments to holders, and holds reserve fund 4. Underwriter: Purchases debt from District and Authority and sells to buyer 5. Bond Counsel: Prepares and certifies note and lease documents R-96-69 Page 4 The Agreements: Note: These documents are substantially complete and correct but not meant to be in final form at this time. 1. Official Statement: Describes issue to potential buyers 2. Site Lease (between District and Authority): Authority agrees to assist in the financing of specified properties. District leases these properties to the Authority for $1 3. Project Lease (between District and Authority): District leases back the specified properties from the Authority and agrees to make principal and interest payments to the Authority necessary to service the debt 4. Local Obligation Purchase Contract: Authority agrees to buy the District's note issue in exchange for the District paying all costs and expenses related to the notes 5. Continuing Disclosure Agreement: Appoints the Trustee as the Dissemination Agent with regard to new SEC disclosure rules The following documents will be executed by the Authority: 1. Purchase Contract (between Authority and Underwriter): Defines terms under which the underwriter will buy the issue from the District 2. Trust Agreement (between Authority and Trustee): Lays out all the details of how the issue will be administered 3. Underwriting Agreement: Defines duties and compensation of the underwriter Prepared by: Michael L. Foster, Controller Contact person: Same as above MROSD LONG-TERM CASH FLOW PROJECTION 6/15/96 6°/dYR EXPENSE GROWTH, CAPITAL SPENDING PER C.I.P,3%TAX GROWTH ($THOUSANDS) FISCAL YEAR: 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 TOTAL BEGINNING CASH 11740 6998 10513 7995 7996 8146 8047 8169 8100 11740 TAX REVENUE 10292 10625 10944 11272 11610 11959 12317 12687 13067 104773 GRANT RECEIPTS 332 493 200 200 200 200 200 200 200 2225 JOINT PROJECTS/SALES 300 600 900 INTEREST INCOME 744 520 480 450 460 460 470 480 490 4554 OTHER INCOME 761 588 617 648 681 715 750 788 827 6376 TOTALREVENUES 12429 12826 12241 12570 12951 13333 13738 14155 14585 118828 OPERATING EXPENSES 4286 4555 4828 5118 5425 5751 6096 6461 6849 49369 FACILITIES COSTS 69 502 110 100 300 300 1381 MAJOR IMPROVEMENTS 232 694 641 745 685 650 750 650 750 5797 DEBT SERVICE-CURRENT 5434 8013 6950 6474 6421 6470 6511 6472 6425 59170 DEBTSERVICE-NEW -2817 -770 132 270 262 259 340 437 -1887 TOTAL DEBT SERVICE 5434 5196 6180 6606 6691 6732 6770 6812 6862 57283 TOTALEXPENSES 10021 10947 11759 12569 12801 13433 13616 14223 14461 113830 OPERATING CASH FLOW 2408 1879 482 1 150 -99 122 -69 124 4998 LAND CONTRACTS 7259 -9160 1500 -401 NETPROCEEDS 19096 19096 LAND PURCHASES: PRIORITY PURCHASES 6803 300 7103 OTHER PURCHASES 7606 8000 4500 20106 ENDING CASH 6998 10513 7995 7996 8146 8047 8169 8100 8224 REQUIRED RESERVES 4910 6496 6496 6496 6496 6496 6496 6496 6496 EXCESSCASH 2O88 4017 1499 1500 1650 1551 1673 1604 1728 CUMM NEW LAND 1 1 8300 1 12800 1 12800 1 12800 12800 12800 12800 12800 } MIDPENINSULA REGIONAL OPEN SPACE DISTRICT RESOLUTION NO. 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT AUTHORIZING TIME ISSUANCE OF 1 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT j 1996 REFUNDING PROMISSORY NOTES j IN A PRINCIPAL AMOUNT NOT TO 1, EXCEED $18,700,000 AND PROVIDING FOR THE FORM, EXECUTION AND REPAYMENT OF SAID NOTES I C 3 Adopted June 26, 1996 SF2-58748.3 't R TABLE OF CONTENTS Page SECTION 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 2. Authority for the Issuance of the Notes . . . . . . . . . . . . . . . . . . . 5 SECTION 3. Terms of the Notes . . . . . . . 5 SECTION 4. Form of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 SECTION 5. Execution of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 f Notes . . . . . . . . . . . . 7 N Delivery o the SECTION 6. . . . . . . . . . SECTION 7. Payment of the Notes 8 SECTION 8. Expense Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 9. Tax Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 SECTION 10. General Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 SECTION 11. Discharge of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 SECTION 12. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 1 EXMIT A Form of Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A - 1 SF2-58749.3 I MIDPENINSULA REGIONAL OPEN SPACE DISTRICT RESOLUTION NO. 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE, MIDPENINSULA REGIONAL OPEN SPACE DISTRICT AUTHORIZING THE ISSUANCE OF MIDPENINSULA REGIONAL OPEN SPACE DISTRICT 1996 REFUNDING PROMISSORY NOTES IN A PRINCIPAL AMOUNT NOT TO EXCEED $18,700,000 AND PROVIDING FOR THE FORM, EXECUTION AND REPAYMENT OF SAID NOTES WHEREAS, the Board of Directors of the Midpeninsula Regional Open Space District (the "District") has found and determined that funds in an amount not to exceed $18,700,000 are needed by the District for the purpose of refunding the Prior Notes (as hereinafter defined) that were issued for the purpose of acquiring necessary and proper lands and facilities for open space purposes of the District and costs incidental thereto; and WHEREAS, the District is authorized by law to borrow money for such purposes, which such borrowing may be evidenced by the issuance of promissory notes; and WHEREAS, all acts, conditions and things required by law to exist, to happen and to be performed precedent to the issuance of promissory notes as provided herein do exist, have happened and have been performed in the time, form and manner as required by law, and the District is now duly authorized to issue promissory notes as provided herein; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Midpeninsula Regional Open Space District, as follows: SECTION 1. Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes hereof and of the Notes have the meanings specified herein: Authority "Authority" means the Midpeninsula Regional Open Space District Financing Authority, a joint exercise of powers entity created between the District and the County of Santa Clara pursuant to California Government Code Section 6500 and following. SF2-58748.3 Board "Board" means the Board of Directors of the District. Business Day "Business Day" means a day of the year that is not a Saturday or Sunday or a day on which banking institutions located in San Francisco, California, are required or authorized to remain closed. Code "Code" means the Internal Revenue Code of 1986 and the regulations of the United States Department of the Treasury issued thereunder, and in this regard reference to any particular section of the Code shall include reference to all successor sections of the Code. Controller "Controller" means the Controller of the District. District "District" means the Midpeninsula Regional Open Space District, a regional open space district duly organized and existing under and pursuant to the Law and having the office of its Board of Directors in Santa Clara County, California. Escrow Men "Escrow Agent" means Wells Fargo Bank, National Association, as escrow agent pursuant to that certain Escrow Agreement, dated as of July 1, 1996, between the District and the Escrow Agent. Expense Fun "Expense Fund" means the 1996 Expense Fund established in Section 6. Federal Securities The term "Federal Securities" means United States of America Treasury bills, notes, bonds or certificates of indebtedness, or obligations for which the full faith and credit of the United States of America are pledged for the payment of interest and principal, or securities evidencing ownership interests in such obligations or in specified portions of the interest on or principal of such obligations. SF2-59749.3 2 i General Fund "General Fund" means the General Fund of the District now existing in the treasury of the District under the Law. Interest and Principal Fund "Interest and Principal Fund" means the 1996 Note Interest and Principal Fund established in Section 6. Law "Law" means Article 3 of Chapter 3 of Division 5 of the Public Resources Code of the State of California, as amended to date, and all laws amendatory thereof and supplemental thereto. Limited Taxes "Limited Taxes" means the limited ad valorem property taxes levied upon all taxable property in the District by the Board of Supervisors of Santa Clara County and by the Board of Supervisors of San Mateo County and allocated to the District under applicable law that are legally available to pay the interest on and principal of and redemption premiums, if any, on the Notes together with the payment on a parity of the interest on and principal of the District's outstanding notes and certain land acquisition contracts, but excluding the proceeds of any Tax Overrides. Notes "Notes" means the "Midpeninsula Regional Open Space District 1996 Refunding Promissory Notes" designated as such in Section 3 and authorized to be issued by the District under and by the authority of the Law and under and pursuant hereto. President "President" means the President of the Board. Prior Notes "Prior Notes" means the District's Variable Rate Demand Notes 1988 Series A, outstanding in the principal amount of $10,400,000, and Secured Promissory Notes (Parcel 2 and 2A), outstanding in the principal amount of $6,258,515. Rebate Fund "Rebate Fund" means the 1996 Note Rebate Fund established in Section 11, i SF2-58749.3 3 I Rebate Instructions "Rebate Instructions" means those calculations and directions required to be performed and delivered by the District under and pursuant to the Tax Certificate. Rebate Requirement "Rebate Requirement" has the meaning assigned to it in the Tax Certificate. Refunding Fund "Refunding Fund" means the 1996 Note Refunding Fund established in Section 6. Resolution "Resolution" means this Resolution No. 96- adopted by the Board under and by authority of the Law on June 26, 1996. Secretary "Secretary" means the Secretary of the Board. Tax Certificate "Tax Certificate" means that the Tax Certificate executed by the District at the time of the original issuance and delivery of the Notes, as originally executed and as it may from time to time be amended or supplemented. Tax Overrides "Tax Overrides" means any tax levied for the purpose of the payment of general obligation bonded indebtedness authorized by voters of the District. Treasurer "Treasurer" means the Treasurer of the District. Trustee "Trustee" means Wells Fargo Bank, National Association, as trustee under that certain Trust Agreement dated as of July 1, 1996, between the Trustee and the N idpeninsula Regional Open Space District Financing Authority, pursuant to which said Authority assigned its rights to receive payment on the Notes to the Trustee. SM-M48.s 4 I SECTION 2. Authority for the Issuance of the Notes. The Board has reviewed all proceedings heretofore taken relative to the issuance of the Notes and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, to happen and to be performed precedent to the issuance of the Notes do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the District is now duly authorized to issue the Notes and incur an indebtedness under and pursuant to the conditions and terms provided in the Resolution. SECTION 3. Terms of the Notes. Promissory notes of the District in an aggregate principal amount not to exceed $18,700,000 are hereby authorized to be issued by the District under and pursuant to the Law for the purpose of paying the Prior Notes and accrued interest thereon and the related incidental expenses, which authorized issue of promissory notes is hereby designated the "Midpeninsula Regional Open Space District 1996 Refunding Promissory Notes." The Notes shall be issued in fully registered form in the denomination of five thousand dollars ($5,000) or any integral multiple thereof (but not to exceed the principal amount of Notes maturing on any one date), shall be dated July 1, 1996, and shall mature (subject to any right of prior redemption reserved herein) on the dates and in the principal amounts as set forth in the following schedule (which principal amounts may be reasonably increased or decreased, as determined by the General Manager or the Controller at the time of the sale of the Notes to meet the debt service objectives of the District, provided that the maximum aggregate principal amount of the Notes shall not exceed $18,700,000): Maturity Date Principal (Sggtember 1) Amount 1999 $ 135,000 2000 130,000 2001 195,000 2002 245,000 2003 285,000 2004 340,000 2005 395,000 2006 465,000 2007 530,000 2008 595,000 2009 605,000 2010 670,000 2011 845,000 2012 915,000 2013 995,000 2014 1,085,000 2015 1,180,000 2016 3,955,000 2017 5,135,000 SF2-58748.3 5 s� The Notes shall bear interest at the interest rate or rates per annum designated in the purchase contract pursuant to which the Notes are sold to the original purchaser thereof. The Notes shall bear interest from the interest payment date next preceding the date of registration thereof, unless the Notes are registered on a day during the period from the sixteenth (16th) day of the month next preceding an interest payment date to such interest payment date, both inclusive, in which event they shall bear interest from such interest payment date, or unless the Notes are registered on a day on or before the fifteenth (15th) day of the month next preceding the first interest payment date, in which event they shall bear interest from July 1, 1996. Such interest shall be payable semiannually on March 1 and September 1 of each year, commencing on March 1, 1997 and continuing until the Notes shall have been fully paid, and the interest due on the maturity or the prior redemption of the Notes and the principal of and the redemption premiums, if any, on the Notes shall be payable at maturity or upon redemption prior to maturity. Both the interest on and principal of and redemption premiums, if any, on the Notes shall be payable in lawful money of the United States of America. The Notes maturing by their terms on or after September 1, 2007, are subject to optional redemption by the District on any interest payment date on or after September 1, 2006, and prior to their respective maturity dates, as a whole, or in part in integral multiples of five thousand dollars ($5,000) in inverse order of maturity (and by lot within any one maturity if less than all the Notes of any one maturity are redeemed), from any legally available funds of the District, upon mailed notice as hereinafter provided, at a redemption price equal to the following amount expressed as a percentage of the principal amount of the Notes or the portions thereof called for redemption, together with accrued interest thereon to the date of redemption, namely: Redemption Date Redemption Price September 1, 2006 102% March 1, 2007 and thereafter 100% Notice of redemption of any Note or any portion thereof shall be given by the District by mailing a copy of such notice by first class mail to the registered owner thereof not less than thirty (30) days nor more than sixty (60) days before the redemption date, rp ovided, that receipt of such notice shall not be a condition precedent to the effect of such notice and neither failure to receive any such notice nor any immaterial defect contained therein shall affect the validity of the proceedings for the redemption of such Note or such portion thereof. Such notice shall state the redemption date, the redemption price, the place of redemption, and shall designate the principal amount, the numbers of the Notes to be redeemed in whole or in part, and shall require that such Notes be then surrendered for redemption in whole or in part at such redemption price, giving notice also that further interest on the Notes or the portions thereof called for redemption will not accrue from and after such redemption date. If any Note so chosen for redemption is to be redeemed in part only, such notice shall also state that such Note is to be redeemed in part only and that upon the presentation of such Note for redemption there will be issued in lieu of the unredeemed portion of the principal amount thereof a new Note or Notes of the same Sn-58748.3 6 J interest rate and maturity date of an aggregate principal amount equal to the unredeemed portion thereof. If notice of redemption has been duly given as aforesaid and money for the payment of the redemption price of the Notes or the portions thereof so called for redemption is available therefor, then on the redemption date designated in such notice such Notes or such portions thereof shall become due and payable, and from and after the date so designated interest on such Notes or the portions thereof so called for redemption shall cease to accrue and the registered owners of such Notes or such portions thereof shall have no rights in respect thereof except to receive payment of the redemption price thereof. SECTION 4. Form of the Notes. The Notes shall be in substantially the form set forth in Exhibit A hereto, the blanks being suitably filled in to comply with the provisions of the Resolution. SECTION 5. Execution of the Notes. The President and the Secretary who may be in office at the date of the Notes, or at any time thereafter prior to the delivery of the Notes, and each of such officers, are hereby authorized and directed respectively as such officers to sign and attest each of the Notes on behalf of the District by use of their manual or facsimile signatures, and the Secretary is hereby additionally authorized and directed to print the seal of the District thereon, which such signing and sealing shall be a sufficient and binding execution of the Notes by the District. In case any officer whose signature appears on the Notes shall cease to be such officer before the delivery of the Notes to the purchaser, such signature shall nevertheless be valid and sufficient for all purposes the same as though such officer had remained in office until the delivery of the Notes. Only such of the Notes duly executed and dated, shall be entitled to any benefits hereunder or be valid or obligatory for any purpose, and such certificate shall be conclusive evidence that the Notes so authenticated have been duly authorized, executed, issued and delivered hereunder and are entitled to the benefits hereof. SECTION 6. Delivery of the Notes. The Secretary is directed to cause to be prepared a sufficient number of blank Notes of suitable quality and to cause the blank spaces thereof to be filled in to comply with the provisions hereof, and to procure their execution by the proper officers of the District, and to deliver them to the Treasurer, who shall safely keep the same and register and deliver them to the Authority upon receiving therefor the purchase price thereof and accrued interest thereon, if any, to the date of delivery. The President and the Secretary are further authorized and directed to make, execute and deliver to the purchaser of the Notes a signature certificate in the form customarily required by purchasers of notes of public districts certifying to the genuineness and due execution of the Notes, and the Treasurer is hereby authorized and directed to make, execute and deliver to the purchaser of the Notes a receipt in the form customarily required by purchasers of notes of public districts evidencing the payment of the purchase price and the delivery of the Notes, which receipt shall be conclusive evidence that the Notes have been duly paid for and delivered. The purchaser of the Notes and any SF2-58748.3 7 subsequent registered owner of the Notes are hereby authorized to rely upon and shall be justified in relying upon any such signature certificate and any such receipt with respect to the Notes issued and delivered pursuant to the authority of the Resolution. Upon the receipt of payment for the Notes when the same shall have been duly sold and delivered, the Treasurer shall set aside and deposit the proceeds received from such sale in the following respective funds and in the following order of priority: (a) The Treasurer shall deposit in the "1996 Note Interest and Principal Fund," which fund the District hereby agrees and covenants to establish and maintain until payment in full or provision therefor of all interest on and principal of and redemption premiums, if any, on the Notes, a sum of money equal to the accrued interest from the date of the Notes to the date of the payment of the purchase price thereof. (b) The Treasurer shall deposit in the "1996 Note Refunding Fund," which fund the District hereby agrees and covenants to establish and maintain until provision for payment of the Prior Notes and the interest thereon as and when they respectively become due has been duly made, a sum of money which will be sufficient to provide for such payment. All money in the Refunding Fund shall be deposited in an escrow fund to be maintained under an escrow agreement to be entered into between the District and the Escrow Agent and applied thereunder for refunding the Prior Notes and the interest thereon as and when they respectively become due, as provided in the resolution authorizing their issuance. (c) The Treasurer shall deposit the remainder of the proceeds received from the sale of the Notes in the "1996 Note Expense Fund," which fund the District hereby covenants and agrees to establish and maintain until payment of all costs of the issuance of the Notes. SECTION 7. Payment of the Notes. The Notes are limited obligations of the District and the interest on and principal of and premium, if any, on the Notes shall, as authorized by and subject to the Law, be paid only from the Limited Taxes, or from other funds legally available therefor. The full faith and credit or taxing power of the District is not pledged for the payment of the interest on or principal of or redemption premiums, if any, on the Notes, and the Notes are not and shall not be secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any property of the District or any of its income or revenue. In order to provide for the timely payment of the interest on and principal of and redemption premiums, if any, on the Notes as the same becomes due, the District agrees and covenants, consistent with the foregoing and as authorized by and subject to the Law, that until the interest on and the principal of and redemption premiums, if any, on the Notes are paid in full or until there is a sum in the treasury of the District set apart for that purpose sufficient to meet all payments of the interest on and principal of and redemption premiums, if any, on the Notes as they become due, it will annually set aside a portion of SF2-38748.3 8 I the Limited Taxes (or other legally available funds of the District) sufficient to pay such interest and principal and redemption premiums, if any, that will become due before the proceeds of the Limited Taxes levied at the next general tax levy will be available for such purpose. In order to implement this provision, the District further agrees and covenants that it will set aside, as soon as possible after the receipt of the Limited Taxes that become delinquent after December 10 of each year (commencing with such Limited Taxes that become delinquent after December 10, 1996), an amount of such Limited Taxes (or other legally available funds of the District) equal to the interest that becomes due and payable on the Notes on the next succeeding March 1 plus the redemption premiums, if any, on the Notes that become due on the Notes on or prior to such date, and that it will set aside, as soon as possible after the receipt of such Limited Taxes that become delinquent after April 10 of each year (commencing with such Limited Taxes that become delinquent after April 10, 1997), an amount of such Limited Taxes (or other legally available funds of the District) equal to the interest that becomes due and payable on the Notes on the next succeeding September 1 plus the redemption premiums, if any, on the Notes that become due on or prior to such date plus the principal of the Notes that becomes due and payable on the next succeeding September 1. All such amounts of Limited Taxes (or other legally available funds of the District) shall be deposited by the Controller in the Interest and Principal Fund. All money in the Interest and Principal Fund shall be used solely for the payment of the interest on and principal of and redemption premiums, if any, on the Notes, and for this purpose the Controller shall, at least one (1) Business Day before each interest payment date on the Notes and each principal maturity date or redemption date of any of the Notes, disburse from the Interest and Principal Fund to the Trustee an amount, in immediately available funds, sufficient to make such interest, principal and premium payments. All money in the Interest and Principal Fund shall, pending its disbursement as above provided, be deposited or invested as determined by the Controller as permitted by law so as to obtain the highest yield that the Controller deems practicable, having due regard for the safety of such deposits and investments and subject to the provisions of Section 11 hereof; provid , that all such deposits and investments shall be withdrawable or shall mature, as the case may be, to coincide as nearly as practicable with the time when such money is required to be withdrawn for use hereunder. All proceeds of such deposits or investments shall (except as otherwise provided by Section 9) be deposited as and when received in the Interest and Principal Fund. When all the interest on and principal of and redemption premiums, if any, on the Notes have been paid, any balance of money then remaining in the Interest and Principal Fund shall be deposited in the General Fund The covenants and agreements set forth herein are for the equal and proportionate benefit, security and protection of all owners of the Notes and the District's outstanding notes and any additional notes which may hereafter be issued on a parity with the Notes, without preference or distinction as to security or otherwise of any such SF2-58748.3 9 obligations over any of the other by reason of the number or date thereof or the time of sale, execution or delivery hereof. SECTION 8. Expense Fund. All money in the Expense Fund shall be withdrawn therefrom only upon the order of the Board or pursuant to its directions, and shall be used and withdrawn solely for paying costs of the issuance of the Notes (including, but not limited to, all printing and document preparation expenses in connection with the Notes, escrow fees and other fees and expenses incurred in connection with the issuance of the Notes and the paying of the Prior Notes), except that any balance of money in the Expense Fund not needed or used for such purpose, after the closure of such fund, shall be transferred to the Interest and Principal Fund. All money in the Expense pe Fund shall, pending expenditure, be deposited or invested as determined by the Controller as permitted by law so as to obtain the highest yield that the Controller deems practicable, having due regard for the safety of such deposits and investments; provided, that all such deposits and investments shall be withdrawable or shall mature, as the case may be, to coincide as nearly as practicable with the time when such money is expected to be withdrawn for use hereunder. All proceeds of such deposits or investments shall (except as otherwise provided by Section 9) be deposited as and when received in the Expense Fund. SECTION 9. Tax Covenants. (a) The District will not take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of the interest on the Notes pursuant to Section 103 of the Code, and specifically the District will not directly or indirectly use or make any use of the proceeds of the Notes or any other funds of the District or take or omit to take any action that would cause the Notes to be "arbitrage bonds" subject to federal income taxation by reason of Section 148 of the Code or "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; and to that end the District, with respect to the proceeds of the Notes and such other funds, will comply with all requirements of such sections of the Code, and all regulations of the United States Department of the Treasury issued thereunder to the extent that such regulations are, at the time, applicable and in effect; provided, that if the District shall obtain an opinion of nationally recognized bond counsel to the effect that any action required under this section is no longer required to maintain the exclusion from gross income of the interest on the Notes pursuant to Section 103 of the Code, the District may rely conclusively on such opinion in complying with the provisions hereof; and provided further, that in the event that at any time the Board is of the opinion that for purposes of this section it is necessary to restrict or limit the yield on the investment of any moneys held by the District hereunder or otherwise, the Board shall so instruct the Controller in writing, and the Controller shall take such action as may be necessary in accordance with such instructions. (b) Without limiting the generality of the foregoing, the District will pay from time to time all amounts required to be rebated to the United States of America pursuant to Section 148(f) of the Code and all regulations of the United States Department SF2-5V48.3 10 of Treasury issued thereunder to the extent that such regulations are, at the time, applicable and in effect, which obligation shall survive payment in full or defeasance of the Notes, and to that end, there is hereby established in the treasury of the District a fund to be known as the "Midpeninsula Regional Open Space District 1996 Notes Rebate Fund" to be held and administered by the Controller. The District will comply with the provisions of the Tax Certificate with respect to making deposits in the Rebate Fund, and moneys held in the Rebate Fund are pledged to provide payments to the United States of America as provided herein and in the Tax Certificate and no other person shall have claim to such moneys except as provided in the Tax Certificate. SECTION 10. General Covenants. The District agrees and covenants that, until payment in full of all the interest on and principal of and redemption premiums, if any, on the Notes (or provision satisfactory for such payment shall have been made), it will: A. Duly and punctually pay or cause to be paid the interest on and principal of and redemption premiums, if any, on the Notes in accordance with the conditions and terms thereof and with the conditions and terms hereof. B. Incur no additional indebtedness or capital lease obligations payable from the Limited Taxes received by the District having any priority in payment to the payment of the interest on or principal of or redemption premiums, if any, on the Notes. C. Incur no additional indebtedness or capital lease obligations payable from the Limited Taxes received by the District on a parity in payment of the interest on or principal of or redemption premiums, if any, on the Notes unless it shall have first filed with the Paying Agent a certificate (which the Paying Agent shall maintain in its files, but shall have no responsibility for the review or verification thereof) executed by the Controller showing: 1. The total Limited Taxes received by the District in its most recent audited fiscal year, as shown by the most recent audited financial statement of the District, plus the total subventions in lieu of taxes received by the District from the State of California in such fiscal year; 2. The debt service payable by the District during its next succeeding fiscal year on all indebtedness or capital lease obligations of the District that would be payable from the Limited Taxes on a parity with the Notes and the debt service that is payable on the outstanding Notes in the next succeeding fiscal year; 3. That the total defined in subparagraph 1 above is at least one hundred twenty-five per cent (125%) of the total defined in subparagraph 2 above. D. Prepare and adopt a budget for each fiscal year, which budget shall provide for the payment of the interest and premium, if any, on and the principal of the SF2-58748.3 11 Notes becoming due and payable in such fiscal year and for appropriations of the Limited Taxes fully sufficient to make such payments. A copy of each budget shall be filed with the Authority within thirty (30) days of its adoption (which budget the Paying Agent shall maintain in its files, but shall not be responsible for the review thereof). SECTION 11. Discharge of Notes. (a) If the District shall pay or cause to be paid or there shall otherwise be paid to the registered owners of all outstandingNotes the interest thereon and theprincipal thereof and the redemption premiums, if any, thereon at the times and in the manner stipulated therein and herein then all agreements, g covenants and other obligations s of the District to the registered owners of such Notes hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. Any y outstanding Notes shall on the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this section if there shall be on deposit with the Trustee money which is sufficient to pay the interest due on such Notes on such date and the principal and redemption premiums, if any, due on such Notes on such date. (c) Any outstanding Notes shall prior to the maturity date or redemption date thereof be deemed to have been paid within the meaning and with the effect expressed in subsection (a) of this section if (1) in case any such Notes are to be redeemed on any date prior to their maturity date, the District shall have agreed to mail a notice of redemption to the respective registered owners of all outstanding Notes, (2) there shall have been deposited with an escrow agent or any paying agent either money in an amount which shall be sufficient or Federal Securities which are not subject to redemption except by the holder thereof prior to maturity (including any Federal Securities issued or held in book-entry form on the books of the Department of the Treasury of the United States of America) or municipal obligations which have been defeased with Federal Securities and which are rated in the highest rating category either by Moody's Investors Service or Standard & Poor's the interest on and principal of which when paid will provide money which, together with the money, if any, deposited with such escrow agent at the same time, shall be sufficient to pay when due the interest to become due on such Notes on and prior to the maturity dates or redemption dates thereof, as the case may be, and the principal of and redemption premiums, if any, on such Notes on and prior to the maturity dates or the redemption dates thereof, as the case may be, as evidenced by a report of an independent certified public accountant on file with the District and such escrow agent, and (3) in the event such Notes are not by their terms subject to redemption within the next succeeding sixty (60) days, the District shall have agreed to mail a notice to the registered owners of such Notes that the deposit required by clause (2) above has been made with such escrow agent and that such Notes are deemed to have been paid in accordance with this section and stating the maturity dates or redemption dates, as the case may be, upon which money is to be available for the payment of the principal of and redemption premiums, if any, on such Notes. SF2-58748.3 12 EXHIBIT A [Form of Note] UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTIES OF SANTA CLARA AND SAN MATED MIDPENINSULA REGIONAL OPEN SPACE DISTRICT 1996 REFUNDING PROMISSORY NOTE No. Interest Maturity Date Rate Date of Note REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS MIDPENINSULA REGIONAL OPEN SPACE DISTRICT, a regional open space district duly organized and existing under and pursuant to the laws of the State of California, and having the office of its Board of Directors in Santa Clara County, California (the "District"), hereby acknowledges itself indebted to and, for value received, promises to pay (but only out of the funds hereinafter referred to, and subject to any right of prior redemption reserved herein) to the registered owner set forth above on the maturity date set forth above or upon the prior redemption hereof the principal sum set forth above, together with interest thereon at the interest rate per annum set forth above from the interest payment date next preceding the date of registration of this Note (unless this Note is registered on a day during the period from the sixteenth (16th) day of the month next preceding an interest payment date to such interest payment date, both inclusive, in which event it shall bear interest from such interest payment date, or unless this Note is registered on a day on or before the fifteenth (15th) day of the month next preceding the first interest payment date, in which event it shall bear interest from July 1, 1996) until the principal hereof shall have been fully paid, payable semiannually on March I and September I of each year, commencing on March 1, 1997. Both the interest on and principal of and redemption premium, if any, on this Note are payable in lawful money of the United States of America. SF2-59743.3 A - 1 (d) Anything contained herein to the contrary notwithstanding, any money held by the Paying Agent in trust for the payment and discharge of any of the Notes or any interest thereon which remains unclaimed for four (4) years after the date when such Notes or interest thereon have become due and payable, either at their stated maturity dates or by call for redemption prior to maturity, if such money was held by the Paying Agent on such date, or for two (2) years after the date of deposit of such money if deposited with the Paying Agent after the date when such Notes or interest thereon became due and payable, shall be repaid by the Paying Agent to the District as its absolute property free from trust and for use in accordance with the Law, and the Paying Agent shall thereupon be released and discharged with respect thereto and the registered owners of such Notes shall look only to the District for the payment of such Notes and interest thereon, Rrovid , that before the Paying Agent shall be required to make any such repayment the District shall mail pursuant to Section 3 a notice to the registered owners of all outstanding Notes that such money remains unclaimed and that after a date named in such notice, which date shall not be less than thirty (30) days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the District. SECTION 12. Effective Date. The Resolution shall take effect from and after its passage and approval. PASSED AND ADOPTED on June 26, 1996, by the following vote: AYES: Directors NOES: ABSENT: Approved: President of the Board of Directors of the Midpeninsula Regional Open Space District (SEAL) Attest: I Clerk of the Midpeninsula Regional Open Space District sF2-58748.3 13 This Note is one of a duly authorized issue of promissory notes of the District designated as its 1996 Refunding Promissory Notes (the "Notes") aggregating Million Dollars ($ ) in principal amount, all of like date and tenor (except for such variations as may be required to designate varying numbers, interest rates, denominations, maturities or redemption provisions), and is issued under and by authority of Article 3 of Chapter 3 of Division 5 of the Public Resources Code of the State of California, as amended to date, and all laws amendatory thereof and supplemental thereto (the "Law"), and under and pursuant to the provisions of Resolution No. 96-_ adopted by the Board of Directors of the District on June 26, 1996 (the "Resolution"), to provide funds for the purpose of acquiring necessary and proper lands and facilities for open space purposes of the District and for the purpose of paying outstanding notes of the District and the accrued interest thereon, all as more particularly provided in the Resolution, and reference is hereby made to the Resolution for a description of the terms on which the Notes are issued, for the provisions with regard to the security for the repayment of the Notes and for the rights of the registered owners of the Notes. All the terms of the Resolution are hereby incorporated herein and constituted a contract between the District h registered caner of this Note to all the provisions of which there registered owner of and the re eyed o s g � P bn this Note, by his acceptance hereof, consents and agrees, and the registered owner of this Note shall have recourse to all the provisions of the Resolution and shall be bound by all the terms and conditions thereof. The Notes maturing by their terms on or after September 1, 2007, are subject to optional redemption by the District on any interest payment date on or after September 1, 2006, and prior to their respective maturity dates, as a whole, or in part in integral multiples of five thousand dollars ($5,000) in inverse order of maturity (and by lot within any one maturity if less than all the Notes of any one maturity are redeemed), from any legally available funds of the District, upon mailed notice as hereinafter described, at a redemption price equal to the following amount expressed as a percentage of the principal amount of the Notes or the portions thereof called for redemption, together with accrued interest thereon to the date of redemption, namely: Redemption Date Redemption Price September 1, 2006 102% March 1, 2007 and thereafter 100% As provided in the Resolution, notice of redemption of this Note or any portion hereof shall be given by mailing a copy of such notice by first class mail to the registered owner hereof not less than thirty (30) days nor more than sixty (60) days before the redemption date; provided, that receipt of such notice shall not be a condition precedent to the effect of such notice and neither failure to receive any such notice nor any immaterial defect contained therein shall affect the validity of the proceedings for the redemption of this Note or such portion hereof. If notice of redemption has been duly given as aforesaid, then on the redemption date designated in such notice this Note or such portion hereof shall become due and payable at the above-described redemption price, and if money for the sr2-58748.3 A - 2 payment of the above-described redemption rice of this Note or such Portion he reof is available therefor, then from and after the date so designated interest on this Note or such portion hereof shall cease to accrue and the registered owner of this Note shall, as to this Note or such portion hereof, have no rights in respect hereof except to receive payment of the redemption price hereof on the redemption date hereof, provided, that if this Note is to be redeemed in part only, upon presentation of this Note for redemption there will be issued in lieu of the unredeemed portion of the principal amount hereof a new Note or Notes of the same interest rate and maturity date of an aggregate principal amount equal to the unredeemed portion hereof. —It is hereby recited, certified and declared that this Note is issued in strict conformity with the Constitution and laws of the State of California and with proceedings of the District authorizing the same, and that all acts, conditions and things required by law to exist, to happen and to be performed precedent to the issuance of this Note do exist, have happened and have been performed in the time, form and manner as required by law, and that this Note, together with all other indebtedness and obligations of the District, does not exceed any limit prescribed by the Constitution or laws of the State of California. _ It is hereby further recited, certified and declared that the Notes are limited obligations of the District and that the interest on and principal of and redemption premiums, if any, on the Notes shall, as authorized by and subject to the Law, be paid only from limited ad valorem property taxes levied upon all taxable property within the District by the Board of Supervisors of Santa Clara County and by the Board of Supervisors of San Mateo County and allocated to the District under applicable law, that are legally available to pay the Notes together with the payment on a parity of the interest on and principal of the District's outstanding notes and certain land acquisition contracts, or from other funds legally available therefor. The full faith and credit or taxing power of the District is not pledged for the payment of the interest on or principal of or redemption premiums, if any, on the Notes, and the Notes are not secured by a legal or equitable pledge of, or charge, lien or encumbrance upon, any property of the District or any of its income or revenue. This Note is transferable by the registered owner hereof, in person or by his duly authorized attorney, at the office of the District, upon surrender of this Note for cancellation accompanied by delivery of a duly executed written instrument of transfer, and thereupon a new Note or Notes of authorized denominations for a like aggregate principal amount and of the same maturity date will be issued to the transferee in exchange therefor, in the manner, subject to the conditions and upon payment of the charges provided in the Resolution. The District may deem and treat the registered owner of this Note as the absolute owner hereof for all purposes, and the District shall not be affected by any notice or knowledge to the contrary; and payment of the interest on and principal of and redemption premium, if any, on this Note shall be made only to such registered owner as above provided, which payment shall be valid and effectual to satisfy and discharge the liability on this Note to the extent of the sum or sums so paid. The Notes are authorized to be issued in the form of fully registered notes in the denomination of five thousand dollars ($5,000) or any integral multiple thereof (not exceeding the principal amount of Notes maturing in any one year), and, subject to the SF2-58749.3 A - 3 I - conditions and upon payment of the charges provided in the Resolution, the Notes may be exchanged at the office of the District for the same aggregate principal amount of Notes of the same maturity date of other authorized denominations. This Note shall not be entitled to any benefits under the Resolution or become valid or obligatory for any purpose until its due execution and delivery. IN WITNESS WHEREOF, the District has caused this Note on its behalf to be signed by the manual or facsimile signature of the President of its Board of Directors and attested by the manual or facsimile signature of the Secretary of its Board of Directors and has caused the seal of the District to be printed hereon, all as of _, 1996. NIIDPENINSULA REGIONAL OPEN SPACE DISTRICT By President of the Board of Directors [SEAL] Attest: Secretary of the Board of Directors M-SV48.3 A - 4 [Form of Assignment] For value received the undersigned do(es) hereby sell, assign and transfer unto the within Note and do(es) hereby irrevocably constitute and appoint attorney to transfer the same on the register of the Paying Agent, with full power of substitution in the premises. Dated: 5IGNAT'URE GUARANTEED BY: NOTE: The signature(s) to this Assignment must correspond with the name(s) as written on the face of the within Note in every particular, without alteration or enlargement or any change whatsoever, and the signature(s) must be guaranteed by an eligible guarantor institution. Social Security Number, Taxpayer Identification Number or other identifying number of Assignee: SF2-5V48.3 A - 5 I CERTIFICATE OF THE CLERK OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT I, Jean Fiddes, Clerk of the Midpeninsula Regional Open Space District, State of California, hereby certify that the foregoing is a true, correct and complete copy of Resolution No. duly adopted by the Board of Directors of the Midpeninsula Regional Open Space District at a regular meeting thereof duly and regularly held on June 26, 1996, of which meeting all of the members of said Board of Directors had due notice. I further certify that I have carefully compared the foregoing copy with the original minutes of said meeting on file and of record in my office; that said copy is a true, correct and complete copy of the original resolution duly adopted by said Board of Directors at said meeting and entered in said minutes; and that said resolution has not been amended, modified or rescinded since its adoption and is in full force and effect as of the date hereof. I further certify that in accordance with California Government Code Section 54954.2, the agenda for said meeting contained a brief description of said resolution to be considered at said meeting, and a copy thereof was posted at least seventy-two (72) hours before said meeting in a location freely accessible to members of the public. IN WITNESS WHEREOF, I have executed this certificate and affixed the seal of the Midpeninsula Regional Open Space District on the date hereinbelow set forth. Dated: , 1996 Clerk of the Midpeninsula Regional Open Space District [SEAL] I SF2 S 8748.3 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT RESOLUTION NO. 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE IMI)PENINSULA REGIONAL OPEN SPACE DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY OF A SITE LEASE, A PROJECT LEASE, A PURCHASE CONTRACT AND A CONTINUING DISCLOSURE AGREEMENT, AND APPROVING A PRELIMINARY OFFICIAL STATEMENT AND APPROVING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the Board of Directors (the "Board") of the Midpeninsula Regional Open Space District (the "District") has duly authorized, pursuant to Resolution No. 96- (the "Note Resolution"), the issuance of Midpeninsula Regional Open Space District 1996 Refunding Promissory Notes (the "Notes") in a principal amount not to exceed $18,700,000 to provide funds for the purpose of refunding the District's Prior Notes (as defined in the Note Resolution) and acquiring necessary and proper lands and facilities for open space purposes of the District; WHEREAS, there has been submitted to the Board by the Midpeninsula Regional Open Space District Financing Authority (the "Authority") a form of Local Obligation Purchase Contract relating to the Notes (the "Purchase Contract"); WHEREAS, the District is authorized by law to lease real property for open space purposes of the District; WHEREAS, the District has determined that it is in the best interests of the District and its citizens and is necessary and proper for District purposes that certain real property described in that certain Site Lease to be dated as of July 1, 1996 (the "Site Lease") be leased to the Authority, and that the Authority lease such real property back to the District pursuant to the Project Lease (the "Project Lease"), proposed to be executed and entered into as of July 1, 1996, by and between the Authority and the District, in substantially the forms presented to this meeting; WHEREAS, under the Project Lease, the District will be obligated to make rental payments to the Authority to pay for such real property leased to it; )WHEREAS, the Authority will assign, without recourse, all its rights to receive such rental payments and any payments under the Notes to Wells Fargo Bank, National Association, as trustee (the "Trustee"), for the benefit of the registered owners of SF2-58750.3 the Authority's 1996 Revenue Bonds (the "Bonds") to be issued under a Trust Agreement dated as of July 1, 1996 (the "Trust Agreement"), between the Authority and the Trustee; WHEREAS, in connection with the issuance of the Bonds, the Authority will distribute a Preliminary Official Statement for the Bonds (the "Preliminary Official Statement") in substantially the form presented to this meeting, and the Authority and the District will enter into a Continuing Disclosure Agreement (the "Continuing Disclosure 5 • Agreement ) in compliance with Securities Exchange Commission Rule 15c2-12(b)( ), and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the authorization of the execution and delivery of the Purchase Contract, the Site Lease, the Project Lease and the Continuing Disclosure Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the District is now duly authorized to execute and deliver the Purchase Contract, the Site Lease, the Project Lease and the Continuing Disclosure Agreement and to approve the Preliminary Official Statement and the distribution thereof; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Midpeninsula Regional Open Space District, as follows: Section 1. All of the foregoing recitals are true and correct, and this Board so finds and determines. Section 2. The Purchase Contract, in the form now on file with the Secretary of the Board, is hereby approved for execution by the District; and pursuant thereto the Notes shall be sold at a purchase price equal to the principal amount thereof plus accrued interest thereon, if any, and pursuant thereto the General Manager of the District, with the advice and consent of the Controller of the District, shall determine the interest rate or rates of the Notes, which such interest rate or rates shall not exceed eight per cent (8%) per annum and which such interest rate or rates shall be inserted therein with the approval of the officers executing the Purchase Contract, and pursuant thereto the President of the Board is hereby authorized to execute and the Secretary of the Board is hereby authorized to attest such execution and affix the seal of the District thereto and deliver the Purchase Contract on behalf of the District, with such changes therein as the officers executing the same may require or approve, such execution and delivery to be conclusive evidence of the approval of the Purchase Contract and the interest rates on the Notes stated therein. Section 3. The District is authorized to execute and deliver the Site Lease, and the President of the Board is hereby authorized and directed to execute the Site Lease for and on behalf of the District and the Secretary of the Board is hereby authorized and directed to attest such execution and to affix the seal of the District thereto and to deliver the Site Lease. As executed and delivered, the Site Lease shall be in substantially the form presented to this meeting, with such additions thereto or changes therein as the officers executing the Site Lease shall require or approve. Sn-58750,3 2 Section 4. The District is authorized to execute and deliver the Project Lease, and the President of the Board is hereby authorized and directed to execute the Project Lease for and on behalf of the District and the Secretary of the Board is hereby authorized and directed to attest such execution and to affix the seal of the District thereto and to deliver the Project Lease. As executed and delivered, the Project Lease shall be in substantially the form presented to this meeting, with such additions thereto or changes therein as the officers executing the Project Lease shall require or approve, including those relating to the total rental payments due under the Project Lease and the amount and schedule of the payments thereunder, such approval to be conclusively evidenced by the execution and delivery thereof. Section S. The District is authorized to execute and deliver the Continuing Disclosure Agreement, and the President of the Board is hereby authorized and directed to execute the Continuing Disclosure Agreement for and on behalf of the District and the Secretary of the Board is hereby authorized and directed to attest such execution and to affix the seal of the District thereto and to deliver the Continuing Disclosure Agreement. As executed and delivered, the Continuing Disclosure Agreement shall be in substantially the form presented to this meeting, with such additions thereto or changes therein as the officers i executing the Continuing Disclosure Agreement shall require or approve. Section 6. The sections of the Preliminary Official Statement relating to the District and the transactions contemplated herein, in the form now on file with the Secretary of the Board are hereby approved, and the General Manager of the District is hereby authorized to approve the distribution of the Preliminary Official Statement in substantially said form and to certify to the Authority on behalf of the District that said sections of the Preliminary Official Statement are accurate ini all material respects, and the Authority s hereby authorized to distribute copies of the Official Statement to persons who may be interested in the purchase of the Bonds. Section 7. The President of the Board, the Secretary of the Board, the General Manager of the District and the Controller of the District are hereby each authorized and directed, in the name and on behalf of the District, to take any and all steps and to execute and deliver any and all certificates, contracts and other documents, including a tax certificate and escrow agreement, which they might deem necessary or appropriate in order to consummate the delivery of the documents approved herein and to otherwise effectuate the purposes of this resolution; and such actions previously taken by the officers of the District are hereby ratified and confirmed. Section 8. This resolution shall take effect from and after its passage, approval and adoption. SF2-587503 3 PASSED AND ADOPTED on June 26, 1996, by the following vote: AYES: Directors NOES: ABSENT: Approved: President of the Board of Directors of the Midpeninsula Regional Open Space District (SEAL) Attest; Secretary of the Board of Directors of the Midpeninsula Regional Open Space District SF2-58750.3 4 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT RESOLUTION NO. 96- A RESOLUTION OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY OF A SITE LEASE, A PROJECT LEASE, A PURCHASE CONTRACT AND A CONTINUING DISCLOSURE AGREEMENT, AND APPROVING A PRELIMINARY OFFICIAL STATEMENT AND APPROVING CERTAIN OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the Board of Directors (the "Board") of the Midpeninsula Regional Open Space District (the "District") has duly authorized, pursuant to Resolution No. 96- (the "Note Resolution"), the issuance of Midpeninsula Regional Open Space District 1996 Refunding Promissory Notes (the "Notes") in a principal amount not to exceed $18,700,000 to provide funds for the purpose of refunding the District's Prior Notes (as defined in the Note Resolution) and acquiring necessary and proper lands and facilities for open space purposes of the District; WHEREAS, there has been submitted to the Board by the Midpeninsula Regional Open Space District Financing Authority (the "Authority") a form of Local Obligation Purchase Contract relating to the Notes (the "Purchase Contract"); WHEREAS, the District is authorized by law to lease real property for open space purposes of the District; WHEREAS, the District has determined that it is in the best interests of the District and its citizens and is necessary and proper for District purposes that certain real property described in that certain Site Lease to be dated as of July 1, 1996 (the "Site Lease") be leased to the Authority, and that the Authority lease such real property back to the District pursuant to the Project Lease (the "Project Lease"), proposed to be executed and entered into as of July 1, 1996, by and between the Authority and the District, in substantially the forms presented to this meeting; WHEREAS, under the Project Lease, the District will be obligated to make rental payments to the Authority to pay for such real property leased to it; WHEREAS, the Authority will assign, without recourse, all its rights to receive such rental payments and any payments under the Notes to Wells Fargo Bank, National Association, as trustee (the "Trustee"), for the benefit of the registered owners of SF2-58750.3 i t the Authority's 1996 Revenue Bonds (the "Bonds") to be issued under a Trust Agreement dated as of July 1, 1996 (the "Trust Agreement"), between the Authority and the Trustee; I WHEREAS, in connection with the issuance of the Bonds, the Authority will distribute a Preliminary Official Statement for the Bonds (the "Preliminary Official Statement") in substantially the form presented to this meeting, and the Authority and the District will enter into a Continuing Disclosure Agreement (the "Continuing Disclosure Agreement") in compliance with Securities Exchange Commission Rule 15c2-12(b)(5); and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the authorization of the execution and delivery of the Purchase Contract, the Site Lease, the Project Lease and the Continuing Disclosure Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the District is now duly authorized to execute and deliver the Purchase Contract, the Site Lease, the Project Lease and the Continuing Disclosure Agreement and to approve the Preliminary Official Statement and the distribution thereof; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Midpeninsula Regional Open Space District, as follows: Section 1. All of the foregoing recitals are true and correct, and this Board so finds and determines. Section 2. The Purchase Contract, in the form now on file with the Secretary of the Board, is hereby approved for execution by the District; and pursuant thereto the Notes shall be sold at a purchase price equal to the principal amount thereof plus accrued interest thereon, if any, and pursuant thereto the General Manager of the District, with the advice and consent of the Controller of the District, shall determine the interest rate or rates of the Notes, which such interest rate or rates shall not exceed eight per cent (8%) per annum and which such interest rate or rates shall be inserted therein with the approval of the officers executing the Purchase Contract, and pursuant thereto the President of the Board is hereby authorized to execute and the Secretary of the Board is hereby authorized to attest such execution and affix the seal of the District thereto and deliver the Purchase Contract on behalf of the District, with such changes therein as the officers executing the same may require or approve, such execution and delivery to be conclusive evidence of the approval of the Purchase Contract and the interest rates on the Notes stated therein. Section 3. The District is authorized to execute and deliver the Site Lease, and the President of the Board is hereby authorized and directed to execute the Site Lease for and on behalf of the District and the Secretary of the Board is hereby authorized and directed to attest such execution and to affix the seal of the District thereto and to deliver the Site Lease. As executed and delivered, the Site Lease shall be in substantially the form presented to this meeting g with such additions thereto or changes therein as the officers executing the Site Lease shall require or approve. sF2-58750.3 2 t Section 4. The District is authorized to execute and deliver the Project Lease, and the President of the Board is hereby authorized and directed to execute the Project Lease for and on behalf of the District and the Secretary of the Board is hereby authorized and directed to attest such execution and to affix the seal of the District thereto and to deliver the Project Lease. As executed and delivered, the Project Lease shall be in substantially the form presented to this meeting, with such additions thereto or changes therein as the officers executing the Project Lease shall require or approve, including those relating to the total rental payments due under the Project Lease and the amount and schedule of the payments thereunder, such approval to be conclusively evidenced by the execution and delivery thereof. Section 5. The District is authorized to execute and deliver the Continuing Disclosure Agreement, and the President of the Board is hereby authorized and directed to execute the Continuing Disclosure Agreement for and on behalf of the District and the Secretary of the Board is hereby authorized and directed to attest such execution and to affix the seal of the District thereto and to deliver the Continuing Disclosure Agreement. As executed and delivered, the Continuing Disclosure Agreement shall be in substantially the i form presented to this meeting, with such additions thereto or changes therein as the officers executing the Continuing Disclosure Agreement shall require or approve. Section 6. The sections of the Preliminary Official Statement relating to the District and the transactions contemplated herein, in the form now on file with the Secretary of the Board are hereby approved, and the General Manager of the District is hereby authorized to approve the distribution of the Preliminary Official Statement in substantially said form and to certify to the Authority on behalf of the District that said sections of the Preliminary Official Statement are accurate in all material respects, and the Authority is hereby authorized to distribute copies of the Official Statement to persons who may be interested in the purchase of the Bonds. Section 7. The President of the Board, the Secretary of the Board, the of the District are hereby each authorized and the Controller 1 Manager of the DistrictY Ge neral and directed, in the name and on behalf of the District, to take any and all steps and to execute and deliver any and all certificates, contracts and other documents, including a tax certificate and escrow agreement, which they might deem necessary or appropriate in order to consummate the delivery of the documents approved herein and to otherwise effectuate the purposes of this resolution; and such actions previously taken by the officers of the District are hereby ratified and confirmed. Section 8. This resolution shall take effect from and after its passage, approval and adoption. I i sF2-58750.3 3 PASSED AND ADOPTED on June 26, 1996, by the following vote: AYES: Directors NOES: ABSENT: Approved: President of the Board of Directors of the Midpeninsula Regional Open Space District (SEAL) Attest: Secretary of the Board of Directors of the Midpeninsula Regional Open Space District SF2-58750.3 4 f RECORDING REQUESTED BY AND OH&S DRAFT WHEN RECORDED RETURN TO: June 17, 1996 Orrick Herrington & Sutcliffe 400 Sansome Street San Francisco, California 94111 Attention: Ana Marie del Rio, Esq. SITE LEASE i by and between the MIDPENINSULA REGIONAL OPEN SPACE DISTRICT and the MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY Executed and Entered Into as of July 1, 1996 SF2-58454.3 TABLE OF CONTENTS Page PARTIES RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 1. Leased Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 2. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SECTION 3. Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SECTION 4. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SECTION 5. Owner in Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SECTION 6. Assignments and Subleases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SECTION 7. Right of Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SECTION 8. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SECTION 9. Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SECTION 10. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 SECTION 11. Waiver of Personal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 SECTION 12. Eminent Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 SECTION 13. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 SECTION 14. Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 SECTION 15. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 SECTION 16. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 SECTION 17. Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 SECTION 18. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 SECTION 19. Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1 SF2-58454.3 i SITE LEASE This Site Lease (this "Site Lease"), executed and entered into as of July 1, 1996, by and between the Midpeninsula Regional Open Space District, a regional open space district duly organized and existing under and by virtue of the laws of the State of California (the "District"), and the Midpeninsula Regional Open Space District Financing Authority, a joint exercise of powers entity duly organized and existing under and by virtue of the laws of the State of California (the "Authority"); WITNESSETH: WHEREAS, the Authority and the District have determined that it would be in the best interest of the District and the residents of the District to provide for the financing or refinancing of the acquisition of additional open space for the District; WHEREAS, the Authority intends to assist the District in financing or refinancing the acquisition of additional open space for the District by issuing its 1996 Revenue Bonds (the "Bonds"); WHEREAS, in order to implement such financing and refinancing, the Authority and the District have determined to execute and enter into this Site Lease, whereby the District will lease certain real property owned by the District to the Authority, and to execute and enter into the Project Lease dated as of the date hereof (the "Project Lease"), whereby the Authority will lease such real property back to the District; and WHEREAS, the District and the Authority certify that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Site Lease do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Site Lease; NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: SECTION 1. Leased Premises. The District hereby leases to the Authority and the Authority hereby hires from the District, on the terms and conditions hereinafter set forth, those certain parcels of real property situated in the State of California, County of Santa Clara, more particularly described in Exhibit A attached hereto and made a part hereof (the "Site"). SECTION 2. Term. The term hereof shall commence on July 1, 1996, or the date this Site Lease is recorded, whichever is later, and shall end on September 1, , unless such term is sooner terminated as hereinafter provided. If prior to September 1, SF2-58454.3 all base rental payments required under the Project Lease shall have been paid, or provision therefor made, the term hereof shall end ten (10) days thereafter or ten (10) days after written notice by the District to the Authority in accordance with Section 15 hereof, whichever is earlier. SECTION 3. Rental. The Authority shall pay to the District as and for the total rental payable hereunder the sum of [One Dollar ($1.00)] on or before the date of commencement hereof. SECTION 4. Purpose. The Authority shall use the Site solely for the purpose of leasing the Site to the District pursuant to the Project Lease; ,provided, that in the event of default by the District under the Project Lease the Authority may exercise the remedies provided in the Project Lease. SECTION 5. Owner in Fee. The District covenants that it is the owner in fee of the Site. SECTION 6. Assip-nments and Subleases. Unless the District shall be in default under the Project Lease, the Authority may not, without the prior written consent of the District, assign its rights hereunder or sublet the Site except to the trustee for the Bonds (the "Trustee"). SECTION 7. Right of Entrx. The District reserves the right for any of its duly authorized representatives to enter upon the Site at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary. for the preservation thereof. SECTION 8. Termination. The Authority agrees, upon the termination hereof, to quit and surrender the Site in the same good order and condition as the same was in at the time of commencement of the term hereunder, reasonable wear and tear excepted, and agrees that any permanent improvements existing upon the Site at the time of the termination hereof shall remain thereon and title thereto shall vest in the District. SECTION 9. Default. In the event the Authority shall be in default in the performance of any obligation on its part to be performed under the terms hereof, which default continues for thirty (30) days following notice and demand for correction thereof to the Authority, the District may exercise any and all remedies granted by law, except that no merger of this Site Lease and of the Project Lease shall be deemed to occur as a result thereof; provided, that the District shall have no power to terminate this Site Lease by reason of any default on the part of the Authority if such termination would affect or impair any assignment of the Project Lease then in effect between the Authority and the Trustee. SECTION 10. Quiet Enjoyment. The Authority at all times during the term hereof shall peaceably and quietly have, hold and enjoy the Site. SM-ssaso.s 2 SECTION 11. Waiver of Personal Liability. All liabilities hereunder on the part of the Authority shall be solely corporate liabilities of the Authority, and the District hereby releases each and every member of the board of directors of the Authority and officer and employee of the Authority of and from any personal or individual liability hereunder. No member of the board of directors of the Authority or officer or employee of the Authorityshall at an time or under an circumstances be individual) or personally liable Y Y Y P Y hereunder for anything done or omitted to be done by the Authority hereunder. SECTION 12. Eminent Domain. In the event the whole or any portion of the Site or the improvements thereon (including the Project, as that term is defined in the Project Lease, and herein the "Project") is taken by eminent domain proceedings, the interest of the Authority shall be recognized and is hereby determined to be the amount of the then unpaid principal components of base rental for the Project due under the Project Lease, including all accrued interest thereon, and the amount of the unpaid additional rental due under the Project Lease, and the balance of the award, if any, shall be paid to the District. SECTION 13. Amendment. This Site Lease may be amended by the parties hereto at any time to substitute another parcel or parcels of real property for any one or more of the parcels of real property constituting the Site, as long as the substituted parcel or parcels of real property are used for open space for the District; provided, that before any such substitution is approved by the District it shall have first prepared and filed with the Authority and the Trustee an M.A.I. appraisal by an independent real estate appraiser that the parcel or parcels of real property that are proposed to be so substituted have a fair market value at least equal to the parcel or parcels of real property that are proposed to be released from the terms of this Site Lease by virtue of such substitution, except that if the parcel or parcels of real property that are proposed to be so substituted have been purchased by the District within twelve (12) months of the amendment of this Site Lease, the District may use the purchase price thereof in determining the fair market value thereof; and provided further, that any parcel or parcels of real property that are proposed to be so substituted shall have no prior liens against them that would impair their use for the purpose intended by the District and shall have a useful life at least as long as the parcel or parcels being substituted out of this Site Lease. Following any such substitution, the Authority shall execute appropriate quitclaim deeds to the District for the parcel or parcels so substituted out of this Site Lease and the Authority shall file notice of any amendment to Standard & Poor's, 25 Broadway, New York, New York 10004, Attention: Public Finance Department, and to Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention. Public Finance Department, so long as such rating agency maintains a rating on the Certificates. SECTION 14. Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms hereof shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining agreements, conditions, covenants or terms hereof shall be affected thereby, and each provision of this Site Lease shall be valid and enforceable to the fullest extent permitted by law. st2-584543 3 SECTION 15. Notices. All approvals, authorizations, consents, demands, designations, notices, offers, requests, statements or other communications hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon the other party if delivered personallyor if mailed b United States registered or certified y g mail, return receipt requested, postage prepaid, and, if to the District, addressed to the Midpeninsula Regional Open Space District, 330 Distel Circle, Los Altos, California 94022, or, if to the Authority, addressed to the Midpeninsula Regional Open Space District Financing District, 330 Distel Circle, Los Altos, California 94022, with a copy to the Trustee, or to such other addresses as the respective parties may from time to time designate by notice in writing. SECTION 16. Governing Law. This Site Lease shall be governed by and construed and interpreted in accordance with the laws of the State of California. SECTION 17. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision hereof. SECTION 18. Seve�. If any agreement, condition, covenant or term hereof or any application hereof should be held by a court of competent jurisdiction to be invalid, void or unenforceable, in whole or in part, all agreements, conditions, covenants or terms hereof and all applications thereof not held invalid, void or unenforceable shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby. SECTION 19. Execution. This Site Lease may be executed and entered into in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. sF2-58454.3 4 IN WITNESS WHEREOF, the parties hereto have executed and entered into this Site Lease by their officers thereunto duly authorized as of the day and year first above written. MIDPENINSULA REGIONAL OPEN SPACE DISTRICT By (SEAL) President of the Board of Directors Attest: Secretary of the Board of Directors MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY By Chairperson Attest: Secretary SF2-58454.3 5 [ATTACH NOTARY ACKNOWLEDGEMENTS HERE] SF2-58454.3 i EXHIBIT A DESCRIPTION OF REAL PROPERTY All those certain parcels of real property situated in the State of California, County of Santa Clara, more particularly described below: SF2-58454,3 All that Certain Real Property Situated in the County of Santa Clara, State of California described as follows: PARCEL ONE: BEGINNING at a point on the Section line common to Section 25, Township 8 South, Range 1 West, M.D.B. & M. and Section 30, Township 8 South, Range I East, M.D.B. & M., distant thereon North 0* 08' 00" East 260.51 feet from the quarter section comer common to said Sections 25 and 30; thence from said point of beginning, and leaving said Section line North 88* 29' 10" East 159.40 feet to a point; thence along the arc of a curve to the right, from a tangent which bears South 21* 50' 54" West with a radius of 90.00 feet through a central angle of 10' 01' 02" for an arc distance of 15.74 feet to a point; thence South 31* 5 F 56" West 10.35 feet to the beginning of a tangent curve to the right; thence along last said curve with a radius of 90.00 feet through a central angle of 45* 40' 58" for an arc distance of 71.76 feet to a point; thence South 77' 32' 54" West 6.67 feet to the beginning of a tangent curve to the left; thence along last said.curve with a radius of 7.00 feet, thence through a central angle of 148* 20' 26" for an arc distance of 18.12 feet; thence South 70' 47' 32" East 37.30 feet to the beginning of a tangent curve to the left; thence along last said curve with a radius of 60.00 feet through a central angle of 43* 19' 02" for an arc distance of 45.36 feet to a point; thence North 65* 53' 26" East 54.06 feet to the beginning of a tangent curve to the right; thence along last said curve with a radius of 90.00 feet, thence through a central angle of 36' 52' 14" for an arc distance of 57.92 feet to a point; thence South 77* 14' 20" East 54.74 feet to the beginning of a tangent curve to the left; thence along last said curve with a radius of 185.00 feet through a central angle of 8* 32' 40" for an arc distance of 27.59 feet to a point; thence South 85* 47' 00" East 120.35 feet to the beginning of a tangent curve to the right; thence along last said curve with a radius of 135.00 feet through a central angle of 105* 22' 13" for an arc distance of 248.27 feet to a point; thence South 19* 35' 13" West 15.78 feet to the beginning of a tangent curve to the left; thence along last said curve with a radius of 45.00 feet through a central angle of 102* 56' 22" for an arc distance of 80.85 feet to a point; thence South 83* 21' 09" East 52.53 feet to the beginning of a tangent curve to the right; thence along last said curve with a radius of 85.00 feet through a central angle of 35* 53' 57" for an arc distance of 53.26 feet to a point; thence South 47* 27' 12" East 44.68 feet to the beginning of a tangent curve to the left; thence along last said curve with a radius of 30.00 feet through a central angle of 67* 23' 01" for an arc distance of 35.28 feet to a point; thence North 65* 09' 47" East 77.40 feet to the beginning of a tangent curve to the left; thence along last said curve with a radius of 60.00 feet, thence through a central angle of 14* 37' 51" for an arc distance of 15.32 feet to a point; I EXHIBIT-A Page of-LIM i thence North 50° 31' 56" East 140.22 feet to the beginning of a tangent curve to the right; thence along last said curve with a radius of 265.00 feet through a central angle of 8° 27' 43" for an arc distance of 39.14 feet to a point; thence North 58° 59' 39" East 42.33 feet to the beginning of a tangent curve to the right; thence along last said curve with a radius of 145.00 feet, thence through a central angle of 101° 00' 01" for an arc distance of 255.60 feet to a point; thence South 200 00' 20" East 84.92 feet to the beginning of a tangent curve to the right; thence along last said curve with a radius of 90.00 feet through a central angle of 16° 00' 56" for an arc distance of 25.16 feet to a point; thence South 3° 59' 24" East 58.20 feet to the beginning of a tangent curve to the left; thence along last said curve with a radius of 35.00 feet through a central angle of 39° 21' 29" For ! an arc distance of 24.04 feet to a point; thence South 430 20' 53" East 59.55 feet to the beginning of a tangent curve to the right; thence along last said curve with a radius of 65.00 feet through a central angle of 19* 14' 42" for an arc distance of 21.83 feet to a point; thence South 24° 06' 11" East 75.21 feet to the beginning on a tangent curve to the left; thence along last curve with a radius of 35.00 feet through a central angle of 36° 56' 15" for an arc distance of 22.56 feet to a point; thence South 61° 02' 26" East 148.45 feet to the beginning of a tangent curve to the left; thence along last said curve with a radius of 60.00 feet, thence through a central angle of V 17' 09" for an arc distance of 4.49 feet to a point; thence South 65° 19' 35" East 108.48 feet to the beginning of a tangent curve to the left; thence along last said curve with a radius of 60.00 feet through a central angle of 21° 14' 21" for an arc distance of 22.24 feet to a point; thence South 86° 33' 56" East 53.98 feet to the beginning of a tangent curve to the right; thence along last said curve with a radius of 65.00 feet through a central angle of 65° 01' 53" for an arc distance of 73.77 feet to a point; thence South 210 32' 03" East 40.13 feet to the beginning of a tangent curve to the right; thence along last said curve with a radius of 65.00 feet through a central angle of 21° 23' 42" for an arc distance of 24.27 feet to a point; thence South 00 08' 21" East 126.07 feet to the beginning of a tangent curve to the left; thence along last said curve with a radius of 35.00 feet through a central angle of 10° 10' 54" for an arc distance of 6.22 feet to a point; thence South 10° 19' 15" East 128.58 feet to the beginning of a tangent curve to the right; thence along last Said curve with a radius of 90.00 feet through a central angle of 5° 07' 27" for an arc distance of 8.05 feet to a point; thence South 5° 11' 48" East 104.94 feet to the beginning of a tangent curve to the left; thence along last said curve with a radius of 35.00 feet through a central angle of 360 29' 26" for an arc distance of 22.29 feet to a point; thence South 41° 41' 14" East 53.42 feet to the beginning of a tangent curve to the left; thence along last said curve with a radius of 35.00 feet through a central angle of 23° 20' 28" for an arc distance of 14.26 feet to a point; thence South 650 01' 42" East 45.04 feet to the beginning of a tangent curve to the left; thence along last said curve with a radius of 60.00 feet through a central angle of 18° 53' 46" for an arc distance of 2 EXHIBIT Page I.ofAi # 19.79 feet to a point; thence South 83° 55' 28" East 108.86 feet to the beginning of a tangent curve to the right; thence along last said curve with a radius of 90.00 i feet, thence through a central angle of 16° 41' 41" for an arc distance of 26.22 feet to a point; thence South 67° 13' 47" East 70.53 feet to a point; thence North 420 55' 02" East 195.64 feet to a point; thence North 810 34' 23" East 300.24 feet to a point; thence South 73° 49' 56" East 247.80 feet to an point; thence South 30 43' 53" East 230.49 feet to a point; thence South 4° 05' 08" West 140.36 feet to a point; thence South 48° 30' 13" West 173.56 feet to a point; thence South 81° 52' 12" West 70.71 feet to a point; thence South 18° 55' 29" West 85.75 feet to a point; thence South 550 54' 00" East 921.40 feet to a point; thence on the general Easterly line of that certain parcel of land described in the Deed from James Rolph III, et ux, to Alpha Land Company, a California corporation, dated February 13, 1964 recorded in the Office of the Recorder of the County of Santa Clara, State of California, on February 13, 1964 in Book 6383 of Official Records, page 114; thence along the general Easterly line of said land deeded to Alpha Land Company, North 10° 15' 00" West 634.61 feet and South 55° 54' 00" East 1118.63 feet to a point; thence at the Southernmost comer of that certain parcel of land described in the Deed from the Board of Commissioners of the Funded Debt of the City of San Jose to A. Pfister dated July 10, 1865 and recorded August 12, 1865 in Book "U" of Deeds, page 26; thence from said point up the center of said Hicks Creek and following along the Westerly boundary line of that certain tract of land described in the Deed from Mayor of the City of San Jose for and on behalf of the Mayor and the Common y ty Y Council of the City of San Jose to Nathaniel Skuse dated November 16, 1867 and recorded April 24, 1875 in Book 10 of Deeds, page 554, Southerly about 12 1/2 chains to a point; thence formerly the Westerly extremity of the Southerly boundary line of said tract of land described in the Deed to Skuse, hereinabove referred to; thence leaving said creek and along said Southerly boundary line of said lands of Skuse, South 74° 15' 00" East to the point of intersection thereof with the center line of a private road leaving to the lands now or formerly of Le Deit, said center line being along the high bank of said Hicks Creek, said center line also being the Westerly line of that certain parcel of land described in the Deed from James Rolph III, et ux, to Dario J. Amerio, et'al, dated November 1, 1958 and recorded November 12, 1958 in Book 4227 of Official Records, page 379; said same centerline being also in and along the Westerly line of that certain parcel of land delineated as Parcel No. 3 on the Map of the "Record of Survey being part of Pueblo Tract No. 3" which Map was recorded in Book 157 of Maps, page 36, Records of said Santa Clara County; thence along said center line the following courses and distances North 70° 56' 38" East 33.74 feet; North 24° 00' 28" West 150.43 feet, North 170 07' 21" East 139.57 feet, North 120 59' 07" West 105.44 feet, North 150 42' 42" East 89.70 feet, North 550 15' 15" East 114.26 feet, North 25° 19' 01" East 168.84 feet, North 560 26' 12" East 93.47 3 EXHIBIT Page of � W i feet, North 70 31' 50" East 105.03 feet, North 370 45' 04" East 124.19 feet, North 24* 16' 33' East 163.18 feet, North 40* 59' 30" East 239.61 feet, North 480 52' 36" East 181.76 feet and North 5* 13' 07" East 66.09 feet to the centerline of Reynolds Road; thence Northerly along said centerline of Reynolds Road, North 19* 41' 59" East 120.45 feet and North 510 34' 59" East 400.89 feet to the point at the Northwesterly comer of said parcel of land so conveyed to Amerio et al, in the centerline of Hicks Road; thence along said centerline of Hicks Road, being the Northerly line of said parcel of land so conveyed to Amerio, et al, South 580 37' 41" East 27.33 feet, thence South 740 38' 01" East 309.54 feet, thence South 670 08' 01" East 378.84 feet, thence North 890 06' 59" East 246.18 feet, thence South 68* 53' 01" East 95.04 feet and South 67 0 08' 01 East 64.15 feet to the intersection thereof with the Westerly line of that certain parcel of land described in the Deed to the La Margaretta Mining Company, recorded May 26, 1909 and filed in Book 348 of Deeds, page 84, Records of said Santa Clara County; thence Northerly along said Westerly line of said parcel so conveyed to La Margaretta. Mining Company, North 23* 25' 32" East 56.86 feet to the centerline of Arroyo Seco de los Capitancillos thence Westerly along said center line of Arroyo Seco de los Capitancillos, North 710 45' 00" West 199.78 feet, thence South 88* 49' 00" West 165.00 feet, thence North 67" 00' 00" West 1143.12 feet, thence to the most Southerly comer of that certain 2.57 acre tract of land conveyed by John D. MacKenzie to Andrew S. MacKenzie, et al, by Deed dated December 23, 1904 and recorded January 6, 1917 in Volume 452 of Deeds, page 89, Records of said Santa Clara County; thence leaving said centerline of Arroyo Seco de los Capitancillos and running along the Southerly line of said 2.57 acre tract of land North 760 57' 12" West 157.48 feet to the Southwesterly comer thereof; thence along the Westerly lines of said 2.57 acre tract of land North 5* 40' 00" East 198.00 feet to a point; thence on the general Northerly line of said land deeded to Alpha Land Company, hereinabove referred to; thence along the general Northerly line of said land deeded to Alpha Land Company, the following courses and distances; North 39* 30' 00" West 411.14 feet, thence South 83* 16' 55" West 216.08 feet, thence North 690 11' 38" West 194.59 feet, thence North 48* 59' 56" West 327.97 feet, thence North 64* 14' 22" West 481.34 feet, thence North 9 0 02' 37" West 372.26 feet, thence North 42* 31' 03" West 208.10 feet, thence North 62* 45' 55" West 413.63 feet, thence North 230 42' 28" West 304.07 feet, thence North 480 10' 18" West 322.56 feet, thence South 89* 17' 10" West 321.54 feet, thence South 54* 08' 14" West 278.32 feet, thence North 47* 34' 45" West 447.17 feet, thence North 49* 35' 02" west 405.50 feet and North 32* 13' 06" West 159.72 feet to a point; thence leaving the general Northerly line of said land deeded to Alpha Land Company South 69* 31' 40" West 64.41 feet to a point; thence South. 9 0 31' 25" East 174.52 feet to a point; thence South 21* 10' 56" West 29.82 feet to the beginning of a tangent curve to the right, thence along last said curve with a radius of 220.00 feet through a 4 EXHIBIT A Page -%Lof central angle of 57° 55' 58" for an arc distance of 222.44 feet to a point; thence South 79° 06' 54" West 113.23 feet to the beginning of a tangent curve to the right; thence along last said curve with a radius of 220.00 feet, thence through a central angle of 28° 45' 45" for an arc distance of 110.44 feet to a point; thence North 72° 07' 21" West 183.23 feet to the beginning on a tangent curve to the left; thence along last said curve with a radius of 180.00 feet, through a central angle of 59° 19' 05" for an arc distance of 186.35 feet to a point; thence North 33° 20' 40" West 311.93 feet to a point; thence South 31° 44' 14" West 240.16 feet to a point; on the line common to Section 25, Township 8 South, Range 1 West, M.D.B. & M., and Section 30, Township 8 South, Range 1 East, M.D.B. & M., distant thereon South 0° 08' 00" West 1063.92 feet from the Northerly common comer thereof; thence along the line common to said Sections 25 and 30, South 0° 08' 00" West, 1400.05 feet to the point of beginning. EXCEPTING THEREFROM that certain strip of land or road which runs along the Westerly side of Arroyo Seco and which was conveyed by the City of San Jose to the County of Santa Clara, by Deed dated August 19, 1867 and recorded in said County Recorders Office of said last named day in Volume "wit I of Deeds, page 401, and by deed dated November 6, 1867 and recorded in Volume "W" of Deeds, page 501. ALSO EXCEPTING THEREFROM the interest granted in the Deed from Jessie S. Gregory, Harry S. Young, R.G. Hudson, Bert F. Rabinowitz and Matt Wahrhaftig, to County of Santa Clara, a body politic and corporate and a political subdivision of the State of California dated December 21, 1939 and recorded January 3, 1940 In Book 961 of Official Records, page 461. ALSO EXCEPTING THEREFROM: the interest granted In the Deed from Jessie S. Gregory, Harry S. Young, R.G. Hudson, Bert F. Rabinowitz and Matt Wahrhafting to County of Santa Clara, a body politic and corporate and a political subdivision of the State of California dated December 21, 1939 and recorded January 3, 1940 in Book 961 of Official Records, page 463. PARCEL TWO: BEGINNING at the comer common to Sections 19 and 30, T. 8 S., R. 1 E., M.D.B. & M., and Sections 24 and 25, T. 8 S., R. 1 W., M.D.B. & M. thence from said point of beginning along the Westerly or Southwesterly boundary line of Lot 39 (the said Lot 39, together with Lot 40 in Township 8 South, Range 1 West, M.D.B. & M., comprising that portion of the Rancho Canada de los Capitancillos, which was finally confirmed to Guadalupe Mining Company and 5 EXHIBIT Page of� which was granted and conveyed to said Guadalupe Mining Company by United States Patent dated September 20, 1871 and recorded October 12, 1871 in Volume "E" of Patents, at page 31, to which said patent and the record thereof reference is hereby made for a more particular description of said Lot 39), South 34° 00' 00" East 111.54 feet, South 15* 15' 00" East 297.00 feet, and South 60' 00' 00" East 52.80 feet to the Northwesterly comer of the tract of land granted and conveyed by the United States of America to James V. Coleman, et al, by Patent dated March 18, 1901 recorded March 29, 1901 in Volume "G" of Patents, at page 1 said Northwesterly comer being the True Point of Beginning of the parcel of land herein described, thence from said True Point of Beginning, leaving said boundary line of said Lot 39, and running along the Westerly boundary line of said tract of land conveyed by and described in said last mentioned patent, the following courses and distances, to wit: South 17° 15' 00" West (at 60.72 feet crossing the center of bridge) 377.52 feet, South 220 15' 00" East 118.14 feet South 30° 00' 00" West 229.68 feet to a point in the Mt. Diablo Meridian from which said comer common to Sections 19, 30 and 24 and 25 bears North 0" 08' 00" East, 1063.92 feet; thence leaving said patent line and running along said Meridian, South 0° 08' 00" West, 1660.56 feet to the quarter section comer between Section 25 in T. 8 S., R. 1 W., and Section 30 in T. 8 S., R. 1 E. thence along the quarter section line running East and West through said Section 25, South 88° 36' 00" West 1273.14 feet to a point in the center of a creek being also in the Westerly boundary line of said tract of land patented as aforesaid; thence along said Westerly line, South 33° 30' 00" West 602.58 feet, South 18° 30' 00" East 427.68 feet, South 4° 00' 00" West 673.86 feet, South 51° 00' 00" East 306.24 feet, South 40 30' 00" East 190.08 feet, South 37" 00' 00" West 578.82 feet, South 40 30' 00" West (at 290.4 feet crossing the Section line between Sections 25 and 36, T. 8 S., R. 1 W.) 1124.64 feet, South 29" 30' 00" West 1329.90 feet, South 200 30' 00" West 1056.00 feet, South 8* 00' 00" West 274.56 feet, South 29° 00' 00" West 475.20 feet, South 6° 00' 00" WeSt 412.50 feet and South 29" 30' 00" West 718.74 feet to the Southwest comer of said tract of land conveyed by the United States Patent to said James V. Coleman, et al, at which comer there was formerly set an old post marked "G Nol. 3"; thence leaving the Westerly boundary line of said last mentioned tract of land and running on and along the Southerly boundary line thereof, South 46° 00' 00" East (at 1056 feet intersecting and crossing the Township line between Townships 8 and 9 South Range 1 West) 3498.00 feet to the most Southerly comer of said last mentioned tract of land at which was formerly set an oak post marked "G No. 4" thence on and along the Easterly boundary line of said tract of land conveyed by the United States of America to said James V. Coleman, et al, in and by the patent aforesaid the following courses and distances, to wit: North 120 30' 00" East 198.00 feet, North 30 00' 00" East 1148.40 feet, North 24° 30' 00" East (at 374.22 feet crossing and intersecting township line) 651.42 feet, North 11° 00' 6 T EXl-11 B 9 1v of 1. 00" West 230.34 feet, North 220 30' 00" East 792.00 feet, North 10° 00' 00" West 246.84 feet, North 34° 00' 00" West 264.00 feet, North 16° 00' 00" East 409.86 feet, North 440 00 00 East 269.94 feet North 22 30 00 East 340.56 feet to the point from which the quarter section corner between Section 36, in Township 8 South Range 1 West and Section 31 in Township 8 South Range 1 East bears due North 143.22 feet, thence North 77° 45' 00" East 681.78 feet, South 890 00' 00" East 449.46 feet, South 53° 45' 00" East 429.00 feet, North 690 00' 00" East 861.30 feet, North 19° 15' 00" East 541.20 feet, North 540 00' 00" East 708.84 feet, North 230 00' 00" East 477.18 feet, North 550 30' 00" East 422.40 feet, North 20 00' 00" West 638.88 feet to a point in the Westerly boundary line of Old Pueblo of San Jose, at which there was formerly set a post marked "G No. 4 1/2"; thence on and along said Pueblo line North 10' 15' 00" West 1881.66 feet, more or less, to the Southeasterly and most Southerly comer of the tract of land which was conveyed by the Commissioners of the Funded Debt of the City of San Jose, to the Santa Clara Mining Association of Baltimore, by Deed dated July 10, 1865 and recorded July 29, 1865 in Volume "T" of Deeds, page 790 thence leaving said Easterly boundary line of said tract of land patented by the United States of America to James V. Coleman, et al, hereinabove referred to; and running thence South 55° 45' 00" East on and along the Southwesterly boundary line of that certain parcel of land which was conveyed or intended to be conveyed by, and described in that certain Deed executed by the Board of Commissioners of the Funded Debt of the City of San Jose, to A. Pfister dated July 10, 1865 and recorded August 12, 1865 in Volume "U" of Deeds, page 26, 1181.40 feet, more or less, to a point in the center of a small creek known as and called Hicks Creek and which creek runs between said parcel of land conveyed to A. Pfister and that tract of land which is described in and was conveyed by that certain Deed made by J.A. Quimby, as the Mayor of the City of San Jose for and on behalf of the Mayor and the Common Council of the City of San Jose to Nathaniel Skuse dated November 16 1867 and recorded April 24 1875 in Volume 10 of Deeds, page 554, (said last mentioned point in said creek being the Southernmost and most Southerly comer of said parcel of land conveyed to A. Pfister); thence Southerly and up the center of said Hicks Creek and following along the Westerly boundary line of said tract of land conveyed to Nathaniel Skuse and hereinabove referred to, about 12 1/2 chains to a point formerly the Westerly extremity of the Southerly boundary line of said tract of land conveyed to Skuse, hereinabove referred to thence leaving said creek and along the said Southerly boundary line of the lands of Skuse, South 74° 15' 00" East to the point of intersection thereof with the center line of a private road leading to the lands now or formerly of Le Deit, said centerline being along the high bank of said Hicks Creek said centerline also being the Westerly line of that certain parcel of land described in the Deed from James Rolph III, et ux, to Dario J. Amerio, et al, dated November 1, 1958 and recorded November 12, 1958 in 7 EX HINT A Aft Fa3e -- 1 of It-AW Book 4227 of Official Records, at page 379, same said centerline being also in and along the Westerly line of that certain parcel of land delineated as Parcel No. 3, upon the Map of the "Record of Survey being Part of Pueblo Tract No. 3" which map was recorded in Book 157 of Maps, at page 36, records of said Santa Clara County thence along said centerline the following courses and distances: North 70° 56' 38' East 33.74 feet, North 240 00' 28" West 150.43 feet, North 170 07' 21" East 139.57 feet, North 12* 59' 07" West 105.44 feet, North 15* 42' 42" East 89.70 feet, North 550 15' 15" East 114.26 feet, North 250 19' 01" East 168.84 feet, North 560 26' 12" East 93.47 feet, North 7° 31' 50" East 105.03 feet, North 37° 45' 04" East, 124.19 feet, North 240 16' 33" East 163.18 feet, North 40° 59' 30" East 239.61 feet, North 48° 52' 36" East 181.76 feet and North 5° 13' 07" East 66.09 feet to the centerline of Reynolds Road; thence Northerly along said centerline of Reynolds Road, North 190 41' 59" East 120.45 feet and North 51° 34' 59" East 400.89 feet to a point at the Northwesterly comer of said parcel of land so conveyed to Amerio, et al, in the centerline of Hicks Road thence along said centerline of Hicks Road, being the Northerly line of said parcel of land so conveyed to Amerio, et al, South 58° 37' 41" East 27.33 feet, South 740 38' 01" East 309.54 feet, South 67° 08' 01" East 378.84 feet, North 89° 06' 59" East 246.18 feet, thence South 680 53' 01" East 95.04 feet and South 670 08' 01" East 64.15 feet to the intersection thereof with the Westerly line of that certain parcel of land described in the Deed to the La Margaretta Mining Company, recorded May 26, 1909 and filed in Book 348 of Deeds, page 84, Records of Santa Clara County thence Northerly along said Westerly line of said parcel so conveyed to Le Margaretta Mining Company, North 230 25' 32" East 56.86 feet to the centerline of Arroyo Seco de los Capitancillos; thence Westerly along said centerline of Arroyo Seco de los Capitancillos, North 71° 45' 00" West 199.78 feet, South 88° 45' 00" West 165.00 feet, North 67° 00' 00" West 1143.12 feet to the most Southerly comer of that certain 2.57 acre tract of land conveyed by John D. MacKenzie to Andrew S. MacKenzie, et al, by Deed dated December 23, 1904 and recorded January 6, 1917 in Volume 452 of Deeds, at page 89, Records of Santa Clara County thence leaving said centerline of Arroyo Seco de los Capitancillos and running along the Southerly line of said 2.57 acre tract of land North 760 57' 12" West, 157.48 feet to the Southwesterly corner thereof thence along the Westerly lines of said 2.57 acre tract of land North 5° 40' 00" East 198.00 feet and North 390 30' 00" West 411.14 feet to the intersection thereof with the same aforesaid centerline of Arroyo Seco de los Capitancillos thence leaving said Westerly line of the 2.57 acre tract South 830 16' 55" West 216.08 feet, thence North 69° 11' 38" West (at 144.59 feet a found Granite monument marked "CCCF" bears North 45* 00' 00" East 66.00 feet ) 194.59 feet, North 480 59' 56" West 327.97 feet, North 640 14' 22" West 481.34 feet, North 9° 02' 37" West 372.26 feet, North 420 31' 03" West 208.10 feet, North 62° 45' 55" West 413.63 feet, North 23° 42' 28" West 304.07 feet, North 8 EXHl611' Pa-,e -of� 48° 10' 18" West 322.56 feet, South 890 17' 10" West 321.54 feet, South 540 08' 14" West 278.32 feet, North 47* 34' 45" West 447.17 feet, North 49° 35' 02" West 405.50 feet, North 320 13' 05" West 159.72 feet, North 16° 39' 40" West 257.40 feet, North 70° 17' 37" West 163.75 feet, South 82° 08' 09" West 237.34 feet, North 860 21' 29" West 291.43 feet, North 73° 10' 57" West 100.26 feet, North 260 04' 03" West 66.54 feet; thence South 17° 15' 00" West 16.36 feet to the TRUE POINT OF Beginning. EXCEPTING THEREFROM that certain strip of land or road which runs along the Westerly side of Arroyo Seco and which was conveyed by the City of San Jose to the County of Santa Clara, by Deed dated August 19, 1867 and recorded in said County Recorders Office on said last named day in Volume "W" of Deeds, page 401 and by deed dated November 6, 1867 and recorded in Volume "W" of Deeds, page 501. i ALSO EXCEPTING THEREFROM the interest granted in the Deed from Jessie S. Gregory, Harry S. Young, R.G. Hudson, Bert F. Rabinowitz and Matt Wahrhaftig, to County of Santa Clara, a body politic and corporate and a political subdivision of the State of California, dated December 21, 1939 and recorded January 3, 1940 in Book 961 of Official Records, page 461. ALSO EXCEPTING THEREFROM all that portion thereof lying within the bounds of Parcel One hereinabove described. EXCEPTING FROM PARCELS ONE and TWO above described, the following; BEGINNING at the comers common to Sections 19 and 30, Township 8 South, Range 1 East, Mount Diablo Base and Meridian and Sections 24 and 25 Township 8 South Range 1 West Mount Diablo Base and Meridian thence south along the Meridian line 1063.92 feet being the True Point of Beginning of the parcel of land herein described, thence North 30 degrees 00' 00" East 229.68 feet, thence; North 22 degrees 15' 00" West 118.14 feet, thence; North 17 degrees 15' 00" East 377.52 feet, thence; North 17 degrees 15' 00" East 16.36 feet, thence; South 26 degrees 04' 03" East 66.54 feet, thence; South 73 degrees 10' 57" East 100.26 feet, thence; South 86 degrees 21' 29" East 291.43 feet, thence; North 82 degrees 08' 09" East 237.34 feet, thence; South 70 degrees 17' 37" East 163.75 feet, thence; South 16 degrees 39' 40" East 257.40 feet, thence; South 32 degrees 13' 05" East 159.72 feet, thence; South 49 degrees 35' 02" East 405.50 feet, thence; South 47 degrees 34' 45" East to the point of intersection between a line described by the course running from the last described point South 47 degrees 34' 45" East 447.17 feet and the south line of the north half of the northwest one quarter of section 30, Township 8 South, Range 1 East, thence westerly along said south line of the north half of the northwest one quarter of 9 EXHIBIT - 0f section 30 to the point of intersection with the westerly line of said section 30, thence northerly along said westerly line, also being said Meridian line above described to the True Point of Beginning. Said parcel being shown on Santa Clara County Tax Assessor's Map as parcel 575-05-001. PARCEL THREE: LOTS 2, 7, 9 and 16 of Section 36, Township 8 South, Range I West, M.D.B. & M.; Lots 3, 6, 7, 9 and 10 of Section 31 Township 8 South, Range I East, M.D.B. & M., the same together being and including all the property that was conveyed by Patent executed by the United States of America to Thomas P.B. Hicks, dated February 8, 1892 and recorded September 15, 1897 in Volume "F" of Patents, at page 43 1; and also all the property that is described in and was conveyed by that certain Patent executed by the United States of America to Thomas P.B. Hicks dated April 10, 1889 and recorded July 1, 1889 in Volume "D" of Patents, page 298. EXCEPTING FROM PARCELS ONE, TWO and THREE above described, the following: An undivided seventeen and one-tenth (17.1%) interest in all oil, gas, gasoline and in all uranium (but not in any other minerals) now underlying and within or that may hereafter be produced, saved, sold and delivered from the hereinabove described premises, as reserved by Matt Wahrhaftig and Alma L. Wahrhaftig, his wife, in that certain Deed dated December 30, 1955 and recorded January 12, 1956 in Book 3384 of Official Records, page 641. An undivided six and five tenths per cent (6.5%) interest in all oil, gas, gasoline and in all uranium (but not in any other minerals) now underlying and within, or that may hereafter be produced, saved, sold and delivered from the hereinabove described premises; as reserved by Francesco Couteau, also known as Francesco Couteau, in that certain Deed dated December 30, 1955 and recorded January 12, 1956 in Book 3385 of Official Records-, page 6. An undivided one and four tenths per cent (1.4%) interest in all oil, gas, gasoline and in all uranium (but not in any other minerals) now underlying and within or that may hereafter be produced, saved, sold and delivered from the hereinabove described premises, as reserved by B.F. Rabinowitz and Delcona Rabinowitz, his wife, in that certain deed dated December 30, 1955 and recorded January 12, 1956 in Book 3385 of Official Records, page It. 10 EXHIBIT pas"e 10 Of It PARCEL FOUR: LOTS l, 2, 7 and 8 in Section 1, Township 9 South, Range 1 West, M.D.B. & M., according to the United States Government Survey. PARCEL FIVE: THE NORTHWEST QUARTER (NW 1/4) of Section 6, Township 9 South, Range 1 East, Mount Diablo Base and Meridian, according to the United States Government Survey. EXCEPTING THEREFROM an undivided one-half (1/2) of all interest in all oil, gas, gasoline and in all uranium (but not in any other minerals) now underlying and within, or that may hereafter be produced, saved, sold, and delivered from the above described premises, as reserved by James R. Tormey and Warren Tormey and Hope A. Tormey and Virginia H. Tormey, in that certain Deed dated August 1, 1956 and recorded August 20, 1956 in Book 3582 of Official Records, page 439. PARCEL SIX: AN EASEMENT for the installation and maintenance of subsurface lines for water and other utilities, within a strip of land 10.00 feet in width, the centerline of which is being more particularly described as follows. BEGINNING at the corner common to Section 19 and 30, T. 8 S., R. 1 E., M.D.B. & M., and Sections 24 and 25, T. 8 S., R. 1 W., M.D.B. & M. thence from said point of beginning along the Westerly and Southwesterly boundary line of Lot 39 (the said Lot 39, together with Lot 40 in Township 8 South Range 1 West, M.D.B.& M., comprising that portion of the Rancho Canada de los Capitancillos, which was finally confirmed to Guadalupe Mining Company, and which was granted and conveyed to said Guadalupe Mining Company by United States Patent dated September 20, 1871 and recorded October 12, 1871 in Volume "E" of Patents, at page 31, to which said patent and the record thereof reference is hereby made for a more particular description of said Lot 39) South 340 00' 0011 East 111.54 feet, South 150 15' 00" East 297.00 feet, and South 600 00' 00" East 52.80 feet to the Northwesterly comer of the tract of land granted and conveyed by the United States of America to James V. Coleman, et al, by Patent dated March 18, 1901 and recorded March 29, 1901 in Volume "G" of Patents, at page 1, thence North 17° 15' 00" East 16.36 feet to the centerline of Arroyo de 11 EXHIBIT P oc a of a los Capitancillos, thence along said centerline South 26° 04' 03" East 15.00 feet to the True Point of Beginning of the herein described centerline. Thence from said True Point of Beginning, leaving said centerline of Arroyo de los Capitancillos, North 24° 05' 19" East 80.66 feet to a point on an existing dirt roadway known as Guadalupe Mines Road; thence following the general alignment of last described dirt roadway, North 31° 40' 09" West 95.00 feet, North 16° 40' 09" West 470.00 feet, North 10° 40' 09" West 237.97 feet, North 14° 39' 51" East 208.95 feet, North 510 59' 51" East 272.08 feet, North 72° 09' 51" East 312.66 feet, and North 860 51' 48" East 493.51 feet to the most Southerly comer of that certain 22.589 acre parcel of land shown upon the Map of the "Record of Survey of a Portion of Lot 39 of Rancho Canada de los Capitancillos located in Fractional Sections 17 and 19, T. 8 S., R. 1 E., M.D.B.& M." which Map was recorded in Book 67 of Maps, at page 29, records of said Santa Clara County; North 72° 02' 31" East 134.42 feet, North 47" 45' 12" East 203.65 feet, thence and North 310 08' 05" East, 466.37 feet. i PARCEL SEVEN: A NON-EXCLUSIVE RIGHT OF WAY for the installation and maintenance of public utilities over a strip of land 25 feet in width, the general Westerly line of which is described as follows: COMMENCING at an iron pipe marked "Sta. 13 + 14.87 on the County Transit Book No. 95, page 64", in the Northerly line of the 194.793 acre parcel of land shown on the Survey Map filed for record in the Office of the Recorder of the County of Santa Clara, on March 3, 1956 in Book 67 of Maps, page 29, distant thereon West 3175.77 feet from the Northeasterly corner thereof; thence South 15° 37' 00" West 261.02 feet to an iron pipe; thence South 8° 56' 36" West 178.62 feet to an iron pipe; thence South 20 55' 00" West 478.06 feet to an iron pipe; thence South 28° 43' 41" West, 210.62 feet to an iron pipe; thence South 31° 04' 47" West 500.67 feet to an iron pipe. 537-10-005 562-08-008 562-10-005, -006, -007 575-04-007 575-05-001, -002 575-09-008, -011 12 EXHIBIT Page _120°f RECORDING REQUESTED BY AND OH&S DRAFT WHEN RECORDED RETURN TO: June 17, 1996 Orrick, Herrington & Sutcliffe 400 Sansome Street San Francisco, California 94111 Attention: Ana Marie del Rio, Esq. PROJECT LEASE by and between the MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY and the MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Executed and Entered Into as of July 1 1996 i SF2-58316.3 TABLE OF CONTENTS Page PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE I DEFINITIONS SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE H THE PROJECT SECTION 2.01. Lease of the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SECTION 2.02. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 SECTION 2.03. Right of Entry and Inspection . . . . . . . . . . . . . . . . . . . . . . . . 6 SECTION 2.04. Prohibition Against Encumbrance or Sale . . . . . . . . . . . . . . . . . 6 SECTION 2.05. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 ARTICLE III TERM OF THE PROJECT LEASE SECTION 3.01. Term of the Project Lease . . . . . . . . . . . . . . . . . . . . . . . . . . 7 ARTICLE IV USE OF PROCEEDS SECTION 4.01. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 ARTICLE V RENTAL PAYMENTS SECTION 5.01. Rental Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 (a) Base Rental Payments . . . . . . . . . . . . . . . . . . . . . . . 7 (b) Additional Rental Payments . . . . . . . . . . . . . . . . . . . 8 SECTION 5.02. Annual Budgets; Reporting Requirements . . . . . . . . . . . . . . . . . 9 SECTION 5.03. Application of Rental Payments . . . . . . . . . . . . . . . . . . . . . . . 9 SECTION 5.04. Rental Abatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 SECTION 5.05. Prepayment of Base Rental Payments . . . . . . . . . . . . . . . . . . . 9 SF2-59316.3 i Page SECTION 5.06. Obligation to Make Rental Payments . . . . . . . . . . . . . * 10 SECTION 5.07. Tax Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 ARTICLE VI TITLE TO THE PROJECT SECTION 6.01. Title to the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 ARTICLE VII MAINTENANCE; TAXES AND OTHER CHARGES; INSURANCE SECTION 7.01. Maintenance of the Project by the District . . . . . . . . . . . . . . . . 11 SECTION 7.02. Taxes, Governmental Charges and Utility Charges . . . . . . . . . . . 11 SECTION 7.03. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 SECTION 7.04. Advances . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 13 SECTION 7.05. Continuing Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 ARTICLE VIII CONDEMNATION SECTION 8.01. Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 ARTICLE IX DISCLAIMER OF WARRANTIES; USE OF THE PROJECT; ENVIRONMENTAL MATTERS SECTION 9.01. Disclaimer of Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 SECTION 9.02. Use of the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 SECTION 9.03. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 ARTICLE X ASSIGNMENT AND INDEMNIFICATION SECTION 10.01. Assignment by Authority . . . . . . . . . . . . . . . . . . . . . . . . . . 15 SECTION 10.02. Assignment by Lessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 SECTION 10.03. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 SP2-58316.3 ii Page ARTICLE XI DEFAULT SECTION 11.01. Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 ARTICLE XII DISCHARGE OF OBLIGATIONS SECTION 12.01. Discharge of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 17 ARTICLE XIII MISCELLANEOUS SECTION 13.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 SECTION 13.02. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 SECTION 13.03. Third Party Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 SECTION 13.04. Net Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 SECTION 13.05. Amendments . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 SECTION 13.06. Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 SECTION 13.07. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 SECTION 13.08. Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 SECTION 13.09. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 SECTION 13.10. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 20 EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 EXHIBIT A DESCRIPTION OF REAL PROPERTY . . . . . . . . . . . . . . . . A-1 EXHIBIT B BASE RENTAL PAYMENT SCHEDULE . . . . . . . . . . . . . . B-1 SF2-59316.3 ill I I PROJECT LEASE This Project Lease (this "Project Lease"), executed and entered into as of July 1, 1996, by and between the Midpeninsula Regional Open Space District Financing Authority, a joint exercise of powers entity duly organized and existing under and by virtue of the laws of the State of California (the "Authority"), and the Midpeninsula Regional Open Space District, a regional open space district duly organized and existing under and by virtue of the laws of the State of California (the "District"); WITNESSETH: WHEREAS, the Authority intends to assist the District in financing or refinancing the acquisition of additional open space for the District by issuing its 1996 Revenue Bonds (the "Bonds"); WHEREAS, in order to implement such financing and refinancing, the Authority and the District have executed and entered into a Site Lease dated as of July 1, 1996 (the "Site Lease"), whereby the District will lease certain real property owned by the District to the Authority, and the Authority and the District have determined to execute and enter into this Project Lease, whereby the Authority will lease such real property (the "Project") back to the District; WHEREAS, under this Project Lease, the District will be obligated to make base rental payments to the Authority for the lease of the Project, and such base rental payments will be used to pay a portion of the principal of and interest on the Bonds; and WHEREAS, the Authority and the District hereby certify that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Project Lease do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Project Lease; NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS: ARTICLE I DEFINITIONS SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes hereof and of any amendment hereof have the SF2-58316.3 meanings defined herein, the following definitions to be equally applicable to both the in 1 s u ar and plural forms f f h o an o the terms g p y defined herein: Applicable Environmental Laws. The term "Applicable Environmental Laws" means and shall include, but shall not be limited to, CERCLA, RCRA, the Federal Water Pollution Control Act, 33 USC Section 1251 et sew., the Clean Air Act, 42 USC Section 7401 et seq., HWCL, HSAA, the Porter-Cologne Act, the Air Resources Act, Cal. Health & Safety Code Section 3900 et the Safe Drinking Water & Toxic Enforcement Act, Cal. Health & Safety Code Section 25249.5, and the regulations thereunder, and any other local, state and/or federal laws or regulations, whether currently in existence or hereafter enacted, that govern I (i) the existence, cleanup and/or remedy of contamination on property; (ii) the protection of the environment from spilled, deposited or otherwise emplaced contamination; (iii) the control of hazardous wastes; or (iv) the use, generation, transport, treatment, removal or recovery of Hazardous Substances, including building materials. Authority The term "Authority" means the Midpeninsula Regional Open Space District Financing Authority, a joint exercise of powers entity duly organized and existing under and by virtue of the laws of the State. Base Rental Payments The term "Base Rental Payments" means all amounts payable by the District under Section 5.01(a). Bonds The term "Bonds" means the Midpeninsula Regional Open Space District Financing Authority 1996 Revenue Bonds issued by the Authority under and pursuant to the Trust Agreement, the proceeds of which are to be used as the source of funds for the acquisition of open space and the payment of the expenses incidental thereto. Business Dad I The term "Business Day" means any day (other than a Saturday or Sunday) on which the corporate trust department of the Trustee is open for business at its corporate trust office in San Francisco or Los Angeles, California. SF2-58316.3 2 Code The term "Code" means the Internal Revenue Code of 1986 and the regulations of the United States Department of the Treasury issued thereunder, and in this regard reference to any particular section of the Code shall include reference to all successor sections of the Code. Distric The term "District" means the Midpeninsula Regional Open Space District, a regional open space district duly organized and existing under and by virtue of the laws of the State. Event of Default The term "Event of Default" means an event described as such in Section 11.01. Federal Securities "Federal Securities" means United States of America Treasury bins, notes, bonds or certificates of indebtedness, or obligations for which the full faith and credit of the United States of America are pledged for the payment of interest and principal, or securities evidencing direct ownership interests in such obligations or in specified portions of the interest on or principal of such obligations that are held by a custodian in safekeeping on behalf of the owners of such securities. Fiscal Year The term "Fiscal Year" means the twelve-month period termination on March 31 of each year, or any other annual accounting period hereafter selected and designated by the District as its Fiscal Year in accordance with applicable law. Hazardous Substance The term "Hazardous Substance" means any substance which shall, at any time, be listed as "hazardous" or "toxic" or in the regulations implementing the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 USC Section 9601 et 5Q., the Resource Conservation and Recovery Act ("RCRA"), 42 USC Section 6901 et=., the California Hazardous Waste Control Law ("HWCV), Cal. Health and Safety Code Section 25100 et =., the Hazardous Substance Account Act ("HSAA"), Cal. Health & Safety Code Section 25300 et =., or the Porter-Cologne Water Quality Control Act (the "Porter-Cologne Act"), Cal. Water Code Section 1300 et=., or which has been or shall be determined at any time by any agency or court to be a hazardous or toxic substance regulated under Applicable Environmental Laws, and shall also include, without limitation, raw materials, building components, the products of any manufacturing or other SF2-58316.3 3 i activities on the subject property, wastes, petroleum, and source, special nuclear or by-product material as defined by the Atomic Energy Act of 1954, as amended (42 USC Section 3011, et =., as amended). Insurance Consultant The term "Insurance Consultant" means an individual or firm employed by the District as an independent insurance consultant, experienced in the field of risk management. Interest Payment Date The term "Interest Payment Date" means March 1 and September 1 of each year, commencing on March 1, 1997. Qpinion of Counsel The term "Opinion of Counsel" means a written opinion of counsel of recognized national standing in the field of law relating to municipal bonds, appointed and paid by the District. i Owner I The term "Owner" means the registered owner of any Bond. Permitted Encumbrances The term "Permitted Encumbrances" means, as of any particular time: (i) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the District may, pursuant to Section 7.02, permit to remain unpaid; (ii) this Project Lease; (iii) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law; (iv) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the date of initial delivery of the Bonds and which an independent third party certifies in writing will not materially impair the use of the Project for the purpose intended by the District; and (v) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions established following the date of recordation of this Project Lease and to which the Authority and the District consent in writing. Principal Payment Date The term "Principal Payment Date" means September 1 of each year, commencing on September 1, 1997. SF2-58316.3 4 Pr ogram Fund The term "Program Fund" means the fund by that name established pursuant to the Trust Agreement. Projec The term "Project" means the Site that has been leased hereunder by the Authority to the District. Project Lease The term "Project Lease" means this Project Lease executed and entered into as of July 1, 1996, by and between the Authority and the District, as originally executed and entered into and as it may from time to time be amended in accordance herewith. Site The term "Site" means those certain parcels of real property situated in the State of California, County of Santa Clara, more particularly described in Exhibit A attached hereto, that have been leased by the District to the Authority pursuant to the Site Lease. Site Lease The term "Site Lease" means that certain Site Lease executed and entered into as of July 1, 1996, by and between the Authority and the District, as originally executed and entered into and as it may from time to time be amended in accordance herewith. State The term "State" means the State of California. Trust Agreement The term "Trust Agreement" means that certain Trust Agreement to be executed and entered into as of July 1, 1996, by and between the Trustee and the Authority, as originally executed and entered into and as it may from time to time be amended or supplemented in accordance therewith, under and pursuant to which the Authority has issued the Bonds. Trustee The term "Trustee" means Wells Fargo Bank, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States of America and having a corporate trust office in San Francisco, California, and its SF2-58316.3 5 f successors or assigns, or any other bank or trust company which may at any time be substituted in its place as provided in the Trust Agreement. ARTICLE II THE PROJECT SECTION 2.01. Lease of the Project. The Authority hereby leases the Project to the District, and the District hereby rents and hires the Project from the Authority, on the conditions and terms hereinafter set forth. The District hereby agrees and covenants that during the term hereof, except as hereinafter provided, it will use the Project consistent with all restrictions on the use thereof for public purposes so as to afford the public the benefits contemplated hereby and so as to permit the Authority to carry out its agreements and covenants contained herein and in the Trust Agreement, and the District hereby further agrees and covenants that during the term hereof it will not abandon or vacate the Project. SECTION 2.02. Quiet En-joyment. The parties hereto mutually covenant that the District, so long as it observes and performs the agreements, conditions, covenants and terms contained herein required to be observed or performed by it and is not in default hereunder, shall at all times during the term hereof peaceably and quietly have, hold and enjoy the Project without suit, trouble or hindrance from the Authority. SECTION 2.03. Right of Entry and Inspection. The Authority shall have the right (but not the duty) to enter the Project and inspect the Project during reasonable business hours (and in emergencies at all times) for any purpose connected with the Authority's rights or obligations hereunder and for all other lawful purposes. SECTION 2.04. Prohibition Against Encumbrance or Sale. The District and the Authority will not create or suffer to be created any mortgage, pledge, lien, charge or encumbrance upon the Project, or upon any real or personal property essential to the operation of the Project, except Permitted Encumbrances. The District and the Authority will not sell or otherwise dispose of the Project or any property essential to the proper operation of the Project. SECTION 2.05. Liens. In the event the District shall at any time during the term hereof cause any improvements to the Project to be constructed or materials to be supplied in or upon or attached to the Project, the District shall pay or cause to be paid when due all sums of money that may become due or purporting to be due for any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the District in, upon, about or relating to the Project and shall keep the Project free of any and all liens against the Project or the Authority's interest therein. In the event any such lien attaches to or is filed against the Project or the Authority's interest therein, the District shall cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that if the District desires to contest any such lien it may do so. If any such lien shall be reduced to final SF2-58316.3 6 judgment and such judgment or any process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and such stay thereafter expires, the District shall forthwith pay and discharge or cause to be paid and discharged such judgment. The District shall, to the maximum extent permitted by law, indemnify and hold the Authority and its directors, officers and employees harmless from, and defend each of them against, any claim, demand, loss, damage, liability or expense (including attorneys' fees) as a result of any such lien or claim of lien against the Project or the Authority's interest therein. ARTICLE III TERM OF THE PROJECT LEASE SECTION 3.01. Term of the Project Lease. The term hereof shall commence on July 1, 1996, or the date this Project Lease is recorded, whichever is later, and shall end on August 31, , unless such term is sooner terminated as hereinafter provided. ARTICLE IV USE OF PROCEEDS SECTION 4.01. Use of Proceeds. The parties hereto agree that any proceeds of the Bonds transferred to the District with respect to the Project Lease will be used to refinance or finance the cost of acquisition of open space for the District and to pay the costs of issuing the Bonds and the expenses incidental thereto. ARTICLE V RENTAL PAYMENTS SECTION 5.01. Rental Payments. The District agrees to pay to the Authority, without deduction or offset of any kind, as rental for the use and occupancy of the Project, the following amounts at the following times: (a) Base Rental Payments. The District shall pay to the Authority rental payments with interest and principal components (the "Base Rental Payments") in accordance with the due dates set forth in the Base Rental Payment Schedule set forth in Exhibit B attached hereto and made a part hereof, each of which such payments shall be payable on the fifteenth (15th) Business Day of the month immediately preceding its due date, and any interest or other income with respect thereto accruing prior to such due date shall belong to the District and shall be returned by the Authority to the District. The interest components of the Base Rental Payments payable by the District hereunder shall be paid by the District as and shall constitute o stitute interest n aid o theprincipal com nents of the Base Rental Payments P Po Y payable by the District hereunder. The payment of base rental during each rental payment 5F2-5$316.3 7 period shall be for the use and/or occupancy of the Project by the District for the six-month period ending on the last day of the month in which the Base Rental Payment for such period is due. The District shall provide written notice to the Trustee at least thirty (30) Business Days prior to an Interest t Payment ent Date upon which the District ct expects is to be unable to appropriate and pay the Base Rental Payment due on such Interest Payment Date, informing the Trustee of such inability to appropriate and pay such rental payment. (b) Additional Rental Payments. The District shall pay to the Authority as additional rental hereunder such amounts in each year as shall be required by the Authority for the payment in full of all costs and expenses incurred by the Authority or the Trustee in connection with the execution, performance or enforcement hereof or any assignment hereof, of the Trust Agreement, of the ownership of the Project and the lease of the Project to the District, including but not limited to payment of all fees, costs and expenses and all administrative costs of the Authority in connection with the Project, this Project Lease and the Trust Agreement and all taxes, assessments and governmental charges of any nature whatsoever hereafter levied or imposed by any governmental authority against the Authority, the Trustee or the rentals and the other payments required to be made by the District hereunder. Such additional rental shall be billed to the District by or on behalf of the Authority from time to time, together with a statement certifying that the amount so billed has been paid by the Authority for one or more of the items above described, or that such amount is then payable by the Authority for one or more of such items, and all amounts so billed shall be due and payable by the District within thirty (30) days after receipt of each bill therefor by the District. Payment of base rental and additional rental for each rental payment period during the term hereof shall constitute the total rental for such rental payment period, and shall be paid by the District in each rental payment period for and in consideration of the right to the use and occupancy, and the continued quiet enjoyment, of the Project during the rental payment period for which such rental is paid. The parties hereto have agreed and determined that the fair rental value is at least equal to the Base Rental Payments shown in the Base Rental Payment Schedule set forth in such Exhibit B. In making such determination, consideration has been given to the costs of the acquisition of the Project, the other obligations of the parties hereunder, the uses and purposes which may be served by the Project and the benefits therefrom which will accrue to the District, its residents and the general public. Each installment of base rental and additional rental payable hereunder shall be paid in lawful money of the United States of America to or upon the order of the Authority. Any such installment of base rental or additional rental accruing hereunder which shall not be paid when due shall bear interest at the rate of twelve per cent (12%) per annum, or the maximum interest rate then permitted by law. All such delinquent installments of base rental and interest thereon shall be deposited in the Reserve Fund, and all such delinquent installments of additional rental and interest thereon shall be paid to or upon the order of the Authority. Notwithstanding any dispute between the Authority and the District, the District SF2-58316.3 8 I shall make all rental payments when due hereunder without deduction or offset of any kind and shall not withhold any rental payments pending the final resolution of such dispute. SECTION 5.02. Annual Budgets: Reporting R"uirements. The District covenants, subject to Section 5.06, to take action as may be necessary to include all such rental payments due hereunder in its annual budgets and to make the necessary annual appropriations for all such rental payments. The District will furnish to the Authority and the Trustee on April 1 of each year a certification that the annual proposed budget of the District for the Fiscal Year of the District beginning on such date contains such necessary annual appropriations. SECTION 5.03. Application of Rental Payments. All rental payments received shall be applied first to the interest components of the base rental due hereunder, then to the principal components (including any prepayment premium components) of the base rental due hereunder and thereafter to all additional rental due hereunder, but no such application of any payments which are less than the total rental due and owing shall be deemed a waiver of an Event of Default hereunder. SECTION 5.04. Rental Abatement. During any period in which, by reason of material damage or eminent domain proceedings (as described in Section 8.01) there is substantial interference with the use and possession by the District of any portion of the Project, rental payments due hereunder with respect to such portion of the Project shall be abated proportionately by the fractional amount that the cost of the portion of the Project so condemned bears to the entire cost of the Project, as calculated by the District and set forth in writing to the Authority and the Trustee; and the District waives the benefits of Civil Code Sections 1932(2) and 1933(4) and any and all other rights to terminate this Project Lease by virtue of any such interference and this Project Lease shall continue in full force and effect. Such abatement shall continue for the period commencing with the date of such interference and ending with the termination thereof. SECTION 5.05. Prepayment of Base Rental Payments. (a) The District may prepay, from eminent domain proceeds received by it pursuant to Section 8.01, all or any portion of the principal components of base rental payments then unpaid in whole on any date, or in part on any Interest Payment Date in integral multiples of five thousand dollars ($5,000) so that the aggregate annual amounts of principal components of base rental payments represented by Certificates which shall be payable after such prepayment date shall each be in an integral multiple of five thousand dollars ($5,000) and shall be as nearly proportional as practicable to the aggregate annual amounts of principal components of base rental payments represented by such Certificates so prepaid, at a prepayment price equal to the sum of the principal components prepaid plus accrued interest thereon to the date of prepayment. (b) The District may prepay on any Interest Payment Date on or after September 1, 2006, from any source of available funds, the principal components of base rental payments payable on and after September 1, 2007, in whole or in part in integral SF2-58316.3 9 multiples of five thousand dollars ($5,000) principal amount in inverse order of Principal Payment Dates (and by lot within any one Principal Payment Date), at a prepayment price equal to the sum of the principal components prepaid plus accrued interest thereo n to the date of prepayment plus a prepayment premium equal to a percentage of the principal amount thereof, in accordance with the following schedule: Prepayment Date Prepayment Premium September 1, 2006 2% March 1, 2007 and thereafter 0 (c) Before making any prepayment pursuant to this section, the District shall, within five (5) Business Days following the event creating such right or obligation to prepay, give written notice to the Authority and the Trustee describing such event and specifying the date on which the prepayment will be made, which date shall be not less than sixty (60) days from the date such notice is given. SECTION 5.06. Obligation to Make Rental Payments. The agreements and covenants on the part of the District contained herein shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the District to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the District to carry out and perform the agreements and covenants contained herein agreed to be carried out and performed by the District. SECTION 5.07. Tax Covenants. The District will not directly or indirectly use or permit the use of the proceeds of the obligation provided herein or any other funds of the District or take or omit to take any action which would cause such obligation to be an "arbitrage bond" within the meaning of Section 148 of the Code, or a "federally guaranteed obligation" under Section 149(b) of the Code, or a "private activity bond" as described in Section 141 of the Code; and to that end, so long as any rental payments due hereunder are I unpaid, the District will comply with all requirements of such sections of the Code to the extent applicable to the obligation provided herein. The District will at all times do and perform all acts and things permitted by law which are necessary or desirable in order to assure that the interest installments of such rental payments will not be included in the gross income of the owners of the Bonds for federal income tax purposes under the Code and will take no action that would result in such interest being so included. SF2-58316.3 10 ARTICLE VI TITLE TO THE PROJECT SECTION 6.01. Title to the Project. Title to the Project shall remain in the Authority during the term of this Project Lease, and title to all property that is placed in or about the Project by the District during the term of this Project Lease and that can be removed without damage to the Project or which is not integrally related to the Project shall remain in the District during the term of this Project Lease. Upon termination or expiration of this Project Lease, title to the Project shall vest in the District, and upon such termination or expiration or vesting, the Authority shall execute and deliver such conveyances, deeds, bills of sale, registration documents and other instruments as may be necessary to effect such vesting of record. ARTICLE VII MAINTENANCE; TAXES AND OTHER CHARGES; INSURANCE SECTION 7.01. Maintenance of the Project by the District. The District agrees that, at all times during the term hereof, it will, at its own cost and expense, maintain, preserve and keep the Project and every portion thereof in good repair, working order and condition and that it will from time to time make or cause to be made all necessary and proper repairs, replacements and renewals. The Authority shall have no responsibility in any of these matters or for the making of additions or improvements to the Project. SECTION 7.02. Taxes, Governmental Charges and Utility Charges. The parties hereto contemplate that the Project will be used for public purposes by the District and, therefore, that the Project will be exempt from all taxes presently assessed and levied with respect to real and personal property, respectively. In the event that the use, possession or acquisition by the District of any portion of the Project is found to be subject to taxation in any form, the District will pay or cause to be paid during the term hereof, as the same respectively become due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to any portion of the Project and any other property acquired by the District in substitution for, as a renewal or replacement of, or a modification, improvement or addition to any portion of the Project, as well as all utility charges incurred in the operation, maintenance, use, occupancy and upkeep of any portion of the Project; r vided , that with respect to any governmental charges or taxes that may lawfully be paid in installments over a period of years, the District shall be obligated to pay only such installments as are accrued during such time as this Project Lease is in effect. SECTION 7.03. Insurance. The District shall procure or cause to be procured and maintain or cause to be maintained throughout the term hereof for the Project policies of insurance against the following risks in the following respective amounts: SF2-58316.3 11 (1) workers' compensation insurance covering all employees working in or on the Project, in the same amount and type as other workers' compensation insurance maintained by the District for similar employees doing similar work; and the District shall also require any other person or entity working in or on the Project to carry the foregoing amount of workers' compensation insurance; and (2) a standard comprehensive public entity liability insurance policy or policies in protection of the District, the Authority and the Trustee and its directors, officers and employees, indemnifying and defending such parties against all direct or contingent loss or liability for damages for personal injury, death or property damage occasioned by reason of the possession, operation or use of the Project, with minimum liability limits of one million dollars ($1,000,000) for personal injury or death of each person and three million dollars ($3,000,000) for personal injury or deaths of two or more persons in each accident or event, and in a minimum amount of two hundred thousand dollars ($200,000) (subject to a deductible clause of not to exceed one hundred thousand dollars ($100,000)) for damage to property resulting from each accident or event; provided, that such public liability and property damage insurance may be in the form of a single limit policy in the amount of three million dollars ($3,000,000) covering all such risks and may be maintained as part of or in conjunction with any other liability insurance carried by the District. Each insurance policy provided for in this section shall contain a provision to the effect that the insurance company shall not cancel the policy or modify it materially and adversely to the interests of the Authority or the Trustee without first giving written notice thereof to the Authority and the Trustee at least sixty (60) days in advance of such intended cancellation or modification; provided, that the Trustee shall not be responsible for the sufficiency of any insurance herein required and shall be fully protected in accepting payment on account of such insurance or any adjustments, compromise or settlement of any loss agreed to by it. Notwithstanding the above provisions, as an alternative to providing the foregoing policies of insurance, the District may provide a self-insurance method or plan of protection, which such self-insurance maintained by the District shall comply with the following terms: (i) the self-insurance program shall be approved by an Insurance Consultant; (ii) the self-insurance program shall include an actuarially sound claims reserve fund out of which each self-insured claim shall be paid, the adequacy of each such fund shall be evaluated on an annual basis by the Insurance Consultant, and any deficiencies in any self-insurance claims fund shall be remedied in accordance with the recommendation of the Insurance Consultant; SF2-58316.3 12 i (iii) the self-insurance claims fund shall be held in a separate fund by the District; (iv) in the event the self-insurance program shall be discontinued, the actuarial soundness of its claim reserve fund, as determined by the Insurance Consultant, shall be maintained. The District shall file a certificate with the Trustee not later than June 1 of each year certifying that the insurance required by this section is in full force and effect for the ensuing year and that the Trustee is named as a loss payee on each policy of insurance which this Project Lease requires to be so endorsed. SECTION 7.04. Advances. In the event the District shall fail to maintain the full insurance coverage required hereby or shall fail to keep the Project in good repair and operating condition, the Authority may (but shall be under no obligation to) purchase the required policies of insurance and pay the premiums on the same or may make such repairs or replacements as are necessary and provide for payment thereof, and all amounts so advanced therefor by the Authority shall become additional rental, which amounts the District agrees to pay within thirty (30) days of a written request therefor, together with interest thereon at the rate of twelve per cent (12%) per annum. I SECTION 7.05. Continuing Disclosure. The District hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement, dated the date hereof, between the District and the Authority (the "Continuing Disclosure Agreement"). Notwithstanding any other provision of this Project Lease, failure of the District to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default; however, the Trustee may and, at the request of the Authority or the Holders of at least 25% aggregate principal amount of Outstanding Bonds, shall, or any Bondholder or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District to comply with its obligations under this Section. For purposes of this Section, "Beneficial Owner" means any person which has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). ARTICLE VIII CONDEMNATION SECTION 8.01. Condemnation. If prior to the termination of the term hereof title to, or the temporary use of, the Project or any portion thereof or the estate of the District or the Authority in the Project or any portion thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any person or firm or corporation acting under governmental authority, then the District and the Authority will cause the net proceeds of any condemnation award to be applied to the prompt replacement SF2-58316.3 13 of the condemned portion of the Project, and any balance of the net proceeds remaining after such work has been completed shall be paid to the District; provided, that the District, at its option and provided the proceeds of such condemnation award together with any other moneys then available for the purpose are at least sufficient to prepay an aggregate principal amount represented by outstanding Certificates equal to the amount of outstanding Certificates attributable to the portion of the Project so condemned (determined by reference to the proportion which the cost of the condemned portion of the Project bears to the cost of the entire Project), may elect not to repair, reconstruct or replace the condemned portion of the Project and thereupon shall cause said proceeds to be used for the prepayment of outstanding Certificates pursuant to the provisions of Section 5.05(a) hereof and Section 2.03 of the Trust Agreement. ARTICLE IX DISCLAIMER OF WARRANTIES; USE OF THE PROJECT; ENVIRONMENTAL MATTERS SECTION 9.01. Disclaimer of Warranties. THE Authority DOES NOT MAKE ANY AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR FITNESS FOR USE OF THE PROJECT, OR WARRANTY WITH RESPECT THERETO. THE DISTRICT ACKNOWLEDGES THAT THE Authority IS NOT A MANUFACTURER OF ANY PORTION OF THE PROJECT OR A DEALER THEREIN AND THAT THE Authority LEASES THE PROJECT TO THE DISTRICT AS-IS, IT BEING AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE DISTRICT. In no event shall the Authority be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Project Lease or the existence, furnishing, functioning or the District's use of the Project as provided hereby. SECTION 9.02. Use of the Proiect. The District will not use, operate or maintain the Project improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated hereby. The District will provide all permits and licenses, if any, necessary for the use of the Project. In addition, the District agrees to comply in all respects with all laws of the jurisdictions in which its operations involving any portion of the Project may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Project; provided, that the District may contest in good faith the validity or application of any such law or rule in any reasonable manner which does not, in the opinion of the Trustee, adversely affect the estate of the Authority in and to the Project or its interest or rights hereunder. SF2-58316.3 14 SECTION 9.03. Environmental Matters. (a) The District and the Authority will comply with all Applicable Environmental Laws and will not use, store, generate, treat, transport or dispose of any Hazardous Substance on, or in a manner that would cause it to later flow, migrate, leak, leach or otherwise come to rest on or in the Project. (b) The District and the Authority will transmit copies of all records concerning the contact with any local, state or federal agency concerning any violation of any Applicable Environmental Laws involving the Project, and all notices, orders or statements received from any governmental entity concerning violations of Applicable Environmental Laws with respect to the Project and any operations conducted thereon or any conditions existing thereon to the Trustee. The District and the Authority will notify the Trustee in writing immediately of any release, discharge, spill, or deposit of any Hazardous Substance that has occurred or is occurring which in any way affects or threatens to affect the Project or the people, structures, or other property thereon. (c) The District and the Authority will permit the Trustee, its agents or any experts designated by the Trustee to have full access to the Project during reasonable business hours for purposes of such independent investigation of compliance with all Applicable Environmental Laws. ARTICLE X ASSIGNMENT AND INDEMNIFICATION SECTION 10.01. Assignment by Authoriv. The parties understand that this Project Lease and certain of the rights of the Authority hereunder will be assigned by the Authority to the [Authority] pursuant to the Assignment Agreement, and accordingly the District agrees to make all payments of base rental due hereunder to the Trustee, [on behalf of the Authority,] notwithstanding any claim, defense, set-off or counterclaim whatsoever (whether arising from a breach hereof or otherwise) that the District may from time to time have against the Authority. The District agrees to execute all documents, including notices of assignment and chattel mortgages or financing statements, which may be reasonably requested by the Authority or the Trustee or any Owner to protect their interests in the Project during the term hereof. SECTION 10.02. Assignment by Lessee. This Project Lease and the interest of the District in the Project may not be assigned or encumbered by the District. SECTION 10.03. Indemnification. The District will, to the full extent then permitted by law, indemnify, protect, hold harmless, save and keep harmless the Authority and the Trustee and its directors, officers and employees from and against any and all liability, obligations, losses, claims and damages whatsoever, regardless of the cause thereof, and expenses in connection therewith, including, without limitation, counsel fees and SP2-58316.3 15 expenses, penalties and interest arising out of or as the result of the entering into of this Project Lease, the Assignment Agreement or the Trust Agreement, the acquisition, improvement and use of the Project and each portion thereof or any accident in connection with the operation, use, condition or possession of the Project or any portion thereof resulting in damage to property or injury to or death to any person including, without limitation, any claim alleging latent and other defects, whether or not discoverable by the District or the Authority; and any claim arising out of strict liability in tort. The indemnification arising under this section shall continue in full force and effect notwithstanding the full payment of all obligations hereunder or the termination hereof for any reason or the resignation or removal of the Trustee. The District agrees not to withhold or abate any portion of the payments required pursuant hereto by reason of any defects, malfunctions, breakdowns or infirmities of the Project. The District and the Authority mutually agree to promptly give notice to each other of any claim or liability hereby indemnified against following either's learning thereof. ARTICLE XI DEFAULT SECTION 11.01. Default. (a) If default shall be made by the District in the observance or performance of any agreement, condition, covenant or term contained herein required to be observed or performed by it (including without limitation the payment of any base rental payments or additional rental payments due hereunder), or upon the happening of any of the events specified in subsection (b) of this section (in either case, an "Event of Default" hereunder), then, subject to the provisions of subsection (c), the Authority shall (with or without notice and demand and without limiting any other rights or remedies the Authority may have) maintain this Project Lease in full force and effect and recover rent and other monetary charges as they become due without terminating the District's right to possession of the Project, regardless of whether or not the District has abandoned the Project. (b) In addition to any Event of Default resulting from breach by the District of any agreement, condition, covenant of term hereof, if (1) the District's interest herein or any part thereof be assigned, sublet or transferred without the written consent of the Authority, either voluntarily or by operation of law; or (2) the District shall file any petition or institute any proceedings under any act or acts, state or federal, dealing with or relating to the subject of bankruptcy or insolvency or under any amendment of such act or acts, either as a bankrupt or as an insolvent or as a debtor or in any similar capacity, wherein or whereby the District asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of its debts or obligations, or offers to its creditors to effect a composition or extension of time to pay its debts, or asks, seeks or prays for a reorganization or to effect a plan of reorganization or for a readjustment of its debts or for any other similar relief, or if the District shall make a general or any assignment for the benefit of its creditors; or (3) the District shall abandon or vacate the Project or any portion thereof; then in each and every such case the District shall m be deemed to be in default hereunder. SF2-58316.3 16 (c) Neither the District nor the Authority shall be in default in the performance of any of its obligations hereunder (except for the obligation to pay base rental pursuant to Section 5.01) unless and until it shall have failed to perform such obligation within thirty (30) days after written notice by the District or the Authority, as the case may be, to the other party properly specifying wherein it has failed to perform such obligation. ARTICLE XII DISCHARGE OF OBLIGATIONS SECTION 12.01. Discharge of Obligations. (a) If the District shall pay or cause to be paid all Base Rental Payments and the interest accrued thereon and all additional rental required to be paid by it hereunder at the times and in the manner provided herein, the right, title and interest of the Authority herein and the obligations of the District to the Authority hereunder shall thereupon cease, terminate, become void and be completely discharged and satisfied, except only as provided in subsection (c). (b) Any unpaid principal component of a Base Rental Payment shall on its scheduled payment date or date of prepayment be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this section if the District makes payment of such Base Rental Payment in the manner provided herein, and money for the purpose of such payment or prepayment is then held by the Trustee. i (c) All or any portion of any unpaid principal component of a Base Rental Payment shall, prior to its scheduled payment date or date of prepayment, be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this section (except that the District shall remain liable for such Base Rental Payment, but only out of such money or securities deposited with the Trustee or an appropriate escrow agent as herein described for such payment) if (i) notice is provided, to the Trustee as required by the Trust Agreement, (ii) there shall have been deposited with the Trustee or such escrow agent either money in an amount which shall be sufficient, or Federal Securities which are not subject to redemption prior to maturity except by the holder thereof (including any such Federal Securities issued or held in book entry form) the interest on and principal of which when paid will provide money which, together with money, if any, deposited with the Trustee or such escrow agent at the same time, shall be sufficient, as stated in a report of a nationally recognized independent certified public accountant or other verification agent addressed to the District and the Trustee or such escrow agent verifying such sufficiency in full, to pay when due such principal component of such Rental Payment or such portion thereof on and prior to its payment date or its date of prepayment, as the case may be, and the prepayment premium, if any, thereon, and (iii) an Opinion of Counsel addressed to the District and the Trustee or such escrow agent is filed to the effect that the action taken pursuant to this subsection will not cause the interest components of the Rental Payments to SF2-18316.3 17 be includable in gross income under the Code for federal income tax purposes and that the Certificates are no longer Outstanding (as that term is defined in the Trust Agreement). (d) After the payment of all Base Rental Payments and the interest accrued thereon and all additional rental and all fees and expenses of the Trustee, the Trustee, upon request of the District, shall cause an accounting to be made in accordance with standard trust industry procedures and filed with the Authority and District and shall execute and deliver to the Authority and the District all such instruments as may be necessary or desirable to evidence such total or partial discharge and satisfaction, as the case may be. ARTICLE XIH MISCELLANEOUS SECTION 13.01. Notices. All written notices to be given hereunder shall be given by first class mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely: If to the Authority: Midpeninsula Regional Open Space District Financing Authority Attention: Chairperson 330 Distel Circle Los Altos, California 94022 If to the District: Midpeninsula Regional Open Space District Attention: General Manager 330 Distel Circle Los Altos, California 94022 If to the Trustee: Wells Fargo Bank, National Association 345 California Street, 8th Floor San Francisco, California 94104 Attention: Corporate Trust Department SECTION 13.02. Binding Effect. This Project Lease shall inure to the benefit of and shall be binding upon the Authority and the District and their respective successors and assigns. 3P2-59316.3 18 SECTION 13.03. Third Party BeneficiarX. The Authority and the Trustee are hereby each designated a third party beneficiary hereunder for the purpose of enforcing any of its rights or any of the rights assigned to the Authority under the Assignment Agreement or the Trustee under the Trust Agreement. SECTION 13.04. Net Lease. It is the purpose and intent of the Authority and the District that lease payments hereunder shall be absolutely net to the Authority so that this Project Lease shall yield to the Authority the lease payments, free of any charges, assessments or impositions of any kind charged, assessed or imposed on or against the Project, and without counterclaim, deduction, defense, deferment or set-off by the District except as herein specifically otherwise provided. The Authority shall not be expected or required to pay any such charge, assessment or imposition, or be under any obligation or liability hereunder except as herein expressly set forth, and all costs, expenses and obligations of any kind relating to the maintenance and operation of the Project which may arise or become due during the term of this Project Lease shall be paid by the District. SECTION 13.05. Amendments. This Project Lease may be amended in writing as may be mutually agreed by the Authority and the District, subject to the written approval of the Trustee; provided, that no such amendment which adversely affects the rights of the Owners shall be effective unless it shall have been consented to by the Owners of a majority of Certificates; and provided further, that no such amendment shall (a) extend the payment date of any base rental payment, or reduce the interest, principal or prepayment premium component of any base rental payment, without the prior written consent of the Owner of each Certificate so affected, or (b) reduce the percentage of Certificates the consent of the Owners of which is required for the execution of any amendment hereof; and provided further, that no such amendment shall substitute another parcel or parcels of real property for any one or more of the parcels of real property leased hereunder unless the substituted parcel or parcels of real property are used for open space for the District; and provided further, that before any such substitution is approved by the District it shall have first prepared and filed with the Authority and the Trustee an M.A.I. appraisal by an independent real estate appraiser that the parcel or parcels of real property that are proposed to be so substituted have a fair market value at least equal to the parcel or parcels of real property that are proposed-to be released from the terms of this Project Lease by virtue of such substitution, except that if the parcel or parcels of real property that are proposed to be so substituted have been purchased by the District within twelve (12) months of the amendment of this Project Lease, the District may use the purchase price thereof in determining the fair market value thereof; and provided further, that any parcel or parcels of real property that are proposed to be so substituted shall have no prior liens against them that would impair their use for the purpose intended by the District and shall have a useful life at least as long as the parcel or parcels being substituted out of this Project Lease. Following any such substitution, the Authority shall execute appropriate quitclaim deeds to the District for the parcel or parcels so substituted out of this Project Lease. The Authority shall provide notice of any such substitution to Standard & Poor's Authority, 25 Broadway, New York, New York 10004, Attention: Public Finance Department, and to Moody s Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention: Public Finance Department, so long as such rating agency then maintains a rating on the Bonds. SF2-58316.3 19 SECTION 13.06. Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms hereof shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining agreements, conditions, covenants or terms hereof shall be affected thereby, and each provision of this Project Lease shall be valid and enforceable to the fullest extent permitted by law. SECTION 13.07. Governing Law. This Project Lease shall be governed by and construed and interpreted in accordance with the laws of the State. SECTION 13.08. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision hereof. SECTION 13.09. Severability. If any agreement, condition, covenant or term hereof or any application hereof should be held by a court of competent jurisdiction to be invalid, void or unenforceable, in whole or in part, all agreements, conditions, covenants or terms hereof and all applications thereof not held invalid, void or unenforceable shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby. SECTION 13.10. Execution in Counterparts. This Project Lease may be executed and entered into in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. Sn-58316.3 20 IN WITNESS WHEREOF, the parties hereto have executed and entered into this Project Lease by their officers thereunto duly authorized as of the day and year first written above. MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY By Chairperson Attest: Secretary MIDPENINSULA REGIONAL OPEN SPACE DISTRICT By (SEAL) President of the Board of Directors Attest: Secretary of the Board of Directors SF2-58316.3 21 [ATTACH NOTARY ACKNOWLEDGEMENTS HERE] SF2-58316.3 22 EXHIBIT A DESCRIPTION OF REAL PROPERTY All those certain parcels of real property situated in the State of California,P P PertY County of Santa Clara, more particularly described below: SF2-58316.3 A.-1 EXHIBIT B i BASE RENTAL PAYMENT SCHEDULE Principal Interest Date Com nen Compgnent Total TOTAL $ $ $ I I SF2-58316.3 B_1 OH&S DRAFT June 17, 1996 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT 1996 REFUNDING PROMISSORY NOTES LOCAL OBLIGATION PURCHASE CONTRACT dated as of July 1, 1996 Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, California 94022 Ladies and Gentlemen: The undersigned Midpeninsula Regional Open Space District Financing Authority (the "Authority"), offers to enter into this Local Obligation Purchase Contract (the "Local Obligation Purchase Contract") with you, the Midpeninsula Regional Open Space District (the "District"), which, upon acceptance, will be binding upon the District and the Authority. Except as otherwise provided herein, capitalized terms used herein shall have the meanings attributed to them in the Trust Agreement, dated as of July 1, 1996, by and between the Authority and Wells Fargo Bank, National Association, as trustee (the "Trustee"). 1. Purchase, Sale and Delivery of the Obligations. (a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Authority hereby agrees to purchase from the District, and the District hereby agrees to sell to the Authority, all (but not less than all) of $ aggregate principal amount of its 1996 Refunding Promissory Notes (the "Local Obligations"), dated the date of their delivery, bearing interest payable on the dates and at the interest rates, and maturing on the dates and in the amounts set forth in Annex A attached hereto. The purchase price for the Local Obligations shall be $ , and shall be payable from amounts held by the Trustee under the Trust Agreement, subject to the terms and conditions thereof. The Local Obligations shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable as provided in that certain Resolution No. 96- adopted by the Board of Directors of the District on June 26, 1996 (the "Resolution"), authorizing the issuance of the Local Obligations and shall be registered in the name of the Trustee. SF2-58471.3 (b) At 8:00 a.m., California time, on July 1996, or at such earlier or later time or date as shall be agreed by the District and the Authority (such time and date being herein referred to as the "Closing Date"), the District will deliver to the Authority at the offices of Orrick, Herrington & Sutcliffe, San Francisco, California (or such other location as may be designated by the Authority and approved by the District), the Local Obligations in definitive form, duly executed by the District, together with the other documents herein mentioned; and the Authority will accept such delivery and pay the purchase price of the Local Obligations as set forth in paragraph (a) of this section by wire transfer payable as provided in the Trust Agreement (such delivery and payment being herein referred to as the "Closing"). The Local Obligations shall be made available to the Authority not later than one business day before the Closing Date for purposes of inspection. 2. Representations, Warranties and Agreements of the District. The District represents and warrants to and agrees with the Authority that: (a) The District is and will be at the Closing Date duly organized and existing under the laws of the State of California, with the full power and authority to issue the Local Obligations, and to carry out and consummate the transactions contemplated by this Local Obligation Purchase Contract and the Resolution, and this Local Obligation Purchase Contract and the Resolution are and will be at the Closing Date valid and binding obligations of the District; (b) When delivered to and paid for by the Authority at the Closing in accordance with the provisions of this Local Obligation Purchase Contract the Local Obligations will have been duly authorized, executed, issued and delivered and will constitute valid and binding obligations of the District in conformity with, and entitled to the benefit and security of the Resolution; c B official action of the District prior to or concurrent) with the O P Y Y acceptance hereof, the District has adopted the Resolution, authorized and approved the execution and delivery of the Local Obligations and this Local Obligation Purchase Contract, and authorized and approved the performance by the District of the obligations on its part contained in the Local Obligations, the Resolution and this Local Obligation Purchase Contract and has authorized and approved the consummation by the District of all other transactions contemplated by this Local Obligation Purchase Contract; (d) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body, pending or, to the knowledge of the District, threatened against the District or its properties or operations (i) seeking to restrain or enjoin the issuance, sale, execution or delivery of the Local Obligations, (ii) in any way contesting or affecting the validity or enforceability of the Local Obligations, the Resolution or this Local Obligation Purchase Contract, any proceedings of the District taken concerning the issuance or sale of the Local Obligations, the collection of reassessments levied by the District in the Improvement Districts or the existence or powers of the District relating to the issuance of the Local Obligations or (iii) which, if determined adversely to the District or its interests would have a material and adverse effect on the SF2-58471.3 2 1 i consummation of the transactions contemplated by or the validity of the Local Obligations, the Resolution, or this Local Obligation Purchase Contract or on the operations of the District; I (e) The execution and delivery of the Local Obligations, the Resolution and this Local Obligation Purchase Contract, and the consummation of the transactions therein and herein contemplated, and the fulfillment of or compliance with the terms and conditions thereof and hereof will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, loan agreement, lease, contract or other agreement or instrument to which the District is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the District, which conflict, violation, breach, default, lien, charge or encumbrance might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Local Obligation Purchase Contract, the Resolution, the Local Obligations or the operations of the District; (f) The District is not in breach of or default under any applicable law or administrative regulation of the State of California or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the District is a party or is otherwise subject, which breach or default may have consequences that would materially and adversely affect the consummation of the transactions described in the Resolution, the Local Obligations or this Local Obligation Purchase Contract and no event has occurred and is continuingwhich with the passage of P g time or the giving of notice or both would constitute such a breach or default under an g g a � Y such instrument; (g) All approvals, consents, authorizations, certifications and other orders of an governmental authority, board agency or commission having jurisdiction, and all Y g Y� g Y g j � 1 filings with any such entities, which would constitute conditions precedent to or the failure to obtain which would materially adversely affect the performance by the District of its obligations hereunder or under the Resolution or the Local Obligations, have been duly obtained and no further consent, approval, authorization or other action or fling with by any governmental or regulatory authority having jurisdiction over the District is or will be required for the issue and sale of the Local Obligations or the consummation by the District of the other transactions described in this Local Obligation Purchase Contract, the Resolution, the Local Obligations; The execution and delivery of this Local Obligation Purchase Contract by the District shall constitute a representation by the District to the Authority that the representations, warranties and agreements contained in this Section 2 are true as of the date hereof, provided that as to all matters of law the District is relying on the advice of counsel P Y g to the District; and provided further that no member of the District Council shall be SM-58471.3 3 individually liable for the breach of any representation, warranty g or agreement contained herein. 3. Conditions to the Local Obli ations of the Authorit . The obligation of €� Y g the Authority to accept delivery of and pay for the Local Obligations on the Closing Date shall be subject, at the option of the Authority, to the accuracy in all material respects of the representations, warranties and agreements on the part of the District contained herein as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the District made in any certificates, or other documents furnished pursuant to the provisions hereof, and to the performance by the District of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions: (a) At the Closing Date, the Resolution and this Local Obligation Purchase Contract shall be in full force and effect in the form heretofore submitted to the Authority and there shall have been taken in connection with the issuance of the Local Obligations and with the transactions contemplated thereby and by this Local Obligation Purchase Contract, all such actions as, in the opinion of Orrick, Herrington & Sutcliffe ("Bond Counsel"), shall be necessary and appropriate; (b) At the Closing Date, the Resolution and this Local Obligation Purchase Contract shall not have been amended, modified or supplemented, except as may have been agreed to by the Authority; (c) At or prior to the Closing Date, the Authority and the Trustee shall have received the following documents, in each case satisfactory in form and substance to the Authority: (1) the Resolution; I (2) the Continuing Disclosure Agreement; (3) an unqualified approving opinion, dated the Closing Date and addressed to the District, of Bond Counsel as to the validity of the Local Obligations. 4 an opinion f District n o st ct Counsel,.dated the Closing Date an ( ) P g e d addressed to the District and the Authority, in substantially the form attached hereto as Exhibit B. (5) such additional legal opinions, certificates, proceedings, instruments and other documents as the Authority or Bond Counsel may reasonably request to evidence compliance by the District with legal requirements, the truth and accuracy, as of the Closing Date, of the representations of the District contained herein, and the due performance or satisfaction by the District at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the District. SF2-58471.3 4 i i If the District shall be unable to satisfy the conditions to the Authority' obligations contained in this Local Obligation Purchase Contract, this Local Obligation Purchase Contract shall terminate and neither the Authority nor the District shall have any further obligation hereunder. 4. Expenses. All expenses and costs of the District and the Authority incident to the authorization, issuance and sale of the Local Obligations including fees and expenses of consultants and the Trustee, fees and expenses of Bond Counsel and counsel for the District, shall be paid by the District. The District agrees that it will pay, from the proceeds of the Local Obligations, the underwriting fees and expenses incurred by the Authority in connection with the sale of the Authority's 1996 Revenue Bonds. 5. Notices. Any notice or other communication to be given to the District under this Local Obligation Purchase Contract may be given by delivering the same in writing at the District's address set forth above and any such notice or other communications required to be given to the Authority may be given by delivering the same in writing to the Authority at 330 Distel Circle, Los Altos, California 94022. The approval of the Authority when required hereunder or the determination of their satisfaction as to any document referred to herein shall be in writing signed by the Authority and delivered to the District. 6. Parties In Interest; Governing Law. This Local Obligation Purchase Contract is made solely for the benefit of the District, the Authority and the Trustee and no other persons, partnership, association or corporation shall acquire or have any right hereunder or by virtue hereof. This Local Obligation Purchase Contract shall be governed by the laws of the State of California. 7. Pledge; Assi ng ment. The District hereby approves the Trust Agreement and the pledge and assignment of all of the Authority's right, title and interest in this Local Obligation Purchase Contract and the Local Obligations to the Trustee under the Trust Agreement for the benefit of the Owners of the Bonds (as provided in the Trust Agreement). 8. Limitation on Liability. The Authority shall incur no liability hereunder or by reason hereof or arising out of the transactions contemplated hereby, and shall be under no obligation to purchase the Local Obligations hereunder, except from proceeds of the Bonds available therefor held by the Trustee under, and subject to the conditions set forth in, the Trust Agreement. The District shall incur no liability hereunder or by reason hereof or arising out of the transactions contemplated hereunder, except as otherwise provided in Section 4 hereof, or be obligated to make any payments with respect to the Local Obligations, except as provided in the Resolution. Sn-58471.3 5 9. Counterparts. This Local Obligation Purchase Contract may be signed in two or more counterparts; all such counterparts, when signed by all parties, shall constitute but one single agreement. MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY B Chairperson ACCEPTED AND AGREED TO: MIDPENINSULA REGIONAL OPEN SPACE DISTRICT By President of the Board of Directors SM-58471.3 6 Exhibit A Midpeninsula Regional Open Space District 1996 Refunding Promissory Notes Dated Date: July 1, 1996 Interest Payment Dates: March 1 and September 1 (commencing March 1, 1997) Maturity Date Principal Interest (,September 1) Amount Rate M-584713 A-1 Exhibit B FORM OF DISTRICT COUNSEL OPINION 1996 Midpeninsula Regional Open Space District Financing Authority 330 Distel Circle Los Altos, California 94022 Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, California 94022 Re: $ — Midpeninsula Regional Open Space District 1996 Refunding Promissory Notes Ladies and Gentlemen: In my capacity as counsel to the Midpeninsula Regional Open Space District (the "District"), and in connection with the above-captioned obligations (the "Local Obligations"), I have reviewed Resolution No. adopted by the Board of Directors of the District at its regular meeting on June 26, 1996 (the "Resolution"), and such other information and documents as I consider necessary to render this opinion. Based upon the foregoing, it is my opinion that: 1. The District is duly organized and validly existing as a regional open space district under the laws of the State of California, with full legal right, power and authority to issue the Local Obligations and to perform all of its obligations under the Local Obligation Purchase Contract dated as of July 1, 1996, between the District and you, as purchaser (the "Local Obligation Purchase Contract") and the Local Obligations. 2. The Resolution was duly authorized, executed and delivered by District and is in full force and effect as of the date hereof. 3. The Local Obligation Purchase Contract and the Local Obligations have been duly authorized, executed and delivered by the District, and the Resolution, the Local Obligation Purchase Contract and the Local Obligations are valid and binding obligations of the District enforceable in accordance with their respective terms except as such enforcement SF2-58471.3 B-1 may be limited by bankruptcy, insolvency and other similar laws affecting the creditors' rights generally and by equitable principles if equitable remedies are sought. 4. There is no action suit or proceeding at law or in equity, before or b P g ,q Y Y any court, regulatory agency, public board or body, pending or, to the best of my knowledge, threatened against or affecting the existence of the District or the titles of its officers to their respective offices, or seeking to restrain or enjoin the issuance, sale or delivery of the Local Obligations, the application of the proceeds thereof in accordance with the Resolution, or the collection or application of the assessments and the interest thereon to pay the principal of and interest on the Local Obligations, or in any way contesting or affecting the validity or enforceability of the Local Obligations, the Resolution, the Local Obligation Purchase Contract, or the powers of the District or its authority with respect to the Local Obligations, the Resolution, the Local Obligation Purchase Contract, or any action on the part of the District contemplated by any of said documents, nor to my knowledge is there any basis therefor. 5. The foregoing opinion is based upon and limited to the laws of the State of California, except State laws pertaining to tax, securities, bankruptcy and insolvency, about which no opinion is expressed. Very truly yours, j I I i SF2-58471.3 B-2 OH&S DRAFT June 17, 1996 I I CONTP4UING DISCLOSURE AGREFAIENT by and among MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY, MIDPENINSULA REGIONAL OPEN SPACE DISTRICT and WELLS FARGO BANK, N.A., as Trustee and Dissemination Agent Dated as of July 1, 1996 Relating to Midpeninsula Regional Open Space District Financing Authority 1996 Revenue Bonds I i SF2-58753.3 CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement (the "Disclosure Agreement"), dated as of July 1, 1996, is executed and delivered by the MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY (the "Issuer"), the MIDPENINSULA REGIONAL OPEN SPACE DISTRICT (the "District"), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee (the "Trustee"), in connection with the issuance of $ Midpeninsula Regional Open Space District Financing Authority 1996 Revenue Bonds (the "Bonds"). The Bonds are being issued pursuant to a Trust Agreement, dated as of July 1, 1996, between the Issuer and the Trustee (the "Trust Agreement"). The Issuer, the District and the Trustee covenant and agree as follows: SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the Issuer and the District for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Trust Agreement, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Issuer or the District, pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Beneficial Owner" shall mean any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). "Disclosure Representative" shall mean the Controller of the Issuer or his or her designee, or such other officer or employee as the Issuer shall designate in writing to the Dissemination Agent from time to time. "Dissemination Agent" shall mean the Trustee, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. "National Repository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. (The National Repositories currently approved by the Securities and Exchange Commission are set forth in Exhibit B hereto). SF2-58753.3 "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Repository" shall mean each National Repository and the State Repository, if any. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. .State Repository" shall mean any public or private repository or entity designated by the State as the state repository for the purpose of the Rule and recognized as such by the Securities and Exchange Commission. SECTION 3. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent to, not later than 210 days after the end of the Issuer's fiscal year (presently June 30), commencing with the report for the 1996-1997 fiscal year, provide to each Repository an Annual Report which is consistent with the requirements of Section 4(a) of this Disclosure Agreement. (b) The District shall, or shall cause the Dissemination Agent to, not later than 210 days after the end of the District's fiscal year (presently March 31), commencing with the report for the 1996-97 fiscal year, provide to each Repository an Annual Report which is consistent with the requirements of Section 4(b) of this Disclosure Agreement. An Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Agreement; rovided that the audited financial statements may be submitted separately from the balance of any related Annual Report and later than the date required above for the filing of such Annual Report if they are not available by that date. If the fiscal year of either the Issuer or the District changes, such party shall give notice of such change in the same manner as for a Listed Event under Section 5(f). (c) Not later than fifteen (15) Business Days prior to the date specified in subsections (a) and (b) above for providing their respective Annual Reports to the Repositories, the Issuer and the District, respectively, shall provide its Annua l Report to the Dissemination Agent and the Trustee (if the Trustee is not the Dissemination Agent). If by such date, the Trustee has not received a copy of such Annual Report, the Trustee shall contact the Issuer or the District, as the case may be, and the Dissemination Agent (if other than the Trustee) to determine if the Issuer or the District, as applicable, has provided its Annual Report. (d) If the Trustee is unable to verify that the applicable Annual Report has been provided to Repositories by the date required in subsections (a) or (b), as the case may SF2-58753.3 2 be, the Trustee shall send a notice to each Repository in substantially the form attached as Exhibit A hereto. (e) The Dissemination Agent shall: (i) determine each year prior to the date for providing the Annual Report the name and address of each National Repository and the State Repository, if any; and (ii) to the extent an Annual Report has been provided to the Dissemination Agent, file a report with the Issuer and the District certifying that the Annual Reports have been provided pursuant to this Disclosure Agreement, stating the date(s) they were provided and listing all the Repositories to which they were provided. SECTION 4. Content of Annual Reports. (a) The Issuer's Annual Report shall contain or include by reference the [audited] financial statements of the Issuer for the prior Fiscal Year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time. [If the Issuer's audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.] (b) The Districts Annual Report shall contain or include by reference the following: 1. The audited financial statements of the District for the prior fiscal year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the District's audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(b), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement relating to the Bonds (the "Official Statement"), and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. 2. Numerical and tabular information for the immediately preceding Fiscal Year of the type contained in the Official Statement in Table 2 ("District Current Secured and Unsecured Tax Receipts") and Table 8 ("Debt Outstanding") Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or the District of SF2-58753.3 3 related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Issuer and the District shall clearly identify each such other document so included by reference. SECTION 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: 1. principal and interest payment delinquencies; 2. non-payment related defaults; 3. modifications to rights of Bondholders; 4. optional, contingent or unscheduled bond calls; 5. defeasances; 6. rating changes; 7. adverse tax opinions or events adversely affecting the tax-exempt status of the Bonds; 8. unscheduled draws on the debt service reserves reflecting financial difficulties; 9. unscheduled draws on credit enhancements reflecting financial difficulties; 10. substitution of credit or liquidity providers, or their failure to perform; 11. release, substitution or sale of property securing repayment of the Bonds. (b) The Trustee shall, within two (2) Business Days of obtaining actual knowledge (at the principal corporate trust office specified in Section 12) of the occurrence of any of the Listed Events, contact the Disclosure Representative, inform such person of the event, and request that the Issuer promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to subsection (f). (c) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, whether because of a notice from the Trustee pursuant to subsection (b) or otherwise, SF2-58753.3 4 identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended or taldng into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Trust Agreement for amendments to the Trust Agreement with the consent of Holders, or (ii) does not, in the opinion of the Trustee or nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Issuer shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer or the District. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(f), and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements` as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Issuer or the District from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Issuer or the District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Issuer or the District shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. SECTION 10. Default. In the event of a failure of the Issuer, the District or the Trustee to comply with any provision of the Disclosure Agreement, the Trustee, pursuant to the Trust Agreement or the Project Lease, may (and, at the request of any Participating Underwriter or the Holders of at least 25% aggregate principal amount of Outstanding Bonds, shall), or any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer, the District or the Trustee, as the case may be, to comply with its obligations under the Disclosure Agreement. A default under the Disclosure Agreement shall I SM-58753.3 6 the Issuer shall as soon as possible determine if such event would be material under applicable federal securities laws. (d) If the Issuer has determined that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the Issuer shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (f). (e) If in response to a request under subsection (b), the Issuer determines that the Listed Event would not be material under applicable federal securities laws, the Issuer shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence. (f) If the Dissemination Agent has been instructed by the Issuer to report the occurrence of a Listed Event, the Dissemination Agent shall file a written notice of such occurrence with the Repositories. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(4) and (5) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Trust Agreement. SECTION b. Termination of Reporting, Obligation. The obligations of the Issuer, the District, the Trustee and the Dissemination Agent under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5(f). SECTION 7. Dissemination Agent. The Issuer may, from time to time, with the consent of the District, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Disclosure Agreement. The Issuer hereby appoints the Trustee as the initial Dissemination Agent. SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Issuer, the District and the Trustee may amend this Disclosure Agreement (and the Trustee shall agree to any amendment so requested by the Issuer, which does not impose any greater duties or risk of liability on the Trustee), and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a), 3(b), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the SF2-58753.3 5 !Ib"" not be deemed an Event of Default under the Trust Agreement, and the sole remedy under the Disclosure Agreement in the event of any failure of the Issuer, the District or the Trustee to comply with the Disclosure Agreement shall be an action to compel performance. SECTION 11. Duties. Immunities and Liabilities of Trustee and Dissemination Agent. The Dissemination Agent (if other than the Trustee) shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Issuer and the District, jointly and severally, agree to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or wilful misconduct. The obligations of the Issuer and the District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. SECTION 12. Notices. Any notices or communications to or among any of the parties to this Disclosure Agreement may be given as follows: If to the Issuer: Midpeninsula Regional Open Space District Financing Authority 330 Distel Circle Los Altos, California 94022 Attention: Chairperson If to the District: Mid peninsula Regional n Space District 330 Distel Circle Los Altos, California 94022 Attention: General Manager If to the Trustee and Dissemination Agent: Wells Fargo Bank, National Association 345 California Street, 8th Floor, MAX ##0115-082 San Francisco, California 94104 Attention: Corporate Trust Department Any person may, by written notice to the other persons listed above, designate a different address to which subsequent notices or communications should be sent. SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Issuer, the District, the Trustee, the Dissemination Agent, if any, the Participating Underwriters and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. SECTION 14. Governing Law. This Disclosure Agreement is made in the State of California and is to be construed under the Constitution and laws of such Stag: SF2-58753.3 7 SECTION 15. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY By Chairperson MIDPENINSULA REGIONAL OPEN SPACE DISTRICT By President WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee and Dissemination Agent By: Authorized Officer SR-58753.3 $ EXHIBIT A NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Obligated Person: Name of Bond Issue: Nfidpeninsula Regional Open Space District Financing Authority 1996 Revenue Bonds Date of Issuance: , 1996 NOTICE IS HEREBY GIVEN that the [Issuer] [District] has not provided an Annual Report with respect to the above-named Bonds as required by Section of the Trust Agreement, dated as of June 1, 1996, between the Issuer and Wells Fargo Bank, National Association, as Trustee. [The [Issuer/District] anticipates that its Annual Report will be filed by Dated: WELLS FARGO BANK, NATIONAL ASSOCIATION, on behalf of the [Issuer] [District] cc: [Issuer] [District] SF2-58753.3 A-1 EXHIBIT B Nationally Recognized Municipal Securities Information Repositories The following are the Nationally Recognized Municipal Securities Information Repositories approved by the Securities and Exchange Commission as of the date of this Disclosure Agreement: Bloomberg Municipal Repository Jj Kenny Information Services P.O. Box 840 The Repository Princeton, NJ 08542-0840 65 Broadway, 16th Floor Internet address: MUNIS@bloomberg.doc New York, NY 10006 (609) 279-3200 (212) 770-4568 FAX (609) 279-3235 (609) 279-5963 FAX (212) 797-7994 Contact: Dave Campbell Contact: Joan Horai, Repository Disclosure, Inc. Moody's NRMSIR Document Augmentation/Municipal Public Finance Information Center Securities 99 Church Street 5161 River Road New York, NY 10007-2796 Bethesda, MD 20816 (800) 339-6306 (301) 951-1450 FAX (212) 553-1460 FAX (301) 718-2329 Contact: Claudette Stephenson Contact: Barry Sugarman (301) 215-6015 (212) 553-0345 Donnelly Financial Thomson NRMSIR Municipal Security Disclosure Archive Secondary Market Disclosure 559 Main Street 395 Hudson Street, 3rd Floor Hudson, MA 01749 New York, NY 10014 Internet address: Internet address: Disclosure@muller.com http://Www.municipal.com (212) 807-3826 (800) 580-3670 FAX (212) 989-2078 FAX (508) 562-1969 Contact: Thomas Garske SF2-58753.3 B-1 .__. ......____ i a PRELIMINARY OFFICIAL STATEMENT DATED , 1996 NEW ISSUE—FULL BOOK-ENTRY 40 RATING: Standard & Pooes: (See"RATING"herein.) y In the opinion of Orrick,Herrington&Sutcliffe,Bond Counsel,based on existing laws,regulations,Tidings and court decisions and assuming,among 'C other matters,compliance with certain covenants,interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the ._, Internal Revenue Code and is exem t from State of California personal income taxes.In the opinion of Bond Counsel,interest on the Bonds is not a specic fi e w preference item for purposes of the federal individual or corporate alternative minimum taxes,although Bond Counsel observes that such interest is included in ua a, adjusted current earnings in calculating federal corporate alternative minimum taxable income.Bond Counsel expresses no opinion regarding other federal or w state income tax consequences relating to the ownership or disposition of,or the accrual or receipt of interest am the Bonds.See "TAX MATTERS"herein. 3 $29,2009000* o MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY 1996 REVENUE BONDS C y C •v 6. 0 Dated: Date of Delivery Due:September 1,as shown below °n ° o This cover page contains certain information forgeneral reference only.It is not a summary of this issue.Investors are advised to read the entire Official y Statement to obtain information essential to the making of an informed investment decision. u The Bonds are being issued to enable the Midpeninsula Regional Open Space District Financing Authority(the`Authority")to enter into separate R 5 Note and Lease Agreements(the'Agreements")with the Midpeninsula Regional Open Space District (the"District")to(i) assist the District in acquiring land to preserve and use as open space,(ii)lease District properties,(ui)refund outstanding variable rate and fixed rate loans of the District ° `' (iv)fund a reserve fund and(v)pay costs of issuance of the Bonds. R ° The current interest Bonds will bear interest payable semiannually on March 1 and September 1 of each year commencing March 1, 1997. Z S c The Bonds will be initially delivered only in book-entry form,registered to Cede&Co.as nominee of The Depository Trust Company("DTC"). u � R Principal of the Bonds will be payable at the principal corporate trust office of the Trustee,Wells Fargo Bank,N.A.,in San Francisco,California,to y a DTC,which will in turn remit such principal or redemption price and interest to the DTC participants,which will in turn remit such principal or °u •� redemption price and interest to the Beneficial Owners of the Bonds,as described herein.DTC will act as securities depository for the Bonds.Individual 2' purchases will be made in book-entry only form in the principal amount of$5,000 or integral multiples thereof.Purchasers of the Bonds will not receive ° instruments representing their interests in the Bonds purchased.See"TILE BONDS—Description of the Bonds"and"—Book-Entry Only System." E , The current interest Bonds maturing on or after September 1,2007,are subject to optional redemption prior to maturity on any interest payment .G date on or after September 1,2006,in whole or in part in any manner determined by the Authority and by lot within any one maturity,at the prices described herein. See "THE BONDS — Optional Redemption" herein. The Bonds maturing on September 1, are subject to mandatory ° redemption as described herein. The payment of principal and interest on the Bonds will be secured under a Trust Agreement,dated as of July 1,1996(the"Trust Agreement")by R M and between the Authority and Wells Fargo Bank,N.A.,as trustee(the"Trustee"),by the Revenues.The Revenues consist grincipally of payments to be O made by the District to the Authority under a Project Lease and a Promissory Note(collectively,the"Agreements"),each dated as of July 1,1996,by and between the District and the Authority.The payments due under the Promissory Notes are secured by limited ad valorem property taxes levied upon all taxable property within the District by the Board of Supervisors of Santa Clara County and by the Board of Supervisors of San Mateo County and allocated to the District under applicable law,and from any other funds legally available therefor.The Promissory Notes are payable on a parity >y 6 e with the District's outstanding 1990 Notes,1992 Notes and 1995 Notes and certain land purchase contracts,as more fully described herein.Payments c ; due pursuant to the Project Loans are payable from rental payments made by the District to the Authority.Such rental payments are subject to annual c+ A. ai appropriation as more fully described herein.The full faith and credit or taxing power of the District is not pledged for the payment of the Revenues, g H ea and the Agreements are not secured by a legal or equitable pledge of,or charge,lien or encumbrance on,any property of the District or any of its v income or revenue. The Bonds are special obligations of the Authority payable solely from the Revenues and from certain amounts held in the funds and accounts ° ° established by the Tlrust Agreement and the Agreements.The Bonds are not a debt or liability bili of the Dis trict,stric the Counties of Santa Clara an Vi h h' t, d San Mateo,the State of California or an political subdivision thereo other than the Authority, Y Po G ri and shall be payable sole) ;'� tY+ P Y y from the funds provided .1 therefor.Neither the District,the County,the State of California nor the Authority shall be obligated to pay the principal of the Bonds,or the interest ° e _ thereon,except from the funds described above,and neither the faith and the credit nor the taxing power of the District,the County,the State of h y California nor any political subdivision thereof is pledged to the payment of the principal of or the interest on the Bonds.The issuance of the Bonds an ,; shall not directly,indirectly or contingently obligate the District,the County,the State of E 8 Y 8a ct, sly California or anypolitical subdivision thereof pol erect to levy or pledge any form of taxation whatever therefor or to make any appropriations for their payment.Neither the Authority nor the District has taxing power. y = °C MATURITY SCHEDULE* u � c Current Interest Bonds c f Maturity Date Interest Yield or Maturity Date Interest Yield or cs September 1 Principal Rate Price September 1 Principal Rate Price 1997 S % % 2004 $ % % ee c 1998 2005 6 1999 2006 2000 2007 2001 2008 2002 2009 it 2003 2010 2011 $ %Term Bonds due September 1,2026—Yield % o, C (Plus Accrued Interest,if any) > ea g o Capital Appreciation Bonds b es 4 t Maptrity Date C September 1 Aggregate Initial Amount Accreted Value Yield to Maturity y �w Y O r W The Bonds are offered when,as and if issued subject to the approval of validity of the Bonds by Orrick Herrington&Sutckffe,San Francisco,California. Certain legal matters will be passed upon for the District by its Legal Counsel.It is expected that the Bonds will be available for delivery to DTC in New York o v c New York on or about July , 1996 ° y Stone & Youngberg LLC y' v C Dated June , 1996 Z E E—F `. �' ' Preliminary,subject to change. [S&Y Doc#8471 Draft POS Dated 6/17/96] MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY Authority Governing Board Nonette G. Hanko, President Mary C. Davey, Member David T. Smernoff, Member Ernestine U. Henshaw, Member Dianne McKenna, Member Midpeninsula Regional Open Space District Board of Directors Nonette G. Hanko, President Mary C. Davey, Vice President David T. Smernoff, Treasurer Elizabeth S. Crowder, Secretary Peter W. Siemens, Director Ernestine U. Henshaw, Director Wim de Wit, Director District Staff L. Craig Britton, General Manager Michael L. Foster, Controller Susan Schectman, Legal Counsel SPECIAL SERVICES Bond Counsel Orrick, Herrington& Sutcliffe San Francisco, California Trustee Wells Fargo Bank,N.A. San Francisco, California [S&Y Doc#8471 Draft POS Dated 6/17/96] No dealer, broker, salesperson or other person has been authorized by the Authority, the District or the Underwriter to give or to make any representations other than those contained herein and, if given or made, such other information or representation must not be relied upon as having been authorized by the Authority, the District or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts, projections or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as a representation of facts. The information set forth herein has been obtained from the District and from other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness, and is not to be construed as a representation by the Underwriter. The information and expressions of opinion herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder will, under any circumstances, create any implication that there has been no change in the affairs of the District or the Counties of San Mateo and Santa Clara since the date hereof. All of the summaries contained herein of the authorizing Trust Agreement and other documents referred to herein are made subject to the provisions of such documents respectively, and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the Authority and the District for further information in connection therewith. All capitalized terms used herein and not normally capitalized have the meanings assigned to them in the Trust Agreement, unless otherwise stated in this Official Statement. IN CONNECTION WITH THIS OFFICIAL STATEMENT, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE AND MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. [S&Y Doc#8471 Draft POS Dated 6/17/96] TABLE OF CONTENTS Emu INTRODUCTION....................................................................................................................................................I THE1996 BONDS...................................................................................................................................................3 SOURCESAND USES OF FUNDS...................................................................................:....................................10 DEBTSERVICE.......................................................................................................... I I THEFINANCING PLAN........................................................................................................................................12 SECURITY AND SOURCE OF PAYMENTS........................................................................................................12 THETRUST AGREEMENT...................................................................................................................................17 THEAUTHORITY..................................................................................................................................................22 THEDISTRICT........................................................................................................................................................23 ESTIMATED REVENUES AND OUTSTANDING OBLIGATIONS................... ...............................................26 DISTRICT FINANCIAL INFORMATION.............................................................................................................35 CONSTITUTIONAL AND STATUTORY TAX LIMITATIONS..........................................................................40 LEGAL.....................................................................................................................................................................42 TAXMATTERS ........................................................................................................................... ..........................42 LEGALITYFOR INVESTMENT...........................................................................................................................43 RATING...................................................................................................................................................................43 LITIGATION...........................................................................................................................................................43 UNDERWRITING...................................................................................................................................................43 CONTINUINGDISCLOSURE................................................................................................................................44 AVAILABILITYOF DOCUMENTS......................................................................................................................44 MISCELLANEOUS.................................................................................................................................................44 APPENDIX A-DISTRICTS AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 1995 ..............................................................................................A-1 APPENDIX B-GENERAL AND ECONOMIC INFORMATION SANTA CLARA COUNTY ANDSAN MATEO COUNTY....................................................................................................B-1 APPENDIX C-PROPOSED FORM OF BOND COUNSEL'S OPINION..............................................................C-1 APPENDIX D-FORM OF CONTINUING DISCLOSURE AGREEMENT.........................................................D-1 APPENDIX E-TABLE OF ACCRETED VALUES..............................................................................................E-1 -t Welcome to Regional g a Open Space 101 San Frarsr co sz San 82 Francisco l San Oakland / Bay Francisco �• � Half Bay 280 Moon San gas 14 San 11 Carlos Matto 35 Countn Redwood (1`01J Santa City Clara "dl „..,r.,,la County u,•c ul„•, 84 1)"1 t 12 al 21 2010� Alto san I,,.,. Woodside 237 2 3 85 �101 Mountain `10' View c� ffi Santa Cruz B 24 35 Sunnyvale o ° N ' 13 8 84 is 9 Cupertino '' "— 19 San oa' lose 85 7 / 16 Saratoga Visit Your Regional Open Space Preserves 9 , Santa 17 Preserves Acres ®©M®©O n n RI Court Sant Clara Los 1. Coal Creek I 493 I�I o�o I 0 C Counrv, fi 2. El Corte de Madera Creek 12,788 I I I I O 3 ,Oy Gatos 3. El Sereno 1,112 I I 0 7 4. Foothills 211 •Iis I•I• O S. Fremont Older 739 �� 0 19 35 , 6. La Honda Creek 2,043 I • • C 17 7. Long Ridge 1,551 I•i• • O 17 � 18 8. Los Trancos 274 I00 • • • 9. Monte Bello 4 Page Mill Area 2,758 �� � � 0 0 0 1 2 3 4 5 f 10. Monte Bello 300 • • • • • • Scale in Miles ni,Picchetti Ra Area 11. Pulgas Ridge 293 0 0 0 • C 12. Purisima Creek Redwoods 2,633 49 0 0 0I0 0 - Midpeninsula Regional Open Space District preserves ' 13. Rancho San Antonio 2,135 1 01� 1 0 14. Ravenswood 373 (0 l • le 15. Russian Ridge 1,s8o Major city, county,state&federal parks,open space 16. Saratoga Gap 701 I I O preserves,and publicly owned watershed 17. Sierra Azul (Kennedy-Limekiln 5,3t 1 I I �* Q And Cathedral Oaks Areas)18. Sierra Azul MidP eninsula Regional Open Space District (Mt.UmuaMu 6843 n Area) • I O 19. Skyline Ridge t,612 Combined with other public parklands, the District's preserves create 20. St.Joseph's Hill 173 I I i O 21. Stevens creek I I I a greenbelt extending from San Carlos to Los Gatos. Since 1972, the Shoreline Nature Study Area 5i !!I I t� District has preserved over 41,000 acres of open space. 22. Teague Hill i 624 I•I•I I O 23. Thornewood 141 I II; II ill To obtain a Visitor's Map for the entire District or for information on 24. Windy Hill 1,132 I•I o I o i o l�•l•I the preserves call the District office (415) 691-1200. Ample Parking C Limited Parking �:)Very Limited Parking .Kemredy-Limekiln area only 4/26/96 [S&Y Doc#8471 Draft POS Dated 6/17/96] $29,200,000* MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY 1996 REVENUE BONDS INTRODUCTION This Official Statement, including the cover page and the appendices hereto (the Official Statement") is provided to furnish information in connection with the sale of $29,200,000* aggregate principal amount of Midpeninsula Regional Open Space District Financing Authority 1996 Revenue Bonds (the "Bonds") being issued pursuant to a Trust Agreement, dated as of July 1, 1996 (the "Trust Agreement"), between the Midpeninsula Regional Open Space District (the "Authority") and Wells Fargo, N.A., as trustee (the "Trustee"). The Bonds are being issued to enable the Authority to purchase certain Promissory Notes of and enter into a Project Lease (collectively, the "Agreements") with the Midpeninsula Regional Open Space District (the "District") to (i) assist the District in acquiring land to preserve and use as open space, (ii) lease District properties used in the maintenance and administration of the District's operations, (iii) refund outstanding variable rate notes and fixed rate loans of the District, (iv) fund a reserve fund, and (v)pay costs of issuance of the Bonds. The Authority was established pursuant to a Joint Exercise of Powers Agreement, dated as of May 1, 1996, by and between the District and the County of Santa Clara (the "County"), pursuant to Chapter 5, Division 7 of Title 1 of the Government Code of the State of California (the "Act"). The Authority was created for the purpose of, among other things, assisting in the financing and refinancing of public capital improvements for the District by the acquisition and/or construction of real and personal property in and for the District and to sell or lease such real and personal property to the District, and has the power to issue and deliver bonds for any purpose authorized under the Act and to purchase, with the proceeds of bonds, bonds or other obligations issued or incurred by the District. The President of the Board of Directors of the District serves as the President of the Board of Directors of the Authority. Three members of the Board of Directors of the District, appointed by the President, and the member of the Board of Supervisors of the County whose district encompasses the greatest territory of the District are also members of the Governing Board of the Authority. The District, which was established by the voters in 1972, includes approximately 330 square miles of land within Santa Clara County and San Mateo County (collectively, the "Counties") on the peninsula south of San Francisco, California, plus approximately 1.2 square miles of land in Santa Cruz County. The 1996 population of the District is approximately 601,000. District policies are the responsibility of a seven-member Board of Directors elected from seven wards within the District. *Preliminary, subject to change. [S&Y Doc-#8471 Draft POS Dated 6/17/96] The payment of principal and interest on the Bonds will be secured under the Trust Agreement by the Revenues. The Revenues consist principally of payments to be made by the District to the Authority represented by the purchase of the District's 1996 Refunding Promissory Notes (the "1996 Notes"), which have been authorized and issued in the amount of $17,100,000* pursuant to a resolution of the District, in addition to rental payments to be received by the Authority pursuant to a Project Lease, dated as of July 1, 1996, by and between the District and the Authority (the "Project Lease") in the amount of $10,000,000*. The payments due pursuant to the 1996 Notes are secured by limited ad valorem property taxes levied upon all taxable property within the District by the respective Board of Supervisors of the Counties and allocated to the District under applicable law (sometimes herein referred to as "Limited Taxes"), and from any other funds legally available therefor. Although a portion of the District lies in Santa Cruz County, no property taxes are levied and collected for the District by the Board of Supervisors of Santa Cruz County. The District has covenanted under the Project Lease to take such action as may be necessary to include all rental payments in its annual budget and to make the necessary annual appropriations for the rental payments. The District's primary source of revenue is property tax revenues. The amount of property tax revenues allocated to the District is primarily a function of the assessed value of properties in the tax code areas comprising the District, the rates at which such properties are taxed by the Counties and the allocation formula applied to property tax revenues. The reduction of assessed values of taxable property in the District caused by economic factors beyond the District's control, or the complete or partial destruction of such property, or a change in the property tax rates or in the property tax allocation formula established by California law could cause a reduction in revenues of the District. Such reduction of revenues could have an adverse effect on the District's ability and therefor, the Authority's ability, to make timely payments on the Agreements and on the Bonds, respectively. Likewise, delinquencies in the payment of property taxes could have an adverse effect on the District's ability to make timely payments on the Agreements. Furthermore, the obligation of the District to appropriate and pay rental payments under the Project Lease will be subordinate to the obligation of the District to apply revenues to make payment on senior lien debt. The District has other indebtedness and lease obligations subordinate to senior debt payable from its general revenues as herein described under the captions "ESTIMATED REVENUES AND OUTSTANDING OBLIGATIONS" and "DISTRICT FINANCIAL INFORMATION." With the exception of the audited financial statements of the District for the year ended March 31, 1995 contained in Appendix A, the financial and statistical information contained herein has been obtained from the records of the District and from certain other sources and such financial information has not been audited or reviewed by the independent auditors for the District. There is no assurance that the numbers contained in the financial projections contained herein will be met, or that the assumptions on which such projections were made will conform to actual experience. If actual experience should deviate significantly from the assumptions upon Preliminary, subject to change. -2- [S&Y Doc#8471 Draft POS Dated 6/17/96] which such projections were made, the moneys available to the District may be insufficient to make such payments on the Agreements which could then produce insufficient Revenue for the Authority to make the payment of the principal of, redemption premium, if any, and interest on the Bonds. THE 1996 BONDS Authority for Issuance The issuance of the Bonds by the Authority is authorized pursuant to the Act and the Trust Agreement. With the proceeds of the Bonds, the Authority will acquire the validly authorized and issued 1996 Notes and a Project Lease. Payments by the District on the 1996 Notes and rental payments by the District to the Authority pursuant to the Project Lease will constitute Revenues as defined in the Trust Agreement. The 1996 Notes are authorized by means of Article 3 of Chapter 3 of Division 5 of the Public Resources Code of the State of California. The Project Lease has been executed and delivered pursuant to a resolution of the District. The District is authorized by the law of the State of California to lease real property for open space purposes. Description of the Bonds The Bonds will bear interest at the rates and mature in the amounts and on the dates set forth on the cover page of this Official Statement. The Bonds in the aggregate principal amount of$29,200,000* will be issued as fully registered bonds in the denominations of$5,000 each or any integral multiple thereof with respect to the Current Interest Bonds and denominations such that the Accreted Value represented thereby on the stated maturity date will be $5,000 or any integral multiple thereof with respect to the Capital Appreciation Bonds. The Bonds will be issued in book-entry form only without coupons, in denominations of $5,000 each or any integral multiple thereof. Principal and premium, if any, evidenced and represented by the Bonds will be payable at the Corporate Trust Office of Trustee in San Francisco, California, to The Depository Trust Company, New York, New York ("DTC"), which will in turn remit such principal and interest to its participants for subsequent disbursement to Owners. Current Interest Bonds Interest on the Current Interest Bonds is payable on March I and September I of each year(each an "Interest Payment Date"), commencing March 1, 1997. Such interest is payable by Preliminary, subject to change. -3- [S&Y Doc #8471 Draft POS Dated 6/17/96] check mailed to the Owners whose names appear on the registration books of the Trustee as of the close of business on the fifteenth day of the month immediately preceding each Interest Payment Date (the "Record Date"); provided, however, that payment of interest may be made by wire transfer to any owner of Bonds in the aggregate principal amount of$1,000,000 or more upon the written request of such owner to the Trustee prior to the Record Date. So long as Cede & Co. is the Owner of all of the Bonds, interest payments will be made by the Trustee by wire transfer to DTC in immediately available funds. Each Current Interest Bond will be dated as of the Delivery Date, and will bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) from the Interest Payment Date next preceding the date of authentication thereof, unless (i) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it will bear interest from such Interest Payment Date; or (ii) it is authenticated on or before February 15, 1997, in which event it will bear interest from the Delivery Date; provided, however, that if, as of the date of authentication of any Current Interest Bond, interest thereon is in default, such Current Interest Bond will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. PP Capital Appreciation Bonds P The Capital Appreciation Bonds will be dated as of the Delivery Date. The Capital Appreciation Bonds are payable at maturity in an amount (their "Accreted Value") equal to the initial amount of such Bonds as shown on the cover page hereof, plus accrued interest thereon from the date of such Bonds, compounded on each Compounding Date. The Capital Appreciation Bonds are NOT subject to optional redemption prior to maturity but are subject to extraordinary redemption. Interest on the Capital Appreciation Bonds will be payable at maturity or prior redemption upon presentation and surrender at the Corporate Trust Office of the Trustee to DTC, which will in turn remit such accreted value to its participants for subsequent disbursement to Owners. The Accreted Value per $5,000 maturity amount of each Capital Appreciation Bond, as of the Delivery Date and as of each Compounding Date thereafter, is shown in the Table of Accreted Values (the "Table of Accreted Values") attached hereto as Appendix E. "Accreted Value" means, with respect to any Capital Appreciation Bond, (a) on any Compounding Date, the amount set forth opposite such Compounding Date on the Table of Accreted Values which is included in Appendix E, (b) on any date between the Delivery Date and the first Compounding Date, the amount determined on the basis of straight-line interpolation between the Delivery Date and such Compounding Date (based on a 360-day year and twelve 30-day months), and (c) on any date which is between two Compounding Dates (based on a 360-day year and twelve 30-day months), the amount determined on the basis of straight-line interpolation between such date and such Compounding Date. -4- [S&Y Doc#8471 Draft POS Dated 6/17/96] Optional Redemption The Current Interest Bonds maturing by their terms on or after September 1, 2007, are subject to optional redemption by the Authority on any Interest Payment Date on or after September 1, 2006, and prior to their respective maturity dates, as a whole, or in part in integral multiples of five thousand dollars ($5,000) from such maturities selected by the Authority (and by lot within any one maturity if less than all the Bonds of any one maturity are redeemed), from any legally available funds of the Authority, upon mailed notice as hereinafter provided, at a redemption price equal to the following amount expressed as a percentage of the principal amount of the Bonds or the portions thereof called for redemption, together with accrued interest thereon to the date of redemption, namely: Redemption Dates Price September 1,2006 102.0% March 1,2007 and thereafter 100.0 The Capital Appreciation bonds are NOT subject to optional redemption. Extraordinary Redemption The Bonds (including the Capital Appreciation Bonds) are subject to redemption on or prior to their respective maturities, upon notice, as a whole on any date, or in part by lot on any Interest Payment Date within each payment date in integral multiples of$5,000 principal amount (or Accreted Value thereof in the case of the Capital Appreciation Bonds) so that the aggregate annual amounts of principal amount so evidenced and represented by the Bonds which will be payable after such prepayment date will be as nearly proportional as practicable to the aggregate annual amounts of principal evidenced and represented by the then unpaid Bonds, from prepaid rental payments made by the District from funds received by the District due to a governmental taking of the Project, or portions thereof, by eminent domain proceedings, which is subject to the Project Lease, at a redemption price equal to the sum of the principal amount evidenced (or Accreted Value) and represented thereby plus accrued interest evidenced and represented thereby to the date fixed for redemption without a redemption premium. Mandatory Sinking Payment Redemption The Current Interest Bonds maturing on September 1, 2026 are subject to mandatory redemption, in part by lot, on September I of each year commencing September 1, , from Sinking Fund Account payments (as provided in the Trust Agreement) at a redemption price equal to the principal amount thereof to be redeemed, without premium, as set forth in the following table: [S&Y Doc#8471 Draft POS Dated 6/17/96] Redemption Date Sinking Fund (September 1) Account Payments Selection of Bonds for Redemption, When less than all of the Bonds of any one maturity date are to be redeemed, the Trustee will select the outstanding Bonds or the portions thereof for redemption by lot in any manner that it deems fair. Notice of Redemption The Trust Agreement requires the Trustee to give mailed notice of redemption of any Bonds to the registered owners of the Bonds called in whole or in part and to various securities depositories and securities information services at least thirty, but not more than sixty, days prior to the redemption date; provided, that neither failure to receive any such notice nor any immaterial defect contained therein will affect the redemption of such Bonds. So long as the Book-Entry Only System is used for the Bonds, the Trustee will give any notice of redemption or any other notices required to be given to Owners only to DTC. Any failure of DTC to advise any DTC Participant (as defined herein), or of any DTC Participant to notify the Beneficial Owner (as defined herein), of any such notice and its content or effect will not affect the validity of the redemption of the Bonds called for redemption or any other action premised on such notice. Beneficial Owners may desire to make arrangements with a DTC Participant so that all notices of redemption or other communications to DTC which affect such Beneficial Owners, including notification of all interest payments, will be forwarded in writing by such DTC Participant. See "THE BONDS—Book-Entry Only System" herein. Effect of Redemption and Notice If a notice of redemption of any Bonds or portions of the Current Interest Bonds to be redeemed has been duly given as aforesaid and money for the payment of the redemption price of the Bonds or such portions of the Current Interest Bonds called for redemption is held by the Trustee, then on the redemption date designated in such notice such Bonds or such portions of the Current Interest Bonds so called for redemption shall become due and payable, and from and after the date so designated interest on such Bonds or such portions of the Current Interest Bonds shall cease to accrue, and the Holders of such Bonds or such portions of the Current Interest Bonds shall have no rights in respect thereof except to receive payment of the redemption price thereof. -6- [S&Y Doc#8471 Draft POS Dated 6/17/96] Transfer and Exchange The Bonds are transferable by the registered owner thereof, in person or by duly authorized attorney, at the principal corporate trust office of the Trustee in San Francisco, California, upon surrender thereof for cancellation accompanied by a duly executed written instrument of transfer on a form approved by the Trustee, and thereupon a new Bond or Bonds will be issued to the transferee in exchange therefor, in the manner, subject to the conditions and upon payment of any tax or governmental charge required to be paid with respect to such transfer as set forth in the Trust Agreement. Book-Entry Only System DTC will act as securities depository for the Bonds. The Bonds will be executed and delivered as fully-registered notes registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered note will be executed and delivered for each maturity of the Bonds, each in the aggregate principal amount due on such maturity date, and will be deposited with DTC. The following information has been provided by DTC and the District makes no representation as to its accuracy or completeness. For further information, DTC may be contacted in New York,New York. DTC is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("DTC Participants") deposit with DTC. DTC also facilitates the settlement among DTC Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in DTC Participants' accounts, thereby eliminating the need for physical movement of securities certificates. "Direct Participants" include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its participants are on file with the Securities and Exchange Commission. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written -7- [S&Y Doc#8471 Draft POS Dated 6/17/96] confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of DTC Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive Bonds representing their ownership interests, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by DTC Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The DTC Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to the issuer of the securities as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal and interest payments and premium, if any, with respect to the Bonds will be made to DTC. DTC's practice is to credit Direct Participants' accounts on the payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by DTC Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such DTC Participant and not of DTC, the Trustee or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Trustee; disbursement of such payments to Direct Participants will be the responsibility of DTC; and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Bonds at any time by giving reasonable notice to the Trustee and the Authority. Under such circumstances, in the event that a successor securities depository is not obtained, physical notes are required to be printed and delivered as described in the Trust Agreement. [S&Y Doc#8471 Draft POS Dated 6/17/96) In the event the Authority and the Trustee determine not to continue the DTC book-entry only system or DTC determines to discontinue its services with respect to the Bonds and the District does not select another qualified securities depository, the Authority will deliver one or more Bonds in such principal amount or amounts, in authorized denominations, and registered in whatever name or names, as DTC will designate. In such event, transfers and exchanges of Bonds will be governed by the provisions of the Trust Agreement. AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE BONDS, THE TRUSTEE WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO HOLDERS ONLY TO DTC. ANY FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE VALIDITY OR SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE. THE AUTHORITY, THE DISTRICT, THE TRUSTEE AND THE UNDERWRITER HAVE NO RESPONSIBILITY OR LIABILITY FOR ANY ASPECTS OF THE RECORDS RELATING TO OR PAYMENTS MADE ON ACCOUNT OF BENEFICIAL OWNERSHIP, OR FOR MAINTAINING, SUPERVISING OR REVIEWING ANY RECORDS RELATING TO BENEFICIAL OWNERSHIP OF INTERESTS IN THE BONDS. THE AUTHORITY, THE DISTRICT, THE TRUSTEE AND THE UNDERWRITER CANNOT AND DO NOT GIVE ANY ASSURANCES THAT DTC WILL DISTRIBUTE PAYMENTS TO DTC PARTICIPANTS OR THAT DTC PARTICIPANTS OR OTHERS WILL DISTRIBUTE PAYMENTS WITH RESPECT TO THE BONDS RECEIVED BY DTC OR ITS NOMINEES AS THE HOLDER OR ANY REDEMPTION NOTICES OR OTHER NOTICES TO THE BENEFICIAL HOLDERS, OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC WILL SERVICE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. The foregoing description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, redemption premium, if any, and interest with respect to the Bonds to DTC, DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds and other related transactions by and between DTC, DTC Participants and the Beneficial Owners is based solely on the District's and the Trustee's understanding of such procedures and record keeping from information provided by DTC. Accordingly, no representations can be made concerning these matters and neither DTC, DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or DTC Participants, as the case may be. The Authority and the Trustee understand that the current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and that the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC. -9- [S&Y Doc#8471 Draft POS Dated 6/17/96] SOURCES AND USES OF FUNDS The following table sets forth the estimated sources and uses of funds. Sources 1996 Revenue Bonds 1988 Note Reserve Fund Total Sources Uses Acquisition of Notes(1) $ Acquisition of Project Lease(2) 1996 Reserve Fund Costs of Issuance Underwriter's Discount Original Issue Discount Total Uses (1) Will provide for a current refunding of the District's 1988 Notes and pre payment of certain land contract notes. (2) Will provide funds for open space acquisition and the prepayment of certain land contract notes. -10- [S&Y Doc#8471 Draft POS Dated 6/17/96] DEBT SERVICE The following table sets forth annual debt service on the Bonds based on the maturity dates and interest rates printed on the cover hereof based, as allocated between the underlying 1996 Notes and the Project Lease. Midpeninsula Regional Open Space District Financing Authority 1996 Revenue Bonds Debt Service Payments Date 1996 Notes Project Lease Total Debt Service 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 [S&Y Doc#8471 Draft POS Dated 6/17/961 THE FINANCING PLAN The Bonds are being issued to provide the funds needed to (i) assist the District in acquiring land to preserve and use as open space, (ii) lease District properties, (iii) refund outstanding variable and fixed rate notes of the District, (iv) fund a reserve fund, and (v) pay costs of issuance of the Bonds. The Authority will use a portion of the Bond proceeds to acquire from the District the 1996 Notes and the Project Lease. The District will apply the funds received from the Authority to the foregoing purposes: The 1996 Notes The District will use a portion of the 1996 Note proceeds in addition to funds on hand to provide for a current refunding of the District's Variable Rate Demand Notes 1988 Series A dated February 11, 1988 in the current outstanding principal amount of$10,400,000. In addition, a portion of the proceeds will be used to pre-pay certain land contract notes previously entered into by the District and held by private property owners who have sold their lands to the District. The Project Lease Proceeds The District will use a portion of the proceeds of the Project Lease to refinance or finance the cost of acquisition of open space for the District. SECURITY AND SOURCE OF PAYMENT The payment of principal and interest on the Bonds will be secured under the Trust Agreement by the Revenues. The Revenues consist principally of payments to be made by the District to the Authority under the Agreements. The 1996 Notes The payments due under the 1996 Notes are payable from limited ad valorem property taxes levied upon all taxable property within the District by the Board of Supervisors of Santa Clara County and by the Board of Supervisors of San Mateo County, and allocated to the District under applicable law, and from any other legally available funds of the District including, but not limited to, subventions received from the State in lieu of property taxes, if any, certain federal and State grants, if any, and interest earned on invested funds. The full faith and credit or taxing power of the District is not pledged for the payment on the 1996 Notes, and the 1996 Notes are not secured by a legal or equitable pledge of, or charge, lien or encumbrance on, any property of the District or any of its income or revenue. -12- [S&Y Doc#8471 Draft POS Dated 6/17/96] The 1996 Notes constitute a contract between the District and the Authority. The covenants and agreements set forth in the 1996 Notes will be for the equal and proportionate benefit, security and protection of the Authority and any additional notes which may hereafter be issued without preference, priority or distinction as to security or otherwise of any of such obligations over any of the other by reason of the number or date thereof or the time of sale, execution and delivery thereof. For the purpose of paying the principal of and interest on the 1996 Notes, until the principal of and interest on the 1996 Notes are paid or until there is a sum in the treasury of the District set apart for that purpose sufficient to meet all payments of principal of and interest on the 1996 Notes as they become due, the District agrees pursuant to the 1996 Notes annually to set aside a portion of the limited ad valorem taxes levied upon all taxable property within the District by the Boards of Supervisors of the Counties, and allocated to the District under applicable law, or other legally available funds of the District, sufficient to pay such principal of and interest on the 1996 Notes that will become due before the proceeds of a tax levied at the next general tax levy will be available for such purpose. The Project Lease The obligation of the District to make the rental payments pursuant to the Project Lease does not constitute an obligation of the District for which the District is obligated to levy or pledge any form of taxation or for which the District has levied or pledged any form of taxation, nor does the obligation of the district to make the Rental Payments constitute an indebtedness of the District,the State, or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction. The obligation of the District to appropriate and pay rental payments under the Project Lease will be subordinate to the obligations of the District to apply tax revenues to make payments on senior lien obligations. Under the Project Lease, the District covenants to take action as may be necessary to include all rental payments due under the Project Lease in its annual budgets and to make the necessary annual appropriations for all such Rental Payments. The Project Lease provides that the covenant of the District to budget and appropriate will be deemed to be and will be construed to be duties imposed by law and it will be the duty of each and every public official of the District to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the district to carry out and perform such covenants. During any period in which, by reason of material damage or eminent domain proceedings (as described in the Project Lease), there is substantial interference with the use and possession by the District of any portion of the Project, rental payments due under the Project Lease with respect to such portion of the Project will be abated proportionately by the fractional amount that the cost of the portion of the Project so damaged or condemned bears to the entire cost of the Project, as calculated by the District and set forth in writing to the Project, as -13 - [S&Y Doc#8471 Draft POS Dated 6/17/96] calculated by the District and set forth in writing to the Trustee; and the District waives the benefits of Civil Code Sections 1932(2) and 1933(4) and any and all other rights to terminate the Project Lease by virtue of any such interference and the Project Lease will continue in full force and effect. Such abatement will continue for the period commencing with the date of such damage or condemnation and ending with the substantial replacement of the portions of the Project so damaged or condemned. The District will agree in the Project Lease that it will procure and maintain (or cause to be procured and maintained) throughout the term of the Project Lease (a) workers' compensation insurance covering all employees working in or on the Project, and (b) public entity liability insurance, with minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in each accident or event, and in a minimum amount of $200,000 (subject to a deductible clause of not to exceed $100,000) for damage to property resulting from each accident or event; provided, that such public liability and property damage insurance may be in the form of a single limit policy in the amount of$3,00,000 covering all such risks and may be maintained as part of or in conjunction with any other liability insurance carried by the District. As an alternative to providing the insurance required by sentences (a) and (b) above, the District may provide a self-insurance method or plan of protection in compliance with certain provisions of the Project Lease. The District also will agree in the Project Lease to file a certificate with the Trustee each year certifying that the insurance required under the Project Lease is in full force and effect for the ensuing year and that the Trustee is named as a loss payee on each policy of insurance which the Project Lease required to be so endorsed. The Project Lease may be amended from time to time to permit the substitution of one parcel or parcels of real property for parcels of real property which are the subject of the Project Lease, as long as the substituted parcels or parcels are used for open space for the District; provided, that before any such substitution is approved by the District it will have first prepared and filed with the Authority and the Trustee an M.A.I. appraisal by an independent real estate appraiser concluding that the parcel or parcels of real property to be so substituted have a fair market value at least equal to that of the parcel or parcels of real property to be released from the terms of the Project Lease by virtue of such substitution except that if the parcel or parcels of real property that are proposed to be substituted have been purchased by the District within 12 months of the amendment of the Project Lease, the District may use the purchase price thereof in determining the fair market value thereof, and, provided further, that so long as any parcel or parcels of real property that re proposed to be so substituted have no prior liens against them that would impair their use for the purpose intended by the District and have a useful life at least as long as the parcel or parcels being substituted out of the Project Lease. -14- [S&Y Doc#8471 Draft POS Dated 6/17/96) Remedies Any remedies available to the Authority under the Project Lease and Trust Agreement or by any law now or hereafter enacted are cumulative, and the exercise of one right or remedy will not impair the right of the Authority to any or all remedies allowable under any statute or rule of law. However, the enforcement of any remedies provided in the Project Lease and Trust Agreement could prove expensive and time consuming. In the event the District fails to make Rental Payments when due, the Trustee may sue for payment on an annual basis; but any suit for money damages would be subject to limitations on legal remedies against public entities in California, including a limitation on legal remedies against public entities in California, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest. In the event of a default, the Trustee will not have the right to re-enter and re-let the Project. In addition to the limitations on remedies contained in the Project Lease and the Trust Agreement, the rights and remedies provided in the Trust Agreement and the Project Lease may be limited by and are subject to provisions of federal bankruptcy laws, as now or hereafter enacted and to other laws or equitable principles that may affect creditors' rights. Reserve Account A Reserve Account will be established for the security of the registered owners of the Bonds in the amount of$ which is the initial Reserve Requirement, as defined in the Trust Agreement. An amount equal to the Reserve Requirement will be retained in the Reserve Account and used only for the payment of principal of and interest on the Bonds to the extent amounts in the Revenue Account (as defined below) are insufficient therefor or for the retirement of all outstanding Bonds. Whenever any withdrawals from the Reserve Account reduce the balance therein below the Reserve Requirement, the Reserve Account will be replenished to the Reserve Requirement on September I of each year from moneys remaining in the Revenue Fund, as provided in the Trust Agreement. [S&Y Doc#8471 Draft POS Dated 6/17/96] Parity Obligations/Senior Lien Obligations The 1996 Notes are co-equal to and are on a parity with outstanding 1990 Notes, 1992 Notes and 1995 Notes as well as Parity Land Contracts all described below. Such notes collectively stand ahead of the Project Lease and Certificates of Participation (1993 Open Space Project) executed on August 18, 1993 in the current outstanding principal amount of $17,225,000. In September 1990, pursuant to Resolution 90-38 adopted by the Board of Directors of the District on August 22, 1990 (the "1990 Resolution") the District sold the 1990 Notes in the aggregate principal amount of$15,000,000 to refund a portion of 1987 promissory notes, prepay certain land contract debt and finance acquisition of open space lands. The outstanding 1990 Notes mature annually from September 1, 1995 through September 1, 2010 and bear interest at rates ranging from 6.5% to 7.5%. As of June 30, 1996, the outstanding principal of the 1990 Notes was $14,460,000. In December 1992, pursuant to Resolution No. 92-56 adopted by the Board of Directors of the District on November 18, 1992 (the "1992 Resolution"), the District sold the 1992 Notes in the aggregate principal amount of$8,000,000 to finance acquisition of open space lands. The 1992 Notes mature annually from July 1,1997 through July 1, 2012 and bear interest at rates ranging from 5.00% to 6.35%. As of June 30, 1996, all of the $8,000,000 original principal amount of the 1992 Notes was outstanding. In January 1995, pursuant to Resolution No. 94-44 adopted by the Board of Directors of the District on December 14, 1994 (the "1994 Resolution") the District sold the 1995 Notes in the aggregate principal amount of$11,500,000 to refund a portion of the 1987 Notes and finance the acquisition of open space lands. The 1995 Notes mature annually from September 1, 1998 through September 1, 2014 and bear interest at rates ranging from 5.75% to 7.10%. As of June 30, 1996, all of the $11,500,000 original principal amount of the 1995 Notes was outstanding. As of June 30, 1996, the District had $247,451 aggregate principal amount of notes representing obligations of the District under contracts for the purchase of land by the District for open space (the "Land Contract Notes"). The 1996 Notes providing security in part for the Bonds are payable from property taxes allocated to the District and legally available to pay the 1996 Notes and obligations of the District on a parity with the 1996 Notes (the "Limited Tax Revenues") and other revenues as herein described, and are not secured by a pledge of any land or other property of the District. Of the $247,451 total amount of Land Contract Notes outstanding, $19,384 is payable from Limited Tax Revenues on a parity with the 1996 Notes, the 1995 Notes, the 1992 Notes and the 1990 Notes. The District may in the future issue additional notes on a parity with such Notes subject to covenants described herein for issuing such parity debt. See "DISTRICT FINANCIAL INFORMATION"herein below. -16- [S&Y Doc#8471 Draft POS Dated 6/17/96] THE TRUST AGREEMENT The following is a brief outline of certain provisions of the Trust Agreement and is not to be considered a full statement pertaining thereto. Reference is made to the Trust Agreement for the complete text thereof. Copies of the Trust Agreement are available from the Authority. The Authority will use the proceeds of the Bonds to acquire the Program Obligations (the 1996 Notes and the Project Lease), pay costs of issuance and fund a reserve fund. All Revenues received by the Authority are hereby assigned by the Authority to the Trustee for the benefit of the Owners of the Bonds, and are hereby irrevocably pledged to the payment of the interest on and the principal of and the redemption premiums, if any, on the Bonds as provided herein, and the Revenues will not be used for any other purpose while any of the Bonds remain Outstanding. This pledge will constitute a first pledge of and charge and lien upon the Revenues and all money on deposit in the accounts and funds established hereunder for the payment of the interest on and principal of and redemption premiums, if any, on the Bonds in accordance with the terms hereof and thereof. In order to carry out and effectuate the pledge, charge and lien contained in the Trust Agreement, the Authority agrees and covenants that all revenues when and as received by the Authority will be transferred by the Authority to the Trustee for deposit in the "Midpeninsula Regional Open Space District Financing Authority 1996 Revenue Bonds Revenue Fund," which fund the Authority agrees and covenants to maintain with the Trustee so long as any Bonds are Outstanding. All money in the Revenue Fund will be accounted for and held in trust by the Trustee, and the Authority will have no beneficial right or interest in any money in the Revenue Fund. All Revenues will be accounted for separately and a part from all other accounts, funds, money or other resources of the Authority. All money in the Revenue Fund will be set aside by the Trustee in the following respective special accounts within the Revenue Fund in the following order of priority: (a) Interest Account, (b) Redemption Account, and (c) Reserve Account. All money in each of such accounts will be held in trust by the Trustee and will be applied, used and withdrawn only for the purposes set forth in the Trust Agreement. (a) Interest Account. On March 1 and September 1 of each year, beginning on March 1, 1997, the Trustee will set aside from the Revenue Fund and deposit in the Interest Account that amount of moneywhich is equal to the amount of intere st becoming du q g e and payable on all Bonds on such March 1 or September 1, as the case may be; provided, that no -17- [S&Y Doc#8471 Draft POS Dated 6/17/96] such deposit need be made in the Interest Account if the amount contained therein is at least equal to the aggregate amount of interest becoming due and payable on all Bonds on such Interest Payment Date. All money in the Interest Account will be used and withdrawn by the Trustee solely for the purpose of paying the interest on the Bonds as it will become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity). (b) Redemption Account. On September I of each year, beginning on September 1, 1997, the Trustee will set aside from the Revenue Fund and deposit in the Principal Subaccount in the Redemption Account an amount of money equal to the principal amount of all Outstanding Current Interest Serial Bonds and Capital Appreciation Bonds maturing on such September I and will set aside from the Revenue Fund and deposit in the Sinking Fund Subaccount in the Redemption Account an amount of money equal to the Sinking Fund Payment required to be made on such September 1;provided, that no such deposit need be made in the Redemption Account if the amount contained in the Principal Subaccount therein is at least equal to the aggregate amount of the principal of all Outstanding Current Interest Serial Bonds and Capital Appreciation Bonds maturing by their terms on such September I and the amount contained in the Sinking Fund Subaccount therein is at least equal to the amount of the Sinking Fund Payment required to be made on such September I for all Outstanding Current Interest Term Bonds. All money in the Principal Subaccount in the Redemption Account will be used and withdrawn by the Trustee solely for the purpose of paying the principal of the Current Interest Serial Bonds and or Accreted Value of the Capital Appreciation Bonds as they become due and payable, whether at maturity or on prior redemption, and all money in the Sinking Fund Subaccount in the Redemption Account will be used and withdrawn by the Trustee solely for the purpose of purchasing or redeeming or paying the Current Interest Tenn Bonds and with respect to the Sinking Fund Subaccount, on each Sinking Fund Payment date the Trustee will apply the Sinking Fund Payment date the Trustee will apply the Sinking Fund Payment required to be made on that date to the redemption (or payment at maturity, as the case may be) of the Current Interest Term Bonds upon notice; provided, that at anytime prior to giving any such notice of such redemption the Trustee will, upon receipt of a Written Request of the Authority, apply any money in the Sinking Fund Subaccount to the purchase for cancellation of Current Interest Term Bonds at public or private sale as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as directed in such Written Request of the Authority, except that the purchase price (excluding accrued interest) will not exceed the redemption price that would be payable for such Current Interest Term Bonds upon redemption by application of such Sinking Fund Payment, and if during the twelve-month period immediately preceding any Sinking Fund Payment date the Trustee has purchased Current Interest Term Bonds with money in the Sinking Fund Subaccount, such Current Interest Term Bonds so purchased will be applied to the extent of the full principal amount thereof to reduce the Sinking Fund Payment due on such Sinking Fund Payment date. -18- I [S&Y Doc#8471 Draft POS Dated 6/17/96] (c) Reserve Account. On September 1 or each year, beginning on September 1, 1997, the Trustee will set aside from the Revenue Fund and deposit in the Reserve Account all money remaining in the Revenue Fund. All money in the Reserve Account will be used and withdrawn by the Trustee solely for the purpose of paying the interest on or the principal of the bonds (in such order) in the event that no other money is available for this purpose in the Interest account or in the Redemption Account;provided, that all money on deposit in the Reserve Account in excess of the Reserve Requirement will, on September 1 of each year (beginning in September, 1997), be withdrawn by the Trustee from the Reserve Account and deposited in the Revenue Fund; and for this purpose all investments in the Reserve Account will be valued on September 1 of each year (beginning in September, 1997) at the face value thereof if such investments mature within twelve (12) months from the date of valuation, or if such investments mature more than twelve (12) months after the date of valuation, at the price at which such investments are redeemable by the holder, at his option, if so redeemable, or if not so redeemable, at the market value of such investments. Rebate Fund. The Authority agrees to establish and maintain with the Trustee so long as any Bonds are Outstanding a fund separate from any other fund established under the Trust Agreement designated the "Midpeninsula Regional Open Space District Financing Authority 1996 Revenue Bonds Rebate Fund." The Trustee will deposit in the Rebate Fund from funds provided by the Authority the Rebate Requirement in accordance with the Tax Certificate, but only as directed by the Authority in an appropriate Written Request of the Authority filed with the Trustee. Investment of Moneys in the Funds and Accounts Subject to the provisions of the Internal Revenue Code of 1986 (the "Code") and State law, all moneys in the funds and accounts established under the Trust Agreement are to be deposited or invested as determined by the Controller so as to obtain the highest yield that the Controller deems practicable, having due regard for the safety of such deposits and investments; provided, that all such deposits and investments must be withdrawable or must mature at such times so as to coincide as nearly as practicable with the time when such moneys are expected to be withdrawn for use under the Trust Agreement. Proceeds of the investment of amounts in the funds and accounts established by the Trust Agreement are deposited as and when received in the fund or acc ount in which suchinvestments n estments are held. -19- ( [S&Y Doc #8471 Draft POS Dated 6/17/96] Covenants of the Authority Punctual Payment and Performance. The Authority will punctually pay the interest on and the principal of and the redemption premium, if any, to become due on every Bond issued hereunder fro m the Revenues in strict conformity with the terms hereof and of the Bonds, and will faithfully observe and perform all the agreements, conditions, covenants and terms to be observed or performed. Against Encumbrances. The Authority will not make any pledge of or place any charge or lien upon the Revenues except as provided herein, and will not issue any bonds, notes or obligations payable from the Revenues or secured by a pledge of or charge or lien upon the Revenues except the bonds. The District may, however, issue additional parity notes and enter into leases. Tax Covenants. The Authority will not take any action, or fail to take any action, if such action or failure to take such action would adversely affect the exclusion from gross income of the interest on the Bonds pursuant to Section 103 of the Code. Accounting Records and Reports. The Authority will keep or cause to be kept proper books of record and accounts in which complete and correct entries will be made of all transactions relating to the receipts, disbursements, allocation and application of the Revenues, and such books will be available for inspection by the Trustee at reasonable hours and under reasonable condition. Not more than 210 days after the close of each Fiscal Year, the Authority will furnish or cause to be furnished to the Trustee audited financial statements for such Fiscal Year prepared by an Independent Certified Public Accountant. Prosecution and Defense of Suits. The Authority will defend against every suit, action or proceeding at any time brought against the Trustee upon any claim to the extent arising out of the receipt, application or disbursement of any of the Revenues or to the extent involving the failure of the Authority to fulfill its obligations;provided, that the Trustee or any affected Owner at its election may appear in and defend any suite, action or proceeding. The Authority will indemnify and hold harmless the Trustee against any and all liability claimed or asserted by any person to the extent arising out of any such failure by the Authority, and will indemnify and hold harmless the Trustee against any attorney's fees or other expenses which it may incur in connection with any litigation to which it may become a party by reason of its actions hereunder, except for any loss, costs, damage or expense resulting from the active or passive negligence, willful misconduct or breach of duty by the Trustee. Enforcement and Amendment of Program Obligations. The Authority will enforce all of its rights with respect to the Program Obligations (the 1996 Notes and the Project Lease) to the fullest extent necessary to preserve the rights and protect the security of the Owners hereunder. The Authority and the Trustee may, without the consent of or notice to the Owners, consent to any amendment, change or modification of either Program Obligation that may be -20- [S&Y Doc#8471 Draft POS Dated 6/17/96] required (a) to conform to the provisions hereof (including any modifications or changes contained in any Supplemental Trust Agreement), (b) for the purpose of curing any ambiguity or inconsistency or formal defect or omission, (c) to add additional rights acquired in accordance with the provisions of the Program Obligation, (d) in connection with any other change therein which is not to the material prejudice of the Trustee or the Owners pursuant to an Opinion of Bond Counsel, or(e) in an Opinion of counsel, to preserve or assure the exemption of interest on the Program Obligation or the Bonds from federal income taxes under the Code or the exemption from State of California personal income tax. Except for amendments, changes or modifications provided for in the preceding paragraph, neither the Authority nor the Trustee will consent to any amendment, change or modification of either Program Obligation without the mailing of notice and the written approval or consent of the Owners of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding given and procured. If at any time the Authority will request the consent of the Trustee to any such proposed amendment, change or modification of either Program Obligation, the Trustee will, upon being satisfactorily indemnified with respect to expenses, cause notice of such proposed amendment, change or modification to be mailed. Such notice will briefly set forth the nature of such proposed amendment, change or modification and will state that copies of the instrument embodying the same are on file at the Principal Corporate Trust Office of the trustee for inspection by all Owners. Maintenance of Existence. The Authority will maintain its existence, powers and authority as a joint exercise of powers entity under the laws of the State of California. Further Assurances. Whenever and so often as reasonably requested to do so by the Trustee or any Owner, the Authority will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments, and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Owners all rights, interest, powers, benefits, privileges and advantages conferred or intended to be conferred upon them. District Covenants and Additional Debt The District agrees and covenants that until payment in full of all the interest on and principal of or Sinking Fund Account Payments for and redemption premiums, if any, on the 1996 Notes (or provision satisfactory for such payment)will have been made, it will: 1. Duly and punctually pay or cause to be paid the principal of or Sinking Fund Account Payments for and redemption premiums, if any, on the 1996 Notes in accordance with the conditions and terms thereof; 2. Incur no additional indebtedness or capital lease obligations payable from Limited Taxes received by the District having any priority in payment to payment of the -21- [S&Y Doc#8471 Draft POS Dated 6/17/96] interest on and principal of or Sinking Fund Account Payments for and redemption premiums, if any, on the 1996 Notes; 3. Incur no additional indebtedness or capital lease obligations payable from Limited Taxes received by the District on a parity in payment with the principal of or Sinking Fund Account Payments for and p redemptions premiums, Y if an on the 1996 Notes P unless it will v l have first filed with the Trustee a certificate executed by the District stnct Controller showing: (i) the total Limited Taxes plus the total subventions received by the District from the State of California in its most recent audited fiscal year, as shown by the most recent audited financial statement of the District; (ii) the debt service payable by the District during its next succeeding fiscal year on all indebtedness or capital lease obligations of the District that would be payable from the Limited Taxes on a parity with the 1996 Notes and the debt service that is payable on the outstanding 1996 Notes in the next succeeding fiscal year; and (iii) that the total defined in subparagraph i above is at least 125% of ( ) the total defined in subparagraph(ii) above. "Limited Taxes" means the limited ad valorem property taxes levied on all taxable property in the District by the Boards of Supervisors of the Counties and allocated to the District under applicable law that are legally available to pay the 1996 Notes and any other notes and parity debt. Prepare and adopt a budget for each fiscal year, which budget will provide for the payment of the interest on and principal of or Sinking Fund Account Payments for and redemption premiums, if any, on the 1996 Notes becoming due and payable in such fiscal year and for appropriations of the Limited Taxes fully sufficient to make such payments. The budgets of the District on file with the Trustee will be open to inspection during regular business hours by any registered owner of the 1996 Notes. THE AUTHORITY The Authority is a joint powers authority, organized pursuant to a Joint Exercise of Powers Agreement, dated as of May 1, 1996 (the "Joint Powers Agreement") by and between the District and the County of Santa Clara. The Joint Powers Agreement was entered into pursuant to the provisions of the California Government Code. The Authority is a separate entity constituting a public instrumentality of the State of California and was formed for the public purpose of assisting the District in financing capital projects. Four members of the Board of -22- I [S&Y Doc #8471 Draft POS Dated 6/17/96] Directors of the District and one member of the Board of Supervisors of the County of Santa Clara constitute the Directors of the Authority. THE DISTRICT Location and Size On November 7, 1972, the citizens of northwestern Santa Clara County voted to establish the Midpeninsula Regional Park District under provisions of the Public Resources Code of the State of California. On July 7, 1976, after another public vote, the District expanded its boundaries by annexing the southeastern portion of San Mateo County. The District was subsequently renamed the "Midpeninsula Regional Open Space District." The approximately 331 square miles of the District include about 200 square miles within Santa Clara County and 130 square miles within San Mateo County, constituting approximately 61% and 39% respectively of the total District area. In 1992, approximately 1.2 square miles of land in Santa Cruz County was also annexed to the District, although the District receives no portion of the property taxes attributable to this land. The southwestern border of the District falls approximately along the ridgeline of the coast range which bisects the San Francisco Peninsula into the coastside and bayside regions. The coastside is predominately rural in character, with limited areas of flat land on the ocean terraces and vast areas of steep, forested ridges and canyons located inland. The District is located on the bayside which has more gentle topography characterized by substantially level areas and rolling plains which have been more favorable for development. The District's northeast border is the San Francisco Bay. The District is composed of the incorporated communities of Palo Alto, Mountain View, Los Altos, Los Altos Hills, Sunnyvale, Cupertino, Saratoga, Monte Sereno, and Los Gatos and adjacent unincorporated areas located in Santa Clara County, the incorporated communities of Woodside, San Carlos, Menlo Park, East Palo Alto, Atherton, Portola Valley and Redwood City and adjacent unincorporated areas located in San Mateo County. The small portion of the District in Santa Cruz County is in an unincorporated area. The District encompasses a population of approximately 601,000 persons. Management The seven-member elected District Board of Directors originates, guides, and enforces District policies. Members of the Board of Directors are elected for staggered four-year terms from seven wards within the District. The following are the current Board members: Nonette G. Hanko,President Peter W. Siemens,Director Mary C. Davey,Vice President Ernestine U. Henshaw,Director David T. Smernoff,Treasurer Wim de Wit,Director Elizabeth S.Crowder,Secretary -23- [S&Y Doc#8471 Draft POS Dated 6/17/96] L. Craig Britton is the District's General Manager and is responsible for the administration of the District's affairs. Mr. Britton joined the District in 1977 as Land Acquisition Manager and in 1979 also assumed the duties of Assistant General Manager. Prior to his involvement with the District, Mr. Britton worked for the Counties of Marin and Santa Cruz and the State of California with duties including acquisition and property management. Mr. Britton attended Claremont Men's College and San Francisco State College where he received a B.A. in Business. Michael L. Foster has been Controller of the District since 1978. In addition to his responsibility with the District, Mr. Foster is also the Vice President - Financial Planning and Treasurer of California Microwave, Inc., a communications equipment manufacturer. Mr. Foster received both an undergraduate degree in economics and a Master of Business Administration from Stanford University. The District currently has 50 full-time employees, 5 part-time employees, and 4 seasonal employees. Objectives and Operations Preservation of open space is the principal objective of the District. "Open space" is generally defined by the District as any land or water area which remains in a natural state, is used for agriculture, or is otherwise essentially undeveloped. The Master Plan of the District (the "Master Plan"), which was adopted initially by the District Board of Directors in fiscal year 1977/78, defines acquisition policies and the role the District will play in the preservation of open space. According to the Master Plan, the District seeks to preserve open space for the following purposes: for the protection of natural vegetation, for the protection of wildlife, for outdoor recreation, for guiding urban form, for scenic preservation, for the preservation of unique sites, for the protection of agriculture, for the production of minerals and for the protection of public health and safety. Under certain circumstances the District may acquire undeveloped land within an urbanized area. The Master Plan of the District defines acquisition policies and the role the District will play in the preservation of open space and reflects the roles the District believes other public agencies and private organizations should play in the preservation of open space. The Master Plan map was based on an open space lands evaluation. The District's most effective method for the preservation of open space is the purchase of land with District revenues and from the proceeds of its debt obligations. Other sources of revenues for acquiring land for open space purposes include obtaining State and federal grants for the land purchases. From time to time the District also receives gifts of open space land and participates in joint projects with other governmental agencies and private non-profit organizations to acquire and maintain open space lands. -24- [S&Y Doc#8471 Draft POS Dated 6/17/96] The District has the power of eminent domain. However, the District does not have regulatory power over lands other than those it owns. Consequently, it cannot adopt zoning ordinances or regulations affecting lands not owned by the District. The power to protect open space by regulating land use is held primarily by the cities located within the District and by the Counties. It is the policy of the current Board of Directors that during the next several years as much as possible of the District's financial resources will be devoted to acquiring open space lands before the land is developed and land costs become prohibitive. In keeping with this land acquisition policy, administrative costs are projected to be kept to a minimum, but land management expenditures are anticipated to be an increasing percentage of annual tax revenue. Approximately 41,219 acres of open space land had been preserved by the District as of June 30, 1996. The use of proceeds of a portion of the Bonds will add additional land to the District's current open space holdings. -25- [S&Y Doc#8471 Draft POS Dated 6/17/96] ESTIMATED REVENUES AND OUTSTANDING OBLIGATIONS General The Bonds are limited obligations of the Authority payable from the Revenues. The Revenues consist principally of payments to be made by the District to the Authority with respect to the Program Obligations (1996 Notes and Project Lease). The District's sources of revenues for making payments under the Program Obligations are derived from two basic sources: (1) the District's allocation of the 1% tax rate levied in the Counties; and (2) subventions received from the State in lieu of certain property taxes. Property Tax Limitation and Allocation Article XIIIA of the California Constitution provides for a maximum ad valorem property tax equal to one percent of the full cash value of property. Article XIIIA defines full cash value to mean "the county assessor's valuation of real property as shown on the 1975-76 tax bill under 'full cash value', or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment." At other times, this full cash value may be increased at a rate not to exceed two percent per year to account for inflation. Future assessed valuation growth allowed under Article XIIIA (new construction, certain changes of ownership, two percent inflation) will be allocated on the basis of"situs" among the jurisdictions that serve the tax rate area within which the growth occurs. Local agencies and schools will share the growth of "base" revenues from the tax rate area. Each year's growth allocation becomes part of each agency's allocation in the following year. The availability of revenues from growth in tax bases to such entities may be affected by the establishment of redevelopment agencies which, under certain circumstances, may be entitled to revenues resulting from the increase in certain property values. See "CONSTITUTIONAL AND STATUTORY TAX LIMITATIONS." Although Proposition 46, approved by the voters of the State in June 1986, permits local governments, including the District, to issue bonded indebtedness payable from ad valorem taxing in excess of one percent of full cash value with the approval of two-thirds of the votes cast by voters voting on the proposition, the voters of the District have not been presented with a tax override proposal with respect to the Bonds. Owners of the Bonds have no right to compel the District to levy or cause to be levied any tax for the payment of the principal of, redemption premium, if any, or interest on the Bonds and must look solely to the allocation described above and to certain other legally available revenues of the District for such payment. -26- [S&Y Doc#8471 Draft POS Dated 6/17/96] Property Tax Collection Procedures In California, property which is subject to ad valorem taxes is classified as "secured" or "unsecured." The secured classification includes property on which any property tax levied by a county becomes a lien on that property sufficient, in the opinion of the county assessor, to secure payment of the taxes. Every tax which becomes a lien on secured property has priority over all other liens, arising pursuant to State law, on the secured property, regardless of the time of the creation of such other liens. A tax levied on unsecured property does not become a lien against the taxed unsecured property, but may become a lien on certain other property owned by the taxpayer. Secured and unsecured property are entered separately on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is substantially different for the two classifications of property. The exclusive means of enforcing the payment of delinquent taxes with respect to property on the secured roll is the sale of the property securing the taxes to the State for the amount of taxes that is delinquent. The taxing authority has four ways of collecting unsecured personal property taxes in the absence of timely payments by the taxpayer: (i) a civil action against the taxpayer; (ii) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (iii) filing a certificate of delinquency for record in the county recorder's office, in order to obtain a lien on certain property of the taxpayer; and (iv) seizure and sale of personal property, improvements or possessory interests belonging or taxable to the assessee. A ten percent penalty is added to delinquent taxes which have been levied with respect to property on the secured roll. In addition, property on the secured roll on which taxes are delinquent is sold to the State on or about June 30 of each fiscal year. Such property may thereafter be redeemed by payment of the delinquent taxes and a delinquency penalty, plus a redemption penalty of 1%2 percent per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the county tax collector. A 10 percent penalty also applies to delinquent taxes on property on the unsecured roll, and further, an additional penalty of 1%z percent per month accrues with respect to such taxes beginning the first day of the third month following the delinquency date. Except for property assessed by the State, the valuation of property is determined as of March 1 each year and equal installments of taxes levied upon secured property become delinquent on the following December 10 and April 10. Taxes on unsecured property are due March 1 and become delinquent August 31 and such taxes are levied at the prior year's secured tax rate. The valuation of State-assessed property is determined on January 1 of each year. SB 327 (Chapter 499, Statutes of 1995) changes the property tax lien date from March 1 to January 1 effective January 1, 1997. -27- i I [S&Y Doc#8471 Draft POS Dated 6/17/96] Assessed Valuation Table 1 shows a detailed summary of the District's assessed valuation since 1985/86. Property in the District is assessed by the Santa Clara and San Mateo County Assessors in their respective counties except for public utility property which is assessed by the State Board of Equalization. TABLE 1 District Assessed Valuation ($000,000's) Santa Clara San Mateo Total District Less: Total Net County County Gross Redevelopment District Fiscal Year Portion Portion Valuation Increment Valuation 1985/86 $23,264.7 $8,900.1 $32,164.8 $516.4 $31,648.4 1986/87 25,560.3 9,832.2 35,392.4 748.4 34,644.1 1987/88 27,708.4 10,844.5 38,552.9 966.0 37,586.9 1988/89 29,285.4 11,583.5 40,869.0 1,047.1 39,821.9 1989/90 32,999.0 13,040.2 46,039.2 1,358.7 44,680.5 1990/91 36,598.5 14,849.0 51,447.5 1,586.8 49,860.7 1991/92 38,191.6 15,866.6 54,058.2 1,783.7 52,274.5 1992/93 40,129.0 16,809.8 56,938.8 1,936.5 55,002.3 1993/94 41,537.4 17,592.6 59,130.0 2,075.5 57,054.5 1994/95 41,918.1 18,203.5 60,121.6 2,146.9 57,974.7 1995/96 [Requested from Cal Munl.] Source: California Municipal Statistics. Secured and Unsecured Tax Levies Table 2 shows the total combined secured and unsecured tax receipts allocated by the Counties to the District and received by the District during the last ten fiscal years. The Pre- Article XIIIA tax override for the District, as well as certain late payments of taxes with respect to fiscal years prior to the fiscal years during which such payments are made are not reflected in Table 2. See "CONSTITUTIONAL AND STATUTORY TAX LIMITATIONS — Constitutional Limitations-Article XIIIA" below. -28- [S&Y Doc#8471 Draft POS Dated 6/17/96] TABLE 2 District Current Secured and Unsecured Tax Receipts (Excludes Pre-Article XIIIA Tax Override Levy)(1) Current Secured Tax Receipts(1) State Fiscal Santa Clara San Mateo District Total Year County County Secured 1986/87 $3,445,208 $1,463,045 $4,908,253 1987/88 3,712,180 1,674,445 5,386,625 1988/89(2) 4,007,120 1,792,226 5,799,346 1989/90 4,476,832 2,031,886 6,508,718 1990/91 4,580,579 2,342,564 6,923,143 1991/92 5,311,839 2,426,882 7,73 8,721 1992/93 5,448,227 2,449,937 7,898,164 1993/94 5,431,540 2,633,077 8,064,617 1994/95 5,947,135 2,829,980 8,777,115 1995/96 6,036,477 2,812,641 8,849,118 Current Unsecured Tax Receipts State Fiscal Santa Clara San Mateo District Total Total Secured Year County County Unsecured and Unsecured 1986/87 $512,189 $209,185 $721,374 $5,629,627 1987/88 507,689 221,739 729,428 6,116,053 1988/89(2) 574,021 236,983 811,004 6,610,350 1989/90 625,167 242,246 867,413 7,376,131 1990/91 739,049 280,485 1,019,534 7,942,677 1991/92 742,900 312,098 1,054,998 8,793,719 1992/93 762,242 331,431 1,093,673 8,991,837 1993/94 754,355 363,596 1,117,951 9,182,568 1994/95 704,557 322,486 1,027,043 9,804,158 1995/96 716,892 351,800 1,068,692 9,917,810 (1) The District also receives a share of delinquent taxes, redemption fees,supplemental taxes and State subvention payments received by each County. This revenue totaled$644,392 in 1994195 and$374,220 in 1995196. (2) Nine-month focal year(District changed fiscal year end from June 30 to March 31). Source:District Controller. The Boards of Supervisors of the Counties have respectively approved the implementation of the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the "Teeter Plan"), as provided for in Section 4701 et seq. of the California Revenue and Taxation Code. Under the Teeter Plan, the Counties apportion secured property taxes on an accrual basis when due (irrespective of actual collections) to local political subdivisions, including the District, for which the Counties act as the tax-levying or tax- collecting agency. -29- [S&Y Doc#8471 Draft POS Dated 6/17/96] The Teeter Plan is to remain in effect unless the Board of Supervisors of the Counties, respectively, order its discontinuance or unless, prior to the commencement of any Fiscal Year of the Counties (which commences on July 1), such Board of Supervisors receive a petition for its discontinuance joined in by resolutions adopted by at least two-thirds of the participating revenue districts in respective County, in which event the respective Board of Supervisors is to order discontinuance of the Teeter Plan effective at the commencement of the subsequent fiscal year. If the Teeter Plan is discontinued subsequent to its implementation, secured property taxes would be allocated to political subdivisions (including the District) for which such County acts as the tax-levying or tax-collecting agency as collected (see "Ad Valorem Property Taxation" above). According to California Municipal Statistics, Inc., the secured tax delinquency rate has been at or below % in both Counties during each of the last eight fiscal years, as shown below in Table 3: TABLE Secured Tax Delinquency Rates (at June 30) Fiscal Year Santa Clara County(1) San Mateo County(1) 1987/88 2.88% 2.22% 1988/89 2.63 2.03 1989/90 2.57 2.82 1990/91 3.37 3.66 1991/92 3.44 3.83 1992/93 3.15 3.40 1993/94 2.70 3.61 1994/95 ton order] (1) Notwithstanding the delinquency rates, both Counties currently use the Teeter Plan described above. Source: California Municipal Statistics, Inc. The District's allocation of tax revenues is the aggregate of the District's apportionment of the taxes produced by the one percent tax rate in nearly one thousand tax code areas in Santa Clara and San Mateo Counties. In accordance with Chapter 6 of the State Revenue and Taxation Code, the tax increment derived by the increase in assessed valuation in each tax code area is apportioned to the taxing entities within the code area in the same proportion as in the prior year, subject to certain modifications for change in jurisdiction or new incorporations and for certain incremental tax revenues allocated directly to redevelopment agencies within the District. Thus, the increase in the District's allocation of taxes varies directly with the increase in the assessed valuation within the District. -30- [S&Y Doc#8471 Draft POS Dated 6/17/96] Unlike special districts in California that are wholly within one county, as a multi-county special district, the District receives 100% of its allocation of collected taxes pursuant to Section 98.6 of the California Revenue and Taxation Code, and is not subject to a discretionary reduction in such allocation by action of either County's Board of Supervisors. Projected Revenues The District has projected revenues and expenditures for the first ten years in which the Bonds will be outstanding and these projections are set forth in Table 4 below. The District's projection of revenues is based on the following parameters: (1) Annual increases of 3 percent per year in the Districts' allocation of funds derived from the basic 1% tax rate. The assessed valuation of taxable property within the District has increased at an average rate of approximately 5.5% annually over the j last five years. (2) District cash balances will be invested to earn 5.5 percent per annum. (3) "Other Revenue" is primarily grants, rental income, and in 1997/2000, proceeds from the sale of surplus property Although the District believes such assumptions to be reasonable, there is no assurance that such assumptions and the projections based thereon will in fact be realized. Table 4 below shows the estimated projected revenues for the District for fiscal years 1996/97 through 2005/06. TABLE 4 Estimated Revenues, 1996/97 through 2005/06 ($000's) Fiscal Year Tax Revenues Interest Earnings Other Revenue Total Revenues 1996/97 $10,625 $420 $1,681 $121726 1997/98 10,944 480 1,517 12,941 1998/99 11,491 450 1,548 13,489 1999/00 12,065 460 1,481 14,006 2000/01 12,669 460 915 14,044 2001/02 13,302 470 950 14,722 2002/03 13,967 480 988 15,435 2003/04 14,666 490 1,027 16,183 2004/05 15,399 500 1,068 16,967 2005/06 16,169 510 1,112 17,791 Source:District Controller. -31- [S&Y Doc#8471 Draft POS Dated 6/17/96] Debt Coverage Table 5 estimates debt service coverage on the District's various debt and lease obligations. The District may issue additional notes on a parity with the 1996 Notes in the future. The issuance of additional parity notes by the District would decrease the debt service coverage ratios reflected in Table 5. See "DISTRICT FINANCIAL INFORMATION - Other Outstanding Debt" for a description of the District's other outstanding obligations payable from Revenues and other legally available funds of the District. -32- [S&Y Doc#8471 Draft POS Dated 6/17/961 TABLE 5 Estimated Debt Service Coverage (S000's except coverage) Senior Coverage Subordinate Coverage from Net Revenues Fully Diluted Coverage without"Other Revenues" Other Lease Total Lease Estimated Total Senior Estimated 1996 and and Net Revenues All Lease Fiscal Estimated Senior Debt Net Project Subordinate Subordinate Revenue Less Other and Adjusted Year Revenue(l) Notes(2) Coverage Revenues Lease(3) Debt(4) Debt Coverage Revenues(5) Debt Payments Coverage(6) 1996/97 $12,726 $3,607 3.53 $9,119 $401 $1,192 $1,593 5.72 $11,045 $5,200 2.12 1997/98 $12,941 $4,270 3.03 $8,671 $594 $1,316 $1,910 4.54 $11,424 $6,180 1.85 1998/99 $13,489 $4,492 3.00 $8,997 $614 $1,310 $1,924 4,68 $11,941 $6,416 1.86 1999/00 $14,006 S4,574 3.06 $9,432 S633 $1,294 $1,927 4.89 $12,525 $6,501 1.93 2000/01 $14,044 $4,518 3.11 $9,526 $650 $1,374 $2,024 4.71 $13,129 $6,542 2.01 2001/02 $14,722 $4,542 3.24 $10,180 $667 $1,371 $2,038 5.00 S13,772 S6,580 2.09 2002/03 $15,435 $4,559 3.39 $10,876 $687 $1,376 S2,063 5.27 $14,447 $6,622 2.18 2003/04 $16,183 $4,592 3.52 $11,591 $711 $1,369 $2,080 5.57 $15,156 $6,672 2.27 2004/05 $16,967 $4,614 3.68 $12,353 $733 $1,376 $2,109 5.86 S15,899 S6,723 2.36 2005/06 S17,791 $4,646 3.83 S13,145 $753 $1,370 $2,123 6.19 S 16,679 $6,769 2.46 (1) Estimated Total Revenue from Table 4. (2) Includes 1996 Refunding Promissory Notes, 1995 Notes, 1992 Notes and 1990 Notes. (3) When combined with the 1996 Notes constitutes the "Program Obligations"or"Agreements"acquired with the proceeds of the Bonds. (4) Includes the 1993 Certificates of Participation. (5) Derived from Table 4. (6) Estimated Revenues less Other Revenues in fiscal year 1995196($10,153,000)provide 1.4 times coverage on maximum annual debt service of approximately,S7,200,000 Source: District Controller. -33- r [S&Y Doc#8471 Draft POS Dated 6/17/96] Direct and Overlapping Bonded Indebtedness [To be updated.] The following sets forth the overlapping and direct bonded indebtedness of the District as of December 1, 1994. I 1994-95 Assessed Valuation: $57,974,647,879 (after deducting $2,146,898,062 redevelopment incremental valuation) DIRECT AND OVERLAPPING BONDED DEBT: %Applicable(1) Debt 12-1-94 I Santa Clara County Authorities 39.966% $116,430,550 San Mateo County Authorities 32.693 71,031,301 Santa Clara County Flood Control and Water Conservation District,Zones W-1 &NC-1 34.572& 58.859 7,920,089 Foothill Community College District Certificates of Participation 92.162 28,408,937 Mountain View-Los Altos Union High School District Certificates of Participation 100. 5,914,000 Sunnyvale School District Certificates of Participation 100. 8,970,000 Cupertino Union School District Certificates of Participation 72.574 13,727,372 Campbell Union School District 16.841 4,574,841 Other School Districts and Authorities Various 16,652,314 City of Mountain View and Lease Obligations 100. 26,984,197 City of Sunnyvale Lease Obligations 99.994 26,818,391 City of Palo Alto Lease Obligations 100. 11,102,800 City of Cupertino Lease Obligations 89.888 52,602,458 City of Redwood City Lease Obligations 100. 24,415,000 , Various 4,795000 Other Cities I Other City Lease Obligations Various 12,222,457 Redwood City General Improvement Districts 100. 17,575,000 El Camino Hospital District Facilities Authority 96.982 3,573,787 Santa Clara Valley Water District Certificates of Participation 39.966 57,798,829 Parking Districts 100. 9,590,000 1915 Act Bonds(Estimate) Various 33,481,450 Other Special Districts Various 5,298,728 Midpeninsula Regional Open Space District 100. 45,800,000(2) Midpeninsula Regional Open Space District 100. 9,875,000 TOTAL GROSS DIRECT AND OVERLAPPING BONDED DEBT $615,562,501 (3) Less: Santa Clara County FC&WCD,Zone NC-1 (100%self-supporting) 1,050,000 Cities of Mountain View and San Jose self-supporting bonds 416,577 El Camino Hospital Facilities Authority(100%self-supporting) 3,573,787 TOTAL NET DIRECT AND OVERLAPPING BONDED DEBT $610,522,137 (1) Based on 1993-94 ratios. (2) Includes$11,500,000 Refunding Notes to be sold. Excludes amounts to be refunded. (3) Excludes tax and revenue anticipation notes,revenue,mortgage revenue and tax allocation bonds and non- bonded capital lease obligations. Ratios to 1994-95 Assessed Valuation: Direct Debt($55,675,000). . . . . . . 0.10% Total Gross Debt. . . . . . . . . . . . . . . 1.06% Total Net Debt. . . . . . . . . . . . . . . . 1.05% I STATE SCHOOL.BUILDING AID REPAYABLE AS OF 6 30 94: $2,756,629 -34- ..... ...... [S&Y Doc #8471 Draft POS Dated 6/17/96) DISTRICT FINANCIAL INFORMATION Method of Accounting i The official books of record kept by the District utilize the principles of fund accounting as prescribed for special districts by the State Controller. All District funds reflect the modified jaccrual basis of accounting under which revenues are generally recognized in the period they become available and measurable and expenditures are recognized generally when the obligation is incurred, except for interest on long term debt which is recognized as an expenditure when due. The District's fisc al year is April 1 through March 31. Prior to fiscal year 19$8/89, the i District's fiscal year was July 1 to June 30. The District's certified public accountants are currently Grant Thornton, San Jose, California. I � I � District Financial Statements I i The District's audited statement of General Fund Revenues, Expenditures and Changes in Fund Balance for the six years ended March 31, 1996 is shown in Table 6. Fiscal year 1995/96 is unaudited. General property taxes are the District's largest source of revenues. Over the last six fiscal years, property taxes have generated between 70%and 89% of the District's total revenues. See "ESTIMATED TAX REVENUES AND NOTE .RETIREMENT" and "CONSTITUTIONAL AND STATUTORY TAX LIMITATIONS" for a description of the tax assessment process in California. Land acquisition, including debt service on notes issued to buy land in prior years, is the major component of the District's expenditures. i Table 7 sets forth the combined Balance Sheet for the District's General Fund, General Fixed Assets Fund, and General Long-Term Debt Fund for the years ended March 31, 1995 and 1996. The General Fixed Assets Fund includes all land, equipment, structures and improvements. The General Long-Term Debt Fund accounts for the annual payment of long- term debt. See APPENDIX A, "DISTRICT'S AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 1995 —Notes to Financial Statements" for the breakdown of j changes in the General Long-Term Debt Account and the amount of future debt service I payments. i i i i i i I I I -35- [S&Y Doc#8471 Draft POS Dated 6/17/96] TABLE 6 Midpeninsula Regional Open Space District General Fund Revenues,Expenditures And Changes In Fund Balance(1) ($000's) Unaudited 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 REVENUES: i General Property Tax $ 8,645 $ 9,434 $ 9,626 $10,116 $10,199 $10,153 State Grants 1,343 713 25 224 1,352 332 Other Taxes 171 Ill 171 177 250 139 Interest 961 840 474 472 618 744 Other 1,155 1,042 561 479 651 1,061 TOTAL REVENUES $12,275 $12,140 $10,857 $11,468 $13,070 $12,429 EXPENDITURES: Salaries and Benefits $ 2,141 $ 2,270 $ 2,635 $ 2,699 $ 2,868 $ 2,923 Services and Other 3,630 1,979 2,091 1,947 1,436 1,664 SUBTOTAL $ 5,771 $ 4,249 $ 4,726 $ 4,646 $ 4,304 $ 4,587 i DEBT SERVICE: Principal Repayment $ 5,446 $ 1,666 $ 2,205 $ 2,346 $ 874 $ 1,483 Interest 2,797 3,070 3,666 2,959 3,195 3,951 SUBTOTAL DEBT SERVICE $ 8,243 $ 4,736 $ 5,871 $ 5,305 $ 4,069 $ 5,434 SUBTOTAL EXPENDITURES 14,014 8,985 10,597 9,951 8,373 10,021 OPERATING CASH FLOW ($I,739) $ 3,155 $ 260 $ 1,517 $ 4,697 $ 2,408 PROPERTY ACQUISITION 9,924 4,467 11,253 5,297 8,454 14,409 EXCESS OF REVENUES OVER EXPENDITURES (11,663) (1,312) (10,993) (3,780) (3,758) (12,001) PROCEEDS FROM NOTES PAYABLE 17,622 135 7,817 5,508 5,226 7,259 NET EXCESS 5,959 (1,177) (3,176) 1,728 1,469 (4,742) STARTING FUND BALANCE 9,806 15,765 14,588 11,412 13,140 14,609 ENDING FUND BALANCE $15,765 $14,588 $11,412 $13,140 $14,609 $9,867 (1) Fiscal Years ending March 31. Source: Audited Financial Statements and District Controller. -36- [S&Y Doc#8471 Draft POS Dated 6/17/96] TABLE 7 Midpeninsula Regional Open Space District Balance Sheet ($000's) Unaudited March 31,1996 March 31, 1995 General General General General General Fixed Long-Term General Fixed Long-Term Fund Asset Debt Fund Assets Debt ASSETS AND OTHER DEBT BALANCES: Cash and Cash Investments $2,169 $6,874 Restricted Cash 4,888 4,886 Taxes Receivable 3,349 4,653 Other Receivables 100 Prepaid Expenses/Other Assets 6 18 Land(at cost) 159,759 145,350 Equipment 1,466 6,059 Structures and Improvements 6,360 1,313 Amount to be Provided for Retirement of General Long- Term Debt 70,587 64,812 TOTAL ASSETS $10,512 $167,585 $70,587 $16,431 $152,722 $64,812 LIABILITIES AND FUND EQUITY LIABILITIES: Accounts Payable $ 109 $ 222 Accrued Liabilities/Deposits 536 244 Deferred Revenue 1,357 Notes Payable 70,587 64,812 TOTAL LIABILITIES $ 645 $ 0 $70,587 $ 1,822 $ 0 $64,812 FUND EQUITY: Investment in General Fixed Assets $167,585 $152,722 Fund Balance 9,867 11,412 TOTAL FUND EQUITY $9,867 $167,585 $ 0 $11,412 $152,722 $ 0 TOTAL LIABILITIES AND EQUITY $10,512 $167,585 $70,587 $13,234 $152,722 $64,812 Source:Audited Financial Statement and District Controller. , Debt Capacity/Additional Debt Pursuant to the California Public Resources Code, the District may acquire lands or facilities by means of a plan to borrow money or by purchase on contract. The amount of such indebtedness to be incurred may not exceed an amount equal to the District's anticipated tax income for the next five-year period. All such indebtedness must be repaid during a period not to exceed 20 years from the date on which it is incurred and may bear interest at rates not exceeding 12% per annum. Each such indebtedness will be authorized by a trust agreement adopted by a resolution adopted by the affirmative votes of at least two-thirds of the members of the Board of -37- I [S&Y Doc#8471 Draft POS Dated 6/17/96] I Directors of the District. Additional debt may also be subject to provisions of parity debt covenants of the District arising from other outstanding obligations. Sources of Funds Tax Revenues. The general ad valorem property tax is the District's major source of revenue, as well as the primary source of funds for the payment of Revenues on the Agreements to pay debt service on the Bonds. The general ad valorem property tax consists of secured and unsecured property taxes. See "ESTIMATED TAX REVENUES AND NOTE RETIREMENT" above for a more complete description of the District's tax revenues. Grp. In 1996/97, the District projects revenues from grants of $493,000, which amount represents grants for which the District has received approval, pending the completion of land acquisitions or site development for certain projects. In general, the District only budgets grant revenues when the source and amount of the grant have been reasonably assured. Major Uses of Funds. Most of the District's funds are used for the acquisition of open space lands and to service the debt issued for those purposes. In keeping with the policy of the District's Board of Directors, administrative costs are projected to be kept to a minimum, but land management expenditures are anticipated to be an increasing percentage of annual tax revenue. In 1995/96, land acquisition, including debt service on notes issued to buy land in prior years, totaled $19,829,919 million, accounting for approximately 81%of total District expenditures. Other Outstanding Debt Following the issuance of the 1996 Notes and execution of the Project Lease, the District will have outstanding $14,460,000 of 1990 Notes, $8,000,000 of 1992 Notes and $11,500,000 of 1995 Notes. In addition, the District will have outstanding $17,225,000 million aggregate principal amount of lease obligations represented by certificates of participation executed and delivered in 1993, and approximately $247,451 principal amount of Land Contract Notes as described below. The District has never defaulted on any of its debt. Table 8 below lists the District's total indebtedness outstanding as of June 30, 1996, after giving effect to the issuance of the Bonds. The outstanding balance of the Land Contract Notes as shown below is, in the case of the Sierra Azul Contract, an aggregate of the outstanding balances on more than one Land Contract Note. Over time, several parcels constituting one open space area have been purchased at different times through contracts secured by Land Contract Notes with differing maturities and interest rates. In each case, the land has been purchased pursuant to the California Public Resources Code which currently requires payment of debt over not more than 20 years. Approximately 33% ($27,245,000*) of the debt outstanding, including the $17,225,000 certificates of participation issued in 1993, the Project Lease and approximately $247,415 of the #Preliminary, subject to change. -38- I [S&Y Doc#8471 Draft POS Dated 6/17/96] Land Contract Notes will be subordinate to the obligation of the District to make payments on Promissory Notes. See Table 5 for estimated coverage calculations. TABLE Midpeninsula Regional Open Space District Debt Outstanding(1) ($000's) Original Obligation Amount Outstanding 1996/97 of Notes June 30, 1996(1) Debt Service Final Payment Foothills 192 151 18 December 1998 Sierra Azul(2) 150 96 13 August 2008 1990 Notes 15,000 14,460 1,609 September 2010 1992 Notes 8,000 8,000 480 December 2012 1993 COP 17,315 17,225 998 September 2020 1995 Notes 11,500 11,500 799 March 2015 1996 Notes 29,199 29,199 1,111 September 2026 Total $81,356 $80,631 $5,028 (1) Including the 1996 Notes expected to be issued in July 1996; excluding the 1988 Notes to be defeased with the proceeds of the 1996 Bonds and all land contract notes to be prepaid from such bond proceeds. (2) Aggregation of Notes payable for parcels within one open space preserve. Salaries and Benefits Salaries and benefits for the District's 50 full-time, 5 part-time, and 4 seasonal employees represent the third major component of total District expenditures. In 1995/96, $2,923,000 was expended for salaries and benefits. District employees are covered under the Public Employees Retirement System administered by the State of California. Other uses of funds include patrol and site development, site maintenance, professional services, utilities and communications. -39- [S&Y Doc#8471 Draft POS Dated 6/17/96) CONSTITUTIONAL AND STATUTORY TAX LIMITATIONS Constitutional Limitations -Article XIIIA Article XIIIA of the California Constitution limits the maximum ad valorem tax on real property to one percent of "full cash value," to be collected by counties and apportioned according to law, but provides that the one percent limitation does not apply to ad valorem taxes to pay interest or redemption charges on (1) indebtedness approved by the voters prior to July 1, 1978, or (2) any bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition. "Full cash value" is defined to mean "the county assessor's valuation of real property as shown on the 1975-76 tax bill under full cash value or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment." The full cash value may be adjusted annually to reflect inflation at a rate not to exceed two percent per year, or reduction in the consumer price index or comparable data for the area under taxing jurisdiction or reduced in the event of declining property value caused by substantial damage, destruction or other factors. Legislation enacted by the California Legislature provides that each county will levy the maximum tax permitted by Article XIIIA of 1.00 per$100 of assessed valuation(based on full cash value). Article XIIIA has subsequently been amended to permit reduction of the "full cash value" base in the event of declining property values caused by damage, destruction or other factors and to provide that there would be no increase in the "full cash value" base in the event of reconstruction of property damaged or destroyed in a disaster and in various other minor or technical ways. Gann Initiative At the Statewide special election on November 6, 1979, the voters approved an initiative entitled "Limitation on Government Appropriations" (the "Gann Initiative") which added Article XIIIB to the California Constitution. Under Article XIIIB, as amended in 1990, State and local government entities have an annual "appropriations limit", which limits the ability to spend certain moneys that are called "appropriations subject to limitation" in an amount higher than the appropriations limits." Article XIIIB does not affect the appropriation of moneys which are excluded from the definition of "appropriations limit", including appropriations of any special district which existed on January 1, 1978, and which did not as of the 1977-78 fiscal year levy an ad valorem tax on property in excess of 12.5 cents per $100 of assessed value. Since the District did not levy a tax in excess of 12.5 cents, in the opinion of the District's General Counsel the District's appropriations are not subject to the limitations of Article XIIIB. -40- i a [S&Y Doc #8471 Draft POS Dated 6/17/96] Statutory Limitations On November 4, 1986, California voters approved Proposition 62, an initiative statute limiting the imposition of new or higher taxes by local agencies. The statute (a) requires new or higher general taxes to be approved by two-thirds of the local agency's governing body and a majority of its voters, (b) requires the inclusion of specific information in all local ordinances or Trust Agreements proposing new or higher general or special taxes, (c) penalizes local agencies that fail to comply with the foregoing, and (d) requires local agencies to stop collecting any new or higher general tax adopted after July 31, 1985, unless a majority of the voters approved the tax by November 3, 1988. Two State Court of Appeals decisions both w pp of hick are final decisions, have declared the majority voter provisions referred to in (a) above in one case and in (a) and (d) above in the second case to be unconstitutional. The District has not imposed, levied or collected new or higher taxes to date, and it has no plans to collect new or higher taxes. On September 28, 1995, the California Supreme Court filed its decision in Santa Clara County Local Transportation Authority v. Carl Guardino, 11 Cal. 4th 220 (1995) (the "Santa Clara decision"), which upheld a Court of Appeal decision invalidating a 1l2-cent countywide sales tax for transportation purposes levied by a local transportation authority. The California Supreme Court based its decision on the failure of the authority to obtain a two-thirds vote of the electorate for the levy of a "special tax," as required by Proposition 62. The Santa Clara decision did not address the question of whether or not it should be applied retroactively. In deciding the Santa Clara case on Proposition 62 grounds, the Court disapproved the decision in City of Woodlake v. Logan, 230 Cal. App. 3d 1058 (1991) ("Woodlake"), where the Court of Appeal had held portions of Proposition 62 unconstitutional as a referendum on taxes prohibited by the California Constitution. The California Supreme Court determined that the voter approval requirement of Proposition 62 is a condition precedent to the enactment of each tax statute to which it applies, while referendum refers to a process invoked only after a statute has been enacted. Numerous taxes to which Proposition 62 would apply were imposed or increased without voter approval in reliance on Woodlake. The Court notes as apparently distinguishable, but did not confirm, the decision in City of Westminster v. County of Orange, 204 Cal. App. 3d 623 (1988), which held unconstitutional the provision of Proposition 62 requiring voter approval of taxes imposed during the "window period" of August 1, 1985 until November 5, 1986. Proposition 62 as an initiative statute does not have the same level of authority as a constitutional initiative, but is analogous to legislation adopted by the State Legislature. Future Initiatives Article XIIIA, the Gann Initiative and Proposition 62 were each adopted as measures that qualified for the ballot pursuant to California's initiative process. From time to time other initiative measures could be adopted, further affecting District revenues or the District's ability to expend revenues. -41- [S&Y Doc#8471 Draft POS Dated 6/17/96] LEGAL All legal proceedings in connection with the issuance of the Bonds are subject to the approval of Orrick, Herrington & Sutcliffe, San Francisco, California, Bond Counsel. Bond Counsel assumes no responsibility for the accuracy, completeness of fairness of this Official Statement. The proposed form of the opinion of Bond Counsel is set forth in Appendix C to this Official Statement. TAX NIATTERS In the opinion of Orrick, Herrington & Sutcliffe, Bond Counsel, based on existing laws, regulations, rulings and court decisions, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the "Code") and is exempt from State of California personal income taxes. Bond Counsel is also 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 although Bond Counsel observes that such interest is included in adjusted current earnings in calculating federal corporate alternative minimum taxable income. The proposed form of the opinion of Bond Counsel is set forth in Appendix C to this Official Statement. 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 Authority 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. Certain requirements and procedures contained or referred to in the Trust Agreement and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the Bonds) 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. Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from California personal income taxes, the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may otherwise affect a holder's federal or state tax liability. The nature and extent of these other tax consequences will depend upon the particular tax status of the holder and the holder's other items of income or deduction. Bond Counsel expresses no opinion regarding any such other tax consequences. -42- [S&Y Doc#8471 Draft POS Dated 6/17/96] LEGALITY FOR INVESTMENT The Bonds are legal investments in California for commercial and savings banks and as such are legal investments for all trust funds, and for funds of insurance companies and trust companies. The Bonds are eligible as security for deposits of public moneys in California. RATING As noted on the cover page of this Official Statement, Standard & Poor's, a division of the McGraw Hill Companies, Inc., (the "Rating Agency") has given the Bonds the rating of Any explanation of the significance of such ratings may be obtained only from the Rating Agency. The Authority has furnished to the Rating Agency certain information and materials. Generally, rating agencies base their ratings on such information and materials and, in addition, on investigations, studies and assumptions made by the rating agencies themselves. There is no assurance that the rating mentioned above will remain for any given period of time or that the rating may not be lowered or withdrawn entirely by the Rating Agency if in their judgment circumstances so warrant. Any such downward change or withdrawal of a rating may have an adverse effect on the market price of the Bonds. LITIGATION There is no litigation pending concerning the validity of the Bonds and the application of the proceeds thereof, the corporate existence of the Authority, the District, or the title of the officers thereof to their respective offices or contesting or affecting the District's ability to receive the Limited Taxes or other moneys that could be used for payment of the Bonds. There are a number of lawsuits and claims pending against the District. The aggregate amount of the uninsured liabilities of the District and the timing of any anticipated payments of judgments which may result from suits and claims will not, in the opinion of the General Counsel of the District, materially affect the District's finances or impair its ability to make Revenue payments under the Agreements, or the Authority's repayment of the Bonds. UNDERWRITING The Bonds will be purchased from the Authority by Stone & Youngberg LLC as underwriter (the "Underwriter") under a Purchase Contract pursuant to which the Underwriter has agreed to purchase all of the Bonds for an aggregate purchase price of$ The initial public offering prices stated on the cover of this Official Statement may be changed from time to time by the Underwriter. The Underwriter may offer and sell the Bonds to -43- [S&Y Doc#8471 Draft POS Dated 6/17/96] certain dealers (including dealers depositing Bonds into investment trusts), dealer banks, banks acting as agents and others at prices lower than said public offering prices. CONTINUING DISCLOSURE The Authority and the District have covenanted for the benefit of the owners and the beneficial owners of the Bonds to provide certain financial information and operating data relating to the District by no later than 210 days following the end of the District's fiscal year (presently March 3 1) (the "Annual Report"), commencing with the report for the 1996/97 Fiscal Year, and to provide notices of the occurrence of certain enumerated events, if deemed by the Authority or the District to be material under federal securities laws. The Annual Report will be filed by the Trustee on behalf of the District with each Nationally Recognized Municipal Securities Information Repository and State Repository, if any. The notices of material events will be filed by the Trustee on behalf of the District with the Municipal Securities Rulemaking Board. The specific nature of the information to be contained in the annual Report or the notices of material events is set forth below in "APPENDIX D - Form of Continuing Disclosure Agreement." These covenants have been made in order to assist the Underwriter in complying with S.E.C. Rule 15c12(b)(5). AVAILABILITY OF DOCUMENTS During the initial offering period for the Bonds, copies of the forms of the Trust Agreement and other documents referred to herein may be obtained, upon written request, from Midpeninsula Regional Open Space District Financing Authority, 330 Distel Circle, Los Altos, California 94022, Attention: Chairperson. After delivery of the Bonds, copies of such agreements may be obtained from the Trustee, Wells Fargo Bank, N.A., 345 California Street, 8th Floor, San Francisco, California 94104, Attention: Corporate Trust Department. MISCELLANEOUS Insofar as any statements made in this Official Statement involve matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact. No representation is made that any of such statements made will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the registered owners of the Bonds. -44- [S&Y Doc#8471 Draft POS Dated 6/17/96) The execution and delivery of this Official Statement have been duly authorized by the Authority. MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY By: /s/ Chairperson II -45- t [S&Y Doc#8471 Draft POS Dated 6/17/96) APPENDIX A DISTRICT'S AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 1995 A-1 [S&Y Doc#8471 Draft POS Dated 6/17/96] APPENDIX B GENERAL AND ECONOMIC INFORMATION SANTA CLARA COUNTY AND SAN MATEO COUNTY Introduction Santa Clara County is located below the southern point of San Francisco Bay and covers a total land area of over 1,300 square miles or about 847,000 acres. Two distinct valleys are created by the hill formation of the Santa Cruz Mountains and the Diablo Range. These two areas are known locally as "North County" and "South County." South County has retained the agricultural base which once characterized the entire area. North County is densely populated, extensively urbanized and heavily industrialized. Most of North County is now referred to as "Silicon Valley" because of the concentration of electronics companies throughout the area. San Mateo County is located on the San Francisco Peninsula. The coastal mountains run north and south through the County dividing the lightly populated coastal area from the more heavily developed eastern corridor between San Francisco and San Jose. San Mateo County attracted businesses at a fast pace during the 1960s with its suburban atmosphere and convenient access to nearby population centers. The County is characterized by manufacturing, engineering and technical-product firms located along the Bay, with commercial and residential areas stretching westward into the foothills. Transportation facilities in the Counties include San Francisco International Airport, a small deepwater port in Redwood City and freeway and bridge connections to nearby ports and airports in San Francisco, San Jose and Oakland. In addition to their own extensive range of manufacturing, professional, service, and academic employers, the Counties provide an important residential base for the financial, trade, commercial, and industrial companies located in San Francisco. The District extends from 20 to 40 miles south of San Francisco. Population According to the California State Department of Finance, as of January 1, 1996, Santa Clara County is ranked the fourth most populous County in the State and is the most populous of the nine San Francisco Bay Area counties. The County's population has been growing at a fast pace since 1960, and between 1960 and 1984, Santa Clara County's population more than doubled. San Mateo County has experienced moderate but consistent population growth since 1970. The U.S. Census reports that between 1970 and 1980 the County grew by approximately B-1 [S&Y Doc#8471 Draft POS Dated 6/17/96] 30,000 residents, or 5.4%. The 1990 Census reported that the County population was 649,623, which represents a 10.6% increase over 1980. The table below shows population estimates for the last six years for both Santa Clara and San Mateo Counties. The population within the Midpeninsula Regional Open Space District was estimated by the District in 1996 to be approximately 601,000. POPULATION STATISTICS SAN MATEO AND SANTA CLARA COUNTIES For Years 1990 through 1995 1990 1991 1992 1993 1994 1995 Midpeninsula Regional Open Space District(1) 598,916 601,000 601,000 601,000 601,000(3) 601,000(3) San Mateo County(2) 649,623 657,000 670,100 680,900 679,100 685,000 Santa Clara County(2) 1,497,577 1,513,100 1,531,800 1,563,800 1,581,700 1,594,800 Source: (1) Midpeninsula Regional Open Space District. (2) California State Department of Finance, Population Research. The 1990 figures come from the United States Census Bureau. (3) Number used based upon 1990 census. Economic Characteristics Santa Clara County, with approximately 818,100 wage and salary jobs in 1995, has the largest employment base of any county in Northern California. Three major industry sectors comprise 72% of the County's employment: manufacturing (30%), services (28%) and retail trade (14%). Their percentage share of County payrolls has remained virtually constant over the past five years. Various types of manufacturing firms are located in Santa Clara County, with durable goods manufacturing accounting for almost 90% of manufacturing employment. Within this sector, the electrical equipment and supplies industry accounts for approximately 36% of all County manufacturing jobs. Other major components of durable goods manufacturing are electronic components and accessories; office computing and accounting machinery; instruments, guided missiles and space vehicles and communications equipment. In the nondurable goods manufacturing sector, the printing, publishing, software, and goods processing industries are the leading employers. The services sector has been the fastest growing industry, particularly in the areas of business and medical services which support electronics manufacturing and health care. B-2 [S&Y Doc#8471 Draft POS Dated 6/17/96] San Mateo County's diversified economy includes construction, manufacturing, transportation, communications, retail and wholesale trade, financial services and government employment. Forty-eight of the nation's top 100 industrial firms are either headquartered or have branch offices in San Mateo County. The two major growth industries affecting San Mateo County over the past decade have been the high technology and office sectors. The San Francisco Bay Area's principal airport, San Francisco International Airport, is located within San Mateo County. Major commercial centers located in the Counties include the Stanford Shopping Center in Palo Alto, Eastridge Mall and Valley Fair in San Jose, Vallco Fashion Park in Cupertino, San Antonio Shopping Center in Mountain View, Great Mall in Milpitas and Hillsdale Mall in San Mateo. Taxable sales and the number of sales permits issued in each County since 1989 are shown below. TAXABLE SALES AND NUMBER OF SALES PERMITS SAN MATEO AND SANTA CLARA COUNTIES For Years 1989 through 1995(1) ($000's) Santa Clara County San Mateo County Year No.of Taxable Percent No.of Taxable Percent (As of July 1) Permits Sales Increase Permits Sales Increase 1989 48,206 17,343,878 8.3% 22,008 7,541,003 4.8% 1990 47,832 17,914,405 3.9 22,764 7,843,359 4.0 1991 48,559 17,425,346 -2.7 22,258 7,863,738 0.3 1992 50,789 17,661,362 1.4 22,835 8,093,618 2.9 1993 50,755 18,516,103 4.8 23,213 8,143,240 0.6 1994 50,966 19,633,186 6.0 23,348 8,172,772 0.4 1995(1) 51,576 22,561,361 (2) -- 23,449 8,763,043 (2) -- (1) Through first three quarters. (2) Preliminary. Source: California State Board of Equalization Major employers in each County, ranked by employment size, are shown in the following table. Santa Clara County's major employers, led by Hewlett-Packard, the County, Lockheed Missiles & Space Co. and IBM, are active in the high technology, government, aerospace and electronic sectors. Many of these companies are the resident hardware and software producers of "Silicon Valley." San Mateo County's employment base includes United Airlines, which employs over 17,000 persons at the San Francisco International Airport, and several electronics manufacturers, medical facilities and research organizations. B-3 [S&Y Doc#8471 Draft POS Dated 6/17/96] MAJOR EMPLOYERS SANTA CLARA AND SAN MATEO COUNTIES (Firms Ranked by Employment Size) Employers Employees SANTA CLARA COUNTY: Hewlett-Packard Company 16,000 County of Santa Clara 13,801 Lockheed Missiles& Space Co. 11,726 IBM Corporation 8,500 Stanford University 7,900 Stanford Hospital 5,323 Santa Clara Valley Health&Hosp. 5,165 City of San Jose 5,084 Apple Computers 4,930 Sun Microsystems 4,830 National Semiconductor 4,736 Intel Corporation 4,000 Pacific Bell 3,216 Tandem Computers 3,100 Silicon Graphics 2,929 Solectron Corporation 2,900 Advanced Micro-Devices, Inc. 2,866 Applied Materials 2,865 San Jose State University 2,800 Quantum Corp. 2,800 Source: San Jose Metropolitan Chamber of Commerce, May 1995. SAN MATEO COUNTY: United Airlines 17,212 Oracle Corp. 4,300 County of San Mateo 4,050 Raychem Corp. 2,749 Genentech Inc. 2,445 Franklin Resources Inc. 2,410 American Airlines 21,00 SRI International 1,940 Intuit Inc. 1,600 U.S.Postal Service 1,485 Kaiser Permanente Medical Center 1,300 Seton Medical Center 1,230 Sequoia Hospital 1,153 San Francisco International Airport 1,087 San Mateo Community College 1,010 District Source: San Mateo County Economic Development Association, Inc. B-4 r [S&Y Doc#8471 Draft POS Dated 6117196] The unemployment rates for both Counties for 1990 through 1995 are shown below. CIVILIAN LABOR FORCE,EMPLOYMENT AND UNEMPLOYMENT SAN MATEO AND SANTA CLARA COUNTIES Annual Averages(1990-1995) Santa Clara County 1990 1991 1992 1993 1994 1995 Civilian Labor Force(1) 846,700 833,700 837,500 838,800 857,200 860,700 Employment 812,800 787,200 781,200 782,100 803,400 818,100 Unemployment 33,900 46,500 56,300 56,700 53,800 42,600 Unemployment Rate(2) 4.0% 5.6% 6.7% 6.8% 6.3% 5.0% San Mateo County 1990 1991 1992 1993 1994 1995 Civilian Labor Force(1) 368,400 364,100 365,000 366,000 371,100 368,900 Employment 357,900 349,300 346,100 347,100 352,800 352,400 Unemployment 10,500 14,800 18,900 18,900 18,300 16,500 Unemployment Rate(2) 2.8% 4.1% 5.2% 5.2% 4.9% 4.5% (1) Labor force by place of residence. Employment includes persons involved in labor-management trade disputes. (2) The unemployment rate is computed from non-rounded data; therefore it may differ from rates calculated by using rounded figures in this table. Source: State of California, Employment Development Department The following table shows the ten largest taxpayers of secured taxes for the Counties. TEN LARGEST TAXPAYERS AS OF 1993 SANTA CLARA AND SAN MATEO COUNTIES Santa Clara County San Mateo County Hewlett-Packard United Airlines Lockheed Missiles&Space Co. Pacific Gas&Electric IBM Corporation Pacific Bell Pacific Bell American Airlines Pacific Gas&Electric Genentech Sobrato Development Corp. Raychem Corporation Richard T.Perry,et.al Delta Airlines Tandem Computers United Telecom/U.S. Sprint Syntex Redwood Shores Properties Metropolitan Life Insurance Co. USAir,Inc. Source: Vices of the Santa Clara County Treasurer-Tax Collector and the San Mateo County Treasurer-Tax Collector. B-5 - i [S&Y Doc#8471 Draft POS Dated 6/17/96] Construction The following table shows building permit activity in Santa Clara County for 1989-1995 and in San Mateo County for 1989-1995 BUILDING PERMIT ACTIVITY SANTA CLARA AND SAN MATEO COUNTIES For Years 1989 through 1995 SANTA CLARA COUNTY: Type 1989 1990 1991 1992 1993 1994 1995 Residential New Single dwellings $ 402,555 $ 288,014 $ 268,931 $ 280,131 $ 300,307 $ 336,452 $ 401,553 New Multi-dwellings 125,184 216,002 148,266 80,671 103,592 132,420 92.002 Add itions/Alterations 161,812 182,501 175,512 182,049 165,154 168,586 163,557 Total Residential $ 689,551 $ 686,517 $ 592,709 $ 542,851 $ 569,051 $ 637,458 $657,111 Non-Residential: New Commercial $ 160,567 $ 207,147 $ 154,964 $ 151,682 $ 123,271 $ 117,928 $244,798 New Industrial 127,235 182,585 65,962 63,073 48,917 88,319 138,731 Other 49,513 39,271 35,466 45,896 28,931 24,681 41,364 Add itions/Alterations 419,432 331,978 374,962 381,649 421,978 365,156 434,516 Total Non-Residential $ 756,747 $ 760,981 $ 631,354 $ 642,300 $ 623,095 $596,083 $859,410 TOTAL VALUATION $1,446,298 $1,447,498 $1,224,063 $1,185,151 $1,192,146 $1,233,542 $1,516,520 No.of New DwellinP Units Single dwellings 2,548 1,675 1,663 1,693 1,825 2,128 2,213 Multi-dwellings 2,311 3,646 2,102 1,143 1,628 1,817 1,232 Total Units 4,859 5,321 3,765 2,836 3,453 3,945 3,445 SAN MATEO COUNTY: Type 1989 1990 1991 1992 1993 1994 1995 Residential: New Single dwellings $216,674 $139,797 $122,888 $83,835 $101,862 $136,623 $151,230 New Multi-dwellings 109,034 20,219 38,163 38,808 10,615 34,678 59,263 Add itions/Alterations 155,624 149,160 128,515 128,826 113,210 108,967 113,151 Total Residential $481,332 $309,176 $289,566 $251,469 $225,689 $280,269 $323,646 Non-Residential: New Commercial $ 91,510 $ 77,279 $ 35,363 $ 30,265 $ 31,160 $112,874 $ 64,311 New Industrial 12,256 3,408 34,707 3,689 931 989 6,083 Other 19,593 10,479 10,012 10,455 11,111 14,250 10,889 Add itions/Alterations 114,616 124,447 102,771 112,354 127,457 167,339 132,966 Total Non-Residential $ 237,975 $ 215,613 $ 182,853 $ 156,763 $ 170,658 $ 295,454 $ 214,248 TOTAL VALUATION $719,307 $524,789 $472,419 $408,232 $396,347 $575,721 $537,895 No.of New Dwelling Units Single dwellings 1,085 636 503 342 422 598 724 Multi-dwellings 1,335 191 331 596 89 301 623 Total Units 2,420 827 834 938 51 I 899 1,347 Source: Economic Sciences Corp. B-6 [S&Y Doc #8471 Draft POS Dated 6/17/96] Agriculture Santa Clara County was once a leading producer of apricot, cherry and prune crops. However, recent industrial development and urbanization have displaced most of the agricultural land. Most of the remaining agricultural acreage is found around the communities of Gilroy and Morgan Hill. Major crops include cut flowers, wine grapes, mushrooms and nursery stock. Dairy products and seasonal crops including tomatoes, bell peppers, strawberries, prunes, walnuts and garlic provide the balance of agricultural production in Santa Clara County. San Mateo County is a national leader in the production of ornamental flowers and nursery products. This industry, which accounts for about 80% of total County revenue from agriculture, developed in the County due to the favorable climate and proximity to the San Francisco International Airport. The industry is located in the western part of the County, particularly around the communities of Half Moon Bay and Pescadero. Transportation Transportation has played a vital role in the Bay Area's growth as an economic center. Seven general purpose ports located in the area and numerous special purpose facilities serve manufacturing industries and facilitate distribution to world markets. The San Francisco Bay Area is the western terminus for three transcontinental railroads. An extensive network of freeways serves the area. The Bay Area's network of freeways and expressways provides the peninsula industries access to regional, national and international markets. U.S. 101, a parallel route along the Bay, and a major north-south highway between San Francisco and Los Angeles, provides access to the deep sea ports at San Francisco and Redwood City, and to air passenger and cargo facilities of San Francisco International and San Jose International Airports. Interstate Highway 280 traverses the ridge of the peninsula and joins U.S. 101 in San Francisco. Additional north-south transportation is provided by Interstate 5, the major national highway reaching north to Canada and south through San Diego, and State Highway 82. Principal routes connecting the peninsula with the East Bay's air and sea ports are State Highway 17, Interstate Highway 680 and the San Mateo, Dumbarton, and San Francisco-Oakland Bay Bridges. The main coast line of the Southern Pacific Railroad traverses Santa Clara County, providing connections to San Francisco, Oakland, and Los Angeles, commuter passenger service is operated on the Southern Pacific between San Jose and San Francisco. In addition to local bus service, cities in the District are served by Santa Clara County Transit System, San Mateo County Transit District and Greyhound Bus Lines. The Bay Area Rapid Transit System ("BART") provides passenger rail service within Contra Costa, Alameda, San Francisco and northern San Mateo Counties. B-7 [S&Y Doc#8471 Draft POS Dated 6/17/96] San Francisco International Airport, located in San Mateo County, is served by all major scheduled air carriers. Metropolitan Oakland Inte rnational ernational Airport is served by eight scheduled airlines and two large supplemental carriers. The San Jose International Airport is served b IP y twelve airlines. General aviation airports include Reid-Hillview in San Jose, South County Airport, Palo Alto Airport, San Carlos Airport, and Half Moon Bay Airport. Water transportation is provided by the international water transportation complex of the San Francisco Bay; major ports include the Port of Oakland, Port of San Francisco, and Port of Redwood City. Education In 1994, approximately 235,442 students were enrolled in Santa Clara County`s 314 public elementary and high schools. In San Mateo County about 85,090 students attended approximately 96 elementary, 36 middle and 24 public high schools. Institutions of higher education include Stanford University, the University of Santa Clara, San Jose State University, and nine public community colleges. B-8 [S&Y Doc#8471 Draft POS Dated 6/17/96] APPENDIX C PROPOSED FORM OF BOND COUNSEL'S OPINION i i C-1 [S&Y Doc#8471 Draft POS Dated 6/17/96] APPENDIX D FORM OF CONTINUING DISCLOSURE AGREEMENT D-1 1 E [S&Y Doc#8471 Draft POS Dated 6/17/96] APPENDIX E TABLE OF ACCRETED VALUES I E•1 I AGREEMENT FOR BOND COUNSEL SERVICES This Agreement for Bond Counsel Services (this "Agreement") is entered into as of June 1, 1996, by and among the Midpeninsula Regional Open Space District (the "District"), the Midpeninsula Regional Open Space District Financing Authority (the "Authority"), and Orrick, Herrington & Sutcliffe ("Bond Counsel"), as follows: WITNESSETH: WHEREAS, the District desires to engage the services of a bond counsel in connection with the refunding of its Variable Rate Demand Notes 1988 Series A and various other land secured promissory notes (collectively, the "Prior Notes") and the financing of additional open space for the District (the "Project") by the issuance and sale of its 1996 Refunding Promissory Notes (the "1996 Notes") and its participation in the execution of a Project Lease and related documents (the "Lease Documents" and, together with the 1996 Notes, the "Local Obligations"); and WHEREAS, the Authority desires to engage the services of a bond counsel in connection with the issuance of its 1996 Revenues Bonds (the "1996 Bonds"), which will be secured by payments from the District to the Authority with respect to the Local Obligations; and WHEREAS, Bond Counsel possesses the necessary professional capabilities and resources to provide the legal services required by the District and the Authority as described in this Agreement; NOW, THEREFORE, in consideration of the mutual conditions, covenants and terms herein contained, the parties hereto agree as follows: Section 1. Legal Services. The District and the Authority hereby employ Bond Counsel to furnish the legal services hereinafter set forth, and Bond Counsel agrees to provide such services in its capacity as special counsel and bond counsel, respectively, including the rendering of certain legal services required in the conduct of the proceedings for the issuance of the 1996 Notes and the execution and delivery of the Lease Documents and the issuance of the 1996 Bonds in an estimated principal amount of not less than twenty- eight million dollars ($28,000,000), all as set forth more particularly below: (a) Consultation with appropriate representatives of the District, including the General Manager of the District, legal counsel to the District and the Authority ("Legal Counsel") and other financing participants with respect to the timing, terms and legal structure of the proposed financing, including analysis of each financing technique and considerations of state law, federal tax law, federal securities law and general public finance law. sF2-59418.1 (b) Preparation of the legal proceedings for the authorization, issuance, sale and delivery of the 1996 Notes, including preparation of all necessary authorizing resolutions and a purchase contract; the authorization, execution and delivery of the Lease Documents, including a site lease and project lease; the creation and authorization of the Authority, including preparation of the joint powers agreement, the bylaws and appropriate resolutions; and the authorization, issuance, sale and delivery of the 1996 Bonds, including preparation of all necessary authorizing resolutions, a trust agreement, a continuing disclosure agreement and other related documents (except the official statement, which shall be prepared by the Underwriter) required in connection with the financing. (c) Attendance at document review sessions and meetings of the District Board of Directors and the Authority where the financing and related matters will be discussed and authorizing actions taken, and the rendering of legal advice, as necessary, and attendance at such other meetings as shall be deemed necessary for the proper conduct of the financing proceedings. (d) Review of the official statement as to those matters that are related to a description of the legal documents, the issuance and sale of the 1996 Bonds and the underlying Local Obligations; provided, that Bond Counsel shall not be responsible for the overall preparation or content of the official statement, which shall be the responsibility of the District and the Underwriter. (e) Review of any insurance or other credit enhancement arrangements entered into in connection with the financing, if such credit enhancement is desired by the District or the Authority. (f) Preparation of the final closing papers, including a tax certificate, required to effect the delivery of the 1996 Notes, the Lease Documents and the 1996 Bonds, and organization of and attendance at the related closing. (g) The rendering of customary final approving legal opinions on the validity of the 1996 Notes and the Lease Documents, and the rendering of a customary final approving legal opinion on the validity of the 1996 Bonds and related trust agreement and the tax-exempt status of the 1996 Bonds, and the rendering of such other legal opinions as may be appropriate in connection with the issuance, delivery and receipt of payment for the 1996 Bonds; provided, that Bond Counsel shall not be required to issue any opinion with respect to the official statement. (h) Such other legal services as may be incidental to the foregoing. Bond Counsel's services are limited to those specifically set forth above, and do not include representation of the District, the Authority or any other party to the transaction in any litigation or other legal or administrative proceeding involving the Local sF2-5%18.t 2 Ma Obligations and the 1996 Bonds. Additionally, unless specifically requested by the District, Bond Counsel's services do not include any responsibility for the preparation or content of the Official Statement (other than preparation of a summary of related legal documents and the review of the description of the opinion to be rendered by Bond Counsel concerning certain tax matters), and Bond Counsel's services also do not include any responsibility for state blue sky laws or any financial advice or analysis with respect to the Local Obligations and the 1996 Bonds, and Bond Counsel will not be responsible for the services performed or acts or omissions of any other financing participant. Also, Bond Counsel's services will not include services related to rebate compliance or continuing disclosure (although Bond Counsel may be available for separate engagements to provide such services pursuant to separate contracts). Finally, the District, the Authority and Bond Counsel acknowledge that the District and the Authority have engaged Legal Counsel to render day-to-day ongoing legal services, and Bond Counsel shall circulate documents to and coordinate its services with Legal Counsel to the extent requested by the District or such Legal Counsel. Section 2. Compensation and Reimbursements. (a) Compensation. The District and Authority agree to pay Bond Counsel for services rendered pursuant to this Agreement a fee of $75,000, payable at the closing of the financing. (b) Reimbursement. In addition to the fee for legal services provided above, the District and Authority will reimburse Bond Counsel for one-half (1/2) of the costs and expenses (direct and indirect) incurred in connection with its services, including (without limitation) word processing, document reproduction and delivery, travel, long distance telephone (including facsimile transmission), computer research, bound volumes, secretarial overtime and other similar expenses (not to exceed a reimbursement of$5,000), except that any filing, publication or printing costs required in connection with the Local Obligations and the 1996 Bonds shall be paid directly by the District. c Pa ment. Fees and expenses accumulated to such date shall be payable ( ) --1'— l� P Y by the District upon the date of the issuance of the 1996 Bonds or upon the date of the termination of this Agreement. Section 3. Termination of this Agreement. This Agreement (and all legal services to be rendered under it) may be terminated at any time by written notice from either party, with or without cause, and in that event, all finished and unfinished documents prepared for adoption or execution by the District and the Authority shall, at the option of the District or the Authority, become its respective property and shall be delivered to it or to any party it may designate; 12rovided, that Bond Counsel shall have no liability whatsoever for any subsequent use of such documents. In the event of termination by the District or the Authority, Bond Counsel shall be paid for its services performed hereunder based on the amount of time expended by Bond Counsel's attorneys and legal assistants at their hourly rates from time to time in effect (but not in excess of $40,000), unless the termination is made for cause, in which event compensation, if any, shall be adjusted in the SF2-5%18.1 3 I light of the particular facts and circumstances involved in the termination, and upon termination, Bond Counsel shall have no future duty of any kind to or with respect to the Local Obligations and 1996 Bonds or the District or the Authority. Section 4. Nature of Engagement: Relationships With Other Parties. The role of Bond Counsel, generally, is to prepare or review the procedures for the issuance of bonds and similar obligations and to provide an expert legal opinion with respect to the validity thereof and other subjects addressed by the opinion, and consistent with the historical origin and unique role of bond counsel, and reliance thereon by the public finance market, Bond Counsel's role as bond counsel under this Agreement is to provide an opinion and related legal services that represent an objective judgment on the matters addressed rather than the partisan position of an advocate. The District and the Authority acknowledge that Bond Counsel regularly performs legal services for many private and public entities in connection with a wide variety of matters. For example, Bond Counsel has represented, is representing or may in the future represent other public entities, underwriters, trustees, rating agencies, insurers, credit enhancement providers, lenders, contractors, suppliers, financial and other consultants/advisors, accountants, investment providers/brokers, providers/brokers of derivative products and others who may have a role or interest in the issuance of the Local Obligations and the 1996 Bonds or that may be involved with or adverse to the District or the Authority in this or some other matter, and Bond Counsel agrees not to represent any such entity in connection with the issuance of the Local Obligations and the 1996 Bonds during the term of this Agreement without the prior consent of the District or the Authority, as the case may be, except possibly with respect to investment or derivative products where, because Bond Counsel has assisted a number of the providers/brokers in designing and developing their products and provides general and transactional advice with respect to such products, it is not practical to seek specific consent in each case, and instead Bond Counsel agrees to separate the attorneys working on the issuance of the Local Obligations and the 1996 Bonds pursuant to this Agreement from the attorneys working on the investment or derivative products. Given the special, limited role of Bond Counsel described above, the District and the Authority acknowledge that no conflict of interest exists or would exist, and waives any conflict of interest that might appear actually or potentially to exist, now or in the future, by virtue of this Agreement or any such other attorney-client relationship that Bond Counsel may have had, have or enter into, and the District and the Authority specifically consent to any and all such relationships. Section 5. Limitation of Rights to Parties; Successor and Assigns. Nothing in this Agreement or in any of the documents contemplated hereby, expressed or implied, is intended or shall be construed to give any person other than the District, the Authority and Bond Counsel any legal or equitable right or claim under or in respect of this Agreement, and this Agreement shall inure to the sole and exclusive benefit of the District, the Authority and Bond Counsel. sF2-59418.1 4 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first written above. MII.7PENINSULA REGIONAL OPEN SPACE DISTRICT By President MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY By Chair i ORRICK, HERRINGTON & SUTCLIFFE 9�J-4 By i A Artner SF2-59418.1 6 Neither the District nor the Authority shall assign its rights and obligations under this Agreement without the written consent of Bond Counsel, and Bond Counsel shall not assign its obligations under this Agreement without the written consent of the District and the Authority except to a successor partnership or corporation to which all or substantially all of the assets and operations of Bond Counsel are transferred; and all references to the District, the Authority and Bond Counsel in this Agreement shall be deemed to refer to any such assignee or successor of the District, the Authority or Bond Counsel, as the case may be, and shall bind and inure to the benefit of such assignee or successor whether so expressed or not. Section 6. Bond Counsel agrees that Carlo S. Fowler will have primary responsibility for the financing described herein. It is further agreed that Bond Counsel may utilize one or more other partners or associates to assist in the financing as may be necessary or appropriate, including those with particular expertise in the areas of municipal finance law, tax law and securities law; provided, that such other partners or associates will work at all times under the supervision of Mr. Fowler, who will at all times retain direct responsibility for the financing on behalf of Bond Counsel. Section 7. Notices. The addresses of the parties for the giving of notices or for other official business hereunder shall be as follows: District: Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, California 94022 Attention: General Manager Authority: Midpeninsula. Regional Open Space District Financing Authority 330 Distel Circle Los Altos, California 94022 Attention: Chairperson Bond Counsel: Orrick, Herrington & Sutcliffe Old Federal Reserve Bank Building 400 Sansome Street San Francisco, California 94111 Attention: Carlo S. Fowler, Esq. Section 8. Counterparts. This Agreement may be executed in any number of counterparts and each counterpart shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same agreement. $ Regional Open S. ce R-96-68 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Meeting 96-15 June 26, 1996 AGENDA ITEM Final Adoption of Trail Use Plan for El Corte de Madera C n Space Preserve GENERAL MANAGER'S RECOMMENDAnON .r► in report ry contained e n Space Preserve as co Adopt the Trail Use Plan for El Corte de Madera Creek Ope pa po R-96-60 as an amendment to the Comprehensive Use and Management Plan for the Preserve. DISCUSSION At your May 22, 1996 meeting you took the following actions: 1. Determined that the Trail Use Plan for El Corte de Madera Creek Open Space Preserve was categorically exempt from the California Environmental Quality Act, and 2. Tentatively adopted the Trail Use Plan for El Corte de Madera Creek Open Space Preserve as contained in report R-96-60 as an amendment to the Comprehensive Use and Management Plan for the Preserve. On June 5, 1996 staff accompanied George Leyva of the California Regional Water Quality Control Board to the preserve in response to a complaint submitted by a member of the public. Staff received a letter, copy attached, from the Regional Water Quality Control Board on June 12, 1996, requesting a study be completed to identify areas in need of mitigative work to minimize or eliminate erosion and the discharge of silt into El Corte de Madera Creek. Staff intends to implement Phase 1 of the Trail Plan for the preserve in the upcoming months. By doing so, approximately two miles of trail immediately adjacent to the creek will be rerouted or closed to bicycle and equestrian traffic. Two other areas remain as potential erosion sources. They are the mid- level crossing of El Corte de Madera Creek and the southern crossing of the creek. Alternative trail alignments in both of these areas are included in Phase 2 of the Plan and will most likely be implemented in 1997. Staff will respond to the Regional Water Quality Control Board letter with this information and submit the required documentation. Since the first reading, staff has received an e-mail letter (which is included under Written Communications) from a bicyclist expressing his concern that some trails used by bicyclists are being significantly changed or closed. Prepared by: Mary de Beauvieres, Open Space Planner Contact person: Same as above 330 Distel Circle » Los Altos, CA 94022-1404 * Phone:415-691-1200 # FAX:415-691-0485 * E-mail: mrosd@netcom.com @ Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw, David T.Smernoff,Nonette Hanko,Betsy Crowder,Wirn de Wit General Manager:L.Craig Britton 51AILQUALIEOHNIA - CALIMMA EM180INNEMEAL MUIEr.1101MUNQ PgTE WI . ft mo CALIFORNIA REGION'TL WATER QUALITY CONffOL. BOARD SAN FRANCISCO BAY REGION 2101 WEBSTER STREET, Suite 500 OAKLAND, CA 94612 .SUN1"6 Tel: (510) 286-1255 FAX: (510) 286-1380 File No. 2170.01 BBS: (510) 286-0404 JUN 199b Mr. John Escobar Operations Manager Mid-Peninsula Regional Open Space District 330 Distel Circle Los Altos, CA 94022-1404 Subject: Erosion Potential - El Corte de Madera Creek Open Space Preserve Site Visit June 5, 1996 Dear Mr. Escobar: This letter transmits staff concerns discussed during the subject site visit. This Board has authority to place limits on any discharge to waters of the State which could impair that water body; El Corte de Madera Creek, being a perennial stream associated with the subject site, is subject to that authority. There appears to be several areas within that site where there exists a potential for erosion and for sediment to be discharged to the creek in violation the California Water Code and the San Francisco Bay Basin Water Quality Control Plan. As discussed, rather than identify specific sites in need of repair, we request that the District propose to this Board how best to manage the site with respect to protection of its water resources) in conjunction with your trail construction plans. We request that you submit a report by June 28, 1996 proposing to study the site identifying important areas that arc in need of mitigative work to minimize or eliminate erosion and silt discharges. lit addition, the submittal should propose a time schedule to both identify what areas are lit need of mitigativc work and a time schedule to do that work. Since the magnitude of that request could be large, the proposal to study the site, as well as the proposal to do the work, could be spread over several years on the condition that all areas known to pose a severe threat or impact are given higher priority over trail use needs. All eroding areas which will not be protected by October 1, 1996 should, at a minimum, be stabilized with an interim solution. Staff can assist you in identifying erosion control and storniwatcr control options available. You should be aware that this is a formal request for a technical report pursuant to California Water Code Section 13267. Failure to respond or late response to this request may subject you to civil liability imposed by the Board to a maximum amount of$1,000 per day. Any extensions of the time deadline set forth above must be confirmed in writing by Board staff. If you have any questions please call George Lcyva at 510/286-3976. Sincerely, Loretta K. B rsamian Executive Officer cc: Robert Zatkin, 406 Maple Way, Woodside, CA 94062 e Regional Open S. ce R-96-73 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Meeting 96-15 June 26, 1996 AGENDA ITEM Authorization to Contract with Eugene R. Sheehan for $24,29 for Trail Construction Services at El Corte de Madera Creek Open Space Preserve GENERAL MANAGER'S RECON MWNDATION Authorize the General Manager to enter into contract with Eugene R. Sheehan for $24,200 to construct the Phase I trail improvements at El Corte de Madera Creek Open Space Preserve. DISCUSSION At your May 22, 1996 meeting, you tentatively adopted the Trail Use Plan for El Corte de Madera Creek Open Space Preserve (see report R-96-60). Final adoption of the plan is being considered by you earlier at this same June 26 meeting. The Trail Use Plan for the preserve mentions that both the planning and operations budgets for fiscal year 1996-1997 included funding for implementation of Phase I of the plan (see `A'priority trails, Al-A5,�on the attached map). Staff is ready to begin the implementation process. Staff is recommending that this District contract with Eugene R. Sheehan of Sutherlin, Oregon to assist in constructing the Phase I trails. The District has a long history of successful trail construction projects under the guidance of Mr. Sheehan. He has supervised the construction of nearly all of the District's trails over his approximately 20-year relationship with the District. Mr. Sheehan has a reputation for building trails of the highest quality, using sound construction methods. He also works closely with District staff, supervising as well as training staff in the proper trail construction and maintenance techniques. Mr. Sheehan uses a Morrison Trailblazer, which is a specialized trail-building machine. The Trailblazer works like a miniature backhoe with a bucket for digging, a blade for scraping, and tracks instead of wheels for better traction. He has additional equipment specialized for trail construction purposes. Examples of trails constructed under the direction of Mr. Sheehan include the Stevens Creek Nature Trail at Monte Bello Open Space Preserve and the Black Mountain Trail at the Windmill Pasture Area of Rancho San Antonio Open Space Preserve. Planning staff will work with Mr. Sheehan to layout the trail locations, in accordance with the Trail Plan. Staff consulted with Mr. Sheehan in determining the feasibility of some of the more complicated trail locations included in the plan. As a result, he is familiar with the preserve. A seasonal trail construction crew, dedicated to the trail construction project at El Corte de Madera Creek Open Space Preserve, will work with Mr. Sheehan to clear vegetation and construct the trails. The three to four-person seasonal crew is currently on staff. 330 Distel Circle , Los Altos,CA 94022-1404 # Phone:415-691-1200 # FAX:415-691-0485 * E-mail: mrosd@netcom.com Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw, David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton R-96-73 Page 2 Mr. Sheehan charges a rate of $35.00 per hour for trail layout and $40.00 per hour for trail construction. His equipment is rented at a rate of $80.00 per day. The total cost of this contract with Mr. Sheehan will not exceed $24,200, plus the cost of insurance. This allows for a twelve week trail construction period. Staff anticipated that trails Al through A5 can be constructed in that time period. In the event the trail construction process is advancing more rapidly, staff and Mr. Sheehan will use the allotted time value to begin construction of the 'B' priority trails. It is difficult to predict how long it will take to construct a given trail. This is due to a number of factors, typically, soil conditions, vegetation cover and steepness of terrain. Staff feel that this project at El Corte de Madera Creek Open Space Preserve is one of the most technically challenging trail construction projects undertaken by the District. Staff has consulted with the District's insurance carrier to investigate the possibility of insuring Mr. Sheehan on the District's policy. Due to Mr. Sheehan's past history with the District and clear record of operation, our insurance carrier assures staff that Mr. Sheehan can be added to the policy for the term of the contract a minimal charge. As of this writing, it is undetermined what the actual expense will be for the insurance. Staff will have that information at the time this report is considered. Staff has determined that this approach allows for a considerable savings to the District over the alternative. Initial investigation of independent insurance carriers indicate that they could charge up to 25% of the cost of the contract to insure a small contractor such as Mr. Sheehan. This expense would be passed on to the District, thus increasing the overall cost of the project. Prepared by: Mary de Beauvieres, Open Space Planner Contact: Same as above TRAIL PLAN MAP EL CORTE DE MADERA _ OPEN SPACE PRESERVE Swett Road r %1' irll /� rid`i i ���\��r '� •-� �� B� - ^�� ��--- , 20W Ir \` �`, \``•�� 1.{)` `Sf' ///j�/,L;� ` (...`:' t'-` _`;1 scale 1• 500• .�)-) ��`•;m '.1�`jb� lia,�`�t +1� �".i.:.'�:a�``jam _. =�'. ��_ -A2-> A1;: _ _ \�,.L 0 Proposed Trails If f i' 5 � $s '`.;�'•�=. l 1\ '� •��: =tie __ .••' ;_ - .: • 'A3;: - B7 ' a �-. Y 8 Existing Trails 2 A4; J% J.�/ %.' )' .1�i\`��1 �,�,fi( �:S"•v�•'�'�r�3�" �'..' _'1'1_—.i>.• ': t','. �,��ij�r 1'1 �•L' (— mot\..- :�• j_'t_• �t (J� 'All D14 Vit J� 11,. l .i,i:�l1��11`' - - % ,'•f r i 1 , �' � r �\ �J l J 'I :,1� r \ 1�!' �•r, /v.- . }!I`,y:.' t; r\� <e� �_�-- � 1 �' t ��11� `._•_;,,\..:��' ''�``\/ rSz`'"4 AW J ''�^`✓. � "• I al iJ.mil—�y�.:G ( .'���-%j �1�;r , t`' r` ` ``"VJ IS i , t '? r , r � 1 1 AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT AND EUGENE R. SHEEHAN THIS AGREEMENT, dated for convenience this 27th day of June, 1996, is by and between EUGENE R. SHEEHAN, a sole proprietorship, ("Trail Contractor") and the MIDPENINSULA REGIONAL OPEN SPACE DISTRICT, ("District") a special district; RECITALS: WHEREAS, Trail Contractor is specially trained, experienced, and competent to perform the special services which will be required by this agreement; and WHEREAS, Trail Contractor is willing to render such professional services, as hereinafter defined, on the following terms and conditions. NOW, THEREFORE, Trail Contractor and the District agree as follows: AGREEMENT: (1) Scope of Service. Subject to the terms and conditions set forth in this agreement, Trail Contractor shall provide to District the services described in Exhibit A. Trail Contractor shall provide said services at the time, place, and in the manner specified in Exhibit A. (2) Compensation. District hereby agrees to pay Trail Contractor an hourly rate of $35.00 per hour for trail layout services and $40.00 per hour for trail construction services. Total compensation for Trail Contractor's services and expenses incurred pursuant to this agreement shall not exceed the sum of$24,000.00. (3) Effective Date and Term. The effective date of this agreement is June 27, 1996 and it shall terminate no later than October 31, 1996. (4) Independent Contractor Status. It is expressly understood and agreed by both parties that Trail Contractor, while engaged in carrying out and complying with any of the terms and conditions of this agreement, is an independent contractor and not an employee of the District. Trail Contractor expressly warrants not to represent, at any time or in any manner, that Trail Contractor is an employee of the District. (5) Billings. Trail Contractor shall submit monthly bills to the District describing its services and costs provided during the previous month. Trail Contractor's monthly bills shall include the following information to which such services or costs pertain: a brief description of services performed, the date the services were performed, the number of hours spent and by whom, and a brief description of any costs incurred, and the Trail Contractor's signature. In no event shall Trail Contractor submit any billing for an amount in excess of the maximum amount of compensation provided in section (2). (6) Advice and Status Roorting. Trail Contractor shall provide the District with timely advice of all significant developments arising during performance of its services hereunder orally or in writing. (7) Assignment and Subcontracting. It is recognized by the parties hereto that a substantial inducement to District for entering into this agreement was, and is, the professional reputation and competence of Trail Contractor. Trail Contractor shall not subcontract any portion of the performance contemplated and provided for herein. (8) Insurance. On or before beginning any of the services or work called for by any term of this agreement, Trail Contractor, at its own cost and expense, shall carry, maintain for the duration of the agreement, and provide proof thereof that is acceptable to the District the insurance specified in subsections (a) through (c) below with insurers and under forms of insurance satisfactory in all respects to the District. (a) Commercial General and Automobile Liability. Trail Contractor, at Trail Contractor's own cost and expense, shall maintain commercial general and automobile liability insurance for the period covered by this agreement in an amount not less than one million dollars per occurrence, combined single limit coverage for risks associated with the work contemplated by this agreement. If a Commercial General Liability Insurance or an Automobile Liability form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this agreement or the general aggregate limit shall be at least twice the required occurrence limit. Such coverage shall include but shall not be limited to, protection against claims arising from bodily and personal injury, including death resulting therefrom, and damage to property resulting from activities contemplated under this agreement, including the use of owned and non-owned automobiles. Each of the following shall be included in the insurance coverage or added as an endorsement to the policy: (i) District, its officers, employees, agents, and volunteers are to be covered as insureds as respects each of the following: liability arising out of activities performed by or on behalf of Trail Contractor, including the insured's general supervision of Trail Contractor; products and completed operations of Trail Contractor; premises owned, occupied or used by Trail Contractor; or automobiles owned, leased, hired, or borrowed by Trail Contractor. The coverage shall contain no special limitations on 2 the scope of protection afforded to District, its officers, employees, agents, or volunteers. (ii) The insurance shall cover on an occurrence basis, and not on the basis of an accident or claims made. (iii) The insurance must cover personal injuries as well as bodily injuries. Any exclusion of contractual liability in personal injury provisions of the policy or any endorsement to it must be eliminated. (iv) An endorsement must state that coverage is primary insurance and that no other insurance affected by the District will be called upon to contribute to a loss under the coverage. (v) Any failure of Trail Contractor to comply with reporting provisions of the policy shall not affect coverage provided to District and its officers, employees, agents, and volunteers. (vi) Broad form property damage liability must be afforded. A deductible that does not exceed $25,000 may be provided. (vii) Notice of cancellation or non-renewal must be received by District at least thirty days prior to such change. (b) Deductibles and Self-Insured Retentions. During the period covered by this agreement, upon express written authorization of District's Legal Counsel, Trail Contractor may increase such deductibles or self-insured retentions with respect to District, its officers, employees, agents, and volunteers. The District Legal Counsel may condition approval of an increase in deductible or self-insured retention levels upon a requirement that Trail Contractor procure a bond guaranteeing payment of losses and related investigations, claim administration, and defense expenses that is satisfactory in all respects to each of them. (c) Notice of Reduction in Coverage. In the event that any coverage required under subsections (a) and (b) of this section of the agreement is reduced, limited, or materially affected in any other manner, Trail Contractor shall provide written notice to District at Trail Contractor's earliest possible opportunity and in no case later than five days after Trail Contractor is notified of the change in coverage. (d) In addition to any other remedies District may have if Trail Contractor fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, District may, at its sole option: 3 (i) Obtain such insurance and deduct and retain the amount of the premiums for such insurance from any sums due under the agreement; (ii) Order Trail Contractor to stop work under this agreement or withhold any payment which becomes due to Trail Contractor hereunder, or both stop work and withhold any payment, until Trail Contractor demonstrates compliance with the requirements hereof; (iii) Terminate this agreement. Exercise of any of the above remedies, however, is an alternative to other remedies District may have and is not the exclusive remedy for Trail Contractor's failure to maintain insurance or secure appropriate endorsements. (9) Indemnification - Trail Contractor's Responsibility. It is understood and agreed that Trail Contractor has the professional skills, experience and knowledge necessary to perform the work agreed to be performed under this agreement, that District relies upon the professional skills of Trail Contractor to do and perform Trail Contractor's work in a skillful and professional manner, and Trail Contractor thus agrees to so perform the work. j Acceptance by District of the work performed under this agreement does not operate as a release of said Trail Contractor from such professional responsibility for the work performed. It is further understood and agreed that Trail Contractor is apprised of the scope of the work to be performed under this agreement and Trail Contractor agrees that said work can and shall be performed in a fully competent manner. I Trail Contractor shall indemnify, defend, and hold District, its officers, employees, agents, and volunteers harmless from and against any and all liability, claims, suits, actions, damages, and causes of action arising out of any personal injury, bodily injury, loss of life, or damage to property, or any violation of any federal, state, or municipal law or ordinance, or other cause in connection with the negligent or intentional acts or omissions of Attorney, its employees, subcontractors, or agents, or on account of the performance or character of this work, except for any such claim arising solely out of the active negligence, sole negligence, or willful misconduct of the District, its officers, employees, agents, or volunteers. It is understood that the duty of District to indemnify and hold harmless includes the duty to defend as set forth in section 2778 of the California Civil Code. Acceptance of insurance certificates and endorsements required under this agreement does not relieve District from liability under this indemnification and hold harmless clause. This indemnification and hold harmless clause shall apply whether or not such insurance policies shall have been determined to be applicable to any of such damages or claims for damages. (10) Licenses. If a license of any kind, which term is intended to include evidence of registration, is required of Trail Contractor, its employees, agents, or subcontractors by federal or state law, Trail Contractor warrants that such license has been obtained, is valid and in good 4 standing, and shall keep in effect at all times during the term of this agreement, and that any applicable bond has been posted in accordance with all applicable laws and regulations. (11) Te rmination, This agreement may be terminated by the District immediately for cause or upon fifteen days written notice without cause. In the event of termination, the Trail Contractor shall be entitled to compensation for services performed to the effective date of termination. (12) Notices. Notices required by this agreement shall be personally delivered or mailed, postage prepaid, as follows: To Trail Contractor: E. R. Sheehan 244 E. Everett Avenue Sutherlin, OR 97479 (503) 459-9630 To the District: L. Craig Britton, General Manager Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, CA 94022 (415) 691-1200 Each party shall provide the other party with telephone and written notice of any change in address as soon as practicable. Notices given by personal delivery shall be effective immediately. Notices given by mail shall be deemed to have been delivered forty-eight hours after having been deposited in the United States mail. (13) Amendments. This agreement may be modified or amended only by a written document executed by both Trail Contractor and District's General Manager and approved as to form by the District Legal Counsel. Such document shall expressly state that it is intended by the parties to amend the terms and conditions of this agreement. (14) Abandonment by Trail Contractor. In the event the Trail Contractor ceases performing services under this agreement or otherwise abandons the project prior to completing all of the services described in this agreement, Trail Contractor shall, without delay, deliver to District all materials and records prepared or obtained in the performance of this agreement, and shall be paid for the reasonable value of the services performed up to the time of cessation or abandonment, less a deduction for any damages or additional expenses which District incurs as a result of such cessation or abandonment. (15) Waiver. The waiver by either party of a breach by the other of any provision of this agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of either the same or a different provision of this agreement. 5 (16) No Third-ply Rigs. The parties intend not to create rights in, or to grant remedies to, any third party as a beneficiary of this agreement or of any duty, covenant, obligation, or undertaking established herein. (17) Severability. Should any part of this agreement be declared by a final decision by a court or tribunal of competent jurisdiction to be unconstitutional, invalid, or beyond the authority of either party to enter into or carry out, such decision shall not affect the validity of the remainder of this agreement, which shall continue in full force and effect, provided that the remainder of this agreement, absent the unexcised portion, can be reasonably interpreted to give effect to the intentions of the parties. (18) Compliance with Laws. In the performance of this agreement, Trail Contractor shall abide by and conform to any and all applicable laws of the United States, the State of California, and the Ordinances of District. Trail Contractor warrants that all work done under this agreement will be in compliance with all applicable safety rules, laws, statutes and practices, including but not limited to Cal/OSHA regulations. (19) Controlling Law. This agreement and all matters relating to it shall be governed by the laws of the State of California. (20) Conflict of Interest. Trail Contractor warrants and covenants that Trail Contractor presently has no interest in, nor shall any interest be hereinafter acquired in, any matter which will render the services required under the provisions of this agreement a violation of any applicable state, local, or federal law. In the event that any conflict of interest should nevertheless hereinafter arise, Trail Contractor shall promptly notify District of the existence of such conflict of interest so that the District may determine whether to terminate this agreement. Trail Contractor further warrants its compliance with the Political Reform Act (Gov. Code § 81000 et seq.) respecting this agreement. (21) Time is of the Essence. Trail Contractor agrees to diligently prosecute the services to be provided under this agreement to completion and in accordance with any schedules specified herein. In the performance of this agreement, time is of the essence. (22) Whole Agreement. This agreement has 9 pages excluding the exhibits described on its signature page. This agreement constitutes the entire understanding and agreement of the parties. This agreement integrates all of the terms and conditions mentioned herein or incidental hereto and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. (23) Multiple Conies of Agreement. Multiple copies of this agreement may be executed but the parties agree that the agreement on file in the office of District's District Clerk is the version of the agreement that shall take precedence should any differences exist among counterparts of the document. 6 �II IN WITNESS WHEREOF, Trail Contractor has executed this agreement, and the District, by its General Manager, who is authorized to do so, has executed this agreement. TRAIL CONTRACTOR Dated: By: E. R. Sheehan F.I.N. MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Dated: By: L. Craig Britton, General Manager Attest:Jean Fiddes, District Clerk Approved as to form and procedure: District Legal Counsel Attachments: Exhibit A: Scope of Services, consisting of 1 page. Exhibit B: Trail Plan Map of El Corte de Madera Open Space Preserve, consisting of 1 page. 7 Exhibit A: Scope of Services Project Description: Eugene R. Sheehan, Trail Contractor, will work with District staff to implement Phase I of the Trail Use Plan for El Corte de Madera Creek Open Space Preserve (report R-96-60 dated May 22, 1996). The project shall include layout and construction of the 'A' priority multi-use trails on El Corte de Madera Creek Open Space Preserve (see attached map, Exhibit B). Trail layout and construction shall begin with the trail identified as Al on the attached map. Upon completion of Al, staff and Trail Contractor shall proceed with layout and construction of trails A2, A3, A4, and A5. If time allows, layout and construction of trails B6 and B7 shall also be completed. Trails shall be constructed to a width of five (5) feet, and a maximum grade of 15 The completed trail surface shall be compacted soil. Obstructions such as trees or large rock outcroppings shall be avoided as practical. Project Manager: Julie McCullough, Open Space Planner, will be the District's Project Manager for this project. 8 Regional ce , R-90-70 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Meeting 96-15 June 26, 1996 AGENDA ITEM Solicitation of Bids for Picchetti Ranch Homestead House Structural Restoration Project GENERAL MANAGEW&RECOMMENDATIONS 1. Determine that the recommended actions are categorically exempt under the California Environmental Quality Act based on the findings contained in this report. 2. Authorize staff to solicit competitive bids from independent contractors for the Picchetti Ranch Homestead House structural restoration project. DISCUSSION In April of 1995 and 1996, the District was awarded $30,000 and $33,000 respectively in grant funding from the Santa Clara County Board of Supervisors through the Historical Project Funds of the parks charter to restore the Homestead House at Picchetti Ranch Area of Monte Bello Open Space Preserve. The scope of work described in both grants include contracting with architects and engineers to prepare construction drawings, constructing a concealed foundation, and new framing on the first and second interior floors that meet seismic requirements. The exterior of the structure will be unchanged. Plans and specifications for the Homestead House structural restoration project have been completed and submitted to the County of Santa Clara for permits. Staff is waiting for final plan approval. Staff anticipates soliciting bids in July and will return to you with bid results and a recommendation for an award of contract in September. The project is expect to be completed by December. At that time, the County will reimburse the District $63,000 in grant funding. BUDGET IMPLICATIONS Since the adoption of the 1996-1997 budget, the scope and funding for the restoration of the Homestead House has increased due to the recent approval of the second Historical Heritage Commission grant. The current $40,000 budget was initially planned to include design and construction elements for the first grant and preparation of plans and specifications for the second grant. In April 1996, when the second grant was officially awarded, staff re-evaluated and combined all elements of both grants into one project in order to expedite the project and be more cost efficient. The entire project was initially expected to occur over three years and cost$97,654. It has since been scaled down to a two-year project with an estimated cost of$63,000 in an effort to bring 330 Distel Circle s Los Altos, CA 94022-1404 * Phone:415-691-1200 * FAX:415-691-0485 * E-mail:mrosd@netcom.com e Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton R-96-70 Page 2 the cost of the project in-line with available grant funding. To date, $10,000 was spent in fiscal year 1995-1996 and another $3,000 spent so far this fiscal year. To complete the project this year, a total of$53,000 is needed which requires a $13,000 increase over the existing funding level. This increase may necessitate a mid-year budget adjustment, but at this time, it is anticipated there will be additional funds available from projects scheduled this year that are expected to be underspent. CEOA COMPLIANCE The District concludes that the proposed action will not have an effect on the environment and is categorically exempt under CEQA (California Environmental Quality Act) section 15301 - existing facilities. The project consists of repair and minor alteration of the Homestead House involving no expansion of use that previously existed. It also includes restoration of a deteriorated structure to meet current standards of public health and safety. Prepared by: Judy Law, Open Space Planner Contact person: Same as above Regional Opera S, xe MIDPENINSULA REGIONAL OPEN SPACE DISTRICT R-96-64 Meeting 96-15 June 26, 1996 AGENDA ITEM Cancellation of July 10, g 10 1996 Regular Meeting GENERAL MANAGER'S RECOMMENDATION Cancel your July 10, 1996 Regular Meeting. DISCUSSION I recommend that you cancel the July 10, 1996 Regular Meeting. Agenda items that would have been presented at the July 10 meeting have been placed on the June 26 agenda or will be placed on the July 24 agenda. Prepared by: Jean H. Fiddes, District Clerk Contact person: Same as above 330 Distel Circle * Los Altos, CA 94022-1404 • Phone:415-691-1200 FAX:415-691-0485 E-mail:mrosd@netcom.com S Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Han ko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton Claims No. 96-12 Meeting 96-15 Date:June 26, 1996 REVISED MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Amount Name Description 467 200.00 Mobile Radio Resources FCC Radio System Tone Report 468 228.21 Moffett Supply Company Restroorn Supplies 469 594.16 Monogram Sanitation Sanitation Services 470 382.94 Monterey County Fire Training Officers' Assn. Wildiand Fire School Registration- P. Congdon 471 19.50 Netcom Monthly Internet Fee 472 9.73 Noble Ford Vehicle Part 473 215.00 National Recreation and Park Association Renewal Membership 474 647.26 Office Depot Office Supplies 475 768.41 Orchard Supply Hardware Field Supplies 476 1,129.80 Pacific Bell Telephone Service 477 3,722.70 Page & Turnbull Consulting Services--Picchetti Ranch Homestead Stabilization 478 363.57 PIP Printing Program Printing-June 9th Event 479 725.00 Glen A. Phillips Landscape Architectural Services- Fremont Older and Monte Bello Parking 480 467.64 Pitney Bowes Credit Corporation Postage Reset Charges 481 190.00 Peninsula Open Space Trust Pezzoli Acquisition Settlement 482 4,000.00 Postage By Phone System Postage 483 18.48 Precision Engravers Name Tags 484 631.44 Quicksilver Printing Notecards, Programs and Envelopes 485 186.06 Rabbit Copiers, Inc. Field Offices Copier Maintenance Plan 486 8,290.00 Randazzo Enterprises Black Mountain Cabin Demolition 487 34.13 Rayne Water Conditioning Water Service 488 1,820.84 Roy's Repair Service Vehicle Repair 489 37.53 Russ Enterprises Signs 490 80.12 San Jose Mercury News Subscription 491 219.71 Sears Field Tools 492 378.50 Sequoia Analytical Water Sample Testing 493 404.18 Malcolm Smith Vehicle Expense and Event Supplies 494 250.00 Suburban Propane Honda Generator Conversion to Propane 495 577.50 TACITEMPS Temporary Receptionist 496 2,402.55 Teater & Etc. Maps and Visitor Guides 497 342.73 Therma Corp. Quarterly Maintenance 498 60.23 TSI Time Systems Office Supplies 499 420*75 U.S. Rentals Water Truck Rental-June 9th Event 500 42.58 Western Tree & Landscape Supply Field Supply 501 960.00 West Valley College Leadership Training Course 502 180.89 Wheelsmith, Inc. June 9th Bicycle Raffle 503 300.00 Roberta Wolfe Recording Services 504 1,208.36 Del Woods Reimbursement--Professional Conference 505 85.34 Yardbird Equipment Sales Field Supplies 506R 40.00 Caltrans Highway Design Manual 507R 132.00 Department of Fish and Game Permit for Installation of Culvert 508R 420.00 Petty Cash Field and Office Supplies, Local and Out- of-Town Meeting Expenses, Docent and Volunteer Expenses, Postage and Private Vehicle Expense TOTAL 75,915.13 Page 2 Claims No. 96-12 Meeting 96-15 Date: June 26, 19 REVISED MIDPENINSULA REGIONAL OPEN SPACE DISTRICT # Amount Name Description 424 219.82 Acme & Sons Sanitation Sanitation Services 425 96.87 All Laser Service Copier Cartridge Refill Service 426 100.00 Randy Anderson Reimbursement-Professional Dues 427 470.17 AT & T Telephone Service 428 268.46 Baron Welding & Iron Works, Inc. Sign Brackets 429 41.05 Black Mountain Spring Water Water Service 430 153.40 Bowerman Electric Electrical Repair-Daniels Nature Center 431 310.50 Breon, O'Donnell, Miller, Brown & Dannis Legal Services 432 49.68 Brian Kangas Foulk Engineering Consultant-Teague Hill 433 47.98 Carleen Bruins Reimbursement--Volunteer Event Supplies 434 235.00 California Park & Recreation Society Recruitment Advertisement 435 565.28 State of CA, Department of General Services GSA Vehicle Purchase Fee 436 340.26 California Water Service Company Water Service 437 8,743.82 Cascade Fire Equipment Company Two Water Pumper Units and Parts 438 2,970.50 Sheryl Marioni Cochran Trail Use Consulting-Fremont Older, Mt. Umunhum and Devils Canyon 439 49.68 Commercial Landscape Supply, Inc. Chemical Spray Suits 440 458.19 Communications & Control, Inc. P G & E Pump-Mt Umunhum 441 110.28 Dennis Danielson Reimbursement-Medical Supplies 442 78.00 Mary DeBeauvieres Vehicle Expense 443 106.30 Decatur Electronics, Inc. Radar Unit Repairs 444 2,729.51 Design Concepts Graphic Design for June 9th Event 445 50.00 Chris Di Leonardo Docent Training 446 39.00 Federal Express Corporation Express Mail 447 79.17 Film to Frame Film Developing 448 126.83 Foster Bros. Security Systems, Inc. Keys 449 34.82 G & K Services Shop Towel Service 450 1,002.08 Sharon Hall Photography Photography-June 9th Event 451 249.85 Hengehold Motor Co., Inc. Van Rental-June 9th Event 452 106.37 Home Depot Field Supplies 453 219.00 Honeywell Inc. Burglar Alarm Service 454 100.00 InterNIC Registration Services Website Domain Registration Fee 455 1,582.84 Jeda Publications, Inc. Fremont Older Brochures 456 11,500.00 Joe's Rototilling Foothills and Skyline Discing 457 2,873.90 Tamara Kan Consulting-Russian Ridge Grassland Study 458 30.71 Kinko's Copy Services 459 31.28 Dennis Kobza & Associates, Inc. Architectural Consulting Services-Skyline Ridge Field Office 460 75.92 Langley Hill Quarry Baserock 461 946.40-- Lanier Worldwide Inc. Photocopier Lease Agreement 2,770.70 462 614.17 Los Altos Garbage Company Garbage Service 463 20.30 Town of Los Gatos Construction Management Services- Skyline Field Office 464 190.74 Magnusen Buick-Pontiac-GMC, Inc. Vehicle Repairs 465 1,688.48 MetroMobileCommunications Radio Repairs and Batteries 466 249.98 McGrath RentCorp Skyline Ranger Office Rental Page 1 Claims No. 96-12 Meeting 96-15 Date: June 26, 1996 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT # Amount Name Description 424 219.82 Acme & Sons Sanitation Sanitation Services 425 96.87 All Laser Service Copier Cartridge Refill Service 426 100.00 Randy Anderson Reimbursement-Professional Dues 427 470.17 AT & T Telephone Service 428 268.46 Baron Welding & Iron Works, Inc. Sign Brackets 429 41.05 Black Mountain Spring Water Water Service 430 153.40 Bowerman Electric Electrical Repair-Daniels Nature Center 431 310.50 Breon, O'Donnell, Miller, Brown & Dannis Legal Services 432 49.68 Brian Kangas Foulk Engineering Consultant-Teague Hill 433 47.98 Carleen Bruins Reimbursement-Volunteer Event Supplies 434 235.00 California Park & Recreation Society Recruitment Advertisement 435 565.28 State of CA, Department of General Services GSA Vehicle Purchase Fee 436 340.26 California Water Service Company Water Service 437 8,743.82 Cascade Fire Equipment Company Two Water Pumper Units and Parts 438 2,970.50 Sheryl Marioni Cochran Trail Use Consulting--Fremont Older, Mt. Umunhum and Devils Canyon 439 49.68 Commercial Landscape Supply, Inc. Chemical Spray Suits 440 458.19 Communications & Control, Inc. P G & E Pump-Mt Umunhum 441 110.28 Dennis Danielson Reimbursement--Medical Supplies 442 78.00 Mary DeBeauvieres Vehicle Expense 443 106.30 Decatur Electronics, Inc. Radar Unit Repairs 444 2,729.51 Design Concepts Graphic Design for June 9th Event 445 50.00 Chris Di Leonardo Docent Training 446 39.00 Federal Express Corporation Express Mail 447 79.17 Film to Frame Film Developing 448 126.83 Foster Bros. Security Systems, Inc. Keys 449 34.82 G & K Services Shop Towel Service 450 1,002.08 Sharon Hall Photography Photography--June 9th Event 451 249.85 Hengehold Motor Co., Inc. Van Rental--June 9th Event 452 106.37 Home Depot Field Supplies 453 219.00 Honeywell Inc. Burglar Alarm Service 454 100.00 InterNIC Registration Services Website Domain Registration Fee 455 1,582.84 Jeda Publications, Inc. Fremont Older Brochures 456 11,500.00 Joe's Rototilling Foothills and Skyline Discing 457 2,873.90 Tamara Kan Consulting-Russian Ridge Grassland Study 458 30.71 Kinko's Copy Services 459 31.28 Dennis Kobza & Associates, Inc. Architectural Consulting Services--Skyline Ridge Field Office 460 75.92 Langley Hill Quarry Baserock 461 946.40 Lanier Worldwide Inc. Photocopier Lease Agreement 462 614.17 Los Altos Garbage Company Garbage Service 463 20.30 Town of Los Gatos Construction Management Services-- Skyline Field Office 464 190.74 Magnuson Buick-Pontiac-GMC, Inc. Vehicle Repairs 465 1,688.48 MetroMobileCommunications Radio Repairs and Batteries 466 249.98 McGrath RentCorp Skyline Ranger Office Rental Page 1 Claims No. 96-12 Meeting 96-15 Date: June 26, 1996 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Amount Name Description 467 200.00 Mobile Radio Resources FCC Radio System Tone Report 468 228.21 Moffett Supply Company Restroorn Supplies 469 594.16 Monogram Sanitation Sanitation Services 470 382.94 Monterey County Fire Training Officers' Assn. Wildiand Fire School Registration-- P. Congdon 471 19.50 Netcom Monthly Internet Fee 472 9.73 Noble Ford Vehicle Part 473 215.00 National Recreation and Park Association Renewal Membership 474 647.26 Office Depot Office Supplies 475 768.41 Orchard Supply Hardware Field Supplies 476 1,129.80 Pacific Bell Telephone Service 477 3,722.70 Page & Turnbull Consulting Services--Picchetti Ranch Homestead Stabilization 478 363.57 PIP Printing Program Printing--June 9th Event 479 725.00 Glen A. Phillips Landscape Architectural Services- Fremont Older and Monte Bello Parking 480 467.64 Pinney Bowes Credit Corporation Postage Reset Charges 481 190.00 Peninsula Open Space Trust Pezzoli Acquisition Settlement 482 4,000.00 Postage By Phone System Postage 483 18.48 Precision Engravers Name Tags 484 631.44 Quicksilver Printing Notecards, Programs and Envelopes 485 186.06 Rabbit Copiers, Inc. Field Offices Copier Maintenance Plan 486 8,290.00 Randazzo Enterprises Black Mountain Cabin Demolition 487 34.13 Rayne Water Conditioning Water Service 488 1,820.84 Roy's Repair Service Vehicle Repair 489 37.53 Russ Enterprises Signs 490 80.12 San Jose Mercury News Subscription 491 219.71 Sears Field Tools 492 378.50 Sequoia Analytical Water Sample Testing 493 404.18 Malcolm Smith Vehicle Expense and Event Supplies 494 250.00 Suburban Propane Honda Generator Conversion to Propane 495 577.50 TAC/TEMPS Temporary Receptionist 496 2,402.55 Teater & Etc. Maps and Visitor Guides 497 342.73 Therma Corp. Quarterly Maintenance 498 60.23 TSI Time Systems Office Supplies 499 420.75 U.S. Rentals Water Truck Rental--June 9th Event 500 42.58 Western Tree & Landscape Supply Field Supply 501 960.00 West Valley College Leadership Training Course 502 180.89 Wheelsmith, Inc. June 9th Bicycle Raffle 503 300.00 Roberta Wolfe Recording Services 504 1,208.36 Del Woods Reimbursement-Professional Conference 505 85.34 Yardbird Equipment Sales Field Supplies TOTAL 72,552.43 Page 2 Regional Open 5, ce MIDPENINSULA REGIONAL OPEN SPACE DISTRICT TO: Board of Directors FROM: C. Britton, General Manager DAT E: June 26, 1996 SUBJECT: FYI i i i 330 Distel Circle • Los Altos,CA 94022-1404 • Phone:415-691-1200 • FAX:415-691-0485 • E-mail:mrosd@netcom.com Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit Genera(Manager:L.Craig Britton Regional Open Spree 1 1 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT June 24, 1996 Mayor Ted Driscoll Town of Portola Valley 765 Portola Road Portola Valley, CA 94028 Subject: Trail Use of the Bridge at Lower Rapley Ranch Road Dear Mayor Driscoll, I am writing in response to your inquiry concerning the bridge across Corte Madera Creek at the lower end of Rapley Ranch Road. The bridge is located on an easement believed to be held by the Rapley Trail Improvement Association and is used by residents and District rangers and public traill users accessing Windy Hill Open Space Preserve. Apparently, the easement is aligned across lands owned by the Town of Portola Valley, the District and possibly includes a corner of an adjacent private parcel. Our records indicate the issue of public use on the bridge has been addressed in past correspondence with a neighbor and incorporated into the Windy Hill Use and Management Plan. In 1988, the District responded to a neighbor's inquiry about public use of the bridge and potential liability. In our response, we stated the level of public trail use on the bridge was considered acceptable in terms of our easement and a pedestrian bridge would be desirable in the long-term. In addition, an explanation of Civil Code Section 846 was given which addresses liability associated with public trail use. Following this inquiry, the concept of a pedestrian bridge was again mentioned in the preserve's management plan as a possibility if public trail use increased to the point of major impact. A number of factors need to be considered by the District and the Town of Portola Valley in order to resolve the potential problem with trail use on the lower end of Rapley Road. The existing bridge needs improvements if it is to continue serving as a pedestrian bridge (and possibly for vehicular access as well). Alternative trail and bridge alignments will most likely result in potential environmental impacts due to the sensitive nature of the riparian habitat. The Town's Eagle Trail and District's Razorback Trail do not currently connect and it is desirable to have a seamless trail connection in the future. Last but not least, property ownership is an important consideration because no matter how we proceed, the project area is under multiple ownership with the District and private property to the south of the creek and Town property to the north of the creek. We are not aware of any available survey information that would easily assist us with property line determination. 330 Distel Circle • Los Altos,CA 94022-1404 • Phone:415-691-1200 • FAX:415-691-0485 • E-mail: mrosd®netcom.com Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton Mayor Ted Driscoll Town of Portola Valley June 24, 1996 Page 2 We appreciate your concern over this matter and would like to see the current situation improved. Unfortunately, funding is not currently available in the District's budget, but we would be interested in moving forward with planning efforts. To do so, it would be very helpful if representatives from the Town and Rapley Trail Improvement Association could meet together with District staff to discuss potential solutions. Please contact me if you would like to schedule such a meeting. S' cerely, f� L. Craig Britton General Manager cc: MRQSD Board of Directors Regional Open Sj%ce MIDPENINSULA REGIONAL OPEN SPACE DISTRICT INTEROFFICE MEMORANDUM June 19, 1996 To: L. Craig Britton, General Manager From: Planning Team/Randy Anderson, Senior Planner` _L'�� Subject: Progress Update and Schedule for Regional Open Space Plan On January 27, 1996 the Board held a special workshop to initiate the Regional Open Space Plan (ROSP) with review of the Basic Policy and development of a draft Mission Statement. That workshop was well attended and many good ideas were generated to clarify and strengthen these policy statements. District staff was assigned to further develop these ideas and return to the Board at a public meeting to review the draft revised policy statements. Staff workshops were held in April, 1996 at which many more good ideas for clarification of the policy statements were obtained. One more staff workshop will be held in late June to complete the development of an administrative draft. Staff has also been working on the plan (map) studies and estimates that will be reviewed to develop, and ultimately publish, the preferred greenbelt plan. The summer months are a challenge for scheduling meetings with full attendance by the Board and the public. Nevertheless, to maintain momentum on the project and take advantage of the coordination opportunity mentioned below, we recommend that the public review continue over two to three Board meetings extending from mid-summer through early fall. This would include an initial meeting to focus on the draft policy statements, a meeting to focus on the draft plan, and a meeting to finalize the draft policy and plan. At least one of these meetings should probably be a special workshop similar to the one held on January 27. In the interim, we intend to coordinate with the staff of local cities and counties to get input on the plan portions of the ROSP. Following Board approval of the final draft, the plan would be formally presented to local city councils and the Boards of Supervisors for comment. Depending on the interest generated, final adoption is anticipated to occur prior to the end of the fiscal year on March 31, 1997. Keeping the ROSP moving on this schedule affords the opportunity to coordinate the project with the West Valley Hillside Preservation Strategy project that is underway in Santa Clara County. This project is a collaboration between Santa Clara County and the cities of Cupertino, Los Gatos, Monte Sereno, and. Saratoga (Los Gatos already has completed a hillside study and agreement with the county) to coordinate and strengthen their standards and review process for hillside development and to define a long term, if not permanent, urban services boundary. The schedule for theHillside Preservation project is essentially in parallel with the ROSP schedule outlined above, and provides the opportu nity for coordinated input on the ROSP by five important agencies. I recommend that this memo be mailed to the people who attended the January 27 workshop to update them on the project and to all District staff members. Regional Open 9okce MIDPENINSULA REGIONAL OPEN SPACE DISTRICT June 14, 1996 Town Council Town of Portola Valley 765 Portola Road Portola Valley, CA 94028 Dear Council Members: In reference to the letter sent to the town b Thomas Fogarty, dated M 2 1 i May 3 . 996• this letter Y g�3' Y responds to the four findings of Use Permit X7D-87, which are apparently necessary for the Fogarty's dedication of a trail easement parallel to Skyline Boulevard. Specifically, I would like to respond to Finding 1, requiring that "the easement connect at either end with improved public trails, or such trails that will be improved, within a reasonable period of time." The District's Windy Hill Open Space Preserve adjoins Skyline Boulevard and the Fogarty property to the northwest. An existing trail is located approximately 0.25 miles from the preserve boundary common to the Fogarty property. District staff could easily build the trail segment necessary to connect with the proposed trail easement to the northwest within a reasonable period of time. In addition, staff has investigated the trail connection along the southeastern boundary of the Fogarty property. The existing trail system on the District's Russian Ridge Open Space Preserve, located on the west side of Skyline Boulevard, could easily be expanded to make the connection with a minimum of effort. The trail alignment requires an encroachment permit from Caltrans and minimal trail construction on the Russian Ridge Open Space Preserve to link with the southeastern corner of the Fogarty property. A schematic site map of the proposed trail connection in this area is enclosed. The District looks forward to working with the Town on this project to help make this trail a reality. This proposed connection will fill a gap in the Bay Area Ridge Trail which extends from Highway 9 to this location with only one other small gap. The District is currently working to close that gap. Please let me know if we can be of any additional assistance on this project. Sin rely,`, L. Craig Britton General Manager encl. cc: MROSD Board of Directors Admiral Joe Quilter 330 Distel Circle • Los Altos,CA 94022-1404 • Phone:415-691-1200 • FAX:415-691-0485 • E-mail:mrosd@netcom.com Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton RUSSIAN RIDGE CALTRANS OPEN SPACE PRESERVE 6 MILE MARK (SM 35 600) 0�/ BERM RAPLEY RANCH ROAD PROPOSED TRAIL ENCROACHMENT fir---CALL BOX AND CROSSING ♦ (SM-035-061) NATIONAL AUDUBON / SOCIETY 1 DRIVEWAY- FOGARTY PROPERTY A. TO WINDY HILL y�� NOT TO SCALE OPEN SPACE �p� PROPOSED RUSSIAN PRESERVE EASEMENT AREA RIME O.S.P. SCHEMATIC SITE MAP FO°"RTM PROPERTY ,o m� og}NATIONAL AUDUBON SOCIETY L. o= s WINDY HILL O.S.P. . s11A0EX Y LOCATION MAP NOT TO SCALE r Fyn+> ,Stomas goyar K, �. - 3270 Alpine Road Portola Valley, Califomia 94028 (415) 854-1822 R FAX (415) 854-2778 MAY 2 91996 May 23 , 1996 Town Council of Portola Valley TOM OF PORTOLA VALLEY 765 Portola Road Portola Valley, CA 9402 Dear Council Members : This letter is in reference to resolution No. 884-1981 and is written at the request of the Town Council of Poz_ola Valley. It is the intent of the Fogarty family to adhere to the content of Use Permit X7D-87 ; resolution No. 1981-215 as regards to provision 8H trail easement . Provision 8H The Town Council is required to make the following findings at a noticed public hearing subject to all rights of review and appeal . Finding 1: Easement connects at either end with improved public trails or such trails that will be improved within a reasonable period of time. Response to 1: Neither The Fogarty Family Trust nor any individual of the Fogarty Family has been notified that Finding 1 has been satisfied. To my knowledge the public has not been noticed that Finding 1 has been satisfied. If Finding 1 has been satisfied, certain written documents and signed recorded dedications of adjoining trail easements should be available for purposes of substantiation. Finding 2 : (1)An agency or agencies have been identified which will improve the trail easement within a (2) reasonable period of time after dedication of the easement and (3) which will provide adequate maintenance and security of the trail . Response to Finding 2 : (1)There has been no notice as to which agencies or agencies will assume the responsibility of Finding 2 . (2)A determination as to what constitutes a reasonable period of time after dedication of easement has not been made (3) and which (agency) will provide adequate maintenance and security for the trail . Response to Finding 2 : (2)At the time of consideration of conditional use permit, Town Council was unwilling to incur any fiscal or legal liability for the development, maintenance, or security of proposed trail . This concern led to the inclusion of Finding 2 and the need for an appropriate agency. Whatever agency or agencies assume responsibility for the trail most certainly will be willing to provide documentation of insurance or alternate1%, indemnify all those that could potentially incur a liability related to trail use . Finding 3 : The requirement of dedication is consistent with all laws applicable at the time of such dedication and that with respect to government code 65909, or successor provisions, such section shall be applied in the same manner as if the use permit were also being acted upon at such time . Response Finding to 3 : Since this provision 3 cites a specific government code 65909 1 request the town access its in-house legal counsel for its interpretation. It is my understanding that provision three has not been met . Finding 4: The easement shall be parallel and in proximity to Skyline Boulevard, between Skyline Boulevard and areas approved in the use PeMiL for cultivation, to the satisfaction of the trails committee and the conservation committee. Response to 4: The area approved in the use permit for cultivation that is parallel and in proximity to Skyline Boulevard measures 1000 yards. An additional 2000 yards of trail would be required to connect to potential public trails . Under Finding 4 if a trail is constructed it will result in a deadend trail onto private property and will violate Finding 1 Sincerely, Thomas J. ogarty, M. Regional Open S ee MIDPENINSULA REGIONAL OPEN SPACE DISTRICT TO: Board of Directors FROM: C. Britton, General Manager DATE: June 21, 1996 SUBJECT: FYI I 330 Distel Circle • Los Altos,CA 94022-1404 Phone:415-691-1200 • FAX:415-691-0485 E-mail:mrosd®netcom.com 0 Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton Regional Open , c MIDPENINSULA REGIONAL OPEN SPACE DISTRICT MEMORANDUM June 20, 1996 TO: L. Craig Britton, General Manager FROM: Judy Law, Open Space Planner SUBJECT: Status of Grant House Restoration Project at Ranch San Antonio Open Space Preserve In April of 1994, the District was awarded $20,000 from the Santa Clara County Board of Supervisors through the Historical Project Funds of the parks charter to restore and furnish the interior of the Grant cabin at Rancho San Antonio. With the assistance of staff, an exhibit consultant, and many outstanding volunteers, the interior of the Grant cabin is now restored and furnished with artifacts. The inside of the Grant cabin is developed as a diorama type.of exhibit. Visitors will be able to look through the exterior windows or stand in the entry to catch a glimpse of turn-of-the- century life. A dedication event is scheduled to be held on July 26 to celebrate completion and to thank the Santa Clara Board of Supervisors and volunteers for making this project possible. Some of the tasks for completing this project included weather-proofing the cabin, developing an exhibit plan, acquiring artifacts, and installing an alarm system. At this time, the interpretive signs are being constructed and they will be installed within the next two weeks. The support material for grant reimbursement was recently submitted to the county. The Grant cabin will be a valuable resource for relating the history of the land to thousands for preserve visitors and students participating in the environmental education programs at the preserve and Deer Hollow Farm. 330 Distel Circle * Los Altos,CA 94022-1404 Phone:415-691-1200 g FAX:415-691-0485 E-mail: mrosd@netcom.com Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton AN 0 71996 Dom. aM. co�s�ww,d tiP�w+ t,@w . new�.w�k ��P- ev„c*�/B�nre➢,�, .� "W�m,o�.P 4tyy1.t,� IU�2- io� aka a, d .A J\v" t-� *ut ;t ti, 14i� . n�u °tea d� AAp 1� �,,,� aC� Grp RA M c e d �✓tn�JC J� i� P� y� HARRISON gpowN 7e4 cAnBRICGE AVE . MENLO pgRK tq gµo25 Regional Open *ce 2 1 �- MIDPENINSULA REGIONAL OPEN SPACE DISTRICT June 20, 1996 Harrison Brown 784 Cambridge Avenue Menlo Park, CA 94025 Dear Mr. Brown: Thank you for your June 6, 1996 letter regarding garbage cans on open space preserves. Years ago, after much consideration, the District decided not to provide garbage cans on open space preserves. We believe that preserve visitors should carry out whatever they bring in. This system is working well in most areas. In the past, sites provided with garbage cans became dumps for neighborhood household trash. Although garbage cans are useful, they have not proven to be a deterrent to littering, and they are a nuisance when thrown into to canyons, turned upside down, or set on fire. We appreciate your efforts to remove litter at the preserves you visit. You are setting an example of responsible public use. We hope you will continue to enjoy your visits to open space preserves. S cerely, i i L. raig Britton General Manager i LCB:sds cc: Board of Directors 330 Distel Circle • Los Altos, CA 94022-1404 • Phone:415-691-1200 • FAX:415-691-0485 • E-mail:mrosd@netcom.com 0 Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit Genera(Manager:L.Craig Britton j 4 b✓;w lE.. i&, s 'vim S 310 UNIVERSITY AVENUE,SUITE 200,PALO ALTO,CALIFORNIA 94301 (415)688-7500 �A June 17, 1996 Malcolm Smith Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, CA 94022-1404 Dear Malcolm: I'm sorry it's taken me so long to send this to you, but I wanted to let you know how much I enjoyed 'This Land is Your Land - A Day in Open Space." There was a tremendous amount of energy and spirit present, and I enjoyed the various activities and displays. The Mercury News is proud to have been a sponsor of this fun afternoon. The Mercury News appreciates our new sponsor relationship with MROSD, as demonstrated by our committment to '"This Land is Your Land" in the form of 60 inches in the Local sections, and 30 inches in Peninsula Living, for a total contribution of $ 9,720.00. It was really a pleasure to work with you, Malcolm, and I look forward to our participation in next year's event. Best Regards, Kathy Phelan Peninsula Marketing Manager KLP: mmb INTER-OFFICE MEMORANDUM June 17, 1996 TO: Craig Britton, General Manger FROM: John Escobar, Operations Manager SUBJECT: MONTHLY FIELD ACTIVITY SUMMARY Month MU Year 1996 VIOLATIONS TOTALS ACCIDENTS TOTALS Bicycles Bicycle 3 Closed area 13 (12) Equestrian 0 Speed 15 (4) Hildng/running 2 Helmet 49 (28) Other first-aid 0 Night riding 0 Search/rescue 0 Dogs Helicopter evacuations 2 Prohibited area 5 (5) Off-leash 11 (2) ENFORCEMENT Fishing/swimming 1 (1) Citations 73 Off-road vehicles 1 (1) Written warnings 70 Closed area 1 (0) Police assistance 0 After hours 13 (7) Weapons CRE%IES Actual contacts 0 Resisting peace officer 1 (1) Reports only 0 Auto Burglary I Vandalism 5 (0) Intimidation/exposure 2 Parking 18 (10) After hours parking 13 (2) MUTUAL AID Dumping/littering 1 (0) Accidents — 4 Enforcement 0 Fire 0 number of citations issued Search 1 SLT11dM KIES OF SIGNIFICANT INCIDENTS May 4: K. Miller reported that the Open Space sign at Sierra Azul was vandalized with paint remover. The sign was replaced. May 5: P. Hearin was called out of his residence to respond to a solo bicycle accident at Fremont Older. A 10-year-old male injured his right arm, causing an obvious deformity. Thb father declined any further assistance and transported his son by private vehicle. May 5: M. Newburn and T. Karnofel responded to a report of an off-road motorcycle on the Charnise Trail at RSA. M. Newburn stopped the subject and issued a citation. May 5: L. Hyman cited a person for fishing at Horseshoe Lake at Skyline Ridge. The person said they were practicing 'catch and release'. May 7 Two separate incidents occurred at St. Josephs Hill. A female jogger reported that & 8: another female jogger followed her and yelled lewd sexual remarks at her. A third female jogger reported that a female stepped out of the brush wearing a pea coat and exposed herself. The suspect was the same in both cases, and is known for exposing herself and making false reports. May 9: A bicyclist at Windy Hill was stopped by B. Malone for no helmet. He fled from the ranger. M. Ken spotted the cyclist on Alpine Road and detained him, with the assistance of San Mateo sheriffs' deputies. The person was cited for no helmet and resisting arrest. May 13: L. Paterson reported that the lock and chain was removed from the gate that accesses the chestnut orchard at the former Incerpi property at Long Ridge. A rambling note saying the land belongs to everyone was left by the gate. May 14: One bicyclist, traveling at approximately 20 mph while overtaking, collided with another bicyclist on the Kennedy Trail at Sierra Azul. One rider had loss of consciousness and a serious head injury. The other had a dislocated shoulder. Both were flown by Life-Flight to Valley Medical Center. The incident was handled by a Los Gatos town ranger, Central Fire, AMR medics, Life-Flight, D. Danielson and T. Lausten. May 23: B. Malone reported extensive graffiti and vandalism in Devils Canyon at Long Ridge, adjacent to an already graffitied cave. May 25: A District neighbor was contacted for grading Loma Prieta Road without authorization. P. Hearin issued a written warning and requested prior notification in the future. May 26: K. Carlson stopped a bicyclist at El Sereno and issued a citation for no helmet. The bicyclist swore at him and threatened revenge, May 27: A hiker on the Regnart Trail at Fremont Older slipped on the dirt, fell and fractured her left hip. She refused any medical care. Her sister transported her to El Camino Hospital. May 27: A bicyclist on the Seven Springs Trail at Fremont Older crashed while riding his brakes. He walked and rode back to the Prospect lot. K. Miller contacted him at the lot, where he was complaining of neck pain. The cyclist was transported by medics to O'Connor Hospital. Central Fire assisted. May 31: L. Hyman took a report of an auto burglary at Russian Ridge in the Alpine Road parking lot. Only spare change was taken but the vehicle sustained damage to the review mirror, radio, and exterior door lock. Regional Open S. ce ................. ............................... MIDPENINSULA REGIONAL OPEN SPACE DISTRICT For Immediate Release Contact: Malcolm Smith June 19, 1996 Public Affairs Manager (415) 691-1200 "A Day in Open Space " Draws Crowds to Horseshoe Lake Los Altos, CA -- Earlier this month, the Midpeninsula Regional Open Space District's outdoor environmental festival, This Land is Your Land..A Day in Open Space, drew over 1,000 people to beautiful Horseshoe Lake at Skyline Ridge Open Space Preserve. The June 9 event featured 34 booths, exhibits, and activities including live wildlife programs, nature interpretive activities and displays, kite making, recreation retailer displays and demonstrations, mountain bike clinics and rides, hikes and walks, crafts, nature center tours, food, music, and raffles. The Midpeninsula Regional Open Space District, extending from the City of San Carlos to the Town of Los Gatos, is a public agency which has preserved over 41,000 acres of diverse open space and manages,23 open space preserves. Funding is provided by a small share of the annual total property tax revenues collected within District boundaries. The District permanently protects wildlife habitat, watershed, and a variety of ecosystems,restores damaged natural resources, and provides trail improvements for passive recreational use by the public. The District's goals are to acquire a continuous greenbelt of protected open space lands for public use and enjoyment, and to preserve open space for future generations to enjoy. There are approximately 20,000 - 30,000 acres of land still at risk of being lost to development within the District's planning area. 330 Distel Circle • Los Altos,CA 94022-1404 • Phone:415-691-1200 • FAX:415-691-0485 • E-mail:mrosd@netcom.com 0 Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton Regional Open S&ce A MIDPENINSULA REGIONAL OPEN SPACE DISTRICT June 19, 1996 Claude A. Look, Executive Director California Trails and Greenways Foundation F.O. Box 183 Los Altos, CA 94023 Subject: Urban Creeks Creative Grant Dear Tony: This letter acknowledges and thanks the California Trails and Greenways Foundation and the Grants Committee for your grant award of $1875 for the restoration of the creek at Picchetti Ranch Open Space Preserve. This money will allow this cooperative effort to fully address the exotic plan removal, dump cleanup/historic artifact cataloging, and creek habitat restoration. We will provide you with a written and photographic record of the project before May 1, 1997. The project certainly will be publicized in the District's newsletter, and we will try to get some coverage in the local press. Sincerely, Randy�Anderon, Senior Planner cc L. Craig Britton, General Manager 330 Distel Circle • Los Altos,CA 94022-1404 • Phone:415-691-1200 • FAX:415-691-0483• E-mail:mrosd@netcom.com (9 Board of Directors:Pete Siemens,Mary C.Davey,Teena Henshaw,David T.Smernoff,Nonette Hanko,Betsy Crowder,Wim de Wit General Manager:L.Craig Britton JUN 141996 Community Development Planning Division 10300 Torre Avenue clip rthl0 Cupertino, CA 95014 (408) 777-3308 Fax (408) 777-3333 June 12, 1996 Mr. Craig Britton Midpeninsula Regional Open Space District 330 Distel Drive Los Altos, CA 94022 Dear Mr. Britton: This is to confirm that your agency has been placed on the Planning Commission agenda on June 24, 1996 at 6:45 p.m. in the City Hall Council Chambers. MROSD is scheduled as the first agenda item; therefore you should arrive at 6:45. Sincerely, ��� Yv e Kelley Admin. Secretary YK Pen#ed an Pecycled Paper Tribute to Wallace Stegner by Page Stegner Long Ridge Open Space Preserve May 19, 1996 Good morning. I I d like to begin by saying what an honor it is to have been asked to assume the role that my father usually plays in this venue. He is sorry that he could not be here, but had a previously planned trip with the directors of the great Basin region of the Nature Conservancy to float down the San Juan River. However, he is most certainly here in spirit and wanted me to express that. I 'd like to share with you a small bit about my relationship with my grandfather and how having such a powerfully gentle man in my life helped to shape me into what I am today. He was one of the best friends I 've ever had, and his spirit still is. Not only was he the person who took me to my first professional baseball game, who put me on a pair of skis at age seven, and who wrote letters full of pearls of wisdom and made me feel like the most important little boy in the world, but he also took me on horseback rides and camped out with me under the stars where we would gaze up for hours at a time while he named and pointed out all of the constellations such as the Big Dipper, Orion' s Belt, and so on. I really got the sense way back then of how small we really are, but how much a part of everything we really are. My grandmother and he used to pack a picnic lunch and bring my sister and me up to this place, where we would take substantial nature hikes and he would p• out and name every plant or bird that crossed our path. Which I suppose that at ten years old, I found to be not as exciting as skiing or a baseball game. But I did find great comfort in my sense of place with nature and these two beautiful people I called my grandparents. And I remember the stern lesson I received right here about leaving things as they are so that others may experience the same things in their original form and get the same sense that I had, that they, too, were the only ones who had ever been here, and if every ten year old boy who came here carved his name in the old oak tree with his new Swiss army knife that his grandpa had bought him it would ruin it for everyone. "Tread gingerly, " he said. I understand now what he meant. We need unscarred places to go and just be. If we don' t have that, then we forget what we really are. I heard it said once that we are not Human Thinking, we are not Human Doings, we are Human Beings, and if we never take the time to just be and be silent, then how are we to ever truly know ourselves? This is why silence is golden and why I feel we need large expanses of wilderness, even if all we ever do is (in his words) drive to its edge and peer in. Because it reminds us that we are all things, and if we lose sight of that, then we will wither and disappear. I feel this will not happen because of people like you, me, and my grandfather, who are enlightened to the importance of just being and witnessing the beauty in all things .