HomeMy Public PortalAbout20160810 - Agenda Packet - Board of Directors (BOD) - 16-18
SPECIAL AND REGULAR MEETING
BOARD OF DIRECTORS OF THE
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
SPECIAL MEETING
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
FINANCING AUTHORITY
Administrative Office
330 Distel Circle
Los Altos, CA 94022
Wednesday, August 10, 2016
5:00 PM*
REVISED A G E N D A
5:00 SPECIAL MEETING OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA
REGIONAL OPEN SPACE DISTRICT – CLOSED SESSION
ROLL CALL
1. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION. (Government
Code Section 54956.9(d)(1))
Name of Case: Midpeninsula Regional Open Space v. Michael Rossetta, et al; Santa Clara
County Superior Court Case Number 1-15-CV-289568
2.
CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code Section
54956.8)
Property: Santa Clara County Assessor’s Parcel Number 517-24-007
Agency Negotiator: Allen Ishibashi, Senior Real Property Agent
Negotiating Party: Marita Quint
Under Negotiation: Fee Title, Trail and Road Easements or Rights
Property: Santa Clara County Assessor’s Parcel Number 517-24-020
Agency Negotiator: Allen Ishibashi, Senior Real Property Agent
Negotiating Party: Ann Dunham
Under Negotiation: Fee Title, Trail and Road Easements or Rights
Property: Santa Clara County Assessor’s Parcel Number 510-33-006
Agency Negotiator: Allen Ishibashi, Senior Real Property Agent
Negotiating Party: Andrew Gere
Under Negotiation: Fee Title, Trail and Road Easements or Rights
Meeting 16-18
Property: Santa Clara County Assessor’s Parcel Number 510-48-002
Agency Negotiator: Allen Ishibashi, Senior Real Property Agent
Negotiating Party: Ken Crafford
Under Negotiation: Fee Title, Trail and Road Easements or Rights
Property: Santa Clara County Assessor’s Parcel Number 510-48-001
Agency Negotiator: Allen Ishibashi, Senior Real Property Agent
Negotiating Party: Oakley Fairview Company
Under Negotiation: Fee Title, Trail and Road Easements or Rights
3. CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION (Government Code
Section 54956.9)
M. Mahronich, et al v. Presentation Center, Los Gatos, Inc.
Santa Clara Superior Court Case No. 1-15-CV-276706
ADJOURNMENT
7:00 MEETING OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN
SPACE DISTRICT
ROLL CALL
ORAL COMMUNICATIONS
The Board President will invite public comment on items not the agenda. Each speaker will ordinarily
be limited to three minutes; however, the Brown Act (Open Meeting Law) does not allow action by the
Board of Directors on items not on the agenda. If you wish to address the Board, please complete a
speaker card and give it to the District Clerk. Individuals are limited to one appearance during this
section.
ADOPTION OF AGENDA
SPECIAL ORDERS OF THE DAY
• Introduction of Staff
o Amy Schmitt, Senior Administrative Assistant
CONSENT CALENDAR
All items on the Consent Calendar may be approved 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.
1. Approve the Minutes for the July 27, 2016 Board meetings
2. Approve Claims Report
3. Renewal of Investment Authority and Adoption of Annual Statement of Investment Policy
(R-16-77)
Staff Contact: Mike Foster, Controller
General Manager’s Recommendation: Adopt a resolution to renew the District Controller’s
investment authority until August 10, 2017 and approve the District’s Revised Statement of
Investment Policy.
4. Fiscal Year 2016-17 Annual Claims List (R-16-83)
Staff Contact: Nicole Gonzales, Budget Analyst II and Andrew Taylor, Senior Accountant
General Manager’s Recommendation: Approve the Fiscal Year 2016-17 Annual Claims List,
including debt service payments.
5. Measure AA Logo (R-16-99)
Staff Contact: Shelly Lewis, Public Affairs Manager
General Manager’s Recommendation: Approve the Legislative, Funding, and Public Affairs
Committee’s recommendation for Measure AA logo design, with the addition of “funded by” and
“2014 Open Space Bond” wording.
6. Resolution Approving a Second Addendum to the Final Environmental Impact Report for
the Mount Umunhum Environmental Restoration and Public Access Project (R-16-96)
Staff Contact: Meredith Manning, Senior Planner
General Manager’s Recommendation: Adopt a resolution approving a Second Addendum to the
certified Final Environmental Impact Report for the Mount Umunhum Environmental Restoration
and Public Access Project at Sierra Azul Open Space Preserve and related minor project
modifications.
BOARD BUSINESS
The President will invite public comment on agenda items at the time each item is considered by the
Board of Directors. Each speaker will ordinarily be limited to three minutes. Alternately, you may
comment to the Board by a written communication, which the Board appreciates.
7. Resolution Authorizing the Issuance of a Series 2016 Green Bonds and Approving Related
Documents and Associated Actions (R-16-97)
Staff Contact: Stefan Jaskulak, Chief Financial Officer
Executive Director’s Recommendation: Adopt a Resolution authorizing issuance of not to exceed
$68 million in Midpeninsula Regional Open Space District Green Bonds, 2016 Refunding (the
“2016 Green Bonds”); approving the related forms and execution of an indenture, a bond
purchase agreement, an escrow agreement, and a continuing disclosure agreement; approving
form of and distribution of an official statement for said refunding bonds; and authorizing taking
of necessary and incidental actions, and documents and certificates.
ADJOURNMENT TO THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
FINANCING AUTHORITY MEETING
SPECIAL MEETING OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
FINANCING AUTHORITY
1. Resolution Authorizing the Early Redemption and Execution of All Necessary Documents
in Connection with the 2016 Green Bonds (R-16-98)
Staff Contact: Stefan Jaskulak, Chief Financial Officer
Executive Director’s Recommendation: Adopt a Resolution of the Board of Directors of the
Midpeninsula Regional Open Space District Financing Authority authorizing the early
redemption of the 2007 Series A Revenue Refunding Bonds and 2011 Revenue Bonds, and
Approving Forms and Execution of an Escrow Agreement, and Authorizing the taking of all
necessary actions in connection with the 2016 Green Bonds.
RECONVENE THE REGULAR MEETING OF BOARD OF DIRECTORS OF THE
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
8. Award of Contract to O.C. Jones & Sons Inc. for construction of the Mount Umunhum
Road Rehabilitation Project (Project) at Sierra Azul Open Space Preserve for a Base
Amount Not-to-Exceed $5,012,758 and a Separate 15% Contingency (R-16-101)
Staff Contact: Zachary Alexander, Capital Project Manager II, Engineering and Construction
Department
General Manager’s Recommendation:
1. Authorize the General Manager to enter into contract with O.C. Jones & Sons of
Berkeley, CA for a not-to-exceed base contract amount of $5,012,758.
2. Authorize a 15% construction contract contingency in the amount of $751,914 to be
reserved for unanticipated issues, thus allowing the total contact amount not-to-exceed
$5,764,672.
3. Adopt a Resolution approving a budget line item adjustment in the amount of $2,764,672
to the Fiscal Year (FY) 2016-17 District budget to fund construction of the Project.
9. Award of Contract to D-Line Constructors for Construction Services for the Mount
Umunhum Summit Project at Sierra Azul Open Space Preserve for a Base Amount Not-to-
Exceed $7,385,000 and a Separate 10% Contingency (R-16-82)
Staff Contact: Damon Adlao, Capital Project Manager III, Engineering and Construction
Department
General Manager’s Recommendation:
1. Approve the Mount Umunhum Summit Project Design and Plans, and delegate to the General
Manager or designee the authority to approve any necessary changes to the Project Design
and Plans, and Direct that the “As Built” Designs Come Back to the Board for Final
Approval.
1.2.Authorize the General Manager to enter into contract with D-Line Constructors of Oakland,
CA, for a not-to-exceed base contract amount of $7,385,000,
2.3.Authorize a 10% construction contract contingency in the amount of $738,500 to be reserved
for unanticipated issues, thus allowing a total contract amount not-to-exceed $8,123,500.
3.4.Adopt a Resolution approving a budget adjustment in the amount of $3,466,450 to the Fiscal
Year 2016-17 Budget.
10. Determination of Compensability for Diversity Outreach Ad Hoc Committee Meetings (R-
16-100)
Staff Contact: Jennifer Woodworth, District Clerk/Assistant to the General Manager
General Manager’s Recommendation: Discuss and determine whether the meetings of the
Diversity Outreach Ad Hoc Committee should be compensable.
INFORMATIONAL MEMORANDA
• Proposed Prospect Road Parking Area (Net Canopy) Safety Structure at Fremont Older Open
Space Preserve
• Salmonid Habitat Restoration Projects, San Gregorio Creek
• Vida Verde Nature Center Grant Report
INFORMATIONAL REPORTS – Reports on compensable meetings attended. Brief reports or
announcements concerning activities of District Directors and staff; opportunity to refer public or Board
questions to staff for factual information; request staff to report back to the Board on a matter at a future
meeting; or direct staff to place a matter on a future agenda. Items in this category are for discussion
and direction to staff only. No final policy action will be taken by the Board.
A. Committee Reports
B. Staff Reports
C. Director Reports
ADJOURNMENT
*Times are estimated and items may appear earlier or later than listed. Agenda is subject to change of order.
In compliance with the Americans with Disabilities Act, if you need assistance to participate in this meeting,
please contact the District Clerk at (650) 691-1200. Notification 48 hours prior to the meeting will enable the
District to make reasonable arrangements to ensure accessibility to this meeting.
Written materials relating to an item on this Agenda that are considered to be a public record and are distributed
to Board members less than 72 hours prior to the meeting, will be available for public inspection at the District’s
Administrative Office located at 330 Distel Circle, Los Altos, California 94022.
CERTIFICATION OF POSTING OF AGENDA
I, Jennifer Woodworth, District Clerk for the Midpeninsula Regional Open Space District (MROSD), declare that
the foregoing agenda for the meeting of the MROSD Board of Directors and special meeting of the MROSD
Financing Authority was posted and available for review on August 5, 2016, at the Administrative Offices of
MROSD, 330 Distel Circle, Los Altos California, 94022. The agenda and any additional written materials are also
available on the District’s web site at http://www.openspace.org.
Jennifer Woodworth, MMC
District Clerk
SPECIAL AND REGULAR MEETING
BOARD OF DIRECTORS OF THE
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
SPECIAL MEETING
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
FINANCING AUTHORITY
Administrative Office
330 Distel Circle
Los Altos, CA 94022
Wednesday, August 10, 2016
5:00 PM*
A G E N D A
5:00 SPECIAL MEETING OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA
REGIONAL OPEN SPACE DISTRICT – CLOSED SESSION
ROLL CALL
1. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION. (Government
Code Section 54956.9(d)(1))
Name of Case: Midpeninsula Regional Open Space v. Michael Rossetta, et al; Santa Clara
County Superior Court Case Number 1-15-CV-289568
2.
CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code Section
54956.8)
Property: Santa Clara County Assessor’s Parcel Number 517-24-007
Agency Negotiator: Allen Ishibashi, Senior Real Property Agent
Negotiating Party: Marita Quint
Under Negotiation: Fee Title, Trail and Road Easements or Rights
Property: Santa Clara County Assessor’s Parcel Number 517-24-020
Agency Negotiator: Allen Ishibashi, Senior Real Property Agent
Negotiating Party: Ann Dunham
Under Negotiation: Fee Title, Trail and Road Easements or Rights
Property: Santa Clara County Assessor’s Parcel Number 510-33-006
Agency Negotiator: Allen Ishibashi, Senior Real Property Agent
Negotiating Party: Andrew Gere
Under Negotiation: Fee Title, Trail and Road Easements or Rights
Meeting 16-18
Property: Santa Clara County Assessor’s Parcel Number 510-48-002
Agency Negotiator: Allen Ishibashi, Senior Real Property Agent
Negotiating Party: Ken Crafford
Under Negotiation: Fee Title, Trail and Road Easements or Rights
Property: Santa Clara County Assessor’s Parcel Number 510-48-001
Agency Negotiator: Allen Ishibashi, Senior Real Property Agent
Negotiating Party: Oakley Fairview Company
Under Negotiation: Fee Title, Trail and Road Easements or Rights
3. CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION (Government Code
Section 54956.9)
M. Mahronich, et al v. Presentation Center, Los Gatos, Inc.
Santa Clara Superior Court Case No. 1-15-CV-276706
ADJOURNMENT
7:00 MEETING OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN
SPACE DISTRICT
ROLL CALL
ORAL COMMUNICATIONS
The Board President will invite public comment on items not the agenda. Each speaker will ordinarily
be limited to three minutes; however, the Brown Act (Open Meeting Law) does not allow action by the
Board of Directors on items not on the agenda. If you wish to address the Board, please complete a
speaker card and give it to the District Clerk. Individuals are limited to one appearance during this
section.
ADOPTION OF AGENDA
SPECIAL ORDERS OF THE DAY
• Introduction of Staff
o Amy Schmitt, Senior Administrative Assistant
CONSENT CALENDAR
All items on the Consent Calendar may be approved 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.
1. Approve the Minutes for the July 27, 2016 Board meetings
2. Approve Claims Report
3. Renewal of Investment Authority and Adoption of Annual Statement of Investment Policy
(R-16-77)
Staff Contact: Mike Foster, Controller
General Manager’s Recommendation: Adopt a resolution to renew the District Controller’s
investment authority until August 10, 2017 and approve the District’s Revised Statement of
Investment Policy.
4. Fiscal Year 2016-17 Annual Claims List (R-16-83)
Staff Contact: Nicole Gonzales, Budget Analyst II and Andrew Taylor, Senior Accountant
General Manager’s Recommendation: Approve the Fiscal Year 2016-17 Annual Claims List,
including debt service payments.
5. Measure AA Logo (R-16-99)
Staff Contact: Shelly Lewis, Public Affairs Manager
General Manager’s Recommendation: Approve the Legislative, Funding, and Public Affairs
Committee’s recommendation for Measure AA logo design, with the addition of “funded by” and
“2014 Open Space Bond” wording.
6. Resolution Approving a Second Addendum to the Final Environmental Impact Report for
the Mount Umunhum Environmental Restoration and Public Access Project (R-16-96)
Staff Contact: Meredith Manning, Senior Planner
General Manager’s Recommendation: Adopt a resolution approving a Second Addendum to the
certified Final Environmental Impact Report for the Mount Umunhum Environmental Restoration
and Public Access Project at Sierra Azul Open Space Preserve and related minor project
modifications.
BOARD BUSINESS
The President will invite public comment on agenda items at the time each item is considered by the
Board of Directors. Each speaker will ordinarily be limited to three minutes. Alternately, you may
comment to the Board by a written communication, which the Board appreciates.
7. Resolution Authorizing the Issuance of a Series 2016 Green Bonds and Approving Related
Documents and Associated Actions (R-16-97)
Staff Contact: Stefan Jaskulak, Chief Financial Officer
Executive Director’s Recommendation: Adopt a Resolution authorizing issuance of not to exceed
$68 million in Midpeninsula Regional Open Space District Green Bonds, 2016 Refunding (the
“2016 Green Bonds”); approving the related forms and execution of an indenture, a bond
purchase agreement, an escrow agreement, and a continuing disclosure agreement; approving
form of and distribution of an official statement for said refunding bonds; and authorizing taking
of necessary and incidental actions, and documents and certificates.
ADJOURNMENT TO THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
FINANCING AUTHORITY MEETING
SPECIAL MEETING OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
FINANCING AUTHORITY
1. Resolution Authorizing the Early Redemption and Execution of All Necessary Documents
in Connection with the 2016 Green Bonds (R-16-98)
Staff Contact: Stefan Jaskulak, Chief Financial Officer
Executive Director’s Recommendation: Adopt a Resolution of the Board of Directors of the
Midpeninsula Regional Open Space District Financing Authority authorizing the early
redemption of the 2007 Series A Revenue Refunding Bonds and 2011 Revenue Bonds, and
Approving Forms and Execution of an Escrow Agreement, and Authorizing the taking of all
necessary actions in connection with the 2016 Green Bonds.
RECONVENE THE REGULAR MEETING OF BOARD OF DIRECTORS OF THE
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
8. Award of Contract to O.C. Jones & Sons Inc. for construction of the Mount Umunhum
Road Rehabilitation Project (Project) at Sierra Azul Open Space Preserve for a Base
Amount Not-to-Exceed $5,012,758 and a Separate 15% Contingency (R-16-101)
Staff Contact: Zachary Alexander, Capital Project Manager II, Engineering and Construction
Department
General Manager’s Recommendation:
1. Authorize the General Manager to enter into contract with O.C. Jones & Sons of
Berkeley, CA for a not-to-exceed base contract amount of $5,012,758.
2. Authorize a 15% construction contract contingency in the amount of $751,914 to be
reserved for unanticipated issues, thus allowing the total contact amount not-to-exceed
$5,764,672.
3. Adopt a Resolution approving a budget line item adjustment in the amount of $2,764,672
to the Fiscal Year (FY) 2016-17 District budget to fund construction of the Project.
9. Award of Contract to D-Line Constructors for Construction Services for the Mount
Umunhum Summit Project at Sierra Azul Open Space Preserve for a Base Amount Not-to-
Exceed $7,385,000 and a Separate 10% Contingency (R-16-82)
Staff Contact: Damon Adlao, Capital Project Manager III, Engineering and Construction
Department
General Manager’s Recommendation:
1. Authorize the General Manager to enter into contract with D-Line Constructors of Oakland,
CA, for a not-to-exceed base contract amount of $7,385,000,
2. Authorize a 10% construction contract contingency in the amount of $738,500 to be reserved
for unanticipated issues, thus allowing a total contract amount not-to-exceed $8,123,500.
3. Adopt a Resolution approving a budget adjustment in the amount of $3,466,450 to the Fiscal
Year 2016-17 Budget.
10. Determination of Compensability for Diversity Outreach Ad Hoc Committee Meetings (R-
16-100)
Staff Contact: Jennifer Woodworth, District Clerk/Assistant to the General Manager
General Manager’s Recommendation: Discuss and determine whether the meetings of the
Diversity Outreach Ad Hoc Committee should be compensable.
INFORMATIONAL MEMORANDA
• Proposed Prospect Road Parking Area (Net Canopy) Safety Structure at Fremont Older Open
Space Preserve
• Salmonid Habitat Restoration Projects, San Gregorio Creek
• Vida Verde Nature Center Grant Report
INFORMATIONAL REPORTS – Reports on compensable meetings attended. Brief reports or
announcements concerning activities of District Directors and staff; opportunity to refer public or Board
questions to staff for factual information; request staff to report back to the Board on a matter at a future
meeting; or direct staff to place a matter on a future agenda. Items in this category are for discussion
and direction to staff only. No final policy action will be taken by the Board.
A. Committee Reports
B. Staff Reports
C. Director Reports
ADJOURNMENT
*Times are estimated and items may appear earlier or later than listed. Agenda is subject to change of order.
In compliance with the Americans with Disabilities Act, if you need assistance to participate in this meeting,
please contact the District Clerk at (650) 691-1200. Notification 48 hours prior to the meeting will enable the
District to make reasonable arrangements to ensure accessibility to this meeting.
Written materials relating to an item on this Agenda that are considered to be a public record and are distributed
to Board members less than 72 hours prior to the meeting, will be available for public inspection at the District’s
Administrative Office located at 330 Distel Circle, Los Altos, California 94022.
CERTIFICATION OF POSTING OF AGENDA
I, Jennifer Woodworth, District Clerk for the Midpeninsula Regional Open Space District (MROSD), declare that
the foregoing agenda for the meeting of the MROSD Board of Directors and special meeting of the MROSD
Financing Authority was posted and available for review on August 5, 2016, at the Administrative Offices of
MROSD, 330 Distel Circle, Los Altos California, 94022. The agenda and any additional written materials are also
available on the District’s web site at http://www.openspace.org.
Jennifer Woodworth, MMC
District Clerk
July 27, 2016
Board Meeting 16-17
SPECIAL AND REGULAR MEETING
BOARD OF DIRECTORS
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
Administrative Office
330 Distel Circle
Los Altos, CA 94022
July 27, 2016
DRAFT MINUTES
SPECIAL MEETING – CLOSED SESSION
President Kishimoto called the special meeting to order at 6:02 p.m.
ROLL CALL
Members Present: Nonette Hanko, Larry Hassett, Yoriko Kishimoto, Curt Riffle, and Pete
Siemens
Members Absent: Jed Cyr and Cecily Harris
Staff Present: Assistant General Manager Kevin Woodhouse, Chief Financial Officer/
Administrative Services Director Stefan Jaskulak, General Counsel Sheryl
Schaffner, and Senior Real Property Agent Allen Ishibashi
1. CONFERENCE WITH REAL PROPERTY NEGOTIATORS (Government Code
Section 54956.8)
Property: Santa Clara County APN: 575-11-022
Agency Negotiator: Allen Ishibashi, Senior Real Property Agent
Negotiating Party: Rod Hibner, Agent Kelly Williams Realty
Under Negotiation: Terms of real property transactions
Public comments opened at 6:00 p.m.
No speakers present.
Public comments closed at 6:00 p.m.
The Board convened into closed session.
President Kishimoto adjourned the special meeting at 6:50 p.m.
REGULAR MEETING – BOARD MEETING
Meeting 16-16 Page 2
President Kishimoto called the regular meeting of the Midpeninsula Regional Open Space
District to order at: 7:00 p.m.
President Kishimoto reported the Board met in closed session, and no reportable action was
taken.
ROLL CALL
Members Present: Nonette Hanko, Larry Hassett, Yoriko Kishimoto, Curt Riffle, and Pete
Siemens
Members Absent: Jed Cyr and Cecily Harris
Staff Present: Assistant General Manager Kevin Woodhouse, Chief Financial Officer/
Administrative Services Director Stefan Jaskulak, General Counsel Sheryl
Schaffner, Land & Facilities Administrative Assistant Elissa Martinez, and
District Clerk Jennifer Woodworth
ORAL COMMUNICATIONS
No speakers present.
ADOPTION OF AGENDA
Motion: Director Riffle moved, and Director Hassett seconded the motion to adopt the agenda.
VOTE: 5-0-0 (Directors Cyr and Harris absent.)
SPECIAL ORDERS OF THE DAY
• Introduction of Staff: Elissa Martinez, Land & Facilities Administrative Assistant
CONSENT CALENDAR
President Kishimoto appointed Director Hanko to act as Secretary Pro Tem for the evening.
1. Approve the Minutes for the July 6, 2016 and July 13, 2016 Board meetings
2. Approve Claims Report
3. Approval of the Inclusion of an Advance Refunding of the Callable Portions of the
2011 Bonds with the 2007 Bonds, in the 2016 Green Bonds (Refunding), and an Associated
Revised Schedule (R-16-94)
General Manager’s Recommendation: Authorize the General Manger to direct staff to include
advance refunding of the callable portion of the 2011 Bonds and to take the actions described in
the Revised Schedule for the 2016 Green Bonds, so as to obtain significant future cash savings.
Meeting 16-16 Page 3
4. Establishing Fiscal Year 2016-2017 Tax Levy for the Midpeninsula Regional Open
Space District’s General Obligation Bonds - Series 2015A and Series 2015B (R-16-92)
General Manager’s Recommendation: Adopt Resolutions of the Board of Directors of the
Midpeninsula Regional Open Space District for each of San Mateo, Santa Clara and Santa Cruz
Counties to establish an ad valorem property tax levy of $0.60 per $100,000 (or $0.0006 per
$100) in assessed value for the District’s General Obligation Bonds – Series 2015A and Series
2015B (Measure AA).
Public comment opened at 7:07 p.m.
No speakers present.
Public comment closed at 7:07 p.m.
Motion: Director Siemens moved, and Director Riffle seconded the motion to approve the
Consent Calendar.
VOTE: 5-0-0 (Directors Cyr and Harris absent.)
BOARD BUSINESS
5. Informational Presentation regarding the Highway 17 Wildlife Passage and Bay
Area Ridge Trail Crossing Project. (R-16-84)
Resource Specialist III Julie Andersen provided the staff report describing the Highway 17
Wildlife Passage and Bay Area Ridge Trail Crossing Project, identifying existing and potential
wildlife and recreational crossing locations and project alternatives for overcrossings or
undercrossings. Ms. Andersen outlined the pros and cons of four crossing alternatives and the
limitations associated with the two “no build” options. Next steps for the project include
preparation of a Caltrans Project Study Report, identification of possible alternative funding
sources, and permitting in FY2017-18. Finally, the Planning and Natural Resources Committee
will be holding an open house in Los Gatos next week to receive public feedback on the various
alternatives.
Director Siemens spoke in favor of constructing separate wildlife and recreational crossings.
Director Riffle requested additional information regarding the need for separate wildlife and
recreational crossings.
Ms. Andersen explained the project’s biologist determined separate crossings are recommended
for the target species due to hesitation by animals and people to interact and enter crossings that
are designated and used by the other.
Director Hassett spoke in favor of the project and specifically construction of an overcrossing.
President Kishimoto inquired if staff was exploring wildlife connectivity possibilities in other
areas.
Meeting 16-16 Page 4
Ms. Andersen described several connectivity projects throughout the region that are being
explored by other agencies.
Director Riffle inquired regarding land ownership for the various crossing options.
Ms. Andersen explained land ownership is challenging for all of the options but may be easier
for the wildlife crossings because trail connections are not needed. The projects are planned to
move forward together for the early stages, but construction may be phased as necessary.
Public comment opened at 7:39 p.m.
Frank Bakonyi spoke in favor of the wildlife crossings to allow animals to access water.
Public comment closed at 7:40 p.m.
No Board action required.
6. Resolution in Support of “Santa Clara County Traffic Relief & Road Repair
Initiative” by the Santa Clara Valley Transportation Authority (R-16-91)
Legislative/External Affairs Specialist Josh Hugg described the VTA Sales tax Measure on the
November 8, 2016 ballot and introduced Carl Guardino of the Silicon Valley Leadership Group
who spoke in favor of the sales tax measure describing the proposed projects to be funded by the
sales tax, including extension of the Bay Area Rapid Transit route into San Jose and Santa Clara,
electrification of Caltrain, road repair and safety improvements, and construction of additional
traffic improvements along State Route 85.
The members of the Board requested additional information regarding specific projects to be
funded.
Mr. Guardino explained the measure is primarily aimed at improving and funding transit options
and road improvements, but no new roads are proposed.
President Kishimoto requested additional information regarding the mitigation portion of the
measure.
Ann Calnan from the Santa Clara Valle y Transportation Authority provided additional
information including funding for advanced mitigation before projects are begun and enhanced
mitigation to go above and beyond the mitigation required by regulatory agencies. The
mitigation program is still being developed and reviewed by regulatory agencies.
Public comment opened at 8:42 p.m.
No speakers present.
Public comment closed at 8:42 p.m.
Motion: Director Riffle moved, and Director Siemens seconded a motion to adopt a resolution
in support of the sales tax measure put forth by the Santa Clara Valley Transportation Authority
on the ballot for the November 8, 2016 statewide general election.
Meeting 16-16 Page 5
VOTE: 5-0-0 (Directors Cyr and Harris absent.)
7. Update on El Corte de Madera Creek Watershed Protection Program (R-16-93)
Resource Specialist III Julie Andersen provided the staff report providing an update on the
Watershed Protection Program (WPP) at the El Corte de Madera Creek Open Space Preserve.
The WPP’s goal was to reduce sediment from the Preserve to downstream waterways and began
in 2001. The WPP was approved in 2004, and regulatory compliance was met in 2015. Ms.
Andersen displayed several photos of the preserve before and after the work was completed,
including the installation of a new bridge, culvert removal, recontouring the habitat after roads
were abandoned, etc. Moving forward the Creek will be reassessed, monitored, and maintained
on an ongoing basis.
The Board of Director thanked staff for their years of work to complete the project.
Public comment opened at 9:08 p.m.
No speakers present.
Public comment closed at 9:08 p.m.
No Board action required.
INFORMATIONAL REPORTS
A. Committee Reports
Director Hassett reported the Real Property Committee met on July 19th to discuss the proposed
purchase of the Peterson Property.
B. Staff Reports
Chief Financial Officer/Administrative Services Director Stefan Jaskulak provided an update on
the bond documents to be brought to the Board of Director on August 10th.
Planning Manager Jane Mark provided an update on the Ravenswood Bay Trail project and the
proposed Facilities Ad Hoc Committee. Ms. Mark reported on progress for the Mt. Umunhum
Summit and Road projects to be going to the Board on August 10th.
Assistant General Manager Kevin Woodhouse reported on a comment letter District staff sent to
Santa Clara County regarding the East Materials Storage Area at Lehigh Quarry.
C. Director Reports
The Board members submitted their compensatory reports.
ADJOURNMENT
Meeting 16-16 Page 6
President Kishimoto adjourned the regular meeting of the Board of Directors of the
Midpeninsula Regional Open Space District at 9:23 p.m.
________________________________
Jennifer Woodworth, MMC
District Clerk
page 1 of 3
CLAIMS REPORT
MEETING 16-18
DATE 08-10-2016
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
Check
Number
Notes Vendor No. and Name Invoice Description Check Date Payment
Amount
72946 *10215 - CALPERS-FISCAL SERVICES DIVISION Monthly Employee Health Insurance 07/27/2016 153,954.98
72923 11500 - POPULOUS, INC.Bear Creek Stables Site Plan 07/27/2016 44,576.25
72953 *11152 - WELLINGTON PARK INVESTORS AO2, AO3, AO4 Rent - August 07/27/2016 25,012.00
72920 10665 - PAVEMENT ENGINEERING INC Mt Um Road Design and Engineering - 6/01 - 6/30/16 07/27/2016 24,697.50
72936 10307 - THE SIGN SHOP 4 Preserve Entrance Signs 07/27/2016 23,175.00
72937 11618 - TRAIL PEOPLE Hwy 17 crossing conceptual design and feasibility 07/27/2016 17,329.50
72950 *11230 - SANTA CLARA COUNTY-C/O UNITED ADMINISTRATIVE SERVI Monthly Employee Dental Insurance 07/27/2016 15,186.87
72915 11462 - MANAGEMENT PARTNERS FOSM Implementation/HR Functional Review 07/27/2016 14,875.00
72978 10687 - PACIFIC LEGACY INC Cultural Resource Evaluation - BCR Preserve Plan 08/03/2016 13,821.02
72931 11216 - SANTA CLARA COUNTY-LAFCO SCC LAFCO Annual Invoice FY 16-17 07/27/2016 13,013.33
72896 10463 - DELL BUSINESS CREDIT Adobe Acrobat (Qty: 30) & 4x Latitude Notebooks 07/27/2016 11,839.21
72943 11687 - WILDWAYS ILLUSTRATED Mindego Hill Trail Interpretive Sign Design 07/27/2016 11,200.00
72922 *10180 - PG & E Electricity/gas 07/16 07/27/2016 10,242.06
72991 10107 - SUNNYVALE FORD Repair multiple exhaust leaks P83 08/03/2016 7,702.79
72951 *10419 - THE LINCOLN NATIONAL LIFE INSURANCE COMPANY Monthly Employee Life and Disability Insurance 07/27/2016 6,471.72
72888 10723 - CALLANDER ASSOCIATES Ravenswood Bay Trail Conceptual Design 07/27/2016 6,464.13
72897 10034 - DIANE WEST-BOURKE Instructor Services & Outdoor Activity Docent Training 07/27/2016 6,000.00
72932 11477 - SCA ENVIRONMENTAL INC.Hazmat Surveys of 20 Structures within La Honda OSP 07/27/2016 5,696.00
72934 11647 - STOEL RIVES LLP Mount Umunhum Consulting 07/27/2016 5,624.00
72903 10222 - HERC RENTALS INC Bulldozer Rental for Road work on MB, WH and PC 07/27/2016 5,501.17
72926 11588 - RONALD SEEVER Holding Field & Corral Fence 07/27/2016 5,337.50
72930 11268 - SANTA CLARA COUNTY PLANNING OFFICE Geotechnical Report Review - Mt Um Stairs, C3 Stormwater Permit - Mt Um 07/27/2016 5,279.00
72967 10222 - HERC RENTALS INC Excavator Rental Mt Um Summit 6/11-7/11/16 08/03/2016 5,105.81
72979 10925 - PAPE` MACHINERY Ford 445 C Fuel Pump Replacement 08/03/2016 4,968.41
72919 10925 - PAPE` MACHINERY Equipment rental for North Ridge Road work -- PC 07/27/2016 4,893.75
72995 11704 - The Party Helpers 50% Deposit for Staff Recognition Event Catering 08/03/2016 4,643.15
72909 11409 - LA OFERTA Translation and Publication of Notice of Election 07/27/2016 4,180.00
72891 11368 - CITY OF CUPERTINO Leadership Acadmey for 2016 07/27/2016 3,600.00
72893 11678 - COGSTONE RESOURCE MANAGEMENT, INC.Driscoll Ranch Demolition Historic Resource Evaluations 07/27/2016 3,470.06
72912 10791 - LSA ASSOCIATES INC Historical Resource Evaluation - Red Barn 07/27/2016 3,458.05
72911 10058 - LIEBERT CASSIDY WHITMORE Human Resources Consulting 07/27/2016 3,446.00
72883 11681 - BERKEY WILLIAMS LLP Legal Servcies Mt. Umunhum Cultural Conservation Easement 07/27/2016 2,917.50
72949 10211 - PUBLIC POLICY ADVOCATES Legislative Advocacy Services 07/27/2016 2,799.82
72975 11600 - MNS ENGINEERS INC.BCR Water System Assessment and Cost Estimate 08/03/2016 2,743.75
72902 11698 - GREENBELT ALLIANCE Sponsorship for annual Greenbelt event 07/27/2016 2,500.00
72958 10022 - CONCERN Quarterly Employee Assistance Program Fees 7/01 - 9/30/16 08/03/2016 2,467.50
72994 *10583 - TELEPACIFIC COMMUNICATIONS Phone service for all offices and internet for SAO 08/03/2016 2,177.31
72982 *11184 - PURCHASE POWER - PITNEY BOWES POSTAGE AO POSTAGE 08/03/2016 2,009.99
72933 11413 - SIERRA CLUB LOMA PRIETA CHAPTER Sponsorship of Guardians of nature 07/27/2016 2,000.00
72941 11702 - VRS-CATERING CONNECTION Catering for Legislative Luncheon 07/27/2016 1,954.37
72947 *10032 - DEL REY BUILDING MAINTENANCE July Custodial Services 07/27/2016 1,815.00
72992 11055 - SYSTEMS FOR PUBLIC SAFETY Background Investigation - 2 Ranger Candidates 08/03/2016 1,779.23
72942 11665 - WATERWAYS CONSULTING BCR public road access Phase I 07/27/2016 1,770.00
72879 11282 - PROELIA DEFENSE AND ARREST TACTICS, LLC Defensive Tactics Training 7/2016 07/26/2016 1,749.96
72955 10170 - CASCADE FIRE EQUIPMENT COMPANY fire fighting pants and coats 08/03/2016 1,720.61
72948 *10212 - PINNACLE TOWERS INC Tower rental - Crown site id 871823 07/27/2016 1,680.21
72904 10223 - HEXAGON TRANSPORTATION CONSULTANTS, INC BCR Parking Lot Access Consulting 07/27/2016 1,590.00
page 2 of 3
CLAIMS REPORT
MEETING 16-18
DATE 08-10-2016
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
Check
Number
Notes Vendor No. and Name Invoice Description Check Date Payment
Amount
72884 11680 - BIGGS CARDOSA ASSOCIATES INC PCR Bridges Structural Consultant - billing for June 2016 07/27/2016 1,496.00
72988 *10580 - SHARP BUSINESS SYSTEMS Printing Costs per agreement 08/03/2016 1,433.64
72954 10381 - BAY AREA BACKFLOW INC Backflow Repair (RSACP)08/03/2016 1,268.00
72952 *10213 - VISION SERVICE PLAN-CA Monthly Employee Vision Insurance 07/27/2016 1,169.63
72885 10840 - CALIFORNIA PENSION GROUP, LLC Pension Consulting - June 2016 07/27/2016 1,000.00
72993 10152 - TADCO SUPPLY Janitorial Supplies (RSACP)08/03/2016 821.58
72925 10324 - RICH VOSS TRUCKING INC Skid Road Trail base rock 07/27/2016 788.00
72939 10403 - UNITED SITE SERVICES INC Sanitation Service (FOOSP), (SA)07/27/2016 781.64
72929 11224 - SANTA CLARA COUNTY - COMMUNICATIONS DEPT Periodic Maintenance service for radio repeater 07/27/2016 750.00
72895 11238 - CXT INCORPORATED Fan for public restroom (Mindego)07/27/2016 739.76
72981 11519 - PRICE, POSTEL & PARMA LLP Mt.Um Road and Trail Property Rights Legal Consulting 08/03/2016 737.00
72990 10143 - SUMMIT UNIFORMS UNIFORM ITEMS 08/03/2016 717.75
72898 11151 - FASTENAL COMPANY Field Supplies 07/27/2016 706.31
72887 *10454 - CALIFORNIA WATER SERVICE CO-949 monthly Water Service FFO, AO 07/27/2016 694.32
72973 10649 - LOS GATOS UNITED METHODIST CHURCH Public meeting facility rental fee (HWY 17 Wildlife Xing)08/03/2016 680.00
72901 *11551 - GREEN TEAM OF SAN JOSE Monthly Garbage Service (RSACP)07/27/2016 640.19
72889 10170 - CASCADE FIRE EQUIPMENT COMPANY Patrol truck fire pumper repair, hose parts 07/27/2016 637.25
72890 10014 - CCOI GATE & FENCE Gate Service / Repair (RSACP)07/27/2016 599.80
72892 10352 - CMK AUTOMOTIVE INC Vehicle service, (2 vehicles)07/27/2016 597.52
72938 11038 - TYCO INTEGRATED SECURITY LLC Alarm Service (FFO)07/27/2016 514.44
72989 10104 - STANFORD UNIVERSITY Grant Payment Due from NR Dept.08/03/2016 500.00
72899 11494 - FURNISS, CHRIS Tuition Reimbursment for Paramedic Recertification 07/27/2016 480.00
72976 10366 - MONTGOMERY HIGHLANDS ASSOCIATION Annual Road Maintenance Dues (ES)08/03/2016 450.00
72900 10187 - GARDENLAND POWER EQUIPMENT Field Equipment 07/27/2016 448.44
72913 11664 - LSQ FUNDING GROUP LC Temporary Staffing - HR - week ending 7/03/16 07/27/2016 435.20
72985 10096 - RON'S TRANSMISSION M38 Repair 08/03/2016 433.69
72970 11169 - KENNETH T. HICKMAN Camera Trap Study of Wildlife - Conservation-grazed Rangelands 08/03/2016 432.00
72960 10184 - CONTINUING EDUCATION OF THE BAR Subscription - CA Muni Law HB 2016 08/03/2016 396.66
72996 10403 - UNITED SITE SERVICES INC Bathroom rental for Fremont Older House tours 08/03/2016 382.60
72969 11265 - KCD CONSTRUCTION Honey Bee Removal - LHC 08/03/2016 375.00
72917 10774 - MICHAEL DEMPSEY, PATRICK DEMPSEY Rock for Ancient Oaks Trail RR, MB 07/27/2016 354.24
72977 10160 - OFFICE DEPOT CREDIT PLAN Office Supplies 08/03/2016 346.19
72984 *10093 - RENE HARDOY 07/16 Gardening services 08/03/2016 325.00
72927 10151 - SAFETY KLEEN SYSTEMS INC Tool Cleaning 07/27/2016 321.99
72894 10184 - CONTINUING EDUCATION OF THE BAR Subscription Update-CA Civil Procedures Before Trail CP31703 07/27/2016 308.30
72928 11054 - SAN MATEO COUNTY HUMAN RESOURCES DEPARTMENT training classes for two employees 07/27/2016 300.00
72921 11144 - PENINSULA MOTOR SPORTS ATV 5 Annual Service 07/27/2016 292.55
72962 10032 - DEL REY BUILDING MAINTENANCE AO JANITORIAL SUPPLIES 08/03/2016 285.95
72964 10174 - FORESTRY SUPPLIERS INC Field Supplies, Tools 08/03/2016 280.60
72878 10679 - DEPARTMENT OF INDUSTRIAL RELATIONS Cal-OSHA Penalty 17100 Mt Umunhum Rd., Los Gatos, CA 95033 07/26/2016 280.00
72974 11664 - LSQ FUNDING GROUP LC Temporary HR Staffing - week ending 7/10/16 08/03/2016 244.80
72881 *10294 - AMERIGAS-SAN JOSE Propane Tank rental SFO, monthly Hawthorn gas service 07/27/2016 217.76
72882 10274 - BAY AREA AIR QUALITY MANAGEMENT SFO fuel truck permit 07/27/2016 194.00
72972 11326 - LEXISNEXIS MATTHEW BENDER Online subscription for July 2016 08/03/2016 188.84
72907 11070 - JENKINS, WARREN Diesel Engines Class - tuition reimbursement 07/27/2016 186.50
72971 11315 - KIM, AMANDA Mileage Reimbursement 08/03/2016 184.79
72965 10168 - G & K SERVICES INC Shop Towel Service (FFO & SFO)08/03/2016 173.63
72910 10331 - LE'S ALTERATIONS Uniform Caps for Field Staff 07/27/2016 160.00
page 3 of 3
CLAIMS REPORT
MEETING 16-18
DATE 08-10-2016
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
Check
Number
Notes Vendor No. and Name Invoice Description Check Date Payment
Amount
72886 *10172 - CALIFORNIA WATER SERVICE CO-3525 Water services at rentals 07/27/2016 155.38
72914 10135 - MADCO Welding Supplies 07/27/2016 154.33
72959 11628 - CONFLUENCE editing newsletter article 08/03/2016 150.00
72956 10352 - CMK AUTOMOTIVE INC Vehicle Service A98, M24 08/03/2016 145.07
72968 10421 - ID PLUS INC Uniform Name Tags 08/03/2016 145.00
72983 10176 - RE BORRMANN'S STEEL CO Steel Supplies 08/03/2016 141.32
72905 10043 - HOWARD ROME MARTIN & RIDLEY LLP Mahronich vs Presentation Center - BCR 07/27/2016 140.00
72944 11266 - WOODWORTH, JENNIFER Reimbursement of City Clerks conference expenses 07/27/2016 122.00
72916 10190 - METROMOBILE COMMUNICATIONS Repair Mobile Radio 07/27/2016 112.50
72957 *11530 - COASTSIDE.NET Monthly SFO Internet 08/03/2016 109.00
72880 10240 - ACE FIRE EQUIPMENT & SERVICE INC Hydrotest medical oxygen cylinders 07/27/2016 105.00
72945 00000 - Bay Area Backflow, Inc.Backflow Repair (RSACP)07/27/2016 104.00
72940 11693 - VAZQUEZ, SALVADOR Uniform Reimbursement - Seasonal Ranger Aide 07/27/2016 100.00
72961 10540 - CRAFTSMEN PRINTING Printing of Business cards: jurich, beckman 08/03/2016 97.88
72906 10421 - ID PLUS INC NAME BADGES 07/27/2016 93.00
72908 10119 - KWIK KEY LOCK & SAFE CO INC Repair AO lobby door 07/27/2016 82.00
72986 10182 - ROYAL BRASS INC Herbicide Spray Equipment 08/03/2016 80.89
72935 11348 - THE BACKFLOW GUY WH Annual water valve inspection 07/27/2016 70.00
72963 11151 - FASTENAL COMPANY Field Supplies 08/03/2016 60.62
72987 10175 - RV CLOUD COMPANY Pressure Gauge Assembly 08/03/2016 41.06
72980 11144 - PENINSULA MOTOR SPORTS Hardware and filter kits for all 3 mules 08/03/2016 35.92
72924 *10134 - RAYNE OF SAN JOSE Water Service (FOOSP)07/27/2016 26.25
72918 10670 - O'REILLY AUTO PARTS Auto Parts 07/27/2016 19.30
72966 10187 - GARDENLAND POWER EQUIPMENT Welder Parts 08/03/2016 18.72
72997 10165 - UPS Add's UPS charges 08/03/2016 1.73
GRAND TOTAL 532,502.04$
*Annual Claims
**Hawthorn Expenses
BCR = Bear Creek Redwoods LH = La Honda Creek PR = Pulgas Ridge SG = Saratoga Gap TC = Tunitas Creek
CC = Coal Creek LR = Long Ridge PC = Purisima Creek SA(U) = Sierra Azul (Mt Um) WH = Windy Hill
ECM = El Corte de Madera LT = Los Trancos RSA = Rancho San Antonio SR= Skyline Ridge AO2, 3, 4 = Administrative Office lease space
ES = El Sereno MR = Miramontes Ridge RV = Ravenswood SCS = Stevens Creek Shoreline Nature FFO = Foothills Field Office
FH = Foothills MB = Monte Bello RR = Russian Ridge TH = Teague Hill SFO = Skyline Field Office
FO = Fremont Older PIC= Picchetti Ranch SJH = St Joseph's Hill TW = Thornewood SAO = South Area Outpost
RR/MIN = Russian Ridge - Mindego Hill PR = Pulgas Ridge DHF = Dear Hollow Farm OSP = Open Space Preserve P## or M## = Patrol or Maintenance Vehicle
R-16-77
Meeting 16-18
August 10, 2016
AGENDA ITEM 3
AGENDA ITEM
Renewal of Investment Authority and Adoption of Annual Statement of Investment Policy
GENERAL MANAGER’S RECOMMENDATION
Adopt a resolution to renew the District Controller’s investment authority until August 10, 2017
and approve the District’s Revised Statement of Investment Policy.
SUMMARY
Approval of the attached resolution will renew the District Controller’s authority to invest
District funds in accordance with District’s Investment Policy
DISCUSSION
At its meeting on August 12, 2015, the Board extended the Controller’s investment authority for
one year and adopted a revised Statement of Investment Policy, with many changes reflecting the
impact of the receipt of Measure AA funding and adoption of an expanded reserve policy. The
revised policy has worked well and the only proposed change to the investment policy is to
include the Chief Financial Officer in the approval and reporting process.
BOARD COMMITTEE REVIEW
This item was not reviewed by any Committee.
FISCAL IMPACT
Approval will allow the District to continue to earn the highest return on its temporarily idle
funds consistent with the statement of Investment Policy.
PUBLIC NOTICE
Public notice was provided pursuant to the Brown Act. No additional notice is required.
CEQA COMPLIANCE
The recommended action is not a project for purposes of the California Environmental Quality
Act.
R-16-77 Page 2
NEXT STEPS
None.
Attachments
1. Resolution Adopting a Statement of Investment Policy
Prepared by:
Mike Foster, Controller
Attachment 1
Resolutions/2015/15-_Renew Investment Authority 1
RESOLUTION NO. 16-__
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT ADOPTING A
STATEMENT OF INVESTMENT POLICY AND AUTHORIZING THE
CONTROLLER TO INVEST SURPLUS FUNDS AS ALLOWED BY THE
CALIFORNIA GOVERNMENT CODE
WHEREAS, the District needs to maximize the yield on surplus temporarily idle funds in
order to help meet capital program objectives, including Measure AA projects; and
WHEREAS, Chapter 4, Division 2 of Title 5 of the Government Code authorizes the
District to deposit and invest surplus funds in investments which, at times, yield interest rates
higher than achievable through the Santa Clara County Pooled Fund, or the California Pooled
Investment Authority; and
WHEREAS, the District can often improve its yield on surplus funds without sacrificing
financial safety and flexibility.
NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS:
SECTION ONE. The Board of Directors of the Midpeninsula Regional Open Space
District does hereby authorize the Controller to invest surplus or temporarily idle funds
according to the Investment Policy attached hereto as Exhibit “A” and by reference made a part
hereof.
SECTION TWO. Before any investments with maturities exceeding one year, the
Controller shall consult with the General Manager, or a District employee authorized to act in his
behalf, to determine anticipated cash flow needs of the District.
SECTION THREE. This resolution supersedes the prior Resolution No. 15-45 adopted
August 12, 2015. This resolution shall no longer be in effect as of August 10, 2017, unless
extended, and inactive funds shall then be deposited in the Santa Clara County Pooled
Investment Fund, with the California Pooled Investment Authority, or invested through the
District’s commercial bank.
* * * * * * * * * *
PASSED AND ADOPTED by the Board of Directors of the Midpeninsula Regional
Open Space District on _____, 2016, at a regular meeting thereof, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
Attachment 1
Resolutions/2015/15-_Renew Investment Authority 2
ATTEST: APPROVED:
Secretary
Board of Directors
President
Board of Directors
APPROVED AS TO FORM:
General Counsel
I, the District Clerk of the Midpeninsula Regional Open Space District, hereby certify
that the above is a true and correct copy of a resolution duly adopted by the Board of Directors
of the Midpeninsula Regional Open Space District by the above vote at a meeting thereof duly
held and called on the above day.
District Clerk
Exhibit A: Statement of Investment Policy
Midpeninsula Regional Open Space District
Board Policy Manual
Statement of Investment Policy 3.08
Chapter 3 – Fiscal Management
Effective Date: 8/10/16 Revised Date: 8/10/16
Prior Versions: 1/8/97; 1/10/01; 1/16/02; 1/8/03; 1/14/04; 1/12/05; 1/11/06; 1/10/07; 1/16/08;
1/13/10; 1/12/11; 1/11/12; 1/24/13; 1/22/14; 1/28/15; 8/12/15
Board Policy 3.08 Page 1 of 4
Goals
Goal 1. Capital Preservation
The primary goal shall be to safeguard the principal of invested funds. The secondary objective
shall be to meet the liquidity needs of the District. The third objective shall be to achieve a
return on funds consistent with this Policy. Temporarily idle funds shall be invested in a
conservative manner, such that funds can always be withdrawn at, or just above or below, full
invested value. Investments that offer opportunities for significant capital gains and losses are
excluded.
Goal 2. Liquidity
Temporarily idle funds shall be managed so that normal operating cash needs and scheduled
extraordinary cash needs can be met on a same day basis. Investments shall be sufficiently
liquid to provide a steady and reliable flow of cash to the District to insure that all land
purchases can be made promptly (within two weeks).
Goal 3. Income
Temporarily idle funds shall earn the highest rate of return that is consistent with capital
preservation and liquidity goals and the California Government Code.
Guidelines
1. Determination of Idle Funds
The Controller shall prepare a cash flow projection prior to all investment decisions involving
securities with a term to maturity exceeding one year. This cash flow projection shall be
reviewed and evaluated by the General Manager or Chief Financial Officer (CFO). The General
Manager or CFO are responsible for approving the Controller’s designation of the amount of
funds available for investment for longer than one year.
2. Restricted Reserves
[a] MROSD Retiree Healthcare Plan: All funds are to be held by CalPERS and
managed by CalPERS.
Exhibit A
Board Policy 3.08 Page 2 of 4
[b] Hawthorn Endowment Fund: All funds will be held in a separate bank account
and invested in accordance with this policy.
[c] Debt Service Reserve Funds Held by Bond Trustees: Funds held by such trustees
shall be invested in accordance with the bond indenture or other agreement providing
for the issuance and management of such debt.
3. General Fund Committed Reserves
At least one-half of the total general fund committed reserve requirement shall be maintained,
at all times, with the Santa Clara County Pooled Investment Fund (SCCPIF).
4. General Fund Un-Assigned Contingency Reserve
In addition to any committed fund reserve requirement, a general fund contingency reserve of
at least $10 million shall be maintained, at all times, with the SCCPIF.
5. General Obligation Bond Proceeds Held by Fiscal Agent
Bond Proceeds held by the District’s Fiscal Agent, either in the Debt Service Fund or Bond
Proceeds Fund, shall be invested through the investment department of the Fiscal Agent and in
accordance with the Fiscal Agent Agreement.
6. Non-Invested Funds
Idle District funds not otherwise invested as permitted by this Policy shall be deposited with the
Santa Clara County Pooled Investment Fund, the San Mateo County Treasurer’s Pooled
Investment Fund or the State of California’s Local Agency Investment Fund.
7. Selection of Investments
The Controller is responsible for selecting investments that fit within the amounts and
maturities recommended by the Controller and by the General Manager or CFO. The Controller
is also responsible for directing security transactions.
8. Investments Instruments and Deposit of Funds
Investments and deposits of funds shall be limited to those allowed by and subject to the
procedures of Government Code Section 53600 et seq. and 53635 et seq. In the event of any
conflict between the terms of this Policy, and the Government Code, the provisions of the
Government Code shall prevail. Investments shall not be leveraged. Investments, and
“derivatives,” that offer opportunities for significant capital gains and losses are excluded. If
after purchase, securities are downgraded below the minimum required rating level, the
securities shall be reviewed for possible sale with a reasonable amount of time after
downgrade. Significant downgrades and the action taken or to be taken will be disclosed in the
next monthly report.
Exhibit A
Board Policy 3.08 Page 3 of 4
9. Maximum Maturity
The average maturity of the total District investment portfolio shall not exceed eighteen
months and no investment, except for debt service reserve funds held by bond trustees, shall
have a maturity of more than three years from the date of purchase. The maturity of
investments in trustee-held debt service reserve funds shall not exceed the final debt service
payment date of the bonds.
10. Diversification
Investments shall meet the diversification test of Government Code Section 53601.7(c), stating
that no more than 5% of the total investment portfolio may be invested in the securities of any
one issuer, except for the obligations of the U.S. Treasury or U.S. Government Agencies.
11. Marketability
For investments other than bank certificates of deposits the breadth of ownership and number
of securities outstanding shall be sufficient to establish a secondary market in which
investments can be readily converted to cash without causing a material change in their market
value.
12. Acceptable Banks
Bankers' Acceptances and Negotiable Certificates of Deposit may be purchased only from the
District’s commercial bank or banks and savings and loan associations with over $1,000,000,000
of deposits and reporting profitable operations and which meet all applicable criteria of the
Government Code. Certificates of Deposit may be purchased from other banks within Santa
Clara and San Mateo Counties which meet all applicable criteria of the Government Code if the
principal is fully insured by the Federal Deposit Insurance Corporation.
13. Acceptable Collateral
Securities collateralizing bank or savings and loan deposits must be rated “A” or higher.
14. Investments in Name of District
All investments purchased shall stand in the name of the District.
15. Reporting
The Controller shall submit a report of the District’s investment portfolio and security
transactions to the Board of Directors by the second Friday of each calendar month in
accordance with Government Code Sections 53607 and 53646. Such reports shall also be
submitted to the General Manager, CFO and to the District’s auditor.
Exhibit A
Board Policy 3.08 Page 4 of 4
16. Purchase of Securities
The Controller is authorized to purchase securities through the investment department of the
District’s bond trustees and fiscal agents and as otherwise permitted by the Government Code.
Any account resolutions required by bank investment departments will be submitted to the
Board of Directors for approval prior to any trading through that bank. The bank or other
investment institution from which authorized securities are purchased shall be instructed in
writing only to purchase securities in the name of the District and that all matured funds shall
be returned to the District’s commercial bank account. The bank shall also be instructed to
send receipts for all transactions to the CFO and the District accounting department.
Exhibit A
R-16-83
Meeting 16-18
August 10, 2016
AGENDA ITEM 4
AGENDA ITEM
Fiscal Year 2016-17 Annual Claims List
GENERAL MANAGER’S RECOMMENDATION
Approve the Fiscal Year 2016-17 Annual Claims List, including debt service payments.
SUMMARY
Pursuant to Board Policy 1.03, the Annual Claims list for Fiscal Year 2016-17 (FY2016-17) is
hereby submitted to the Board of Directors (Board) for review and approval so that salaries and
benefits, debt service, and recurring expenses may be paid in a timely and efficient manner. At
the Regular Board Meeting on December 16, 2015, the Board authorized the General Manager or
designee to approve payment of claims up to $50,000 (R-15-163) to increase operational
efficiencies, subject to Board ratification at the Board’s next regularly scheduled meeting. As
part of this report and to be aligned with the Board-approved authority bestowed to the General
Manager, the Controller recommends that Annual Claims Lists include only claims that exceed
$50,000, as presented in this document.
DISCUSSION
The Annual Claims list provided as part of this report includes claims that exceed $50,000. On
December 16, 2015, the Board authorized the General Manager or designee to approve the
payment of claims up to $50,000, subject to Board ratification at the next Regular Board meeting
(R-15-163). In light of this delegation of payment approval authority and the post facto
ratification by the Board, it is redundant to list claims that are less than $50,000 on the Annual
Claims List. Approval of the proposed Annual Claims would authorize the accounting office to
pay salaries and benefits, debt service, and recurring services in a timely and efficient manner.
This item would minimize the occurrence of late fees, finance charges, and urgent check
requests.
Recusal Statement
Included as part of the Annual Claims on page 2 of this report is a recusal statement that is read
by the presiding Board President for Director Hanko on her economic conflict of interests in
AT&T, Verizon, and PG&E claims. The purpose of this annual recusal statement is to enable
Director Hanko to meet her conflict of interest recusal responsibilities at one annual meeting
rather than being required to repeat the same recusal statement at each regular Board meeting
when claims are presented on the Consent Calendar. If approved, recusals on AT&T, Verizon,
and PG&E claims by Director Hanko will not need to be made at each regular Board meeting.
R-16-83 Page 2
Debt Service Claims
The debt service claims listed below for FY2016-17 reflect payments required of the Midpeninsula
Regional Open Space District to meet the outstanding District debt obligations for the current fiscal
year:
** The total debt service includes interest to be paid directly out of bond premium proceeds held
by the trustee.
Annual Claims
The annual claims listed below for FY2016-17 reflect payments in excess of the General
Manager’s authority:
ANNUAL CLAIMS
ITEM DESCRIPTION AMOUNT
Staff Salaries $15,114,572
Debt Service (includes note paying agent fees) $12,144,984
Retirement Plans $2,146,077
Group Insurance Premiums $2,421,482
State Mandated Insurance-Unemployment & Workers Comp. $487,307
Wellington Park Investors (AO Office Lease) $316,623
Property/Liability/Vehicle Insurance (CALJPIA) $304,470
PRINCIPAL INTEREST
NOTEHOLDER-LAND
Daloia 23,105.24 1,665.84
Hunt - 75,000.00
Subtotal-Notes 23,105.24 76,665.84
BONDS PAYABLE
2007 Bonds - Series A 3,235,000.00 2,275,375.00
2011 Bonds 120,000.00 1,075,775.00
2012 Refunding 365,000.00 667,625.00
2015 Refunding 675,000.00 1,111,375.00
2015 GO Bonds Series A&B 775,000.00 1,732,062.50
Subtotal-Notes 5,170,000.00 6,862,212.50
TOTALS - NOTEHOLDERS & BONDS 5,193,105.24 6,938,878.34
TOTAL DEBT SERVICE 12,131,983.58
ANNUAL CLAIMS:
DEBT SERVICE
FISCAL YEAR 2016-2017
R-16-83 Page 3
Utilities - Electricity/Gas/Propane/Telephone/Cellular Telephone $190,310
(PG&E***/Cal Water/Amerigas/Verizon***/AT&T***)
Dispatch Services (City of Mountain View) $166,913
Fuel - Valley Oil Company $135,000
TOTAL: $33,427,738
***Annual Recusal Statement: Director Hanko is voluntarily recusing herself from voting on all
claims for AT&T , Verizon, and PG&E.
BOARD COMMITTEE REVIEW
This item was not reviewed by a Board Committee; however, the Action Plan and Budget
Committee reviewed the FY2016-17 District Budget in April.
FISCAL IMPACT
The listed Annual Claims have been included in the FY2016-17 District Budget, which was
approved by the Board of Directors at the Regular Meeting of June 22, 2016 (R-16-71).
PUBLIC NOTICE
Public notice was provided as required by the Brown Act. No additional notice is required.
CEQA COMPLIANCE
Approval of the Annual Claims is not considered a project under the California Environmental
Quality Act (CEQA) and no environmental review is required.
NEXT STEPS
With Board approval, staff will proceed with preparing open purchase orders for the listed vendors
and pay invoices upon receipt.
Attachments:
1. Detailed List of Debt Service Obligations FY2016-17
Responsible Manager:
Stefan Jaskulak, Chief Financial Officer
Prepared by:
Nicole Gonzales, Budget Analyst II and Andrew Taylor, Senior Accountant
Close of Remaining Principal Final FY 2016/2017 - Debt Service Payments
Payable to Escrow Original Note Rate %Term At June 30, 2015 Payment Due Total Principal Interest
Daloia 10/11/2002 240,000.00 6.25%15 Years 56,921.77 10/10/2017 24,771.08 23,105.24 1,665.84
Hunt 04/15/2003 1,500,000.00 5.50%10 years 1,500,000.00 04/01/2023 75,000.00 0.00 75,000.00
1,740,000.00 1,556,921.77 99,771.08 23,105.24 76,665.84
2007 Bonds Series A 12/15/2006 52,415,000.00 4% to 5%20 years 47,300,000.00 09/01/2027 5,510,375.00 3,235,000.00 2,275,375.00
2011 Bonds 05/05/2011 20,500,000.00 2% to 6%30 years 20,385,000.00 09/01/2041 1,195,775.00 120,000.00 1,075,775.00
2012 Refunding Notes 02/02/2012 31,264,707.20 2% to 5%30 years 33,229,501.25 *09/01/2041 1,032,625.00 365,000.00 667,625.00
2015 Refunding Notes 01/22/2015 23,630,000.00 2% to 6%19 years 23,630,000.00 09/01/2034 1,786,375.00 675,000.00 1,111,375.00
2015 Measure AA GOs 7/29/2015 45,000,000.00 1.5% to 5%30 years 0.00 09/01/2045 2,507,062.50 775,000.00 1,732,062.50
172,809,707.20 124,544,501.25 12,032,212.50 5,170,000.00 6,862,212.50
174,549,707.20 126,101,423.02 12,131,983.58 5,193,105.24 6,938,878.34
* Includes Accretions
DEBT SERVICE
FISCAL YEAR 2016-2017
ATTACHMENT 1
R-16-99
Meeting 16-18
August 10, 2016
AGENDA ITEM 5
AGENDA ITEM
Measure AA Logo
GENERAL MANAGER’S RECOMMENDATION
Approve the Legislative, Funding, and Public Affairs (LFPAC) Committee’s recommendation
for Measure AA logo design, with the addition of “funded by” and “2014 Open Space Bond”
wording.
SUMMARY
The Public Affairs Department has created a Measure AA logo to identify and showcase
Measure AA funded projects. Logo options were presented to the Legislative, Funding, and
Public Affairs (LFPAC) Committee and revised based on the Committee’s input. The logo will
be used in conjunction with the District’s logo but can also be pulled out to stand alone because
of its strong alignment with the District’s brand identity, look and feel. The logo will be used on
printed and electronic outreach material, on in-preserve temporary and permanent signage, and
shared with partner agencies to identify jointly funded projects.
DISCUSSION
In May 2016, the Public Affairs Department contracted with a design firm specializing in logo
creation to design a logo to identify Measure AA funded projects. The image is graphically
derived from the Midpeninsula Regional Open Space District’s logo to maintain agency branding
standards and familiarity related to the District’s unique look and feel. The Measure AA logo
(Attachment A) uses the District’s color palette and its iconic hawk.
Public Affairs staff presented the logo to the LFPAC at their July 12, 2016, meeting and received
positive feedback. The committee liked the overall logo design as well as the use of the iconic
hawk. The committee requested a version with additional wording connecting the logo to the
bond measure approved by voters. Staff has worked with the contracted design firm to provide
an alternative logo per LFPAC’s suggestion, with the addition of the wording “Funded by”, as
well as “2014 Open Space Bond” to distinguish the District’s bond from another local bond with
the same letters. This new version of the logo will be the primary logo used, although the stand-
alone logo may be used when there are design or space limitations.
The Measure AA logo will be used to identify projects in District publications such as the Views
newsletter, project fact sheets, website, video and social media. In addition, it will be used in
preserves to identify specific projects through both temporary and permanent signage. Examples
of usage include temporary signs during construction followed by permanent signs once a project
R-16-99 Page 2
(e.g., bridge, trail, staging area) is completed. The size and location of the signs will be within
the established sign guidelines provided in Attachment B.
The Measure AA logo will primarily be used in conjunction with the District’s logo and would
serve as a visual and recognizable way to showcase to the public their Measure AA “funds at
work”. The Measure AA logo is designed in a way that it can be separated from the District’s
logo and still be associated with the District. Additional usage would include sharing the logo
with partner agencies for jointly funded projects such as the San Francisco Bay Trail in Menlo
Park and East Palo Alto.
FISCAL IMPACT
Development of logo and alternatives for LFPAC review, and revisions to the recommended
logo based on LFPAC comments are included in the District’s contract with the graphic
designer. Total project cost is estimated at $2,395.
PUBLIC NOTICE
Public notice was provided as required by the Brown Act.
CEQA COMPLIANCE
This item is not a project subject to the California Environmental Quality Act.
NEXT STEPS
Upon Board approval, the Public Affairs Department will develop a graphic design style guide to
give guidance on how to correctly use the Measure AA logo and begin incorporating the
Measure AA logo into all applicable communication material and signage.
Responsible Department Head:
Shelly Lewis, Public Affairs Manager
Prepared by:
Peggy Gibbons, Public Affairs Specialist
Attachments:
1. Logo
2. Sign Guidelines
ATTACHMENT 1 –
STAND-ALONE LOGO
“FUNDED BY” LOGO
WEBSITE EXAMPLE – MEASURE AA PAGE
PRESERVE SIGNBOARD EXAMPLE
ATTACHMENT 2 –
Measure AA - Sign Guidelines
Index:
1. Purpose & Introduction
2. Types of Signs
3. MAA Sign Placement Guidelines
4. Procedure for MAA Sign Request
5. Partner Funding Sign Guidelines
1. Purpose & Introduction
A) Purpose for MAA Signs: To highlight projects and land conservation funded in whole or in part
with MAA funds.
2. Types of Signs
A) Temporary MAA Signs
a. Notices inside the Signboard
i. Style: A laminated notice/sign
ii. Placement: Inside the Preserve signboard(s).
iii. Purpose: To inform the public of restoration work or a new acquisition where
placement of an actual sign at or near the site would not be appropriate.
b. During Construction sign (generic)
i. Style: A re-useable A-frame sign that can be placed anywhere and removed
quickly.
ii. Placement: This sign would be a temporary sign for when crew or contractors
are actually working and the construction is visible from an existing public
access point.
iii. Purpose: To inform the public that the construction they see is their MAA tax
dollars at work.
B) Permanent MAA Signs
a. Small Logo (generic)
i. Style: Small round MAA logo along the lines of the Bay Area Ridge Trail
emblem. Maximum 5” diameter circle or 5” x 5” square with 1.5” rounded
corners, with a 0.25” contrasting border.
ii. Placement: Could be placed on any piece of the
built environment (a bridge or trail sign for example).
iii. Purpose: Low profile generic sign specifically for
discreet individual facilities funded through MAA (e.g.
bridge, boardwalk, interpretive panel display, etc.); if
facility is part of a larger MAA funded project, use
either sign (b), (c), or (d)
b. Small Sign for Existing Sign Post (customized)
i. Style: A customizable rectangular sign the same size as the
standard trail sign (8.0” x 14”, with 1.5” radius corners).
Would have MAA logo and short sentence about specific
project funded by MAA.
ii. Placement: Could be placed below an existing trail sign
iii. Purpose: To inform visitors of a MAA project or acquisition
that lies away from view of a staging area AND is not located
adjacent to or within a major gathering area or open area
(like a picnic area, large wide trailhead, or large flat vista point).
c. Stand Alone Sign (customized)
i. Style: Customizable 12.0” x 24.0” with 1.5” rounded corners
(this size is what the District has used in the past for grant funding
acknowledgement) sign that features MAA logo and brief project
information.
ii. Placement: On own sign post near other elements in the built
environment.
iii. Purpose: To alert the public of an MAA funded project and give
information about the project and/or acknowledge funding from
(multiple) partners for projects that are not located within view
of a signboard AND is located adjacent to within a large gathering
area or open area (like a picnic area, large wide trailhead or large
flat vista point).
d. Preserve Signboard Banner Addition (generic)
i. Style: Generic rectangle banner approx. 30” x 12” that blends
in with the style of our preserve signboards with something
like “Your Measure AA Dollars at Work” and the MAA logo.
ii. Placement: This rectangle banner sign would go on a double
signboard below the sign that does not have the brochure
holder.
i. Purpose: To inform visitors that a brand new staging area
or other project located within eyesight of the signboards is
funded by MAA. Above: Example of a
Measure Q Sign by
the Open Space
Above: The Bay Area
Ridge Trail circular
logo sign
Above: Example of a
Stand Alone Sign to
recognize funding
sources
3. MAA Sign Placement Guidelines
A) General Guidelines
a. Where possible, place sign in the context of other built features (e.g. trailhead
signboards, sign posts, buildings, etc.)
b. Place on an existing sign post or other built element, avoid installing new posts unless it
is the absolutely necessary.
c. Any time work being done on a MAA project is visible to the public, put up a temporary
sign to inform public that this is their AA tax dollars at work.
d. When a custom MAA sign is needed with project information, keep text as brief (word
count?) as possible.
e. Avoid locating multiple MAA signs in one location to prevent sign pollution.
B) Restoration Projects
a. Signage is at the discretion of the Natural Resources Department due to the fact that
some natural resource restoration projects may involve sensitive species, or changes
that could be temporarily unsightly
b. When sign is specifically for a restoration project, it is likely to be a customized
informational MAA sign due to the fact that restoration may be obvious to public
c. For a project that is not visible from any public access point, an alternate option would
be to put up a temporary informational sign in the preserve signboard
C) Public Access Projects
a. When a new staging area is opened, place a (permanent) generic MAA banner sign on
the preserve signboard.
b. If a trail, or other smaller MAA-funded public access is implemented, put up a smaller
sign on nearest existing trail sign post or other sign post.
Left: Mock-up of a
Preserve Signboard
Banner Sign Addition
D) Real Property Acquisitions/Land Conservation
i. An informational notice/sign should be placed in the signboard at that preserve’s
staging area: (a) if the property is not visible from a public access point, or (b) to
prevent potential trespassing in a closed area of the Preserve, if the public were
informed of the exact location of acquisition.
ii. A permanent sign could be placed near acquisition boundary if this is a publicly
accessible point.
b. For other acquisitions which are not connected to an open preserve, it is better to
notify the public (if desired) through alternate means such as the E-news or website
4. Procedure for MAA Sign Request to Sign Coordinator
I. Project Manager should include MAA signs as part of the overall project implementation
schedule, budget and checklist.
II. Project Manager takes lead on ensuring proper MAA sign(s) are obtained and installed.
III. Project Manager submits a new standard MAA sign request with Sign Coordinator.
IV. If customized MAA sign is necessary, Project Manager works with Sign Coordinator to
customize sign template for project at hand.
V. Sign Coordinator procures customized or generic MAA sign.
VI. Project Manager works with contractor or Land & Facilities Services staff to install new
MAA sign(s).
VII. Project Manager works with contractor or Visitor Services staff to place temporary MAA
sign at project site prior to start of construction.
5. Partner Funding Sign Guidelines
A) It is ideal if partner funding acknowledgement is included as part of a MAA sign instead of a
stand-alone sign.
a. The main exception is where stated in grant funding or property purchase agreements
that we must install a specific sign that focuses solely on that funding authority.
R-16-96
Meeting 16-18
August 10, 2016
AGENDA ITEM 6
AGENDA ITEM
Resolution Approving a Second Addendum to the Final Environmental Impact Report for the
Mount Umunhum Environmental Restoration and Public Access Project
GENERAL MANAGER’S RECOMMENDATION
Adopt a resolution approving a Second Addendum to the certified Final Environmental Impact
Report for the Mount Umunhum Environmental Restoration and Public Access Project at Sierra
Azul Open Space Preserve and related minor project modifications.
SUMMARY
The Final Environmental Impact Report (EIR) and Mitigated Monitoring Plan (MMP) was
previously approved by the Board on October 17, 2012, for the Mount Umunhum Environmental
Restoration and Public Access Project (Project) at Sierra Azul Open Space Preserve (R-12-104;
available on the District website at http://www.openspace.org/umunhum) (Attachment 1). A First
Addendum to this EIR was approved by the Board on December 9, 2015 for adding proposed
discretionary elements to the Project (R-15-165) (Attachment 1). Subsequently, the Summit
Project and Road Rehabilitation Project arose as two distinct implementation projects from the
overall Project. Detailed construction plans from these projects provided new information
regarding the generation of greater quantities of soil material. The additional soil material will
be routed to Mount Thayer where it will be used as part of the previously proposed landform
restoration. In addition, the detailed construction plans also call for the addition of three gabion
retaining walls for the Road Rehabilitation Project (Attachment 2).
The Second Addendum to the 2012 EIR analyzes these modifications to the Project to fulfill the
requirements of the California Environmental Quality Act (CEQA) (Attachment 3). Appendix A
for the Second Addendum is also available on the District website (Attachment 1). The District
concludes that the proposed project modifications would not alter any of the conclusions of the
approved EIR. No new significant environmental effects or a substantial increase in the severity
of previously identified significant effects would result. The Project’s minor modifications to the
amount of haul materials and ultimate destination of transport to Mount Thayer, as well as the
addition of three gabion retaining walls, will not have a significant effect on the environment.
As a result, the General Manager recommends that the Board adopt a resolution approving this
Second Addendum (Attachment 4). Approval of the EIR Addendum is related to the Board’s
approval of the two contracts for the Summit and Road Rehabilitation Projects, which are
subsequent Agenda Items for the August 10, 2016 Board meeting.
R-16-96 Page 2
MEASURE AA
A 5-year Measure AA Project List approved by the Board at their October 29, 2014 meeting
includes Priority Action #23 (Portfolio #23) that encompasses all of the Mount Umunhum Public
Access Projects at a cost of $27.972 million. The Board’s approval of this EIR Addendum
would further the goals of Portfolio #23 and Project #23-4 by allowing reuse of existing soil
material onsite for a previously-identified component of the Project, rather than generating
unnecessary truck traffic on the Santa Clara County-maintained Hicks Road in order to dispose
of the same material at greater cost.
DISCUSSION
The Board certified the 2012 EIR and MMP for the Mount Umunhum Environmental
Restoration and Public Access Project (Project) in October 2012, and approved an addendum to
this EIR in December 2015 for adding proposed discretionary elements to the Project. Since
then, a number of the approved Project components have been implemented, including
construction of the Bald Mountain Parking Area, a substantial portion of the Mt. Umunhum
Trail, the Guadalupe Creek Overlook, demolition of the former Almaden Air Force Station
(excluding the radar tower), and the radar tower interim repairs. The Summit and Road
Rehabilitation Projects have been designed and bids have been received for both projects, which
will be presented to the Board at this same meeting on August 10, 2016 for consideration.
Subsequent to the certification of the EIR and First Addendum, construction designs for the
Summit and Road Rehabilitation Projects indicate that a larger than anticipated volume of soil
material will be generated by both projects (approximately 11,000 and 4,000 cubic yards,
respectively). At the time of the 2012 EIR, the total amount of fill and sidecast material was not
fully known for either project. The increase in anticipated soil material is advantageous to
support the landform restoration work previously identified for Mount Thayer. It is ideal to use
native soil in order to support native revegetation that relies on specific soil and drainage
characteristics to thrive. However, soil material generated from the Road Rehabilitation Project
containing weed seeds or that is otherwise unsuited for landform restoration work (i.e. pulverized
or contaminated) will be off-hauled as necessary to an appropriate disposal location. Transport to
a local landfill facility was also previously evaluated and approved in the 2012 EIR, and the
District retains the discretion determine which soil material should be transported to Mount
Thayer and which material should be hauled off the construction site to a landfill facility.
Additionally, the Road Rehabilitation Project design calls for three gabion retaining walls that
were not originally identified as project elements in the 2012 EIR. The three gabion walls
perform different functions including slope stability below the surface of the road, road
widening, and replacement of an existing failing retaining wall.
Consequently, the additional minor modifications to the previously-approved project consist of:
1) an increase in the number of truck haul trips and cubic yards (cy) of excavated material to
Mount Thayer, where the material would be used as part of the previously proposed landform
restoration at Mount Thayer and 2) installation of a total of approximately 180 linear feet of
gabion retaining walls at three locations along Mt. Umunhum Road.
The purpose of the Second Addendum is to evaluate the potential impacts of additional truck
traffic associated with the Summit and Road Rehabilitation Projects for the purpose of
R-16-96 Page 3
transporting soil material to Mount Thayer, and to evaluate any potential impacts related to the
installation of the gabion retaining walls. All proposed project modifications would be located on
previously disturbed land located within the Project Area analyzed in the 2012 EIR.
An ongoing dialogue will be opened and maintained with the neighbors early and throughout
project implementation to ensure potential impacts associated with the Projects, especially
vehicular access on Mt. Umunhum Road, are minimized to the full extent feasible.
CEQA Determination
The EIR Second Addendum evaluated the potential environmental consequences associated with
aesthetics, agriculture and forestry resources, air quality, biological resources, cultural resources,
geology and soils, greenhouse gas emissions, hazards and hazardous materials, hydrology and
water quality, land use and planning, mineral resources, noise, population and housing, services,
recreation, traffic and circulation, and utilities and service systems.
The proposed Project modification would occur within the previously disturbed areas and would
remain within the disturbance area identified in the 2012 EIR. These areas include Mt.
Umunhum Road, Mount Umunhum Summit, and Mount Thayer Summit. None of these
discretionary modifications result in any significant environmental effects nor substantial
increase in severity of previously evaluated significant effects under the 2012 EIR.
In accordance with CEQA Guidelines section 15162(a), no new significant environmental
effects, and no substantial increase of the severity of previously identified significant effects,
would result from the project modifications. Moreover, the proposed minor changes would not
affect any of the mitigation measures, including their feasibility of implementation, contained
within the MMP. Therefore, the differences between the approved Project described in the 2012
EIR and the modification of the Project as currently proposed and described in the attached
Second Addendum are minor technical changes, and the Second Addendum, considered together
with the 2012 EIR, the First Addendum, and MMP, addresses the potential environmental
impacts of the project modifications and provides sufficient environmental documentation
thereof.
FISCAL IMPACT
There are no direct fiscal impacts from approving the Second Addendum. The funding necessary
for the Project modifications has been included in the District’s Fiscal Year 2016-17 Budget and
consideration of award of contract for both projects will be presented to the Board later at this
meeting.
BOARD COMMITTEE REVIEW
This item was brought to the full Board given interest and importance.
PUBLIC NOTICE
Public notice was provided as required by the Brown Act. In addition, notice was provided to
immediate neighbors adjacent to the Project Area. Since an addendum is prepared if only minor
technical changes or additions are necessary, the Second Addendum need not be circulated for
public review.
R-16-96 Page 4
CEQA COMPLIANCE
As detailed above, the District concludes that the Project’s minor modifications will not have a
significant effect on the environment. The environmental analysis revealed no potentially
significant impacts for the discretionary items as described in the Second Addendum. The
Second Addendum, considered together with the 2012 EIR, MMP, and the First Addendum,
addresses the potential environmental impacts of the Project modifications, and there is no
substantial increase in the severity of previously identified significant impacts; therefore, no new
mitigation measures are required.
NEXT STEPS
If approved, the District will file a Notice of Determination with the Santa Clara County Clerk
Recorder’s Office, which initiates the 30-day public notification period. A Notice of
Determination would also be filed with the State Clearinghouse within five (5) days of Board
action. A copy of the EIR Second Addendum would be available for public review at the
District’s Administrative Office and a copy would also be posted to the District’s website.
Attachments
1. 2012 Final Environmental Impact Report, Mitigation Monitoring Plan, First
Addendum to the 2012 EIR, and Second Addendum to the 2012 EIR including
Appendix A are available on the District website at
http://www.openspace.org/umunhum
2. Map of Proposed Project Modifications
3. Second Addendum to the 2012 EIR
4. Resolution adopting Second Addendum to the 2012 EIR
Responsible Department Head:
Jane Mark, AICP, Planning Department
Prepared by:
Meredith Manning, Senior Planner, Planning Department
Contact person:
Meredith Manning, Senior Planner, Planning Department
Graphics prepared by:
Nathan Grieg, GIS Technician
Attachment 1
The following documents for the Mount Umunhum Environmental
Restoration and Public Access Project are available on the District website at
http://www.openspace.org/umunhum
1) 2012 Final Environmental Impact Report
2) Mitigation Monitoring Plan
3) First Addendum to the EIR, and
4) Second Addendum to the EIR including Appendix A
Bald Mountain
2,387 ft.
Mount Umunhum
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Mount Thayer
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Attachment 2
Ascent Environmental Addendum to the Environmental Impact Report
Midpeninsula Regional Open Space District
Mount Umunhum Environmental Restoration and Public Access Project 1
MOUNT UMUNHUM ENVIRONMENTAL RESTORATION AND
PUBLIC ACCESS PROJECT OVERVIEW
PURPOSE OF THIS DOCUMENT
In June 2012, the Midpeninsula Regional Open Space District (MROSD) Board of Directors certified the
Environmental Impact Report (EIR) (State Clearinghouse No. 2010122037) for the Mount Umunhum
Environmental Restoration and Public Access Project (herein referred to as the 2012 EIR). The 2012 EIR
analyzed a proposed project that included demolition of most (as well as an option to demolish all) of the
abandoned structures associated with the former Almaden Air Force Station (AFS), phased public access to
the summit of Mount Umunhum, roadway and access improvements, environmental restoration,
development of public use facilities and a range of possible amenities such as trails, observation and
reflection areas, interpretive displays, picnic tables, shade structures, vault toilets, camp sites, a visitor
center, and non-potable water (for horses and fire protection) contained in one or more onsite water tanks.
The 2012 EIR also included longer term plans to allow public access to the summit of Mount Thayer via a
trail connection from Ralph’s Mountain, and landform restoration at the peak at Mount Thayer. In December
of 2015, an addendum to the EIR was approved pursuant to CEQA for the proposed addition of gates,
associated fencing, and an MROSD easement for road access on the private road to Mount Thayer. For
details, refer to Section 1.2, ‘Project History’, below. Together, the 2012 EIR and 2015 addendum to the EIR
is herein referred to as the approved EIR.
MROSD is currently proposing additional minor modifications to the previously approved project. These
modifications include: 1) installation of a total of approximately 180 linear feet of gabion retaining walls at
three locations along Mt. Umunhum Road, and 2) an increase in the number of truck haul trips and cubic
yards (cy) of excavated material to Mount Thayer where the material would be used as part of the previously
proposed landform restoration at Mount Thayer’s peak. Refer to Section 3, ‘Description of Proposed Project
Modifications’, of this addendum for a more detailed description of proposed project modifications. The
project goals and objectives identified in Section 3.4, page 3-5, of the 2012 EIR remain unchanged.
The purpose of this proposed addendum is to consider whether these modifications to the project would
result in the need for additional analysis under CEQA (Public Resources Code, section 21166; CEQA
Guidelines, sections 15162, 15164).
As demonstrated in Section 4, ‘Environmental Consequences of Proposed Project Modifications’, below, the
project modifications do not meet any of the criteria listed in section 15162 of the CEQA Guidelines (as
described in Section 2, CEQA Guidance Regarding Preparation of an addendum to the EIR, below) and an
addendum is, therefore, appropriate. This means the modifications would (1) not result in any new
significant environmental effects or a substantial increase in severity of previously evaluated significant
effects that result from either a substantial change to the project or changes to the project circumstances;
(2) there is no new information of substantial importance since certification of the 2012 EIR that shows the
modifications would have new significant effects or more severe previously evaluated effects; and (3) no
mitigation measures or alternatives, which were found to be infeasible in the 2012 EIR and which are
capable of substantially reducing a significant environmental effect, would now be feasible. Therefore,
pursuant to section 15164 of the CEQA Guidelines, the differences between the approved project described
in the 2012 EIR and the refined elements of the project as they are currently proposed are considered minor
technical changes.
This document concludes that the proposed project modifications would not alter any of the conclusions of
the approved EIR. No new significant environmental effects or a substantial increase in the severity of
previously identified significant effects would result. The additions also would not affect any of the mitigation
Attachment 3
Ascent Environmental Addendum to the Environmental Impact Report
Midpeninsula Regional Open Space District
2 Mount Umunhum Environmental Restoration and Public Access Project
measures, including their feasibility or implementation. As mentioned above, none of the conditions listed in
section 15162 of the CEQA Guidelines exist for the project modification described herein. Therefore,
pursuant to section 15164 of the CEQA Guidelines, the differences between the approved project described
in the approved EIR and the modification of the project as currently proposed and described in this
addendum are minor, and this addendum provides sufficient environmental documentation.
PROJECT HISTORY
In 1986, the MROSD acquired the former Almaden Air Force Station (AFS) and all remaining facilities at the
site within the Sierra Azul Open Space Preserve (Preserve) (Exhibit 1-1). The ultimate intent of this purchase
was to restore the area to a natural condition and provide public access; however, hazardous materials
associated with the construction and operation of the former AFS had to first be removed. While a portion of
hazardous materials was cleaned up by the federal government soon after the MROSD’s purchase, other
materials, particularly lead-based paint and asbestos-containing construction materials used on buildings
fell outside the scope of the original federal cleanup program. The MROSD worked with community, state,
and federal leaders to obtain federal funding to complete the remaining cleanup, and federal funds were
committed in 2010 toward remediation of remaining hazardous materials. The MROSD approved the
structure abatement project in August 2010, which was complete in the summer of 2011.
In June 2012, the EIR (State Clearinghouse No. 2010122037) for the Mount Umunhum Environmental
Restoration and Public Access Project (i.e. 2012 EIR) was certified. The approved project area from the
Certified EIR is shown in Exhibit 1-2.The 2012 EIR analyzed a proposed project that included demolition of
most (with an option to demolish all) of the abandoned structures associated with the former Almaden AFS.
The project included roadway and access improvements to provide phased public access to the summit of
Mount Umunhum, as described above in the first paragraph of Section 1.1, Purpose of This Document.
Facilities at the summit would be located in areas previously disturbed by the former Almaden AFS. The
2012 EIR also included longer term plans to allow public access to the summit of Mount Thayer via a trail
connection from Ralph’s Mountain. The project goals and objectives identified in Section 3.4, page 3-5, of
the 2012 Draft EIR remain unchanged.
A series of public meetings on the project were held during preparation of the EIR, beginning in September
2010. Prior to initiation of the Draft EIR, the MROSD held a public meeting on September 30, 2010 to
receive input on project features and preferences and a public open house was held on November 17,
2010, to present the results of the first meeting and obtain further public feedback. A public scoping
meeting on the issues to be addressed in the Draft EIR was held on December 9, 2010. On December 12,
2011, the Draft EIR was distributed to public agencies and the general public, and a public hearing to
receive comments on the Draft EIR was held on January 18, 2012. On May 25, 2012, the Final EIR was
released for public review.
The project decisions have occurred in stages. On June 12, 2012, the MROSD certified the EIR and approved
the demolition phase of the project, not including the radar tower that was operated as part of the Almaden
AFS. The disposition of the tower generated substantial public interest, and several options were evaluated
in the EIR. The MROSD hosted a public open house on July 18, 2012 to gather public input on the radar
tower options; the Board did not make any decisions on the radar tower at this meeting. A second decision
hearing was held on September 19, 2012, at which the MROSD’s Board of Directors approved select project
elements, not including the radar tower and summit area amenities, and removed consideration of the
backpack camp from the project to instead include its consideration as part of the larger Preserve Plan.
Project elements approved by the Board at this meeting were primarily located below the elevational
summit, and included parking, vault toilets, emergency callbox, hang gliding/paragliding, non-potable water
tanks for fire protection and horse troughs, environmental restoration, and avian nesting structures. At this
meeting, the Board also provided direction to move forward with construction of the Bald Mountain Parking
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Mount Umunhum Environmental Restoration and Public Access Project 3
Exhibit 1 Project Location
Attachment 3
Ascent Environmental Addendum to the Environmental Impact Report
Midpeninsula Regional Open Space District
4 Mount Umunhum Environmental Restoration and Public Access Project
Exhibit 2 Proposed Project Modifications
Attachment 3
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Midpeninsula Regional Open Space District
Mount Umunhum Environmental Restoration and Public Access Project 5
Area, the connecting multi-use Mt. Umunhum Trail to the summit, and safety upgrades and improvements to
Mt. Umunhum Road.
The final stage of project approval occurred on October 17, 2012, which included: 1) summit area amenities
such as trails, observation and reflection areas, interpretive displays, picnic tables, shade structures,
restrooms and a visitor center; 2) future public vehicle access to the summit via Mt. Umunhum Road; 3)
iterative approach for future shuttle service; and 4) additional staff positions. Also at this hearing, the Board
approved Interim Action A, allowing for short-term safety improvements to the radar tower, and deferred a
decision on the radar tower option for up to five (5) years until October 2017, to allow time for the
community to raise funds, if there is sufficient interest, to preserve the tower.
Since then, a number of the approved project components analyzed in the 2012 EIR have been
implemented. In January 2015, MROSD approved funding to complete structural and safety repairs and
improvements to the radar tower to facilitate public access around the exterior perimeter of the structure.
The interim structural repairs included code-required repairs to bring the structure up to code for “collapse
prevention” as well as the implementation of code and safety requirements to close and seal off all access
to the interior of the structure. Completion of these early interim repairs would allow safe limited access to
the exterior of the structure for a number of tours including potential donor, MROSD-led, and docent-led
events prior to the opening of general public access to the summit. The interim repairs were substantially
completed as of September 2015.
The Bald Mountain Parking Area was completed in fall 2014 and is open for hiking access to the Bald
Mountain Trail. Construction of the new Mt. Umunhum Trail to the top of the mountain was initiated in 2013.
A small crew of MROSD staff is completing the trail and bridges which are targeted for completion in 2017.
Construction has begun on the Guadalupe Creek Overlook, which is located along the Mt. Umunhum Trail,
and is anticipated to be completed by the spring of 2017.
In August 2015, the Board approved final design development options for the Mount Umunhum Summit
Project (options do not include recommendations for the radar tower). Also at that time, the Board directed
staff to look for areas for additional shade structures at the summit and proceed with final design
development and production of construction documents, with construction anticipated to begin in fall 2016.
In December of 2015, an addendum to the Environmental Impact Report for the Mount Umunhum
Environmental Restoration and Public Access Project was approved. This addendum addressed the addition
of solar-powered electric or manual gates and associated fencing and a MROSD easement for road access
on the private road to Mount Thayer.
In the first half of 2016 the District made significant progress in resolving access rights to allow full public
access to the summit of Mount Umunhum along Mt Umunhum Road, and MROSD now has access for patrol
and maintenance along on the road to the summit of Mount Thayer. Accordingly, MROSD is preparing to
proceed with “Phase 2 construction” evaluated in the 2012 EIR which consists of safety upgrades to Mt.
Umunhum Road, public access improvements, and visitor amenities are all anticipated to be substantially
completed by spring 2017.
In May of 2016, the MROSD Board of Directors approved the Mt. Umunhum Road Rehabilitation Project
design and bid plan set that included the road surface, road safety, road drainage and additional road
improvements previously evaluated and covered in the approved EIR. In addition, three separate gabion
retaining walls along Mt Umunhum Road were deemed to be a necessary part of the roadway improvements;
these features and the soil required to be off-hauled and associated truck trips are evaluated as additional
features in this Addendum.
In June of 2016, the MROSD Board of Directors approved the “Retain and Seal” option for the Mount
Umunhum Radar Tower, which was evaluated in the 2012 EIR, and authorized the General Manager to
receive public and private funds for the Radar Tower as donations to fund future repairs and maintenance
activities, as determined by MROSD.
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6 Mount Umunhum Environmental Restoration and Public Access Project
As with all other MROSD preserves, Mount Umunhum (located within the Sierra Azul Open Space Preserve) is
planned to be open 365 days a year from dawn to one-half hour after sunset.
CEQA GUIDANCE REGARDING PREPARATION OF
AN ADDENDUM TO THE EIR
If, after certification of an EIR, there are changes or additions to a project that will require new discretionary
actions, CEQA provides three possible mechanisms to address these changes: a subsequent EIR, a
supplement to an EIR, or an addendum to an EIR.
Section 15162 (a) of the CEQA Guidelines provides that when an EIR has been certified for a project, no
subsequent EIR shall be prepared for that project unless the lead agency determines, on the basis of
substantial evidence in light of the whole record, that one or more of the following conditions is met:
(1) substantial changes are proposed in the project which will require major revisions of the previous EIR
due to the involvement of new significant environmental effects or a substantial increase in the severity
of previously identified significant effects;
(2) substantial changes occur with respect to the circumstances under which the project is undertaken which
will require major revisions of the previous EIR due to the involvement of new significant environmental
effects or a substantial increase in the severity of previously identified significant effects; or
(3) new information of substantial importance, which was not known and could not have been known with
the exercise of reasonable diligence at the time the previous EIR was certified as complete, shows any of
the following:
(A) the project will have one or more significant effects not discussed in the previous EIR;
(B) significant effects previously examined will be substantially more severe than shown in the previous EIR;
(C) mitigation measures or alternatives previously found not to be feasible would in fact be feasible, and
would substantially reduce one or more significant effects of the project, but the project proponents
decline to adopt the mitigation measures or alternatives; or
(D) mitigation measures or alternatives which are considerably different from those analyzed in the
previous EIR would substantially reduce one or more significant effects on the environment, but the
project proponents decline to adopt the mitigation measures or alternatives.
Section 15164 of the CEQA Guidelines states that a lead agency or a responsible agency shall prepare an
addendum to a previously certified EIR if some changes or additions are necessary, but none of the
conditions described above in section 15162(a), calling for preparation of a subsequent EIR, have occurred.
CEQA allows lead and those responsible agencies issuing additional discretionary approvals for a project to
restrict their review of modifications to a previously approved project to the incremental effects associated
with the proposed modifications, compared against the anticipated effects of the previously approved
project at build-out. In other words, if the project under review constitutes a modification of a previously
approved project which was subject to prior final environmental review, the “baseline” for purposes of CEQA
is adjusted such that the originally approved project is assumed to exist.
The MROSD is proposing minor modifications to the approved project; these changes are described in
Section 3 of this addendum. As demonstrated in detail below, the project modifications do not meet any of
the criteria listed in section 15162. First, the modifications would not result in any new significant
environmental effects or a substantial increase in severity of previously evaluated significant effects that
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Mount Umunhum Environmental Restoration and Public Access Project 7
result from either a substantial change to the project or changes to the project circumstances. Second, there
is no new information of substantial importance since certification of the 2012 EIR that shows the
modifications would have new significant effects or more severe previously evaluated effects. Finally, no
mitigation measures or alternatives, which were found to be infeasible in the 2012 EIR and which are
capable of substantially reducing a significant environmental effect, would now be feasible. Therefore,
pursuant to section 15164 of the CEQA Guidelines, the differences between the approved project described
in the 2012 EIR and the refined elements of the project as they are currently proposed are considered minor
technical changes. Furthermore, the approved EIR and associated mitigation monitoring and reporting
program remain valid for mitigating the identified significant impacts that would result from implementation
of the project, including the proposed modifications. For these reasons, an addendum to the approved EIR is
the appropriate mechanism to address modifications to the project.
DESCRIPTION OF PROPOSED PROJECT MODIFICATIONS
MROSD’s proposed modifications to the approved EIR include: 1) installation of a total of approximately 180
linear feet of retaining walls in three locations along Mt. Umunhum Road, and 2) increasing the number of
truck haul trips for transporting excavated material from project construction activities, and routing
excavated material haul trips to Mount Thayer where the material would be used as part of the previously
proposed landform restoration. The purpose of this proposed addendum is to consider whether these
modifications to the 2012 EIR would result in the need for additional analysis under CEQA (Public Resources
Code, section 21166; CEQA Guidelines, sections 15162, 15164). The following provides a description of
each proposed modification to the previously approved 2012 EIR. All proposed modifications are located
within areas identified on previously disturbed land located within the project site analyzed in the 2012 EIR.
MT. UMUNHUM ROAD REHABILITATION PROJECT RETAINING WALL
MODIFICATIONS
The road upgrades and safety improvements to Mt. Umunhum Road require the construction of retaining
walls along three distinct sections of the affected roadway (see Exhibit 2). Depending on the location of the
three retaining walls, each section performs a variety of functions including slope stability below the surface
of the roadway, road widening, and replacement of failing retaining wall. A cumulative total of approximately
180 linear feet of retaining wall would be installed. The retaining walls would consist of gabions (welded wire
mesh) filled with rock and would be approximately four feet tall (above ground surface) with approximately
two additional feet below the ground. Construction of the gabion retaining walls includes demolition and
disposal of existing retaining wall materials; excavation of existing asphalt and native soil related to
placement of the gabions; placement of native materials over the installed gabions; and placing, spreading,
and compaction of the ground up road materials removed in the process. Any loose or soft fill soil underlying
the proposed gabion wall project footprint would be removed and replaced with approved native materials.
During construction of the gabion retaining walls, construction could necessitate the temporary closure of
the directional travel lane closest to where the retaining wall is being installed. A nine (9) foot wide drive
aisle would be maintained along Mt. Umunhum Road during the construction of the gabion retaining walls
with maximum 10-minute wait time for general vehicular passage. Consistent with Impact 4.11-1 of the
approved EIR, MROSD would ensure appropriate emergency vehicle access. MROSD’s Traffic Control Plan
for construction (required pursuant to County standards) would provide necessary safety measures for
maximizing roadway safety during construction, including measures to ensure minimization of response time
delays to emergency vehicle access.
The addition of the gabion retaining walls as a modification to the approved EIR would require the excavation
of approximately 750 cy of material. The hauling and disposal of this material is addressed in Section 3.2,
‘Construction Excavation and Haul Modifications’ below.
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8 Mount Umunhum Environmental Restoration and Public Access Project
CONSTRUCTION EXCAVATION AND HAUL MODIFICATIONS
3.2.1 Roadway Construction Modifications
As discussed above, the construction of the gabion retaining walls requires the excavation of 750 cy of
material. For purposes of this analysis, it is assumed that excavated material haul trips would be performed
using double-bottom semi-trucks with total capacity of 14 cy per load.
The 2012 EIR indicated that excess material from the roadway and drainage improvements (excluding
materials containing noxious weeds and other unsuitable materials) would be hauled to the summit of
Mount Umunhum to be used for landform restoration. Because of refinements in the construction details, it
has been determined that the materials generated by the roadway and drainage construction activities
would, instead, be hauled to Mount Thayer for landform restoration, rather than Mount Umunhum.
In total, these project modifications (gabion walls and materials offhaul) would result in a maximum of 20
additional one-way haul trips per day during peak construction activity over a 4- to 6-month period. These
haul trips would be primarily routed to Mount Thayer, via Mt. Umunhum Road to Loma Almaden Road. Note
that, as described in the 2012 EIR, unsuitable material will still be hauled offsite via Hicks Road to an
appropriate landfill. This is not considered part of the proposed project modifications.
3.2.2 Mount Umunhum Summit Construction Modifications
The 2012 EIR assumed that excavated material generated by construction activities associated with the
Mount Umunhum summit restoration would be reused within the Mount Umunhum summit area. The
proposed modifications would increase the total amount of excavated material by a maximum of 11,000 cy,
most of which would be diverted to the peak of Mount Thayer to assist in previously approved landform
restoration.
For the 11,000 cy. of additional excavated material to be hauled from Mount Umunhum Summit to Mount
Thayer, it is assumed for purposes of this analysis that 9,000 cy would be removed from the summit using
double-bottom semi-trucks with a total capacity of 14 cy per load and the remaining 2,000 cy would be
hauled using a ten-wheeler truck with a total capacity of 8 cy per load. Mount Thayer is approximately 1.7
miles driving distance west of the Mount Umunhum summit construction site. The increase in excavated
material would necessitate approximately 900 one-way trips, which would be spread over a four- to six-
month period.
In total, this project modification would result in a maximum of 100 one-way haul trips per day (50 inbound
and 50 outbound) between Mount Umunhum and Mount Thayer. The excavated materials would be hauled
and deposited on Mount Thayer where they would be used for landform restoration. The number and type of
off-road construction equipment is consistent with the number and type described in the 2012 EIR. Given
the anticipated timing of the summit and road project, respectively, and the expected number of haul trucks
onsite, it is unlikely that the combined number of truck trips would exceed 100 one-way haul-trips per day,
even if the two construction activities occurred concurrently.
The haul route includes portions of Mt. Umunhum Road between Mount Umunhum and Loma Almaden Road
to the west and terminates on the peak of Mount Thayer as shown in Exhibit 2. A portion of Loma Almaden
Road along the haul route is unpaved. Note that the road width does not allow for two haul trucks to pass
simultaneously in all locations; therefore, truck drivers returning from Mount Thayer would be instructed to
pull over in appropriate locations (to be specified prior to materials hauling) to allow oncoming loaded trucks
to pass.
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Mount Umunhum Environmental Restoration and Public Access Project 9
ENVIRONMENTAL CONSEQUENCES OF
PROPOSED PROJECT MODIFICATIONS
The purpose of this discussion below is to evaluate the environmental issue areas in terms of any “changed
condition” (i.e., changed circumstances, project changes, or new information of substantial importance)
resulting from the proposed project modifications that may result in a different environmental impact
significance conclusion from the approved EIR. These resource issue areas are addressed below.
AESTHETICS
The approved EIR identified less-than-significant impacts associated with impacts on scenic vistas, damage
to scenic resources within a scenic highway corridor, changes in visual character, and impacts from
nighttime lighting.
The MROSD’s proposed modifications to the approved EIR include installation of a total of approximately
180 linear feet of retaining walls in three locations along Mt. Umunhum Road (see Exhibit 1-1). The
proposed gabion (welded wire mesh) retaining walls would be approximately four feet tall (above ground
surface) and filled with rock. The proposed retaining walls would not be seen by motorists or other preserve
users since the walls will be located below the roadway or otherwise be out of sight from the roadway. None
of the retaining walls would be visible from offsite views due to distance, intervening topography, and use of
natural and naturally-colored materials.
The proposed modifications to the approved EIR would also increase the total amount of excavated material
from Mount Umunhum summit (by a maximum of 11,000 cy) used for previously approved landform
restoration of Mount Thayer’s peak. The additional excavation material to be diverted to the peak of Mount
Thayer for landform restoration would increase the height of Mount Thayer and help restore the natural
landform of the peak closer to a natural looking appearance. As discussed in the approved EIR, the nearest
residence to this project feature is located approximately 370 feet west of Mount Thayer. Intervening
topography obstructs views of the site from this residential structure. The next nearest residence is located
over 1,000 feet from the Mount Thayer site and observers from this residence would have unobstructed
views of the Mount Thayer site (MROSD 2011: 4.1-3). The additional volume of excavated material for
landform restoration would increase the height of the peak by a single point maximum of approximately 30
feet; however, the average height of the reconstructed peak would likely be closer to 25 feet or less. This
change would be minor relative to the overall viewshed because the project would provide a more natural
looking appearance to the peak that would blend in with other natural features in the area and would result
in a minor change to the visual character of the project site, especially as viewed by nearby residences.
Based on the above discussion, there are no new significant effects or substantial changes to the
environmental evaluation of aesthetic resources provided in the approved EIR that would occur with the
implementation of the proposed project modifications. The project modifications evaluated in this addendum
are visually consistent with the project as proposed in the approved EIR and would not generate any new
significant impacts related to aesthetics.
AGRICULTURE AND FORESTRY RESOURCES
As discussed in Chapter 1 of the Draft EIR (MROSD 2011: p.1-5), the project site is not used for agriculture,
nor does it consist of forestry land. It is designated as “hillsides” and “other public lands” in the Santa Clara
County General Plan, indicating it is not intended for agricultural uses. The California Department of
Conservation’s Farmland Mapping and Monitoring Program identifies the project site as “urban and built-up
land” and “other land” and identifies no farmland on the project site or in the project vicinity (Department of
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10 Mount Umunhum Environmental Restoration and Public Access Project
Conservation 2008). The proposed project modifications (i.e., installation of retaining walls and construction
excavation and haul modifications) would not convert agricultural or forestry uses and would therefore have
no impact on these resources and would result in no change to the 2012 EIR conclusion.
AIR QUALITY
The 2012 EIR identified significant or potentially significant impacts related to increases in construction-
related emissions of fugitive dust (PM 10 and PM 2.5 ), and exposure of sensitive receptors to fugitive dust
emissions containing naturally occurring asbestos during construction-related earth movement activities. As
indicated in the 2012 EIR, these impacts would be reduced to a less-than-significant impact with
implementation of Mitigation Measures 4.7-1 (Draft EIR, pp. 4.7-20). The 2012 EIR identified less-than-
significant impacts associated with increases in construction-generated emissions of reactive organic gases
and nitrogen oxides, PM 10 exhaust, and PM 2.5 exhaust, long-term operational emissions of criteria air
pollutant and precursors, project-generated local mobile-source carbon monoxide emissions, exposure of
sensitive receptors to emissions of toxic air contaminants from on-site sources during construction and
operation, and exposure to odorous emissions.
Because the area of disturbance would remain the same as identified in the 2012 Draft EIR, construction
and installation of the proposed project modifications would not increase construction-related emissions of
fugitive dust (PM 10 and PM 2.5 ) and would not result in increased exposure of sensitive receptors to fugitive
dust emissions containing naturally occurring asbestos during construction-related earth movement
activities beyond the level described in the 2012 EIR. Mitigation Measure 4.7-1 of the 2012 EIR would
require implementation of applicable the Bay Area Air Quality Management District Air Quality Guidelines
related to basic control measures during construction and compliance with Bay Area Air Quality Management
District’s naturally occurring asbestos program and Air Toxic Control Measure Inspection Guidelines, Policies,
and Procedures. With implementation of Mitigation Measure 4.7-1, no new or increased construction-related
air quality impacts would result from implementation of the proposed project modifications evaluated in this
addendum.
Construction-related emissions of the proposed project modifications were estimated using the Road
Construction Emissions Model (SMAQMD 2016). The Road Construction Emissions Model is recommended
to assess the emissions for linear construction projects and allows for the input of project-specific
information. This model was developed by the Sacramento Metropolitan Air Quality Management District but
is approved by air districts throughout California.
Table 1 summarizes the modeled construction-related emissions of criteria air pollutants and criteria air
pollutants and precursors for the proposed project. Refer to Appendix A for detailed modeling input
parameters and results.
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Table 1 Summary of Construction Emissions of Criteria Air Pollutants and Precursors
Construction Phase
Pollutant Emissions (lb/day)
ROG NOX PM 10
Exhaust 1
PM 10
Dust
PM 2.5
Exhaust 1
PM 2.5
Dust 1
Phase 2 (from the 2012 Draft EIR) – Landform and Habitat Restoration; Construction of
Connector Trail to Bald Mountain; Construction of parking lot at Bald Mountain; Repairs to Mt.
Umunhum Road3
7.6 50.5 2.9 150.3 2.9 31.5
Proposed Project Modifications – Gabion retaining wall construction; Summit construction
excavation and haul modifications <1 1.9 <1 <1 <1 <1
Maximum Daily Emissions for Total Construction Phase (Phase 2) 7.7 52.4 3.0 150.3 3.0 31.5
BAAQMD Significance Thresholds (lb/day) (Average Daily Emissions) 54 54 82 —2 54 —2
Notes: BAAQMD = Bay Area Air Quality Management District; lb/day = pounds per day; ROG = reactive organic gases; NO X = oxides of nitrogen; PM 10 = particulate matter
with aerodynamic diameter less than 10 microns; PM 2.5 = particulate matter with aerodynamic diameter less than 2.5 microns.
Bold represents an exceedance of the applicable threshold.
1 BAAQMD’s construction-related thresholds for PM 10 and PM 2.5 are for exhaust emissions of these pollutants. Therefore, PM 10 and PM 2.5 emissions shown are only those
associated with construction-related exhaust (e.g., construction worker vehicles, material delivery trucks, heavy-duty construction equipment).
2 BAAQMD does not have a quantitative threshold of significance for fugitive PM 10 and PM 2.5 fugitive dust. These values are provided for disclosure purposes only.
3 Modeled in 2011 using Urbemis 2008 model.
Detailed assumptions and modeling output files are included in Appendix A.
Source: Modeling performed by Ascent Environmental, Inc. 2011, 2016.
As shown in Table 1, the increased emissions associated with the proposed addition of up to a maximum of
100 additional one-way material haul trips per day as described in detail in Section 3; Description of
Proposed Project Modifications, combined with the project emissions identified in the 2012 EIR, would not
result in exceedance of BAAQMD’s respective thresholds of significance for any of the listed criteria air
pollutants and precursors. For the reasons described above, no new significant effects or substantial
changes to the environmental evaluation of air quality impacts evaluated in the 2012 EIR would occur with
implementation of the proposed project modifications.
BIOLOGICAL RESOURCES
The 2012 EIR identified significant or potentially significant impacts related to loss of bat colonies during
building demolition, loss of special-status species (i.e., including rare plants, special-status amphibians and
reptiles, and nesting birds) during ground-disturbing activities (i.e., trail construction, road improvements, or
other ground-disturbing activities), and loss of riparian habitat or other sensitive natural communities or fill
of Waters of the U.S. during trail construction. These impacts would be reduced to a less-than-significant
impact with implementation of Mitigation Measures 4.3-1 through 4.3-3 (Draft EIR, pp. 4.3-23, 4.3-25; Final
2012 EIR, pp. 3-2 through 3-3). The 2012 EIR identified a less-than-significant impact associated with
effects of increased recreation on native species and interference with wildlife movement and no impact
related to conflict with local policies, ordinances or an approved habitat conservation plan.
The project modifications would not increase the potential for impacts to biological resources because the
area of ground disturbance associated with the proposed project modifications would be consistent with the
areas of disturbance analyzed in the 2012 EIR. No additional tree removal or building demolition would
occur with proposed project modifications. Segments of retaining wall totaling 180 linear feet in three
separate locations along Mt. Umunhum Road would result in inconsequential interference with wildlife
movement in the region. The addition of excavated materials for previously approved landform restoration at
Mount Thayer is anticipated to result in no new or more severe impacts to biological resources. Mitigation
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12 Mount Umunhum Environmental Restoration and Public Access Project
Measure 4.3-1 through 4.3-3 of the 2012 EIR require surveying, avoidance, minimization, and monitoring
measures within the project footprint to reduce impacts to special-status plant and wildlife species during
construction. With implementation of Mitigation Measures 4.3-1 through 4.3-3 and proposed project
modifications limited to proposed areas of disturbance analyzed in the 2012 EIR, no new impacts to
biological resources would result from implementation of the proposed project modifications evaluated in
this addendum.
CULTURAL RESOURCES
Construction-related impacts on presently undocumented cultural resources and human remains were
identified as potentially significant in the EIR. These impacts would be reduced to a less-than-significant
impact with implementation of Mitigation Measure 4.2-3 and 4.2-4 (Final EIR, pp. 3-7 through 3-8; Draft EIR,
4.2-29 through 4.2-30). The 2012 EIR identified a less-than-significant impact associated with construction-
related impacts on documented significant archaeological and historical resources. As described in Chapter
1 of the Draft EIR (Draft EIR, p.1-5), the potential to encounter paleontological resources is low because soil
moving activities would occur within areas of disturbance that were analyzed in the 2012 EIR and grading is
not expected to substantially expose native soils.
Construction of the proposed modifications would be limited to areas of disturbance that were analyzed in
the 2012 EIR. No new impacts to cultural resources would result from implementation of the proposed
modifications.
GEOLOGY AND SOILS
The 2012 EIR identified significant or potentially significant impacts related to risks to people and structures
from seismic hazards or landslides and construction-related erosion hazards. As indicated in the 2012 EIR,
these impacts would be reduced to a less-than-significant impact with implementation of Mitigation Measure
4.5-2 (Draft EIR, pp. 4.5-8 through 4.5-9), requiring consultation with the San Francisco Bay Basin Regional
Water Quality Control Board, preparation of a Stormwater Pollution Prevention Plan (SWPPP), and
implementation of Best Management Practices (BMPs). The 2012 EIR identified less-than-significant
impacts associated with slope stability hazards.
The proposed project modifications would occur within proposed areas of disturbance analyzed in the 2012
EIR. The proposed project roadway improvement modifications (i.e. retaining walls along Mt. Umunhum
Road) would be constructed within previously disturbed areas (i.e., exposed, non-vegetated soils) of the site
wherever feasible. Additionally, the proposed retaining walls would improve slope stability along Mt.
Umunhum Road. Thus, with implementation of Mitigation Measure 4.5-2 of the EIR, the proposed
modifications would not alter the impact conclusions identified in the 2012 EIR for geology and soils.
GREENHOUSE GAS EMISSIONS
The EIR identified less-than-significant impacts associated with generation of greenhouse gas emissions and
impacts of climate change on the environmental restoration and public access plan.
The proposed project modifications would include more intensive excavation and hauling construction
activities that would, at the peak of hauling activities, increase the number of new two-way vehicle trips per
day by 50 vehicle trips. Within the 2012 EIR, GHG emissions from construction were estimated to be 671
metric tons of CO 2 equivalent per year (MT CO 2 e/year) over the construction period; however, as stated in
the 2012 EIR, BAAQMD does not have an adopted significance threshold for GHG emissions from
construction (the BAAQMD threshold identified for operations-related GHG emissions is 1,100 MT
Attachment 3
Ascent Environmental Addendum to the Environmental Impact Report
Midpeninsula Regional Open Space District
Mount Umunhum Environmental Restoration and Public Access Project 13
CO 2 e/year). The proposed project modifications would result in an increase of approximately 35 MT
CO 2 e/year over the construction period, which constitutes a 5 percent increase from the level of GHG
emissions evaluated in the 2012 EIR for construction, bringing the total GHG emissions for the construction
period to 706 MT CO 2 e/year. The proposed project modifications would not result in any new long-term
operational related vehicle trips. Construction would occur over a finite period of time after which all
construction‐related GHG emissions would cease, and the construction phase would not be the dominant
source of GHG emissions from the project. The proposed project modifications would not result in new or
more severe impacts because the proposed land uses remain fundamentally the same and there would not
be any addition of long-term operational traffic (the primary generator of mobile source greenhouse gas
emissions), and the additional construction-related GHG emissions are not a considerable amount.
HAZARDS AND HAZARDOUS MATERIALS
The 2012 EIR identified a significant impact related to exposure to existing hazardous materials, including
asbestos in soil near old structures and pesticides above acceptable levels. These impacts would be
reduced to a less-than-significant impact with implementation of Mitigation Measures 4.6-1 (i.e. prepare a
focused pesticide soil testing and remediation program) of the Draft EIR (MROSD 2011: p.4.6-12). The 2012
EIR identified less-than-significant impacts associated with exposure to hazardous materials during project
construction, use or transport of hazardous materials during project operations, potential hazards from
interference with emergency response, and exposure of people or structures to wildland fires.
The proposed project modifications would not alter the area of disturbance that was analyzed in the 2012
EIR. Mitigation Measure 4.6-1 of the EIR requires focused soil testing and a remediation plan within the
former Almaden AFS. Implementation of Mitigation Measure 4.6-1 would reduce potential for human
exposure to any existing hazardous materials contamination that may be encountered within the former
Almaden AFS as a result of the proposed project modifications. Therefore, the proposed modifications to the
project would not result in new or more severe impacts
HYDROLOGY AND WATER QUALITY
The 2012 EIR identified potentially significant impacts related to potential short-term construction-related
soil erosion and water quality impairment and water quality impacts. These impacts would be reduced to a
less-than-significant impact with implementation of Mitigation Measures 4.4-1 and 4.4-3 of the EIR (Draft
EIR, pp. 4.4-9 through 4.4-11). The 2012 EIR identified a less-than-significant impact associated with
stormwater impacts (i.e., erosion, siltation, or flooding of on- or off-site areas).
The proposed modifications would result in additional excavation associated with installation of the retaining
walls and the construction activities on the Mount Umunhum Summit. Although unlikely, these activities
could result in potential short-term construction-related soil erosion and water quality impairment. Prior to
earth-moving activities, Mitigation Measure 4.4-1 of the EIR requires consultation with the San Francisco Bay
Basin Regional Water Quality Control Board to acquire appropriate regulatory approvals (ex. Section 401
water quality certification, NPDES stormwater permit for general construction activities, and any other
necessary site-specific waste discharge requirements), preparation of a stormwater pollution prevention
plan, and implementation of best management practices to avoid construction-related erosion and water
quality impairment. Mitigation Measure 4.3-3 of the 2012 EIR requires avoidance and minimization
measures related to construction that requires removal of riparian and wetland vegetation or placement of
fill material into waters of the U.S. Because proposed project modifications would occur within previously
disturbed areas and not within any wetlands, removal of riparian vegetation or impacts to waters of the U.S.
would not occur. Implementation of Mitigation Measure 4.4-1 would reduce potential construction-related
erosion and water quality impairment resulting from proposed project modifications to a less-than-significant
level.
Attachment 3
Ascent Environmental Addendum to the Environmental Impact Report
Midpeninsula Regional Open Space District
14 Mount Umunhum Environmental Restoration and Public Access Project
LAND USE AND PLANNING
As discussed in Chapter 1 of the Draft EIR (Draft EIR, p.1-5), land use and planning impacts would occur if
the project would physically divide an established community (example: a freeway dividing a populated
residential community), if it would conflict with a land use policy adopted for the purpose of avoiding an
environmental impact, or if it would conflict with an applicable habitat conservation plan or natural
community conservation plan. Regarding land use policies, each section of the 2012 EIR addresses the
potential for conflicts between the project and relevant plans adopted for the purpose of avoiding
environmental impacts.
The project site was a former air force station consisting of abandoned radar facility structures, other
operational buildings, personnel housing and support facilities. The air force station was decommissioned in
1980 and since that time has not been used or populated. All buildings and structures have since been
demolished with the exception of the 83-foot tall by 63-foot wide base of the former radar sail, which was
removed by the military at the time of decommissioning.
The approved project and the proposed modifications (i.e., installation of retaining walls and construction
excavation and haul modifications) are located on the same project site, which is located in a sparsely
populated area. Therefore, the project would not divide an established community. Although the Sierra Azul
Open Space Preserve abuts the Santa Clara Valley Habitat Plan, a Habitat Conservation Plan and Natural
Community Conservation Plan, the project site is not included within the boundaries of the HCP or any other
habitat conservation or natural community conservation plans, and therefore would not conflict with any
such plans. The proposed project modifications would not alter the approved land use type or intensity;
therefore; similar to the project analyzed in the 2012 EIR, the proposed project modifications would have no
impact on land use.
MINERAL RESOURCES
As discussed in Chapter 1 of the Draft EIR (Draft EIR, p.1-5), the site does not have any known economic
mineral resources. Therefore, the proposed project modifications are not anticipated to alter the availability
of any economic mineral resources. As discussed in the 2012 EIR, the project would have no impact on
mineral resources and the project modifications do not alter this conclusion.
NOISE
The EIR determined that all project-related noise impacts would be less than significant, including the long-
term exposure of existing sensitive receptors to operational-related increases in stationary-source noise, and
traffic noise, and groundborne vibration. The EIR also determined that short-term exposure of existing
sensitive receptors to construction-generated noise and vibration would be less than significant.
The proposed project modifications would result in additional truck haul trips, as described in Section 3.2,
Construction Excavation and Haul Modifications. Noise emission levels from dump trucks range from 74 to
81 dBA at 50 feet (FTA 2006). As described in the 2012 EIR, the nearest sensitive receptor to Phase 2
construction activity would be approximately 400 feet away from the haul route that trucks would use
(located north of Mt Umunhum Road; see Exhibit 2 for location). At this distance, based on standard
attenuation rates for vegetated areas, the level of truck noise at the receptor would range from 53 to 60
dBA. As described in the 2012 EIR, the construction activities associated with the proposed project
modifications would be limited to the less noise sensitive hours of the day (7:00 am to 7:00 pm). A
maximum of 50 total truck trips would take place at the peak of Phase 2 construction if the proposed project
modifications were included. The truck trips would be spread throughout the day (7:00 am to 7:00 pm),
equating to approximately eight to ten trips per hour.
Attachment 3
Ascent Environmental Addendum to the Environmental Impact Report
Midpeninsula Regional Open Space District
Mount Umunhum Environmental Restoration and Public Access Project 15
Any noise or ground vibration produced by construction equipment associated with proposed project
modifications would be minor, of short duration, intermittent, and consistent with the 2012 EIR conclusions
(i.e., less-than-significant). For these reasons, the proposed modifications would not result in new or
substantially more severe noise impacts. Because of the 400-foot (minimum) distance of a sensitive
receptors from Mt. Umunhum Road and the private road that leads to Mount Thayer in this sparsely-
populated area, the proposed addition of up to an average of ten (10) new material haul trips per hour on
these roads would not result in a consequential change to traffic source noise levels. Construction and
operation of proposed project modifications would not result in the exposure of off-site receptors to noise
levels in excess of applicable standards. For these reasons, the proposed modifications would not result in
new or more severe noise impacts.
POPULATION AND HOUSING
As discussed in Chapter 1 of the 2012 EIR (Draft EIR, p.1-5), no elements of the project would alter
population growth. The project would not extend urban infrastructure into an unserved area; therefore, it
would not induce population growth. Further, although the project would remove housing from the site, this
housing was dedicated to military uses and was long ago abandoned and is remote from any public services
needed to serve a housing development.
The proposed project modifications include installation of retaining walls and construction excavation and
haul modifications. Similar to the approved project, the proposed project modifications would not
necessitate the construction of replacement housing and would result in no impact related to population and
housing.
SERVICES
The 2012 EIR identified less-than-significant impacts associated with increased demand for fire protection,
emergency medical services, and law enforcement.
The construction phase and activities associated with the proposed project modifications would require the
preparation of a Traffic Control Plan conforming to the applicable requirements of the County of Santa Clara
and the California Manual of Uniform Traffic Control Devices (CA MUTCD), 2014 Edition, and is required to
be submitted and approved by the MROSD. Consistent with County policy, the Traffic Control Plan would
ensure that construction activities associated with the proposed project modifications would not block public
service vehicle access within the site and would minimize disruption of response times or other public
service standards. Consistent with Impact 4.11-1 of the approved EIR, the project would ensure appropriate
emergency vehicle access.
Fire protection/first response and law enforcement staff access would be maintained at all times to ensure
minimization of any delays related to emergency response times during project construction. Thus, changes
to the proposed project (i.e., installation of retaining walls and construction excavation and haul
modifications) since the time of prior environmental review would not result in new or more severe impacts
to public services.
As discussed in Chapter 1 of the Draft EIR (Draft EIR, p.1-5), the approved project would not adversely affect
park and/or open space preserve services; to the contrary, the project itself expands park and/or open
space preserve services to the region and would marginally reduce pressure on other parks and open space
preserves to the degree the project provides an alternative to other regional recreation. The project also
would have no effects on schools because the expansion of parks and open space preserve services at the
site would not bring a new residential population to the area and would therefore not affect school capacity.
The proposed project modifications would not affect this conclusion.
Attachment 3
Ascent Environmental Addendum to the Environmental Impact Report
Midpeninsula Regional Open Space District
16 Mount Umunhum Environmental Restoration and Public Access Project
RECREATION
As discussed in Chapter 1 of the 2012 EIR (Draft EIR, p.1-5), the project would provide a new recreational
facility that includes new trails and day use visitor amenities at the Summit. The proposed project
modifications include the installation of retaining walls and construction excavation and haul modifications
as part of the overall project providing a new recreational facility. All proposed project modifications would
occur during the construction phase of the project. Thus, the proposed project modifications would not
obstruct recreational activities within the preserve or result in any increased demand for recreation, thus,
resulting in no impact to recreation.
TRAFFIC AND CIRCULATION
The 2012 EIR identified significant or potentially significant impacts related to construction traffic. These
impacts would be reduced to a less-than-significant impact with implementation of Mitigation Measure 4.10-
1 of the EIR (Draft EIR, pp. 4.10-17 through 4.10-18). The 2012 EIR identified less-than-significant impacts
associated with roadway level of service, cumulative roadway level of service (year 2020), public transit,
bicycle or pedestrian facility effects, guardrails and reduced possibility of vehicle diversion from travel lanes,
and roadway and drainage ongoing maintenance.
The 2012 EIR identified the demolition phase (three to six months duration) as the most traffic‐intensive
phase of construction, which would involve up to 60 worker trips inbound to the site each morning and
outbound from the site each late afternoon (each‐way) and 20 two‐way truck trips per day (20 inbound and
20 outbound). A total of approximately 1,100 additional two-way truck trips would be required during Phase
2 of construction to haul the additional material. The additional truck haul trips would be spread over four to
six months which would equate to an average of approximately 12 additional truck trips per day. Similar to
the peak construction phase, the additional material haul trips associated with proposed project
modifications would be temporary in nature and would be spread throughout the workday. Therefore, the
demolition phase would remain as the worst-case, or peak construction period, and the level of service
analysis for construction traffic in 2012 EIR would not be affected by the proposed project modifications.
Construction activities associated with the proposed modifications would increase the construction traffic
described and analyzed in the 2012 EIR. Mitigation Measure 4.10-1 of the EIR requires implementation of
measures that improve roadway conditions and operation during and after construction. Additionally,
construction activities associated with the installation of the gabion retaining walls could potentially require
the closing of one lane of traffic along Mt. Umunhum Road for a limited period of time, which could result in
temporary traffic delays for two residences above this location on Loma Almaden Road who use Mt.
Umunhum Road to access their private property. Consistent with applicable requirements of the County of
Santa Clara, and the California Manual of Uniform Traffic Control Devices (CA MUTCD), a Traffic Control Plan
would be completed and submitted to the MROSD for approval. Thus, the addition of traffic on the private
road or the temporary lane closure would not substantially affect the traffic analysis performed in the 2012
EIR. This would constitute a less-than-significant impact related to traffic and circulation.
UTILITIES & SERVICE SYSTEMS
As discussed in Chapter 1 of the Draft EIR (Draft EIR, p.1-5), the approved project would not adversely affect
utilities. All typical utilities would be self-contained. No substantial wastewater would be created; vault toilets
would be used, with the septage cleaned out regularly by MROSD staff or private service providers and
disposed at an approved facility. Water use would be insubstantial, and nonpotable water would occasionally
be purchased either from a municipality and transported to the summit, or purchased locally from a
neighboring landowner at the summit and hauled a short distance to the storage tank. Water is intended
primarily for on-site use but could be utilized for wildland fire suppression as appropriate. Regarding storm
Attachment 3
Ascent Environmental Addendum to the Environmental Impact Report
Midpeninsula Regional Open Space District
Mount Umunhum Environmental Restoration and Public Access Project 17
drainage, the site would be recontoured to its natural form where feasible, and no increase in storm
drainage would be expected. Further, because the site would be cleared of debris and dilapidated buildings,
runoff quality would improve.
The proposed project modifications include installation of retaining walls and construction excavation and
haul modifications which would not affect utilities or service systems.
CONCLUSION
The proposed addition of gabion retaining walls in three separate locations along Mt. Umunhum Road and
the proposed construction excavation and haul modifications would not alter any of the conclusions of the
2012 EIR. No new significant environmental effects or a substantial increase in the severity of previously
identified significant effects would result. The additions also would not affect any of the mitigation
measures, including their feasibility or implementation. As mentioned above, none of the conditions listed in
section 15162 of the CEQA Guidelines exist for the project modification described herein. Therefore,
pursuant to section 15164 of the CEQA Guidelines, the differences between the approved project described
in the 2012 EIR and the modification of the project as currently proposed and described in this addendum
are minor and this addendum provides sufficient environmental documentation.
REFERENCES
Department of Conservation. 2010. Santa Clara County Important Farmland 2010. Available:
ftp://ftp.consrv.ca.gov/pub/dlrp/FMMP/pdf/2010/scl10.pdf. Accessed July 24, 2015.
Federal Transit Administration. 2006. Transit Noise and Vibration Impact Assessment.
Sacramento Metropolitan Air Quality Management District. 2016b (June). Road Construction Emissions Model
Version 8.1.0. Available: http://www.airquality.org/ceqa.
Attachment 3
Resolutions/2015/15-__Mt. Um EIR Addendum 1
RESOLUTION NO. 15-__
RESOLUTION OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA
REGIONAL OPEN SPACE DISTRICT APPROVING AN ADDENDUM TO THE
CERTIFIED FINAL ENVIRONMENTAL IMPACT REPORT FOR THE MOUNT
UMUNHUM ENVIRONMENTAL RESTORATION AND PUBLIC ACCESS PROJECT
WHEREAS, pursuant to the California Environmental Quality Act (Public Resources
Code § 21000 et seq.) (“CEQA”), the Midpeninsula Regional Open Space District (the
“District”) is the lead agency for environmental review of the Mount Umunhum Environmental
Restoration and Public Access Project (the “Project”); and
WHEREAS, on June 12, 2012, the Board of Directors of the District (the “Board”)
certified the Final Environmental Impact Report (“EIR ” or “2012 EIR”) for the Project by
approving Resolution No. 12-24, which certification was supported by findings of fact and
approval of a Mitigation Monitoring Plan; and
WHEREAS, on October 17, 2012, the Board adopted Resolution No. 12-40 approving
the Project as described in the 2012 EIR, with the exception of an option for the radar tower,
which was deferred for five years, pending the outcome of community efforts to preserve it; and
WHEREAS, subsequent to the certification of the 2012 EIR and approval of the Project,
the District identified certain minor modifications to the Project, including but not limited to
installation of gates and fencing and acquiring a road access easement to Mount Thayer (the
“Modifications”); and on December 9, 2015, the Board adopted Resolution No. 15-59 approving
the First Addendum to the 2012 EIR and these minor project modifications; and
WHEREAS, subsequent to the certification of the 2012 EIR and approval of the Project,
the District identified certain minor modifications to the Project, including but not limited to
transport of soil material and installation of gabion retaining walls (the “Project Modifications”);
and
WHEREAS, the Project Modifications are desirable to the District because they will: 1)
enhance the District’s ability to fulfill the goal of the Project, which is to establish a fiscally and
environmentally sustainable visitor destination that aligns with the District’s mission by
balancing public access, enjoyment and education with environmental restoration; and 2) allow
reuse of existing native soil material onsite for a previously-identified restoration component of
the Project rather than generate unnecessary truck traffic on the Santa Clara County-maintained
Hicks Road in order to dispose of the same material at greater cost; and
WHEREAS, the District has prepared an Addendum to the 2012 EIR in accordance with
CEQA section 21166 and CEQA Guidelines section 15164 to describe the Modifications,
attached hereto as Exhibit A (the “Addendum”); and
Attachment 4
Resolutions/2015/15-__Mt. Um EIR Addendum 2
WHEREAS, the Project Modifications constitute minor technical changes and would not
alter any of the conclusions, or result in new significant impacts to the environment, there is no
substantial increase in the severity of previously identified significant impacts, and no new
mitigation measures are required.
NOW, THEREFORE, BE IT RESOLVED AND APPROVED by the Board of Directors as
follows:
1. The Second Addendum to the 2012 EIR fully describes the proposed minor
changes to the Project and has been prepared in compliance with CEQA (Cal.
Public Resources Code section 21000 et seq.) and the CEQA Guidelines (Cal.
Code of Regs. section 15000 et seq.)
2. The Second Addendum reflects the Board of Directors’ independent judgment
and analysis.
3. In accordance with CEQA Guidelines section 15164, the Second Addendum,
considered together with the 2012 EIR, the First Addendum, and the MMP,
adequately addresses the potential environmental impacts associated with the
Project Modifications.
4. The documents and other materials constituting the administrative record of the
proceedings upon which the Board’s decision is based are located at the
Midpeninsula Regional Open Space District, Administration Office, 330 Distel
Circle, Los Altos, CA 94022.
5. The Second Addendum is hereby approved by the Board and shall be considered
a part of the District’s environmental review of the Project.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
PASSED AND ADOPTED by the Board of Directors of the Midpeninsula Regional
Open Space District on August 10, 2016, at a Regular Meeting thereof, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST: APPROVED:
Secretary
Board of Directors
President
Board of Directors
APPROVED AS TO FORM:
General Counsel
Attachment 4
Resolutions/2015/15-__Mt. Um EIR Addendum 3
I, the District Clerk of the Midpeninsula Regional Open Space District, hereby certify
that the above is a true and correct copy of a resolution duly adopted by the Board of Directors
of the Midpeninsula Regional Open Space District by the above vote at a meeting thereof duly
held and called on the above day.
District Clerk
Exhibit A: Second Addendum to the Final 2012 EIR
Attachment 4
R-16-97
Meeting 16-18
August 10, 2016
AGENDA ITEM 7
AGENDA ITEM
Resolution Authorizing the Issuance of a Series 2016 Green Bonds and Approving Related
Documents and Associated Actions.
GENERAL MANAGER AND CONTROLLER’S RECOMMENDATION
Adopt a Resolution authorizing issuance of not to exceed $68 million in Midpeninsula Regional
Open Space District Green Bonds, 2016 Refunding (the “2016 Green Bonds”); approving the
related forms and execution of an indenture, a bond purchase agreement, an escrow agreement,
and a continuing disclosure agreement; approving form of and distribution of an official
statement for said refunding bonds; and authorizing taking of necessary and incidental actions,
and documents and certificates.
SUMMARY
The Resolution authorizes the District to issue and sell, by negotiated sale, not to exceed $68
million in 2016 Green Bonds, and approves the Indenture, Official Statement, Escrow
Agreement, Continuing Disclosure Agreement, and the Bond Purchase Agreement with Morgan
Stanley as underwriter. The purpose of the 2016 Green Bonds is to refinance the Financing
Authority’s 2007 Series A Revenue Refunding Bonds and the callable portion of the 2011
Revenue Bonds (together “Prior Bonds”), in order to take advantage of today’s very low interest
rates and achieve significant debt service savings.
DISCUSSION
In 2007, the District sold its 2007 Refunding Promissory Notes (the “2007 Notes”) to the
Midpeninsula Regional Open Space District Financing Authority (the “Authority”), and the
Authority issued its 2007 Series A Refunding Bonds (the “2007 Authority Bonds”), which were
limited obligations of the Authority, payable only from amounts received from the 2007 Notes.
In 2011, the District entered into a Lease Agreement with the Authority, under which the
Authority leased certain property to the District, and the District agreed to make semiannual
lease payments to the Authority (the “Lease Payments”). The Authority then issued its 2011
Revenue Bonds (the “2011 Authority Bonds,” and, together with the 2007 Authority Bonds, the
“Authority Bonds”), which were limited obligations of the Authority payable only from the
Lease Payments.
By refinancing its 2007 Notes and prepaying a portion of the amounts due under the 2011 Lease
Agreement, the District can refinance its obligations at lower interest rates, and achieve
significant savings.
R-16-97 Page 2
Interest rates for municipal bonds have fallen to near historic lows, providing an opportunity to
achieve significant savings on future debt service. The following table summarizes the
estimated transaction size, total debt service savings, and overall present value savings.
Estimated Savings from 2016 Green Bond Refunding *
Series Refunding of 2007
Revenue Bonds
Refunding of 2011
Revenue Bonds Total
Outstanding Par $ 47,300,000 $ 20,290,000 $67,590,000
Refunding Par $ 37,840,000 $ 19,535,000 $ 57,375,000
Estimated All-in TIC ** 1.45% 2.70% 2.11%
Gross Cashflow Savings $ 9,066,354 $ 6,564,882 $ 15,631,236
Average Annual Cashflow
Savings***
$ 824,214 $ 262,595 $ 625,249
Net PV Savings $ 8,442,311 $ 4,130,684 $ 12,572,995
PV savings as % of Refunded
Par
19.16% 21.64% 19.91%
* The above illustrations for the refunding par amounts, TIC and debt service savings are all
estimated based on market conditions as of August 1, 2016 as provided by Morgan Stanley.
The final numbers at Bond Closing will likely to be different. In the Board Resolution, the
Board authorizes the issuance of the 2016 Green Bonds only if the present value of the debt
service savings shall be at least 10% of the Prior Bonds.
** True Interest Cost (TIC)
*** The Total for the Average Annual Cashflow Savings is a weighted average of the refunding
savings for the 2007 bonds and the 2011 bonds, and not a sum of the two averages.
As part of the bond sale, the District and its Underwriter will focus on marketing the Bonds to
local retail buyers. Local buyers, including residents of the District and users of the District’s
preserves, can create greater competition for the Bonds and enhance the overall sale. To target
these buyers, the District will engage in an outreach effort which can include print and digital
advertising in the Mercury News, San Mateo Daily Journal, and Almanac News, highlighting the
sale in the District’s E-Newsletter and on the District’s website, a conference call with local
retail brokers to share the District’s credit strengths and financing structure and providing
priority to ensure that local buyers who place orders will receive bonds.
The bonds will be marketed to investors as “Green Bonds”, a designation that conveys to
potential investors that the bond was originally issued for environmentally-beneficial purposes.
The Green Bond designation can enhance retail outreach to specifically target those buyers who
support socially responsible investing and green initiatives. The level of retail participation can
vary and depends on economic and market conditions at the time of sale.
Green Bonds are relatively new in the municipal bond market and have been sold to finance
projects including open space preservation, clean water, renewable energy, energy efficiency,
LEED certified facilities, mass transit and other projects intended to address climate change and
environmental preservation. Green Bonds can potentially expand the District’s investor base to
bond funds that specifically invest in green projects, as well as local investors who are more
likely to invest in socially responsible initiatives. The Green Bond designation will be used as
part of the marketing efforts by the District and Underwriter including in the Official Statement,
R-16-97 Page 3
investor presentation, on the District’s website, monthly newsletter, and in any local advertising
to raise awareness for the bond sale.
The District is seeking bond ratings from Standard & Poor’s and Fitch. The rating agencies have
indicated that they will be able to release their ratings on the 2016 Green Bonds by August 18,
2016.
If approved by the Board, the schedule is to distribute the Preliminary Official Statement on or
about August 29, 2016 and price the bonds in the beginning of September with transaction
closing around mid-September. The proposed issue improves the District’s long-term financial
plan and will not affect the District’s statutory debt limit as total debt outstanding after the
refunding will remain the same or decline slightly. After the proposed sale, District’s total
indebtedness (excluding the Measure AA GO Bonds) would be about 52% of the District’s
statutory debt limit based on the current projection of tax revenues for the next five fiscal years
(FYs 2017 thru 2021).
SUMMARY OF THE PROPOSED TRANSACTION:
1. Amount: Par value of $57.375 million
2. Term: Twenty-five years
3. Average Life: 9.10 years
4. Purpose: Refinance the Prior Bonds to reduce future debt service payments;
projected net reduction of debt service of about $15 million
5. Interest Rates: Estimated true interest cost of 2.10% to 2.50%
6. Reserve Fund: None
7. Underwriting Fee: Not to exceed 0.45% of par amount of amount issued
8. Other Costs of Issuance: Estimated at $290,000
9. Closing Schedule: Price by early September, Close by mid-September
PARTIES TO THE TRANSACTION:
1. Issuer: Midpeninsula Regional Open Space District
2. Trustee: Zions Bank
3. Escrow Agent: BNY Mellon
4. Underwriter: Morgan Stanley
5. Bond Counsel: Orrick Herrington & Sutcliffe
6. Disclosure Counsel: Schiff-Hardin
7. Financial Adviser: Backstrom McCarley Berry
DUTIES OF THE PARTIES:
1. Issuer: Issues bonds, makes principal and interest payments
2. Trustee: Administers bonds for the benefit of the holders, collects
principal and interest from the District, makes bond payments to
to holders
3. Escrow Agent: Hold the defeasance securities, make principal and interest
payments on the defeased 2011 Bonds prior to call date; and
redeems the 2011 Bonds
R-16-97 Page 4
4. Underwriter: Purchases bonds from the District and sells them to investors in the
capital market
5. Bond Counsel: Prepares bond documents, opines on the bonds’ validity; assures
buyers of the tax-exempt status of the bonds
6. Disclosure Counsel: Drafts District Official Statement and advises on compliance
with federal securities laws
7. Financial Advisor: Verify fair pricing on the bonds; verify bond purchase price
THE DISTRICT’S DISCLOSURE OBLIGATIONS
The attached Preliminary Official Statement has been reviewed and approved for transmittal to
the Board of Directors by staff and the District’s financing team. The distribution of the
Preliminary Official Statement by the District is subject to federal securities laws, including the
Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require the
Preliminary Official Statement to include all facts that would be material to an investor in the
2016 Green Bonds. Material information is information that there is a substantial likelihood that
it would have actual significance in the deliberations of the reasonable investor when deciding
whether to buy or sell the 2016 Green Bonds.
The Securities and Exchange Commission (the “SEC”), the agency with regulatory authority
over the District’s compliance with the federal securities laws, has issued guidance as to the
duties of the Board of Directors with respect to its approval of the Preliminary Official Statement.
In its “Report of Investigation in the Matter of County of Orange, California as it Relates to the
Conduct of the Members of the Board of Supervisors” (Release No. 36761 / January 24, 1996)
(the “Release”), the SEC stated that, if a member of the Board has knowledge of any facts or
circumstances that an investor would want to know about prior to investing in the issuer’s bonds
being marketed with the Preliminary Official Statement, whether relating to their repayment, tax-
exempt status, undisclosed conflicts of interest with interested parties, or otherwise, he or she
should endeavor to discover whether such facts are adequately disclosed in the Preliminary
Official Statement. In the Release, the SEC stated that the steps that a member of the Board
could take include becoming familiar with the Preliminary Official Statement and questioning
staff and consultants about the disclosure of such facts.
MAIN AGREEMENTS:
Note that the attached documents are substantively complete but are officially in Draft form until
the sale is completed.
1. Indenture – Document governing terms of bonds.
2. Bond Purchase Agreement – document by which Green Bonds are sold to Morgan
Stanley as Underwriter.
3. Escrow Agreement – Agreement by which Green Bond proceeds are held in trust for
payment of 2011 Lease Agreement and 2011 Authority Bonds until the redemption date
of September 1, 2021.
4. Continuing Disclosure Certificate – Document by which District agrees to provide certain
information to the market.
5. Preliminary Official Statement – Describes Green Bonds and the District to potential
investors.
R-16-97 Page 5
FISCAL IMPACT
Sale of the proposed 2016 Green Bonds will reduce overall District debt service payments by
approximately $15 million over the next twenty-five years. The proposed sale is consistent with,
and, in fact, improves, the District’s long-term financial model.
BOARD COMMITTEE REVIEW
The sale of the proposed 2016 Green Bonds was not reviewed by committee. The Midpeninsula
Regional Open Space District Financing Authority will meet to authorize the optional
redemption of the Authority Bonds and approve the form of escrow agreement on August 10,
2016, and other matters in connection with this transaction.
PUBLIC NOTICE
Notice was provided pursuant to the Brown Act. No additional notice is necessary.
CEQA COMPLIANCE
No compliance is required as this action is not a project under CEQA.
NEXT STEPS
If approved by the Board, staff will proceed with finalization of the documents and sell the 2016
Green Bonds. Within a month of closing of the transaction, a post-sale evaluation report will be
brought to the Board.
Attachments:
1. 2016 Green Bond Resolution authorizing issuance of not to exceed $68 million of the
Midpeninsula Regional Open Space District Green Bonds, 2016 Refunding (the “2016 Green
Bonds”); approving forms and execution of an indenture, a bond purchase agreement, an
escrow agreement, and a continuing disclosure agreement; approving form of and
distribution of an official statement for said refunding bonds; and authorizing taking of
necessary and incidental actions, and documents and certificates.
2. 2016 Green Bonds Indenture
3. 2016 Green Bonds Escrow Agreement
4. 2016 Green Bonds Continuing Disclosure Certificate
5. 2016 Green Bonds Preliminary Official Statement (POS)
6. Bond Purchase Agreement
Responsible Manager:
Stefan Jaskulak, Chief Financial Officer
Prepared by:
Lisa Tulee, Senior Management Analyst
Contact Person:
Stefan Jaskulak, Chief Financial Officer
OHSUSA:765404851.9
RESOLUTION NO. 16-____
A RESOLUTION AUTHORIZING ISSUANCE OF NOT TO EXCEED $68,000,000 OF
REFUNDING BONDS; APPROVING FORMS AND EXECUTION OF AN INDENTURE,
A PURCHASE CONTRACT, AN ESCROW AGREEMENT, AND A CONTINUING
DISCLOSURE AGREEMENT; APPROVING FORM OF AND DISTRIBUTION OF AN
OFFICIAL STATEMENT FOR SAID REFUNDING BONDS; AND AUTHORIZING
TAKING OF NECESSARY AND INCIDENTAL ACTIONS, AND DOCUMENTS AND
CERTIFICATES.
WHEREAS, the Midpeninsula Regional Open Space District (the “District”) has
heretofore issued certain outstanding 2007 Refunding Promissory Notes (the “2007 Notes”) in
order to perform a refinancing of certain prior District obligations (the “2007 Refunding”);
WHEREAS, in order to assist the District with the 2007 Refunding, the
Midpeninsula Regional Open Space District Financing Authority (the “Authority”) has
heretofore issued its 2007 Series A Revenue Refunding Bonds (1996 and 1999 Refinancing
Project) (the “2007 Authority Bonds”) and used the proceeds of such bonds to acquire the 2007
Notes;
WHEREAS the payment of the District’s 2007 Notes secures the Authority’s
outstanding 2007 Authority Bonds;
WHEREAS, the District has heretofore entered into a Site Lease, dated May 1,
2011, by and between the District and the Authority (the “Site Lease”), under which the District
leased certain property of the District (the “Leased Property”) to the Authority in consideration
of payment by the Authority of an upfront rental payment (the “Site Lease Payment”);
WHEREAS, for the purpose of providing the funds to enable the Authority to pay
the Site Lease Payment to the District in accordance with the Site Lease, the Authority has
heretofore issued its 2011 Revenue Bonds (the “2011 Authority Bonds,” and, together with the
2007 Authority Bonds, the “Authority Bonds”);
WHEREAS, in order to secure the payments of principal of and interest on the
2011 Authority Bonds, the Authority has heretofore entered into a Lease Agreement, dated as of
May 1, 2011, by and between the District and the Authority (the “Lease Agreement”), under
which the Authority agreed to lease the Leased Property back to the District and the District is
obligated to pay semiannual lease payments (the “Lease Payments”) as rental for the Leased
Property;
WHEREAS, the Authority has assigned its right to receive the Lease Payments to
The Bank of New York Mellon Trust Company, N.A., as Trustee (the “2011 Trustee”) as
security and the source of payment for the 2011 Authority Bonds;
Attachment 1
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OHSUSA:765404851.9
WHEREAS, the outstanding 2007 Authority Bonds are subject to optional
redemption on September 1, 2016 and on any date thereafter, and the outstanding 2011 Authority
Bonds maturing on and after September 1, 2022 are subject to optional redemption on September
1, 2021 and on any date thereafter;
WHEREAS, the District has determined that it is in the best interests of the
District and is necessary and proper for District purposes that the District issue its Midpeninsula
Regional Open Space District Green Bonds, 2016 Refunding (the “2016 Green Bonds”) to
refund its outstanding obligations under the 2007 Notes and thereby direct the Authority to
redeem the 2007 Authority Bonds, and to prepay a portion of its obligations under the Lease
Agreement and thereby cause the redemption of the portion of the 2011 Authority Bonds subject
to optional redemption (such callable 2011 Authority Bonds, together with the outstanding 2007
Authority Bonds, the “Prior Bonds”);
WHEREAS, the District is designating the 2016 Green Bonds as “Green Bonds”
to allow investors to invest directly in bonds that finance environmentally beneficial projects, as
the proceeds of the bonds will be used to refinance the acquisition and preservation of properties
that have been dedicated for open space purposes;
WHEREAS, the District acquires and preserves, or returns to its natural state,
such lands for scenic beauty and enjoyment, the protection of natural vegetation, wildlife and
agriculture, and establishes boundaries for urban growth and enhances quality of life, recreation
in nature and educational opportunities through the creation of a regional greenbelt;
WHEREAS, the District has determined that open space protects and restores the
natural environment and promotes healthier living by providing opportunities for ecologically
sensitive public enjoyment and education;
WHEREAS, the District is authorized by law to issue refunding revenue bonds to
refinance any bonds, notes or other evidences of indebtedness of the District;
WHEREAS, this Board is authorized, and now wishes, to issue the 2016 Green
Bonds as refunding bonds pursuant to Article 3 of Chapter 3 of Division 5 of the Public
Resources Code (the “District Act”), and all laws amendatory thereof or supplemental thereto,
including Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government
Code of the State of California (together with the District Act, the “Law”), to redeem all or a
portion of the outstanding 2007 Notes (the refunded portion of the 2007 Notes, the “Prior
Notes”), and to prepay a portion of its obligations under the Lease Agreement (such obligations
the “Prior Lease Obligations,” and, together with the Prior Notes, the “Prior Obligations”) and
thereby to cause the redemption of the Prior Bonds;
WHEREAS, this Board acknowledges that refinancing any of the Prior Bonds
more than 90 days in advance of the date of redemption thereof shall preclude any tax-exempt
advance refunding of the portion of bonds issued for such purpose;
WHEREAS, this Board has been presented with forms of:
Attachment 1
3
OHSUSA:765404851.9
•an Indenture by and between the District and Zions Bank, a
division of ZB, National Association;
•an Escrow Agreement by and between the District, the Authority
and The Bank of New York Mellon Trust Company, N.A.;
•a Continuing Disclosure Certificate;
•a Bond Purchase Agreement (the “Purchase Contract”) by and
between the District and Morgan Stanley & Co., LLC. (the
“Underwriter”); and
•a Preliminary Official Statement;
WHEREAS, Backstrom McCarley Berry & Co., LLC shall serve as the Financial
Advisor to the District;
WHEREAS, Orrick, Herrington & Sutcliffe, LLP shall serve as Bond Counsel to
the District, and Schiff Hardin LLP shall serve as Disclosure Counsel to the District;
WHEREAS, the Board has examined and approved each document presented to
it and desires to authorize and direct the execution and delivery of such documents and the
consummation of the financing contemplated herein and therein; and
WHEREAS, the District has full legal right, power and authority under the
Constitution and the laws of the State of California to enter into the transactions hereinafter
authorized;
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the
Midpeninsula Regional Open Space District, as follows:
Section 1.The District hereby specifically finds and declares that the actions
authorized hereby constitute and are with respect to public affairs of the District and that the
statements, findings and determinations of the District set forth above are true and correct.
Section 2.The District hereby authorizes the issuance and sale, by negotiated
sale, of not to exceed $68,000,000 aggregate principal amount of 2016 Green Bonds. The
District has chosen to sell the 2016 Green Bonds by negotiated sale in order to provide greater
flexibility in the timing of the sale, to provide more opportunity to optimize the structure of the
issue, and to achieve greater interest cost savings. The 2016 Green Bonds may be issued in one
or more series or subseries and shall be designated the “Midpeninsula Regional Open Space
District Green Bonds, 2016 Refunding” with such additional designations as the General
Manager or his written designee, the Controller, or the Chief Financial Officer / Director of
Administrative Services, (each an “Authorized Officer”) may deem necessary or desirable.
Section 3.The form of Indenture by and between the District and Zions Bank,
a division of ZB, National Association, as Trustee (the “Trustee”), on file with the District Clerk
of the Board (the “Clerk”), is hereby approved and the Authorized Officers are hereby severally
Attachment 1
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OHSUSA:765404851.9
authorized and directed to execute and deliver the Indenture in substantially said form, with such
changes therein as such officers may require or approve, such approval to be conclusively
evidenced by the execution and delivery thereof.
Section 4.The form of Purchase Contract by and between the Underwriter
and the District on file with the Clerk, is hereby approved. The Authorized Officers are hereby
severally authorized and directed to execute and deliver the Purchase Contract in substantially
said form, with such changes therein as such officer may require or approve, such approval to be
conclusively evidenced by the execution and delivery thereof and pursuant thereto to sell the
2016 Green Bonds to the Underwriter for the purchase price set forth in the Purchase Contract,
provided that said price to be not less than the principal amount of the 2016 Green Bonds less an
underwriting discount which shall not exceed 0.45% (exclusive of any original issue discount) of
the principal amount of the 2016 Green Bonds (which this Board hereby determines reflects an
underwriter’s spread that is both reasonable and customary under the prevailing market
conditions), the present value of the debt service savings with respect to the Prior Bonds shall be
at least 10% of the aggregate principal amount of such Prior Bonds, no 2016 Green Bond shall
mature later than September 1, 2041, no 2016 Green Bond shall bear interest at a rate greater
than 6% per annum, and the true interest cost of the 2016 Green Bonds shall not exceed 4.00%.
Section 5.The form of Official Statement describing the 2016 Green Bonds,
on file with the Clerk, is hereby approved. The Authorized Officers are hereby severally
authorized and directed to execute and deliver a final Official Statement in substantially said
form, with such additions thereto or changes therein as the District may require or approve, such
approval to be conclusively evidenced by the execution and delivery thereof. The Underwriter is
hereby authorized to distribute copies of the Official Statement to persons purchasing the 2016
Green Bonds and other interested parties. The distribution of the Preliminary Official Statement
by the Underwriter is hereby authorized and approved. The Authorized Officers are hereby
severally authorized and directed to execute a certificate confirming that the Preliminary Official
Statement has been “deemed final” by the District for purposes of Securities and Exchange
Commission Rule 15c2-12.
Section 6.The form of Escrow Agreement by and between the District, the
Authority and The Bank of New York Mellon Trust Company, N.A., as Escrow Agent, on file
with the Clerk is hereby approved. The Authorized Officers are hereby severally authorized and
directed to execute and deliver the Escrow Agreement in substantially said form, with such
changes therein as such officer may require or approve, such approval to be conclusively
evidenced by the execution and delivery thereof. The 2011 Trustee is hereby authorized and
directed to give notice of redemption of the callable 2011 Authority Bonds to be redeemed as
shall be required by the Escrow Agreement and pursuant to the terms of the Indenture with
respect to the 2011 Authority Bonds.
Section 7.The form of Continuing Disclosure Certificate on file with the
Clerk, is hereby approved. The Authorized Officers are hereby severally authorized and directed
to execute and deliver the Continuing Disclosure Agreement in substantially said form, with such
changes therein as such officer may require or approve, such approval to be conclusively
evidenced by the execution and delivery thereof.
Attachment 1
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OHSUSA:765404851.9
Section 8.The officers of the District are hereby authorized and directed,
jointly and severally, to do any and all things which they may deem necessary or advisable in
order to consummate the transactions herein authorized and otherwise to carry out, give effect to
and comply with the terms and intent of this Resolution, including, but not limited to, directing
the trustee for the 2007 Authority Bonds to provide a conditional notice of redemption for the
2007 Authority Bonds, providing for the purchase of escrow securities, and engaging certified
public accountants to verify the sufficiency of funds deposited in escrow, executing amendments
to the Site Lease or Lease Agreement and paying costs of issuance. The President of the Board,
the Clerk, the Authorized Officers, and the other officers of the District are hereby severally
authorized and directed to execute and deliver any and all documents, written requests,
certificates and representations, including but not limited to signature certificates, no-litigation
certificates, tax and rebate certificates, the letter of representations to The Depository Trust
Company and certificates concerning the contents of the Official Statement distributed in
connection with the sale of the 2016 Green Bonds, necessary or desirable to accomplish the
transactions set forth above and to administer the documents authorized hereby.
Section 9.All actions heretofore taken by the officers and agents of the
District with respect to the sale, execution and delivery of the 2016 Green Bonds are hereby
approved and confirmed.
Section 10.This Resolution shall take effect from and after its date of
adoption.
* * * * * * * * * * * * * * * * * * * *
PASSED AND ADOPTED this 10th day of August, 2016 by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST: APPROVED:
______________________________________ ______________________________________
Clerk
Board of Directors
President
Board of Directors
APPROVED AS TO FORM:
______________________________________
General Counsel
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OHSUSA:765404851.9
CLERK’S CERTIFICATE
I, , District Clerk of the Board of the Midpeninsula
Regional Open Space District, hereby certify as follows:
The foregoing is a full, true and correct copy of a resolution duly adopted at a
regular meeting of the Board of Directors of said District duly and regularly held at the regular
meeting place thereof on the 10th day of August, 2016, of which meeting all of the members of
said Board had due notice and at which a majority thereof were present; and at said meeting said
resolution was adopted by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
An agenda of said meeting was posted at least 72 hours before said meeting at
330 Distel Circle, Los Altos, California, a location freely accessible to members of the public,
and a brief general description of said resolution appeared on said agenda.
I have carefully compared the same with the original minutes of said meeting on
file and of record in my office; the foregoing resolution is a full, true and correct copy of the
original resolution adopted at said meeting and entered in said minutes; and said resolution has
not been amended, modified or rescinded since the date of its adoption, and the same is now in
full force and effect.
WITNESS my hand and the seal of the Midpeninsula Regional Open Space
District this day of __________, 2016.
________________________________________
District Clerk
Attachment 1
OHS DRAFT
7/22/2016
OHSUSA:765393766.5
INDENTURE
Dated as of September 1, 2016
by and between the
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
and
ZIONS BANK, A DIVISION OF ZB, NATIONAL ASSOCIATION,
as Trustee
Relating to the
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
GREEN BONDS, 2016 REFUNDING
Attachment 2
TABLE OF CONTENTS
Page
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OHSUSA:765393766.5
ARTICLE I DEFINITIONS; EQUAL SECURITY .............................................................. 2
SECTION 1.01.Definitions .......................................................................................... 2
SECTION 1.02.Equal Security ..................................................................................... 7
ARTICLE II AUTHORIZATION AND ISSUANCE OF 2016 REFUNDING
BONDS ............................................................................................................. 8
SECTION 2.01.Authorization and Purpose of 2016 Green Bonds .............................. 8
SECTION 2.02.Denominations of 2016 Green Bonds ................................................. 9
SECTION 2.03.Date and Maturity Dates of and Interest Rates on 2016 Green
Bonds .................................................................................................. 9
SECTION 2.04.Interest Payment Dates of 2016 Green Bonds .................................. 10
SECTION 2.05.Form of 2016 Green Bonds .............................................................. 10
SECTION 2.06.Payment of Bonds ............................................................................. 11
SECTION 2.07.Execution of Bonds ........................................................................... 11
SECTION 2.08.Transfer and Exchange of Bonds ...................................................... 11
SECTION 2.09.Mutilated, Destroyed, Stolen or Lost Bonds .................................... 12
SECTION 2.10.Temporary Bonds ............................................................................. 12
SECTION 2.11.Use of Depository for Bonds ............................................................ 13
SECTION 2.12.Additional Bonds and Promissory Notes .......................................... 14
ARTICLE III APPLICATION OF PROCEEDS ................................................................... 15
SECTION 3.01.Application of Proceeds of Sale of 2016 Green Bonds .................... 15
ARTICLE IV REDEMPTION OF BONDS .......................................................................... 16
SECTION 4.01.Redemption of 2016 Green Bonds ................................................... 16
SECTION 4.02.Partial Redemption of Bonds ............................................................ 17
SECTION 4.03.Notice of Redemption ....................................................................... 17
SECTION 4.04.Effect of Redemption ........................................................................ 17
SECTION 4.05.Conditional Notice of Redemption ................................................... 18
SECTION 4.06.Rescission or Cancellation of Redemption ....................................... 18
ARTICLE V REVENUES .................................................................................................... 18
SECTION 5.01.Pledge of Revenues ........................................................................... 18
SECTION 5.02.Allocation of Revenues ..................................................................... 18
ARTICLE VI COVENANTS OF THE DISTRICT ............................................................... 19
SECTION 6.01.Punctual Payment ............................................................................. 19
Attachment 2
TABLE OF CONTENTS
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OHSUSA:765393766.5
SECTION 6.02.Against Encumbrances ..................................................................... 19
SECTION 6.03.Tax Covenants and Matters; Rebate Fund ........................................ 19
SECTION 6.04.Payment of Claims ............................................................................ 20
SECTION 6.05.Payment of Taxes and Compliance With Governmental
Regulations ....................................................................................... 20
SECTION 6.06.Financial Statements and Other Reports ........................................... 20
SECTION 6.07.Protection of Security and Rights of Owners ................................... 21
SECTION 6.08.Continuing Disclosure ...................................................................... 21
SECTION 6.09.Further Assurances ........................................................................... 21
ARTICLE VII THE TRUSTEE .............................................................................................. 21
SECTION 7.01.The Trustee ....................................................................................... 21
SECTION 7.02.Liability of Trustee ........................................................................... 23
SECTION 7.03.Notice to Trustee ............................................................................... 24
ARTICLE VIII AMENDMENT OF OR SUPPLEMENT TO THE INDENTURE ................ 24
SECTION 8.01.Procedure for Amendment of or Supplement to the Indenture......... 24
SECTION 8.02.Disqualified Bonds ........................................................................... 25
SECTION 8.03.Endorsement or Replacement of Bonds After Amendment ............. 26
SECTION 8.04.Amendment by Mutual Consent ....................................................... 26
SECTION 8.05.Notice to and Consent of Owners ..................................................... 26
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES OF OWNERS ......................... 26
SECTION 9.01.Events of Default .............................................................................. 26
SECTION 9.02.Application of Funds Upon Default; No Acceleration ..................... 27
SECTION 9.03.Remedies of Owners ......................................................................... 27
SECTION 9.04.Non-Waiver ...................................................................................... 28
SECTION 9.05.Actions by Trustee as Attorney-in-Fact ............................................ 28
SECTION 9.06.Remedies Not Exclusive ................................................................... 29
ARTICLE X DEFEASANCE ............................................................................................... 29
SECTION 10.01.Discharge of Bonds ........................................................................... 29
SECTION 10.02.Unclaimed Money ............................................................................ 30
ARTICLE XI MISCELLANEOUS ....................................................................................... 30
SECTION 11.01.Liability of District Limited to Revenues and Certain Other
Funds................................................................................................. 30
Attachment 2
TABLE OF CONTENTS
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SECTION 11.02.Benefits of the Indenture Limited to Certain Parties ........................ 31
SECTION 11.03.Successor Is Deemed Included in All References to
Predecessor ....................................................................................... 31
SECTION 11.04.Execution of Documents by Owners ................................................ 31
SECTION 11.05.Waiver of Personal Liability ............................................................. 32
SECTION 11.06.Content of Certificates and Reports .................................................. 32
SECTION 11.07.Investment of Money in Funds ......................................................... 32
SECTION 11.08.Notice by Mail .................................................................................. 33
SECTION 11.9.Maintenance of Funds ....................................................................... 33
SECTION 11.10.Business Days ................................................................................... 34
SECTION 11.11.Article and Section Headings, Gender and References .................... 34
SECTION 11.12.Governing Law ................................................................................. 34
SECTION 11.13.Notices .............................................................................................. 34
SECTION 11.14.Partial Invalidity ............................................................................... 34
SECTION 11.15.Execution in Several Counterparts ................................................... 35
EXHIBIT A FORM OF 2016 REFUNDING BONDS ................................................. A-1
Attachment 2
OHSUSA:765393766.5
An extra section break has been inserted above this paragraph. Do not delete this section break if
you plan to add text after the Table of Contents/Authorities. Deleting this break will cause Table
of Contents/Authorities headers and footers to appear on any pages following the Table of
Contents/Authorities.
Attachment 2
OHSUSA:765393766.5
INDENTURE
This Indenture (the “Indenture”), dated as of September 1, 2016, 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 Zions
Bank, a division of ZB, National Association, a national banking association duly organized and
existing under and by virtue of the laws of the United States of America and authorized to accept
and execute trusts of the character herein set forth, as Trustee (the “Trustee”);
WITNESSETH:
WHEREAS, the Midpeninsula Regional Open Space District (the “District”) is
authorized by law to issue refunding revenue bonds to refinance any obligations theretofore
entered into by it; and
WHEREAS, the District has determined that it is in the best interests of the
District and is necessary and proper for District purposes that the District issue its Midpeninsula
Regional Open Space District Green Bonds, 2016 Refunding (the “2016 Green Bonds”) to
refund its outstanding obligations under certain outstanding promissory notes (the “2007 Notes”)
held by the Midpeninsula Regional Open Space District Financing Authority (the “Authority”)
the payment of which secures the Authority’s 2007 Series A Revenue Refunding Bonds (the
“2007 Authority Bonds”), and to prepay its obligations under that certain Lease Agreement,
dated as of May 1, 2011, by and between the District and the Authority, the payment of lease
payments under which secures the Authority’s 2011 Revenue Bonds (the “2011 Authority
Bonds” and, together with the 2007 Authority Bonds, the “Prior Bonds”); and
WHEREAS, the District has determined that all things necessary to cause the
2016 Green Bonds, when duly executed by the District and authenticated and delivered by the
Trustee as provided herein, to be legal and valid special obligations of the District enforceable in
accordance with their terms, and to constitute the Indenture a valid agreement for the purposes
and uses herein set forth in accordance with its terms, have been done and taken, and the
execution and delivery hereof and the execution, authentication and delivery of the 2016 Green
Bonds, subject to the terms hereof, have in all respects been duly authorized; and
WHEREAS, the District anticipates that additional series of bonds may be issued
pursuant hereto;
NOW THEREFORE, THE INDENTURE WITNESSETH, that in order to declare
the conditions and terms upon and subject to which the 2016 Green Bonds and subsequent series
of Bonds are to be issued, and to secure the payment of the interest on and principal of and
redemption premiums, if any, on all Bonds at any time executed, authenticated and delivered
hereunder according to their tenor, and to secure the observance and performance of all the
agreements, conditions, covenants and terms contained herein and therein, and in consideration
of the premises and of the mutual agreements and covenants contained herein and of the
purchase and acceptance of the 2016 Green Bonds and subsequent series of Bonds by the
respective registered owners thereof from time to time, and for other valuable consideration, the
receipt whereof is hereby acknowledged, the District does hereby agree and covenant with the
Attachment 2
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OHSUSA:765393766.5
Trustee, for the benefit of the respective registered owners from time to time of the Bonds, as
follows:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
SECTION 1.01.Definitions. Unless the context otherwise requires, the
terms defined in this section shall for all purposes hereof and of the Bonds and of any certificate,
opinion, report, request or other document herein or therein mentioned have the meanings herein
specified, the following definitions to be equally applicable to both the singular and plural forms
of any of the terms defined herein:
“2007 Notes” means the District’s outstanding (a) 2007 Refunding Notes (1996
Project Lease – 2nd Issue), (b) 2007 Refunding Notes (1996 Promissory Notes), (c) 2007
Refunding Notes (1999 Project Lease – 2nd Issue), and (d) 2007 Refunding Notes (1999
Promissory Notes), originally issued in 2007 in the total aggregate principal amount of
$52,415,000 to prepay prior obligations of the District.
“2007 Authority Bonds” means the Authority’s 2007 Series A Revenue
Refunding Bonds (1996 and 1999 Refinancing Project) originally issued in 2007 in the aggregate
principal amount of $52,415,000.
“2011 Authority Bonds” means the Authority’s 2011 Revenue Bonds originally
issued in 2011 in the aggregate principal amount of $20,500,000.
“2011 Lease Agreement” means that certain Lease Agreement by and between
the District and the Midpeninsula Regional Open Space District Financing Authority, dated as of
May 1, 2011.
“2016 Escrow Agent” means The Bank of New York Mellon Trust Company,
N.A., as the Escrow Agent for the 2011 Authority Bonds.
“2016 Escrow Agreement” means that certain Escrow Agreement executed and
entered into as of September 1, 2016, by and between the District, the Authority and the 2016
Escrow Agent relating to the prepayment of a portion of the obligations under the 2011 Lease
Agreement and the redemption of the 2011 Authority Bonds as provided therein.
“2016 Escrow Fund” means the Midpeninsula Regional Open Space District
2016 Escrow Fund established pursuant to the 2016 Escrow Agreement.
“2016 Green Bonds” means the _______________________________ dollars
($__________) aggregate principal amount of the Bonds constituting the Midpeninsula Regional
Open Space District Green Bonds, 2016 Refunding authorized, executed, issued and delivered by
the District under and pursuant to the Law and under and pursuant hereto and that are secured
hereby.
Attachment 2
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OHSUSA:765393766.5
“Authority” means the Midpeninsula Regional Open Space District Financing
Authority, a Joint Powers Authority established pursuant to the laws of the State of California.
“Board of Directors” means the Board of Directors of the District.
“Bond Redemption Fund” means the Bond Redemption Fund established
pursuant to Section 5.02.
“Bonds” means all bonds (including the 2016 Green Bonds) of the District
authorized, executed, issued and delivered by the District under and pursuant to the Law and this
Indenture, the payments of which are on a parity with each other [and with the payment of the
District’s promissory notes and other obligations] and which are secured by a pledge of and lien
on the Revenues.
“Business Day” means any day (other than a Saturday or a Sunday) on which
banks and the Trustee are open for business.
“Certificate of the District” means an instrument in writing signed by the
General Manager of the District or the Controller of the District, or by any other officer of the
District duly authorized by the Board of Directors for that purpose.
“Code” means the Internal Revenue Code of 1986 and all then applicable
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 successors to such
section of the Code.
“Costs of Issuance” means all costs and expenses directly or indirectly payable
by or reimbursable to the District related to the authorization, sale, execution and initial delivery
of a series of Bonds, including, but not limited to, costs of preparation and reproduction of
documents, filing and recording fees, initial fees and charges of the Trustee and any Escrow
Agent (including fees and expenses of their counsel), rating agency fees, surety and bond
insurance premiums, legal fees and charges and fees and charges of other consultants and
professionals, together with all fees and charges for preparation, execution and safekeeping of
the Bonds, and any other cost, charge, fee or expense in connection with the authorization, sale,
execution and initial delivery of a series of Bonds.
“Costs of Issuance Fund” means the Midpeninsula Regional Open Space
District Revenue Bonds Costs of Issuance Fund established pursuant to Section 3.01(b) or such
other costs of issuance fund as may be created pursuant to a Supplemental Indenture, as
applicable.
“Debt Service” means, for any Fiscal Year, the sum of (1) the interest accruing
during such Fiscal Year or other period on all Outstanding Bonds, assuming that all Outstanding
Serial Bonds are retired as scheduled and that all Outstanding Term Bonds are redeemed or paid
from sinking fund payments as scheduled (except to the extent that such interest is to be paid
from the proceeds of sale of any Bonds so long as such funded interest is in an amount equal to
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the gross amount necessary to pay such interest on the Bonds and is invested in Defeasance
Securities which mature no later than the related Interest Payment Date, (2) the principal amount
of all Outstanding Serial Bonds maturing during such Fiscal Year or other period, and (3) the
principal amount of all Outstanding Term Bonds required to be redeemed or paid (together with
the redemption premiums, if any, thereon) during such Fiscal Year or other period; and (4) that
portion of the principal and interest on Promissory Notes required to be made at the times
provided in the notes during such period.
“Defeasance Securities” means non-callable (1) cash; (2) U.S. Treasury
Certificates, Notes and Bonds (including State and Local Government Series – “SLGS”); (3)
direct obligations of the U.S. Treasury which have been stripped by the Treasury itself, such as
CATS, TIGRS and similar securities; (4) Resolution Funding Corp. (REFCORP) strips (interest
component only) which have been stripped by request to the Federal Reserve Bank of New York
in book entry form; (5) pre-refunded municipal bonds rated by Moody’s and by S&P at the level
that U.S. obligations are rated, or if not rated by Moody’s, then pre-refunded bonds that have
been pre-refunded with cash, direct U.S. or U.S. guaranteed obligations, or other pre-refunded
municipal obligations; and (6) obligations issued by the following agencies which are backed by
the full faith and credit of the U.S.: (a) U.S. Export-Import Bank direct obligations or fully
guaranteed certificates of beneficial ownership, (b) Farmers Home Administration (FmHA)
certificates of beneficial ownership, (c) Federal Financing Bank, (d) General Services
Administration participation certificates, (e) U.S. Maritime Administration Guaranteed Title XI
financing, (f) U.S. Department of Housing and Urban Development (HUD) Project Notes, Local
Authority Bonds, New Communities Debentures – U.S. government guaranteed debentures, and
U.S. Public Housing Notes and Bonds – U.S. government guaranteed public housing notes and
bonds.
“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 of
California.
“District Act” means Article 3 of Chapter 3 of Division 5 of the Public
Resources Code, and all laws amendatory thereof or supplemental thereto.
“Event of Default” means an event described as such in Section 9.01.
“Fiscal Year” means the twelve-month period terminating on June 30 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.
“Generally Accepted Accounting Principles” means the uniform accounting
and reporting procedures set forth in publications of the American Institute of Certified Public
Accountants or its successor and the Government Accounting Standards Board or its successor,
or by any other generally accepted authority on such procedures, and includes, as applicable, the
standards set forth by the Financial Accounting Standards Board or its successor.
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“Indenture” means this Indenture dated as of September 1, 2016 between the
District and the Trustee and all Supplemental Indenture Notes.
“Independent Certified Public Accountant” means any firm of certified public
accountants duly licensed and entitled to practice and practicing as such under the laws of the
State of California, appointed and paid by the District, and each of whom:
(1) is in fact independent and not under the domination of the District;
(2) does not have a substantial financial interest, direct or indirect, in the
operations of the District; and
(3) is not connected with the District as a member of the Board of Directors or
an officer or employee of the District, but may be regularly retained to audit the accounting
records of and make reports thereon to the District.
“Promissory Notes” means all notes of the District authorized and executed by
the District under and pursuant to the Law, the payments under which are payable on a parity
with the payment of the Bonds and which are secured by a pledge of and lien on Revenues in
accordance with Section 2.12.
“Interest Payment Date” means any March 1 or September 1 on which interest
on any of the Bonds is scheduled to be paid.
“Law” means the District Act, as amended, and all laws amendatory thereof or
supplemental thereto, including Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5
of the Government Code of the State of California.
“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.
“Outstanding,” when used as of any particular time with reference to Bonds,
means (subject to the provisions of Section 8.02) all Bonds executed, authenticated and delivered
hereunder except:
(1) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee
for cancellation;
(2) Bonds paid or deemed to have been paid pursuant to Section 10.01; and
(3) Bonds in lieu of or in substitution for which other Bonds shall have been
executed by the District and authenticated and delivered by the Trustee pursuant to Section 2.09.
“Owner” means the registered owner of any Outstanding Bond, as shown in the
registration books maintained by the Trustee pursuant to Section 2.08.
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“Permitted Investments” means any of the following to the extent then
permitted by law:
(1) Defeasance Securities;
(2) any obligations which are then legal investments for moneys of the District
under the laws of the State of California and comply with the District’s investment policy;
provided that such investments shall be rated at the time of investment in the highest short-term
or one of the three highest long-term rating categories by Moody’s and S&P;
(3) money markets or mutual funds which are rated at the time of investment by
S&P “AAAm-G” or “AAAm” or higher and, if rated by Moody’s, are rated at the time of
investment “Aaa” or higher, which funds may include funds for which the Trustee, its affiliates
or subsidiaries provide investment advisory or other management services;
(4) the County of Santa Clara Investment Pool;
(5) the Local Agency Investment Fund of the State of California; and
(6) Savings accounts or deposit accounts (including those of the Trustee and its
affiliates), but only to the extent that the amounts being invested in such savings accounts or
deposit accounts are fully insured by the FDIC.
“Promissory Notes” means the outstanding promissory notes of the District
payable from the Revenues.
“Principal Corporate Trust Office” means the corporate trust office of the
Trustee in Los Angeles, California; provided, that for the purposes of the transfer, registration,
exchange, payment and surrender of the Bonds, the term “Principal Corporate Trust Office” shall
mean such office as may be designated by the Trustee from time to time.
“Principal Payment Date” means any September 1 on which principal of any of
the Bonds is scheduled to be paid.
“Prior Bonds” means the 2007 Authority Bonds payable from the 2007 Notes,
and the portion of the 2011 Authority Bonds subject to redemption and payable from the
payments made by the District under the 2011 Lease Agreement.
“Rebate Fund” means the Midpeninsula Regional Open Space District Green
Bonds, 2016 Refunding Rebate Fund established pursuant to Section 6.03.
“Record Date” means, with respect to any Interest Payment Date, the fifteenth
day of the month, preceding such Interest Payment Date, whether or not such day is a Business
Day.
“Refunding Fund” means the Refunding Fund established pursuant to
Section 3.01(a).
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“Revenues” means the revenues, income and investment earnings received by
the District, including the District’s share of the general one percent ad valorem property tax
levied in the District by the Board of Supervisors of the County of Santa Clara and the Board of
Supervisors of the County of San Mateo and allocated to the District, except for any revenue
restricted to a specific purpose and not legally available to pay Debt Service such as the ad
valorem taxes levied for the payment of the District’s voter approved general obligation bonds.
“Revenue Fund” means the Midpeninsula Regional Open Space District
Revenue Fund now existing in the treasury of the District.
“Serial Bond” means a Bond for which no sinking fund payments are provided.
“Supplemental Indenture” means any indenture then in full force and effect
which has been executed by the District and the Trustee, amendatory hereof or supplemental
hereto and executed in accordance with the terms hereof.
“Tax Certificate” means the certificate, dated the date of the original issuance
and delivery of the 2016 Green Bonds, with respect to the requirements of certain provisions of
the Code, as such certificate may from time to time be amended or supplemented in accordance
with its terms, or any additional Tax Certificate as may be executed and delivered in connection
with a subsequent series of Bonds, as applicable.
“Term Bond” means a Bond which is payable on or before its specified maturity
date from sinking fund payments established for that purpose and calculated to retire such Bonds
on or before their specified maturity dates.
“Trustee” means Zions Bank, a division of ZB, National Association, a national
banking association duly organized and existing under and by virtue of the laws of the United
States of America and authorized to accept and execute trusts of the character herein set forth, at
its Principal Corporate Trust Office, acting in its capacity as trustee under and pursuant hereto,
and its successors or assigns, or any other bank or trust company or national banking association
at its Principal Corporate Trust Office which may at any time be substituted in its place as
provided in Section 7.01.
“Written Request of the District” means an instrument in writing signed by the
General Manager of the District, or by any other officer of the District duly designated by the
Board of Directors for that purpose.
SECTION 1.02.Equal Security. In consideration of the acceptance of the
Bonds by the Owners thereof, the Indenture shall be deemed to be and shall constitute a contract
between the District and the Trustee for the benefit of the Owners from time to time of all the
Bonds executed, authenticated and delivered hereunder and then Outstanding to secure the full
and final payment of the interest on and the principal of and the redemption premiums, if any, on
all such Bonds, subject to the agreements, conditions, covenants and terms contained herein; and
all agreements, conditions, covenants and terms contained herein required to be observed or
performed on behalf of the District shall be for the equal and proportionate benefit, security and
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protection of the Owners from time to time of all Bonds without preference, priority or
distinction as to security or otherwise of any Bonds over any other Bonds.
ARTICLE II
AUTHORIZATION AND ISSUANCE OF 2016 REFUNDING BONDS
SECTION 2.01.Authorization and Purpose of 2016 Green Bonds.
(a)The Board of Directors has reviewed all proceedings heretofore taken relative
to the authorization of the 2016 Green Bonds and has found, as a result of such review,
and hereby finds and determines that all acts, conditions and things required by the Law
to exist, happen and be performed precedent to the issuance of the 2016 Green Bonds do
exist, have happened and have been performed in due time, form and manner as required
by the Law, and that the District is now authorized, pursuant to each and every
requirement of the Law and hereof, to issue the 2016 Green Bonds under the Law in the
aggregate principal amount of ________________________________________ dollars
($__________) in the form and manner provided herein. The 2016 Green Bonds shall be
entitled to the benefit, protection and security of the provisions hereof, shall be
designated the “Midpeninsula Regional Open Space District Green Bonds, 2016
Refunding” and shall be issued by the District under and pursuant to the Law and under
and pursuant hereto. The 2016 Green Bonds may contain or have endorsed thereon such
descriptive provisions, specifications and words not inconsistent with the provisions
hereof as may be desirable or necessary to comply with custom or the rules of any
securities exchange or commission or brokerage board or otherwise as may be
determined by the District prior to the delivery thereof.
(b)The purpose for which the 2016 Green Bonds are to be issued is to provide
funds to the District which will be sufficient to provide for the refunding of the Prior
Bonds and cause the prepayment of the 2007 Notes and (as provided in the 2016 Escrow
Agreement) to prepay a portion of its obligations under the 2011 Lease Agreement and
thereby cause the redemption of a corresponding portion of the 2011 Authority Bonds,
and to pay all Costs of Issuance.
(c)From and after the issuance of the 2016 Green Bonds, the findings and
determinations of the Board of Directors respecting the 2016 Green Bonds shall be
conclusive evidence of the existence of the facts so found and determined in any action or
proceeding in any court in which the validity of such 2016 Green Bonds is at issue, and
no bona fide purchaser of any of the 2016 Green Bonds shall be required to see to the
existence of any fact or to the performance of any condition or to the taking of any
proceeding required prior to such issuance or to the application of the purchase price paid
for the 2016 Green Bonds. The validity of the issuance of the 2016 Green Bonds shall
not be dependent on or affected in any way by any proceedings taken by the District for
the payment and refunding of any of the 2007 Notes or the Prior Bonds, and the recital
contained in the 2016 Green Bonds that the 2016 Green Bonds are issued under and
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pursuant to the Law and under and pursuant hereto shall be conclusive evidence of their
validity and of the regularity of their issuance, and all 2016 Green Bonds shall be
incontestable from and after their issuance. The 2016 Green Bonds shall be deemed to be
issued, within the meaning hereof, whenever the purchase price for the 2016 Green
Bonds shall have been received by or on behalf of the District and the 2016 Green Bonds
shall have been duly executed, authorized and delivered.
SECTION 2.02.Denominations of 2016 Green Bonds. The 2016 Green
Bonds shall be issued as fully registered bonds in denominations of five thousand dollars
($5,000) or any integral multiple of five thousand dollars ($5,000) (not exceeding the principal
amount of 2016 Green Bonds maturing at any one time).
SECTION 2.03.Date and Maturity Dates of and Interest Rates on 2016
Green Bonds. The 2016 Green Bonds shall be dated the date of the initial delivery thereof, and
shall mature on the dates and in the principal amounts and shall bear interest at the rates per
annum as set forth in the following schedule:
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Maturity Date
(September 1)
Principal
Amount
Interest
Rate
2017 $ %
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
SECTION 2.04.Interest Payment Dates of 2016 Green Bonds. The
interest on the 2016 Green Bonds shall be computed on the basis of a 360-day year of twelve
(12) 30-day calendar months, and shall be payable on March 1, 2017, and semiannually
thereafter on March 1 and September 1 in each year. The 2016 Green Bonds shall bear interest
from the Interest Payment Date next preceding the date of authentication thereof, unless they are
authenticated on a day during the period from the Record Date for an Interest Payment Date to
such Interest Payment Date, both dates inclusive, in which event they shall bear interest from
such Interest Payment Date, or unless they are authenticated on a day on or before the Record
Date for the first Interest Payment Date, in which event they shall bear interest from their date;
provided, that if at the time of authentication of any 2016 Green Bond interest is then in default
on the Outstanding 2016 Green Bonds, such 2016 Green Bond shall bear interest from the
Interest Payment Date to which interest has previously been paid or made available for payment
on the Outstanding 2016 Green Bonds.
SECTION 2.05.Form of 2016 Green Bonds. The 2016 Green Bonds and
the authentication and registration endorsement and assignment to appear thereon shall be
substantially in the forms attached hereto as Exhibit A.
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SECTION 2.06.Payment of Bonds. The interest on and principal of and
redemption premiums, if any, on the Bonds shall be payable in lawful money of the United
States of America at the Principal Corporate Trust Office of the Trustee, and the District and the
Trustee shall deem and treat the registered owner of any Bond as the absolute owner of such
Bond for all purposes hereof, whether such Bond shall be overdue or not, and neither the District
nor the Trustee shall be affected by any notice or knowledge to the contrary. Payment of interest
on the Bonds due on or before the maturity or prior redemption thereof shall be made only to the
person whose name appears in the registration books required to be kept by the Trustee pursuant
to Section 2.08 as the registered owner thereof at the close of business as of the Record Date next
preceding each Interest Payment Date, such interest to be paid by check mailed by first class
mail on each Interest Payment Date to such registered owner at his address as it appears on such
books, except that in the case of an Owner of one million dollars ($1,000,000) or more in
aggregate principal amount of Bonds then Outstanding, payment shall be made at such Owner’s
option by wire transfer on each Interest Payment Date of immediately available funds to an
account in a bank or trust company or savings bank that is a member of the Federal Reserve
System and that is located in the United States of America according to written instructions
given by such Owner to the Trustee by the applicable Record Date. Payment of the principal of
and redemption premiums, if any, on the Bonds shall be made only to the person whose name
appears in the registration books required to be kept by the Trustee pursuant to Section 2.08 as
the registered owner thereof, such principal and redemption premiums, if any, to be paid upon
surrender of the Bonds at the Principal Corporate Trust Office of the Trustee at maturity or upon
prior redemption. All such payments of interest on and principal of and redemption premiums, if
any, on the Bonds shall be valid and effectual to satisfy and discharge the liability on such Bonds
to the extent of the sum or sums so paid.
SECTION 2.07.Execution of Bonds. The Bonds shall be signed on behalf
of the District by the manual or facsimile signature of the President and Secretary of the Board of
Directors of the District, whereupon they shall be delivered to the Trustee for authentication and
delivery by the Trustee to the purchaser thereof upon receipt of a Written Request of the District;
provided, that in case any officer of the District who shall have signed any of the Bonds shall
cease to be such officer before the Bonds so signed shall have been delivered to the purchaser
thereof by the Trustee, such Bonds may nevertheless be delivered by the Trustee, and upon such
delivery shall be as binding upon the District as though such officer who signed the same had
continued to be such officer until such delivery; and provided further, that any Bond may be
signed on behalf of the District by any person who on the actual date of the execution of such
Bond shall be the proper officer of the District, although on the nominal date of such Bond such
person shall not have been such officer of the District. Only those Bonds that bear thereon a
certificate of authentication manually executed by the Trustee shall be entitled to any benefit,
protection or security hereunder or be valid or obligatory for any purpose, and such certificate of
authentication of the Trustee shall be conclusive evidence that the Bonds so authenticated have
been duly authorized, sold, executed and delivered hereunder and are entitled to the benefits
hereof.
SECTION 2.08.Transfer and Exchange of Bonds. The Trustee shall keep
at its Principal Corporate Trust Office sufficient books for the transfer and exchange of the
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Bonds, which books shall at all times during normal business hours and upon reasonable prior
notice be open to inspection by the District. Any Bond may, in accordance with its terms, be
transferred or exchanged on such books by the person in whose name it is registered, in person or
by his duly authorized attorney, upon payment by the Owner requesting such transfer or
exchange of any tax or other governmental charge required to be paid with respect to such
transfer or exchange and upon surrender of such Bond for cancellation accompanied by delivery
of a duly executed written instrument of transfer or exchange in a form acceptable to the Trustee.
Whenever any Bond or Bonds shall be surrendered for transfer or exchange, the District shall
execute and the Trustee shall authenticate and deliver a new Bond or Bonds of the same maturity
date and in authorized denominations in the same aggregate principal amount.
SECTION 2.09.Mutilated, Destroyed, Stolen or Lost Bonds. In case any
Bond shall become mutilated in respect of the body of such Bond or shall be believed by the
District to have been destroyed, stolen or lost, upon proof of ownership satisfactory to the
District and the Trustee and upon the surrender of such mutilated Bond at the Principal
Corporate Trust Office of the Trustee, or upon the receipt of evidence satisfactory to the Trustee
of such destruction, theft or loss and upon receipt of indemnity satisfactory to the Trustee, and
also upon payment of all expenses incurred by the District and the Trustee in the premises, the
District shall execute and the Trustee shall authenticate and deliver at such office a new Bond or
Bonds of the same maturity date for the same aggregate principal amount in authorized
denominations of like tenor and date and bearing such numbers and notations as the Trustee shall
determine in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu
of and in substitution for the Bond so destroyed, stolen or lost; provided, that if any such
destroyed, stolen or lost Bond shall have matured, payment of the amount due thereon may be
made by the District upon receipt of like proof, indemnity and payment of expenses.
Any replacement Bonds issued pursuant to this section shall be entitled to equal
and proportionate benefits with all other Bonds issued hereunder, and the District and the Trustee
shall not be required to treat both the original Bond and any replacement Bond as being
Outstanding for the purpose of determining the principal amount of Bonds which may be issued
hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but
both the original and the replacement Bond shall be treated as one and the same.
SECTION 2.10.Temporary Bonds. The Bonds may be initially issued in
temporary form exchangeable for definitive Bonds when ready for delivery, which temporary
Bonds shall be printed, lithographed or typewritten, shall be of such denominations as may be
determined by the District, shall be issued in fully registered form and shall contain such
reference to any of the provisions hereof as may be appropriate, and each temporary Bond shall
be executed by the District upon the same conditions and in substantially the same manner as the
definitive Bonds. If the District issues temporary Bonds, it will execute and furnish definitive
Bonds without delay, and thereupon the temporary Bonds may be surrendered in exchange
therefor at the Principal Corporate Trust Office of the Trustee, and the Trustee shall authenticate
and deliver in exchange for such temporary Bonds an equal aggregate principal amount of
definitive Bonds in authorized denominations of the same maturity date or dates, and until so
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exchanged, the temporary Bonds shall be entitled to the same benefits as definitive Bonds issued
hereunder.
SECTION 2.11.Use of Depository for Bonds.
(a)Notwithstanding anything to the contrary contained herein, the Bonds shall be
initially registered in the name of “Cede & Co.,” as nominee of The Depository Trust
Company, New York, New York, and shall be initially issued as one Bond for each of the
maturities in the principal amounts set forth in Section 2.03, and The Depository Trust
Company, New York, New York, is hereby appointed initial depository for the Bonds.
After the initial registration of the Bonds, registered ownership of the Bonds, or any
portion thereof, may not thereafter be transferred except:
(i) to any successor of Cede & Co., as nominee of The Depository Trust
Company, or its nominee, or to any substitute depository designated pursuant to
clause (ii) of this subsection (a “substitute depository”); provided, that any successor of
Cede & Co., as nominee of The Depository Trust Company or substitute depository, shall
be qualified under any applicable laws to provide the services proposed to be provided by
it;
(ii) to any substitute depository not objected to by the Trustee, upon (1) the
resignation of The Depository Trust Company or its successor (or any substitute
depository or its successor) from its functions as depository; or (2) a determination by the
District to substitute another depository for The Depository Trust Company (or its
successor) because The Depository Trust Company or its successor (or any substitute
depository or its successor) is no longer able to carry out its functions as depository;
provided, that any such substitute depository shall be qualified under any applicable laws
to provide the services proposed to be provided by it; or
(iii) to any person as provided below, upon (1) the resignation of The
Depository Trust Company or its successor (or substitute depository or its successor)
from its functions as depository; or (2) a determination by the District to remove The
Depository Trust Company or its successor (or any substitute depository or its successor)
from its functions as depository.
(b)In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (a)
hereof, upon receipt of the Bonds by the Trustee, together with a Written Request of the
District to the Trustee, a new Bond for each maturity shall be executed, authenticated and
delivered in the aggregate principal amount of the Bonds, registered in the name of such
successor or such substitute depository, or their nominees, as the case may be, all as
specified in such Written Request of the District. In the case of any transfer pursuant to
clause (iii) of subsection (a) hereof, upon receipt of all Bonds by the Trustee, together
with a Written Request of the District to the Trustee, new Bonds shall be executed,
authenticated and delivered in such denominations numbered in the manner determined
by the Trustee and registered in the names of such persons as are requested in such
Written Request of the District, subject to the limitations of Section 2.02, and thereafter
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the Bonds shall be transferred pursuant to the terms of Section 2.08; provided, that the
Trustee shall not be required to deliver such new Bonds on a date prior to sixty (60) days
after receipt of such Written Request of the District.
(c)The District and the Trustee shall be entitled to treat the person in whose name
any Bond is registered as the Owner thereof for all purposes hereof and any applicable
laws, notwithstanding any notice to the contrary received by the District or the Trustee,
and the District and the Trustee shall have no responsibility for transmitting payments to,
communication with, notifying, or otherwise dealing with any beneficial owners of the
Bonds. Neither the District nor the Trustee shall have any responsibility or obligation,
legal or otherwise, to the beneficial owners or to any other party, including The
Depository Trust Company or its successor (or substitute depository or its successor),
except to The Depository Trust Company or its successor (or substitute depository or its
successor) as an Owner of any Bonds.
(d)So long as the Bonds are registered in the name of Cede & Co. or its
registered assigns, the District and the Trustee shall cooperate with Cede & Co., as sole
Owner, or its registered assigns, in effecting payment of the interest on and principal of
and redemption premiums, if any, on the Bonds by arranging for payment in such manner
that funds for such payments are properly identified and are made immediately available
on the date they are due.
SECTION 2.12.Additional Bonds and Promissory Notes. The District
agrees and covenants that, until payment in full of all interest on and principal of the Bonds (or
provision satisfactory for such payment shall have been made), it will incur no additional
indebtedness or obligations payable from the Revenues having any priority in payment to the
payment of the interest on or principal of the Bonds.
The District further agrees and covenants that it will incur no additional
indebtedness or obligations that are secured by a pledge of and lien on or payable from the
Revenues received by the District on a parity in payment of the interest on or principal of the
Bonds unless:
(a) such issuance is in compliance with the District’s Act which act currently
requires that the aggregate principal amount of the proposed debt and of all Bonds and
Promissory Notes that will be outstanding after the issuance of such debt shall not exceed
an amount equal to the anticipated property tax revenue allocations for the next five-year
period; and
(b) it shall have first filed with the Trustee a Certificate of the District (which the
Trustee shall maintain in its files, but shall have no responsibility for the review or
verification thereof) showing:
(i) The total Revenues received by the District in its most recent audited
Fiscal Year, as shown by the most recent audited financial statement of the District;
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(ii) The maximum annual Debt Service that will be payable following the
proposed additional debt on (A) all outstanding Promissory Notes of the District and
other obligations of the District that would be payable from Revenues on a parity with the
Bonds, (B) the outstanding Bonds and (C) the proposed additional indebtedness that is to
be secured by a pledge of and lien on or payable from the Revenues received by the
District on a parity in payment of the interest on or principal of the Bonds; and
(iii) That the total defined in subparagraph (i) above is at least one hundred
twenty-five percent (125%) of the total defined in subparagraph (ii) above.
Subsections (a) and (b) hereof notwithstanding, there shall be no limitations on
the ability of the District to (1) issue any Bonds at any time to refund any outstanding Bonds or
any outstanding Promissory Notes or other obligations payable on a parity transaction (provided
that such refunding produces at least $1 of net present value savings); or (2) execute any contract
which is payable from Revenues on a subordinate basis to the payment by the District of the
Bonds.
ARTICLE III
APPLICATION OF PROCEEDS
SECTION 3.01.Application of Proceeds of Sale of 2016 Green Bonds.
Upon the receipt of payment of the purchase price of the 2016 Green Bonds when the same shall
have been duly issued by the District, the Trustee shall (upon receipt of a Written Request of the
District) set aside and deposit such net purchase price of the 2016 Green Bonds in the following
funds, in the following order:
(a)the Trustee shall transfer the amount of $____________ to the 2016 Escrow
Agent for deposit in the 2016 Escrow Fund, which money, will be sufficient for the 2016
Escrow Agent (as evidenced by a report of a verification agent or Independent Certified
Public Accountant appointed by the District) to provide for the prepayment of a portion
of the District’s obligations under the Lease Agreement and the defeasance and
redemption of the 2011 Authority Bonds subject to redemption on September 1, 2021;
and
(b)the Trustee shall transfer the amount of $___________ to The Bank of New
York Mellon Trust Company, N.A., as prepayment of the 2007 Notes and which amount
will be applied to the redemption of the 2007 Authority Bonds [and a portion of which
payment will be used to make yield reduction payments to the Internal Revenue Service
in the amount indicated in the verification report prepared with respect to such
redemption];
(c)the Trustee shall deposit in the “Midpeninsula Regional Open Space District
Revenue Bonds Costs of Issuance Fund” (which fund the Trustee shall establish and
maintain) the remainder of such proceeds, being the amount of $__________. All money
in the Costs of Issuance Fund shall be used and withdrawn by the Trustee to pay the
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Costs of Issuance upon receipt of a Written Request of the District filed with the Trustee,
each of which shall be sequentially numbered and shall state the person to whom
payment is to be made, the amount to be paid, the purpose for which the obligation was
incurred and that such payment is a proper charge against such fund; provided, that on
February 1, 2017, or upon a prior determination by the District that all Costs of Issuance
have been paid (as set forth in a Certificate of the District so determining filed with the
Trustee), any balance of money remaining in the Costs of Issuance Fund shall be
withdrawn from the Costs of Issuance Fund by the Trustee and deposited in the Interest
Fund.
ARTICLE IV
REDEMPTION OF BONDS
SECTION 4.01.Redemption of 2016 Green Bonds.
(a)Optional Redemption. The 2016 Green Bonds maturing on or after September
1, 20__ shall be subject to redemption prior to their stated maturity date at the option of the
District, from any source of available funds, as a whole or in part on any date on or after
September 1, 20__, at a redemption price equal to the principal amount of such 2016 Green
Bonds called for redemption, together with accrued interest thereon to the date fixed for
redemption, without premium.
(b)Mandatory Sinking Fund Redemption. The $_________ Term Bond
maturing on September 1, 20__, is also subject to mandatory sinking fund redemption on each
Mandatory Sinking Fund Redemption Date and in the respective principal amounts as set forth in
the following schedule, at a redemption price equal to 100% of the principal amount thereof to
be redeemed (without premium), together with interest accrued thereon to the date fixed for
redemption:
Mandatory Sinking Fund
Redemption Date
(September 1)
Principal Amount
To be Redeemed
20__ $
20__†
† Maturity.
(c)The District shall give the Trustee written notice at least thirty (30) days (or
such lesser time period acceptable to the Trustee) before any date fixed for the redemption of the
2016 Green Bonds called for redemption pursuant to Section 3.01(a), designating the portion
thereof called for redemption and the date of such redemption.
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SECTION 4.02.Partial Redemption of Bonds. If less than all of the
Bonds are to be redeemed at any one time, the District shall select the maturities of the Bonds
and the principal amount of each such maturity to be redeemed in its sole discretion. If less than
all Bonds maturing by their terms on any one date are to be redeemed at any one time, the
Trustee shall select the Bonds of such maturity to be redeemed by lot and shall promptly notify
the District in writing of the numbers of such Bonds so selected for redemption. For purposes of
such selection, Bonds shall be deemed to be composed of $5,000 multiples and any such
multiple may be separately redeemed.
SECTION 4.03.Notice of Redemption. Notice of redemption shall be
mailed by first-class mail by the Trustee, not less than twenty (20) nor more than sixty (60) days
prior to the redemption date to the Owners of the Bonds designated for redemption at their
addresses appearing on the registration books of the Trustee. Each notice of redemption shall
state the date of such notice, the redemption price, the place of redemption (including the name
and appropriate address of the Trustee), the CUSIP number of the maturity or maturities, and, if
less than all of any such maturity is to be redeemed, the distinctive certificate numbers of the
Bonds of such maturity to be redeemed, the redemption price thereof and, in the case of Bonds to
be redeemed in part only, the respective portions of the principal amount thereof to be redeemed.
Each such notice shall also state that on said date there will become due and payable on each of
said Bonds the redemption price thereof and in the case of a Bond to be redeemed in part only,
the specified portion of the principal amount thereof to be redeemed, together with interest
accrued thereon to the redemption date, and that from and after such redemption date interest
thereon shall cease to accrue, and shall require that such Bonds be then surrendered at the
address of the Trustee specified in the redemption notice. Neither failure to receive any such
notice nor any defect therein shall affect the validity of the proceedings for redemption of such
Bonds or the cessation of the accrual of interest on the redemption date.
In the event of redemption of Bonds, the Trustee shall mail a notice of redemption
upon receipt of a Written Request of the District but only after the District shall file a Certificate
of the District with the Trustee that on or before the date set for redemption, the District will
deposit with or otherwise make available to the Trustee for deposit in the “Bond Redemption
Fund” the money required for payment of the redemption price, including accrued interest, of all
Bonds then to be called for redemption (or the Trustee determines that money will be deposited
with or otherwise made available to it in sufficient time for such purpose), together with the
estimated expense of giving such notice.
SECTION 4.04.Effect of Redemption. If notice of redemption has been
duly given as aforesaid and money for the payment of the redemption price of the Bonds called
for redemption is held by the Trustee, then on the redemption date designated in such notice
Bonds so called for redemption shall become due and payable, and from and after the date so
designated interest on such Bonds shall cease to accrue, and the Owners of such Bonds shall
have no rights in respect thereof except to receive payment of the redemption price thereof.
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All Bonds redeemed pursuant to the provisions of this section shall be cancelled
by the Trustee and shall be destroyed with a certificate of destruction furnished to the District, if
it so requests, and shall not be reissued.
SECTION 4.05.Conditional Notice of Redemption. Any notice of
optional redemption of the Bonds may be conditional and if any condition stated in the notice of
redemption shall not have been satisfied on or prior to the redemption date, said notice shall be
of no force and effect and the District shall not be required to redeem such Bonds and the
redemption shall be cancelled and the Trustee shall within a reasonable time thereafter give
notice, to the persons and in the manner in which the notice of redemption was given, that such
condition or conditions were not met and that the redemption was cancelled.
SECTION 4.06.Rescission or Cancellation of Redemption. The District
shall have the right to rescind any optional redemption by written notice of rescission. In
addition, any notice of optional redemption shall be cancelled and annulled if for any reason
funds are not available on the date fixed for redemption for the payment in full of the Bonds then
called for redemption. Any such rescission or cancellation shall not constitute an Event of
Default hereunder. The Trustee shall mail notice of rescission or cancellation of such
redemption in the same manner as the original notice of redemption was sent.
ARTICLE V
REVENUES
SECTION 5.01.Pledge of Revenues. Pursuant to Section 5544.2(f) of the
Act all Revenues are hereby irrevocably pledged to the payment of the Bonds and all other
Promissory Notes in accordance with the terms thereof as provided herein and therein; provided,
that out of the Revenues there may be apportioned such sums for such purposes as are expressly
permitted by this article.
SECTION 5.02.Allocation of Revenues. In order to carry out and
effectuate the pledge and lien contained herein, the District agrees and covenants that all
Revenues shall be received by the District in trust hereunder and shall be deposited when and as
received in the Midpeninsula Regional Open Space District Revenue Fund (the “Revenue
Fund”), which fund the District agrees and covenants to maintain so long as any Bonds remain
Outstanding. Based upon the adopted budget of the District, amounts to be received in the
Revenue Fund exceeding the deposits to the debt service requirements set forth below, shall be
surplus funds, which surplus funds may be budgeted and applied for any lawful purpose of the
District.
The District shall transfer the following amounts from the Revenue Fund into the
following respective funds at the times and in the manner and priority described hereinafter,
which funds the Trustee hereby agrees to establish and maintain so long as any Bonds are
Outstanding. The money in each of such funds shall be disbursed only for the purposes and uses
hereinafter authorized:
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(a)Interest Fund. On or before the 25th day of the month next preceding each
Interest Payment Date (commencing on February 25th, 2017), shall deposit in the Interest
Fund an amount equal to the interest becoming due and payable to but not including such
Interest Payment Date. All money in the Interest Fund shall be used and withdrawn by
the Trustee solely for the purpose of paying the interest on the Bonds to but not including
their respective Interest Payment Dates.
(b)Principal Fund. On or before the 25th day of the month next preceding each
Principal Payment Date (commencing on August 25th, 2017), The District shall deposit
in the Principal Fund an amount equal to the principal of the Bonds becoming due and
payable on such date. All moneys in the Principal Fund shall be used and withdrawn by
the Trustee solely for the purpose of paying the principal of the Bonds on their respective
Bond Payment Dates or redemption dates.
(c)Bond Redemption Fund. At the time that any payment is due to the Trustee
for the purpose of optional or mandatory redemption, the District shall deposit in the
Bond Redemption Fund an amount equal to the principal amount of, and interest on the
Bonds being redeemed, plus the redemption premium, if any. All money in the Bond
Redemption Fund shall be used and withdrawn by the Trustee solely for the purpose of
paying the principal of, interest on, and redemption premium, if any due on the Bonds on
their respective redemption dates.
(d) Excess Funds. Unless the District shall otherwise direct in writing, any
amounts remaining in the Interest, Principal, and Bond Redemption Funds on the Business Day
following September 1 of each year shall be returned to the District for deposit in the Revenue
Fund.
ARTICLE VI
COVENANTS OF THE DISTRICT
SECTION 6.01.Punctual Payment. The District will punctually budget
for and pay the interest on and principal of and redemption premiums, if any, on the Bonds in
strict conformity with the terms hereof and of the Bonds, and will faithfully observe and perform
all the agreements, conditions, covenants and terms contained herein and in the Bonds required
to be observed and performed by it.
SECTION 6.02.Against Encumbrances. The District will not make any
pledge of or place any lien on the Revenues except as provided herein. The District may at any
time, or from time to time, issue evidences of indebtedness for any lawful purpose that are
payable from and secured by a pledge of and lien on any Revenues as provided in Section 2.12;
provided, that such additional pledge and lien shall be subordinate in all respects to the pledge of
and lien on the Revenues provided herein.
SECTION 6.03.Tax Covenants and Matters; Rebate Fund. In addition
to the funds established pursuant to Article V, the District hereby agrees and covenants to
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establish and maintain with the Trustee a fund separate from any other fund established and
maintained hereunder to be known as the “Rebate Fund.” Upon receipt of a Written Request of
the District, there shall be deposited in the Rebate Fund such amounts furnished by the District
as are required to be deposited therein pursuant to the Tax Certificate or any subsequent tax
certificate executed in connection with a subsequent series of Bonds, and all money at any time
deposited in the Rebate Fund shall be held by the Trustee in trust, to the extent required to satisfy
the Rebate Requirement (as that term is defined in the Tax Certificate or any subsequent tax
certificate executed in connection with a subsequent series of Bonds), for payment to the United
States of America; and notwithstanding the provisions hereof relating to the pledge of Revenues,
the allocation of money in the Rebate Fund, the investments of money in any fund and the
defeasance of Outstanding Bonds, all amounts required to be deposited into or on deposit in the
Rebate Fund shall be governed exclusively by this section and by the Tax Certificate or any
subsequent tax certificate executed in connection with a subsequent series of Bonds (which are
incorporated herein by reference) and by all Written Requests of the District related thereto filed
with the Trustee, and the Trustee shall follow all such Written Requests of the District, and shall
have no liability or responsibility to enforce compliance by the District with the terms of the Tax
Certificate or any subsequent tax certificate executed in connection with a subsequent series of
Bonds; provided, that notwithstanding any provisions of this section, if the District shall provide
to the Trustee an Opinion of Counsel that any specified action required under this section is no
longer required or that some further or different action is required to maintain the exclusion from
federal income tax of interest with respect to the Bonds, the District and the Trustee may
conclusively rely on such opinion in complying with the requirements of this section, and,
notwithstanding anything to the contrary contained herein, the agreements and covenants
hereunder shall be deemed to be modified to that extent.
SECTION 6.04.Payment of Claims. The District will pay and discharge
any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien
on the Revenues or any part thereof or on any funds in the hands of the District prior to or
superior to the lien of the Bonds or which might impair the security of the Bonds; provided, that
nothing herein contained shall require the District to make any such payments so long as the
District in good faith shall contest the validity of any such claims.
SECTION 6.05.Payment of Taxes and Compliance With Governmental
Regulations. The District will pay and discharge all taxes, assessments and other governmental
charges which may hereafter be lawfully imposed when the same shall become due. The District
will duly observe and conform with all valid regulations and requirements of any governmental
authority, but the District shall not be required to comply with any regulations or requirements so
long as the validity or application thereof shall be contested in good faith.
SECTION 6.06.Financial Statements and Other Reports. (a) The
District will prepare and file with the Trustee, as a supplement to the financial statements of the
County, annually within ten (10) months after the close of each Fiscal Year (commencing with
the Fiscal Year ending June 30, 2016), financial statements of the District for the preceding
Fiscal Year prepared in accordance with Generally Accepted Accounting Principles. The
Trustee shall have no duty to review such financial statements.
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(b)On or before the first day of November in each Fiscal Year commencing with
Fiscal Year 2016-17, the District will file with the Trustee a budget approved by the
Board of Directors which includes all payments on Outstanding Bonds and Promissory
Notes and other obligations payable from Revenues. Any budget may be amended at any
time during any Fiscal Year and such amended budget shall be filed by the District with
the Trustee. The Trustee shall have no responsibility for determining adequacy of any
budget provisions required hereunder.
SECTION 6.07.Protection of Security and Rights of Owners. The
District will preserve and protect the security of the Bonds and the rights of the Owners
hereunder, and will warrant and defend such rights against all claims and demands of all persons.
SECTION 6.08.Continuing Disclosure. The District will comply with and
carry out all of the provisions of any Continuing Disclosure Certificates (each a “Continuing
Disclosure Certificate”) executed by the District and as it may be amended from time to time in
accordance with the terms thereof, and notwithstanding any other provision hereof, failure of the
District to comply with a Continuing Disclosure Certificate shall not be considered an Event of
Default hereunder; provided, that the Trustee may, and at the request of the Owners of at least
twenty-five per cent (25%) in aggregate principal amount of Outstanding Bonds whose Owners
are beneficiaries of the Continuing Disclosure Certificate, shall (but only to the extent it is
indemnified to its satisfaction, including indemnification from and against attorneys’ fees), or
any Owner or Beneficial Owner (as that term is defined in the Continuing Disclosure Certificate)
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.
SECTION 6.09.Further Assurances. The District will adopt, deliver,
execute and make any and all further assurances, instruments and resolutions as may be
reasonably necessary or proper to carry out the intention or to facilitate the performance hereof
and for the better assuring and confirming unto the Owners of the rights and benefits provided to
it herein.
ARTICLE VII
THE TRUSTEE
SECTION 7.01.The Trustee. Zions Bank, a division of ZB, National
Association at its Principal Corporate Trust Office, is hereby appointed Trustee hereunder for the
purpose of receiving all money which the District is required to deposit with the Trustee
hereunder and to allocate, use and apply such money as provided herein.
The District at any time may (prior to the occurrence of an Event of Default
which shall then be continuing), upon any breach of the trust set forth herein, remove any
Trustee and appoint any successor thereto upon thirty (30) days’ written notice to the removed
Trustee; provided, that any such successor Trustee shall be a bank or trust company or national
banking association with a principal corporate trust office in the United States of America, and
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that has a combined capital (exclusive of borrowed capital) and surplus of at least five hundred
million dollars ($500,000,000) and is subject to supervision or examination by federal or state
authority. If such bank or trust company or national banking association publishes a report of
condition at least annually, pursuant to law or to the requirements of any supervising or
examining authority above referred to, then for the purposes of this section the combined capital
and surplus of such bank or trust company shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
Any Trustee may at any time resign by giving written notice to the District and by
giving to the Owners notice of such resignation, which notice shall be mailed to the Owners at
their addresses appearing in the registration books maintained by the Trustee pursuant to
Section 2.08. Upon receiving such notice of resignation, the District shall promptly appoint a
successor Trustee by an instrument in writing; provided, that if no such successor shall have been
appointed by the District within thirty (30) days after the receipt by the District of such notice,
the resigning Trustee may petition any court of competent jurisdiction to appoint a successor
Trustee.
Any resignation or removal of a Trustee and appointment of a successor Trustee
shall become effective only after a successor Trustee shall have been appointed and only upon
the acceptance of appointment by the successor Trustee.
The Trustee is hereby authorized and directed to pay the interest on the Bonds on
each Interest Payment Date as provided herein and to pay the principal of and the redemption
premiums, if any, on the Bonds when duly presented for payment at maturity or on redemption
prior to maturity, and to cancel and destroy all Bonds upon payment thereof and to deliver
evidence of such cancellation and destruction to the District.
The District shall from time to time, subject to any agreement between the District
and the Trustee then in force, pay to the Trustee compensation for its services, reimburse the
Trustee for all its advances and expenditures, including but not limited to advances to and fees
and expenses of independent accountants, counsel and engineers or other experts employed by it
in the exercise and performance of its duties and obligations hereunder, and, to the extent
permitted by law, indemnify and save the Trustee and its officers, directors, employees and
agents harmless against any costs, expenses, losses and liabilities not arising from its own
negligence or willful misconduct which it may incur in the exercise and performance of its duties
and obligations hereunder. The Trustee’s rights to indemnification and protection from liability
hereunder and its rights to payment of its fees and expenses shall survive its resignation or
removal and final payment or defeasance of the Bonds.
Any bank or trust company into which the Trustee may be merged or converted or
with which it may be consolidated, or any bank or trust company resulting from any merger,
conversion or consolidation to which it shall be a party, or any bank or trust company to which
the Trustee may sell or transfer all or substantially all of its corporate trust business, if such bank
or trust company would be eligible under this section to serve as Trustee, shall be the successor
Trustee hereunder without the execution or filing of any paper or any further act, anything herein
to the contrary notwithstanding.
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SECTION 7.02.Liability of Trustee. The recitals of facts, agreements and
covenants contained herein and in the Bonds shall be taken as statements, agreements and
covenants of the District, and the Trustee does not assume any responsibility for the correctness
of the same and does not make any representation as to the validity or sufficiency hereof or of
the Bonds, the adequacy of any security afforded thereunder, or the correctness or completeness
of any information contained in any offering materials distributed in connection with the sale of
any Bonds, and shall not incur any responsibility in respect of any of the foregoing other than in
connection with the duties or obligations assigned to or imposed upon it hereunder. The Trustee
shall not be liable in connection with the performance of its duties and obligations hereunder
except for its own negligence or willful misconduct.
The Trustee shall be under no obligation to exercise any of the rights vested in it
hereunder at the request or direction of any Owner pursuant hereto unless such Owner shall have
offered to the Trustee security or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction.
Except during the continuance of an Event of Default,
(a)the Trustee undertakes to perform such duties and obligations and only such
duties and obligations as are specifically set forth herein, and no implied duties or obligations
shall be read herein against the Trustee; and
(b)in the absence of negligence or willful misconduct on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming to the
requirements hereof.
In case an Event of Default has occurred and is then continuing, the Trustee shall
exercise such rights vested in it hereby, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
The Trustee shall not be accountable for the use by the District of any money
which the Trustee releases to the District or which the District otherwise receives, or to verify
compliance by the District with the provisions of Section 5.02 or Section 2.12. The Trustee shall
not have any obligation to incur any financial or other liability or risk in performing any duty or
obligation or in exercising any right or remedy hereunder. The Trustee shall be entitled to
interest on all amounts advanced by it hereunder at the maximum interest rate permitted by law.
Notwithstanding the foregoing, the Trustee shall not be required to advance its own funds. The
Trustee in its individual or other capacity may become the owner or pledgee of the Bonds with
the same rights it would have if it were not the Trustee.
The Trustee shall not be deemed to have knowledge of any Event of Default
(other than a payment default hereunder) until an officer of the Trustee at its Principal Corporate
Trust Office has been notified by the District in writing that such an Event of Default has
occurred. The Trustee shall not be bound to ascertain or inquire as to the performance or
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observance by any other party of any of the agreements, conditions, covenants or terms hereof or
of any of the documents executed in connection with the Bonds.
The Trustee shall not have any duty to review any financial statement filed with it
by the District.
Before taking action under Article IX or upon the direction of the Owners, the
Trustee may require that indemnity satisfactory to it be furnished to it to protect it against all fees
and expenses, including those of its attorneys and advisors, and protect it against all liability it
may incur.
SECTION 7.03.Notice to Trustee. The Trustee shall be protected in acting
upon any bond, certificate, consent, indenture, notice, order, report, request, requisition or other
paper or document believed by it to be genuine and to have been signed or presented by the
proper party or parties. The Trustee may consult with counsel, who may be counsel to the
District, with regard to legal questions, and the opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken or suffered hereunder in
good faith and in accordance therewith.
The Trustee shall not be bound to recognize any person as the Owner of a Bond
unless and until such Bond is submitted for inspection, if required, and his title thereto
satisfactorily established, if disputed.
Whenever in the administration of its duties and obligations hereunder the Trustee
shall deem it necessary or desirable that a matter be proved or established prior to taking or
suffering any action hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by a Certificate of the District, and such certificate shall
be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon
the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of
such matter or may require such additional evidence as to it may seem reasonable.
ARTICLE VIII
AMENDMENT OF OR SUPPLEMENT TO THE INDENTURE
SECTION 8.01.Procedure for Amendment of or Supplement to the
Indenture. The Indenture and the rights and obligations of the District and of the Owners may
be amended or supplemented at any time by a Supplemental Indenture which shall become
binding when the written consents of Owners of more than fifty per cent (50%) in aggregate
principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in
Section 8.02) are filed with the Trustee; provided, that no such amendment or supplement shall
(1) extend the maturity of any Bond, or reduce the interest rate thereon, or otherwise alter or
impair the obligation of the District to pay the interest thereon or the principal thereof or any
redemption premium thereon or to pay any sinking fund account payment therefor at the time
and place and at the rate and in the currency and from the funds provided herein without the
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express written consent of the Owner of such Bond; or (2) permit the creation by the District of
any mortgage, pledge or lien upon the Revenues and the other funds provided herein superior to
or on a parity with the pledge and lien created herein for the benefit of the Bonds and the
Promissory Notes; or (3) reduce the percentage of Bonds required for the written consent to any
amendment hereof or supplement hereto; or (4) modify any rights or obligations of the Trustee
without its prior written assent thereto.
The Indenture and the rights and obligations of the District and of the Owners
may also be amended or supplemented at any time by a Supplemental Indenture which shall
become binding upon execution, but only to the extent permitted by law and only for any one or
more of the following purposes:
(a)to add to the agreements and covenants of the District contained herein
other agreements and covenants thereafter to be observed, or to surrender any right or
remedy herein reserved to or conferred upon the District;
(b)to make such provisions for the purpose of curing any ambiguity
contained herein or of curing, correcting or supplementing any defective provision
contained herein or in regard to questions arising hereunder as the District may deem
necessary or desirable and not inconsistent herewith, which shall not materially adversely
affect the interests of the Owners;
(c)to provide for the issuance of any additional Bonds and to provide the
terms and conditions under which such additional Bonds may be issued, subject to and in
accordance with the provisions hereof;
(d)to amend or supplement the Indenture in such manner as to permit the
qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar
federal statute hereafter in effect, and to add such other agreements, conditions,
covenants and terms as may be permitted by said act or any similar federal statute, which
shall not materially adversely affect the interests of the Owners of the Bonds;
(e)to maintain the exclusion under the Code of interest on the Bonds from
gross income for federal income tax purposes or the exemption of such interest from
State of California personal income taxes;
(f)for any other purpose that does not materially adversely affect the interests
of the Owners.
The Trustee may conclusively rely upon and accept an Opinion of Counsel that an
amendment hereof is in conformity with the provisions of this article.
SECTION 8.02.Disqualified Bonds. Any Bonds owned or held by or for
the account of the District shall not be deemed Outstanding for the purpose of any consent or
other action or any calculation of Outstanding Bonds provided for herein, and shall not be
entitled to consent to, or take any other action provided for herein.
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SECTION 8.03.Endorsement or Replacement of Bonds After
Amendment. After the effective date of any action taken as hereinabove provided, the District
may determine that the Bonds may bear a notation, by endorsement in form approved by the
District, as to such action, and in that case upon demand of the Owner of any Bond Outstanding
on such effective date and presentation of such Owner’s Bond for the purpose at the Principal
Corporate Trust Office, a suitable notation as to such action shall be made on such Bond;
provided, that if the District shall so determine, new Bonds so modified as, in the opinion of the
District, shall be necessary to conform to such action shall be prepared and executed, and in that
case upon demand of the Owner of any Bond Outstanding at such effective date such new Bonds
shall be exchanged at the Principal Corporate Trust Office of the Trustee, without cost to each
Owner, for Bonds then Outstanding, upon surrender of such Outstanding Bonds.
SECTION 8.04.Amendment by Mutual Consent. The provisions of this
article shall not prevent any Owner from accepting any amendment as to the particular Bonds
held by such Owner, provided that due notation thereof is made on such Bonds.
SECTION 8.05.Notice to and Consent of Owners. If consent of the
Owners of the Bonds is required under the terms of this Indenture for the amendment of this
Indenture or for any other similar purpose, the District shall cause notice of the proposed
amendment to be given by first-class mail to the Owners of the Outstanding Bonds then shown
on the registration books for the Bonds. Such notice shall briefly set forth the nature of the
proposed amendment or other action and shall state that copies of any such amendment are on
file at the office of the District and the Principal Corporate Trust Office of the Trustee for
inspection by all Owners of the Bonds. If, within sixty (60) days or such longer period as shall
be prescribed by the District following the mailing of such notice, the Owners of the requisite
principal amount of the Bonds Outstanding by instruments filed with the District shall have
consented to the amendment or other proposed action, then the District may adopt or execute, as
appropriate, such amendment or take such proposed action and the consent of the Owners shall
thereby be conclusively presumed. Such instruments filed with the District may include
documents, including Certificates of the District, stating that Owners of Bonds have consented to
an amendment by purchasing such Bonds if the official statement or other disclosure document
related to such purchase disclosed that the purchase of the Bonds was deemed to mean that the
Owners consented to the amendment.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
SECTION 9.01.Events of Default. Each of the following events (each an
“Event of Default”) shall constitute a default hereunder:
(a)if default shall be made in the due and punctual payment of the interest on
any Bond when and as the same shall become due and payable;
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(b)if default shall be made in the due and punctual payment of the principal
of or the redemption premium, if any, on any Bond when and as the same shall become
due and payable, whether at maturity as therein expressed, by declaration or otherwise;
(c)if default shall be made by the District in the observance or performance
of any of the other agreements, conditions, covenants or terms on its part contained
herein or in the Bonds, and such default shall have continued for a period of thirty (30)
days after the District shall have been given notice in writing of such default by the
Trustee; provided, that such default shall not constitute an Event of Default hereunder if
the District shall commence to cure such default within such thirty (30)-day period and
thereafter diligently and in good faith shall proceed to cure such default within a
reasonable period of time; or
(d)if the District shall file a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law of the United
States of America or the State of California, or if a court of competent jurisdiction shall
approve a petition, filed with or without the consent of the District, seeking
reorganization under the federal bankruptcy laws or any other applicable law of the
United States of America or the State of California, or if, under the provisions of any
other law for the relief or aid of debtors, any court of competent jurisdiction shall assume
custody or control of the District or of the whole or any substantial part of its property;
(e)if the District shall fail to pay any principal or interest when due under any
Promissory Note;
SECTION 9.02.Application of Funds Upon Default; No Acceleration. If
an Event of Default shall occur and be continuing, the District shall immediately transfer to the
Trustee all Revenues held by it and the Trustee shall apply all Revenues and any other funds then
held or thereafter received by the Trustee under any of the provisions of this Indenture
(excluding the Rebate Fund) in the following order:
First, to the payment of the costs, fees and expenses of the Trustee, if any, in
carrying out the provisions of this article, including reasonable compensation to its agents,
attorneys and counsel, and thereafter to the payment of the costs and expenses of the Owners in
providing for the declaration of such Event of Default, including reasonable compensation to
their agents, attorneys and counsel;
Second, upon presentation of the several Bonds and Promissory Notes, and the
stamping thereon of the amount of the payment if only partially paid or upon the surrender
thereof if fully paid, to the payment of the principal of and interest on the Bonds and Promissory
Notes in the order in which they become due.
Third, to any other obligations of the District then due and payable.
SECTION 9.03.Remedies of Owners. In an Event of Default, any Owner
shall have the right for the equal benefit and protection of all Owners similarly situated to:
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(a)by mandamus or other suit or proceeding at law or in equity to enforce his
rights against the District and any of the officers and employees of the District, and to
compel the District or any such officers or employees to perform and carry out their
duties under the Law and their agreements and covenants with the Owners as provided
herein;
(b)by suit in equity to enjoin any acts or things which are unlawful or violate
the rights of the Owners; or
(c)by a suit in equity to require the District and its officers and employees to
account for the Revenues as the trustee of an express trust.
SECTION 9.04.Non-Waiver. Nothing in this article or in any other
provision hereof, or in the Bonds, shall affect or impair the obligation of the District, which is
absolute and unconditional, to pay the interest on and the principal of and the redemption
premiums, if any, on the Bonds to the respective Owners of the Bonds at the scheduled dates of
maturity or upon prior redemption as herein provided out of the Revenues and the other funds
provided herein pledged for such payment, or affect or impair the right of action, which is also
absolute and unconditional, of such Owners to institute suit to enforce such payment by virtue of
the contract embodied in the Bonds and herein.
A waiver of any default or breach of duty or contract by any Owner shall not
affect any subsequent default or breach of duty or contract, or impair any rights or remedies on
any such subsequent default or breach, and no delay or omission by any Owner to exercise any
right accruing upon any default hereunder shall impair any such right or shall be construed to be
a waiver of any such default or an acquiescence therein, and every remedy conferred upon the
Owners by the Law or by this article may be enforced and exercised from time to time and as
often as shall be deemed expedient by the Owners.
If any suit, action or proceeding to enforce any right or exercise any remedy is
abandoned or determined adversely to the Owners, the District, the Trustee and the Owners shall
be restored to their former positions, rights and remedies as if such suit, action or proceeding had
not been brought or taken.
SECTION 9.05.Actions by Trustee as Attorney-in-Fact. Any suit, action
or proceeding which any Owner shall have the right to bring to enforce any right or remedy
hereunder may be brought by the Trustee for the equal benefit and protection of all Owners, and
the Trustee is hereby appointed (and the successive respective Owners of the Bonds issued
hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it)
the true and lawful attorney-in-fact of the Owners for the purpose of bringing any such suit,
action or proceeding and to do and perform any and all acts and things for and on behalf of the
Owners as a class or classes as may be necessary or advisable in the opinion of the Trustee as
such attorney-in-fact; provided, that the Trustee shall have no duty or obligation to enforce any
right or remedy unless it has been indemnified by the Owners from any liability or expense,
including without limitation fees and expenses of its attorneys
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SECTION 9.06.Remedies Not Exclusive. No remedy herein conferred
upon or reserved to the Owners is intended to be exclusive of any other remedy, and every such
remedy shall be cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised
without exhausting and without regard to any other remedy conferred by the Law or any other
law.
ARTICLE X
DEFEASANCE
SECTION 10.01.Discharge of Bonds. If the District shall pay or cause to
be paid, or there shall otherwise be paid, to the Owners of all Outstanding Bonds the interest
thereon and the principal thereof and the redemption premiums, if any, thereon at the times and
in the manner stipulated therein and herein, then the Owners of such Bonds shall cease to be
entitled to the pledge of Revenues and the other funds provided herein, and all agreements,
covenants and other obligations of the District to the Owners of such Bonds hereunder shall
thereupon cease, terminate and become void and be discharged and satisfied.
Any Outstanding Bonds shall prior to the scheduled maturity dates thereof be
deemed to have been paid within the meaning of and with the effect expressed in the first
paragraph of this section (except that the District shall remain liable for the payment of such
Bonds, but only from the money deposited with the Trustee as herein provided) if there shall
have been deposited with the Trustee money to be held in trust by the Trustee sufficient for such
payment at the maturity dates thereof or the redemption dates thereof.
Any Outstanding Bonds shall prior to the scheduled maturity dates thereof be
deemed to have been paid within the meaning of and with the effect expressed in the first
paragraph of this section (except that the District shall remain liable for the payment of such
Bonds, but only from the money or Defeasance Securities deposited with the Trustee as herein
provided) if (1) there shall have been deposited with the Trustee or escrow agent either money in
an amount which shall be sufficient or Defeasance Securities which are not subject to redemption
prior to maturity (including any Defeasance Securities issued or held in book-entry form on the
books of the Department of Treasury of the United States of America) the interest on and the
principal of which when paid will provide money which, together with the money, if any,
deposited with the Trustee or escrow agent at the same time, shall be sufficient (as evidenced by
a report of an Independent Certified Public Accountant or verification agent obtained by the
District and filed with the Trustee) to pay when due the interest to become due on such Bonds on
and prior to the maturity dates thereof or the redemption dates thereof and the principal of and
the redemption premiums, if any, on such Bonds on the maturity dates thereof or the redemption
dates thereof; and (2) the District shall have given the Trustee (in form satisfactory to the
Trustee) irrevocable instructions to mail, as soon as practicable, a notice to the Owners of such
Bonds that the deposit required by clause (1) of this paragraph has been made with the Trustee
and that such Bonds are deemed to have been paid in accordance with this section, and stating
the maturity dates thereof or the redemption dates thereof upon which money is to be available
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for the payment of the principal of and the redemption premiums, if any, on such Bonds;
provided, that no Defeasance Securities or money deposited with the Trustee or escrow agent
pursuant to this section (nor any interest on or principal payments of such Defeasance Securities)
shall be withdrawn or used for any purpose other than, and such Defeasance Securities and
money shall be held in trust for, the payment of the interest on and the principal of and the
redemption premiums, if any, on such Bonds as provided herein, except that any money received
from such interest on or principal payments of such Defeasance Securities deposited with the
Trustee or escrow agent which is not then needed for the foregoing purpose shall, to the extent
practicable, be reinvested as specified in a Written Request of the District filed with the Trustee
or escrow agent in Defeasance Securities maturing at the times and in the amounts sufficient to
pay when due the interest on and the principal of and the redemption premiums, if any, on such
Bonds on and prior to such maturity dates thereof or redemption dates thereof, and all interest
earned from such reinvestments shall be deposited in the Revenue Fund.
After the payment of the interest and principal and redemption premiums, if any,
on all Outstanding Bonds as provided in this section, the Trustee shall (after the payment of all
amounts due to it hereunder) execute and deliver to the District all such instruments as may be
necessary or desirable to evidence the discharge and satisfaction hereof, and the Trustee shall
pay over or deliver to the District all money or deposits or investments held by it pursuant hereto
which are not required for the payment of the interest and principal and redemption premiums, if
any, on the Bonds.
SECTION 10.02.Unclaimed Money. Anything contained herein to the
contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge
of the interest on or the principal of or the redemption premiums, if any, on any of the Bonds
which remains unclaimed for two (2) years after the date when such payments have become due
and payable, if such money was held by the Trustee at such date, or for two (2) years after the
date of deposit of such money if deposited with the Trustee after the date when such payments
became due and payable, shall be repaid by the Trustee to the District as its absolute property
and free from trust, and the Trustee shall thereupon be released and discharged with respect
thereto and the Owners shall look only to the District for the making of such payments; provided,
that before being required to make any such payment to the District, the Trustee shall mail by
first class mail to the Owners of such Bonds (at the expense of the District) at their addresses as
they appear in the registration books maintained by the Trustee pursuant to Section 2.08 a notice
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.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01.Liability of District Limited to Revenues and Certain
Other Funds. Notwithstanding anything contained herein, the District shall not be required to
advance any money derived from any source of income other than the Revenues and the other
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funds provided herein for the payment of the interest on or the principal of or the redemption
premiums, if any, on the Bonds or for the observance or performance of any agreements,
conditions, covenants or terms contained herein (except that the District’s obligation to pay the
Rebate Requirement (as that term is defined in the Tax Certificate) to the United States of
America shall be considered a general obligation of the District and shall be payable from any
available funds of the District); provided, that the District may advance funds for any such
payment as long as such funds are derived from a source legally available for such purpose.
The Bonds are special obligations of the District and are payable, as to the interest
thereon and the principal thereof and the redemption premiums, if any, thereon, solely from the
Revenues pledged hereunder, and the District is not obligated to pay them except from the
Revenues. All of the Bonds and the Promissory Notes are equally secured by a pledge of, and
charge and lien upon, the Revenues, and the Revenues constitute a trust fund for the security and
payment of the interest on and the principal of and the redemption premiums, if any, on the
Bonds and the Promissory Notes as provided herein. No persons executing the Bonds shall be
liable personally on the Bonds by reason of their issuance.
SECTION 11.02.Benefits of the Indenture Limited to Certain Parties.
Nothing herein, expressed or implied, is intended to give to any person other than the District the
Trustee and the Owners any right or remedy under or by reason hereof, and any agreements,
conditions, covenants or terms hereof required to be observed or performed by and on behalf of
the District or any officer or employee thereof shall be for the sole and exclusive benefit of the
Trustee and the Owners.
SECTION 11.03.Successor Is Deemed Included in All References to
Predecessor. Whenever herein either the District or any officer or employee thereof is named or
referred to, such reference shall be deemed to include the successor to the powers, duties and
functions, with respect to the management, administration and control of the District’s facilities,
that are presently vested in the District or such officer or employee, and all the agreements,
conditions, covenants and terms contained herein required to be observed or performed by or on
behalf of the District or any officer or employee thereof shall bind and inure to the benefit of the
respective successors thereof whether so expressed or not.
SECTION 11.04.Execution of Documents by Owners. Any consent,
declaration, request or other instrument which the Indenture may require or permit to be
executed by Owners may be in one or more instruments of similar tenor and shall be executed by
Owners in person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution
by any Owner or his attorney of such consent, declaration, request or other instrument, or of such
writing appointing such attorney, may be proved by the certificate of any notary public or other
officer authorized to take acknowledgments of deeds to be recorded in the state, territory or
commonwealth in which he purports to act that the person signing such consent, declaration,
request or other instrument or writing acknowledged to him the execution thereof, or by an
affidavit of a witness of such execution, duly sworn to before such notary public or other officer.
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Any consent, declaration, request or other instrument or writing of the Owner of
any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be
done by the District in good faith and in accordance therewith.
SECTION 11.05.Waiver of Personal Liability. No member of the Board of
Directors or officer or employee of the District shall be individually or personally liable for the
payment of the interest on or the principal of or the redemption premiums, if any, on the Bonds;
but nothing contained herein shall relieve any member of the Board of Directors or officer or
employee of the District from the performance of any official duty provided by law or provided
herein.
SECTION 11.06.Content of Certificates and Reports. Every certificate or
report with respect to compliance with an agreement, condition, covenant or term contained
herein shall include (a) a statement that the person or persons making or giving such certificate
or report have read such agreement, condition, covenant or term and the definitions herein
relating thereto; (b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such certificate or report are
based; (c) a statement that, in the opinion of the signers, they have made or caused to be made
such examination or investigation as is necessary to enable them to express an informed opinion
as to whether or not such agreement, condition, covenant or term has been complied with; and
(d) a statement as to whether, in the opinion of the signers, such agreement, condition, covenant
or term has been complied with.
Any such certificate made or given by an officer of the District may be based,
insofar as it relates to legal matters, upon a certificate or opinion of or representation by counsel
unless such officer knows that the certificate or opinion or representation with respect to the
matters upon which his certificate may be based, as aforesaid, are erroneous, or in the exercise of
reasonable care should have known that the same were erroneous. Any such certificate or
opinion or representation made or given by counsel may be based, insofar as it relates to factual
matters information with respect to which is in the possession of the District, upon the opinion of
or representation by an officer or officers of the District unless such counsel knows that the
opinion or representation with respect to the matters upon which his opinion or representation
may be based, as aforesaid, are erroneous, or in exercise of reasonable care should have known
that the same were erroneous.
SECTION 11.07.Investment of Money in Funds. Upon receipt of a
Written Request of the District by the Trustee at least two (2) Business Days prior to the date of
such investment, all money in the Bond Redemption Fund or the Rebate Fund shall be invested
by the Trustee in those Permitted Investments specified in such Written Request of the District;
provided, that the Trustee shall be under no liability for the purchase of any Permitted
Investment in accordance with any such Written Requests or any losses thereon; and provided
further, that the Permitted Investments in which money in the Bond Redemption Fund or the
Rebate Fund shall be invested shall mature prior to the date on which such money is estimated to
be required to be paid out hereunder or thereunder, and provided further, that in the absence of
any such Written Request of the District regarding investments, the Trustee shall leave such
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funds uninvested. Any interest, income or profits from the deposits or investments of money in
the Rebate Fund shall remain in the Rebate Fund, and on March 1 and September 1 of each year
(beginning on March 1, 2017) any interest, income or profits from the deposits or investments of
money in the Bond Redemption Fund shall be deposited in the Revenue Fund. For purposes of
determining the amount on deposit in any fund held hereunder, all investments credited to such
fund shall be valued 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,
and except as otherwise provided in this section, Permitted Investments or Defeasance Securities
representing an investment of money attributable to any fund and all investment profits or losses
thereon shall be deemed at all times to be a part of such fund.
Notwithstanding anything to the contrary contained herein, in making any
valuations of investments hereunder, the Trustee may utilize computerized securities pricing
services that may be available to it, including those available through its regular accounting
system, and may rely thereon. The Trustee or its affiliates may act as principal or agent in the
making or disposing of any investment and may also act as sponsor, advisor or manager in
connection with any investments. The Trustee may commingle the accounts and funds
established hereunder for investment purposes, but shall account for each account and fund
separately. The Trustee shall have no liability for any losses incurred with respect to any
investment acquired or disposed of in accordance with this section. The District acknowledges
that to the extent regulations of the Comptroller of the Currency or other applicable regulatory
entity grant the District the right to receive brokerage confirmations of security transactions as
they occur, the District will not receive such confirmations to the extent permitted by law. The
Trustee will furnish the District periodic cash transaction statements which include detail for all
investment transactions made by the Trustee hereunder.
SECTION 11.08.Notice by Mail. Any notice required to be given by mail
to any Owners shall be given by mailing a copy of such notice, first class postage prepaid, to
such Owners at their addresses appearing in the registration books required to be kept by the
Trustee pursuant to the provisions of Section 2.08 not less than twenty (20) days nor more than
sixty (60) days following the action or prior to the event concerning which notice thereof is
required to be given; provided, that neither failure to receive any such notice nor any immaterial
defect contained therein shall affect the sufficiency or validity of the proceedings taken in
connection with the action or the event concerning which such notice was given.
SECTION 11.09.Maintenance of Funds. Any fund required hereby to be
established and maintained by the District or the Trustee may be established and maintained in
the accounting records of the District or the Trustee either as an account or fund, and may, for
the purposes of such records, any audits thereof and any reports or statements with respect
thereto, be treated either as an account or as a fund; but all such records with respect to all such
funds shall at all times be maintained in accordance with sound accounting practices and with
due regard for the protection of the security of the Bonds and the rights of the Owners.
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SECTION 11.10.Business Days. When any action is provided for herein to
be done on a day named or within a specified time period, and the day or the last day of the
period falls on a day that is not a Business Day, such action may be performed on the next
ensuing Business Day with the same effect as though performed on the appointed day or within
the specified period.
SECTION 11.11.Article and Section Headings, Gender and References.
The headings or titles of the several articles and sections hereof (and in the table of contents
appended hereto) shall be solely for convenience of reference and shall not affect the meaning,
construction or effect hereof, and words of any gender shall be deemed and construed to include
all genders, and all references herein to “Articles,” “Sections” and other subdivisions or clauses
are to the corresponding articles, sections, subdivisions or clauses hereof; and the words
“hereby,” “herein,” “hereto,” “herewith,” “hereunder” and other words of similar import refer to
the Indenture as a whole and not to any particular article, section, subdivision or clause hereof.
SECTION 11.12.Governing Law. The Indenture shall be governed and
construed in accordance with the Law and the laws of the State of California.
SECTION 11.13.Notices. Whenever any notice is required to be given
hereunder, such notice shall be mailed, first class mail, postage prepaid to the following parties at
the following addresses:
If to the District:
Midpeninsula Regional Open Space District
330 Distel Circle
Los Altos, CA 94022
If to the Trustee:
Zions Bank, a division of ZB, National Association
550 S. Hope Street, Suite 2875
Los Angeles, CA 90071
Attn: Corporate Trust Department
SECTION 11.14.Partial Invalidity. If any one or more of the agreements,
conditions, covenants or terms or portions thereof provided herein to be observed or performed
on the part of the District or of the Trustee should be contrary to law, then such agreement or
agreements, such condition or conditions, such covenant or covenants, such term or terms or
such portions thereof shall be null and void and shall be deemed separable from the remaining
agreements, conditions, covenants and terms or portions thereof and shall in no way affect the
validity hereof or of the Bonds, and the Owners shall retain all the rights and benefits accorded to
them under the Law or any other applicable provisions of law. The District hereby declares that
it would have executed the Indenture and each and every other section, paragraph, subdivision,
sentence, clause and phrase hereof and would have authorized the issuance of the Bonds
pursuant hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions,
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sentences, clauses or phrases of the Indenture or the application thereof to any person or
circumstance may be held to be unconstitutional, unenforceable or invalid.
SECTION 11.15.Execution in Several Counterparts. The Indenture may
be executed in any number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original; and all such counterparts, or as many of them as the District and the
Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the Midpeninsula Regional Open Space District has
caused the Indenture to be executed in its name and on its behalf by the General Manager and to
be attested by the Clerk of the Board of Directors of the District, and Zions Bank, a division of
ZB, National Association, as Trustee, in token of its acceptance of the trusts created hereunder,
has caused the Indenture to be executed in its corporate name by its duly authorized officer, all as
of the date and year first above written.
MIDPENINSULA REGIONAL OPEN
SPACE DISTRICT
By: __________________________________
General Manager
ATTEST:
______________________________________
Clerk of the Board of Directors
ZIONS BANK, A DIVISION OF ZB,
NATIONAL ASSOCIATION, AS TRUSTEE
By: __________________________________
Authorized Officer
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[To be Updated]
EXHIBIT A
FORM OF 2016 REFUNDING BONDS
No. $
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTIES OF SANTA CLARA AND SAN MATEO
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
GREEN BOND, 2016 REFUNDING
Interest
Rate
Maturity
Date
Bond
Date CUSIP
_________% September 1, _____ ___________, 2016 __________
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The 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 (the
“District”), for value received hereby promises to pay (but only from the Revenues and the other
funds hereinafter referred to) to the registered owner set forth above on the maturity date set
forth above the principal amount set forth above (subject to any right of prior redemption
hereinafter provided for), together with interest thereon computed on the basis of a 360-day year
of twelve (12) 30-day calendar months from the interest payment date next preceding the date of
authentication of this Bond (unless this Bond is authenticated on a day during the period from the
day prior to a Record Date (as that term is hereinafter defined) for an interest payment date to
such interest payment date, both dates inclusive, in which event it shall bear interest from such
interest payment date, or unless it is authenticated on a day on or before the Record Date for the
first interest payment date, in which event it shall bear interest from its date) until the principal
hereof shall have been paid, at the interest rate per annum set forth above, payable on March 1,
2017, and semiannually thereafter on September 1 and March 1 in each year. The interest on this
Bond due on or before the maturity or prior redemption hereof shall be payable only to the
person whose name appears in the registration books required to be kept by Zions Bank, a
division of ZB, National Association (the “Trustee”) at its Principal Corporate Trust Office (as
that term is defined in the Indenture hereinafter referred to, and herein the “Principal Corporate
Trust Office”) as the registered owner hereof at the close of business as of the fifteenth (15th)
day of the month next preceding each interest payment date (each, a “Record Date”), with such
interest to be paid by check mailed by first class mail on each interest payment date to such
registered owner at his address as it appears on such books, except that in the case of a registered
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owner of one million dollars ($1,000,000) or more in aggregate principal amount of Bonds then
outstanding, payment shall be made at such owner’s option by wire transfer on each interest
payment date of immediately available funds to an account in a bank or trust company or savings
bank that is a member of the Federal Reserve System and that is located in the United States of
America according to written instructions given by such owner to the Trustee by the applicable
Record Date. The principal of and redemption premium, if any, on this Bond shall be payable
only to the person whose name appears in such registration books as the registered owner hereof,
such principal and redemption premium, if any, to be paid upon surrender of this Bond to the
Trustee at its Principal Corporate Trust Office at maturity or upon prior redemption. The interest
on and principal of and redemption premium, if any, on this Bond are payable in lawful money
of the United States of America.
This Bond is one of a duly authorized issue of Bonds of the District in the
aggregate principal amount of _______________ ($_________) designated the “Midpeninsula
Regional Open Space District Green Bonds, 2016 Refunding” (the “Bonds”) issued by the
District to provide funds to the District which will be sufficient to provide for the refunding of
the District’s Prior Bonds (as defined in the Indenture) issued to refinance the construction of
certain regional open space facilities, which Bonds are issued under and pursuant to the Act and
all laws amendatory thereof or supplemental thereto, including Articles 10 and 11 of Chapter 3
of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (collectively,
the “Law”), and under and pursuant to the provisions of an Indenture executed and entered into
as of September 1, 2016 (the “Indenture”) by and between the District and the Trustee, all of like
tenor and date (except for such variations, if any, as may be required to designate varying
numbers, denominations, maturities, interest rates or redemption provisions). All the Bonds are
equally and ratably secured in accordance with the terms and conditions of the Indenture (copies
of which are on file at the office of the Clerk of the Board of Directors of the District and at the
Principal Corporate Trust Office of the Trustee), and reference is hereby made to the Law and to
the Indenture and any and all amendments thereof and supplements thereto for a description of
the terms on which the Bonds are issued and for the rights of the registered owners of the Bonds;
and all the terms of the Law and the Indenture are hereby incorporated herein and constitute a
contract between the District and the registered owner from time to time of this Bond, to all the
provisions of which the registered owner of this Bond, by his acceptance hereof, agrees and
consents; and each registered owner hereof shall have recourse to all the provisions of the Law
and the Indenture and shall be bound by all the terms and conditions thereof.
The Bonds are subject to redemption prior to maturity as set forth in Appendix A
hereto.
The Bonds are special obligations of the District and are payable, as to the interest
thereon and the principal thereof and the redemption premiums, if any thereon, solely from the
Revenues (as that term is defined in the Indenture and herein the “Revenues”) and certain other
funds provided in the Indenture, and the District is not obligated to pay them except from the
Revenues and such other funds. All the Bonds, together with any additional Promissory Notes
executed by the District payable from the Revenues and any additional revenue refunding bonds
issued by the District payable from the Revenues (all as provided in the Indenture), are equally
secured by a pledge of, and charge and lien upon, the Revenues and such other funds, and the
Revenues and such other funds constitute a trust fund for the security and payment of the interest
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on and the principal of and the redemption premiums, if any, on the Bonds (and such other parity
obligations) as provided in the Indenture. The Bonds are not a debt of the District, the State of
California or any of its political subdivisions, and neither the District, the State of California nor
any of its political subdivisions is liable hereon, nor in any event shall the Bonds or any interest
thereon or any redemption premiums thereon be payable out of any funds or properties other
than those of the District. The Bonds do not constitute an indebtedness of the District within the
meaning of any constitutional or statutory limitation or restriction, and no persons executing the
Bonds are liable on the Bonds personally by reason of their issuance. Additional Promissory
Notes payable from the Revenues and such other funds may be executed by the District and
additional revenue refunding bonds payable from the Revenues and such other funds may be
issued by the District which will rank equally as to security with the Bonds, but only subject to
the terms and conditions set forth in the Indenture.
The District has covenanted and warranted that, for the payment of the interest on
and principal of and redemption premium, if any, on this Bond and all such existing and
additional Promissory Notes and all such additional revenue refunding bonds when due, there
has been created and will be maintained by the District the Midpeninsula Regional Open Space
District Revenue Fund (as that term is defined in the Indenture) into which all Revenues (as that
term is defined in the Indenture) shall be deposited, and as an irrevocable charge the District has
allocated the Revenues to the payment of the interest on and principal of and redemption
premiums, if any, on and any sinking fund account payments for the Bonds and all such existing
and additional Promissory Notes and all such additional revenue refunding bonds, and the
District will pay promptly when due the interest on and principal of and redemption premium, if
any, on this Bond and all other Bonds of this issue and all such existing and additional
Promissory Notes and all such additional revenue refunding bonds out of the Revenues and such
other funds, all in accordance with the terms and provisions set forth in the Indenture.
The Bonds are issuable in the form of fully registered bonds in denominations of
five thousand dollars ($5,000) or any integral multiple of five thousand dollars ($5,000) (not
exceeding the principal amount of Bonds maturing at any one time). The registered owner of
any Bond or Bonds may surrender the same (together with a written instrument of transfer
satisfactory to the Trustee duly executed by the registered owner or his duly authorized attorney)
in exchange for an equal aggregate principal amount of Bonds of the same maturity date of
authorized denominations in the same aggregate principal amount, subject to the conditions and
upon payment of the charges provided in the Indenture.
The registration of this Bond is transferable on the registration books kept by the
Trustee by the registered owner hereof or by his duly authorized attorney upon surrender of this
Bond, together with a written instrument of transfer satisfactory to the Trustee duly executed by
the registered owner or his duly authorized attorney, and thereupon a new Bond or Bonds of the
same maturity date of authorized denominations in the same aggregate principal amount will be
issued to the transferee in exchange therefor in the manner, subject to the conditions and terms
and upon payment of the charges provided in the Indenture. The District and the Trustee may
deem and treat the person in whose name this Bond is registered as the absolute owner hereof for
the purpose of receiving payment of, or on account of, the interest hereon and principal hereof
and redemption premium, if any, hereon and for all other purposes.
Attachment 2
-A-4-
OHSUSA:765393766.5
The rights and obligations of the District and of the registered owners of the
Bonds may be amended or supplemented at any time in the manner, to the extent and upon the
terms provided in the Indenture, and in certain circumstances without the consent of such
registered owners, but no such amendment or supplement shall (1) extend the maturity of this
Bond or reduce the interest rate hereon or otherwise alter or impair the obligation of the District
to pay the interest hereon or principal hereof or redemption premium, if any, hereon or to pay
any sinking fund account payment herefor at the time and place and at the rate and in the
currency and from the funds provided in the Indenture without the express written consent of the
registered owner of this Bond; or (2) permit the creation by the District of any mortgage, pledge
or lien upon the Revenues and such other funds superior to or on a parity with the pledge and
lien created in the Indenture for the benefit of the Bonds and such existing and additional
Promissory Notes and such additional revenue refunding bonds authorized to be executed and
issued under the Indenture; or (3) reduce the percentage of Bonds required for the written
consent to an amendment of or supplement to the Indenture; or (4) modify any rights or
obligations of the Trustee without its prior written assent thereto; all as more fully set forth in the
Indenture.
This Bond shall not be entitled to any benefits under the Indenture or become
valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall
have been manually signed by an authorized signatory of the Trustee.
It is hereby certified that all acts, conditions and things required by law to exist, to
have happened and to have been performed precedent to and in the issuance of this Bond do
exist, have happened and have been performed in due time, form and manner as required by law
and that the amount of this Bond, together with all other obligations of the District, does not
exceed any limit prescribed by the laws of the State of California and is not in excess of the
principal amount of the Bonds permitted to be issued under the Indenture.
Attachment 2
-A-5-
OHSUSA:765393766.5
IN WITNESS WHEREOF, the Midpeninsula Regional Open Space District has
caused this Bond to be executed in its name and on its behalf by the manual or facsimile
signatures of the President and the Secretary of the Board of Directors of the District and has
caused this Bond to be dated _______________, 2016.
MIDPENINSULA REGIONAL OPEN SPACE
DISTRICT
By: ___________________________________
President of the Board of Directors of the
Midpeninsula Regional Open Space District
MIDPENINSULA REGIONAL OPEN
SPACE DISTRICT
By: _________________________________
Secretary of the Board of Directors of the
Midpeninsula Regional Open Space District
Attachment 2
-A-6-
OHSUSA:765393766.5
[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION
TO APPEAR ON 2016 REFUNDING BONDS]
This is one of the Bonds described in the within-mentioned Indenture which has
been authenticated on ____________________.
ZIONS BANK, A DIVISION OF ZB, NATIONAL
ASSOCIATION,
as Trustee
By: _____________________________________
Authorized Signatory
[FORM OF ASSIGNMENT TO APPEAR ON 2016 REFUNDING BONDS]
For value received the undersigned do(es) hereby sell, assign and transfer unto
____________________ the within Bond and do(es) hereby irrevocably constitute and appoint
____________________ attorney to transfer the same on the bond register of the Trustee, with
full power of substitution in the premises.
__________________________________________
Dated: ____________________
SIGNATURE GUARANTEED BY:
___________________________________
NOTE: The signature(s) to this Assignment must correspond with the name(s) as written
on the face of the within Bond 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: ___________________________________
[ENDORSEMENT TO APPEAR ON 2016 REFUNDING BONDS]
Unless this Bond is presented by an authorized representative of The Depository
Trust Company, a New York corporation (“DTC”), to the District or the Trustee for registration
of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co.
or in such other name as is requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
Attachment 2
-A-7-
OHSUSA:765393766.5
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof Cede & Co., has an interest herein.
Attachment 2
OHS DRAFT 8/3/16
OHSUSA:765365695.6
ESCROW AGREEMENT
Dated as of September 1, 2016
by and between the
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
and
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
as Escrow Agent
RELATING TO THE
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
FINANCING AUTHORITY 2011 REVENUE BONDS
Attachment 3
TABLE OF CONTENTS
Page
OHSUSA:765365695.6
Recitals ..................................................................................................................................1
Section 1 Establishment and Maintenance of the Escrow Fund ..............................................2
Section 2. Payment from the Escrow Fund ...............................................................................2
Section 3. Accounting for Escrow; Substitutions .....................................................................2
Section 4. Investments and Reinvestments ...............................................................................3
Section 5. Deficiencies in the Escrow Fund .............................................................................3
Section 6. Notice of Redemption; Notice of Defeasance .........................................................3
Section 7. Compensation and Indemnification of the Escrow Agent .......................................4
Section 8. Functions of the Escrow Agent ................................................................................4
Section 9. Amendment of the Escrow Agreement ....................................................................5
Section 10. Notices .....................................................................................................................5
Section 11. Severability ..............................................................................................................6
Section 12. Governing Law ........................................................................................................6
Section 13. Execution .................................................................................................................6
SCHEDULE 1 Refunded Bonds .................................................................................................. 1-1
SCHEDULE 2 Escrow Securities ................................................................................................ 2-1
SCHEDULE 3 Refunding Requirements ..................................................................................... 3-1
EXHIBIT A Form of Notice to 2011 Trustee of Prepayment .................................................... A-1
EXHIBIT B Form of Notice of Redemption ...............................................................................B-1
EXHIBIT C Form of Notice of Defeasance ................................................................................C-1
Attachment 3
OHSUSA:765365695.6
ESCROW AGREEMENT
This Escrow Agreement (the “Escrow Agreement”), dated as of September 1,
2016, by and among 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”), the Midpeninsula Regional Open Space District Financing Authority, a joint powers
authority duly organized and existing under the laws of the State of California (the “Authority”)
and The Bank of New York Mellon Trust Company, N.A., 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 Los Angeles, California, and being qualified to accept and
administer the escrow hereby created (the “Escrow Agent”);
WITNESSETH:
WHEREAS, the District previously entered into a Lease Agreement (the “Lease
Agreement”), dated as of May 1, 2011, by and between the District and the Authority, under
which the District remits lease payments to the Authority (the “Lease Payments”); and
WHEREAS, the Authority duly issued and delivered $20,500,000 principal
amount of its 2011 Revenue Bonds (the “Bonds”) under an Indenture (the “Indenture”) dated as
of May 1, 2011, by and between the District and The Bank of New York Mellon Trust Company,
N.A., as trustee (the “2011 Trustee”), of which $[________] principal amount is currently
outstanding; and
WHEREAS, the Authority has assigned its right to receive the Lease Payments to
the 2011 Trustee as security and the source of payment for the Bonds;
WHEREAS, the outstanding Bonds maturing on and after September 1, 2022
are subject to optional redemption on September 1, 2021 (the “Redemption Date”) and on any
date thereafter; and
WHEREAS, pursuant to a Resolution of the District adopted on _______, 2016,
the District is issuing its Midpeninsula Regional Open Space District Green Bonds, 2016
Refunding (the “2016 Green Bonds”), in part to prepay a portion of its obligation under the
Lease Agreement, and thereby cause the defeasance of the Bonds described in Schedule 1
attached hereto (the “Refunded Bonds”) and to cause the redemption of the Refunded Bonds on
the Redemption Date; and
WHEREAS, the Escrow Agent hereby confirms that the Refunded Bonds are
Outstanding (as defined in the Indenture) under the Indenture as of the date hereof and have not
been previously defeased and redeemed and the Authority hereby confirms that the right to
defease and redeem the Refunded Bonds had not been sold or previously exercised; and
WHEREAS, in order to implement the foregoing, the District has taken action, on
behalf of itself and the Authority, to cause to be delivered to the Escrow Agent, for deposit in the
Escrow Fund hereinafter referred to, the sum of $[_________] from the proceeds of the 2016
Green Bonds, a portion of which sum will be used to purchase those certain United States
Attachment 3
2
OHSUSA:765365695.6
Treasury obligations (the “Escrow Securities”) listed in Schedule 2 attached hereto, the receipts
from the interest on and principal of which Escrow Securities, together with the unexpended
money from such initial deposit into the Escrow Fund, will be sufficient, as certified by Causey,
Demgen & Moore Inc., certified public accountants, in their Verification Report on file with the
District and the Escrow Agent, to provide for the prepayment of the Lease Agreement with
respect to the portion of the Lease Payments allocable to the Refunded Bonds, listed in Schedule
3 attached hereto, which the Escrow agent is hereby directed to apply to the payment and
redemption of the Refunded Bonds at the times and in the amounts and subject to the limitations
provided in Section 2 hereof;
NOW, THEREFORE, the District, the Authority and the Escrow Agent hereby
agree as follows:
Section 1. Establishment and Maintenance of the Escrow Fund. The Escrow
Agent agrees to establish and maintain the Escrow Fund (the “Escrow Fund”) until all the
Refunded Bonds have been paid and redeemed as provided in Section 2 hereof, and to hold the
Escrow Securities and the money (whether constituting the initial deposit in the Escrow Fund or
constituting receipts from the sale of or the maturity of the Escrow Securities) in the Escrow
Fund at all times as a separate escrow account wholly segregated from all other securities,
investments or money held by it. All Escrow Securities and money in the Escrow Fund are
hereby irrevocably pledged to secure the payment and redemption of the Refunded Bonds as
provided in Section 2 hereof (the “Refunding Requirements”); provided, that any money held in
the Escrow Fund that is not used for the payment and redemption of the Refunded Bonds as
provided in Section 2 hereof shall be repaid to the District free from the trust created by the
Escrow Agreement.
The Escrow Agent shall hold all Escrow Securities, whether acquired as initial
investments, subsequent investments or reinvestments hereunder, and the money received from
time to time as principal and interest thereon, in trust, to secure, and for the payment of the
Refunding Requirements, and shall collect the principal of and interest on the Escrow Securities
held by it hereunder promptly as such principal and interest become due.
Section 2. Payment from the Escrow Fund. The Escrow Agent is hereby
irrevocably instructed to, and the Escrow Agent hereby agrees to, sell and collect and deposit in
the Escrow Fund the proceeds of the Escrow Securities held in the Escrow Fund, and to use such
proceeds, together with any other money deposited in the Escrow Fund, to make the interest
payments on the Refunded Bonds as they come due until the Redemption Date to (as such
payments are set forth on Schedule 3 attached hereto) and on the Redemption Date to redeem all
Refunded Bonds at the redemption price thereof, together with the interest accrued thereon to,
but not including, the Redemption Date, at the times and places and in the manner specified in
the Indenture.
Section 3. Accounting for Escrow; Substitutions. The moneys and the Escrow
Securities from time to time accounted for in the Escrow Fund shall not be subject to withdrawal by
the District or the Authority nor otherwise subject to the order of the District or Authority except as
otherwise provided in Section 2 hereof.
Attachment 3
3
OHSUSA:765365695.6
There shall be no exchange or substitution of the Escrowed Securities, except upon
(i) the written direction of the Authority, (ii) receipt by the District, the Authority and the 2011
Trustee of a new verification report, prepared by an independent certified public accountant,
verifying the sufficiency of the escrow to pay the Refunding Requirements of the Refunded Bonds
in full on their respective interest payment dates or redemption dates and (iii) receipt of an opinion
of nationally recognized bond counsel to the effect that such exchange or substitution will not
adversely affect the exemption from federal income tax of interest on the 2016 Green Bonds or
Refunded Bonds.
Section 4. Investments and Reinvestments. The Escrow Agent shall have no
obligation by virtue of the Escrow Agreement, general trust law or otherwise to make any
investment or reinvestment of any moneys in the Escrow Fund at any time except as otherwise
provided in this Escrow Agreement or as hereafter directed by the Authority and upon (i) receipt of
an opinion of nationally recognized bond counsel to the effect that such investment or reinvestment
will not adversely affect the exemption from federal income tax of interest on the 2016 Green
Bonds or the Refunded Bonds and (ii) receipt by the District, the Authority and the 2011 Trustee of
a new verification report, prepared by an independent certified public accountant, verifying the
sufficiency of the escrow to pay the Refunding Requirements of the Refunded Bonds in full on their
respective interest payment dates or redemption dates. Except as is otherwise directed by the
Authority in accordance with the provisions of this Escrow Agreement, any moneys in the Escrow
Fund not needed to pay the principal of, premium, if any, or interest on the Refunded Bonds on any
payment date therefor shall be held by the Escrow Agent uninvested.
The District and the Authority acknowledge that to the extent regulations of the
Comptroller of the Currency of other applicable regulatory entity grant the District and/or the
Authority the right to receive brokerage confirmations of security transactions as they occur, the
District and the Authority will not receive such confirmations to the extent permitted by law. The
Escrow Agent will furnish the District and the Authority periodic cash transaction statement which
shall include detail for all investment transactions made by the Escrow Agent hereunder.
Section 5. Deficiencies in the Escrow Fund. If at any time it shall appear to the
Escrow Agent that the money in the Escrow Fund will not be sufficient to make all payments
required by Section 2, the Escrow Agent shall notify the District and the Authority in writing as
soon as reasonably practicable of such fact, stating the amount of such deficiency and the reason
therefor, and the District shall use its best efforts to obtain and deposit with the Escrow Agent for
deposit in the Escrow Fund, from any legally available moneys, all such additional money as
may be required to provide for the payment and redemption of the Refunded Bonds in
accordance with the conditions and terms of the Indenture and hereof; provided, that the Escrow
Agent shall in no event or manner be responsible for the failure of the District to make any such
deposit.
Section 6. Notice of Redemption; Notice of Defeasance.
(a) The Authority hereby irrevocably instructs the Escrow Agent to give timely
notice of the redemption of the Refunded Bonds to Bondholders in accordance with Section 4.03
of the Indenture, and said notice shall be substantially in the form of the notices attached hereto as
Exhibit A and Exhibit B.
Attachment 3
4
OHSUSA:765365695.6
(b) The Escrow Agent, acting as 2011 Trustee and dissemination agent (the
“Dissemination Agent”), is hereby irrevocably instructed to provide notice, on the earliest
practicable date, of the defeasance of the Refunded Bonds in accordance with Section 5(f) of the
Continuing Disclosure Agreement between the District and the Escrow Agent, in its capacity as
Dissemination Agent thereunder, related to the Refunded Bonds in the form set forth in Exhibit C.
Section 7. Compensation and Indemnification of the Escrow Agent.
(a) The District shall pay the Escrow Agent a one-time fee for its services
hereunder and shall reimburse the Escrow Agent for its reasonable out-of-pocket expenses
(including but not limited to the reasonable fees and expenses, if any, of its counsel or
accountants) incurred by the Escrow Agent in connection with these services, all as more
particularly agreed upon by the District and the Escrow Agent; provided, that these fees and
expenses shall in no event be deducted from the Escrow Fund.
(b) The District and the Authority agree to indemnify the Escrow Agent and
its agents, directors, officers and employees, and hold the Escrow Agent and its agents, directors,
officers and employees harmless from, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind (including, without
limitation, reasonable fees and disbursements of counsel or accountants for the Escrow Agent)
which may be imposed on, incurred by, or asserted against the Escrow Agent or such other party
at any time by reason of its performance of Escrow Agent’s services, in any transaction arising
out of the Escrow Agreement or any of the transactions contemplated herein, unless due to the
negligence or willful misconduct of the particular indemnified party. The provisions of this
section shall survive the removal or resignation of the Escrow Agent.
Section 8. Functions of the Escrow Agent.
(a) The Escrow Agent undertakes to perform only such duties as are expressly
and specifically set forth in the Escrow Agreement and no implied duties or obligations shall be
read into the Escrow Agreement against the Escrow Agent.
(b) The Escrow Agent may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, and shall be protected and indemnified as
stated in the Escrow Agreement, in acting, or refraining from acting, upon any written notice,
instruction, request, certificate, document, electronic mail, facsimile transmission, report or
opinion furnished to the Escrow Agent and believed by the Escrow Agent to have been signed or
presented by the proper party, and it need not investigate any fact or matter stated in such notice,
instruction, request, certificate, document, electronic mail, facsimile transmission, report or
opinion.
(c) The Escrow Agent shall not have any liability hereunder except to the
extent of its own negligence or willful misconduct. In no event shall the Escrow Agent be liable
for any special, indirect or consequential damages, even if parties know of the possibility of such
damages. The Escrow Agent shall have no duty or responsibility under the Escrow Agreement
in the case of any default in the performance of agreements or covenants contained in the
Indenture or in the case of the receipt of any written demand with respect to such default. The
Attachment 3
5
OHSUSA:765365695.6
Escrow Agent is not required to resolve conflicting demands to money or property in its
possession under the Escrow Agreement.
(d) The Escrow Agent may consult with counsel of its own choice (which
may be counsel to the District) and, notwithstanding anything to the contrary contained herein,
the opinion of such counsel shall be full and complete authorization to take or suffer in good
faith any action in accordance with such opinion of counsel.
(e) The Escrow Agent shall not be responsible for any of the recitals or
representations contained herein, and shall not be liable for any action or omission of the District
under the Escrow Agreement.
(f) The Escrow Agent shall not be liable for the accuracy of the calculations
as to the sufficiency of the Escrow Securities and money in the Escrow Fund to pay and redeem
the Refunded Bonds as provided in Section 2 hereof.
(g) Whenever in the administration of the trust of the Escrow Agreement the
Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to
taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or willful misconduct on the
part of the Escrow Agent, be deemed to be conclusively proved and established by a certificate
of the District, and such certificate shall, in the absence of negligence or willful misconduct on
the part of the Escrow Agent, be full warrant to the Escrow Agent for any action taken or
suffered by it under the provisions of the Escrow Agreement upon the faith thereof.
Section 9. Amendment of the Escrow Agreement. The Escrow Agreement
may not be revoked or amended by the parties hereto unless there shall first have been filed with
the District, the Authority and the Escrow Agent (i) an unqualified opinion of a nationally
recognized bond counsel that such amendment will not adversely affect the exclusion from gross
income for federal income tax purposes of interest on the Refunded Bonds, and (ii) unless such
amendment is not materially adverse to the interests of the registered owners of the Refunded
Bonds, the written consent of the registered owners of all the Refunded Bonds.
Section 10. Notices. All notices and communications hereunder shall be in
writing and shall be deemed to be duly given if received or sent by first class mail, as follows:
If to the District:
Midpeninsula Regional Open Space District
330 Distel Circle
Los Altos, California 94022
Attention: General Manager
If to the Authority:
Midpeninsula Regional Open Space District Financing Authority
Attachment 3
6
OHSUSA:765365695.6
330 Distel Circle
Los Altos, California 94022
Attention: Authorized Officer
If to the Escrow Agent:
The Bank of New York Mellon Trust Company, N.A.
400 South Hope Street, Suite 500
Los Angeles, California 90071
Attention: Corporate Trust Department
Section 11. Severability. If any section, paragraph, sentence, clause or
provision of the Escrow Agreement shall for any reason be held to be invalid or unenforceable,
the invalidity or unenforceability of such section, paragraph, sentence, clause or provision shall
not affect any of the remaining provisions of the Escrow Agreement.
Section 12. Governing Law. The Escrow Agreement shall be construed and
governed in accordance with the laws of the State of California.
Section 13. Execution. The Escrow Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all together shall
constitute but one and the same agreement.
Attachment 3
7
OHSUSA:765365695.6
IN WITNESS WHEREOF, the District, the Authority and the Escrow Agent have
caused the Escrow Agreement to be executed each on its behalf as of the day and year first above
written.
MIDPENINSULA REGIONAL OPEN SPACE
DISTRICT
By
General Manager
MIDPENINSULA REGIONAL OPEN SPACE
DISTRICT FINANCING AUTHORITY
By
Authorized Officer
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
as Escrow Agent
By
Authorized Officer
Attachment 3
1-1
OHSUSA:765365695.6
SCHEDULE 1
Refunded Bonds
The Refunded Bonds constitute the portion of the currently outstanding
Midpeninsula Regional Open Space District Financing Authority 2011 Revenue Bonds that are
subject to optional redemption on September 1, 2021, as follows:
Principal
Amount
Maturity Date
(September 1)
$ 20__
Attachment 3
2-1
OHSUSA:765365695.6
SCHEDULE 2
Escrow Securities
[To Come from the Verification Report]
Attachment 3
3-1
OHSUSA:765365695.6
SCHEDULE 3
Refunding Requirements
[To Come.]
Attachment 3
A-1
OHSUSA:765365695.6
EXHIBIT A
FORM OF NOTICE TO 2011 TRUSTEE OF PREPAYMENT (FROM DISTRICT)
[To Come.]
Attachment 3
B-1
OHSUSA:765365695.6
EXHIBIT B
FORM OF NOTICE OF REDEMPTION
[To Come.]
Attachment 3
C-1
OHSUSA:765365695.6
EXHIBIT C
FORM OF NOTICE OF DEFEASANCE
S.E.C. RULE 15C2-12
NOTICE OF LISTED EVENT
The Midpeninsula Regional Open Space District (the “District”), acting on behalf of the
Midpeninsula Regional Open Space Financing Authority (the “Authority”), hereby provides notice of the
following events related to the Midpeninsula Regional Open Space District Financing Authority 2011
Revenue Bonds (the “Bonds”).
Event:
The Bonds maturing on and after September 1, 2022, as set forth in Schedule I attached hereto
have been defeased on [Closing Date] and will be called for redemption on September 1, 2021.
Other Matters:
This notice is provided solely for the purposes of the Continuing Disclosure Agreement delivered
in connection with the above-referenced Bonds. The filing of this notice does not constitute or imply any
representation: (i) that the foregoing Specified Event is material to investors; (ii) regarding any other
financial, operating or other information about the District or the Bonds; or (iii) that no other
circumstances or events have occurred or that no other information exists concerning the District, the
Bonds or the Specified Event, which may have a bearing on the District’s financial condition, the
security for the Bonds, or an investor’s decision to buy, sell, or hold the Bonds
Dated: __________, 2016
MIDPENINSULA REGIONAL OPEN SPACE
DISTRICT
By:_________________________________
General Manager
Attachment 3
SF\321912910.1
$__,___,000*
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
GREEN BONDS, 2016 REFUNDING
CONTINUING DISCLOSURE CERTIFICATE
This CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) is executed
and delivered by the MIDPENINSULA REGIONAL OPEN SPACE DISTRICT (the “District”) in
connection with the issuance of the Green Bonds, 2016 Refunding captioned above (the “2016 Green
Bonds”). The 2016 Green Bonds are being issued pursuant to a Indenture dated as of September 1, 2016,
between the District and Zions Bank, a division of ZB, National Association, as Trustee.
The District covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and
delivered by the District for the benefit of the holders and beneficial owners of the 2016 Green Bonds and
in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5).
Section 2. Definitions. In addition to the definitions set forth above and in the Indenture, which
apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2,
the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the District pursuant to, and as described
in, Sections 3 and 4 of this Disclosure Certificate.
“Business Day” means any day (other than a Saturday or a Sunday) on which banks and the
Trustee are open for business.
“Annual Report Date” means 210 days after the end of each Fiscal Year.
“Disclosure Coordinator” means the District Senior Accountant or other individual designated
from time to time by the District Controller, as provided in the District Disclosure Policy.
“Dissemination Agent” means, initially, Goodwin Consulting Group, or any successor
Dissemination Agent designed in writing by the District and which has been filed with the then current
Dissemination Agent a written acceptance of such designation.
“EMMA” means the Electronic Municipal Marketplace Access site maintained by the MSRB,
currently located at http://emma.msrb.org.
“Fiscal Year” means any twelve-month period beginning on July 1 in any year and extending to
the next succeeding June 30, both dates inclusive, or any other 12-month period selected and designated
by the District as its official Fiscal Year period under a Certificate of the District filed with the Trustee.
“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the
Securities and Exchange Commission as the sole repository of disclosure information for purposes of the
Rule, or any other repository of disclosure information that may be designated by the Securities and
Exchange Commission as such for purposes of the Rule in the future.
“Official Statement” means the final official statement executed by the District in connection with
the issuance of the 2016 Green Bonds.
Attachment 4
SF\321912910.1
“Participating Underwriter” means Morgan Stanley & Co. LLC, the original underwriter of the
2016 Green Bonds required to comply with the Rule in connection with offering of the 2016 Green
Bonds.
“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as it may be amended from time to time.
“Significant Events” means any of the events listed in Section 5(a) of this Disclosure Certificate.
Section 3. Provision of Annual Reports.
(a) The District shall, or shall cause the Dissemination Agent to, not later than the Annual
Report Date, commencing January 26, 2017, provide to the MSRB, in an electronic format as prescribed
by the MSRB, an Annual Report for the fiscal year ending June 30, 2016, that is consistent with the
requirements of Section 4 of this Disclosure Certificate; provided that the first Annual Report shall
consist solely of the Official Statement. Not later than 15 Business Days prior to the Annual Report Date,
the District shall provide the Annual Report to the Dissemination Agent (if other than the District). If by
15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the District) has
not received a copy of the Annual Report, the Dissemination Agent shall contact the District to determine
if the District is in compliance with the previous sentence. The 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 Certificate; provided that the audited financial
statements of the District may be submitted separately from the balance of the Annual Report, and later
than the Annual Report Date, if not available by that date. If the District’s Fiscal Year changes, it shall
give notice of such change in the same manner as for a Significant Event under Section 5(c). The District
shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the
effect that such Annual Report constitutes the Annual Report required to be furnished by the District
hereunder.
(b) If the District does not provide (or cause the Dissemination Agent to provide) an Annual
Report by the Annual Report Date, the District shall provide (or cause the Dissemination Agent to
provide) to the MSRB, in an electronic format as prescribed by the MSRB, a notice in substantially the
form attached as Exhibit A.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then-applicable rules
and electronic format prescribed by the MSRB for the filing of annual continuing disclosure
reports; and
(ii) if the Dissemination Agent is other than the District, file a report with the District
certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and
stating the date it was provided.
Section 4. Content of Annual Reports. The District’s Annual Report shall contain or incorporate
by reference the following:
(a) The District’s audited financial statements 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 Annual Report Date, the Annual Report shall contain unaudited financial statements in a format
similar to the financial statements contained in the final Official Statement, and the audited financial
statements shall be filed in the same manner as the Annual Report when they become available.
Attachment 4
SF\321912910.1
(b) Unless otherwise provided in the audited financial statements filed on or before the
Annual Report Date, financial information and operating data with respect to the District for the
preceding Fiscal Year, substantially similar to that provided in the corresponding tables in the Official
Statement:
(i) A maturity schedule for the outstanding 2016 Green Bonds, and a listing of 2016
Green Bonds redeemed prior to maturity;
(ii) Information for the preceding Fiscal Year to update the following tables in the
Official Statement:
(A) Table 3B – Aggregate General Fund Debt Service Schedule;
(B) Table 4 – District General Fund Tax Receipts for the past 10 Years.
(C) Table 5 – Historical Maximum Annual General Fund Debt Service; and
(BD) Table 7 – Summary of Assessed Values.
(c) In addition to any of the information expressly required to be provided under this
Disclosure Certificate, the District shall provide such further material information, if any, as may be
necessary to make the specifically required statements, in the light of the circumstances under which they
are made, not misleading.
(d) 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 District or related public entities, which are
available to the public on EMMA or filed with the Securities and Exchange Commission. 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 Disclosure Certificate, the District shall give, or cause
to be given, notice of the occurrence of any of the following Significant Events with respect to the 2016
Green Bonds, no later than ten (10) Business Days after the occurrence of such event:
(i) Principal and interest payment delinquencies;
(ii) Unscheduled draws on debt service reserves reflecting financial difficulties;
(iii) Unscheduled draws on credit enhancements reflecting financial difficulties;
(iv) Substitution of credit or liquidity providers, or their failure to perform;
(v) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final
determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other
material notices or determinations with respect to the tax status of the security, or other
material events affecting the tax status of the security;
(vi) Tender offer;
(vii) Defeasances;
(viii) Rating Changes; or
Attachment 4
SF\321912910.1
(ix) Bankruptcy, insolvency, receivership or similar event of the District or other obligated
person.
Note: This event is considered to occur upon the happening of any of the following: the
appointment of a receiver, fiscal agent or similar officer for an obligated person in a
proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or
federal law in which a court or governmental authority has assumed jurisdiction over
substantially all of the assets or business of the District, or if such jurisdiction has been
assumed by leaving the existing governmental body and officials or officers in possession
but subject to the supervision and orders of a court or governmental authority, or the
entry of an order confirming a plan of reorganization, arrangement or liquidation by a
court or governmental authority having supervision or jurisdiction over substantially all
of the assets or business of the District.
(b) The District shall give, or cause to be given, notice of the occurrence of any of the
following events described in this Section 5(b) with respect to the 2016 Green Bonds, if material, not later
than ten (10) business days after the occurrence of the event:
(i) Unless described in Section 5(a)(v), adverse tax opinions or other material notices or
determinations by the Internal Revenue Service with respect to the tax status of the 2016
Green Bonds or other material events affecting the tax status of the 2016 Green Bonds;
(ii) Modifications to rights of security holders, if material;
(iii) Bond calls;
(iv) Release, substitution, or sale of property securing repayment of the 2016 Green Bonds;
(v) Non-payment related defaults;
(vi) The consummation of a merger, consolidation, or acquisition involving an obligated
person or the sale of all or substantially all of the assets of the obligated person, other
than in the ordinary course of business, the entry into a definitive agreement to undertake
such an action or the termination of a definitive agreement relating to any such actions,
other than pursuant to its terms; or
(vii) Appointment of a successor or additional trustee or the change of name of a trustee.
(c) The District acknowledges that it is required to make a determination whether a
Significant Event described in Section 5(b) is material under applicable federal securities laws in order to
determine if a filing with EMMA is required. If the District determines that the occurrence of an event
listed in Section 5(b) would be material under applicable federal securities laws, or if the District changes
its Fiscal Year, the District shall file, or shall cause the Dissemination Agent to file, within ten (10)
business days of occurrence, a notice of such event on EMMA.
(d) Notwithstanding the foregoing, notice of Significant Events described in Section 5(a)(vii)
and Section 5(b)(iii) above need not be given any earlier than the notice (if any) of the underlying event is
given to Owners of affected Bonds pursuant to the Indenture.
Section 6. Identifying Information for Filings with EMMA. All documents provided to the MSRB
under the Disclosure Certificate shall be accompanied by identifying information as prescribed by the
MSRB.
Attachment 4
SF\321912910.1
Section 7. Termination of Reporting Obligation. The obligations of the District under this
Disclosure Certificate shall terminate upon the legal defeasance, prior redemption, or payment in full of
all of the 2016 Green Bonds. If such termination occurs prior to the final maturity of the 2016 Green
Bonds, the District shall give notice of such termination in the same manner as for a Significant Event
under Section 5(c).
Section 8. Dissemination Agent. The District may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may
discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. Any
Dissemination Agent may resign by providing thirty (30) days written notice to the District.
The initial dissemination agent shall be Goodwin Consulting Group.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the District may amend this Disclosure Certificate, and any provision of this Disclosure
Certificate may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 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 identity, nature, or status of an obligated person with
respect to the 2016 Green Bonds, or type of business conducted;
(b) The undertakings herein, as proposed to be amended or waived, would, in the opinion of
nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the
primary offering of the 2016 Green Bonds, after taking into account any amendments or interpretations of
the Rule, as well as any change in circumstances; and
(c) The proposed amendment or waiver either (i) is approved by holders of the 2016 Green
Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of
holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the
interests of the holders or beneficial owners of the 2016 Green Bonds.
If the annual financial information or operating data to be provided in the Annual Report is
amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto
containing the amended operating data or financial information shall explain, in narrative form, the
reasons for the amendment and the impact of the change in the type of operating data or financial
information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be followed
in preparing financial statements, the annual financial information for the year in which the change is
made shall present a comparison between the financial statements or information prepared on the basis of
the new accounting principles and those prepared on the basis of the former accounting principles. The
comparison shall include a qualitative discussion of the differences in the accounting principles and the
impact of the change in the accounting principles on the presentation of the financial information, in order
to provide information to investors to enable them to evaluate the ability of the District to meet its
obligations. To the extent reasonably feasible, the comparison shall be quantitative.
A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner as
for a Significant Event under Section 5(c).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to
prevent the District from disseminating any other information, using the means of dissemination set forth
in this Disclosure Certificate or any other means of communication, or including any other information in
any Annual Report or notice of occurrence of a Significant Event, in addition to that which is required by
Attachment 4
SF\321912910.1
this Disclosure Certificate. If the District chooses to include any information in any Annual Report or
notice of occurrence of a Significant Event in addition to that which is specifically required by this
Disclosure Certificate, the District shall have no obligation under this Disclosure Certificate to update
such information or include it in any future Annual Report or notice of occurrence of a Significant Event.
Section 11. Default. If the District fails to comply with any provision of this Disclosure
Certificate, the Trustee may, and at the request of the Owners of at least twenty-five percent (25%) in
aggregate principal amount of Outstanding Bonds whose Owners are beneficiaries of the Continuing
Disclosure Certificate, the Trustee shall (but only to the extent it is indemnified to its satisfaction,
including indemnification from and against attorneys’ fees), or any Owner or Beneficial Owner (as that
term is defined in the Indenture) 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 Disclosure Certificate.. A default under this Disclosure Certificate shall not be
deemed an “Event of Default” under the Indenture, and the sole remedy under this Disclosure Certificate
in the event of any failure of the District to comply with this Disclosure Certificate shall be an action to
compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination
Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the
District agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and
agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the
exercise or performance of its powers and duties hereunder, including the costs and expenses (including
attorney’s fees) of defending against any claim of liability, but excluding liabilities due to the
Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or
obligation to review any information provided to it by the District hereunder, and shall not be deemed to
be acting in any fiduciary capacity for the District, the Bondowners or any other party. The obligations of
the District under this Section shall survive resignation or removal of the Dissemination Agent and
payment of the 2016 Green Bonds.
(b) The Dissemination Agent shall be paid compensation by the District for its services
provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be
reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the
performance of its duties hereunder.
Attachment 4
SF\321912910.1
Section 13. Notices. Any notices or communications to or among any of the parties to this
Disclosure Certificate may be given as follows:
To the District: Midpeninsula Regional Open Space District
330 Distel Circle
Los Altos, CA 94022
Attention: Disclosure Coordinator
Telephone: 650-691-1200
To the Dissemination Agent: Goodwin Consulting Group
555 University Avenue, Suite 280
Sacramento, CA 95825
Attention: Victor Irzyk
Telephone: 916-561-0890
Email victor@goodwinconsultinggroup.net
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the
District, the Dissemination Agent, the Participating Underwriter and the holders and beneficial owners
from time to time of the 2016 Green Bonds, and shall create no rights in any other person or entity.
Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts,
each of which shall be regarded as an original, and all of which shall constitute one and the same
instrument.
Date: __________, 2016
MIDPENINSULA REGIONAL OPEN SPACE
DISTRICT
By
General Manager
AGREED AND ACCEPTED
GOODWIN CONSULTING GROUP,
as Dissemination Agent
By:
Attachment 4
A-1
SF\321912910.1
EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
Name of Issue: $__,___,000 Midpeninsula Regional Open Space District
Green Bonds, 2016 Refunding
Date of Issuance: ________, 2016
NOTICE IS HEREBY GIVEN that the District has not provided an Annual Report with respect
to the above-named 2016 Green Bonds as required by the Continuing Disclosure Certificate dated
_________, 2016. The District anticipates that the Annual Report will be filed by
_______________.
Dated: _____________
DISSEMINATION AGENT:
By:
Its:
Attachment 4
PRELIMINARY OFFICIAL STATEMENT DATED __________, 2016
NEW ISSUE — BOOK-ENTRY ONLY RATINGS: Fitch: “___”
S&P: “___”
(See “RATINGS”)
In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the District, based upon
an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other
matters, the accuracy of certain representations and compliance with certain covenants, interest on the
2016 Green Bonds is excluded from gross income for federal income tax purposes under Section 103 of
the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In the
further opinion of Bond Counsel, interest on the 2016 Green 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 when calculating corporate
alternative minimum taxable income. Bond Counsel expresses no opinion regarding any other tax
consequences related to the ownership or disposition of, or the amount, accrual or receipt of interest on,
the 2016 Green Bonds. See “TAX MATTERS.”
[District Logo]
$__,___,000*
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
GREEN BONDS, 2016 REFUNDING
Dated: Date of Delivery Due: September 1 see inside cover
Purpose; Authorization. The Midpeninsula Regional Open Space District (the “District”) is issuing the
Midpeninsula Regional Open Space District Green Bonds, 2016 Refunding (the “2016 Green Bonds”) to:
(i) refund its outstanding obligations under certain outstanding promissory notes (the “2007 Notes”) held
by the Midpeninsula Regional Open Space District Financing Authority (the “Authority”) the payment of
which secures the Authority’s 2007 Series A Revenue Refunding Bonds (1996 and 1999 Refinancing
Project) (the “2007 Authority Bonds”), and to prepay a portion of its obligations under that certain Lease
Agreement, dated as of May 1, 2011, by and between the District and the Authority, the payment of lease
payments under which secures the Authority’s 2011 Revenue Bonds (the “2011 Authority Bonds, and,
together with the 2007 Authority Bonds, the “Prior Bonds”), as more full described herein; and (ii) pay
certain costs associated with the issuance of the 2016 Green Bonds. See “PLAN OF REFUNDING.”
The 2016 Green Bonds are issued pursuant to the Constitution and laws of the State of California (the
“State”), including the provisions of Article 3 of Chapter 3 of Division 5 of the Public Resources Code
(the “District Act”), and all laws amendatory thereof or supplemental thereto, including Articles 10
and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California
(together with the District Act, the “Law”) and an Indenture, dated as of September 1, 2016 (the
“Indenture”), between the District and Zions Bank, a division of ZB, National Association, as trustee (the
“Trustee”). See “PLAN OF REFUNDING” and “THE 2016 GREEN BONDS–Authority for Issuance; Purpose.”
Security and Source of Payment. The 2016 Green Bonds are special obligations of the District and are
payable from and secured solely by Revenues of the District (as defined herein), consisting primarily of
the District’s share of the general 1% ad valorem property tax levied in the District by the Board of
Supervisors of the County of Santa Clara County and by the Board of Supervisors of the County of San
Attachment 5
Mateo County (together, the “Counties”) upon all property subject to taxation and allocated to the
District. See “SECURITY AND SOURCE OF PAYMENT FOR THE 2016 GREEN BONDS.”
No Reserve Fund will be established for the 2016 Green Bonds.
Payments. Interest on the 2016 Green Bonds is payable on September 1 and March 1, of each year,
commencing March 1, 2017. Principal on the 2016 Green Bonds is payable on September 1 in the
amounts and in the years set forth on the inside cover. Payments of principal and interest on the 2016
Green Bonds will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants, which
will remit such payments to the Beneficial Owners of the 2016 Green Bonds. See “THE 2016 GREEN
BONDS–Payment of Principal and Interest” and APPENDIX G–“DTC AND THE BOOK-ENTRY ONLY
SYSTEM.”
Redemption. 2016 Green Bonds are subject to redemption prior to their stated maturities. See “THE
2016 GREEN BONDS–Redemption Provisions.”
Book-Entry Only. The 2016 Green Bonds will be issued in book-entry only form, initially registered in
the name of Cede & Co., New York, New York, as nominee of The Depository Trust Company (“DTC”),
New York, New York. Individual purchases of the 2016 Green Bonds will be made in principal amounts
of $5,000 and integral multiples thereof under the book-entry only system maintained by DTC.
Purchasers of the 2016 Green Bonds will not receive physical certificates representing their interests in
the 2016 Green Bonds. So long as DTC, or its nominee, is the registered owner of the 2016 Green Bonds,
payments of principal and interest with respect to the 2016 Green Bonds will be made by the Trustee
directly to DTC or its nominee, which will in turn remit such payments to the beneficial owners of the
2016 Green Bonds. See APPENDIX G–”DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Maturity Schedule. See inside cover.
Investor Considerations. This cover page contains information for general reference only. It is not a
summary of the security or terms of this issue. Investors must read the entire Official Statement for
a discussion of special factors which should be considered, in addition to the other matters set forth
in this Official Statement, in considering the investment quality of the 2016 Green Bonds.
Legal Matters. The 2016 Green Bonds are offered when, as and if sold and issued, and accepted by the
Underwriter, subject to the approval as to their legality by Orrick, Herrington & Sutcliffe LLP, San
Francisco, California, Bond Counsel to the District.
Certain legal matters will be passed upon for the District by its General Counsel and by Schiff Hardin
LLP, San Francisco, California, Disclosure Counsel.
Hawkins Delafield & Wood LLP, San Francisco, California is serving as counsel to the Underwriter.
Delivery. It is anticipated that the 2016 Green Bonds in book-entry form, will be available for delivery
through the facilities of DTC in New York, New York, on or about _________, 2016.
Morgan Stanley
Dated: _________, 2016
____________
* Preliminary, subject to change.
Attachment 5
MATURITY SCHEDULE
(Base CUSIP†: 598022)
$__,___,000*
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
GREEN BONDS, 2016 REFUNDING
(Green Bonds)
$__,___,000* Serial Bonds
Maturity Date Principal Interest
(September 1) Amount Rate Yield Price CUSIP No.†
______________
* Preliminary, subject to change.
† Copyright 2016, American Bankers Association. CUSIP data are provided by S&P Global Ratings, and are provided for
convenience of reference only. Neither the District nor the Underwriter assumes any responsibility for the accuracy of these
CUSIP data. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP
Service. The CUSIP number for a specific maturity is subject to being changed after the issuance of the 2016 Green Bonds
as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity.
Attachment 5
i
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
No Offering May Be Made Except by this Official Statement. No broker, dealer, salesperson or other person has
been authorized to give any information or to make any representations with respect to the 2016 Green Bonds other than
as contained in this Official Statement, and if given or made, such other information or representation must not be relied
upon as having been authorized.
No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the
solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person
making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or
solicitation.
Effective Date. This Official Statement speaks only as of its date, and the information and expressions of
opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official
Statement nor any sale of the 2016 Green Bonds will, under any circumstances, create any implication that there has been
no change in the affairs of the District or any other parties described in this Official Statement.
Use of this Official Statement. This Official Statement is submitted in connection with the sale of the 2016
Green Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This
Official Statement is not a contract with the purchasers of the 2016 Green Bonds.
Preparation of this Official Statement. The information contained in this Official Statement has been obtained
from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness.
Document References and Summaries. All references to and summaries of the Indenture or other documents
contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete
statements of those documents.
Bonds are Exempt from Securities Laws Registration. The issuance and sale of the 2016 Green Bonds have not
been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in
reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities
Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934.
Stabilization of Prices. In connection with this offering, the Underwriter may overallot or effect transactions
which stabilize or maintain the market price of the 2016 Green Bonds at a level above that which might otherwise prevail
in the open market. Such stabilizing, if commenced, may be discontinued at any time. The Underwriter may offer and sell
the 2016 Green Bonds to certain dealers and others at prices lower than the public offering prices set forth on the cover
page hereof and said public offering prices may be changed from time to time by the Underwriter.
Forward-Looking Statements. Certain statements contained in this Official Statement reflect not historical facts
but forecasts and “forward-looking statements.” In this respect, the words “estimate,” “project,” “anticipate,” expect,”
“intend,” “believe,” “plan,” “budget,” and similar expressions are intended to identify forward-looking statements.
Projections, forecasts, assumptions, expressions of opinions, estimates and other forward statements are not to be
construed as representations of fact and are qualified in their entirety by the cautionary statements set forth in this Official
Statement.
The achievement of certain results or other expectations contained in such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or
achievements described to be materially different from any future results, performance or achievements expressed
or implied by such forward-looking statements. The District does not plan to issue any updates or revisions to
those forward-looking statements if or when events, conditions or circumstances on which such statements are
based occur or do not occur.
District Website. The District maintains a website. References to website addresses presented in this Official
Statement are for information purposes only and are solely for the convenience of the reader. The information presented
on any website is not a part of this Official Statement are not incorporated into, and are not a part of, this Official
Statement, and should not be relied upon in making an investment decision with respect to the 2016 Green Bonds.
Attachment 5
680
880
280
280
280
280
Santa ClaraSunnyvale
Stanford
University
Palo Alto
Mountain View
ALAMEDA COUNTY
SANTA CLARA COUNTY
SANTA CRUZ COUNTY
SAN MATEO COUNTY
Campbell
Soquel Demonstration
State Forest
Ano
Nuevo
State
Park
San Gregorio
Castle Rock
State Park
Don Edwards San
Francisco Bay
National Wildlife
Refuge
State Wildlife
Refuge
S a n M a t e o B r i d g e
Half
Moon
Bay
El Granada
Burlingame
San Mateo Foster CityCrystal Springs
Watershed
(City & Co. of SF)
Sanborn Skyline
County Park
Woodside
San Carlos
Huddart
County
Park
Big Basin
Redwoods State Park
Butano State Park
Pescadero Creek
County Park Saratoga
Los Gatos
San Jose
Redwood City
Almaden
Quicksilver
County Park
280
280
280
680
880
280
Forest of Nisene Marks
State Park
Cloverdale
Ranch
East
Palo Alto
P
a
c
i
f
i
c
O
c
e
a
n
Ano
Nuevo
Bay
S a n Fra
n
c
i
s
c
o
B
a
y
District Boundary
S
p
h
e
r
e
o
f
I
n
f
l
u
e
n
c
e
0 4 82
Miles
15
San
Francisco
San
Francisco
Bay
Santa Cruz
Oakland
San Jose
Half
Moon
Bay
Midpeninsula
Regional Open Space
District
Pacific
Ocean
16
22
13
14
10
14
3
23
24
7
5
92
17
20
11
8
2625
12 6
18
4
1
21
19
91
1
82
101280
92
35
35
82
101
84
84
84
880
880
237
101280
87
35
85
17
17
N
85
680
280
Midpeninsula Regional Open Space District
Open Space Preserves and Locations
Land Trust, Private Watershed Lands,
& Conservation Easements/Plans
MROSD Preserves
Other Protected Open Space or Park
Lands & Public Watershed Lands
Private Property
Other Public Agency Lands
& Institutional Lands
# Preserve Acres
17 Russian Ridge 3,491
18 Saratoga Gap 1,608
19 Sierra Azul 18,939
20 Skyline Ridge 2,143
21 St. Joseph’s Hill 270
22 Stevens Creek 55
23 Teague Hill 626
24 Thornewood 167
25 Tunitas Creek* 1,660
26 Windy Hill 1,414
# Preserve Acres
9 Los Trancos 274
10 Miramontes Ridge* 1,716
11 Monte Bello 3,537
12 Picchetti Ranch 308
13 Pulgas Ridge 366
14 Purisima Creek
Redwoods 4,752
15 Rancho
San Antonio 3,988
16 Ravenswood 376
# Preserve Acres
1 Bear Creek
Redwoods 1,437
2 Coal Creek 508
3 El Corte de
Madera Creek 2,906
4 El Sereno 1,419
5 Foothills 212
6 Fremont Older 739
7 La Honda Creek 6,144
8 Long Ridge 2,035
* Currently not open for public access.
The Midpeninsula Regional Open Space DistrictAttachment 5
iv
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
DISTRICT BOARD OF DIRECTORS
Pete Siemens, Ward 1, Board Member
Yoriko Kishimoto, Ward 2, Board President
Jed Cyr, Ward 3, Board Member
Curt Riffle, Ward 4, Board Treasurer
Nonette Hanko, Ward 5, Board Member
Larry Hassett, Ward 6, Board Vice President
Cecily Harris, Ward 7, Board Secretary
DISTRICT STAFF
Stephen E. Abbors, General Manager
Michael L. Foster, Controller
Sheryl Schaffner, Esq., General Counsel
Stefan Jaskulak, Chief Financial Officer/Administrative Services Manager
Ana Ruiz, Assistant General Manager
Kevin Woodhouse, Assistant General Manager
PROFESSIONAL SERVICES
Orrick, Herrington & Sutcliffe LLP
San Francisco, California
Bond Counsel
Schiff Hardin LLP
San Francisco, California
Disclosure Counsel
Backstrom McCarley Berry & Co., LLC
San Francisco, California
Financial Advisor
Zions Bank, a division of ZB, National Association
Los Angeles, California
Trustee
The Bank of New York Mellon Trust Company, N.A.
Los Angeles, California
Escrow Agent
Causey Demgen & Moore P.C.
Denver, Colorado
Verification Agent
Attachment 5
v
TABLE OF CONTENTS
INTRODUCTION ............................................. 1
General ........................................................... 1
The District .................................................... 1
Authority for Issuance; Purpose ..................... 1
Security for the 2016 Green Bonds ................ 2
Other Outstanding Debt ................................. 2
Redemption .................................................... 3
Summaries Not Definitive ............................. 3
THE DISTRICT ................................................. 3
PLAN OF REFUNDING ................................... 3
ESTIMATED SOURCES AND USES OF
FUNDS ....................................................... 6
THE 2016 GREEN BONDS .............................. 6
Authority for Issuance .................................... 6
Designation of 2016 Green Bonds as
Green Bonds ........................................... 6
Payment of Principal and Interest .................. 7
Redemption Provisions .................................. 8
Redemption Procedures ................................. 8
Defeasance ..................................................... 9
DEBT SERVICE SCHEDULES ..................... 11
SECURITY AND SOURCE OF
PAYMENT FOR THE 2016 GREEN
BONDS .................................................... 13
Pledge of Revenues ...................................... 13
Allocation of Revenues ................................ 13
No Debt Service Reserve Fund .................... 15
Ad Valorem Property Taxation Within
the District ............................................ 15
Allocation of Property Taxes ....................... 15
General Fund Tax Receipts .......................... 16
Assessed Valuations ..................................... 17
Taxation of State-Assessed Utility
Property ................................................ 19
Assessed Valuation by Land Use ................. 19
Assessed Valuation of Single-Family
Residential Properties .......................... 20
Largest Secured Property Taxpayers
in District ............................................. 21
Tax Rate Areas ............................................ 22
Appeals of Assessed Value .......................... 22
Property Tax Collections ............................. 23
Direct and Overlapping Debt
Obligations ........................................... 25
Additional Bonds and Promissory
Notes .................................................... 27
CONSTITUTIONAL AND STATUTORY
LIMITATIONS ON DISTRICT .............. 27
TAX REVENUES AND
APPROPRIATIONS ................................ 27
Article XIII A of the State
Constitution .......................................... 27
Article XIII B of the State
Constitution .......................................... 28
Article XIII C and XIII D of the State
Constitution .......................................... 28
Proposition 1A; Proposition 22 ................... 30
Unitary Property .......................................... 30
Future Initiatives .......................................... 30
TAX MATTERS ............................................. 31
CONTINUING DISCLOSURE ....................... 33
General ......................................................... 33
Past Instances of Non-Disclosure ................ 33
UNDERWRITING .......................................... 34
LEGAL MATTERS ........................................ 34
MUNICIPAL ADVISOR ................................ 34
NO MATERIAL LITIGATION ...................... 35
RATINGS ........................................................ 35
VERIFICATION OF MATHEMATICAL
COMPUTATIONS .................................. 35
FINANCIAL STATEMENTS ......................... 36
MISCELLANEOUS ........................................ 37
Attachment 5
vi
MAPS, CHARTS, AND TABLES
Regional Map .................................................................................................................................................. ii
Flow of Funds Chart ...................................................................................................................................... 14
Table 1 - Prior Authority Bonds .............................................................................................................. 4
Table 2 - Estimated Sources and Uses of Funds ..................................................................................... 6
Table 3A - 2016 Green Bonds Debt Service Schedule .............................................................................. 11
Table 3B - Aggregate General Fund Debt Service Schedule ..................................................................... 12
Table 4 - General Fund Tax Receipts ...................................................................................................... 16
Table 5 - Historical and Projected Maximum Annual General Fund Debt Service Coverage ................ 17
Table 6 - Projected Revenues for General Fund Debt ............................................................................. 17
Table 7 - Summary of Assessed Valuation ............................................................................................. 18
Table 8 - 2015-16 Assessed Valuation and Parcels by Land Use ........................................................... 19
Table 9 - Per Parcel 2015-16 Assessed Valuation of Single Family Homes ........................................... 20
Table 10 - Largest Local Secured Taxpayers ............................................................................................ 21
Table 11 - Typical Total Tax Rates per $100 of Assessed Valuation ....................................................... 22
Table 12 - Statement of Direct and Overlapping Bonded Debt ................................................................. 26
APPENDICES
Appendix A - District General, Financial, and Operating Information; and Economic
and Demographic Information Regarding Santa Clara and San Mateo Counties ....... A-1
Appendix B - Annual Financial Report for Fiscal Year Ended March 31, 2015 ............................... B-1
Appendix C - District Investment Policy ........................................................................................... C-1
Appendix D - Summary of Certain Provisions of the Indenture ........................................................ D-1
Appendix E - Form of Continuing Disclosure Certificate ................................................................. E-1
Appendix F - Form of Opinion of Bond Counsel ............................................................................... F-1
Appendix G - DTC and the Book-Entry Only System ....................................................................... G-1
Attachment 5
$__,___,000*
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
GREEN BONDS, 2016 REFUNDING
INTRODUCTION
This introduction contains only a brief summary of certain of the terms of the 2016 Green Bonds
being offered, and a brief description of the Official Statement. All statements contained in this
introduction are qualified in their entirety by reference to the entire Official Statement. Capitalized terms
used in this Official Statement and not otherwise defined shall have the meanings given to such terms as
set forth in the Indenture. See APPENDIX D–“SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE–
Definitions.”
General
The purpose of this Official Statement (which includes the cover page, inside cover page and the
Appendices) is to provide information concerning the issuance of the above-captioned Bonds (the “2016
Green Bonds”).
The District
General. The Midpeninsula Regional Open Space District (the “District”) was formed in 1972 to
acquire and preserve public open space land in northern and western portions of Santa Clara County. In
June 1976, the southern and eastern portions of San Mateo County were annexed to the District. The
District annexed three parcels located in the northern tip of Santa Cruz County in 1992, but presently no
property taxes on this land are levied. In September 2004, the District completed the Coastside Protection
Program, which extended the District boundaries to the Pacific Ocean in San Mateo County, from the
southern borders of Pacifica to the San Mateo/Santa Cruz County line.
The District now encompasses over 550 square miles of land in Santa Clara County
(approximately 200 square miles), San Mateo County (approximately 350 square miles) and Santa Cruz
County (approximately 2.6 square miles) (collectively, the “Counties”). As of the 2010 decennial census,
approximately 720,000 people lived within the boundaries of the District.
Governing Board and Management. A seven-member Board of Directors, elected by ward (the
“Board of Directors”), establishes policies for the District. Specifically, the Board sets general operating
objectives for the District, monitors financial and long-range planning, establishes policies governing
conditions of employment, and sets policies to protect and enhance the natural and cultural resources of
the District. Members of the Board of Directors are elected for staggered four-year terms.
For additional information about the operations and finances of the District, see APPENDIX A–
“DISTRICT GENERAL, FINANCIAL, AND OPERATING INFORMATION; AND ECONOMIC AND DEMOGRAPHIC
INFORMATION REGARDING SANTA CLARA AND SAN MATEO COUNTIES.”
Authority for Issuance; Purpose
The 2016 Green Bonds are issued pursuant to the Constitution and laws of the State of California
(the “State”), including the provisions of Article 3 of Chapter 3 of Division 5 of the Public Resources
Code (the “District Act”), and all laws amendatory thereof or supplemental thereto, including Articles 10
_______________
* Preliminary, subject to change.
Attachment 5
2
and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California
(together with the District Act, the “Law”) and an Indenture, dated as of September 1, 2016 (the
“Indenture”), between the District and Zions Bank, a division of ZB, National Association, as trustee (the
“Trustee”).
The 2016 Green Bonds are being issued by the District to: (i) refund its outstanding obligations
under certain outstanding promissory notes (the “2007 Notes”) held by the Midpeninsula Regional Open
Space District Financing Authority (the “Authority”) the payment of which secures the Authority’s 2007
Series A Revenue Refunding Bonds (1996 and 1999 Refinancing Project) (the “2007 Authority Bonds”),
and to prepay a portion of its obligations under that certain Lease Agreement, dated as of May 1, 2011, by
and between the District and the Authority, the payment of lease payments under which secures the
Authority’s 2011 Revenue Bonds (the “2011 Authority Bonds, and, together with the 2007 Authority
Bonds, the “Prior Bonds”); and (ii) pay certain costs associated with the issuance of the 2016 Green
Bonds. See “PLAN OF REFUNDING.”
Security for the 2016 Green Bonds
General. The 2016 Green Bonds are special obligations of the District payable from “Revenues,”
defined in the Indenture as the revenues, income, and investment earnings received by the District,
including the District’s share of the general 1% ad valorem property tax levied in the District by the
Board of Supervisors of the County of Santa Clara and by the Board of Supervisors of the County of San
Mateo and allocated to the District, except for any revenue restricted to a specified purpose and not
legally available to pay Debt Service such as the ad valorem property taxes levied for the payment of the
District’s voter approved general obligation bonds. Such taxes are in addition to other taxes levied upon
property within the District.
The District may issue additional bonds or incur additional obligations payable from Revenues on
a parity with the 2016 Green Bonds. See “SECURITY AND SOURCE OF PAYMENT FOR THE 2016 GREEN
BONDS–Additional Bonds,” and “–Direct and Overlapping Debt Obligations.”
No Reserve Fund. No reserve fund will be established as security for the 2016 Green Bonds.
See “SECURITY AND SOURCE OF PAYMENT FOR THE 2016 GREEN BONDS.”
Parity Obligations. The District has outstanding approximately $125.1 million of notes (the
“Promissory Notes”) and bonds (“Bonds”) the payments of which are secured by a pledge of and lien on
Revenues on a parity with the payment of the 2016 Green Bonds,, inclusive of the $67.59 million* Prior
Bonds but excluding the 2016 Green Bonds. See “SECURITY AND SOURCE OF PAYMENT FOR THE 2016
GREEN BONDS.”
Other Outstanding Debt
The District also has outstanding approximately $45 million of general obligation bonds secured
by and payable from Measure AA. For a description of Measure AA, see APPENDIX A–“DISTRICT
GENERAL, FINANCIAL, AND OPERATING INFORMATION; AND ECONOMIC AND DEMOGRAPHIC
INFORMATION REGARDING SANTA CLARA AND SAN MATEO COUNTIES–District Financial Information-
General.”
_______________
* Preliminary, subject to change.
Attachment 5
3
Redemption
The 2016 Green Bonds are subject to optional [and mandatory sinking fund] redemption prior to
their stated maturity. See “THE 2016 GREEN BONDS–Redemption Provisions.”
Summaries Not Definitive
The summaries and references of documents, statutes, reports and other instruments referred to in
this Official Statement do not purport to be complete, comprehensive or definitive, and each such
summary and reference is qualified in its entirety by reference to each document, statute, report, or
instrument.
Copies of the documents described in this Official Statement will be available at the General
Manager’s office, Midpeninsula Regional Open Space District, 330 Distel Circle, Los Altos, California
94022, telephone: 650-691-1200. The District may impose a charge for copying and mailing.
THE DISTRICT
The District is a regional greenbelt system located in the San Francisco Bay Area and
encompasses over 550 square miles of land in the Counties. The District operates 26 open space
preserves, which comprise more than 60,000 acres, making a preserve system of diverse and unparalleled
beauty in one of the largest metropolitan areas in the country. The preserves, ranging from 55 to more
than 1,800 acres, are open to the public, all year, free of charge.
The mission of the District is to acquire and preserve, or return to its natural state, open space
land in perpetuity for scenic beauty and enjoyment, for the protection of natural vegetation, wildlife and
agriculture, to establish boundaries for urban growth, and enhance quality of life, for recreation in nature,
and for educational opportunities through the creation of a regional greenbelt. For additional information
on the District see APPENDIX A–“DISTRICT GENERAL, FINANCIAL, AND OPERATING INFORMATION; AND
ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING SANTA CLARA AND SAN MATEO COUNTIES.”
PLAN OF REFUNDING
A portion of the proceeds from the sale of the 2016 Green Bonds will be used by the District
together with other available moneys, to effect a current refunding of the 2007 Authority Bonds and cause
prepayment of the 2007 Promissory Notes; and to prepay a portion of its obligations under that certain
Lease Agreement, dated as of May 1, 2011, by and between the District and the Authority, the payment of
lease payments under which secures the Authority’s 2011 Revenue Bonds.
The proceeds from each series of the Prior Bonds were used to acquire “open space” located
within the District. “Open space” is defined as land or water area that remains in its natural state, is used
for agriculture, or is otherwise essentially undeveloped and the benefits of open space include enhanced
survival prospects for endangered plant and animal species, increased public safety through the
minimization of flood erosion, landslide, earthquake, and fire hazards, and the creation of more livable
urban environments. A map of the District is located on page ii.
Attachment 5
4
2007 Authority Bonds. The 2007 Authority Bonds were issued by the Authority pursuant to the
terms and conditions of an Indenture of Trust, dated as of January 1, 2007 (the “2007 Authority Bonds
Indenture”) between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee,
to purchase the 2007 Promissory Notes issued by the District. The 2007 Promissory Notes were issued to
refinance certain prior obligations of the District that financed the acquisition of approximately
4,739 acres of open space located at the following preserves: Bear Creek Redwoods (6 acres), El Sereno
(259 acres), Long Ridge (273 Acres), Miramontes (296 acres), Monte Bello (40 Acres), Pulgas Ridge (73
acres), Purisima Creek Redwoods (481 acres), Russian Ridge (198 acres), Sierra Azul (2,963 acres),
Skyline Ridge (136 acres), and Thornewood (14 acres).
2011 Authority Bonds. The 2011 Authority Bonds were issued by the Authority pursuant to the
terms and conditions of an Indenture of Trust, dated as of May 1, 2011 (the “2011 Authority Bonds
Indenture”) by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as
trustee. The 2011 Authority Bonds were issued to finance the acquisition of approximately 2,627 acres of
open space located at the following preserves: Bear Creek Redwoods (6 acres), El Corte de Madera Creek
(90 acres), El Sereno (4 acres), Miramontes Ridge (564) acres, Monte Bello (159 acres), Purisima Creek
Redwoods (280 acres), Saratoga Gap (66 acres), Sierra Azul (427 acres), Tunitas Creek (952 acres), and
Windy Hill (70 acres).
The Prior Authority Bonds consist of the following:
Table 1
$44,065,000
Midpeninsula Regional Open Space District Financial Authority
2007 Series A Revenue Refunding Bonds
Dated Date: January 9, 2007
Redemption Date: September __, 2016
Redemption Price: 100%
Maturity Date
(September 1)
Principal Amount
CUSIP No.(1)
2017 $3,405,000 598024FA0
2018 3,585,000 598024FB8
2019 3,275,000 598024FC6
2020 3,665,000 598024FD4
2021 3,860,000 598024FE2
2022 4,075,000 598024FF9
2023 4,290,000 598024FG7
2024 500,000 598024FH5
2024 4,020,000 598024FT9
2027(2) 13,390,000 598024FL6
______________
(1) Copyright 2016, American Bankers Association. CUSIP data are provided by S&P Global Ratings, and are provided for
convenience of reference only. Neither the District nor the Underwriter assumes any responsibility for the accuracy of these
CUSIP data. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP
Service.
(2) Term Bond.
* Preliminary, subject to change.
Attachment 5
5
$19,090,000*
Midpeninsula Regional Open Space District Financial Authority
2011 Revenue Bonds
Dated Date: May 19, 2011
Redemption Date: September 1, 2021
Redemption Price: 100%
Maturity Date
(September 1)
Principal Amount
CUSIP No.(1)
2022 $325,000 598024GE1
2023 365,000 598024GF8
2024 410,000 598024GG6
2025 455,000 598024GH4
2026 510,000 598024GJ0
2029(2) 1,875,000 598024GK7
2034(2) 4,555,000 598024GL5
2041(2) 5,595,000 598024GM3
2041(2) 5,000,000 598024GN1
______________
(1) Copyright 2016, American Bankers Association. CUSIP data are provided by S&P Global Ratings, and are provided for
convenience of reference only. Neither the District nor the Underwriter assumes any responsibility for the accuracy of these
CUSIP data. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP
Service.
(2) Term Bond.
* Preliminary, subject to change.
A portion of the proceeds from the sale of the 2016 Green Bonds will be transferred to The Bank
of New York Mellon Trust Company, N.A., to prepay the 2007 Notes and which amount will be
sufficient to pay the redemption price of and accrued interest on the 2007 Authority Bonds on
September 1, 2016.
A portion of the proceeds from the sale of the 2016 Green Bonds will be deposited into an escrow
fund (the “2016 Escrow Fund”) established pursuant to an Escrow Agreement, dated as of September 1,
2016 (the “2016 Escrow Agreement”) by and among the District, the Authority, and The Bank of New
York Mellon Trust Company, N.A., as escrow agent for the 2011 Authority Bonds. The amounts
deposited in the 2016 Escrow Fund with respect to the 2011 Authority Bonds will be invested in
noncallable defeasance securities, the principal of and interest on which, when received, will be sufficient
to pay the redemption price of and accrued interest on the 2011 Authority Bonds on September 1, 2021.
Upon such deposit, the 2011 Authority Bonds will no longer be deemed outstanding under the 2011
Authority Bonds Indenture.
The mathematical computations used to determine the sufficiency of the escrow deposit to
defease and prepay, as applicable, the Prior Bonds will be verified by Causey Demgen & Moore P.C. (the
“Verification Agent”) who will deliver a report to such effect upon delivery of the 2016 Green Bonds.
See “VERIFICATION OF MATHEMATICAL COMPUTATIONS.”
Attachment 5
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ESTIMATED SOURCES AND USES OF FUNDS
The estimated sources and uses of funds received from the sale of the 2016 Green Bonds are set
forth below:
Table 2
Estimated Sources and Uses of Funds
SOURCES OF FUNDS:
Principal Amount of Bonds $
Original Issue Premium __________
TOTAL SOURCES $
USES OF FUNDS:
Deposit into 2016 Escrow Account(1)$
Deposit to Costs of Issuance Fund(2)
Underwriter’s Discount __________
TOTAL USES $
_____________
* Preliminary, subject to change.
(1) See “PLAN OF REFUNDING.”
(2) Includes legal fees, financial advisory fees, Trustee’s fees, printing expenses, rating agency fees and other costs associated
with the issuance of the 2016 Green Bonds.
THE 2016 GREEN BONDS
Authority for Issuance
The 2016 Green Bonds are issued pursuant to the Constitution and laws of the State, including the
Law, and the Indenture. The 2016 Green Bonds are authorized to be issued by the Resolution. For
additional information about the provisions of the Indenture, see APPENDIX D–“SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE.”
Designation of 2016 Green Bonds as Green Bonds
The mission of the District is to acquire and preserve a regional greenbelt of open space land in
perpetuity; protect and restore the natural environment; and provide opportunities for ecologically
sensitive public employment and education.
The District is issuing the 2016 Green Bonds as “Green Bonds,” to allow investors to invest
directly in bonds which finance such environmentally beneficial projects. The owners of the 2016 Green
Bonds do not assume any specific project risk or economic benefit related to the projects as a result of the
Green Bonds designation.
Use of Proceeds. The proceeds from the 2016 Green Bonds will be used to refund or prepay, as
applicable, the Prior Bonds, the original proceeds of which were used to acquire an aggregate of
approximately 7,366 acres of open space within the District in the following preserves: Bear Creek
Redwoods, El Corte de Madera Creek, El Sereno, Long Ridge, Miramontes Ridge, Monte Bello, Pulgas
Ridge, Purisima Creek Redwoods, Russian Ridge, Saratoga Gap, Sierra Azul, Skyline Ridge, Tunitas
Creek, Thornewood, and Windy Hill. For a summary description projects financed with the proceeds of
the Prior Bonds, see “PLAN OF REFUNDING.” See also, “SECURITY AND SOURCE OF PAYMENT FOR THE
2016 GREEN BONDS.” The District acquires and preserves, or returns to its natural state, land for scenic
Attachment 5
7
beauty and enjoyment, to protect natural vegetation, wildlife and agriculture, to establish boundaries for
urban growth, enhance quality of life, recreation in nature, and educational opportunities through the
creation of a regional greenbelt.
Project Evaluation and Selection. Expansion of open space preserves by the District is based on
location and the opportunity to acquire properties to support the creation of a regional greenbelt. The
District prioritizes acquisitions based on an evaluation of opportunities to link preserves with federal,
State, county, and city parklands, potential public trail uses, and protect wildlife, watersheds, and other
natural resources.
Management of Proceeds. A portion of the proceeds from the sale of the 2016 Green Bonds will
be deposited into the segregated 2016 Escrow Fund established pursuant to an Escrow Agreement. The
Escrow Fund will be used to fund, redeem or defease, as applicable, the Prior Bonds. See “PLAN OF
REFUNDING.” The remaining proceeds of the 2016 Green Bonds will be used to pay the costs associated
with the issuance of the 2016 Green Bonds.
Reporting. The proceeds of the Prior Bonds were expended as described above and as
summarized in “PLAN OF REFUNDING.” Because all projects financed by the Prior Bonds are complete,
the District does not intend to report on the use of proceeds. The District does, however, encourage
investors to access its website (http://www.openspace.org/) for ongoing updates related to the District and
its open space preserves.
Payment of Principal and Interest
The 2016 Green Bonds will mature on September 1 in the years indicated on the inside cover
page hereof and will bear interest at the rates set forth on the inside cover page hereof on March 1 and
September 1 of each year, commencing on March 1, 2017 (each, an “Interest Payment Date”), computed
using a year of 360 days comprising twelve 30-day months.
Payment of Interest. Payment of interest on any Bond on each Interest Payment Date (or on the
following business day, if the Interest Payment Date does not fall on a business day) will be made to the
person appearing on the registration books of the Trustee as the registered owner thereof (the “Owner”)
on each Record Date, such interest to be paid by check or draft mailed to such Owner at such Owner’s
address as it appears on such registration books or at such other address as the Owner may have filed with
the Trustee for that purpose on or before the Record Date. The Owner of an aggregate principal amount of
$1,000,000 or more of Bonds may request in writing to the Trustee that such Owner be paid interest by
wire transfer to the bank and account number on file with the Trustee as of the applicable Record Date. So
long as the 2016 Green Bonds are held by Cede & Co., as nominee of DTC, payment will be made by
wire transfer.
Payment of Principal. Principal will be payable at maturity, or upon redemption prior to
maturity, upon surrender of Bonds at the principal office of the Trustee. The interest, principal and
premiums, if any, on the 2016 Green Bonds will be payable in lawful money of the United States of
America from moneys on deposit in the Debt Service Fund of the District under the Indenture, consisting
of ad valorem taxes collected by the County Treasurer of the respective Counties, together with any
premium and accrued interest received upon issuance of the 2016 Green Bonds. So long as all outstanding
Bonds are held in book-entry form and registered in the name of a securities depository or its nominee, all
payments of principal of, premium, if any, and interest on the 2016 Green Bonds and all notices with
respect to such Bonds will be made and given, respectively, to such securities depository or its nominee
and not to Beneficial Owners. See APPENDIX G–“DTC aND THE BOOK-ENTRY ONLY SYSTEM.”
Attachment 5
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Redemption Provisions
Optional Redemption. The 2016 Green Bonds maturing on or before September 1, 20__ are not
subject to optional redemption prior to maturity. The 2016 Green Bonds maturing on or after
September 1, 20__ are subject to redemption prior to their stated maturity date at the option of the
District, from any source of available funds, as a whole or in part on any date on or after
September 1, 20__, at a redemption price equal to the principal amount of such 2016 Green Bonds called
for redemption, together with accrued interest thereon to the date fixed for redemption, without premium.
The District is required to give the Trustee written notice at least thirty (30) days (or such lesser
time period acceptable to the Trustee) before any date fixed for redemption of the 2016 Green Bonds
called for redemption pursuant to the Indenture, designating the portion thereof called for redemption and
the date of such redemption.
Mandatory Sinking Fund Redemption. The 2016 Green Bonds maturing on September 1, 20__
(the “Term Bond”) is also subject to sinking fund redemption on each Mandatory Sinking Fund
Redemption Date in the respective principal amounts set forth below, at a redemption price equal to 100%
of the principal amount to be redeemed, without premium[, in part by lot,] together with accrued interest
thereon to the date fixed for redemption
Term Bond Due September 1, 20__
Mandatory Sinking Redemption Date Principal
(September 1) Amount to be Redeemed
Redemption Procedures
Partial Redemption. If less than all of the 2016 Green Bonds are to be redeemed at any one time,
the District is required to select the maturities of the 2016 Green Bonds and the principal amount of each
such maturity to be redeemed in its sole discretion. If less than all 2016 Green Bonds maturing by their
terms on any one date are to be redeemed at any one time, the Trustee is required to select the 2016 Green
Bonds of such maturity to be redeemed by lot and is required to promptly notify the District in writing of
the numbers of such 2016 Green Bonds so selected for redemption. For purposes of such selection, 2016
Green Bonds will be deemed to be composed of $5,000 multiples and any such multiple may be
separately redeemed.
Notice of Redemption. Notice of redemption are to be mailed by first-class mail by the Trustee,
not less than 20 nor more than 60 days prior to the redemption date to the Owners of the 2016 Green
Bonds designated for redemption at their addresses appearing on the registration books of the Trustee.
Each notice of redemption is required to state the date of such notice, the redemption price, the place of
redemption (including the name and appropriate address of the Trustee), the CUSIP number of the
maturity or maturities, and, if less than all of any such maturity is to be redeemed, the distinctive
certificate numbers of the 2016 Green Bonds of such maturity to be redeemed, the redemption price
thereof and, in the case of 2016 Green Bonds to be redeemed in part only, the respective portions of the
principal amount thereof to be redeemed. Each such notice is also required to state that on said date there
will become due and payable on each of said 2016 Green Bonds the redemption price thereof and in the
case of a 2016 Green Bond to be redeemed in part only, the specified portion of the principal amount
thereof to be redeemed, together with interest accrued thereon to the redemption date, and that from and
after such redemption date interest thereon will cease to accrue, and will require that such 2016 Green
Attachment 5
9
Bonds be then surrendered at the address of the Trustee specified in the redemption notice. Neither
failure to receive any such notice nor any defect therein will affect the validity of the proceedings for
redemption of such 2016 Green Bonds or the cessation of the accrual of interest on the redemption date.
In the event of redemption of 2016 Green Bonds, the Trustee is required to mail a notice of
redemption upon receipt of a Written Request of the District but only after the District files a Certificate
of the District with the Trustee that on or before the date set for redemption, the District will deposit with
or otherwise make available to the Trustee for deposit in the “Bond Redemption Fund” the money
required for payment of the redemption price, including accrued interest, of all Bonds then to be called for
redemption (or the Trustee determines that money will be deposited with or otherwise made available to it
in sufficient time for such purpose), together with the estimated expense of giving such notice.
Effect of Redemption. If notice of redemption has been duly given as required in the Indenture
and money for the payment of the redemption price of the 2016 Green Bonds called for redemption is
held by the Trustee, then on the redemption date designated in such notice 2016 Green Bonds so called
for redemption will become due and payable, and from and after the date so designated interest on such
2016 Green Bonds will cease to accrue, and the Owners of such 2016 Green Bonds will have no rights in
respect thereof except to receive payment of the redemption price thereof.
Conditional Notice of Redemption. Any notice of optional redemption of the 2016 Green Bonds
may be conditional and if any condition stated in the notice of redemption shall not have been satisfied on
or prior to the redemption date, said notice will be of no force and effect, the District will not be required
to redeem such 2016 Green Bonds, the redemption will be cancelled, and the Trustee is required within a
reasonable time thereafter to give notice to the persons and in the manner in which the notice of
redemption was given, that such condition or conditions were not met and that the redemption was
cancelled.
Rescission or Cancellation of Redemption. The District has the right to rescind any optional
redemption by written notice of rescission. In addition, any notice of optional redemption will be
cancelled and annulled if for any reason funds are not available on the date fixed for redemption for the
payment in full of the 2016 Green Bonds then called for redemption. Any such rescission or cancellation
shall not constitute an Event of Default hereunder. The Trustee is required to mail notice of rescission or
cancellation of such redemption in the same manner as the original notice of redemption was sent.
Defeasance
All or a portion of the 2016 Green Bonds may be defeased prior to the scheduled maturity dates
thereof if the District deposits with the Trustee or escrow agent: (i) either money in an amount which is
sufficient or Defeasance Securities which are not subject to redemption prior to maturity, the interest on
and the principal of which when paid will provide money which, together with the money, if any,
deposited with the Trustee or escrow agent at the same time, is sufficient (as evidenced by a report of an
Independent Certified Public Accountant or verification agent obtained by the District and filed with the
Trustee) to pay when due the interest to become due on such Bonds on and prior to the maturity dates
thereof or the redemption dates thereof and the principal of and the redemption premiums, if any, on such
Bonds on the maturity dates thereof or the redemption dates thereof; and (ii) the District has given the
Trustee (in form satisfactory to the Trustee) irrevocable instructions to mail, as soon as practicable, a
notice to the Owners of such 2016 Green Bonds that the deposit of money and/or Defeasance Securities
has been made with the Trustee and that such 2016 Green Bonds are deemed to have been paid in
accordance with the Indenture, and stating the maturity dates thereof or the redemption dates thereof upon
which money is to be available for the payment of the principal of and the redemption premiums, if any,
on such 2016 Green Bonds; provided, that no money or Defeasance Securities or money deposited with
the Trustee or escrow agent pursuant to the Indenture (nor any interest on or principal payments of such
Attachment 5
10
Defeasance Securities) will be withdrawn or used for any purpose other than, and such Defeasance
Securities and money will be held in trust for, the payment of the interest on and the principal of and the
redemption premiums, if any, on such 2016 Green Bonds as provided in the Indenture, except that any
money received from such interest on or principal payments of such Defeasance Securities deposited with
the Trustee or escrow agent which is not then needed for the foregoing purpose is required, to the extent
practicable, be reinvested as specified in a Written Request of the District filed with the Trustee or escrow
agent in Defeasance Securities maturing at the times and in the amounts sufficient to pay when due the
interest on and the principal of and the redemption premiums, if any, on such 2016 Green Bonds on and
prior to such maturity dates thereof or redemption dates thereof, and all interest earned from such
reinvestments is required to be deposited in the Revenue Fund.
Any money, deposits, or investments held by the Trustee pursuant to the Indenture which are not
required for the payment of the interest and principal and redemption premiums, if any, on the 2016
Green Bonds so defeased will be paid to the to the District.
See also APPENDIX D–“SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE–Defeasance.”
(Remainder of this Page Intentionally Left Blank)
Attachment 5
11
DEBT SERVICE SCHEDULES
Table 3A shows the debt service schedule with respect to the 2016 Green Bonds (assuming no
optional redemptions), and Table 3B shows the aggregate debt service schedule for all Bonds and
Promissory Notes of the District payable from the District general fund, inclusive of the Prior Bonds, and
exclusive of the 2016 Green Bonds.
Table 3A
2016 Green Bonds
Debt Service Schedule
Bond Year Ending Total
September 1 Principal Interest Debt Service
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
Attachment 5
12
Table 3B
Aggregate General Fund Debt Service Schedule†
Fiscal
Year
Ending
(June 30)
2007
Authority
Bonds
2011
Authority
Bonds 2012 Bonds 2015 Bonds Total
2017 $5,510,375.00 $1,195,775.00 $1,032,625.00 $1,786,375.00 $9,525,150.00
2018 5,519,375.00 1,221,725.00 1,034,550.00 1,821,550.00 9,597,200.00
2019 5,524,625.00 1,245,875.00 1,034,050.00 1,856,725.00 9,661,275.00
2020 5,043,125.00 1,272,975.00 1,032,950.00 1,884,725.00 9,233,775.00
2021 5,259,625.00 1,298,675.00 1,031,250.00 1,918,675.00 9,508,225.00
2022 5,266,500.00 1,322,975.00 1,031,150.00 1,939,375.00 9,560,000.00
2023 5,283,125.00 1,350,775.00 1,032,725.00 1,967,125.00 9,633,750.00
2024 5,289,000.00 1,376,518.75 1,029,150.00 1,995,750.00 9,690,418.75
2025 5,300,625.00 1,404,537.50 1,030,025.00 1,990,875.00 9,726,062.50
2026 5,057,000.00 1,430,075.00 1,351,400.00 2,002,750.00 9,841,225.00
2027 4,802,750.00 1,462,725.00 1,347,900.00 1,996,250.00 9,609,625.00
2028 4,530,500.00 1,491,487.50 1,351,950.00 2,006,250.00 9,380,187.50
2029 – 1,521,737.50 4,659,000.00 1,992,750.00 8,173,487.50
2030 – 1,548,987.50 4,579,875.00 1,951,875.00 8,080,737.50
2031 – 1,582,043.75 4,570,000.00 1,899,500.00 8,051,543.75
2032 – 1,615,437.50 4,465,000.00 1,826,375.00 7,906,812.50
2033 – 1,649,762.50 4,355,000.00 1,728,625.00 7,733,387.50
2034 – 1,675,018.75 4,250,000.00 1,602,625.00 7,527,643.75
2035 – 1,710,943.75 3,810,534.00 1,440,125.00 6,961,602.75
2036 – 1,749,025.00 6,183,820.80 – 7,932,845.80
2037 – 1,778,750.00 5,660,252.95 – 7,439,002.95
2038 – 1,812,450.00 5,135,000.00 – 6,947,450.00
2039 – 1,844,700.00 5,102,650.00 – 6,947,350.00
2040 – 1,875,225.00 5,078,158.80 – 6,953,383.80
2041 – 1,908,587.50 5,045,588.10 – 6,954,175.60
2042 – 1,944,200.00 5,510,000.00 – 7,454,200.00
TOTAL $62,386,625.00 $40,290,987.50 $81,744,604.65 $35,608,300.00 $220,030,517.15
_____________
† For a summary of outstanding general fund debt obligations, see Table A-3 in APPENDIX A–“DISTRICT GENERAL, FINANCIAL,
AND OPERATING INFORMATION; AND ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING SANTA CLARA AND SAN
MATEO COUNTIES–District Financial Information–LONG TERM DEBT OF THE DISTRICT.”
* Preliminary, subject to change. For a description of the 2011 Authority Bonds expected to be prepaid, see “Plan of
Refunding.”
Attachment 5
13
SECURITY AND SOURCE OF PAYMENT FOR THE 2016 GREEN BONDS
Pledge of Revenues
Pursuant to Section 5544.2(f) of the District Act, all Revenues are pledged to the payment of
Bonds, including the 2016 Green Bonds and all other Promissory Notes in accordance with their
respective terms.
Allocation of Revenues
The District agrees and covenants in the Indenture that all Revenues received by the District will
be deposited when and as received in the Midpeninsula Regional Open Space District Revenue Fund (the
“Revenue Fund”), which fund the District agrees and covenants to maintain so long as any 2016 Green
Bond remain Outstanding. Based upon the adopted budget of the District, amounts to be received in the
Revenue Fund exceeding the deposits to the debt service requirements set forth below, will be surplus
funds, which surplus funds may be budgeted and applied for any lawful purpose of the District.
The District is required to transfer the following amounts from the Revenue Fund into the
following respective funds at the times and in the manner and priority summarized below.
First: To the Interest Fund. On or before the 25th day of the month next preceding each Interest
Payment Date (commencing on February 25th, 2017), the District shall deposit in the Interest Fund an
amount equal to the interest becoming due and payable to but not including such Interest Payment Date.
All money in the Interest Fund is required to be used and withdrawn by the Trustee solely for the purpose
of paying the interest on the 2016 Green Bond to but not including their respective Interest Payment
Dates.
Second: To the Principal Fund. On or before the 25th day of the month next preceding each
Principal Payment Date (commencing on August 25th, 2017), the District is required to deposit in the
Principal Fund an amount equal to the principal of the 2016 Green Bonds becoming due and payable on
such date. All moneys in the Principal Fund shall be used and withdrawn by the Trustee solely for the
purpose of paying the principal of the 2016 Green Bonds on their respective Bond Payment Dates or
redemption dates.
Third: To the Bond Redemption Fund. At the time that any payment is due to the Trustee for the
purpose of optional or mandatory redemption, the District is required to deposit in the Bond Redemption
Fund an amount equal to the principal amount of, and interest on the 2016 Green Bond being redeemed,
plus the redemption premium, if any. All money in the Bond Redemption Fund will be used and
withdrawn by the Trustee solely for the purpose of paying the principal of, interest on, and redemption
premium, if any due on the 2016 Green Bond on their respective redemption dates.
Fourth: Excess Funds. Unless the District otherwise directs in writing, any amounts remaining
in the Interest, Principal, and Bond Redemption Funds on the Business Day following September 1 of
each year will be returned to the District for deposit in the Revenue Fund.
Attachment 5
14
Flow of Funds Chart
Revenues
Revenue Fund
Interest Fund
Principal Fund
Bond Redemption Fund
Excess Funds are transferred on the Business
Day following September 1 of each year
On or before the 25th day of the month
preceding each Interest Payment Date
On or before the 25th day of the month
preceding each Interest Payment Date
At the time any payment is due to the Trustee for
the purpose of optional or mandatory redemption
Attachment 5
15
No Debt Service Reserve Fund
The 2016 Green Bonds are secured by and payable solely from Revenues consisting primarily of
the District’s share of the general one percent ad valorem property taxes levied on all taxable property in
the District. Therefore, the Indenture does not require the District to establish a reserve fund for the 2016
Green Bonds.
Ad Valorem Property Taxation Within the District
Taxes are levied by the Counties for each fiscal year (June 30) on taxable real and personal
property which is situated in the District as of the preceding January 1. For assessment and collection
purposes, property is classified either as “secured” or “unsecured” and is listed accordingly on separate
parts of the assessment roll. The “secured roll” is that part of the assessment roll containing State-assessed
public utilities property and real property having a tax lien which is sufficient, in the opinion of the
County Assessors of the Counties, to secure payment of the taxes. Other property is assessed on the
“unsecured roll.”
Property taxes on the secured roll are due in two installments, on November 1 and February 1 of
each fiscal year (June 30). If unpaid, such taxes become delinquent on December 10 and April 10,
respectively, and a 10% penalty attaches to any delinquent payment. Property on the secured roll with
respect to which taxes are delinquent becomes tax defaulted on or about June 30 of the fiscal year. Such
property may thereafter be redeemed by payment of a penalty of 1.5% per month to the time of
redemption, plus costs and a redemption fee. If taxes are unpaid for a period of five years or more, the
property is subject to sale.
Property taxes on the unsecured roll are due as of the January 1 lien date and become delinquent,
if unpaid, on August 31. A 10% penalty attaches to delinquent unsecured taxes. If unsecured taxes are
unpaid by 5:00 p.m. on October 31, an additional penalty of 1.5% attaches to them on the first day of each
month until paid. The taxing authority has four ways of collecting delinquent unsecured personal property
taxes: (i) bringing a civil action against the taxpayer; (ii) filing a certificate in the office of the County
Clerk of a County specifying certain facts in order to obtain a lien on certain property of the taxpayer;
(iii) filing a certificate of delinquency for record in the County Clerk and County Recorder’s office of the
applicable County in order to obtain a lien on certain property of the taxpayer; and (iv) seizing and selling
personal property, improvements, or possessory interests belonging or assessed to the assessee.
Allocation of Property Taxes
The allocation of ad valorem property taxes to local governments and, accordingly, the District, is
subject to certain State statutes, which may change from time to time. However, such allocation of ad
valorem property taxes has received constitutional protection in recent years, and the District believes that
any such change will not adversely affect its ability to pay debt service on the 2016 Green Bonds. See
also “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON DISTRICT TAX REVENUES AND
APPROPRIATIONS–Proposition 1A; Proposition 22.”
Attachment 5
16
General Fund Tax Receipts
The following table shows the District’s general fund tax receipts for the past 10 fiscal years
(ended each June 30).
Table 4
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
General Fund Tax Receipts for Past 10 Fiscal Years
Ending June 30
District Secured and Unsecured Tax Receipts (1) (2)
Fiscal Year(3) Santa Clara San Mateo
(June 30) County County Total District
2005-06 $12,535,575 $6,618,709 $19,154,284
2006-07 15,009,587 7,676,989 22,686,576
2007-08 16,161,599 8,146,356 24,307,955
2008-09 17,641,902 8,737,514 26,379,416
2009-10 18,059,222 9,057,026 27,116,248
2010-11 17,836,555 9,020,424 26,856,979
2011-12 18,115,962 9,076,982 27,192,944
2012-13 19,141,070 9,455,338 28,596,408
2013-14 20,866,158 10,059,271 30,925,429
2014-15 22,857,348 10,758,474 33,615,822
_______________
(1) The District also receives a share of delinquent taxes, redemption fees, supplemental taxes and State subvention payments
from each County in the District. This revenue totaled $967,353 in 2013-14 and $1,226,621 in 2014-15.
(2) During 2013-14 and 2014-15, the District received $960,675 and $784,436, respectively, related to the dissolution of
redevelopment agencies within the District. See also “–Dissolution of Redevelopment Agencies.”
(3) Santa Clara County and San Mateo County both provide property tax receipt based on their fiscal year ending June 30.
There are no general fund taxes levied in Santa Cruz County.
Source: District Controller.
Table 5 presents historic and proforma maximum annual debt service coverage, for the District’s
long-term general fund debt, and Table 6 presents projected revenues for the District reflecting assessed
valuations announced by County Assessors in July 2016 for 2016-17 (an approximately 9.0% increase),
and assuming 3% annual growth in 2017-18 and thereafter. The projected revenues do not include any
future development grants or tax levies for general obligation bonds.
(Remainder of this Page Intentionally Left Blank)
Attachment 5
17
Table 5
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
Historical and Projected Maximum Annual General Fund Debt Service Coverage
Fiscal Years Ended March 31
($ in Thousands)
2011-12
2012-13
2013-14
2014-15
Proforma
2015-16
General Fund Tax Revenues $28,737 $30,270 $32,433 $35,082 $38,394
Senior Debt Service(1)5,352 6,058 5,607 5,570 7,734
Senior Coverage Ratio 5.4x 5.0x 5.8x 6.3x 5.0x
Operating Revenue after Senior Debt(2)25,320 26,027 28,543 31,363 32,800
Subordinate Obligations(3) 4,460 2,819 3,251 3,324 2,149
Net Revenue Coverage Ratio 5.7x 9.2x 8.8x 9.4x 15.3x
______________
(1) Includes the 2007A Bonds, the 2011 Bonds, 2012 Promissory Notes and the 2015 Refunding Promissory Notes.
(2) Includes projected “Other Revenue” from Table 6.
(3) Includes $1,575,000 maximum debt service payment on a private note, currently scheduled for repayment in 2022-23 but the
holder can demand repayment at any time.
Source: District Controller.
Table 6
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
Projected Revenues for General Fund Debt
Fiscal Years Ending June 30
($ in Thousands)
Fiscal Year
(June 30) Tax Revenues Other Revenue† Operating Revenue
2016-17 $42,330 $1,891 $44,221
2017-18 43,600 1,919 45,519
2018-19 44,908 1,948 46,856
2019-20 46,255 1,977 48,233
2020-21 47,643 2,007 49,650
_____________
† Includes revenues from property management and interest.
Source: District Controller.
Assessed Valuations
The assessed valuation of property in the District is established by the County Assessors of the
Counties, except for public utility property, which is assessed by the State Board of Equalization.
Assessed valuations are reported at 100% of the “full value” of the property, as defined in Article XIII A
of the California Constitution. The full value may be adjusted annually to reflect inflation at a rate not to
exceed 2% per year, or to reflect a reduction in the consumer price index or comparable data for the area,
or to reflect declines in property value caused by substantial damage, destruction or other factors,
including assessment appeals filed by property owners. Prior to fiscal year (June 30) 1981-82, assessed
valuations were reported at 25% of the full value of property. For a discussion of how properties currently
are assessed, see “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON DISTRICT TAX REVENUES AND
APPROPRIATIONS.”
Attachment 5
18
Certain classes of property, such as churches, colleges, not-for-profit hospitals, and charitable
institutions, are exempt from property taxation and do not appear on the tax rolls. No reimbursement is
made by the State for such exemptions.
The fiscal year (June 30) 2015-16 assessed valuation of the District in Santa Clara County
increased 10.9% over fiscal year 2014-15. The fiscal year 2015-16 assessed valuation in San Mateo
County increased 8.3% from fiscal year 2014-15. Ad valorem taxes are not levied on the three parcels
located in the Santa Cruz County portion of the District.
Table 7
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
Summary of Assessed Valuation
Fiscal Years 2011-12 through 2015-16
Santa Clara County Portion Only
Fiscal Year Total Before Total After
(June 30) Local Secured Utility Unsecured Rdv. Increment Rdv. Increment
2012 $110,480,450,873 $5,192,456 $6,843,136,528 $117,328,779,857 $112,337,678,583
2013 115,665,767,418 5,192,456 7,574,405,026 123,245,364,900 117,796,453,103
2014 125,816,313,137 5,192,456 8,032,679,682 133,854,185,275 128,261,359,652
2015 134,293,818,913 3,616,356 8,134,278,301 142,431,713,570 136,364,265,861
2016 148,710,117,100 3,616,356 8,236,860,519 156,950,593,975 151,221,560,473
San Mateo County Portion Only
Fiscal Year Total Before Total After
(June 30) Local Secured Utility Unsecured Rdv. Increment Rdv. Increment
2012 $51,670,520,965 $2,464,668 $1,952,159,401 $53,625,145,034 $49,913,049,371
2013 53,793,234,014 2,464,745 1,948,563,396 55,744,262,155 51,977,724,339
2014 57,513,572,325 2,335,966 2,180,554,159 59,696,462,450 55,714,674,355
2015 60,798,836,807 2,343,298 2,087,352,630 62,888,532,735 58,641,317,894
2016 66,177,632,738 3,085,789 2,363,781,063 68,544,499,590 63,519,108,202
Total District
Fiscal Year Total Before Total After
(June 30) Local Secured Utility Unsecured Rdv. Increment Rdv. Increment
2012 $162,150,971,838 $7,657,124 $8,795,295,929 $170,953,924,891 $162,250,727,954
2013 169,459,001,432 7,657,201 9,522,968,422 178,989,627,055 169,774,177,442
2014 183,329,885,462 7,528,422 10,213,233,841 193,550,647,725 183,976,034,007
2015 195,092,655,720 5,959,654 10,221,630,931 205,320,246,305 195,005,583,755
2016 214,887,749,838 6,702,145 10,600,641,582 225,495,093,565 214,740,668,675
_______________
Source: California Municipal Statistics, Inc.
Attachment 5
19
Taxation of State-Assessed Utility Property
Less than 1% of property tax revenue of the District is derived from utility property subject to
assessment by the State Board of Equalization (“SBE”). Property valued by the SBE as an operating unit
in a primary function of the utility taxpayer is known as “unitary property,” a concept designed to permit
assessment of the utility as a going concern rather than assessment of each individual element of real and
personal property owned by the utility taxpayer. State-assessed unitary and “operating nonunitary”
property (which excludes nonunitary property of regulated railways) is allocated to the counties based on
the situs of the various components of the unitary property. Except for unitary property of regulated
railways and certain other excepted property, all unitary and operating nonunitary property is taxed at
special county-wide rates and tax proceeds are distributed to taxing jurisdictions according to statutory
formulae generally based on the distribution of taxes in the prior year.
Assessed Valuation by Land Use
The following table describes a distribution of taxable real property located in the District by
principal purpose for which the land is used, and the assessed valuation and number of parcels for each
use.
Table 8
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
2015-16 Assessed Valuation and Parcels by Land Use
2015-16 % of No. of % of
Assessed Valuation† Total Parcels Total
Non-Residential:
Agricultural/Rural $481,975,623 0.22% 636 0.32%
Commercial/Office 28,650,008,026 13.33 6,159 3.12
Industrial 15,835,905,174 7.37 2,341 1.19
Recreational 413,995,774 0.19 111 0.06
Government/Social/Institutional 1,252,220,345 0.58 1,163 0.59
Miscellaneous 467,816,027 0.22 854 0.43
SUBTOTAL NON-RESIDENTIAL $47,101,920,969 21.92% 11,264 5.70%
Residential:
Single Family Residence $133,755,943,880 62.24% 139,741 70.74%
Condominium/Townhouse 16,371,804,227 7.62 29,725 15.05
Mobile Home 217,612,283 0.10 3,742 1.89
2-4 Residential Units 3,650,775,060 1.70 5,983 3.03
5+ Residential Units/Apartments 11,214,505,748 5.22 2,680 1.36
Miscellaneous Residential 28,755,608 0.01 80 0.04
SUBTOTAL RESIDENTIAL $165,239,396,806 76.90% 181,951 92.11%
Vacant Parcels $2,546,432,063 1.19% 4,315 2.18%
TOTAL $214,887,749,838 100.00% 197,530 100.00%
____________
† Local Secured Assessed Valuation; excluding tax-exempt property.
Source: California Municipal Statistics, Inc.
Attachment 5
20
Assessed Valuation of Single-Family Residential Properties
The following table focuses on single-family residential properties only, which comprise
approximately 62% of the assessed value of taxable property in the District. The table provides a
distribution of single-family residences in the District by assessed value. The average assessed value is
$957,170, and the median assessed value is $692,901.
Table 9
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
Per Parcel 2015-16 Assessed Valuation of Single Family Homes
2015-16 Average Median
No. of Assessed Assessed Assessed
Parcels Valuation Valuation Valuation
Single Family Residential 139,741 $133,755,943,880 $957,170 $692,901
2015-16 No. of % of Cumulative Total % of Cumulative
Assessed Valuation Parcels† Total % of Total Valuation Total % of Total
$0 - $99,999 11,264 8.061% 8.061% $838,423,308 0.627% 0.627%
$100,000 - $199,999 15,805 11.310 19.371 2,252,310,503 1.684 2.311
$200,000 - $299,999 9,722 6.957 26.328 2,428,660,357 1.816 4.126
$300,000 - $399,999 8,491 6.076 32.404 2,963,656,402 2.216 6.342
$400,000 - $499,999 8,627 6.174 38.578 3,887,118,048 2.906 9.248
$500,000 - $599,999 8,601 6.155 44.733 4,727,596,362 3.534 12.783
$600,000 - $699,999 7,871 5.633 50.365 5,107,000,265 3.818 16.601
$700,000 - $799,999 7,682 5.497 55.863 5,761,495,791 4.307 20.908
$800,000 - $899,999 7,645 5.471 61.333 6,502,559,022 4.862 25.770
$900,000 - $999,999 7,007 5.014 66.348 6,649,016,947 4.971 30.741
$1,000,000 - $1,099,999 5,944 4.254 70.601 6,227,521,676 4.656 35.397
$1,100,000 - $1,199,999 4,845 3.467 74.068 5,560,768,631 4.157 39.554
$1,200,000 - $1,299,999 4,019 2.876 76.944 5,018,736,524 3.752 43.306
$1,300,000 - $1,399,999 3,853 2.757 79.702 5,193,982,288 3.883 47.190
$1,400,000 - $1,499,999 3,253 2.328 82.030 4,709,142,070 3.521 50.710
$1,500,000 - $1,599,999 2,994 2.143 84.172 4,636,861,128 3.467 54.177
$1,600,000 - $1,699,999 2,515 1.800 85.972 4,144,203,315 3.098 57.275
$1,700,000 - $1,799,999 2,271 1.625 87.597 3,972,165,759 2.970 60.245
$1,800,000 - $1,899,999 2,046 1.464 89.061 3,779,942,370 2.826 63.071
$1,900,000 - $1,999,999 1,682 1.204 90.265 3,277,501,154 2.450 65.521
$2,000,000 and greater 13,604 9.735 100.000 46,117,281,960 34.479 100.000
TOTAL 139,741 100.000% $133,755,943,880 100.000%
_____________
† Improved single family residential parcels. Excludes condominiums and parcels with multiple family units.
Source: California Municipal Statistics, Inc.
Attachment 5
21
Largest Secured Property Taxpayers in District
The twenty taxpayers in the District with the greatest combined secured assessed valuation of
taxable property on the 2015-16 tax roll, and the assessed valuations thereof, are shown below.
Table 10
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
Largest Local Secured Taxpayers
Fiscal Year 2015-16
(June 30)
2015-16
Assessed % of
Property Owner Primary Land Use Valuation Total
1. Board of Trustees, Leland Stanford Jr. University Various Property Holdings $5,762,011,362 2.68%
2. Google Inc. Office Building 2,831,953,508 1.32
3. Campus Holdings Inc. Office Building 1,511,150,025 0.70
4. Lockheed Missiles and Space Co. Inc. Manufacturing 1,254,107,558 0.58
5. Apple Computer Inc. Office Building 1,043,951,286 0.49
6. Oracle Corp. Office Building 590,928,074 0.27
7. Network Appliance Inc. Office Building 577,318,627 0.27
8. Menlo & Juniper Networks LLC Office Building 515,358,677 0.24
9. Sobrato Interests Apartments 432,911,034 0.20
10. Yahoo Inc. Office Building 431,563,491 0.20
11. Applied Materials Inc. Research and Development 400,338,485 0.19
12. Intuitive Surgical Inc. Office Building 386,530,569 0.18
13. HCP Life Science REIT Inc. Research and Development 347,803,542 0.16
14. Wells REIT II-University Circle LP Office Building 333,161,508 0.16
15. SPF Mathilda LLC Office Building 297,273,207 0.14
16. The Irvine Company Apartments 287,001,902 0.13
17. MT SPE LLC Office Building 281,977,051 0.13
18. Westport Office Park LLC Office Building 272,555,675 0.13
19. BRE Properties Inc. Apartments 260,299,127 0.12
20. DWF IV 1400-1500 Seaport Blvd. LLC Office Building 259,000,000 0.12
SUBTOTAL $18,077,194,708 8.41%
All Others Various 196,810,555,130 91.59
TOTAL $214,887,749,838 100.00%
____________
Source: California Municipal Statistics, Inc.
Attachment 5
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Tax Rate Areas
Contained within the District’s boundaries are numerous overlapping local agencies. The
following tables show ad valorem property tax rates for the last five tax years in the largest Tax Rate Area
of the District in Santa Clara County and San Mateo County.
Table 11
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
Typical Total Tax Rates per $100 of Assessed Valuation(1)
Santa Clara County (Tax Rate Area 6-001)(2)
2012 2013 2014 2015 2016(3)
General $1.00000 $1.00000 $1.00000 $1.00000 1.00000
County Retirement Levy .03880 .03880 .03880 .03880 .03880
County Hospital Bond .00470 .00510 .00350 .00910 .00880
City of Palo Alto .01550 .01290 .01770 .01594 .01477
Palo Alto Unified School District .04560 .09510 .09140 .08510 .08600
Foothill-De Anza Community College District .02970 .02870 .02900 .02760 .02400
Midpeninsula Regional Open Space District – – – – .00080
TOTAL ALL PROPERTY $1.13430 $1.18060 $1.18040 $1.17654 $1.17317
Santa Clara Valley Water District – State Water Project .00630 .00690 .00700 .00650 .00570
TOTAL LAND AND IMPROVEMENT .00630 .00690 .00700 .00650 .00570
San Mateo County (Tax Rate Area 9-001)(4)
2012 2013 2014 2015 2016
General $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Midpeninsula Regional Open Space District – – – – .0008
Redwood City School District .0255 .0256 .0240 .0230 .0158
Sequoia Union High School District .0358 .0356 .0313 .0433 .0434
San Mateo Community College District Bond .0199 .0194 .0194 .0190 .0250
TOTAL $1.0812 $1.0806 $1.0747 $1.0853 $1.0850
_______________
(1) Due to the District’s size and that it is located in two counties (Santa Cruz County excluded), there is no tax rate area that
represents the typical total tax rate for the District. The above tax rate areas are the largest in terms of assessed valuation for
each county’s portion of the district.
(2) 2015-16 assessed valuation of Tax Rate Area (TRA) 6-001 is $23,936,719,617, which is 10.62% of the District’s total
assessed valuation.
(3) Fiscal year 2015-16 was the first year in which ad valorem property taxes authorized by Measure AA were levied. For a
description of Measure AA, see APPENDIX A–“DISTRICT GENERAL, FINANCIAL, AND OPERATING INFORMATION; AND
ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING SANTA CLARA AND SAN MATEO COUNTIES–District Financial
Information-General.”
(4) 2015-16 assessed valuation of TRA 9-001 is $8,109,918,455, which is 3.60% of the District’s total assessed valuation.
Source: California Municipal Statistics, Inc.
Appeals of Assessed Value
General. There are two types of appeals of assessed values that could adversely impact property
tax revenues within the District.
Appeals may be based on Proposition 8 of November 1978, which requires that for each
January 1 lien date, the taxable value of real property must be the lesser of its base year value, annually
adjusted by the inflation factor pursuant to Article XIII A of the State Constitution, or its full cash value,
taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal
of property or other factors causing a decline in value. See “CONSTITUTIONAL AND STATUTORY
Attachment 5
23
LIMITATIONS ON DISTRICT TAX REVENUES AND APPROPRIATIONS” and APPENDIX A–“DISTRICT
GENERAL, FINANCIAL, AND OPERATING INFORMATION; AND ECONOMIC AND DEMOGRAPHIC
INFORMATION REGARDING SAN MATEO AND SANTA CLARA COUNTIES–RISKS AFFECTING THE
DISTRICT.”
Under California law, property owners may apply for a reduction of their property tax assessment
by filing a written application, in form prescribed by the State Board of Equalization, with the applicable
County board of equalization or assessment appeals board. In most cases, the appeal is filed because the
applicant believes that present market conditions (such as residential home prices) cause the property to
be worth less than its current assessed value. Proposition 8 reductions may also be unilaterally applied by
the applicable County Assessor.
In 2008-09, the Santa Clara County Assessor’s office reduced the assessed values of 90,836
properties as of January 1, 2009, for a reduction in assessed valuation totaling $17.4 billion. In 2010-11,
the Santa Clara County Assessor’s office unilaterally reduced the assessed values of 118,690 properties,
for a reduction in assessed valuation of $14.3 billion. In San Mateo County, 16% of residential properties
had declines in assessed valuations for fiscal year (June 30) 2010-11.
By fiscal year (June 30) 2012-13, assessed valuation in Santa Clara County had rebounded to a
level above that for fiscal year 2009-10, which had been the highest valuation in the history of Santa
Clara County. For San Mateo County, assessed valuation in fiscal year (June 30) 2011-12 recovered to a
level above that for fiscal year (June 30) 2009-10, which had been the highest valuation in the history of
San Mateo County. No assurance can be given that property tax appeals in the future will not
significantly reduce the assessed valuation of property within the District.
Any reduction in the assessment ultimately granted as a result of such appeal applies to the year
for which application is made and during which the written application was filed. These reductions are
subject to yearly reappraisals and are adjusted back to their original values when market conditions
improve. Once the property has regained its prior value, adjusted for inflation, it once again is subject to
the annual inflationary factor growth rate allowed under Article XIII A. See “CONSTITUTIONAL AND
STATUTORY LIMITATIONS ON DISTRICT TAX REVENUES AND APPROPRIATIONS.”
A second type of assessment appeal involves a challenge to the base year value of an assessed
property. Appeals for reduction in the base year value of an assessment, if successful, reduce the
assessment for the year in which the appeal is taken and prospectively thereafter. The base year is
determined by the completion date of new construction or the date of change of ownership. Any base year
appeal must be made within four years of the change of ownership or new construction date.
Property Tax Collections
The District’s total secured tax collections and delinquencies are apportioned on a County-wide
basis, according to the District’s designated tax rate amount. Therefore, the total secured tax levies, as
well as collections and delinquencies reported, do not represent the actual secured tax levies, collections
and delinquencies of taxpayers within the tax areas of the District. In addition, the District’s total secured
tax levy does not include special assessments, supplemental taxes or other charges that have been
assessed on property within the District or other tax rate areas of the Counties.
Each of Santa Clara County and San Mateo County has adopted the Alternative Method of
Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”) as provided for
in Sections 4701 through 4717 of the State Revenue and Taxation Code. The Teeter Plan requires that a
county pay 100% of ad valorem secured property taxes due to local agencies in the fiscal year such taxes
Attachment 5
24
are due regardless of the actual payments and delinquencies. Under these provisions, each county
operating under the Teeter Plan establishes a delinquency reserve and assumes responsibility for all
secured delinquencies, assuming that certain conditions are met.
The District is a participant in the Teeter Plan of each County. Because of this method of tax
collection, districts located in counties operating under the Teeter Plan and participating in the Teeter Plan
are assured of 100% collection of their secured tax levies if the conditions established under the
applicable county’s Teeter Plan are met. However, such districts are no longer entitled to share in any
penalties due on delinquent payments or in the interest that accrues on delinquent payments.
The Teeter Plan, as applicable to the District, remains in effect unless the Board of Supervisors of
either County orders its discontinuance or unless, prior to the commencement of any fiscal year (which
commences on July 1), the Board of Supervisors of such County has received a petition for its
discontinuance joined in by resolutions adopted by two thirds of the participating revenue districts in such
County, in which event the Board of Supervisors is required to order discontinuance of the Teeter Plan
effective at the commencement of the subsequent fiscal year.
The Board of Supervisors of either County may, by resolution adopted not later than July 15 of
the fiscal year for which it is to apply after holding a public hearing on the matter, discontinue the
procedures under the Teeter Plan with respect to any tax levying agency or assessment levying agency in
the County if the rate of secured tax delinquency in that agency in any year exceeds 3% of the total of all
taxes and assessments levied on the secured rolls for that agency. In the event that the Teeter Plan was
terminated, the amount of the levy of ad valorem taxes in the District would depend upon the collections
of the ad valorem property taxes and delinquency rates experienced with respect to the parcels within the
District.
So long as the Teeter Plan remains in effect with respect to each County, the receipt of revenues
by the District with respect to the levy of ad valorem property taxes in the Counties will not be dependent
upon actual collections of the ad valorem property taxes by the Counties.
See APPENDIX A–“DISTRICT GENERAL, FINANCIAL, AND OPERATING INFORMATION; AND
ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING SAN MATEO AND SANTA CLARA COUNTIES–
DISTRICT FINANCIAL INFORMATION–Long-Term Obligations” for a description of long-term debt payable
from the District’s General Fund.
(Remainder of this Page Intentionally Left Blank)
Attachment 5
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Direct and Overlapping Debt Obligations
Set forth in Table 12 is a direct and overlapping debt report (the “Debt Report”) prepared by
California Municipal Statistics, Inc. for debt issued as of June 30, 2016. The Debt Report is included for
general information purposes only. The District has not reviewed the Debt Report for completeness or
accuracy and makes no representation in connection therewith.
The Debt Report generally includes long-term obligations sold in the public credit markets by
public agencies whose boundaries overlap the boundaries of the District in whole or in part. Such long-
term obligations generally are not payable from revenues of the District (except as indicated) nor are they
necessarily obligations secured by land within the District. In many cases, long-term obligations issued by
the specified public agency are payable only from the general fund or other revenues of such public
agency.
The contents of the Debt Report are as follows: (i) the first column indicates the public agencies
which have outstanding debt as of the date of the Debt Report and whose territory overlaps the District;
(ii) the second column shows the percentage of the assessed valuation of the overlapping public agency
identified in column one which is represented by property located within the District; and (iii) the third
column is an apportionment of the dollar amount of each public agency’s outstanding debt (which amount
is not shown in the table) to property in the District, as determined by multiplying the total outstanding
debt of each agency by the percentage of the District’s assessed valuation represented in column two.
(Remainder of this Page Intentionally Left Blank)
Attachment 5
26
Table 12
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
Statement of Direct and Overlapping Bonded Debt
(June 30, 2016)
2015-16 Assessed Valuation: $225,495,093,565
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 7/1/16
Santa Clara County 40.448% $ 320,584,781
Foothill-De Anza Community College District 93.405 546,216,052
San Mateo Community College District 38.431 247,643,225
West Valley-Mission Community College District 29.331 123,169,760
Palo Alto Unified School District 100. 304,863,766
Fremont Union High School District 85.328 312,279,223
Sequoia Union High School District 91.159 367,803,775
Other High School Districts Various 145,995,674
Belmont-Redwood Shores School District and School Facilities Improvement Districts Nos. 1 and 2 8.409-93.577 56,109,998
Cupertino Union School District 75.322 220,579,489
Los Altos School District 100. 73,555,000
Los Gatos Union School District 97.925 92,524,436
Menlo Park City School District 100. 118,948,824
San Carlos School District 96.331 116,137,198
Mountain View-Whisman School District 100. 224,142,334
Sunnyvale School District 100. 159,445,820
Other Unified and Elementary School Districts Various 282,120,057
Cities 0.019-100. 102,970,277
El Camino Hospital District 98.760 134,590,128
Midpeninsula Regional Open Space District 100. 45,000,000
Special Districts 100. 3,333,492
Community Facilities Districts 100. 30,875,000
Santa Clara Valley Water District Benefit Assessment District 40.448 40,067,789
1915 Act Bonds (Estimate) 100. 34,001,505
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $4,102,957,603
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
Santa Clara County General Fund Obligations 40.448% $276,371,525
Santa Clara County Pension Obligation Bonds 40.448 148,492,030
San Mateo County General Fund Obligations 38.431 164,632,569
County Board of Education Certificates of Participation 38.431-40.448 6,381,408
Foothill Community College District Certificates of Participation 93.405 9,082,087
West Valley-Mission Community College District General Fund Obligations 29.331 18,824,636
Union High School District General Fund Obligations Various 10,497,442
Saratoga Union School District Certificates of Participation 100. 4,600,000
Other Unified and Elementary School District General Fund Obligations Various 4,401,285
City of Cupertino General Fund Obligations 93.081 33,355,576
City of Los Altos General Fund Obligations 100. 1,460,000
City of Palo Alto General Fund Obligations 100. 2,383,453
City of Redwood City General Fund Obligations 100. 1,711,586
City of Sunnyvale General Fund Obligations 99.994 19,463,832
Other City General Fund Obligations Various 7,171,615
Menlo Park Fire Protection District Certificates of Participation 100. 11,015,000
Santa Clara County Vector Control District Certificates of Participation 40.448 1,168,947
Midpeninsula Regional Open Space District General Fund Obligations 100. 122,305,886 (1)
TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT $843,318,877
Less: Santa Clara County supported obligations 148,082,394
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT $695,236,483
OVERLAPPING TAX INCREMENT DEBT (Successor Agencies): 100. % $166,454,779
GROSS COMBINED TOTAL DEBT $5,112,731,259 (2)
NET COMBINED TOTAL DEBT $4,964,648,865
(1) Excludes accreted value of capital appreciation bonds.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.
Ratios to 2015-16 Assessed Valuation:
Direct Debt ($45,000,000) .............................................................................. 0.02%
Total Direct and Overlapping Tax and Assessment Debt ............................... 1.82%
Combined Direct Debt ($167,305,886) ........................................................ 0.07%
Gross Combined Total Debt ............................................................................ 2.27%
Net Combined Total Debt ................................................................................ 2.20%
Ratios to Redevelopment Incremental Valuation ($10,754,424,890):
Total Overlapping Tax Increment Debt ........................................................... 1.55%
____________
Source: California Municipal Statistics, Inc.
Attachment 5
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Additional Bonds and Promissory Notes
The District agrees and covenants in the Indenture that, until payment in full of all interest on and
principal of the 2016 Green Bonds (or provision satisfactory for such payment has been made), it will
incur no additional indebtedness or obligations payable from the Revenues having any priority in payment
to the payment of the interest on or principal of the 2016 Green Bonds.
The District further agrees and covenants in the Indenture that it will incur no additional
indebtedness or obligations that are secured by a pledge of and lien on or payable from the Revenues
received by the District on a parity in payment of the interest on or principal of the 2016 Green Bonds;
unless: (i) such issuance is in compliance with the District Act which act currently requires that the
aggregate principal amount of the proposed debt and of all Bonds and Promissory Notes that will be
outstanding after the issuance of such debt does not exceed an amount equal to the anticipated property
tax revenue allocations for the next five-year period; and (ii)the District files a certificate with the Trustee
showing that: (A) total Revenues received by the District in its most recent audited fiscal year, as shown
by the most recent audited financial statement of the District, (B) the maximum annual Debt Service that
will be payable following the proposed additional debt on (1) all outstanding Promissory Notes of the
District and other obligations of the District that would be payable from Revenues on a parity with the
2016 Green Bonds, (2) the outstanding 2016 Green Bonds, and (3) the proposed additional indebtedness
that is to be secured by a pledge of and lien on or payable from the Revenues received by the District on a
parity in payment of the interest on or principal of the 2016 Green Bonds, and (C) the total Revenues
defined in (A) above is at least 125% of the total defined in clause (ii).
Notwithstanding the above, there are no limitations on the ability of the District to: (i) issue any
Bonds at any time to refund any outstanding 2016 Green Bonds or any outstanding Promissory Notes or
other obligations payable on a parity transaction (provided that such refunding produces at least $1 of net
present value savings); or (ii) execute any contract which is payable from Revenues on a subordinate
basis to the payment by the District of the 2016 Green Bonds.
CONSTITUTIONAL AND STATUTORY LIMITATIONS ON DISTRICT
TAX REVENUES AND APPROPRIATIONS
Article XIII A of the State Constitution
Article XIII A of the State Constitution, known as Proposition 13, was approved by the voters in
June 1978 and has been amended on occasions, including most recently on November 7, 2000 to reduce
the voting percentage required for the passage of school bonds. Section l(a) of Article XIII A limits the
maximum ad valorem tax on real property to 1% of “full cash value,” and provides that such tax shall be
collected by the counties and apportioned according to State statutes. Section l(b) of Article XIII A
provides that the 1% limitation does not apply to ad valorem taxes levied to pay interest or redemption
charges on any (1) indebtedness approved by the voters prior to July 1, 1978, (2) 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 and (3) bonded indebtedness incurred by a school
district, community college district or county office of education for the construction, reconstruction,
rehabilitation or replacement of school facilities, including the furnishing and equipping of school
facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters
voting on the proposition.
Under current law, local agencies are no longer permitted to levy directly any ad valorem
property tax (except to pay voter-approved indebtedness).
Attachment 5
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Section 2 of Article XIII A defines “full cash value” to mean the county assessor’s valuation of
real property as shown on the 1975-76 fiscal year (June 30) tax bill, or thereafter, the appraised value of
real property when purchased, newly constructed, or a change in ownership has occurred. The full cash
value may be adjusted annually to reflect inflation at a rate not to exceed 2% per year, or to reflect a
reduction in the consumer price index or comparable data for the taxing jurisdiction, or may be reduced in
the event of declining property value caused by substantial damage, destruction or other factors. See
“–Litigation Relating to Two Percent Limitation” below. Legislation implementing Article XIII A
provides that, notwithstanding any other law, local agencies may not levy any ad valorem property tax
except to pay debt service on indebtedness approved by the voters as described above. Such legislation
further provides that each county will levy the maximum tax permitted by Article XIII A, which is $1.00
per $100 of assessed market value.
Since its adoption, Article XIII A has been amended a number of times. These amendments have
created a number of exceptions to the requirement that property be reassessed when it is purchased, newly
constructed or undergoes a change in ownership. These exceptions include certain transfers of real
property between family members, certain purchases of replacement dwellings for persons over age 55
and by property owners whose original property has been destroyed in a declared disaster, and certain
improvements to accommodate disabled persons and for seismic upgrades to property. These amendments
have resulted in marginal reductions in the property tax revenues attributable to the District.
Both the State Supreme Court and the United States Supreme Court have upheld the validity of
Article XIII A.
Article XIII B of the State Constitution
In addition to the limits Article XIII A imposes on property taxes that may be collected by local
governments, certain other revenues of the State and most local governments are subject to an annual
“appropriations limit” imposed by Article XIII B which effectively limits the amount of such revenues
those entities are permitted to spend. Article XIII B, approved by the voters in July 1979, was modified
substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to
“proceeds of taxes,” which consist of tax revenues, State subventions and certain other funds, including
proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the
cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes”
excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed
on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges or fees,
and certain other non-tax funds. Article XIII B also does not limit appropriation of local revenues to pay
debt service on bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters,
appropriations required to comply with mandates of courts or the federal government, appropriations for
qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in
gasoline taxes and motor vehicle weight fees above January 1, 1990 levels. The appropriations limit may
also be exceeded in case of emergency; however, the appropriations limit for the next three years
following such emergency appropriation must be reduced to the extent by which it was exceeded, unless
the emergency arises from civil disturbance or natural disaster declared by the Governor, and the
expenditure is approved by two-thirds of the legislative body of the local government.
Article XIII C and XIII D of the State Constitution
General. On November 5, 1996, the voters of the State approved Proposition 218, known as the
“Right to Vote on Taxes Act.” Proposition 218 adds Articles XIII C and XIII D to the California
Constitution and contains a number of interrelated provisions affecting the ability of the District to levy
and collect both existing and future taxes, assessments, fees and charges.
Attachment 5
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Taxes. Article XIII C requires that all new local taxes be submitted to the electorate before they
become effective. Taxes for general governmental purposes of the District (“general taxes”) require a
majority vote; taxes for specific purposes (“special taxes”), even if deposited in the District’s General
Fund, require a two-thirds vote. The voter approval requirements of Proposition 218 reduce the flexibility
of the District to raise revenues for the General Fund, and no assurance can be given that the District will
be able to impose, extend or increase such taxes in the future to meet increased expenditure needs.
Property-Related Fees, Charges and Assessments. Article XIII D also adds several provisions
making it generally more difficult for local agencies to levy and maintain property- related fees, charges,
and assessments for municipal services and programs. These provisions include, among other things, (i) a
prohibition against assessments which exceed the reasonable cost of the proportional special benefit
conferred on a parcel, (ii) a requirement that assessments must confer a “special benefit,” as defined in
Article XIII D, over and above any general benefits conferred, (iii) a majority protest procedure for
assessments which involves the mailing of notice and a ballot to the record owner of each affected parcel,
a public hearing and the tabulation of ballots weighted according to the proportional financial obligation
of the affected party, and (iv) a prohibition against fees and charges which are used for general
governmental services, including police, fire or library services, where the service is available to the
public at large in substantially the same manner as it is to property owners.
Reduction or Repeal of Taxes, Fees and Charges. Article XIII C also removes limitations on the
initiative power in matters of reducing or repealing local taxes, assessments, fees or charges. No
assurance can be given that the voters of the District will not, in the future, approve an initiative or
initiatives which reduce or repeal local taxes, assessments, fees or charges currently comprising a
substantial part of the District’s General Fund. If such repeal or reduction occurs, the District’s ability to
pay debt service on certain of its Long-Term Obligations could be adversely affected.
Burden of Proof. Article XIII C provides that local government “bears the burden of proving by
a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no
more than necessary to cover the reasonable costs of the governmental activity, and that the manner in
which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on,
or benefits received from, the governmental activity.” Similarly, Article XIII D provides that in “any legal
action contesting the validity of a fee or charge, the burden shall be on the agency to demonstrate
compliance” with Article XIII D.
Proposition 26. On November 2, 2010, California voters approved Proposition 26, entitled the
“Supermajority Vote to Pass New Taxes and Fees Act.” Section 1 of Proposition 26 declares that
Proposition 26 is intended to limit the ability of the State Legislature and local government to circumvent
existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26
amended Articles XIII A and XIII C of the State Constitution. The amendments to Article XIII A limit the
ability of the State Legislature to impose higher taxes (as defined in Proposition 26) without a two-thirds
vote of the Legislature. The amendments to Article XIII C define “taxes” that are subject to voter
approval as “any levy, charge, or exaction of any kind imposed by a local government,” with certain
exceptions.
Judicial Interpretation. The interpretation and application of Articles XIII C and XIII D will
ultimately be determined by the courts with respect to a number of the matters discussed below, and it is
not possible at this time to predict with certainty the outcome of such determination.
Attachment 5
30
Proposition 1A; Proposition 22
Proposition 1A of 2004. Proposition 1A of 2004, proposed by the Legislature in connection with
the State’s fiscal year (June 30) 2004-05 Budget Act, and approved by the voters in November 2004, was
generally effective in fiscal year (June 30) 2006-07. Proposition 1A of 2004 provides that the State may
not reduce any local sales tax rate, limit existing local government authority to levy a sales tax rate or
change the allocation of local sales tax revenues, subject to certain exceptions. Proposition 1A generally
prohibits the State from shifting to schools or community colleges any share of property tax revenues
allocated to local governments for any fiscal year, as set forth under the laws in effect as of November 3,
2004. Any change in the allocation of property tax revenues among local governments within a county
must be approved by two-thirds of both houses of the Legislature.
Proposition 1A of 2004 provided, however, that beginning in fiscal year (June 30) 2008-09, the
State may shift to schools and community colleges up to 8% of local government property tax revenues,
which amount must be repaid, with interest, within three years, if the Governor proclaimed that the shift is
needed due to a severe state financial hardship, the shift was approved by two-thirds of both houses and
certain other conditions were met. Such a shift may not occur more than twice in any 10-year period.
The State could also approve voluntary exchanges of local sales tax and property tax revenues among
local governments within a county.
Proposition 22. On November 2, 2010, voters in the State approved Proposition 22 known as the
“Local Taxpayer, Public Safety, and Transportation Protection Act.” Proposition 22 eliminates or reduces
the State’s authority to (i) temporarily shift property taxes from cities, counties and special districts to
schools, (ii) use vehicle license fee revenues to reimburse local governments for State-mandated costs
(the State will have to use other revenues to reimburse local governments), (iii) redirect property tax
increment from redevelopment agencies to any other local government, (iv) use State fuel tax revenues to
pay debt service on State transportation bonds, or (v) borrow or change the distribution of State fuel tax
revenues.
Unitary Property
AB 454 (Chapter 921, Statutes of 1986) provides that revenues derived from most utility property
assessed by the State Board of Equalization (“Unitary Property”), commencing with the 1988-89 fiscal
year (June 30), are allocated as follows: (i) each jurisdiction will receive up to 102% of its prior year
State-assessed revenue; and (ii) if county-wide revenues generated from Unitary Property are less than the
previous year’s revenues or greater than 102% of the previous year’s revenues, each jurisdiction will
share the burden of the shortfall or benefit of the excess revenues by a specified formula. This provision
applies to all Unitary Property except railroads, whose valuation will continue to be allocated to
individual tax rate areas.
The provisions of AB 454 do not constitute an elimination of the assessment of any State-
assessed properties nor a revision of the methods of assessing utilities by the State Board of Equalization.
Generally, AB 454 allows valuation growth or decline of Unitary Property to be shared by all
jurisdictions in a county.
Future Initiatives
Article XIII A, Article XIII B, Article XIII C, Article XIII D, and Propositions 1A of 2004, 22, 26
and 62 were each adopted as measures that qualified for the ballot through California’s initiative process.
From time to time other initiative measures could be adopted, further affecting the District’s revenues.
Attachment 5
31
TAX MATTERS
In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and
court decisions, and assuming, among other matters, the accuracy of certain representations and
compliance with certain covenants, interest on the 2016 Green 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 of the further opinion that
interest on the 2016 Green 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 when calculating corporate alternative minimum taxable income. A complete
copy of the proposed form of opinion of Bond Counsel is set forth as APPENDIX F hereto.
To the extent the issue price of any maturity of the 2016 Green Bonds is less than the amount to
be paid at maturity of such 2016 Green Bonds (excluding amounts stated to be interest and payable at
least annually over the term of such 2016 Green Bonds), the difference constitutes “original issue
discount,” the accrual of which, to the extent properly allocable to each Beneficial Owner thereof, is
treated as interest on the 2016 Green Bonds which is excluded from gross income for federal income tax
purposes and State of California personal income taxes. For this purpose, the issue price of a particular
maturity of the 2016 Green Bonds is the first price at which a substantial amount of such maturity of the
2016 Green Bonds is sold to the public (excluding bond houses, brokers, or similar persons or
organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue
discount with respect to any maturity of the 2016 Green Bonds accrues daily over the term to maturity of
such 2016 Green Bonds on the basis of a constant interest rate compounded semiannually (with straight-
line interpolations between compounding dates). The accruing original issue discount is added to the
adjusted basis of such 2016 Green Bonds to determine taxable gain or loss upon disposition (including
sale, redemption, or payment on maturity) of such 2016 Green Bonds. Beneficial Owners of the 2016
Green Bonds should consult their own tax advisors with respect to the tax consequences of ownership of
2016 Green Bonds with original issue discount, including the treatment of Beneficial Owners who do not
purchase such 2016 Green Bonds in the original offering to the public at the first price at which a
substantial amount of such 2016 Green Bonds is sold to the public.
2016 Green Bonds purchased, whether at original issuance or otherwise, for an amount higher
than their principal amount payable at maturity (or, in some cases, at their earlier call date) (“Premium
Bonds”) will be treated as having amortizable bond premium. No deduction is allowable for the
amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is
excluded from gross income for federal income tax purposes. However, the amount of tax-exempt
interest received, and a Beneficial Owner’s basis in a Premium Bond, will be reduced by the amount of
amortizable bond premium properly allocable to such Beneficial Owner. Beneficial Owners of Premium
Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond
premium in their particular circumstances.
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 2016 Green Bonds.
The District has made certain representations and covenanted to comply with certain restrictions,
conditions and requirements designed to ensure that interest on the 2016 Green Bonds will not be
included in federal gross income. Inaccuracy of these representations or failure to comply with these
covenants may result in interest on the 2016 Green Bonds being included in gross income for federal
income tax purposes, possibly from the date of original issuance of the 2016 Green Bonds. The opinion
of Bond Counsel assumes the accuracy of these representations and compliance with these covenants.
Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or
Attachment 5
32
not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s
attention after the date of issuance of the 2016 Green Bonds may adversely affect the value of, or the tax
status of interest on, the 2016 Green Bonds. Accordingly, the opinion of Bond Counsel is not intended to,
and may not, be relied upon in connection with any such actions, events or matters.
Although Bond Counsel is of the opinion that interest on the 2016 Green Bonds is excluded from
gross income for federal income tax purposes and is exempt from State of California personal income
taxes, the ownership or disposition of, or the accrual or receipt of amounts treated as interest on, the 2016
Green Bonds may otherwise affect a Beneficial Owner’s federal, state or local tax liability. The nature
and extent of these other tax consequences depends upon the particular tax status of the Beneficial Owner
or the Beneficial Owner’s other items of income or deduction. Bond Counsel expresses no opinion
regarding any such other tax consequences.
Current and future legislative proposals, if enacted into law, clarification of the Code or court
decisions may cause interest on the 2016 Green Bonds to be subject, directly or indirectly, in whole or in
part, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise
prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest. For
example, the Obama Administration’s budget proposals in recent years have proposed legislation that
would limit the exclusion from gross income of interest on the 2016 Green Bonds to some extent for
high-income individuals. The introduction or enactment of any such legislative proposals or clarification
of the Code or court decisions may also affect, perhaps significantly, the market price for, or
marketability of, the 2016 Green Bonds. Prospective purchasers of the 2016 Green Bonds should consult
their own tax advisors regarding the potential impact of any pending or proposed federal or state tax
legislation, regulations or litigation, as to which Bond Counsel is expected to express no opinion.
The opinion of Bond Counsel is based on current legal authority, covers certain matters not
directly addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment
of the Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service (“IRS”)
or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about
the future activities of the District, or about the effect of future changes in the Code, the applicable
regulations, the interpretation thereof or the enforcement thereof by the IRS. The District has covenanted,
however, to comply with the requirements of the Code.
Bond Counsel’s engagement with respect to the 2016 Green Bonds ends with the issuance of the
2016 Green Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the District
or the Beneficial Owners regarding the tax-exempt status of the 2016 Green Bonds in the event of an
audit examination by the IRS. Under current procedures, parties other than the District and their
appointed counsel, including the Beneficial Owners, would have little, if any, right to participate in the
audit examination process. Moreover, because achieving judicial review in connection with an audit
examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with
which the District legitimately disagrees, may not be practicable. Any action of the IRS, including but
not limited to selection of the 2016 Green Bonds for audit, or the course or result of such audit, or an
audit of bonds presenting similar tax issues may affect the market price for, or the marketability of, the
2016 Green Bonds, and may cause the District or the Beneficial Owners to incur significant expense.
Attachment 5
33
CONTINUING DISCLOSURE
General
The District has covenanted for the benefit of the owners and beneficial owners of the 2016
Green Bonds to provide certain financial information and operating data relating to the District by no later
than 210 days after the end of the District’s fiscal year (June 30) being the current fiscal year-end) (the
“Annual Report”), commencing with the report due January 26, 2017 for fiscal year (June 30) 2015-16,
and to provide notice of the occurrence of significant events either deemed to be material under federal
regulations or deemed by the District to be material under the facts and circumstances. The Annual
Report and the notices of significant events will be filed by the District or by a dissemination agent on
behalf of the District with the Municipal Securities Rulemaking Board through its Electronic Municipal
Market Access (EMMA) website. The specific nature of the information to be contained in the Annual
Report or the notices of significant events is set forth in the form of Continuing Disclosure Certificate
presented in APPENDIX E.
Any failure by the District to comply with the provisions or the Continuing Disclosure Certificate
is not an “Event of Default” as defined in the Indenture. The sole remedy upon any failure by the District
to comply with the Disclosure Certificate will be an action to compel performance. See APPENDIX E–
“FORM OF CONTINUING DISCLOSURE CERTIFICATE.”
Past Instances of Non-Disclosure
The District timely submitted its annual continuing disclosure information to its dissemination
agent each year from 2009 through 2014. However, the District failed to fully link the continuing
disclosure information to all of the applicable CUSIP numbers when it was posted on EMMA; certain of
the annual reports were missing updates to certain financial data because those annual reports were not
submitted in a format that could be uploaded, or did not include updates of some of the financial and
operating data that was not available to the District and would have needed to be purchased from a third
party provider; and the District did not file notices of certain rating changes; although such ratings were
discussed in the management’s discussion section of the District’s annual audited financial statements.
The District made all remedial filings in September 2014 to address those instances of non-
compliance, and in November 2014 the Board of Directors adopted policies and procedures to ensure
compliance with its continuing disclosure undertakings. Those policies and procedures, which became
effective April 1, 2015, include: identifying a disclosure coordinator within the organization to coordinate
the preparation of annual reports by a dissemination agent on behalf of the District, file notices of listed
events on EMMA and coordinate annual disclosure training sessions; and establishing a disclosure
working group comprised of the General Manager, the Controller and the General Counsel to review and
approve such annual reports and notices of listed events. On June 25, 2015, the District engaged
Goodwin Consulting Group to act as dissemination agent for its continuing disclosure reporting.
Attachment 5
34
UNDERWRITING
The 2016 Green Bonds are being purchased by Morgan Stanley & Co. LLC (the “Underwriter”)
pursuant to the terms and conditions of a bond purchase agreement between the District and the
Underwriter, which provides that the Underwriter will purchase all of the 2016 Green Bonds if any are
purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in
said agreement, the approval of certain legal matters by counsel and certain other conditions.
The Underwriter has agreed to purchase the 2016 Green Bonds at a price equal to $_________,
which equals the par amount of the 2016 Green Bonds ($_________), plus a net original issue premium
of $_________, less an Underwriter’s discount of $_________.
The Underwriter intends to offer the 2016 Green Bonds to the public initially at the prices set
forth on the inside cover page of this Official Statement, which prices may subsequently change without
any prior notice.
The Underwriter reserves the right to join with dealers and other underwriters in offering the
2016 Green Bonds to the public. The Underwriter may offer and sell Bonds to certain dealers (including
dealers depositing Bonds into investment trusts) at prices lower than the public offering prices, and such
dealers may re-allow any such discounts on sales to other dealers. In reoffering Bonds to the public, the
Underwriter may over-allocate or effect transactions that stabilize or maintain the market prices for Bonds
at levels above those that might otherwise prevail. Such stabilization, if commenced, may be discontinued
at any time.
Morgan Stanley, parent company of Morgan Stanley & Co. LLC, one of the Underwriters, has
entered into a retail distribution arrangement with its affiliate Morgan Stanley Smith Barney LLC. As part
of the distribution arrangement, Morgan Stanley & Co. LLC may distribute municipal securities to retail
investors through the financial advisor network of Morgan Stanley Smith Barney LLC. As part of this
arrangement, Morgan Stanley & Co. LLC may compensate Morgan Stanley Smith Barney LLC for its
selling efforts with respect to the 2016 Green Bonds.
LEGAL MATTERS
Orrick, Herrington & Sutcliffe LLP, San Francisco, California, Bond Counsel to the District, will
render the opinion substantially in the form of APPENDIX F hereto with respect to the validity of the 2016
Green Bonds. Certain legal matters will be passed upon for the District by its General Counsel and by
Schiff Hardin LLP, San Francisco, California, Disclosure Counsel. Certain legal matters will be passed
upon for the Underwriter by Hawkins Delafield & Wood LLP, San Francisco, California.
Fees payable to Bond Counsel, Disclosure Counsel, and Underwriter’s Counsel are contingent
upon issuance of the 2016 Green Bonds.
MUNICIPAL ADVISOR
The District has retained Backstrom McCarley Berry & Co., LLC, as Financial Advisor (the
“Financial Advisor”) for the sale of the “2016 Green Bonds.” The Financial Advisor is not obligated to
undertake, and has not undertaken to make, an independent verification, or to assume responsibility for
the accuracy, completeness or fairness of the information contained in this Official Statement.
Attachment 5
35
NO MATERIAL LITIGATION
[Confirm]
The District is not aware of any pending or threatened litigation concerning the validity of the
2016 Green Bonds, or the District’s ability to receive ad valorem taxes and to collect other revenues, or
contesting the District’s ability to issue the 2016 Green Bonds. Furthermore, the District is not aware of
any pending or threatened litigation to restrain, enjoin, question or otherwise affect the political existence
of the District or the validity of the Resolution, or in any way contesting or affecting the validity or
enforceability of any of the foregoing or any proceedings of the District taken with respect to any of the
foregoing.
The District is routinely subject to lawsuits and claims. In the opinion of the District, the
aggregate amount of the uninsured liabilities of the District under these lawsuits and claims will not
materially affect the financial position or operations of the District.
RATINGS
Fitch Ratings (“Fitch”) has assigned its municipal bond rating of “___” to the 2016 Green Bonds.
S&P Global Ratings (“S&P”) has assigned its municipal bond rating of “___” to the 2016 Green Bonds.
These ratings reflect only the views of the rating agencies, and explanations of the significance of
these ratings, and any outlooks assigned to or associated with these ratings, should be obtained from the
respective rating agencies.
Generally, a rating agency bases its rating on the information and materials furnished to it and on
investigations, studies and assumptions of its own. The District has provided certain additional
information and materials to the rating agencies (some of which does not appear in this Official
Statement).
There is no assurance that these ratings will continue for any given period of time or that these
ratings will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of
the rating agencies, circumstances so warrant. Any such downward revision or withdrawal of any rating
on the 2016 Green Bonds may have an adverse effect on the market price or marketability of the 2016
Green Bonds.
VERIFICATION OF MATHEMATICAL COMPUTATIONS
Upon delivery of the 2016 Green Bonds, Causey Demgen & Moore P.C., Denver, Colorado (the
“Verification Agent”), will deliver a report stating that it has reviewed and confirmed the mathematical
accuracy of certain computations relating to the adequacy of the funds and/or securities deposited in the
2016 Escrow Fund and the interest thereon, if any, to pay, when due, the redemption price and interest on
the Prior Bonds on the specified respective redemption dates thereof.
Attachment 5
36
FINANCIAL STATEMENTS
Chavan & Associates, LLP, Certified Public Accountants (the “Auditor”), audited the financial
statements of the District for the fiscal year ended March 31, 2015. The Auditor’s examination was made
in accordance with generally accepted auditing standards and Governmental Auditing Standards, issued
by the Comptroller General of the United States. See APPENDIX B–“ANNUAL FINANCIAL REPORT FOR
FISCAL YEAR ENDED MARCH 31, 2015.”
The Auditor has not performed any post-audit review of the financial condition or operations of
the District.
Resolution No. 14-000 adopted by a majority of the Board of Directors on July 22, 2015, changed
the fiscal year of the District to June 30 of each year beginning July 1, 2016 and extended fiscal year
2015-16 by three months to conclude on June 30, 2016. The Financial Statements of the District for the
fiscal year ended June 30, 2016 are expected to be available in October 2016.
(Remainder of this Page Intentionally Left Blank)
Attachment 5
37
MISCELLANEOUS
All of the descriptions of applicable law, the Indenture, the District, and the agreements and other
documents contained 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 District for further information in connection therewith.
This Official Statement does not constitute a contract with the purchasers of the 2016 Green
Bonds. Any statements made in this Official Statement involving matters of opinion or estimates, whether
or not so expressly stated, are set forth as such and not as representations of fact, and no representation is
made that any of the estimates will be realized.
The execution and delivery of this Official Statement has been duly authorized by the
Board of Directors of the District.
MIDPENINSULA REGIONAL OPEN SPACE
DISTRICT
By:
Stephen E. Abbors
General Manager
Attachment 5
A-i
APPENDIX A
DISTRICT GENERAL, FINANCIAL, AND OPERATING INFORMATION; AND ECONOMIC
AND DEMOGRAPHIC INFORMATION REGARDING SANTA CLARA AND
SAN MATEO COUNTIES
TABLE OF CONTENTS
DISTRICT GENERAL INFORMATION ............................................................................................... A-1
Administration .................................................................................................................................... A-1
Operations and Planning..................................................................................................................... A-3
DISTRICT FINANCIAL INFORMATION ............................................................................................. A-5
Financial Policies ............................................................................................................................... A-6
Summary of Financial Statements ...................................................................................................... A-8
Long-Term Debt of the District ........................................................................................................ A-10
Dissolution of Redevelopment Agencies ......................................................................................... A-12
District Organization and Employee Relations ................................................................................ A-12
Employee Retirement Systems ......................................................................................................... A-12
Other Post-Employment Retirement Benefits .................................................................................. A-15
Risk Management ............................................................................................................................. A-17
ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING SANTA CLARA AND
SAN MATEO COUNTIES ..................................................................................................................... A-19
General ............................................................................................................................................. A-19
Population ......................................................................................................................................... A-20
Employment and Industry ................................................................................................................ A-21
Effective Buying Income .................................................................................................................. A-24
Construction Activity ....................................................................................................................... A-26
Commercial Activity ........................................................................................................................ A-27
Attachment 5
A-ii
LIST OF TABLES
Table A-1 - District General Fund and Debt Service Fund Revenues, Expenditures and
Changes in Fund Balances ....................................................................................... A-8
Table A-2 - District Statement of Net Assets .............................................................................. A-9
Table A-3 - District General Fund Debt Outstanding ................................................................ A-10
Table A-4A - Population Estimates .............................................................................................. A-20
Table A-5B - Population Projections by Age ............................................................................... A-20
Table A-6 - San Jose-Sunnyvale-Santa Clara MSA Annual Average Civilian Labor Force,
Employment and Unemployment by Industry ....................................................... A-21
Table A-7 - San Francisco-Redwood City-South San Francisco MD Annual Average
Civilian Labor Force, Employment and Unemployment by Industry .................... A-22
Table A-8 - County of Santa Clara Largest Employers ............................................................. A-23
Table A-9 - County of San Mateo Major Employers ................................................................ A-24
Table A-10 - Effective Buying Income ........................................................................................ A-25
Table A-11 - County of Santa Clara Building Permit Valuation ................................................ A-26
Table A-12 - County of San Mateo Building Permit Valuation .................................................. A-26
Table A-13 - County of Santa Clara Annual Taxable Transactions, Number of Permits and
Valuation of Taxable Transactions ......................................................................... A-27
Table A-13 - County of San Mateo Taxable Retail Sales, Number of Permits and
Valuation of Taxable Transactions ......................................................................... A-27
Attachment 5
A-1
APPENDIX A
DISTRICT GENERAL, FINANCIAL, AND OPERATING INFORMATION; AND ECONOMIC
AND DEMOGRAPHIC INFORMATION REGARDING SANTA CLARA
AND SAN MATEO COUNTIES
The 2016 Green Bonds are payable solely from Revenues consisting primarily of the District’s
share of the general one percent ad valorem property tax levied by the County of Santa Clara and the
County of San Mateo and allocated on property within the District. See “SECURITY AND SOURCE OF
PAYMENT FOR THE 2016 GREEN BONDS” in the Official Statement.
DISTRICT GENERAL INFORMATION
The Midpeninsula Regional Park District (the “District”) was established in 1972, by voters of
northwestern Santa Clara County. In 1976, voters approved expansion of the District to include
southeastern San Mateo County. Later, the District became the “Midpeninsula Regional Open Space
District.” With the final approval of the Coastside Protection Program in 2004, the District’s boundary
was extended to the Pacific Ocean in San Mateo County, from the southern borders of Pacifica to the San
Mateo County/Santa Cruz County border.
The boundaries of the District include approximately 200 square miles in Santa Clara County and
350 square miles in San Mateo County. Since 1992, the District has added 2.6 square miles in Santa Cruz
County, but currently no property taxes are levied on this land. Ad valorem taxes will be levied on the
Santa Cruz parcels, but the amount is expected to be minimal and is not presented in the tables in the
Official Statement. The District includes 17 cities (Atherton, Cupertino, East Palo Alto, Half Moon Bay,
Los Altos, Los Altos Hills, Los Gatos, Menlo Park, Monte Sereno, Mountain View, Palo Alto, Portola
Valley, Redwood City, San Carlos, Saratoga, Sunnyvale, and Woodside). For a map of the District see
page ii.
Administration
The Board originates, guides, and enforces District policies. A 165.45-person budgeted full-time
equivalent permanent staff (as of fiscal year 2016-17) administers the policies, headed by the General
Manager, who is appointed by the Board. The current General Manager is Stephen E. Abbors.
Set forth below are the names and expirations of the current terms for the members of the Board.
Name Office Expiration of Current Term
Pete Siemens, Ward 1 Member December 2018
Yoriko Kishimoto, Ward 2 President December 2018
Jed Cyr, Ward 3 Member December 2016
Curt Riffle, Ward 4 Treasurer December 2016
Nonette Hanko, Ward 5 Member December 2018
Larry Hassett, Ward 6 Vice President December 2018
Cecily Harris, Ward 7 Secretary December 2016
Attachment 5
A-2
The executive management staff consists of three positions appointed by the District Board; the
General Manager, Controller, and General Counsel. Three management staff positions are appointed by
the General Manager; the Chief Financial Officer and two Assistant General Managers.
Brief resumes for the District executive management staff are set forth below.
Stephen E. Abbors, General Manager. Mr. Abbors joined the District in early 2008 after a
24-year career managing watersheds and recreation for the East Bay Municipal Utility District,
headquartered in Oakland, California. Prior to that, he was employed for over a decade by the East Bay
Regional Park District, also headquartered in Oakland and the largest regional park district in the United
States. He holds Bachelors and Masters Degrees in Biological Sciences from California State University,
East Bay.
Michael L. Foster, District Controller. Mr. Foster has served as District Controller since 1978.
Mr. Foster received an undergraduate degree in economics and a Master of Business Administration
degree from Stanford University.
Sheryl Schaffner, Esq., General Counsel. Ms. Schaffner became the District’s General Counsel
in March 2012. Ms. Schaffner has over 20 years of experience representing public agencies, including
cities, counties and state agencies, in both public and private sector capacities. Prior to joining the
District, she served as City Attorney to the Cities of San Ramon and Eureka. She has experience in the
private sector, specializing in CEQA with a leading environmental firm, served as staff counsel to the
California Department of Conservation, senior staff counsel to the State Water Resources Control Board
and functioned as lead attorney for the San Francisco Bay and North Coast Regional Water Quality
Control Boards. She provided pro bono counsel to the Yolo Land Trust and Davis Agricultural Land
Trust. Ms. Schaffner received her J.D. from the University of California at Davis.
Brief resumes for the District management staff are set forth below:
Stefan Jaskulak, Chief Financial Officer/Administrative Services Manager. Mr. Jaskulak
joined the District in January 2016 as the District’s first Chief Financial Officer/Administrative Services
Director. Mr. Jaskulak has over 25 years of in-depth financial management experience including financial
operations, treasury systems and operations, risk, accounting, financial systems, overseeing budgetary
functions and operations, and structured finance including utilizing short and long term debt instruments
as part of a comprehensive finance program. He has been a member of the Government Finance Officers
Association’s (GFOA) Treasury & Investment Management Committee since 2012 and his current term
extends into 2017. Mr. Jaskulak earned his bachelor's degree in Business Administration from Loyola
Marymount University and his Master in Business Administration from Newport University.
Ana Ruiz, Assistant General Manager. Ms. Ruiz joined the District in June 1998 as the
District’s Planning Technician in the Planning Department, and has progressed through the ranks to
Planning Manager overseeing all major District capital projects, and ultimately to her current position as
Assistant General Manager over Planning and Project Delivery, overseeing the Real Property, Planning,
and Engineering and Construction Departments. Ms. Ruiz has over 18 years of planning and project
management experience in open space, recreation, and environmental restoration. She earned her
bachelor’s degree in Geological and Environmental Sciences from Stanford University and a Masters in
Urban and Regional Planning from San Jose State University. She is a Certified Planner by the American
Institute of Certified Planners (AICP), the professional institute of the American Planning Association.
Attachment 5
A-3
Kevin Woodhouse, Assistant General Manager. Mr. Woodhouse has been with the District
since 2013 as Assistant General Manager overseeing Visitor and Field Services, which includes the
Visitor Services, Land & Facilities Services, and Natural Resources departments. With over 23 years’
experience in the public sector in various key positions, Mr. Woodhouse has a comprehensive background
in operational and administrative management, including being a Deputy City Manager of a mid-sized
city which involved Council goal-setting process and policy development, development of budget and
fiscal-sustainability strategies, labor negotiations, intergovernmental partnership development, and
monitoring environmental sustainability programs and progress. Mr. Woodhouse earned his Bachelor’s
degree in Philosophy from Stanford University, and a Master’s in Public Administration from San
Francisco State University, and is an active member of the International City/County Management
Association and the Municipal Management Association of Northern California.
Operations and Planning
The District’s chief method for preserving open space is to buy land, using District revenues as
well as State and federal grants, receive gifts of open space land and undertake joint projects with other
governmental agencies and private nonprofit corporations. The District also has the power of eminent
domain except within the 220 square mile Coastside Protection Area in San Mateo County, but the
District cannot regulate land it does not own. The District cannot adopt zoning or other land use
restrictions; this power lies mainly with the local jurisdictions within the District’s territory.
As part of the District’s 2011 Strategic Plan, the Board of Directors unanimously approved the
District’s revised strategic direction for a more balanced implementation of its three-part mission
statement to achieve beneficial impacts in (i) land preservation, (ii) resource restoration and (iii) public
access and recreation. This strategic direction served as the policy foundation for the development of the
District’s 2014 Vision Plan, a 40-year plan that identified 54 projects located across the District’s
jurisdiction, aiming to expand public access to new areas, improve recreational facilities, protect
important open space, support viable working and agricultural lands, restore sensitive natural habitats, and
support cultural and scenic landscape.
Of the projects identified in the 2014 Vision Plan, 25 highest priority projects were identified to
be financed with proceeds of general obligation bonds issued by the District.
(Remainder of this Page Intentionally Left Blank)
Attachment 5
A-
4
Attachment 5
A-5
DISTRICT FINANCIAL INFORMATION
General. The District keeps its books using the California State Controller’s fund accounting
principles for special districts, with a modified accrual basis of accounting in which the District generally
recognizes revenues when they become both available and measurable and expenditures when it incurs
the obligation (except for interest on long-term debt, which the District recognizes when it falls due).
From 1989 through 2015, the District’s fiscal year was April 1 through March 31. On
July 22, 2015, the Board of Directors adopted Resolution No. 14-000 changing the fiscal year of the
District to July 1 through June 30, and extending fiscal year 2015-16 by three months to conclude
June 30, 2016.
The District’s certified public accountants are currently Chavan & Associates, LLP. See
APPENDIX B for the District’s audited financial statements for the fiscal year ending March 31, 2015.
This Official Statement includes estimates by the District Controller of revenues and expenditures for the
12 months ended March 31, 2016. Audited financial statements for the 15 month period ending
June 30, 2016 are expected to be available in October 2016. Due to the change in fiscal year, financial
information presented in Tables A-1, A-2 and A-3 will not be comparable to financial information
presented in the audited financial statements for the fiscal year ending June 30, 2016 and in the financial
statements issued thereafter.
Over the last six fiscal years, property taxes comprised 90% to 95% of the District’s total
revenues, excluding land donations and land acquisition grants. The District’s primary expenditures are
for debt service, capital expenditures for land and preserve improvements, and land management and
administrative expenses. The capital expenditures are made at the District’s discretion and a majority of
such future capital spending will be funded by the issuance of up to $300 million of general obligation
bonds, which were approved by more than two-thirds of the qualified voters of the District on
June 3, 2014 (“Measure AA”). The first series of Measure AA bonds in the amount of $45 million were
issued in August 2015.
Measure AA funds may be used to fund projects that improve access to hiking and biking
opportunities, protect and preserve redwood forests, natural open spaces, the scenic beauty of the region,
coastline, and critical wildlife habitat, restore creeks to protect water quality, and reduce forest fire risk,
and authorizes the levy of an annual tax in an amount not to exceed $3.18 per $100,000 of assessed value
of property owned. Measure AA funds are authorized to be used only to fund the 25 key capital projects
identified in the 2014 Vision Plan of the District. Expenditures of Measure AA funds are required to be
verified by an independent citizen oversight committee that consists of seven at-large members who
reside within the District. The Oversight Committee, which is expected to convene at least once a year,
reviews the Measure AA expenditures and the Annual Audit and Accountability report of the District, and
presents its findings to the Board of Directors.
Land management and administrative expenses increase subject to changing management policy
and controls. Over the last six fiscal years, administrative and land management expenses were 49% to
54% of general fund property tax revenue. Over the same period, District employee salaries and benefits
comprised, on average, 76% of administrative and land management expenses and 39% of General Fund
property tax revenue. Operating expenses are expected to significantly increase over the next three years
as the District adds resources to implement the 25 general obligation Measure AA funded projects.
Projected operating expenses are expected to approach 60% of general fund tax revenues in fiscal year
(ending June 30) 2016-17 and exceed 65% in fiscal year 2017-18.
Driven by the continued strong economy in Silicon Valley, District property tax revenue again
increased above its long-term trend line in the 12 months ended March 31, 2016, growing by $3.3 million,
or 9.4%. General fund tax revenue also exceeded the original budget by $2.1 million, or 5.8%. The
Attachment 5
A-6
District received approximately 68% of its tax revenue from Santa Clara County and 32% from San
Mateo County. Total general fund revenue, including property management income, interest income, and
development grants, but excluding land donations and land acquisition grants, increased by $3.1 million
or 8.2%.
The District purchased $12.6 million of land and associated structures in the 12 months ended
March 31, 2016. All of this cost was funded from Measure AA bond proceeds. Total capital spending is
estimated at $17.2 million of which $14.9 million was funded by Measure AA bond proceeds, and $2.3
million was funded from the general fund. In addition, following the issuance of the Measure AA bonds,
the District reimbursed the general fund for $5.5 million for capital expenditures, including qualified land
purchases, completed in 2014-15.
The District manages its expenditures within the annual budget. Excluding land acquisition
transactions and debt service, total District spending of $22.0 million in fiscal year 2016 was $4.5 million,
or 17.1%, below budget. As in most recent years, a large majority of the budget variance was due to
delays and deferrals of capital projects; the District spent 92% of the amount it budgeted for salaries and
benefits, and 79% of the amount it budgeted for services and supplies.
Under California law, the District may acquire land or facilities by borrowing money or by
purchasing on contract, subject to certain limits (based on tax revenues projected for the five years
following the borrowing). The law limits the annual interest rate to 12%. For purchase money financings
using District promissory notes, the borrowing term may not exceed 30 years. The District has never
defaulted in the payment of any of its debt or other obligations.
Financial Policies
Reserve Policy. On November 25, 2014, the Board of Directors adopted a reserve policy (the
“Reserve Policy”). The stated purpose of the Reserve Policy is to: (i) provide adequate funding to meet
the District’s short-term and long-term plans, (ii) provide funds for unforeseen expenditures related to
emergencies, such as natural disasters, (iii) strengthen the financial stability of the District against present
and future uncertainties such as economic downturns and revenue shortfalls, and (iv) maintain an
investment-grade bond rating. The Reserve Policy was developed, with input from the District auditors, to
meet the requirements of GASB Statement No. 54–“Fund Balance Reporting and Governmental Fund
Type Definitions.”
The Reserve Policy contemplates:
• a non-spendable fund balance, which is required to be equal to the sum of the District’s
non-spendable assets;
• a restricted fund balance, which includes amounts reserved for specific, externally
imposed purposes;
• a committed fund balance, which includes amounts reserved for specific, internally
imposed purposes;
• an assigned fund balance, which includes amounts intended for specific purposes that are
neither restricted nor unassigned; and
• an unassigned balance for amounts which are not otherwise classified.
The Board of Directors most recently reviewed and updated the list of required reserves and
reserve balances on June 22, 2016. The total amount reserved for committed funds was increased by $10
million to $30.4 million.
Attachment 5
A-7
Any spending from the unassigned fund requires approval of the Board of Directors and
reimbursed from the general fund within two years. The general fund has a minimum balance requirement
of 28% of budgeted general fund tax revenue, equal to $11.9 million for fiscal year [2016-17]. The
Reserve Policy may be changed by the District at any time.
Investment Policy. The District annually adopts an investment policy (the “Investment Policy”)
governing the investment of District funds. The primary goals of the Investment Policy are: Capital
Preservation – safeguard the principal of invested funds; Liquidity – managing the fund so that normal
operating cash needs and scheduled extraordinary cash needs of the District can be met on a same day
basis; and Income – funds shall earn the highest rate of return that is consistent with capital preservation
and liquidity goals and the California Government Code.
Pursuant the Investment Policy, investments and deposits of funds are limited to those allowed by
and subject to the procedures of Government Code Section 53600 et seq. and 53635 et seq. In the event
of any conflict between the terms of the Investment Policy, and the Government Code, the provisions of
the Government Code prevail. The Investment Policy does not permit investments to be leveraged or
investment in “derivatives” that offer opportunities for significant capital gains and losses.
The Board of Directors is required annually to designate the minimum amount of unassigned fund
balance to be held in reserve in consideration of unanticipated events that could adversely affect the
financial condition of the District and jeopardize the continuation of necessary public services. Any
spending from the minimum general fund reserve requires the approval of the Board of Directors and is
required to be reimbursed within two years.
The current Investment Policy, adopted by the Board of Directors on [August 10, 2016] is
attached as APPENDIX C.
(Remainder of this Page Intentionally Left Blank)
Attachment 5
A-8
Summary of Financial Statements
The following two tables present selected audited cash flow, balance sheet and budget
information as of the fiscal years ending March 31. On July 22, 2015, the Board of Directors adopted
Resolution No. 14-000 changing the fiscal year of the District to July 1 through June 30, and extending
fiscal year 2015-16 by three months to conclude June 30, 2016.
Table A-1
District General Fund and Debt Service Fund Revenues,
Expenditures and Changes in Fund Balances
Fiscal Years Ending March 31 through 2015 (Audited) and March 31, 2016 (Proforma)
($ in Thousands)
(Proforma)
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
REVENUES:
Property Taxes(1) $27,269 $28,737 $30,270 $32,433 $35,082 $38,394
Development Grants 143 450 538 1,676 953 447
Interest 294 375 288 150 175 250
Other(2) 1,506 1,560 1,527 1,567 1,678 1,890
TOTAL OPERATING REVENUES $29,211 $31,121 $32,623 $35,826 $37,887 $40,981
EXPENDITURES:
Salaries and Benefits 10,910 11,179 11,836 13,079 13,630 14,405
Services and other(3) 3,325 4,613 5,567 5,259 6,162 6,777
SUBTOTAL $14,235 $15,791 $17,403 $18,337 $19,791 $21,182
DEBT SERVICE(4):
Principal Repayment 3,301 4,457 2,843 2,999 3,145 4,361
Interest 4,786 5,355 6,034 5,859 5,749 5,522
SUBTOTAL DEBT SERVICE $8,087 $9,812 $8,877 $8,858 $8,894 $9,883
SUBTOTAL EXPENDITURES 22,321 25,603 26,280 27,196 28,685 31,064
OPERATING CASH FLOW $6,890 $5,518 $6,343 $8,630 $9,202 $9,917
OTHER NON-OPERATING ITEMS (NET)(5) – – 2,520 (1,971) – (5,500)
STRUCTURES AND IMPROVEMENTS 1,197 1,398 2,206 3,561 2,209 0
PROPERTY ACQUISITION (NET)(6) 8,579 9,066 5,820 3,410 4,717 0
EXCESS OF REVENUES OVER EXPENDITURES (2,886) (4,946) (4,202) 3,630 2,276 15,417
PROCEEDS FROM NOTES PAYABLE 850 20,000 0 0 (1,620) 0
NET EXCESS ($2,036) $15,054 ($4,202) $3,630 $656 $15,417
STARTING FUND BALANCE 30,331 28,295 43,349 39,147 42,776 43,432
ENDING FUND BALANCE $28,295 $43,349 $39,147 $42,776 $43,432 $58,849
_____________
(1) Excludes taxes from Measure AA.
(2) Excludes donations of land.
(3) Excludes Structures & Improvements.
(4) Excludes Measure AA general obligation bonds.
(5) As of March 31, 2016, includes reimbursement of the Measure AA general fund for qualified Measure AA expenditures
prior to issuance of the Measure AA bonds.
(6) Cost of land acquired net of associated grant and gift income.
Sources: District audited financial statements and District Controller for Proforma fiscal year 2015-16.
Attachment 5
A-9
Table A-2
District Statement of Net Assets
($ in Thousands)
March 31,
2011
March 31,
2012
March 31,
2013
March 31,
2014
March 31,
2015
ASSETS:
Cash and Cash Investments $20,332 $36,704 $32,536 $32,712 $35,562
Restricted Cash 1,408 1,568 1,634 1,619 0
Taxes and Other
Receivables
7,965 8,551 9,348 10,383 10,588
Deferred Charges 1,093 1,279 1,211 1,143 1,075
Net OPEB Assets 1,514 1,334 1,097 1,004 863
Land (at Cost) 345,389 368,468 379,411 383,509 390,691
Construction in Progress 2,801 4,779 4,396 4,710 3,251
Equipment and Vehicles 2,062 2,160 2,239 2,490 2,647
Structures and
Improvements
6,356 7,186 7,397 7,202 7,188
Infrastructure 2,958 3,339 5,145 7,012 7,700
TOTAL ASSETS $391,829 $435,285 $444,409 $451,784 $459,564
LIABILITIES:
Account Payable $763 $736 $811 $744 $1,624
Accrued
Liabilities/Deposits
815 3,056 3,883 2,696 1,338
Compensated Absences:
Due in One Year 23 119 221 0 0
Due in more than One
Year
1,112 1,136 1,255 0 0
Notes Payable:
Due within One Year 4,832 3,346 3,293 3,309 4,350
Due in more than One
Year
118,188 137,193 135,659 133,888 131,127
TOTAL LIABILITIES $125,733 $145,585 $145,121 $140,637 $138,439
NET ASSETS:
Invested in capital assets,
net
$236,546 $245,393 $259,638 $268,869 $278,611
Restricted 1,408 1,568 2,731 4,327 2,566
Unrestricted 28,142 42,738 36,919 37,951 39,948
TOTAL NET ASSETS $266,096 $289,699 $299,288 $311,147 $321,125
____________
Source: District audited financial statements.
See APPENDIX B for the District’s audited financial statements for the fiscal year ended
March 31, 2015. The District has not requested, and the auditor has not provided, any update or review of
such statements in connection with their presentation in this Official Statement. The audited financial
statements for the 15 months ended June 30, 2016 are expected to become available in October 2016.
Attachment 5
A-10
Long-Term Debt of the District
Set forth below is a table presenting the long-term obligations payable by the District (each, a
“Long-Term Obligation”), outstanding at March 31, 2016.
Table A-3
District Outstanding Debt
($ in Thousands)
Obligation
Original Outstanding 2016-17 Final
Obligation Amount 3/31/2016 Debt Service Payment
PAYABLE FROM THE GENERAL FUND
Senior Obligations:
2007 Notes, Series A(1) $52,415 $47,300 $5,510 September 2027
2011 Authority Bonds(1) 20,500 20,290 1,196 September 2041
2012 Refunding Notes(2) 31,265 34,294 1,033 September 2041
2015 Refunding Notes 23,630 23,225 1,786 September 2034
Subtotal Senior Obligations $127,810 $125,109 9,525
Subordinate Obligations:
Sierra Azul 240 41 25 October 2017
Bear Creek 1,500 1,500 75 April 2023
Subtotal Subordinate Obligations 1,740 1,541 100
SUBTOTAL GENERAL FUND $129,550 $126,650 $9,625
PAYABLE FROM MEASURE AA
2015 General Obligation Bonds 45,000 45,000 2,601 September 2045
SUBTOTAL MEASURE AA $45,000 $45,000 $2,601
TOTAL $174,550 $171,650 $12,226
____________
(1) To be refunded or prepaid, as applicable. See “PLAN OF REFUNDING.”
(2) Outstanding balance for 2012 Refunding Notes includes accreted interest of $3,989,444 as of March 31, 2016.
Source: District Controller.
Promissory Notes
Daloia Land Purchase Contract Promissory Note (Sierra Azul). During the fiscal year ending
2003 the District entered into a land purchase contract promissory note in the amount of $240,000. The
promissory note bears interest at a fixed rate of 6.25% and matures October 10, 2017. At March 31, 2016,
the outstanding balance of the Daloia Land Contract note was $41,414.
Hunt Living Trust Promissory Note (Bear Creek). On April 1, 2003, the District entered into a
$1,500,000 promissory note with the Hunt Living Trust as part of a lease and management agreement.
The note is due in full on April 1, 2023 and bears interest at 5.5% semi-annually through April 1, 2013
and 5.0% per annum until the maturity, or prior redemption, of the note. At March 31, 2016, the
outstanding balance on the note was $1,500,000.
Attachment 5
A-11
2012 Refunding Promissory Notes. On January 19, 2012, the District advance refunded
$34,652,643 in 1999 Lease Revenue Bonds by issuing $31,264,707 in promissory notes. The 2012 notes
bear interest rates ranging from 2.00% to 6.04%. The notes are a blend of current interest and capital
appreciation notes maturing through 2042. The net proceeds of $33,295,663 (after payment of $278,683
in underwriting fees, insurance, and other issuance costs and a premium of $2,309,638) were used to
purchase U.S. government securities. Those securities were deposited in an irrevocable trust with an
escrow agent to provide for all future debt service payments on the 1999 Series bonds. As a result, the
1999 Series bonds are considered to be defeased and the liability for those bonds has been removed from
the long-term debt in the financial statements. At March 31, 2016, the outstanding balance of the notes,
including accreted interest of $3,989,444, was $34,294,151.
2015 Refunding Promissory Notes (2004 Project Lease). On January 22, 2015, the District
currently refunded $31,900,009.95 of the Authority’s 2004 Revenue Bonds by issuing $23,630,000 in
promissory notes. The 2015 notes bear interest rates ranging from 2.00% to 5.00%. The final maturity of
the notes is September 1, 2034. The net proceeds of $30,904,975.22 (after payment of $253,008.62 in
underwriting fees, and other issuance costs and a premium of $4,948,499.70) together with $2,326,475.22
of funds related to the 2004 Revenue Bonds, were used to purchase U.S government securities. Those
securities were deposited in an irrevocable trust with an escrow agent to redeem the 2004 Revenue Bonds
in full on March 1, 2015. At March 31, 2016, the outstanding balance of the notes was $23,225,000.
Revenue Bonds
2007 Series A Revenue Refunding Bonds and Series B-T Taxable Revenue Refunding Bonds. On
December 15, 2006 the District issued six series of promissory notes (2007 District Notes) for the purpose
of refunding its 1996 Project Lease, 1996 Promissory Notes, 1999 Project Lease, and 1999 Promissory
Notes. On December 15, 2006 the Authority, on behalf of the District, issued $52,415,000 of 2007 Series
A Revenue Refunding Bonds (the “2007 Authority Bonds”) and $6,785,000 of 2007 Series B-T Taxable
Revenue Refunding Bonds (the “2007 Authority Taxable Bonds”) for the purpose of defeasing the
aggregate purchase price of the 2007 District Notes. The 2007 Authority Bonds bear interest from 4.0% to
5.0% and Series B-T bonds bear interest at 5.15%. Interest for both the 2007 Authority Bonds and the
2007 Authority Taxable Bonds are due semiannually on March 1 and September 1. Principal payments
for the 2007 Authority Bonds began September, 2012 and are due annually, thereafter. Principal
payments for the 2007 Authority Taxable Bonds are due annually on September 1. As of March 31, 2016,
the outstanding balance of the 2007 Authority Bonds is $47,300,000. . The 2007 Bonds will be refunded
with a portion of the proceeds of the 2016 Green Bonds. See “PLAN OF REFUNDING” in the forepart of
this Official Statement.
There is no remaining balance on the 2007 authority Taxable Bonds.
2011 Authority Bonds. On May 19, 2011, the Authority, on behalf of the District, issued
$20,500,000 of 2011 Revenue Bonds (the “2011 Authority Bonds”) for the purpose of acquiring land to
preserve and use as open space and pay bond issue and related costs. The 2011 Authority Bonds are not
general obligation bonds. Each year, the District appropriates revenues–mainly limited property tax
collections that Santa Clara County and San Mateo County allocated to the District–to pay its obligations
under a Lease Agreement for use and occupancy of District land in addition to other District debt and
lease obligations unrelated to this financing. The 2011 Authority Bonds bear interest at 2.0% to 6.0% and
are due semi-annually on March 1 and September 1. Principal payments on the 2011 Authority Bonds are
due annually September 1. At March 31, 2016, the outstanding balance of these bonds was $20,290,000.
A portion of the 2011 Authority Bonds will be prepaid from a portion of the proceeds of the 2016 Green
Bonds. See “PLAN OF REFUNDING” in the forepart of this Official Statement.
Attachment 5
A-12
Dissolution of Redevelopment Agencies
The California Legislature adopted a bill, “ABX1 26,” during the fiscal year (June 30) 2011-12
State budget process that purported to amend the California Community Redevelopment Law to dissolve
redevelopment agencies on a State-wide basis. On December 29, 2011, the California Supreme Court
upheld ABX1 26 in the face of an expedited legal challenge. As a result, all California redevelopment
agencies, including redevelopment agencies of cities located within the District, were dissolved as of
February 1, 2012, and such redevelopment agencies were to cease operations and dismantle, and to
transfer assets and responsibilities to a successor entity as of the same date.
According to additional “trailer bill” legislation (AB 1484) effective on July 1, 2012, which
further amended the Community Redevelopment Law, each County Auditor-Controller, the State
Department of Finance and the State Controller may require the return of funds improperly spent or
transferred to a public entity in conflict with the provisions of ABx1 26 and AB 1484 (together, the
“Dissolution Law”) and, if funds are not returned within 60 days, the funds may be recovered through an
offset of sales and use tax or property tax allocations to the local agency.
As a consequence of the operation of the Dissolution Law, the District, as well as counties, school
districts and other special districts, may receive higher amounts of ad valorem property tax allocations,
due to future receipt of property tax increment amounts that had previously funded redevelopment
agencies. However, such tax increment amounts may currently be pledged to secure redevelopment
agency bonds or otherwise contractually encumbered, and the District cannot predict when its property
tax receipts might increase or by how much.
District Organization and Employee Relations
As of March 31, 2016, the District had 129.75 permanent full-time equivalent budgeted
employees who received benefits. Certain field employees are represented through a Memorandum of
Understanding by and between the District and the Midpeninsula Regional Open Space District
(“MROSD”) Field Employee Association.
Labor Organization Represented Employees Contract Expiration
MROSD Employees Field Association 46 June 30, 2018
Employee Retirement Systems
All permanent District employees are eligible to participate in the pension plan offered by the
California Public Employees’ Retirement System (“CalPERS”), an agent multiple employer defined
benefit plan which acts as a common investment and administrative agent for its participating member
employers. CalPERS provides retirement and disability benefits, annual cost of living adjustments and
death benefits to plan members, who must be public employees and beneficiaries. Benefit provisions are
established by State statute and District resolution. Benefits are based on years of credited service, equal
to one year of full time employment. Funding contributions are determined annually on an actuarial basis
as of June 30 by CalPERS; the District must contribute these amounts.
CalPERS requires that any public agency with fewer than 100 active members, such as the
District, participate in a mandatory risk pool. The risk pools combine the assets and liabilities across
employers to produce large risk sharing pools. These risk sharing pools dramatically reduce or eliminate
large fluctuations in an employer’s retirement contribution rate caused by unexpected demographic
events. The District is participant in the CalPERS miscellaneous plan risk pool.
Attachment 5
A-13
The plan’s provisions and benefits in effect at March 31, 2016 are summarized below. As of
January 1, 2013, the District adopted the State PEPRA Plan for employees new to the CalPERS system.
See “–Pension Reform Act of 2013 (Assembly Bill 340).” The table shows the provision/benefit for both
Classic (pre-existing CalPERS members) and PEPRA (new to CalPERS) employees.
Benefit vesting schedule 5 years of service
Benefit payments Monthly for life
Retirement age 55 Classic, 62 PEPRA
Monthly benefits, as a % of annual salary 2.5% Classic, 2.0% PEPRA
Required employees contribution rate 8.0% Classic, 6.25% PEPRA
Required employer contribution rate 9.671%
Employer lump sum annual payment $453,846
CalPERS determines contribution requirements using a modification of the Entry Age Normal
Method. Under this method, the District’s total normal benefit cost for each employee from date of hire to
date of retirement is expressed as a level percentage of the related total payroll cost. Normal benefit cost
under this method is the level amount the District must pay annually to fund an employee’s projected
retirement benefit. This level percentage of payroll method is used to amortize any unfunded actuarial
liabilities. The actuarial assumptions used to compute contribution requirements are also used to compute
the actuarial accrued liability. The District does not have a net pension obligation since it pays these
actuarially required contributions bi-weekly.
CalPERS uses the market related value method of valuing the plan’s assets. Until November
2015, an investment rate of return of 7.50% was assumed. In November 2015, CalPERS announced a
new de-risking policy, under which it will shift its asset allocation to less volatile investments and
gradually reduce the assumed rate of return to 6.5% over 20 years. Annual salary increases are assumed
to vary by duration of service. Changes in liability due to plan amendments, changes in actuarial
assumptions, or changes in actuarial methods are amortized as a level percentage of payroll on a closed
basis over 20 years. Investment gains and losses are accumulated as they are realized and 10% of the net
balance is amortized annually.
The required contributions representing annual pension cost, for the year ended March 31 were as
follows:
Percentage of APC
Fiscal Year Ending Annual Pension Cost (APC) Contributed
3/31/2016 $1,358,520 100%
3/31/2015 1,343,244 100
3/31/2014 1,461,069 100
The history below shows the actuarial accrued liability, the District’s share of the pool’s market
value of assets, share of the pool’s unfunded liability, funded ratio and the annual covered payroll.
Share of Pool’s District’s Share
Accrued Market of of Pool’s Annual
Valuation Liability Value of Unfunded Funded Covered
Date (AL) Assets (MVA) Liability Ratio Payroll
06/30/2011 $34,618,095 $24,536,806 $10,081,289 70.9% $7,848,758
06/30/2012 37,786,746 25,367,343 12,419,403 67.1 7,829,173
06/30/2013 41,366,083 31,517,880 9,848,203 76.2 8,320,777
06/30/2014 47,538,562 38,636,138 8,902,424 81.3 8,398,938
__________
Source: CalPERS.
Attachment 5
A-14
In June 2016, the District made a $3 million prepayment to CalPERS, to be applied to reduce its
unfunded pension liability.
Pension Reform Act of 2013 (Assembly Bill 340). On September 12, 2012, the Governor of the
State signed AB 340, a bill that enacted the California Public Employees’ Pension Reform Act of 2013
(“PEPRA”) and that also amended various sections of the California Education and Government Codes,
including the County Employees Retirement Law of 1937. AB 340 (i) increased the retirement age for
new State, school, and city and local agency employees depending on job function, (ii) capped the annual
CALPERS pension benefit payout, (iii) addressed numerous abuses of the system, and (iv) required State,
school, and certain city and local agency employees to pay at least half of the costs of their CalPERS
pension benefits. PEPRA applies to all public employers except the University of California, charter cities
and charter counties (except to the extent they contract with CalPERS.)
The provisions of AB 340 became effective on January 1, 2013 with respect to State employees
hired on that date and after; local government employee associations, including employee associations of
the District, have a five-year window to negotiate compliance with AB 340 through collective bargaining.
If no deal is reached by January 1, 2018, a city, public agency or school district could force employees to
pay their half of the costs of CalPERS pension benefits, up to 8% of pay for civil workers and 11% or
12% for public safety workers.
CalPERS predicts that the impact of AB 340 on employers, including the District, and employees
will vary, based on each employer’s current level of benefits. To the extent that the new formulas lower
retirement benefits, employer contribution rates could decrease over time as current employees retire and
employees subject to the new formulas make up a larger percentage of the workforce. This change would,
in some circumstances, result in a lower retirement benefit for employees than they currently earn.
Additionally, CalPERS notes that changes arising from AB 340 could ultimately have an adverse impact
on public sector recruitment in areas that have historically experienced recruitment challenges due to
higher pay for similar jobs in the private sector.
More information about AB 340 can be accessed through CalPERS’s website at
www.calpers.ca.gov. The reference to this internet website is shown for reference and convenience only;
the information contained within the website may not be current and has not been reviewed by the District
and is not incorporated herein by reference.
The District is unable to predict what the amount of CalPERS liabilities will be in the future or
the amount of the CalPERS contributions which the District may be required to make, all as a result of the
implementation of AB 340, and as a result of negotiations with its Labor Organizations.
(Remainder of this Page Intentionally Left Blank)
Attachment 5
A-15
Other Post-Employment Retirement Benefits
The District joined the California Employers’ Retiree Benefit Trust (“CERBT”), an agent
multiple-employer plan administered by CalPERS, consisting of an aggregation of single- employer
plans. The District Board authorized a deposit of $1,900,000 in CERBT on June 5, 2008, to begin funding
its other post-employment benefits (“OPEB”) liability.
By Board resolution and through agreements with its labor unit, the District provides certain
health care benefits for retired employees (spouse and dependents are not included) under third-party
insurance plans. A summary of eligibility and retiree contribution requirements are shown below:
Eligibility Service or disability retirement from the District
Age 50 and 5 years of CalPERS service
Continue participated in Public Employees Medical and Hospital Care
Act (PEMHCA)
Retiree Medical Benefit District pays retiree premiums up to:
$350 per month effective 1/1/2009
Must be at least equal to statutory Public Employees' Medical and
Hospital Care Act (PEMHCA) minimum
($122 in 2015, $125 in 2016)
PEMHCA Administrative Fee District pays CalPERS administrative fees (0.32% of premiums for 2015-
16)
Surviving Spouse Continuation Retiree benefit continues to surviving spouse if retiree elects survivor
annuity under CalPERS retirement plan
Other OPEB None
As of June 30, 2016, there were approximately 36 active employees, 17 retirees, and seven
dependents, who are eligible to receive retirement health care benefits.
Funding Policy. In accordance with the District’s budget, the Annual Required Contribution
(“ARC”) is to be funded throughout the year as a percentage of payroll. Concurrent with implementing
GASB Statement No. 45, the District’s Board of Directors passed a resolution to participate in CERBT,
an irrevocable trust established to fund OPEB. CERBT is managed by an appointed board not under the
control of the District. CERBT is not considered a component unit by the District. Separately issued
financial statements for CERBT may be obtained from CalPERS at P.O. Box 942709, Sacramento,
California 94229-2709.
(Remainder of this Page Intentionally Left Blank)
Attachment 5
A-16
Annual OPEB Cost and Net OPEB Assets. The District’s annual OPEB cost (expense) is
calculated based on the ARC of the employer, an amount actuarially determined in accordance with the
parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing
basis, is projected to cover normal cost each year and amortize any unfunded actuarial accrued liability
(“UAAL”) (or funding excess) over a period not to exceed 30 years. The following table shows the
components of the District’s annual OPEB cost for the year, the amount actually contributed to the plan
and changes in the District’s net OPEB obligation at March 31, 2016:
Annual Required Contribution $303,000
Interest on net OPEB asset (79,000)
Adjustment to Annual Required Contribution 74,000
Annual OPEB cost (expense) 387,000
Contributions made (benefit payments) (108,500)
Decrease/(Increase) in net OPEB asset 278,500
Net OPEB asset–beginning of year 863,176
Net OPEB asset–end of year $584,676
The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan,
and the net OPEB obligation for the last three fiscal years are as follows:
Fiscal Year Ended Annual OPEB Percentage Net
March 31 Cost Contributed OPEB Asset
2016 $387,000 28% $584,676
2015 298,000 53 863,176
2014 265,000 65 1,003,925
______________
Sources: Midpeninsula Regional Open Space District Annual Financial Report for the year ended March 31, 2015 and District
Controller.
The District made its budgeted fiscal year 2015-16 OPEB contribution of $150,000 in June 2016.
Funded Status and Funding Progress. Based upon the most recent actuarial valuation for
June 30, 2015, the most recent actuarial valuation date, the actuarial accrued liability (“AAL”) for future
OPEB cash benefits was $3,035,000. The 2015 actuarial value of plan assets was $2,520,000. UAAL, on
a cash basis, was calculated at $515,000. The estimated annual covered payroll was $9,182,000, resulting
in a cash basis UAAL as a percent of payroll of 5.6%. The District has budgeted a $250,000 OPEB
contribution for fiscal year 2016-17 and, in addition, will continue to fund all benefit payments from the
general fund.
Actuarial Methods and Assumptions. The ARC was determined as part of a June 30, 2015
actuarial valuation using the entry age normal actuarial cost method. This is a projected benefit cost
method, which takes into account those benefits that are expected to be earned in the future as well as
those already accrued. The actuarial assumptions included: (i) 7.25% investment rate of return, (ii) 3.25%
projected annual salary increase, and (iii) health inflation increases of 4.5% per year. The actuarial
methods and assumptions used include techniques that smooth the effects of short-term volatility in
actuarial accrued liabilities and the actuarial value of assets. Actuarial calculations reflect a long-term
perspective and actuarial valuations involve estimates of the value of reported amounts and assumptions
about the probability of events far into the future. Actuarially determined amounts are subject to revision
at least biannually as results are compared to past expectations and new estimates are made about the
future. The District’s OPEB unfunded actuarial accrued liability is being amortized as a level percentage
of projected payroll using a 30 year open amortization period.
Attachment 5
A-17
Risk Management
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction
of assets; injuries to employees; and natural disasters. Prior to July 1, 2002, the District managed and
financed these risks by purchasing commercial insurance. On July 1, 2002, the District joined the
California Joint Powers Insurance Authority (CAL JPIA). CAL JPIA is composed of 116 California
public entities and is organized under a joint powers agreement pursuant to California Government Code
Section 6500 et seq. The purpose of CAL JPIA is to arrange and administer programs for the pooling of
self-insurance losses, to purchase excess insurance or reinsurance, and to arrange for group-purchased
insurance for property and other coverages. The CAL JPIA pool began covering claims of its members in
1978. Each member government has an elected official as its representative on the Board of Directors.
The Board operates through a nine-member Executive Committee.
The District is a pool member of the following insurance programs:
General and Automobile Liability. General Liability coverage includes bodily injury, personal
injury, or property damage to a third party resulting from a member activity, including automobile
liability. Members provide pool funding through annual contributions and retrospective deposits. Annual
contributions for both the Liability and Workers’ Compensation programs are posted each April; each
member’s share of cost is determined by their exposure (payroll) and loss experience (claims) relative to
other members. Retrospective adjustments, calculated each October, are based on the ongoing claim
development of past coverage periods, and can result in either an additional deposit or a refund.
Costs are spread to members as follows: the first $30,000 to $750,000 are pooled based on a
member’s share of costs under $30,000; costs in excess of $750,000 are shared by the members based
upon each member’s payroll. Costs of covered claims above $5,000,000 are currently paid by reinsurance.
The protection for each member is $50,000,000 per occurrence, and $50,000,000 annual aggregate.
Worker’s Compensation. Workers’ Compensation (“WC”) coverage includes benefits to
employees who are injured or become ill as a result of their work activities. WC losses are pooled by Cal
JPIA members to $2,000,000; coverage above $2,000,000 is purchased with statutory limits. The District
is charged for the first $50,000 of each claim. Costs from $50,000 to $100,000 per claim are pooled based
on the member’s losses under its retention level. Costs between $100,000 and $2,000,000 per claim are
pooled based on payroll.
The WC program also includes Employers’ Liability of $10,000,000 per occurrence. Employers’
Liability costs from $2,000,000 to $5,000,000 are paid by excess insurance purchased by Cal JPIA.
Pollution and Remediation Legal Liability. This policy provides coverage for both first and third
party damages, including certain types of cleanups; fuel spill or hazmat incident; member listed non-
owned disposal sites; above ground and underground storage tanks; and for sudden and gradual pollution
at or from property, streets, sanitary sewer trunk lines and storm drain outfalls owned by the District.
Coverage is on a claims-made basis. There is a $50,000 deductible. During the three-year policy period,
Cal JPIA has a limit of $50,000,000 and each pool member has a $10,000,000 aggregate limit. The
current term is July 1, 2014 through July 1, 2017.
Property Insurance. The property insurance program includes all-risk coverage for real and
personal property (such as, scheduled buildings, contents, equipment, vehicles, office furniture, etc.). The
insurance is underwritten by several insurance companies. The all-risk deductibles are $5,000 per
occurrence for property and $1,000 for non-emergency vehicles. Premiums are paid annually and are not
subject to retroactive adjustments.
Attachment 5
A-18
Mechanical Breakdown Insurance. This optional coverage is purchased separately under the
property program. Coverage is for physical damage for sudden and accidental breakdown of boilers and
machinery, and electrical injury. There is a $5,000 per accident or occurrence deductible for property
damage; and $5,000 extra expense.
Crime Insurance. Coverage is provided for employee dishonesty, failure to faithfully perform
duties, forgery, counterfeiting, theft, robbery, burglary and computer fraud. Cal JPIA contracts with
Alliant Insurance Services for administering this program. District’s coverage limit is $1,000,000 with a
$2,500 per occurrence deductible. Premiums are paid annually and are not subject to retroactive
adjustments.
Cyber Liability Program. The cyber liability program is partially covered under the liability
program and partially through a stand-alone coverage program. Cyber liability provides coverage for both
first- and third-party claims. First-party coverage includes privacy regulatory claims, security breach
response, business income loss, dependent business income loss, digital asset restoration costs, and cyber-
extortion threats, while third-party coverage includes privacy liability, network security liability, and
multimedia liability. Members work directly with the reinsurer to investigate and respond to claims.
There is a $1,000,000 per occurrence limit of coverage, $1,000,000 aggregate limit per policy period per
member, and is $10,000,000 aggregate limit of coverage for all members per policy period.
Special Event Insurance. This program provides liability insurance when member- owned
premises are used for special events or short-term activities (e.g., art festivals, yoga classes, job fairs,
etc.). Members administer the program, accept funds, and issue certificates of insurance online with
Alliant Insurance Services, with whom the Cal JPIA contracts for the program. There is no deductible,
and the member is added as an additional insured. Liability limits are purchased in $1,000,000 per
occurrence increments. Medical payments are also available with limits of $5,000, with the option to
purchase $5,000 in additional limits.
Vendors/Contractors Insurance. General Liability coverage is provided to vendors/contractors
who otherwise could not meet the District’s minimum insurance requirements for General Liability, or
General Liability and Professional Liability combined. Cal JPIA contracts with Alliant Insurance Services
for administering this program. The contract is classified according to a hazard class, and the premium is
based on the contract value. The member collects the premium from the vendor/contractor and then remits
the premium payment to Alliant Insurance Services.
Attachment 5
A-19
ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING
SANTA CLARA AND SAN MATEO COUNTIES
Following is economic and demographic information for Santa Clara and San Mateo Counties.
While three District parcels are located in Santa Cruz County, these parcels represent an insignificant
amount of assessed valuation, so economic and demographic information regarding Santa Cruz County is
not included herein.
General
Santa Clara and San Mateo Counties are two of nine counties in the San Francisco- Oakland Bay
Area.
Santa Clara County. Santa Clara County covers an area of over 1,300 square miles and is located
south of the San Francisco Bay in northern California. There are two distinct valleys in Santa Clara
County, which are referred to as North County and South County. South County has more of an
agricultural base and is comprised of only two cities, twenty miles apart from each other. As a contrast,
North County is densely populated, heavily industrialized and extensively urbanized. This part of Santa
Clara County is comprised of 13 cities, each adjacent to another. Due to its high concentration of high-
technology industries, the northwestern portion of North County is commonly referred to as “Silicon
Valley.” Several small lakes and reservoirs are scattered across the County and the highest peak can be
found in San José at Mount Hamilton with an elevation of 4,213 feet. Several major highways serve Santa
Clara County, including Highway 101 providing access to San Francisco and Los Angeles.
San Mateo County. San Mateo County shares its borders with the City and County of San
Francisco to the north and Santa Clara County to the south, the Pacific Ocean to the west and San
Francisco Bay to the east, Santa Clara County to the south and San Joaquin County to the east. San Mateo
County is a major employment base, accessible to downtown San Francisco approximately 15 miles
north, and is also accessible to the San Jose and Silicon Valley areas approximately 30 miles south via
Interstate 280 or U.S. Highway 101. San Mateo County has an approximate total area of 741 square
miles, of which 448 square miles is land and 293 square miles is water. It is the third-smallest county in
California by land area.
(Remainder of this Page Intentionally Left Blank)
Attachment 5
A-20
Population
The tables below shows population estimates and projections for the past five years for Santa
Clara and San Mateo Counties, according to the State Department of Finance.
Table A-4A
SANTA CLARA COUNTY AND SAN MATEO COUNTY AND STATE OF CALIFORNIA
Population Estimates
Calendar Years 2012 through 2016 as of January 1
Calendar Year Santa Clara County San Mateo County State of California
2012 1,828,496 735,256 37,881,357
2013 1,856,194 745,626 38,239,207
2014 1,879,813 752,145 38,567,459
2015 1,903,974 759,155 38,907,642
2016 1,927,888 766,041 39,255,883
_____________
Source: State Department of Finance, Table 2: E-4 Population Estimates for Cities, Counties, and State, 2011-2016 with 2010
Benchmark.
Table A-4B
SANTA CLARA COUNTY AND SAN MATEO COUNTY AND STATE OF CALIFORNIA
Population Projections by Age
Calendar Years 2012 through 2016 as of January 1
2012 2013 2014 2015 2016
Santa Clara County
Under 19 2,303,464 2,330,749 2,352,813 2,372,890 2,390,802
20-39 516,193 517,865 518,872 517,843 516,028
40-59 523,435 530,998 537,126 542,332 546,132
60 and over 307,606 321,578 334,221 347,783 361,566
San Mateo County
Under 19 914,509 920,971 926,820 932,451 937,430
20-39 189,020 188,384 188,111 187,790 187,441
40-59 217,796 218,514 218,974 218,958 218,672
60 and over 150,027 155,845 160,763 166,303 171,663
State of California
Under 19 48,199,753 48,439,756 48,759,031 49,092,330 49,437,081
20-39 10,780,155 10,871,695 10,965,838 11,037,987 11,111,228
40-59 10,241,260 10,272,246 10,299,721 10,323,082 10,331,433
60 and over 6,582,388 6,820,715 7,071,818 7,340,539 7,605,654
_____________
Source: State Department of Finance, Table P-2: State and County Population Projections by Race/Ethnicity and Age,
2011-2016 with 2010 Benchmark.
Attachment 5
A-21
Employment and Industry
Santa Clara County. Santa Clara County is part of the San Jose-Sunnyvale-Santa Clara
Metropolitan Statistical Area (“MSA”), which is comprised of Santa Clara and San Benito Counties. The
unemployment rate (not seasonally adjusted) in the San Jose-Sunnyvale-Santa Clara MSA was ___% in
July 2016 (preliminary), compared to an unadjusted rate of ___% for July 2015. This compares with
unadjusted unemployment rates for July 2016 of ___% for the State and ___% for the nation.
The table below lists employment by industry group for the years 2011 through 2015.
Table A-5
SAN JOSE SUNNYVALE SANTA CLARA MSA
(San Benito and Santa Clara Counties)
Annual Average Civilian Labor Force, Employment and Unemployment,
Unemployment by Industry
(March 2015 Benchmark)
2011 2012 2013 2014 2015
Civil Labor Force(1) 968,100 988,500 1,003,200 1,025,100 1,048,200
Employment 876,600 908,300 937,000 971,100 1,003,600
Unemployment 91,500 79,200 66,200 53,900 44,600
Unemployment Rate 9.5% 8.0% 6.6% 5.3% 4.3%
Wage and Salary Employment:(2)
Agriculture 5,000 4,900 5,000 5,300 5,400
Mining and Logging 200 200 300 300 200
Construction 31,800 34,800 37,500 39,700 43,200
Manufacturing 155,300 155,900 155,700 158,700 161,600
Wholesale Trade 34,000 35,000 36,300 36,500 36,400
Retail Trade 81,800 84,100 84,900 86,400 87,500
Transportation, Warehousing, Utilities 12,100 13,000 14,200 14,900 15,500
Information 51,300 54,200 58,700 66,300 74,800
Finance and Insurance 19,400 20,400 20,900 21,300 22,000
Real Estate and Rental and Leasing 13,000 12,900 13,000 13,300 13,400
Professional and Business Services 166,700 178,200 191,200 203,000 216,000
Educational and Health Services 129,700 136,800 143,800 150,000 156,700
Leisure and Hospitality 77,400 82,500 87,500 91,900 95,700
Other Services 24,600 24,800 25,400 26,400 27,100
Federal Government 10,100 9,800 9,900 9,900 9,900
State Government 6,400 6,400 6,300 6,400 6,600
Local Government 76,1000 75,200 75,600 77,100 76,200
TOTAL ALL INDUSTRIES(3) 894,700 928,900 965,800 1,007,000 1,048,200
____________
(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic
workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic
workers, and workers on strike.
(3) Totals may not add due to rounding.
Source: State of California Employment Development Department, Labor Market Division.
Attachment 5
A-22
San Mateo County. San Mateo County is included in the San Francisco-Redwood City-South
San Francisco Metropolitan Division (“MD”), which is comprised of San Francisco and San Mateo
Counties. The unemployment rate (not seasonally adjusted) in the San Francisco-Redwood City-South
San Francisco MD was ___% in July 2016, compared to an unaudited rate of ___% in July 2015. This
compares with unadjusted unemployment rates for July 2016 of ___% for the State and ___% for the
nation.
The table below lists employment by industry group for the calendar years 2011 through 2015.
Table A-6
SAN FRANCISCO REDWOOD CITY SOUTH SAN FRANCISCO MD
(San Francisco and San Mateo Counties)
Annual Average Civilian Labor Force, Employment and Unemployment,
Unemployment by Industry
(March 2015 Benchmark)
2011 2012 2013 2014 2015
Civil Labor Force(1) 894,600 922,900 936,700 961,100 990,000
Employment 824,700 861,900 886,400 919,900 955,000
Unemployment 69,900 61,000 50,300 41,200 34,900
Unemployment Rate 7.8% 6.6% 5.4% 4.3% 3.5%
Wage and Salary Employment:(2)
Agriculture 1,800 1,700 1,800 1,900 1,900
Mining and Logging 100 0 100 100 100
Construction 28,400 30,300 32,600 36,100 41,500
Manufacturing 34,400 34,000 34,700 35,600 35,700
Wholesale Trade 22,300 23,500 24,700 25,600 27,100
Retail Trade 73,700 75,700 77,500 79,600 81,500
Transportation, Warehousing, Utilities 34,900 36,500 38,700 39,700 40,600
Information 40,600 46,400 49,600 54,600 59,800
Finance and Insurance 49,100 49,500 50,300 51,300 53,100
Real Estate and Rental and Leasing 17,200 18,300 19,300 19,600 20,400
Professional and Business Services 195,800 214,200 228,000 243,900 261,100
Educational and Health Services 116,800 120,000 123,400 126,000 129,900
Leisure and Hospitality 115,000 121,500 125,700 131,100 135,800
Other Services 34,100 35,800 37,600 39,600 40,100
Federal Government 18,300 17,900 17,600 17,500 17,700
State Government 33,700 33,200 32,900 33,000 34,100
Local Government 68,300 68,400 68,400 70,200 72,600
TOTAL ALL INDUSTRIES(3) 884,400 926,700 962,700 1,005,300 1,053,000
____________
(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic
workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic
workers, and workers on strike.
(3) Totals may not add due to rounding.
Source: State of California Employment Development Department, Labor Market Division.
Attachment 5
A-23
The following tables list the largest manufacturing and non-manufacturing employers within
Santa Clara County and San Mateo County as of March 2016, in alphabetical order.
Table A-7
COUNTY OF SANTA CLARA
Largest Employers
As of March 2016
Employer Name Location Industry
Adobe Systems Inc. San Jose Publishers-Computer Software (Mfrs)
Advanced Micro Devices Inc. Sunnyvale Semiconductor Devices (Mfrs)
Apple Inc. Cupertino Computers-Electronic-Manufacturers
Applied Materials Inc. Santa Clara Semiconductor Manufacturing Equipment (Mfrs)
Bon Appetit-Cafe Adobe San Jose Restaurant Management
California’s Great America Santa Clara Amusement & Theme Parks
Christopher Ranch LLC Gilroy Garlic (Mfrs)
Cisco Systems Inc. San Jose Computer Peripherals (Mfrs)
E Bay Inc. San Jose Auctioneers
Flextronics International Milpitas Semiconductor Devices (Mfrs)
HP Inc. Palo Alto Computers-Electronic-Manufacturers
Intel Corp. Santa Clara Semiconductor Devices (Mfrs)
Kaiser Permanente Medical Ctr Sn San Jose Hospitals
Kaiser Permanente Medical Ctr San Jose Hospitals
Liberty Tax Svc. San Jose Tax Return Preparation and Filing
Lockheed Martin Space Systems Sunnyvale Satellite Equipment & Systems-Mfrs
Microsoft Corp. Mountain View Computer Software-Manufacturers
NASA Mountain View Federal Offices-US
Net App Inc. Sunnyvale Computer Storage Devices (Mfrs)
Philips Lumileds Lighting Co San Jose Lighting Fixtures-Supplies & Parts-Mfrs
Santa Clara Valley Medical Ctr San Jose Hospitals
SAP Center San Jose Stadiums Arenas & Athletic Fields
Stanford School of Medicine Stanford Schools-Medical
Texas Instruments Inc. Santa Clara Semiconductor Devices (Mfrs)
VA Medical Ctr-Palo Alto Palo Alto Hospitals
_______________
Source: State of California Employment Development Department, extracted from The America’s Labor Market Information
System (ALMIS) Employer Database, 2016 2nd Edition.
Attachment 5
A-24
Table A-8
COUNTY OF SAN MATEO
Major Employers
As of March 2016
(Listed Alphabetically)
Employer Name Location Industry
A R Dental Care Daly City Dentists
Electronic Charging Station Menlo Park Research Device
Electronic Arts Inc. Redwood City Game Designers (Mfrs)
Facebook Inc. Menlo Park Social Media
Forced Dump Debris Box Svc Burlingame Garbage Collection
Franklin Resources Inc. San Mateo Asset Management
Franklin Templeton Investments San Mateo Investments
Genentech Inc. South San Francisco Pharmaceutical Products-Wholesale
Gilead Sciences Inc. Foster City Biological Products (Mfrs)
Guckenheimer Inc. Foster City Marketing Programs & Services
Hyatt Regency-San Francisco Burlingame Hotels and Motels
Kaiser Permanente Medical Ctr Redwood City Hospitals
Kaiser Permanente South Sn South San Francisco Hospitals
Lpch Menlo Park Health Care Facilities
Motif Inc. San Mateo Business Services NEC
Oracle Corp. Redwood City Computer Software-Manufacturers
San Francisco Intl Airport-SFO San Francisco Airports
San Mateo County Behavior San Mateo Government Offices-County
San Mateo Medical Ctr San Mateo Hospitals
Sciex LLC Redwood City Scientific Apparatus and Instruments-Mfrs
SRI International Inc. Menlo Park Research Service
US Interior Dept. Menlo Park Government-Offices US
Visa Inc. Foster City Credit Card and Other Credit Plans
Visa International Svc Assn Foster City Associations
Visa USA Inc. Foster City Credit Card and Other Credit Plans
_______________
Source: State of California Employment Development Department, extracted from The America’s Labor Market Information
System (ALMIS) Employer Database, 2016 2nd Edition.
Personal Income
The United States Department of Commerce, Bureau of Economic Analysis (the “BEA”)
produces economic account statistics that enable government and business decision-makers, researchers,
and the public to follow and understand the performance of the national economy.
The BEA defines “personal income” as income received by persons from all sources, including
income received from participation in production as well as from government and business transfer
payments. Personal income represents the sum of compensation of employees (received), supplements to
wages and salaries, proprietors’ income with inventory valuation adjustment and capital consumption
adjustment (CCAdj), rental income of persons with CCAdj, personal income receipts on assets, and
personal current transfer receipts, less contributions for government social insurance. Per capita personal
income is calculated as the personal income divided by the resident population based upon the Census
Bureau’s annual midyear population estimates.
Attachment 5
A-25
The table below summarizes the total personal income and the per capital personal income for the
County of Santa Clara, the County of San Mateo, the State and the United States from 2010 through 2014
(the most recent year for which county data is available.
Table A-9
COUNTY OF SANTA CLARA AND COUNTY OF SAN MATEO,
STATE OF CALIFORNIA AND UNITED STATES
Personal Income (Not Adjusted for Inflation)
For Calendar Years 2010 Through 2014
Year and Area
Personal Income
(millions of dollars)
Per Capita
Personal Income
(dollars)
2014
Santa Clara County $141,874 $74,883
San Mateo County 68,015 89,659
State 1,939,528 49,985
United States 14,683,147 46,049
2013
Santa Clara County 133,655 71,431
San Mateo County 64,282 85,653
State 1,849,505 48,125
United States 14,064,468 44,438
2012
Santa Clara County 131,951 71,670
San Mateo County 63,951 85,798
State 1,812,315 47,614
United States 13,904,485 44,266
2011
Santa Clara County 117,086 64,542
San Mateo County 106,402 76,897
State 1,691,003 44,852
United States 13,233,436 42,453
2010
Santa Clara County 106,402 59,545
San Mateo County 51,264 71,204
State 1,578,553 42,411
United States 12,459,613 40,277
____________________
† County data not yet available.
Source: U.S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Information System,
November 19, 2015.
Attachment 5
A-26
Construction Activity
The following tables provide a summary of residential building permit valuations and
nonresidential building permit valuations, and the total number of all building permit valuations in Santa
Clara County and San Mateo County during the past five years.
Table A-10
COUNTY OF SANTA CLARA
Building Permit Valuation - For Calendar Years 2011 through 2014
(Dollars in Thousands)
2011 2012 2013 2014 2015
New Single-Family $366,126.4 $678,168.8 $694,884.6 $594,472.7 $653,970.2
New Multi-Family 315,853.0 558,544.1 941,420.4 1,196,127.7 706,781.1
Res. Alterations/Additions 392,229.1 288,105.1 423,739.6 439,747.1 505,844.7
TOTAL RESIDENTIAL 1,074,208.5 1,524,818.0 2,060,044.6 2,230,347.5 1,866,595.9
New Commercial 228,074.5 745,468.8 1,217,647.4 898,270.7 1,428,420.1
New Industrial 68,701.3 22,481.5 72,222.0 10,172.2 100,301.2
New Other 47,728.5 19,197.3 1,749,161.2 1,534,213.1 1,697,046.2
Com Alterations/Additions 1,122,235.2 1,115,633.3 1,293,656.1 212,756.4 364,033.1
TOTAL NONRESIDENTIAL 1,466,739.5 1,902,780.9 4,332,686.7 2,655,412.5 3,589,800.5
New Dwelling Units
Single Family 978 1,432 1,859 1,602 1,710
Multiple Family 2,234 4,245 6,009 8,310 3,906
TOTAL 3,212 5,677 7,868 9,912 5,616
____________
Source: Construction Industry Research Board, Building Permit Summary.
Table A-11
COUNTY OF SAN MATEO
Building Permit Valuation - For Calendar Years 2011 through 2015
(Valuation in Thousands of Dollars)
2011 2012 2013 2014 2015
New Single-Family $194,950.1 $245,163.9 $292,893.4 $289,903.2 $374,275.5
New Multi-Family 107,040.0 171,390.4 151,019.5 168,859.4 259,181.0
Res. Alterations/Additions 289,619.5 201,543.1 299,830.5 348,231.1 408,011.2
TOTAL RESIDENTIAL 591,609.6 618,097.4 743,743.4 2,230,347.5 1,041,467.7
New Commercial 28,247.6 83,374.0 165,578.7 432,585.4 427,063.6
New Industrial 3,359.4 2,021.6 15,724.2 9,600.0 0
New Other 26,029.4 1,975.6 58,726.5 490,364.5 489,389.7
Com Alterations/Additions 244,089.0 167,438.8 263,460.8 84,241.0 94,031.8
TOTAL NONRESIDENTIAL 301,725.4 254,810.0 503,490.2 1,016,790.7 228,961.0
New Dwelling Units
Single Family 213 264 350 315 521
Multiple Family 545 671 840 1,302 1,386
TOTAL 758 935 1,190 1,617 1,907
____________
Source: Construction Industry Research Board, Building Permit Summary.
Attachment 5
A-27
Commercial Activity
The following tables show historic taxable sales within Santa Clara County and San Mateo
County for calendar years 2010 through 2014 the most recent data available.
Table A-12
COUNTY OF SANTA CLARA
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions
(Dollars in Thousands)
Calendar Years 2010 through 2014†
Retail Stores Total All Outlets
Number Taxable Number Taxable
Year of Permits Transactions of Permits Transactions
2010 27,215 $17,695,858 43,583 $30,523,322
2011 27,252 19,419,542 43,390 33,431,217
2012 28,109 21,116,708 43,980 36,220,445
2013 29,545 22,424,641 45,274 37,621,606
2014† N/A N/A 45,852 39,628,655
_______________
† Most recent data available.
Source: California State Board of Equalization, Taxable Sales in California (Sales & Use Tax).
Table A-13
COUNTY OF SAN MATEO
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions
(Dollars in Thousands)
Calendar Years 2010 through 2014†
Retail Stores Total All Outlets
Number Taxable Number Taxable
Year of Permits Transactions of Permits Transactions
2010 11,340 $7,846,274 18,979 $11,966,338
2011 11,470 8,536,043 18,995 13,020,643
2012 11,748 9,277,144 19,189 13,906,978
2013 12,438 9,935,641 19,808 14,611,618
2014† N/A N/A 19,999 15,298,434
_______________
† Most recent data available.
Source: California State Board of Equalization, Taxable Sales in California (Sales & Use Tax).
Attachment 5
B-1
APPENDIX B
ANNUAL FINANCIAL REPORT
FOR FISCAL YEAR ENDED MARCH 31, 2015
Attachment 5
C-1
APPENDIX C
DISTRICT INVESTMENT POLICY
Attachment 5
D-1
APPENDIX D
SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
Attachment 5
E-1
APPENDIX E
FORM OF CONTINUING DISCLOSURE CERTIFICATE
Attachment 5
F-1
APPENDIX F
FORM OF OPINION OF BOND COUNSEL
Attachment 5
G-1
APPENDIX G
DTC AND THE BOOK-ENTRY ONLY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and record
keeping with respect to beneficial ownership interests in the 2016 Green Bonds, payment of principal,
interest and other payments on the 2016 Green Bonds to DTC Participants or Beneficial Owners,
confirmation and transfer of beneficial ownership interest in the 2016 Green Bonds and other related
transactions between DTC, the DTC Participants and the Beneficial Owners is based solely on
information provided by DTC. Accordingly, no representations can be made concerning these matters
and neither the 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 the DTC Participants, as
the case may be.
Neither the District (the “Issuer”) nor the Trustee appointed with respect to the 2016 Green
Bonds (the “Trustee”) takes any responsibility for the information contained in this Appendix.
No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute
to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the 2016
Green Bonds, (b) certificates representing ownership interest in or other confirmation or ownership
interest in the 2016 Green Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its
nominee, as the registered owner of the 2016 Green Bonds, or that they will so do on a timely basis, or
that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this
Appendix. The current “Rules” applicable to DTC are on file with the Securities and Exchange
Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are
on file with DTC.
1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for
the 2016 Green Bonds. The 2016 Green Bonds will be issued as fully-registered securities registered in
the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an
authorized representative of DTC. One fully-registered certificate will be issued for the 2016 Green
Bonds, in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the
aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect
to each $500 million of principal amount and an additional certificate will be issued with respect to any
remaining principal amount of such issue.
2. DTC, the world’s largest depository, 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 and provides asset servicing for over 2.2 million
issues of U.S. and non-U.S. equity, corporate and municipal debt issues, and money market instrument
from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also
facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in
deposited securities through electronic computerized book-entry transfers and pledges between Direct
Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct
Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The
Depository Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number of Direct
Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income
Clearing Corporation, and Emerging Markets Clearing Corporation (NSCC, FICC, and EMCC, also
Attachment 5
G-2
subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange
LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available
to others such as both U.S. and non- U.S. securities brokers and dealers, banks, trust companies, and
clearing corporations that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The
DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More
information about DTC can be found at www.dtcc.com and www.dtc.org.
3. Purchases of 2016 Green Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the 2016 Green Bonds on DTC’s records. The ownership
interest of each actual purchaser of each 2016 Green Bond (“Beneficial Owner”) is in turn to be recorded
on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation
from DTC of their purchase. Beneficial Owners are, however, 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 2016 Green Bonds are to be accomplished by entries made on the books of
Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in 2016 Green Bonds, except in the event that use of the
book-entry system for the 2016 Green Bonds is discontinued.
4. To facilitate subsequent transfers, all 2016 Green Bonds deposited by Direct Participants with
DTC are registered in the name of DTC’s partnership nominee, Cede & Co. or such other name as may be
requested by an authorized representative of DTC. The deposit of 2016 Green Bonds with DTC and their
registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the 2016 Green Bonds; DTC’s
records reflect only the identity of the Direct Participants to whose accounts such 2016 Green Bonds are
credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will
remain responsible for keeping account of their holdings on behalf of their customers.
5. 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. Beneficial Owners of 2016 Green Bonds may wish to
take certain steps to augment transmission to them of notices of significant events with respect to the
2016 Green Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security
documents. For example, Beneficial Owners of 2016 Green Bonds may wish to ascertain that the nominee
holding the 2016 Green Bonds for their benefit has agreed to obtain and transmit notices to Beneficial
Owners, in the alternative, Beneficial Owners may wish to provide their names and addresses to the
registrar and request that copies of the notices be provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the 2016 Green Bonds within an
issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect
to the 2016 Green Bonds unless authorized by a Direct Participant in accordance with DTC’s Procedures.
Under its usual procedures, DTC mails an Omnibus Proxy to Issuer 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 2016 Green Bonds are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Attachment 5
G-3
8. Principal and interest payments on the 2016 Green Bonds will be made to Cede & Co., or such
other nominee as may be requested by an authorized representative of DTC, or such other nominee as
may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’
accounts, upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent on
payable date in accordance with their respective holdings shown on DTC’s records. Payments by
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 Participant and not of DTC nor its nominee, Agent, or Issuer,
subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of
redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may
be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent,
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.
9. DTC may discontinue providing its services as securities depository with respect to the 2016
Green Bonds at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the
event that a successor securities depository is not obtained, security certificates are required to be printed
and delivered.
10. The Issuer may decide to discontinue use of the system of book-entry-only transfers through
DTC (or a successor securities depository). In that event, security certificates will be printed and
delivered to DTC.
11. The information in this section concerning DTC and DTC’s book-entry system has been
obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the
accuracy thereof.
48986‐0000
SF\321919524.1
Attachment 5
Hawkins Delafield & Wood
Draft of August 4, 2016
2666982.4 040876 AGMT
[Principal Amount]
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
GREEN BONDS, 2016 REFUNDING
[Pricing Date], 2016
BOND PURCHASE AGREEMENT
Midpeninsula Regional Open Space District
330 Distel Circle
Los Altos, CA 94022-1404
Ladies and Gentlemen:
The undersigned, Morgan Stanley & Co. LLC, as underwriter (the “Underwriter”),
hereby offers to enter into this Bond Purchase Agreement (the “Bond Purchase Agreement”)
with the Midpeninsula Regional Open Space District (the “District”) which, upon the District’s
written acceptance of this offer, will be binding upon the District and upon the Underwriter. This
offer is made subject to the written acceptance hereof by the District and the delivery of such
acceptance to the Underwriter at or prior to 6:00 P.M., California time on the date hereof and, if
not so accepted, will be subject to withdrawal by the Underwriter upon written notice given to
the District any time prior to the acceptance hereof by the District.
1. Upon the terms and conditions and upon the basis of the representations,
warranties and agreements hereinafter set forth, the Underwriter hereby agrees to purchase from
the District for reoffering to the public, and the District hereby agrees to sell to the Underwriter
for such purpose, all (but not less than all) of $[Principal Amount] aggregate principal amount of
the District’s Green Bonds, 2016 Refunding (the “Bonds”). The Bonds shall be dated the date of
delivery thereof and shall be payable in the years and the amounts, and bear interest at the rates,
set forth in Schedule I hereto, such interest being payable on September 1 and March 1 of each
year, commencing [________ 1, 20__]. The aggregate purchase price of the Bonds shall be
$________ (representing the principal amount of the Bonds, [plus [net] original issue premium]
in the amount of $________, less the Underwriter’s discount of $______________).
2. The Bonds are being issued by the District pursuant to the Constitution and laws
of the State of California (the “State”), including the provisions of Article 3 of Chapter 3 of
Division 5 of the Public Resources Code (the “District Act”), and all laws amendatory thereof or
supplemental thereto, including Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5
of the Government Code of the State of California (together with the District Act, the “Law”)
and an Indenture, dated as of September 1, 2016 (the “Indenture”), between the District and
Zions Bank, a division of ZB, National Association, as trustee (the “Trustee”).
The 2016 Series A Bonds are payable from and secured by the District’s share of the
general one percent ad valorem tax levied by the County of Santa Clara County and the County
of San Mateo County (together, the “Counties”) upon all property subject to taxation and
allocated to the District.
Attachment 6
2
The District has delivered or caused to be delivered to the Underwriter the District’s
preliminary official statement relating to the Bonds, dated [POS Date], 2016, (the preliminary
official statement, together with the cover page, inside cover page and any and all appendices
thereto, being herein referred to as the “Preliminary Official Statement”). The District confirms
that the Preliminary Official Statement was “deemed final” as of its date, for purposes of
Securities and Exchange Commission Rule 15c2-12 (“Rule 15c2-12”), except for certain
information permitted to be omitted by said Rule. The District hereby ratifies, confirms and
approves the use by the Underwriter of the Preliminary Official Statement. The Bonds are being
offered pursuant to the District’s final official statement relating to the Bonds, dated [Pricing
Date], 2016 (the final official statement, together with the cover page, inside cover page and any
and all appendices thereto and including any amendments or supplements thereto prior to the
Closing (as defined herein), being herein referred to as the “Official Statement”). Capitalized
terms used herein which are not otherwise defined herein shall have the respective meanings
given such terms in the Official Statement.
The Bonds are being issued to provide funds to (i) refund the District's outstanding
obligations under certain outstanding promissory notes (the “2007 Notes”) held by the
Midpeninsula Regional Open Space District Financing Authority (the “Authority”) the payment
of which secures the Authority’s 2007 Series A Refunding Bonds (the “2007 Authority Bonds”),
and to prepay its obligations under that certain Lease Agreement, dated as of May 1, 2011, by
and between the District and the Authority, the payment of lease payments under which secures
the Authority’s 2011 Revenue Bonds (the “2011 Authority Bonds, and, together with the 2007
Authority Bonds, the “Prior Bonds”); and (ii) pay certain costs associated with the issuance of
the Bonds.
The Bonds shall be substantially in the form described in, and shall be issued and secured
under and pursuant to, the Indenture, which shall be substantially in the form previously
submitted to the Underwriter with only such changes therein as shall be mutually agreed upon by
the District and the Underwriter. The Bonds shall be subject to redemption as provided in
Schedule I hereto, in the Official Statement and the Indenture.
3. The Underwriter agrees to make a bona fide public offering of all the Bonds at
prices not greater than (or yields lesser than) the respective initial public offering prices (or
yields) set forth on Schedule I attached hereto and incorporated herein by reference. The
Underwriter reserves the right to (i) overallot or effect transactions which stabilize or maintain
the market prices of the Bonds at levels above those which might otherwise prevail in the open
market and (ii) discontinue such stabilizing, if commenced, at any time. Subsequent to the initial
public offering, the Underwriter reserves the right to change the public offering prices (or yields)
as it deems necessary in connection with the marketing of the Bonds, provided that the
Underwriter shall not change the interest rates set forth on Schedule I. The Bonds may be
offered and sold to certain dealers at prices lower than such initial public offering prices.
4. The District hereby authorizes the use by the Underwriter of the Indenture, the
Continuing Disclosure Certificate dated the Closing Date (as defined in Section 7) (the
“Continuing Disclosure Certificate”), the Preliminary Official Statement, the Official Statement,
and any supplements or amendments thereto, and the information contained in each of such
documents, in connection with the public offering and sale of the Bonds.
Attachment 6
3
5. Within seven (7) business days from the date hereof, and in any event not later
than two (2) business days before the Closing Date, the District hereby agrees to deliver, or to
cause to be delivered, the Official Statement in “designated electronic format” (as defined in
Rule G-32 of the Municipal Securities Rulemaking Board (the “MSRB”)) to such addresses as
the Underwriter shall specify, in order to enable the Underwriter to comply with its obligations
pursuant to Rule 15c2-12(b)(4), Rule G-32 and all other applicable rules of the MSRB. The
Underwriter agrees to file the Official Statement (including the Official Statement as it may be
amended or supplemented) with the MSRB through its Electronic Municipal Market Access
system within one (1) Business Day after receipt from the District, but in no event later than the
Closing Date (as defined in Section 7 below).
6. The District will undertake, pursuant to the Continuing Disclosure Certificate, to
provide certain annual financial information and notices of certain events, as described in the
Official Statement.
7. At 8:00 A.M., Pacific Time, on [Closing Date], 2016, or at such other time or on
such other Business Day as shall have been mutually agreed upon by the District and the
Underwriter (the “Closing Date”), the District, subject to the terms and conditions hereof, will
cause the delivery of the Bonds to the Underwriter through the facilities of The Depository Trust
Company, New York, New York (“DTC”) and delivery of the other documents required hereby
at the offices of Orrick, Herrington & Sutcliffe LLP in San Francisco, California, or at such other
place as the District and the Underwriter may mutually agree upon, such Bonds to be in fully
registered book-entry form, duly executed and registered in the name of Cede & Co., as nominee
of DTC; and, subject to the terms and conditions hereof, the Underwriter will accept such
delivery and pay the purchase price of the Bonds by wire transfer in immediately available funds
to, or in care of, the Trustee as directed in a certificate of an Authorized Representative of the
District as shall have been mutually agreed upon by the District and the Underwriter; such
delivery of and payment for the Bonds is referred to herein as the “Closing.” The Bonds in
electronic format shall be made available for inspection by the Underwriter at least one Business
Day before the Closing.
8. The District represents, warrants and covenants to the Underwriter that:
a. The District is a regional open space district, duly organized and validly existing
pursuant to the laws of the State of California, with full legal right, power and authority to
undertake the activities described in and contemplated by the Preliminary Official Statement, the
Official Statement and this Bond Purchase Agreement, including without limitation the adoption,
execution and delivery of the documents and agreements described therein and herein as
documents and agreements to which it is a party;
b. (i) At or prior to the Closing, the District will have taken all action required to be
taken by it to authorize the issuance and delivery of the Bonds and the performance of its
obligations thereunder; (ii) the District has full legal right, power and authority to enter into the
Indenture, the Continuing Disclosure Certificate, the Escrow Agreement, dated as of _____1,
2016 (the “Escrow Agreement”) between the District, the Authority and The Bank of New York
Mellon Trust Company, N.A., as Escrow Agent (the “Escrow Agent”) and this Bond Purchase
Agreement (collectively, the “Legal Documents”) and to carry out and consummate the
Attachment 6
4
transactions contemplated by the Legal Documents, the Resolution and the Official Statement;
and (iii) this Bond Purchase Agreement has been duly executed and delivered and constitutes a
valid and legally binding obligation of the District enforceable in accordance with its terms;
(iv) the Bonds, when issued, authenticated and delivered to the Underwriter in accordance with
the terms of the Indenture, will constitute legal, valid and binding instruments, entitled to the
benefits of the Indenture and enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors rights generally, the application of equitable
principles, the exercise of judicial discretion and the limitations on legal remedies against public
entities in the State;
c. Between the date of this Bond Purchase Agreement and the date of the Closing,
except as contemplated by the Official Statement, the District will not incur any material
liabilities, direct or contingent, or enter into any material transaction, in either case other than in
the ordinary course of its business, and, except as contemplated by the Official Statement, there
shall not have been any material adverse change in the condition, financial or physical, of the
District other than changes in the ordinary course of business;
d. The District is not in in any material respect breach of or default under any
applicable constitutional provision, 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 to which the
District is otherwise subject, and no event has occurred and is continuing which, with the
passage of time or the giving of notice or both, would constitute a default or event of default
under any such instrument; and the execution and delivery of the Legal Documents, the adoption
and of the Resolution, and compliance with the provisions of the Legal Documents will not in
any material respect conflict with or constitute a breach of or default under any constitutional
provision, law, administrative regulation, judgment, court decree, loan agreement, indenture,
bond, note, resolution, agreement or other instrument to which the District is subject, or by
which it is bound;
e. Except as disclosed in the Preliminary Official Statement and the Official
Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before
or by any court, government agency, public board or body, pending against the District (with
service of process against the District having been accomplished) or, to the best knowledge of
the District, threatened against the District, (i) in any way questioning the existence of the
District or the titles of the officers of the District to their respective offices; (ii) affecting or
seeking to prohibit, restrain or enjoin the execution or delivery of any of the Bonds, or the
application of the proceeds of sale of the Bonds, or the collection of revenues pledged or to be
pledged to pay the principal or interest or other amounts due with respect to the Bonds, or the
execution and delivery by the District of this Bond Purchase Agreement; (iii) in any way
contesting or affecting the validity of the Bonds, the Resolution, the Legal Documents or the tax-
exempt status of interest due with respect to the Bonds; or (iv) contesting the completeness or
accuracy of the Preliminary Official Statement or the Official Statement or any supplement or
amendment thereto or asserting that the Preliminary Official Statement or the Official Statement
contained any untrue statement of a material fact or omitted to state any material fact necessary
Attachment 6
5
to make the statements therein, in light of the circumstances under which they were made, not
misleading;
f. The District will furnish such information, execute such instruments and take such
other action not inconsistent with law as the Underwriter may reasonably request (i) to qualify
the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such
states and other jurisdictions of the United States as the Underwriter may designate and (ii) to
determine the eligibility of the Bonds for investment under the laws of such states and other
jurisdictions, and will use commercially reasonable efforts to continue such qualifications in
effect so long as required for the distribution of the Bonds; provided, however, that the District
shall not be required to execute a general or special consent to service of process or qualify to do
business in connection with any such qualification or determination in any jurisdiction;
g. All authorizations, approvals, licenses, permits, consents and orders of any
governmental authority, legislative body, board, agency or commission having jurisdiction of the
matter which are required for the due authorization of, which would constitute a condition
precedent to or the absence of which would materially adversely affect the due performance by
the District of its obligations in connection with, the execution, sale and delivery of the Bonds
under this Bond Purchase Agreement have been duly obtained, except for such approvals,
consents and orders as may be required under the Blue Sky or securities laws of any state in
connection with the offering and sale of the Bonds; and, except as disclosed in the Preliminary
Official Statement and the Official Statement, all authorizations, approvals, licenses, permits,
consents and orders of any governmental authority, board, agency or commission, having
jurisdiction in the matter which are required for the due authorization of, which would constitute
a condition precedent to, or the absence of which would materially adversely affect the due
performance by the District of its respective obligations under the Bonds or the Legal Documents
have been duly obtained;
h. The Preliminary Official Statement (other than information permitted to be
omitted from the deemed final Preliminary Official Statement under Rule 15c2-12) as of its date
did not, and as of the date hereof does not, contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (excluding therefrom the information contained
under the caption “UNDERWRITING” and all information concerning the book-entry system set
forth under the caption “THE 2016 GREEN BONDS” and in Appendix G as to which no
representations or warranties are made);
i. At the time of the District’s acceptance hereof and (unless an event occurs of the
nature described in Section 8(k)) at all times during the period from the date of this Bond
Purchase Agreement to and including the date which is twenty-five (25) days following the end
of the underwriting period for the Bonds (as determined in accordance with Section 14 hereof),
the Official Statement does not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (excluding therefrom the
information contained under the caption “UNDERWRITING” and all information concerning
the book-entry system set forth under the caption “THE 2016 GREEN BONDS” and in
Appendix G as to which no representations or warranties are made);
Attachment 6
6
j. If the Official Statement is supplemented or amended pursuant to Section 8(k), at
the time of each supplement or amendment thereto and (unless subsequently again supplemented
or amended pursuant to such Section) at all times during the period from the date of this Bond
Purchase Agreement to and including the date which is twenty-five (25) days following the end
of the underwriting period for the Bonds (as determined in accordance with Section 14 hereof),
the Official Statement as so supplemented or amended, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
k. If during the period from the date of this Bond Purchase Agreement to and
including the date which is twenty-five (25) days following the end of the underwriting period
for the Bonds (as determined in accordance with Section 14 hereof) any event shall occur which
might or would cause the Official Statement, as then supplemented or amended, to contain any
untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading, the District shall notify the Underwriter of any such event and, if in the opinion of
the Underwriter and District Counsel such event requires the preparation and publication of a
supplement or amendment to the Official Statement, the District will prepare and furnish to the
Underwriter (i) a reasonable number of copies of the supplement or amendment to the Official
Statement in form and substance acceptable to the Underwriter, and [(ii) if such notification shall
be subsequent to the Closing, such legal opinion, certification, instruments and other documents
as the Underwriter may reasonably deem necessary to evidence the truth and accuracy of such
supplement or amendment to the Official Statement;]
l. The financial statements of, and other financial information regarding, the District
contained in the Official Statement fairly present the financial position and results of the
operations of the District as of the dates and for the periods therein set forth, and (i) the annual
audited financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied; (ii) the other historical financial information has been
determined on a basis substantially consistent with that of the District’s audited financial
statements included in the Official Statement; (iii) there has not been any material increase in
long-term debt or commitments or any material decrease in fund equity of the District, other than
through the normal course of operations of the District as compared to the audited financial
statements of the District for the year ended March 31, 2015 included in the Preliminary Official
Statement and the Official Statement; (iv) no events have occurred which would require
adjustments of or disclosures in the audited financial statements of the District as of and for the
year ended March 31, 2015, included in the Preliminary Official Statement and the Official
Statement, in order for them to be in conformity with generally accepted accounting principles;
and (v) the audited financial statements of the District as of and for the year ended March 31,
2015, included in the Preliminary Official Statement and the Official Statement, do not require
adjustments or additional disclosures essential to a fair presentation in conformity with generally
accepted accounting principles;
m. The consent of Chavan & Associates, LLP, Certified Public Accountants,
independent certified public accountants to the District, is not required for inclusion of their
report on the District’s financial statements for the fiscal year ended March 31, 2015 and
reference to such firm included in the Preliminary Official Statement and the Official Statement;
Attachment 6
7
n. Except as disclosed in the Official Statement, the District has not failed in the past
five years to comply in all material respects with any continuing disclosure undertakings with
regard to Rule 15c2-12 to provide annual reports or notices of events specified in such rule; and
o. The District has not been notified of any listing or proposed listing by the Internal
Revenue Service to the effect that the District is a bond issuer whose arbitrage certificates may
not be relied upon.
All representations, warranties and agreements of the District shall remain operative and
in full force and effect, regardless of any investigations made by the Underwriter or on the
Underwriter’s behalf, and shall survive delivery of the Bonds.
9. The Underwriter has entered into this Bond Purchase Agreement in reliance upon
the representations and warranties of the District contained herein, the covenants of the District
contained in the Bonds, the Legal Documents, and the performance by the District of its
obligations hereunder, both as of the date hereof and as of the Closing Date. The Underwriter’s
obligations under this Bond Purchase Agreement are and shall be subject to the following further
conditions:
a. The representations and warranties of the District contained herein shall be true
and correct in all material respects on the date hereof and at and as of the Closing, as if made at
and as of the Closing, except that all representations in respect of the Preliminary Official
Statement shall be deemed to have been made as of the date of this Bond Purchase Agreement,
and the statements made in all certificates and other documents delivered to the Underwriter at
the Closing pursuant hereto shall be true and correct in all material respects at the Closing; the
District shall be in compliance with each of the agreements made by it in this Bond Purchase
Agreement (unless such agreements are waived by the Underwriter); and there shall not have
occurred a material adverse change in the financial position, results of operations or financial
condition of the District which may result in any material adverse change which may have a
material adverse effect on the ability of the District to meet its obligations under the Bonds, the
Legal Documents and the Indenture;
b. At the time of the Closing, the Official Statement, the Resolution, the Legal
Documents and the Bonds, shall be in full force and effect, and shall not have been amended,
modified or supplemented (except as may be agreed to in writing by the Underwriter and the
District); all actions which, in the opinion of Orrick, Herrington & Sutcliffe LLP (“Bond
Counsel”), shall be necessary in connection with the transactions contemplated hereby, shall
have been duly taken and shall be in full force and effect; and the District shall perform or have
performed its obligations required under or specified in the Legal Documents, the Official
Statement, the Resolution and the Bonds to be performed at or prior to the Closing;
c. At the time of the Closing, the Official Statement (as amended and supplemented)
shall be true and correct in all material respects, shall not contain an untrue statement of a
material fact and shall not omit any statement or information necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading;
Attachment 6
8
d. At the time of the Closing, except as disclosed in the Official Statement, (i) no
default by the District shall have occurred and be continuing in the payment of the principal and
redemption premium, if any, of or interest on any bond, note or other evidence of indebtedness
issued by the District and (ii) no bankruptcy, insolvency or other similar proceeding in respect of
the District shall be pending or to the knowledge of the District contemplated;
e. At or prior to the Closing, the Underwriter shall receive the following documents:
(1) Copies of (a) the Resolution, certified by the District as having been duly
adopted by the District and as being in full force and effect on the date of Closing, and
(b) the Authority Resolution, certified by the Authority as having been duly adopted by
the Authority, and as being in full force and effect on the date of Closing;
(2) The opinion of Bond Counsel, dated the Closing Date, in substantially the
form included in the Official Statement as Appendix D, addressed to the District and
accompanied by a reliance letter addressed to the Underwriter;
(3) A supplemental opinion of Bond Counsel, dated the Closing Date, in form
and substance satisfactory to the Underwriter and Counsel to the Underwriter, addressed
to the District and the Underwriter, to the effect that (i) the District has duly and validly
executed the Bond Purchase Agreement, and the Bond Purchase Agreement constitutes
the legal, valid and binding agreement of the District, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or
hereafter enacted and to the exercise of judicial discretion in appropriate cases; (ii) the
Bonds are not subject to the registration requirements of the Securities Act of 1933, as
amended, and the Indenture is exempt from qualification pursuant to the Trust Indenture
Act of 1939, as amended; and (iii) the statements set forth in the Preliminary Official
Statement and the Official Statement (or if either shall be amended or supplemented, the
statements in the Preliminary Official Statement or Official Statement as so amended or
supplemented addressing the matters addressed in the statements) contained in the front
portion of the Preliminary Official Statement and the Official Statement under the
headings “THE 2016 GREEN BONDS,” “SECURITY AND SOURCE OF PAYMENT
FOR THE 2016 GREEN BONDS,” and “TAX MATTERS,” and in Appendices D and F
thereto, insofar as such statements purport to summarize certain provisions of the Bonds,
the Indenture and the opinion of Bond Counsel concerning certain tax matters relating to
the Bonds, are accurate in all material respects;
(4) A defeasance opinion of Bond Counsel relating to the Prior Bonds that are
defeased, dated the Closing Date, and addressed to the District, the Escrow Agent and the
Underwriter, in form and substance acceptable to the Underwriter;
(5) An opinion of Schiff Hardin LLP, disclosure counsel to the District, dated
the Closing Date, and addressed to the District and the Underwriter, substantially in the
form attached as Appendix A hereto;
(6) An opinion of General Counsel to the District, in form and substance
satisfactory to the Underwriter, dated the Closing Date, and addressed to the District and
Attachment 6
9
the Underwriter, substantially in the form attached as Appendix B hereto, and an opinion
of counsel to the Authority, dated the Closing Date, and addressed to the Authority and
the Underwriter, substantially in the form attached as Appendix C hereto;
(7) The opinion of Hawkins Delafield & Wood LLP, counsel to the
Underwriter dated the Closing Date addressed to the Underwriter, in form and substance
satisfactory to the Underwriter;
(8) A certificate signed by a duly authorized official of the District in form
and substance satisfactory to the Underwriter dated the Closing Date to the effect that
(A) each and all of the representations and warranties of the District contained in this
Bond Purchase Agreement and the Legal Documents are true and correct in all material
respects on and as of the Closing Date with the same effect as if made on the Closing
Date, except that all representations in respect of the Preliminary Official Statement shall
be deemed to have been made as of the date of this Bond Purchase Agreement, and no
event affecting the District has occurred since the date of the Official Statement which
either makes untrue or incorrect in any material respect as of the Closing Date any
statement or information contained in the Official Statement or is not reflected in the
Official Statement but should be reflected therein in order to make the statements and
information therein, in light of the circumstances under which they were or are made, not
misleading in any material respect; and (B) other than as set forth in the Preliminary
Official Statement and the Official Statement, no litigation is pending (with service of
process against the District having been accomplished) or, to the District’s knowledge,
threatened in any court to restrain or enjoin the execution or delivery of any of the Bonds,
or the application of the proceeds of sale of the Bonds, or the collection of the revenues
or other income or moneys pledged or to be pledged to pay the principal or interest or
other amounts due with respect to the Indenture or the Bonds, or in any way contesting or
affecting the adoption of the Resolution or the execution, delivery or validity or the
Indenture or the Bonds or the security therefor or the Indenture, or involving any of the
property or assets of the District or under the control of the District wherein an
unfavorable decision, ruling or finding would materially adversely affect the ability of the
District to perform its obligations under the Resolution, the Legal Documents or the
Bonds or the security for the Bonds or the exclusion of interest due with respect to the
Bonds from gross income for purposes of federal or state income taxation;
(9) [A certificate signed by a duly authorized official of the Authority in form
and substance satisfactory to the Underwriter dated the Closing Date to the effect that (A)
each and all of the representations and warranties of the Authority contained in the
Escrow Agreement are true and correct in all material respects on and as of the Closing
Date with the same effect as if made on the Closing Date; and (B) no litigation is pending
(with service of process against the District having been accomplished) or, to the
District’s knowledge, threatened in any court to restrain or enjoin the execution or
delivery of the resolution of the Authority approving the execution and delivery of the
Escrow Agreement, or in any way contesting or affecting the adoption of the Authority's
resolution or the execution, delivery or validity or the Escrow Agreement;];
Attachment 6
10
(10) A certificate signed by an authorized officer of the Trustee, addressed to
the Underwriter, in form and substance satisfactory to the Underwriter dated the Closing
Date to the effect that (i) the Trustee is a duly organized and validly existing national
banking association and has full power and authority to carry out its activities under the
Indenture, (ii) the Bonds have been duly authenticated and delivered by the Trustee in
accordance with the Indenture, (iii) each of the Indenture has been duly authorized,
executed and delivered by the Trustee and, assuming due authorization, execution and
delivery by the other party thereto, each of the Indenture is the valid, legal and binding
agreement of the Trustee, enforceable in accordance with its terms, and (iv) the execution
and delivery of the Indenture and the authentication and delivery of the Bonds, and
compliance with the provisions thereof, will not conflict with, or constitute a breach of or
default under, any law, administrative regulation, court decree, resolution, charter, by-law
or agreement to which the Trustee is subject or by which it is bound;
(11) An opinion of counsel to the Trustee, addressed to the Underwriter, in
form and substance satisfactory to the Underwriter dated the Closing Date to the effect
that (i) the Trustee has duly authorized, executed and delivered the Indenture the
Indenture constitutes a valid and legally binding agreements of the Trustee enforceable in
accordance with its terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditor’s rights, (ii) the Trustee has lawful authority for the
authentication and delivery of the Bonds, (iii) the Trustee has duly authenticated and
delivered the Bonds in accordance with the Indenture; (iv) the Trustee is a national
banking association duly organized, validly existing and in good standing under the laws
of the United States having full power and authority and being qualified to enter into,
accept and administer the trust created under the Indenture and to enter into such
Indenture; (v) the execution, delivery and performance of its duties under the Indenture
will not conflict with or cause a default under any law, ruling, agreement, administrative
regulation or other instrument by which the Trustee is bound; and (vi) no action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any court,
regulatory agency, public board or body, is served and pending or threatened in any way
affecting the existence of the Trustee or the titles of its directors or officers to their
respective offices, or seeking to restrain or enjoin the issuance, sale or delivery of the
Bonds or the application of proceeds thereof in accordance with the Indenture and the
Escrow Agreement, or in any way contesting or affecting the Bonds or the Indenture or
the Escrow Agreement;
(12) Executed copies of this Bond Purchase Agreement, the Indenture, the
Continuing Disclosure Certificate, the Escrow Agreement and the Official Statement,
together with a copy of the record of proceedings for the Bonds;
(13) A Tax Certificate of the District signed by an authorized officer of the
District;
(14) Evidence that the underlying credit ratings on the Bonds of “___” and
“___”, have been assigned by Standard & Poor’s Rating Service ("S&P") and Fitch
Attachment 6
11
Ratings ("Fitch"), respectively, and that each is in full force and effect on the Closing
Date;
(15) A copy of the Blue Sky Survey with respect to the Bonds;
(16) A copy of the District’s executed Blanket Letter of Representation to The
Depository Trust Company; and
(17) Such additional legal opinions, certificates, proceedings, instruments and
other documents as the Underwriter or Bond Counsel may reasonably request to evidence
compliance by the District with legal requirements, the accuracy, as of the time of
Closing, of the District’s representations herein contained 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.
If the District shall be unable to satisfy the conditions to the Underwriter’s obligations
contained in this Bond Purchase Agreement or if the Underwriter’s obligations shall be
terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase
Agreement shall terminate and neither the District nor the Underwriter shall have any further
obligation hereunder, nor any liability to any other party with respect to such termination.
10. The Underwriter may terminate this Bond Purchase Agreement by notification to
the District if at any time after the date hereof and prior to the Closing:
a. Legislation shall have been favorably reported for passage in either house of the
Congress of the United States of America by any committee of such house to which legislation
has been referred for consideration or has been enacted (or resolution passed) by the Congress of
the United States of America or recommended to the Congress by the President of the United
States, the Department of the Treasury, the Internal Revenue Service, or any member of
Congress, or favorably reported for passage to either House of Congress by any committee of
such House to which such legislation had been referred for consideration, or a decision rendered
by a court established under Article III of the Constitution of the United States of America or by
the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or
proposed), press release or other form of notice issued or made by or on behalf of the Treasury
Department of the United States of America or the Internal Revenue Service, with the purpose or
effect, directly or indirectly, that in the reasonable judgment of the Underwriter materially
adversely affects the marketability of the Bonds;
b. Legislation shall have been favorably reported for passage by either house of the
United States Congress by any committee of such house to which such legislation has been
referred for consideration, or has been enacted (or resolution passed) by the Congress or an
order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling,
regulation (final, temporary or proposed), press release or other form of notice issued or made by
or on behalf of the Securities and Exchange Commission, or any other governmental agency
having jurisdiction of the subject matter, to the effect that obligations of the general character of
the Bonds, including any or all underlying arrangements, are not exempt from registration under
or other requirements of the Securities Act of 1933, as amended, or that the Indenture is not
Attachment 6
12
exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as
amended, or that the issuance, offering or sale of obligations of the general character of the
Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official
Statement or otherwise is or would be in violation of the federal securities laws as amended and
then in effect;
c. A general suspension of trading in securities on the New York Stock Exchange, or
the imposition by the New York Stock Exchange or other national securities exchange, or any
governmental authority, of any material restrictions not now in force with respect to the Bonds,
or the material increase of any such restrictions now in force, including those relating to the
extension of credit by, or the charge to the net capital requirements of, the Underwriter, or a
general banking moratorium or limits on loans or the amounts of loans to investment banking
firms in general shall have been declared by federal, State of New York or State of California
officials authorized to do so;
d. The introduction, proposal or enactment of any amendment to the United States
Constitution or California Constitution or any action by any federal or California court,
legislative body, regulatory body or other authority materially adversely affecting the tax status
of the District, its property, income, securities (or interest thereon), the validity or enforceability
of the Resolution, the Indenture or the Bonds;
e. Any event occurring, or information becoming known which, in the judgment of
the Underwriter, makes untrue in any material respect any statement or information contained in
the Preliminary Official Statement or in the Official Statement, or has the effect the Preliminary
Official Statement or in the Official Statement contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading, and, in
either such event, (A) the District refuses to permit the Official Statement to be supplemented to
supply such statement or information in a manner satisfactory to the Underwriter or (B) the
effect of the Official Statement as so supplemented is, in the judgment of the Underwriter, to
materially adversely affect the market price or marketability of the Bonds or the ability of the
Underwriter to enforce contracts for the sale, at the contemplated offering prices (or yields), of
the Bonds;
f. There shall have occurred any outbreak or increase of hostilities or terrorism or
other local, national or international event, act, occurrence, calamity or crisis, or there shall have
occurred a financial crisis or a default with respect to the debt obligations of, or the institution of
proceedings under the federal or applicable state bankruptcy laws by or against, any agency or
instrumentality of the State of California, any state of the United States or agency thereof, or any
District located in the United States having a population of over one million the effect of which
on the financial markets of the United States of America, in the reasonable judgment of the
Underwriter, is such as to materially and adversely affect (A) the market price or the
marketability of the Bonds, or (B) the ability of the Underwriter to enforce contracts for the sale
of the Bonds;
g. There shall have been any material change in the affairs of the District, or the
Official Statement shall have been supplemented pursuant to Section 8(k) hereof, and in the
Attachment 6
13
reasonable judgment of the Underwriter, such change or supplement materially affects the
marketability of the Bonds or the market price of the Bonds;
h. Any rating of the Bonds shall have been downgraded, suspended or withdrawn by
a national rating service;
i. An order, decree or injunction of any court of competent jurisdiction, issued or
made to the effect that the issuance, offering or sale of obligations of the general character of the
Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying obligations,
as contemplated hereby or by the Preliminary Official Statement of the Official Statement, is or
would be in violation of any applicable law, rule or regulation, including (without limitation) any
provision of applicable federal securities law as amended and then in effect;
j. A stop order, ruling, regulation or official statement by the Securities and
Exchange Commission or any other governmental agency having jurisdiction of the subject
matter shall have been made or any other event occurs, the effect of which is that the issuance,
offering or sale of the Bonds, or the execution and delivery of the Legal Documents as
contemplated hereby or by the Preliminary Official Statement or the Official Statement, is or
would be in violation of any applicable law, rule or regulation, including (without limitation) any
provision of applicable federal securities laws, including the Securities Act of 1933, the
Securities and Exchange Act of 1934, or the Trust Indenture Act of 1939, each as amended and
as then in effect; or
k. Any litigation shall be instituted or pending (with service of process against the
District having been accomplished) at the time of the Closing to restrain or enjoin the issuance,
sale or delivery of the Bonds, or in any way contesting or affecting any authority for or the
validity of the proceedings, authorizing and approving the Bonds, the Resolution, the Legal
Documents or the existence or powers of the District with respect to its obligations under the
Legal Documents or the Bonds.
11. The District shall, except as set forth in the next succeeding paragraph, pay any
expenses incident to the performance of the District’s obligations hereunder, including but not
limited to the following: (i) the cost of the preparation, printing and delivery of the Bonds,
(ii) the fees for bond ratings, (iii) the cost of printing and distribution of the Indenture, the
Continuing Disclosure Certificate, the Preliminary Official Statement and the Official Statement,
(iv) the fees and disbursements of Orrick, Herrington & Sutcliffe LLP, as Bond Counsel, and of
Schiff Hardin LLP, Disclosure Counsel, (v) any fees and disbursements of the District’s
accountants (vii) the fees and disbursements of the Trustee and its counsel, (vii) the fees and
expenses of Backstrom McCarley Berry & Co., LLC, financial advisor to the District, (viii) the
fees and disbursements of any accountants, attorneys, auditors, experts, consultants or advisors
retained by the District, and (ix) any other costs and disbursements incurred by the District in
connection with the transaction. To the extent that the Underwriter, in order to facilitate the
transactions hereunder, has advanced funds to pay any expenses of the District incidental to this
Bond Purchase Agreement and the transactions hereunder (including, but not limited to,
transportation, lodging, meals and other ancillary costs of District representatives associated with
the financing), the District shall reimburse the Underwriter for such advances as part of the
Underwriter’s discount.
Attachment 6
14
The Underwriter shall pay (i) the fees and disbursements of Hawkins Delafield & Wood
LLP, retained by the Underwriter in connection with the purchase and sale of the Bonds pursuant
hereto as Underwriter’s counsel, (ii) the fee payable to the California Debt and Investment
Advisory Commission with respect to the sale of the Bonds, (iii) advertising expenses and all
other expenses incurred by the Underwriter in connection with the public offering and
distribution of the Bonds, (iv) fees and expenses related to obtaining CUSIP numbers, and
(v) expenses to qualify the Bonds for sale under any Blue Sky laws. Notwithstanding that the
fees payable to the California Debt and Investment Advisory Commission are solely the legal
obligation of the Underwriter, the District agrees to reimburse the Underwriter for such fees as
part of the Underwriter’s discount.
12. Any notice or other communication to be given to the District under this Bond
Purchase Agreement may be given by delivering the same in writing to Midpeninsula Regional
Open Space District, 330 Distel Circle, Los Altos, CA 94022-1404, Attention: Chief Financial
Officer, or to such other person as she may designate in writing, and any notice or other
communication to be given to the Underwriter under this Bond Purchase Agreement (other than
the acceptance hereof as specified in the first Paragraph hereof) may be given by delivering the
same in writing to Morgan Stanley & Co. LLC, 555 California Street, 21st Floor, San Francisco,
California 94104, Attention: Adam Aranda.
13. The validity, interpretation and performance of this Bond Purchase Agreement
shall be governed by the laws of the State of California.
14. The term “end of the underwriting period” means the later of such time as (i) the
District delivers the Bonds to the Underwriter or (ii) the Underwriter does not retain directly or
as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public.
Unless the Underwriter gives notice to the contrary, the “end of the underwriting period” shall be
deemed the Closing Date. Any notice delivered pursuant to this Section shall be written notice,
delivered to the District at or prior to the Closing, and shall specify a date, other than the Closing
Date (or other date specified by notice delivered pursuant to this Section), to be deemed the “end
of the underwriting period.”
15. This Bond Purchase Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
16. The District acknowledges and agrees that: (i) the transaction contemplated by
this Bond Purchase Agreement is an arm’s length, commercial transaction between the District
and the Underwriter in which the Underwriter is acting solely as a principal and is not acting as a
municipal advisor, financial advisor or fiduciary to the District; (ii) the Underwriter has not
assumed any advisory or fiduciary responsibility to the District with respect to the transaction
contemplated hereby and the discussions, undertakings and procedures leading thereto
(irrespective of whether Underwriter has provided other services or is currently providing other
services to the District on other matters); (iii) the only obligations the Underwriter has to the
District with respect to the transaction contemplated hereby expressly are set forth in this Bond
Purchase Agreement; and (iv) the District has consulted its own legal, accounting, tax, financial
and other advisors, as applicable, to the extent it has deemed appropriate.
Attachment 6
15
[Signature Page Follows]
Attachment 6
16
17. This Bond Purchase Agreement when accepted by the District in writing as
heretofore specified shall constitute the entire agreement between the District and the
Underwriter and is made solely for the benefit of the District and the Underwriter (including the
successors or assigns of the Underwriter or any members of the syndicate, if any). No other
person shall acquire or have any right hereunder or by virtue hereof.
Very truly yours,
MORGAN STANLEY & CO. LLC
By: ____________________________________
Executive Director
Agreed and Accepted this
____ day of _________ at ___:___ a.m./p.m.
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
By: __________________________________
[Chief Financial Officer]
Attachment 6
2666982.4 040876 AGMT
SCHEDULE I
[TO COME]
Attachment 6
B-1
2666982.4 040876 AGMT
APPENDIX B
FORM OF DISCLOSURE COUNSEL OPINION
[Closing Date]
Midpeninsula Regional Open Space District
Los Altos, California
Morgan Stanley & Co. LLC
San Francisco, California
Re: $[Principal Amount]
Midpeninsula Regional Open Space District, California
Green Bonds, 2016 Refunding
Attachment 6
B-1
2666982.4 040876 AGMT
APPENDIX B
FORM OF DISTRICT COUNSEL OPINION
[Closing Date]
Midpeninsula Regional Open Space District
Los Altos, California
Morgan Stanley & Co. LLC
San Francisco, California
Re: $[Principal Amount]
Midpeninsula Regional Open Space District, California
Green Bonds, 2016 Refunding
[to be revised]
Ladies and Gentlemen:
We have acted as counsel to the Midpeninsula Regional Open Space District (the
“District”) in connection with the issuance by the District of its Green Bonds, 2016 Refunding
(the “Bonds”) in the aggregate principal amount of $[Principal Amount] and the sale of such
Bonds pursuant to the Bond Purchase Agreement dated [Pricing Date], 2016 (the “Bond
Purchase Agreement”) between the District and Morgan Stanley & Co. LLC.
In connection therewith, we have examined originals or copies certified or otherwise
identified to our satisfaction of such documents, records and other instruments as we have
deemed necessary or appropriate for the purpose of this opinion, including (i) Resolution No. __
adopted by the District of Directors of the District (the "Board") on ________, 2016 (the “Board
Resolution”), (ii) an Indenture, dated as of _______ 1, 2016, by and between the District and
Zions Bank, a division of ZB, National Association, as trustee (the “Trustee”), (collectively, the
“Indenture”), (iii) the Preliminary Official Statement of the District relating to the Bonds dated
_______, 2016 (the “Preliminary Official Statement”) and the Official Statement of the District
relating to the Bonds dated [Pricing Date], 2016 (the “Official Statement”), (iv) the Escrow
Agreement, dated as of _______, 2016 (the "Escrow Agreement"), by and between the District
and The Bank of New York Mellon Trust Company, N.A. (the "Escrow Agent"), (v) the
Continuing Disclosure Certificate, dated [Closing Date], 2016 (the “Continuing Disclosure
Certificate”), executed by the District, (vi) the Tax Certificate, dated the date hereof and
executed by the District, and (vii) the various proceedings of the District and certificates and
counsel opinions executed and delivered in connection with the sale of the Bonds.
Based upon the foregoing and upon consideration of applicable law, and subject to the
qualifications provided herein, we are of the opinion that:
1. The District is duly organized and validly existing under the laws of the State of
California.
Attachment 6
B-2
2666982.4 040876 AGMT
2. The District Resolution was duly adopted, and the Indenture, the Bond Purchase
Agreement, the Escrow Agreement and the Continuing Disclosure Certificate (the “District
Legal Documents”) and the Preliminary Official Statement and the Official Statement were duly
approved and authorized to be executed, at a meeting of the governing body of the District,
which was called and held pursuant to law and with all public notice required by law and at
which a quorum was present and acting throughout.
3. The District has the right and power under law to adopt the District Resolution
and to enter into the District Legal Documents. The District Legal Documents are valid and
binding upon the District and enforceable in accordance with its terms (except as enforcement
may be limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws
relating to the enforcement of creditor’s rights generally). No other authorization for the
adoption of the District Resolution, the execution and delivery of the Indenture and the issuance
of the Bonds is required (except for “Blue Sky” laws and other securities regulation of which we
express no opinion).
4. Other than as described in the Preliminary Official Statement and the Official
Statement, there is no action, suit, proceeding, or investigation at law or in equity before or by
any court, public board or body, pending (with service of process against the District having
been accomplished) or, to the best of our knowledge, threatened against or affecting the District
(i) to restrain or enjoin the issuance or the delivery of the Bonds, (ii) in any way contesting or
affecting any authority for the issuance of the Bonds or the validity of the Bonds, the Indenture
or the District Resolution, (iii) in any way contesting the existence or powers of the District with
respect to the issuance of the Bonds or the security therefore, or (iv) if determined adversely to
the District, would have a material, adverse impact on the operations or finances of the District.
5. The execution and delivery of the District Legal Documents by the District, and
performance by the District of its obligations thereunder, will not in any material manner conflict
with or result in a breach of any of the terms, conditions or provisions of any agreement or
instrument to which the District is a party or by which it is bound or constitute a default
thereunder.
6. The District is not in material breach of or default under any applicable law or
administrative regulation of the State or any applicable judgment or decree or any lease
agreement, indenture, bond, note, resolution, agreement or other instrument to which the District
is a party or is otherwise subject which breach or default would, materially adversely affect the
District’s ability to enter into or perform its obligations under the District Legal Documents, and
no event has occurred and is continuing which, with the passage of time or the giving of notice,
or both, would constitute such a breach or default.
7. To the best of my knowledge, the information in the Preliminary Official
Statement and the Official Statement concerning the District (excluding therefrom financial
statements and other statistical data included in the Official Statement, and the information
contained under the caption “UNDERWRITING” and all information concerning the book-entry
system set forth under the caption “The 2016 Green Bonds” and in Appendix G, as to which no
view is expressed) does not contain any untrue statement of a material fact or omit to state a
Attachment 6
B-3
2666982.4 040876 AGMT
material fact required to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Very truly yours,
Attachment 6
B-4
2666982.4 040876 AGMT
APPENDIX C
FORM OF AUTHORITY COUNSEL OPINION
[Closing Date]
Midpeninsula Regional Open Space District Financing Authority
Los Altos, California
Morgan Stanley & Co. LLC
San Francisco, California
Re: $[Principal Amount]
Midpeninsula Regional Open Space District, California
Green Bonds, 2016 Refunding
[form to come]
Ladies and Gentlemen:
Attachment 6
R-16-98
Meeting 16-01
August 10, 2016
FINANCING AUTHORITY AGENDA ITEM 1
AGENDA ITEM
Resolution Authorizing the Early Redemption and Execution of All Necessary Documents in
Connection with the 2016 Green Bonds
EXECUTIVE DIRECTOR AND CONTROLLER’S RECOMMENDATION
Adopt a Resolution of the Board of Directors of the Midpeninsula Regional Open Space District
Financing Authority authorizing the early redemption of the 2007 Series A Revenue Refunding
Bonds and 2011 Revenue Bonds, and Approving Forms and Execution of an Escrow Agreement,
and Authorizing the taking of all necessary actions in connection with the 2016 Green Bonds.
DISCUSSION
In order to achieve significant cash flow savings over the next 25 years, District staff is
proposing to refinance the Financing Authority’s 2007 Series A Revenue Refunding Bonds and
the callable portion of the 2011 Revenue Bonds (together “Prior Bonds”) in order to take
advantage of today’s very low interest rates and achieve significant debt service savings.
Attachments
1. Resolution Authorizing the Execution and Delivery of Documents in Connection with the
Refinancing of the Authority’s Outstanding 2007 Series A Revenue Refunding Bonds and
the 2011 Revenue Bonds, and Approving Related Documents and Official Actions
2. 2016 Bonds Escrow Agreement
Responsible Manager:
Stefan Jaskulak, Chief Financial Officer
Prepared by:
Lisa Tulee, Senior Management Analyst
Contact Person:
Stefan Jaskulak, Chief Financial Officer
OHSUSA:765556272.5
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY
RESOLUTION NO. 16-____
RESOLUTION OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
FINANCING AUTHORITY AUTHORIZING THE EARLY REDEMPTION OF
REVENUE BONDS, SERIES 2007 AND REVENUE BONDS, SERIES 2011, AND
APPROVING FORMS AND EXECUTION OF AN ESCROW AGREEMENT, AND
AUTHORIZING THE TAKING OF ALL NECESSARY ACTIONS IN CONNECTION
THEREWITH.
WHEREAS, the Midpeninsula Regional Open Space District (the “District”)
previously issued certain outstanding refunding promissory notes (the “2007 Notes”) currently
held by the Midpeninsula Regional Open Space District Financing Authority (the “Authority”),
the payment of which secures the Authority’s outstanding 2007 Series A Revenue Refunding
Bonds (1996 and 1999 Refinancing Project) (the “2007 Authority Bonds”);
WHEREAS, the Authority heretofore issued its 2007 Authority Bonds pursuant to
an Indenture of Trust, dated as of January 1, 2007 (the “2007 Indenture”), by and between the
Authority and The Bank of New York Mellon Trust Company, N.A., as successor trustee (the
“2007 Trustee”);
WHEREAS, the Authority heretofore entered into a Lease Agreement, dated as of
May 1, 2011, by and between the District and the Authority, under which the District makes
lease payments to the Authority (the “Lease Payments”);
WHEREAS, the Authority heretofore issued its 2011 Revenue Bonds (the “2011
Authority Bonds” and, together with the 2007 Authority Bonds, the “Authority Bonds”) pursuant
to an Indenture of Trust dated as of May 1, 2011(the “2011 Indenture”), by and between the
Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the “2011
Trustee”);
WHEREAS, the Authority has assigned its right to receive the Lease Payments to
the 2011 Trustee as security and the source of payment for the 2011 Authority Bonds;
WHEREAS, the outstanding 2007 Authority Bonds are subject to optional
redemption on September 1, 2016 and on any date thereafter, and the outstanding 2011 Authority
Bonds maturing on and after September 1, 2022 are subject to optional redemption on September
1, 2021 and on any date thereafter;
WHEREAS, the District intends to issue its Midpeninsula Regional Open Space
District Green Bonds, 2016 Refunding (the “2016 Green Bonds”) to refund its outstanding
obligations under the 2007 Notes and thereby direct the redemption of the 2007 Authority
Bonds, and to prepay a portion of its obligations under the Lease Agreement thereby providing
Attachment 1
2
OHSUSA:765556272.5
funds for the defeasance and redemption of the portion of the 2011 Authority Bonds that are
subject to optional redemption (such callable 2011 Authority Bonds, together with the
outstanding 2007 Authority Bonds, the “Prior Bonds”);
WHEREAS, this Board of Directors of the Authority (this “Board”) hereby
determines that it is desirable to assist the District in this refinancing by calling the 2007
Authority Bonds for redemption, and by using the proceeds received from the District’s 2016
Green Bonds to redeem the 2007 Authority Bonds and, to establish an escrow agreement to
provide for the defeasance and redemption of the callable portion of the 2011 Authority Bonds;
WHEREAS, this Board has been presented with a form of an Escrow Agreement
related to the callable 2011 Authority Bonds by and between the District, the Authority and The
Bank of New York Mellon Trust Company, N.A., as escrow agent (the “Escrow Agent”); and
WHEREAS, the Authority has full legal right, power and authority under the
Constitution and the laws of the State of California to enter into the transactions hereinafter
authorized;
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the
Midpeninsula Regional Open Space District Financing Authority, as follows:
Section 1.The Authority hereby specifically finds and declares that the
statements, findings and determinations of the Authority set forth above are true and correct.
Section 2.The Authority hereby determines that it is necessary and in the best
interest of the Authority to assist the District by providing for the redemption and defeasance of
the Prior Bonds by the payment of the outstanding principal of and accrued interest on such
bonds to the respective dates of redemption thereof from the proceeds of the District’s 2016
Green Bond and investment earnings thereon.
Section 3.The form of Escrow Agreement by and between the District, the
Authority and The Bank of New York Mellon Trust Company, N.A., as Escrow Agent, on file
with the Secretary of the Board is hereby approved. The Chairperson, Treasurer or Controller of
the Authority (each an “Authorized Authority Officer”) are hereby severally authorized and
directed to execute and deliver the Escrow Agreement in substantially said form, with such
changes therein as such officer may require or approve, such approval to be conclusively
evidenced by the execution and delivery thereof. The Escrow Agent is hereby authorized and
directed to give notice of redemption of the callable 2011 Authority Bonds to be redeemed as
shall be required by the Escrow Agreement and pursuant to the terms of the Indenture with
respect to the 2011 Authority Bonds.
Section 4.The officers of the Authority are hereby authorized and directed,
jointly and severally, to do any and all things which they may deem necessary or advisable in
order to consummate the call and redemption of the Prior Bonds described herein and otherwise
give effect to and comply with the terms and intent of this Resolution, including, but not limited
to, determination of the appropriate redemption dates, providing for the purchase of escrow
securities, and engaging certified public accountants to verify the sufficiency of funds deposited
in escrow. The Members of the Board, the Secretary of the Board, the Authorized Authority
Attachment 1
3
OHSUSA:765556272.5
Officers, and the other officers of the Authority are hereby severally authorized and directed to
execute and deliver any and all certificates and representations necessary or desirable to
accomplish the transactions set forth above.
Section 5.All actions heretofore taken by the officers and agents of the
Authority with respect to the transactions contemplated hereby are hereby ratified, confirmed
and approved.
Section 6.This Resolution shall take effect from and after its date of
adoption.
* * * * * * * * * * * * * * * * * * * *
PASSED AND ADOPTED this 10th day of August, 2016 by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST: APPROVED:
______________________________________ ______________________________________
Secretary
Board of Directors
President
Board of Directors
APPROVED AS TO FORM:
______________________________________
General Counsel
Attachment 1
4
OHSUSA:765556272.5
SECRETARY’S CERTIFICATE
I, , Secretary of the Board of the Midpeninsula Regional
Open Space District Financing Authority, hereby certify as follows:
The foregoing is a full, true and correct copy of a resolution duly adopted at a
regular meeting of the Board of Directors of said Authority duly and regularly held at the regular
meeting place thereof on the 10th day of August, 2016, of which meeting all of the members of
said Board had due notice and at which a majority thereof were present; and at said meeting said
resolution was adopted by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
An agenda of said meeting was posted at least 72 hours before said meeting at
330 Distel Circle, Los Altos, California, a location freely accessible to members of the public,
and a brief general description of said resolution appeared on said agenda.
I have carefully compared the same with the original minutes of said meeting on
file and of record in my office; the foregoing resolution is a full, true and correct copy of the
original resolution adopted at said meeting and entered in said minutes; and said resolution has
not been amended, modified or rescinded since the date of its adoption, and the same is now in
full force and effect.
WITNESS my hand and the seal of the Midpeninsula Regional Open Space
District Financing Authority this day of __________, 2016.
________________________________________
Authority Secretary
Attachment 1
OHS DRAFT 8/3/16
OHSUSA:765365695.6
ESCROW AGREEMENT
Dated as of September 1, 2016
by and between the
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
and
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
as Escrow Agent
RELATING TO THE
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
FINANCING AUTHORITY 2011 REVENUE BONDS
Attachment 2
TABLE OF CONTENTS
Page
OHSUSA:765365695.6
Recitals ..................................................................................................................................1
Section 1 Establishment and Maintenance of the Escrow Fund ..............................................2
Section 2. Payment from the Escrow Fund ...............................................................................2
Section 3. Accounting for Escrow; Substitutions .....................................................................2
Section 4. Investments and Reinvestments ...............................................................................3
Section 5. Deficiencies in the Escrow Fund .............................................................................3
Section 6. Notice of Redemption; Notice of Defeasance .........................................................3
Section 7. Compensation and Indemnification of the Escrow Agent .......................................4
Section 8. Functions of the Escrow Agent ................................................................................4
Section 9. Amendment of the Escrow Agreement ....................................................................5
Section 10. Notices .....................................................................................................................5
Section 11. Severability ..............................................................................................................6
Section 12. Governing Law ........................................................................................................6
Section 13. Execution .................................................................................................................6
SCHEDULE 1 Refunded Bonds .................................................................................................. 1-1
SCHEDULE 2 Escrow Securities ................................................................................................ 2-1
SCHEDULE 3 Refunding Requirements ..................................................................................... 3-1
EXHIBIT A Form of Notice to 2011 Trustee of Prepayment .................................................... A-1
EXHIBIT B Form of Notice of Redemption ...............................................................................B-1
EXHIBIT C Form of Notice of Defeasance ................................................................................C-1
Attachment 2
OHSUSA:765365695.6
ESCROW AGREEMENT
This Escrow Agreement (the “Escrow Agreement”), dated as of September 1,
2016, by and among 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”), the Midpeninsula Regional Open Space District Financing Authority, a joint powers
authority duly organized and existing under the laws of the State of California (the “Authority”)
and The Bank of New York Mellon Trust Company, N.A., 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 Los Angeles, California, and being qualified to accept and
administer the escrow hereby created (the “Escrow Agent”);
WITNESSETH:
WHEREAS, the District previously entered into a Lease Agreement (the “Lease
Agreement”), dated as of May 1, 2011, by and between the District and the Authority, under
which the District remits lease payments to the Authority (the “Lease Payments”); and
WHEREAS, the Authority duly issued and delivered $20,500,000 principal
amount of its 2011 Revenue Bonds (the “Bonds”) under an Indenture (the “Indenture”) dated as
of May 1, 2011, by and between the District and The Bank of New York Mellon Trust Company,
N.A., as trustee (the “2011 Trustee”), of which $[________] principal amount is currently
outstanding; and
WHEREAS, the Authority has assigned its right to receive the Lease Payments to
the 2011 Trustee as security and the source of payment for the Bonds;
WHEREAS, the outstanding Bonds maturing on and after September 1, 2022
are subject to optional redemption on September 1, 2021 (the “Redemption Date”) and on any
date thereafter; and
WHEREAS, pursuant to a Resolution of the District adopted on _______, 2016,
the District is issuing its Midpeninsula Regional Open Space District Green Bonds, 2016
Refunding (the “2016 Green Bonds”), in part to prepay a portion of its obligation under the
Lease Agreement, and thereby cause the defeasance of the Bonds described in Schedule 1
attached hereto (the “Refunded Bonds”) and to cause the redemption of the Refunded Bonds on
the Redemption Date; and
WHEREAS, the Escrow Agent hereby confirms that the Refunded Bonds are
Outstanding (as defined in the Indenture) under the Indenture as of the date hereof and have not
been previously defeased and redeemed and the Authority hereby confirms that the right to
defease and redeem the Refunded Bonds had not been sold or previously exercised; and
WHEREAS, in order to implement the foregoing, the District has taken action, on
behalf of itself and the Authority, to cause to be delivered to the Escrow Agent, for deposit in the
Escrow Fund hereinafter referred to, the sum of $[_________] from the proceeds of the 2016
Green Bonds, a portion of which sum will be used to purchase those certain United States
Attachment 2
2
OHSUSA:765365695.6
Treasury obligations (the “Escrow Securities”) listed in Schedule 2 attached hereto, the receipts
from the interest on and principal of which Escrow Securities, together with the unexpended
money from such initial deposit into the Escrow Fund, will be sufficient, as certified by Causey,
Demgen & Moore Inc., certified public accountants, in their Verification Report on file with the
District and the Escrow Agent, to provide for the prepayment of the Lease Agreement with
respect to the portion of the Lease Payments allocable to the Refunded Bonds, listed in Schedule
3 attached hereto, which the Escrow agent is hereby directed to apply to the payment and
redemption of the Refunded Bonds at the times and in the amounts and subject to the limitations
provided in Section 2 hereof;
NOW, THEREFORE, the District, the Authority and the Escrow Agent hereby
agree as follows:
Section 1. Establishment and Maintenance of the Escrow Fund. The Escrow
Agent agrees to establish and maintain the Escrow Fund (the “Escrow Fund”) until all the
Refunded Bonds have been paid and redeemed as provided in Section 2 hereof, and to hold the
Escrow Securities and the money (whether constituting the initial deposit in the Escrow Fund or
constituting receipts from the sale of or the maturity of the Escrow Securities) in the Escrow
Fund at all times as a separate escrow account wholly segregated from all other securities,
investments or money held by it. All Escrow Securities and money in the Escrow Fund are
hereby irrevocably pledged to secure the payment and redemption of the Refunded Bonds as
provided in Section 2 hereof (the “Refunding Requirements”); provided, that any money held in
the Escrow Fund that is not used for the payment and redemption of the Refunded Bonds as
provided in Section 2 hereof shall be repaid to the District free from the trust created by the
Escrow Agreement.
The Escrow Agent shall hold all Escrow Securities, whether acquired as initial
investments, subsequent investments or reinvestments hereunder, and the money received from
time to time as principal and interest thereon, in trust, to secure, and for the payment of the
Refunding Requirements, and shall collect the principal of and interest on the Escrow Securities
held by it hereunder promptly as such principal and interest become due.
Section 2. Payment from the Escrow Fund. The Escrow Agent is hereby
irrevocably instructed to, and the Escrow Agent hereby agrees to, sell and collect and deposit in
the Escrow Fund the proceeds of the Escrow Securities held in the Escrow Fund, and to use such
proceeds, together with any other money deposited in the Escrow Fund, to make the interest
payments on the Refunded Bonds as they come due until the Redemption Date to (as such
payments are set forth on Schedule 3 attached hereto) and on the Redemption Date to redeem all
Refunded Bonds at the redemption price thereof, together with the interest accrued thereon to,
but not including, the Redemption Date, at the times and places and in the manner specified in
the Indenture.
Section 3. Accounting for Escrow; Substitutions. The moneys and the Escrow
Securities from time to time accounted for in the Escrow Fund shall not be subject to withdrawal by
the District or the Authority nor otherwise subject to the order of the District or Authority except as
otherwise provided in Section 2 hereof.
Attachment 2
3
OHSUSA:765365695.6
There shall be no exchange or substitution of the Escrowed Securities, except upon
(i) the written direction of the Authority, (ii) receipt by the District, the Authority and the 2011
Trustee of a new verification report, prepared by an independent certified public accountant,
verifying the sufficiency of the escrow to pay the Refunding Requirements of the Refunded Bonds
in full on their respective interest payment dates or redemption dates and (iii) receipt of an opinion
of nationally recognized bond counsel to the effect that such exchange or substitution will not
adversely affect the exemption from federal income tax of interest on the 2016 Green Bonds or
Refunded Bonds.
Section 4. Investments and Reinvestments. The Escrow Agent shall have no
obligation by virtue of the Escrow Agreement, general trust law or otherwise to make any
investment or reinvestment of any moneys in the Escrow Fund at any time except as otherwise
provided in this Escrow Agreement or as hereafter directed by the Authority and upon (i) receipt of
an opinion of nationally recognized bond counsel to the effect that such investment or reinvestment
will not adversely affect the exemption from federal income tax of interest on the 2016 Green
Bonds or the Refunded Bonds and (ii) receipt by the District, the Authority and the 2011 Trustee of
a new verification report, prepared by an independent certified public accountant, verifying the
sufficiency of the escrow to pay the Refunding Requirements of the Refunded Bonds in full on their
respective interest payment dates or redemption dates. Except as is otherwise directed by the
Authority in accordance with the provisions of this Escrow Agreement, any moneys in the Escrow
Fund not needed to pay the principal of, premium, if any, or interest on the Refunded Bonds on any
payment date therefor shall be held by the Escrow Agent uninvested.
The District and the Authority acknowledge that to the extent regulations of the
Comptroller of the Currency of other applicable regulatory entity grant the District and/or the
Authority the right to receive brokerage confirmations of security transactions as they occur, the
District and the Authority will not receive such confirmations to the extent permitted by law. The
Escrow Agent will furnish the District and the Authority periodic cash transaction statement which
shall include detail for all investment transactions made by the Escrow Agent hereunder.
Section 5. Deficiencies in the Escrow Fund. If at any time it shall appear to the
Escrow Agent that the money in the Escrow Fund will not be sufficient to make all payments
required by Section 2, the Escrow Agent shall notify the District and the Authority in writing as
soon as reasonably practicable of such fact, stating the amount of such deficiency and the reason
therefor, and the District shall use its best efforts to obtain and deposit with the Escrow Agent for
deposit in the Escrow Fund, from any legally available moneys, all such additional money as
may be required to provide for the payment and redemption of the Refunded Bonds in
accordance with the conditions and terms of the Indenture and hereof; provided, that the Escrow
Agent shall in no event or manner be responsible for the failure of the District to make any such
deposit.
Section 6. Notice of Redemption; Notice of Defeasance.
(a) The Authority hereby irrevocably instructs the Escrow Agent to give timely
notice of the redemption of the Refunded Bonds to Bondholders in accordance with Section 4.03
of the Indenture, and said notice shall be substantially in the form of the notices attached hereto as
Exhibit A and Exhibit B.
Attachment 2
4
OHSUSA:765365695.6
(b) The Escrow Agent, acting as 2011 Trustee and dissemination agent (the
“Dissemination Agent”), is hereby irrevocably instructed to provide notice, on the earliest
practicable date, of the defeasance of the Refunded Bonds in accordance with Section 5(f) of the
Continuing Disclosure Agreement between the District and the Escrow Agent, in its capacity as
Dissemination Agent thereunder, related to the Refunded Bonds in the form set forth in Exhibit C.
Section 7. Compensation and Indemnification of the Escrow Agent.
(a) The District shall pay the Escrow Agent a one-time fee for its services
hereunder and shall reimburse the Escrow Agent for its reasonable out-of-pocket expenses
(including but not limited to the reasonable fees and expenses, if any, of its counsel or
accountants) incurred by the Escrow Agent in connection with these services, all as more
particularly agreed upon by the District and the Escrow Agent; provided, that these fees and
expenses shall in no event be deducted from the Escrow Fund.
(b) The District and the Authority agree to indemnify the Escrow Agent and
its agents, directors, officers and employees, and hold the Escrow Agent and its agents, directors,
officers and employees harmless from, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind (including, without
limitation, reasonable fees and disbursements of counsel or accountants for the Escrow Agent)
which may be imposed on, incurred by, or asserted against the Escrow Agent or such other party
at any time by reason of its performance of Escrow Agent’s services, in any transaction arising
out of the Escrow Agreement or any of the transactions contemplated herein, unless due to the
negligence or willful misconduct of the particular indemnified party. The provisions of this
section shall survive the removal or resignation of the Escrow Agent.
Section 8. Functions of the Escrow Agent.
(a) The Escrow Agent undertakes to perform only such duties as are expressly
and specifically set forth in the Escrow Agreement and no implied duties or obligations shall be
read into the Escrow Agreement against the Escrow Agent.
(b) The Escrow Agent may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, and shall be protected and indemnified as
stated in the Escrow Agreement, in acting, or refraining from acting, upon any written notice,
instruction, request, certificate, document, electronic mail, facsimile transmission, report or
opinion furnished to the Escrow Agent and believed by the Escrow Agent to have been signed or
presented by the proper party, and it need not investigate any fact or matter stated in such notice,
instruction, request, certificate, document, electronic mail, facsimile transmission, report or
opinion.
(c) The Escrow Agent shall not have any liability hereunder except to the
extent of its own negligence or willful misconduct. In no event shall the Escrow Agent be liable
for any special, indirect or consequential damages, even if parties know of the possibility of such
damages. The Escrow Agent shall have no duty or responsibility under the Escrow Agreement
in the case of any default in the performance of agreements or covenants contained in the
Indenture or in the case of the receipt of any written demand with respect to such default. The
Attachment 2
5
OHSUSA:765365695.6
Escrow Agent is not required to resolve conflicting demands to money or property in its
possession under the Escrow Agreement.
(d) The Escrow Agent may consult with counsel of its own choice (which
may be counsel to the District) and, notwithstanding anything to the contrary contained herein,
the opinion of such counsel shall be full and complete authorization to take or suffer in good
faith any action in accordance with such opinion of counsel.
(e) The Escrow Agent shall not be responsible for any of the recitals or
representations contained herein, and shall not be liable for any action or omission of the District
under the Escrow Agreement.
(f) The Escrow Agent shall not be liable for the accuracy of the calculations
as to the sufficiency of the Escrow Securities and money in the Escrow Fund to pay and redeem
the Refunded Bonds as provided in Section 2 hereof.
(g) Whenever in the administration of the trust of the Escrow Agreement the
Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to
taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or willful misconduct on the
part of the Escrow Agent, be deemed to be conclusively proved and established by a certificate
of the District, and such certificate shall, in the absence of negligence or willful misconduct on
the part of the Escrow Agent, be full warrant to the Escrow Agent for any action taken or
suffered by it under the provisions of the Escrow Agreement upon the faith thereof.
Section 9. Amendment of the Escrow Agreement. The Escrow Agreement
may not be revoked or amended by the parties hereto unless there shall first have been filed with
the District, the Authority and the Escrow Agent (i) an unqualified opinion of a nationally
recognized bond counsel that such amendment will not adversely affect the exclusion from gross
income for federal income tax purposes of interest on the Refunded Bonds, and (ii) unless such
amendment is not materially adverse to the interests of the registered owners of the Refunded
Bonds, the written consent of the registered owners of all the Refunded Bonds.
Section 10. Notices. All notices and communications hereunder shall be in
writing and shall be deemed to be duly given if received or sent by first class mail, as follows:
If to the District:
Midpeninsula Regional Open Space District
330 Distel Circle
Los Altos, California 94022
Attention: General Manager
If to the Authority:
Midpeninsula Regional Open Space District Financing Authority
Attachment 2
6
OHSUSA:765365695.6
330 Distel Circle
Los Altos, California 94022
Attention: Authorized Officer
If to the Escrow Agent:
The Bank of New York Mellon Trust Company, N.A.
400 South Hope Street, Suite 500
Los Angeles, California 90071
Attention: Corporate Trust Department
Section 11. Severability. If any section, paragraph, sentence, clause or
provision of the Escrow Agreement shall for any reason be held to be invalid or unenforceable,
the invalidity or unenforceability of such section, paragraph, sentence, clause or provision shall
not affect any of the remaining provisions of the Escrow Agreement.
Section 12. Governing Law. The Escrow Agreement shall be construed and
governed in accordance with the laws of the State of California.
Section 13. Execution. The Escrow Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all together shall
constitute but one and the same agreement.
Attachment 2
7
OHSUSA:765365695.6
IN WITNESS WHEREOF, the District, the Authority and the Escrow Agent have
caused the Escrow Agreement to be executed each on its behalf as of the day and year first above
written.
MIDPENINSULA REGIONAL OPEN SPACE
DISTRICT
By
General Manager
MIDPENINSULA REGIONAL OPEN SPACE
DISTRICT FINANCING AUTHORITY
By
Authorized Officer
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
as Escrow Agent
By
Authorized Officer
Attachment 2
1-1
OHSUSA:765365695.6
SCHEDULE 1
Refunded Bonds
The Refunded Bonds constitute the portion of the currently outstanding
Midpeninsula Regional Open Space District Financing Authority 2011 Revenue Bonds that are
subject to optional redemption on September 1, 2021, as follows:
Principal
Amount
Maturity Date
(September 1)
$ 20__
Attachment 2
2-1
OHSUSA:765365695.6
SCHEDULE 2
Escrow Securities
[To Come from the Verification Report]
Attachment 2
3-1
OHSUSA:765365695.6
SCHEDULE 3
Refunding Requirements
[To Come.]
Attachment 2
A-1
OHSUSA:765365695.6
EXHIBIT A
FORM OF NOTICE TO 2011 TRUSTEE OF PREPAYMENT (FROM DISTRICT)
[To Come.]
Attachment 2
B-1
OHSUSA:765365695.6
EXHIBIT B
FORM OF NOTICE OF REDEMPTION
[To Come.]
Attachment 2
C-1
OHSUSA:765365695.6
EXHIBIT C
FORM OF NOTICE OF DEFEASANCE
S.E.C. RULE 15C2-12
NOTICE OF LISTED EVENT
The Midpeninsula Regional Open Space District (the “District”), acting on behalf of the
Midpeninsula Regional Open Space Financing Authority (the “Authority”), hereby provides notice of the
following events related to the Midpeninsula Regional Open Space District Financing Authority 2011
Revenue Bonds (the “Bonds”).
Event:
The Bonds maturing on and after September 1, 2022, as set forth in Schedule I attached hereto
have been defeased on [Closing Date] and will be called for redemption on September 1, 2021.
Other Matters:
This notice is provided solely for the purposes of the Continuing Disclosure Agreement delivered
in connection with the above-referenced Bonds. The filing of this notice does not constitute or imply any
representation: (i) that the foregoing Specified Event is material to investors; (ii) regarding any other
financial, operating or other information about the District or the Bonds; or (iii) that no other
circumstances or events have occurred or that no other information exists concerning the District, the
Bonds or the Specified Event, which may have a bearing on the District’s financial condition, the
security for the Bonds, or an investor’s decision to buy, sell, or hold the Bonds
Dated: __________, 2016
MIDPENINSULA REGIONAL OPEN SPACE
DISTRICT
By:_________________________________
General Manager
Attachment 2
R-16-101
Meeting 16-18
August 10, 2016
AGENDA ITEM 8
AGENDA ITEM
Award of Contract to O.C. Jones & Sons Inc. for construction of the Mount Umunhum Road
Rehabilitation Project (Project) at Sierra Azul Open Space Preserve for a Base Amount Not-to-
Exceed $5,012,758 and a Separate 15% Contingency
GENERAL MANAGER’S RECOMMENDATIONS
1. Authorize the General Manager to enter into contract with O.C. Jones & Sons of
Berkeley, CA for a not-to-exceed base contract amount of $5,012,758.
2. Authorize a 15% construction contract contingency in the amount of $751,914 to be
reserved for unanticipated issues, thus allowing the total contact amount not-to-exceed
$5,764,672.
3. Adopt a Resolution approving a budget line item adjustment in the amount of $2,764,672
to the Fiscal Year (FY) 2016-17 District budget to fund construction of the Project.
SUMMARY
The purpose of the Project is to complete roadway upgrades and safety improvements to Mount
Umunhum Road, allowing all visitors regardless of physical ability to access the summit. On
May 25, 2016, (R-16-62) the Board approved the Project Design and Bid Plan Set and authorized
the General Manager to advertise the Request for Bids (RFB) for the Project. The Invitation to
Bid was issued on June 10, 2016. The District received three (3) bid proposals on Friday, July
15, 2016. O.C. Jones & Sons Inc., is the lowest responsive and responsible bidder. Given the
magnitude of the construction contract, the General Manager directed District staff to contract
with a third party cost estimating consultant, Cumming Construction Management, to provide an
independent cost estimate of the Project from which to compare the bids received as well as the
latest engineer’s cost estimate. The third party cost estimate arrived at $6,424,579,
approximately 28.2% higher than the received bid. Therefore, the General Manager
recommends awarding the contract to O.C. Jones & Sons Inc., (O.C. Jones) for a total not-to-
exceed amount of $5,764,672, which includes a 15% contingency amount of $751,914. The
Fiscal Year 2016-17 budget allocated $3.0 million to addresss the road repairs and safety
improvements. To fund the Project, a budget line item increase of $2,764,672 is required.
MEASURE AA
The 5-year Measure AA (MAA) Project List approved by the Board on October 29, 2014
includes the Road Project as part of MAA Portfolio #23, Mount Umunhum Public Access and
Interpretation Projects, with a total funding allocation of $27.972 Million. This contract is well
R-16-101 Page 2
within the remaining Measure AA funds and serves to further the goals of Portfolio #23 by
providing the necessary road repairs along Mount Umunhum Road to open the road to public
vehicular use to access the summit.
DISCUSSION
Background
In October, 2012, the Board approved the Mount Umunhum Environmental Restoration and
Public Access Project (R-12-104), which includes the Bald Mountain Parking Area, the Mount
Umunhum Trail, ecological restoration and development of visitor amenities at the summit, and
roadway upgrades and safety improvements to Mount Umunhum Road to accommodate public
vehicular use to allow all visitors, regardless of physical ability, to reach the summit. Access to
the summit of Mount Umunhum was identified as a priority action during the District’s Vision
Plan process, and Measure AA funding was included for roadway improvements under Portfolio
Portfolio #23.
On July 8, 2015, the District hired the civil engineering firm Pavement Engineering Inc., (PEI) to
develop the construction design for the recommended upgrades to Mount Umunhum Road (R-
15-103). On May 25, 2016, the Board approved the Project’s Design and Bid Plan Set (R-16-
62), which was developed by PEI and peer-reviewed by a second civil firm, Sandis. The plan set
was released for bid on June 10, 2016. The Project elements that were approved by the Board
include:
• Rehabilitation and resurfacing of the entirety of Mount Umunhum Road from the intersection
of Hicks Road to the flagpole area near the Summit using a “Pulverize & Replace” process;
• Addition of a double chip seal to entire roadway surface;
• Shallow and deep road settlement repairs;
• New gabion retaining walls below roadway;
• 20-foot paved driveway aprons for the four (4) private properties whose residents use the
road to access their properties;
• New guardrails, replacement of existing guardrails and end terminals;
• Roadway striping, fog lines, and botts’dots;
• Signage related to traffic calming, road sharing, pedestrian crossing, speed limit, no parking,
and signage required by the Project’s Mitigation Monitoring Plan;
• Roadside concrete erosion control barriers;
• Erosion and rock netting;
• Removal of roadside trees, under road roots, and upslope boulders and material at risk of
failure;
• Removal and replacement of a roadside asphalt dike;
• Removal and replacement/installation of drop inlets, curb inlets, asphalt scuppers;
• New roadside V-ditch and rock-lined V-ditch;
• Removal and replacement/installation of drop inlets and headwalls;
• New sub-surface and edge drains;
• Removal and replacement of damaged culverts and drain pipes;
• Five traffic pullouts along Mount Umunhum Road; and
• Installation of new automatic gate systems.
R-16-101 Page 3
In addition to approving the Project elements, the Board also authorized the General Manager to
approve any necessary changes to the project design and plans before and during construction.
Since that time, minor alterations have been made to the plans, and will be approved by the
General Manager prior to the commencement of construction. Additionally, all alterations to the
plans will be captured with a set of As-Built Plans at the conclusion of the Project and will
subsequently be presented to the Board for final review and consideration of approval.
Contractor Selection
The Request for Bids was issued on June 10, 2016, and the bid package was sent to contractors,
subcontractors, and consultants who had requested to be notified of the project, as well as local
contractors known to have experience in the rehabilitation and construction of rural roadways.
Legal notices were posted in the San Jose Mercury News, San Mateo County Times, Santa Cruz
Sentinel, and five Builder’s Exchange programs. The Invitation to Bid was also posted on the
District website.
Pre-bid meetings/site tours were held at the project site on June 17, 2016, and June 24, 2016, and
were attended by a total of five (5) prime contractors. Sealed bids were due on July 15 , 2016,
and three (3) bids were received as summarized below:
Bidder Location Total Bid
Percent +/- from June
2016 Revised Engineer’s
Estimate ($5,187,134)
O.C. Jones Berkeley, CA $5,012,758 -3.4%
D-Line Constructors Inc. Oakland, CA $5,499,663 +6.0%
Graniterock Construction
Company
San Jose, CA $6,389,457 +23.9%
On July 7, 2016, the District retained Cumming Construction Management (Cumming) to
perform a third party construction cost estimate of the Project. The estimate was done without
the estimator’s knowledge of the bid results, used the same information that was given to
potential bidders, and took into consideration the unique factors characteristic of this project.
Cumming estimated a total construction cost of $6,424,579. Cumming’s estimate is 23.9% above
PEI’s estimate, and 28.2% above O.C. Jones’ bid. The table below shows a summary and
comparision.
Source Total Estimate
or Bid
Percent +/- from O.C.
Jones’ Bid ($5,012,758)
O.C. Jones $5,012,758 0%
PEI Engineer’s Estimate $5,187,134 +3.4%
Cumming Third Party Cost Estimate $6,424,579 +28.2%
The results of the third-party engineer’s estimate indicate that the bid proposal received from
O.C. Jones represents a fair price and may likely be below market value. O.C. Jones presented a
complete and responsive bid package and has successfully completed similar projects for other
public agencies, and is therefore deemed to be a responsive and responsible contractor.
Additionally, O.C. Jones submitted a competitive proposal that is just under the Project
R-16-101 Page 4
engineer’s estimate for the work and aligns with current market data for road rehabilitation and
improvement work within the greater Bay Area. Therefore, the General Manager recommends
awarding the contract for construction services for the Project to O.C. Jones in the base amount
of $5,012,758.
Contract Contingency
A 15% contingency amount of $751,914 is recommended for this Project to address unforeseen
conditions that may be encountered during execution of the work. Unit pricing was included on
the bid form to allow negotiation with the contractor should unforeseen situations arise.
Unanticipated issues that may arise at this particular project site include subsurface work
associated with roadway settlement repairs, hillside grading, and the installation of gabion
retaining walls. This contingency is slightly higher than the amount recommended for the
Summit Project because the Road Project covers a larger footprint (over 5.5 miles of road) and
the amount of aforementioned unanticipated issues is greater.
FISCAL IMPACT
The District’s Fiscal Year 2016-17 Action Plan and Budget includes $3,566,400 to complete the
Mount Umunhum Road Rehabilitation Project. The budget includes construction costs for the
Project, allowances for contingencies and unforeseen conditions, consultant fees for general
conditions, oversight, and construction administration, special inspections and other soft costs.
A budget line item adjustment is requested from the Board in the amount of a $2,764,672
increase for a total of $6,331,072 to the Fiscal Year 2016-17 Budget to fully fund the remaining
construction work. If the Board approves the General Manager’s recommendation, it is
anticipated the project will be 100% complete in the Spring of 2017.
Given that there are two budget line item adjustments being recommended as part of the August
10, 2016 Board meeting that affect Portfolio 23, the following table is provided to outline the
Measure AA Portfolio budget, costs to date, and the fiscal implications related to the Mount
Umunhum Summit and Road Projects:
Budget (in $millions)
MAA 23 Portfolio Total $27.97
Spent to Date: $4.08
Encumbrances: $0.3
Mount Umunhum Summit Project: $8.89*
Mount Umunhum Road Project: $6.33*
Balance Remaining (Proposed): $8.37
* These amounts include the proposed construction contracts and other expected expenses to complete the project,
including special inspections, construction administration, etc.
BOARD COMMITTEE REVIEW
The full Board approved Road Project Design and Bid Plan Set and authorized the District to
advertise the Request for Bids for the Mount Umunhum Road Improvement Project on May 25,
2016. Due to the full Board’s review, separate Board Committee review was not necessary for
this contract award.
R-16-101 Page 5
PUBLIC NOTICE
Public notice of this Agenda Item was provided per the Brown Act. Additional public notice
was provided to interested parties and Mount Umunhum Road neighbors.
CEQA COMPLIANCE
The Project was evaluated as part of the Environmental Impact Report (EIR) and Mitigated
Monitoring Plan (MMP) approved by the Board on October 17, 2012, for the Mount Umunhum
Environmental Restoration and Public Access Project in Sierra Azul Open Space Preserve (R-12-
104). In 2015, the District prepared an Addendum to the 2012 EIR to analyze minor
modifications to the Summit and Road improvements that included installation of gates and
fencing, and acquiring a road access easement to Mount Thayer for District vehicles, contractors,
and emergency access only (no general public access). In July 2016, the District prepared a
second Addendum to the 2012 EIR to analyze minor modifications to the Road Project that
included: 1) installation of a total of approximately 180 linear feet of retaining walls, in three
locations along Mt. Umunhum Road, to provide slope stability for road widening; and 2)
increasing the number of truck haul trips for transporting excavated material from project
construction activities, and routing all excavated material haul trips to Mount Thayer where the
material will be used as part of the previously proposed landform restoration (R-12-91).
In summary, taken together, the EIR and its two Addenda fully analyzed the Road Project in
compliance with the requirements of the California Environmental Quality Act (CEQA).
Awarding the contract for construction of the Mount Umunhum Road Rehabilitation Project is
consistent with the EIR and its Addenda for implementation of the Mount Umunhum
Environmental Restoration and Public Access Plan. No new significant environmental effects or
a substantial increase in the severity of previously identified significant effects would result from
this project beyond what was analyzed in the EIR.
NEXT STEPS
Upon approval by the Board of Directors, the General Manager will enter into a contract with
O.C. Jones & Sons, Inc. to construct the Mount Umunhum Road Rehabilitation Project. Project
construction is scheduled to begin in August 2016 and be completed in Spring 2017.
Attachments:
1. Board Report: Project’s Design and Bid Plan Set (R-16-62)
2. Resolution Amending the Budget for Fiscal Year 2016-17
Responsible Department Head:
Jay Lin, Engineering and Construction Manager
Prepared by:
Zachary Alexander, Capital Project Manager II, Engineering and Construction Department
Contact person:
Zachary Alexander, Capital Project Manager II, Engineering and Construction Department
R-16-62
Meeting 16-11
May 25, 2016
SPECIAL MEETING AGENDA ITEM 1
AGENDA ITEM
Approval of the Bid Plan Set for the Mount Umunhum Road Improvement Project and
Authorization to Release the Request for Bids
GENERAL MANAGER’S RECOMMENDATIONS
1. Approve the Mount Umunhum Road Improvement Project Design and Bid Plan Set.
2.Delegate to the General Manager the authority to approve any necessary changes to the
Project Design and Plans, and Direct that the “As Built” Designs Come Back to the Board for
Final Approval.
3. Authorize the General Manager to advertise the Request for Bids for the Mount Umunhum
Road Improvement Project.
SUMMARY
The Midpeninsula Regional Open Space District (District) entered into a contract with the civil
engineering firm Pavement Engineering Inc., (PEI) on July 8, 2015 (R-15-103) to develop
construction plans detailing the recommended upgrades to Mount Umunhum Road. PEI has
developed a bid plan set of construction documents that have been peer-reviewed by a second
civil engineering firm, Sandis, and deemed ready to include in a Request for Bids (RFB) to
implement the Mount Umunhum Road Improvement Project. Sufficient funds remain in the
Fiscal Year (FY)2015-16 budget to complete the bidding process and award a repair contract by
end of June. Funds for construction have been requested in the proposed FY2016-17 budget,
with a targeted start of early July. In order for the District to construct road improvements
during the 2016/2017 construction season, condemnation proceedings for Mount Umunhum
Road rights have been initiated with the Santa Clara County Superior Court to obtain possession
of the necessary rights. Issuance of the RFB is not dependent on securing the property rights;
however, construction of the roadway improvements requires the District’s possession of the
road rights before proceeding.
MEASURE AA
The project is part of Measure AA (MAA) Portfolio #23, Mount Umunhum Public Access and
Interpretation Projects: Open Mt. Umunhum for multi-use public access to the summit via the
road and a trail; open Bay Area Ridge Trail and nearby trail connections; and preserve additional
open space and complete wildlife corridor, in the amount of $27.972 million of which $3.965
million has been allocated for the Mount Umunhum Road Improvement Project. In addition, the
project is included in the Board-approved Measure AA 5-year Project List.
Attachment 1
R-16-62 Page 2
BACKGROUND
Mount Umunhum Road was built by the federal government to provide vehicular access to the
former Almaden Air Force Station (AFS), which was constructed in the late 1950s and dedicated
for operation in 1958. The AFS was in use for 22 years, closing in 1980. At its peak, the AFS
housed approximately 120 people, including employees and their families. On average, the
facility employed approximately 30 stationed military personnel, and 50 to 100 civilian
personnel. Historical records indicate that in 1971 the roadway had a daily two-way traffic
volume of roughly 190 vehicles. The current road is 29,800 linear feet (LF) (approximately 5.6
miles) from the summit of Mount Umunhum to the Hicks Road intersection, and ranges in width
from approximately 15.7 to 28 feet wide, with an average roadway width of 21.7 feet.
Historically, the two-lane rural road was used to access the former AFS. In order to provide
general public access to the Summit, property rights need to be perfected for the roadway and the
necessary improvements completed along the road, which include resurfacing and installing
turnouts, curbs, guardrails, and other safety infrastructure. Engineered slope stabilization
measures are also needed to address a number of geologic issues associated with the roadway,
including slip-outs and slope failures above and below the roadway that are potential sources of
sediment. In general, the substructure of the roadway is in very good condition, and a majority
of the required improvements focus on the upper portion of the roadway structure that is in
disrepair due to general use and lack of maintenance. After roadway improvements are
completed, Mount Umunhum Road will remain a two-lane, rural road for visitors to access the
Summit during open Preserve hours and at the same time benefiting the neighbors who use the
road to access their properties.
DISCUSSION
In October, 2012, the Board approved the Mount Umunhum Environmental Restoration and
Public Access Project (R-12-104), which includes the Bald Mountain Parking Area, the Mount
Umunhum Trail, ecological restoration and development of visitor amenities at the summit, and
roadway upgrades and safety improvements to Mount Umunhum Road to accommodate public
vehicular use to allow all visitors regardless of physical ability to reach the summit. Access to
the summit of Mount Umunhum was identified as a priority action during the District’s Vision
Plan process, and funding for roadway improvements was included in Measure AA, under
Priority Action (Portfolio) #23, which passed in June, 2014.
In July, 2015, the District selected PEI to design and develop the construction plans for the
proposed roadway improvements. PEI has developed the requested bid plan set, which is now
ready for issuance as part of a public bid process to implement the recommended upgrades to
Mount Umunhum Road and provide safe public vehicular access to the summit.
In May, 2016, PEI’s road design was peer-reviewed by Sandis. In general, Sandis concurred
with PEI’s design but recommended additional information and details to the plans and
specifications. Sandis also recommended installation of new guardrail to the road in addition to
replacing existing guardrail. PEI will update project plans and specifications by May 31, 2016 to
address the comments provided by Sandis.
The road construction project is being closely coordinated with the Summit Project that is
focused on public access improvements and site restoration on the mountaintop. The two design
teams and Project Managers have worked closely together in an effort to ensure integration and
Attachment 1
R-16-62 Page 3
coordination of these designs, contract documents, construction timelines, and administration to
ensure successful delivery of the Mount Umunhum Road Improvement Project and the Summit
Project.
The Mount Umunhum Road Improvement Project’s bid plan set includes the following proposed
improvements and upgrades to Mount Umunhum Road and associated infrastructure:
Proposed Road Surface Improvements
• Resurface the entirety of Mount Umunhum Road from the intersection of Hicks Road
to the flagpole area near the Summit using either a Cold In-place Recycling (CIR) or
Pulverize & Replace Process (P&R) (remainder of roadway to the summit area of the
mountain will be repaired as part of the Summit Project);
o The Request for Bids will solicit for both resurfacing techniques, as they have
a similar cost, performance, and life expectancy (20 years).
o Both techniques recycle and utilize 100% of existing roadway material during
the resurfacing process.
o Each process requires different types of machinery; also typically, General
Contractors can perform the P&R process, whereas special licensing is
required for the CIR process.
• Addition of a double chip seal to entire roadway surface;
o Chip seal increases the life of the road by 10 to 15 years and provides for
increased traction.
• Shallow and deep road settlement repairs;
• New Gabion retaining walls below roadway; and,
• 20-foot paved driveway aprons for the four (4) private properties whose residents use
the road to access their properties.
Proposed Surface Improvements Quantity
Resurface Entire Roadway, 18’ Wide 532,260 square feet (SF)
Shallow & Deep Road Settlement Repairs 30,888 SF
Gabion Retaining Walls 89 linear feet (LF)
Proposed Road Safety Improvements
Mount Umunhum Road is designated as a multi-modal roadway allowing for vehicular and
bicycle traffic. The sharing of the narrow and steep roadway by the two transportation methods
required additional attention during the Project design and development process, resulting in
roadway safety design elements that address both the safety needs of vehicular drivers and
bicyclists. Additionally, the Project EIR and Mitigation Monitoring Report were developed with
the understanding of an expected increase in vehicular and bicycle traffic on the roadway, and
outlined the required safety measures for incorporation into the Project plans in order to provide
a means for bicyclists to share the roadway with vehicles in a safe manner. These include:
• New guardrails, replacement of existing guardrails and end terminals;
Attachment 1
R-16-62 Page 4
• Roadway striping, fog lines, and botts’dots;
• Signage related to traffic calming, road sharing, pedestrian crossing, speed limit, no
parking, and signage required by the Project’s Mitigation Monitoring Plan;
• Roadside concrete erosion control barriers;
• Erosion and rock netting;
• Removal of roadside trees, under road roots, and upslope boulders and material at risk of
failure;
• Removal and replacement of a roadside asphalt dike.
Proposed Safety Improvements Quantity
Replacement of Existing Guardrails 3,256 LF
New Guardrail End Terminals 1,450 LF
Erosion Control Barriers 2,520 LF
Erosion Control Netting 362 LF
Asphalt Dike 14,204 LF
Root Removal 2,493 SF
Tree, Stump, and Root Removal 26 each (EA)
Boulder & Material Removal 860 LF
Proposed Road Drainage Improvements
• Removal and replacement/installation of drop inlets, curb inlets, asphalt scuppers;
• New roadside V-ditch and rock-lined V-ditch;
• Removal and replacement/installation of drop inlets and headwalls;
• New sub-surface and edge drains; and
• Removal and replacement of damaged culverts and drain pipes.
Proposed Drainage Improvements Quantity
Drop Inlets 62 EA
Curb Inlets 4 EA
Asphalt Scuppers 402 LF
V-Ditch 21,981 LF
Head Walls 32 EA
Sub and Edge Drains 110 LF
New Drainage Pipe 343 LF
Additional Roadway Improvements
• Installation of a new roadway gate on Mount Umunhum Road between the Hicks Road
intersection and Jacques Ridge parking lot; and
o The gate will be a solar powered electric automatic double leaf gate, similar to the
existing gate at the entrance to the Bald Mountain Parking Area.
o Additionally, two fully shielded, downturned solar powered motion-triggered
security lights will be installed at the gate location to improve nighttime access
for District staff and neighboring property owners, as well as provide an added
level of security. The lights will be mounted on a new light pole, with one light
pointed down towards Hicks Road, and the other positioned down towards the
Jacques Ridge parking area and up Mount Umunhum Road.
Attachment 1
R-16-62 Page 5
• Five traffic pullouts along Mount Umunhum Road.
o Each pullout will have a five-foot paved apron from the edge of the roadway, with
the remaining pullout area consisting of compacted gravel.
o All pullout locations will have “No Parking” signs, and are intended for
temporary refuge from Mount Umunhum Roadway traffic.
Approval of the Project bid plan set and the issuance of a Request for Bids (RFB) is the first step
in selecting a qualified contractor to construct the new roadway upgrades. The District is in the
process of resolving multiple, long-standing real property and right-of-way issues that need to be
addressed to ensure that the District can provide and protect public access to the summit of
Mount Umunhum. As of January 2016, special counsel initiated condemnation proceedings in
Santa Clara County Superior Court to obtain possession of the necessary rights so that the
District can construct road improvements during the 2016/2017 construction season. Issuance of
the RFB is not dependent on securing the property rights; however, construction of the roadway
improvements requires the District’s appropriate possession of the road before proceeding.
In order to promote efficiency in and professional oversight of the design and construction
process, the General Manager recommends that the Board delegate to the General Manager the
authority to approve any necessary changes to the project design and plans moving forward. s
These changes could include modifications to the plans and specifications, and increases or
decreases in the quantity of work to be performed or materials, equipment, or supplies furnished.
The General Manager, through the Engineering and Construction Manager, would only approve
changes if the modifications are consistent with previously stated Board direction and design
approvals, and the total cost remains both within the Board-approved project budget and the
contract “not-to-exceed” amount as approved by the Board (presently scheduled to come before
the Board in July). Any changes that require additional funds beyond those previously
authorized by the Board will be brought first to the Board for review and consideration of
approval. To keep the Board apprised of these changes, the General Manager would provide
updates as needed under the Biweekly Reports. Moreover, the Board will be asked, at the
conclusion of the project, to formally accept the improvements and approve the final As Builts.
FISCAL IMPACT
Funds in the amount of $3.6 million will be requested in the proposed FY2016-17 budget to
complete the construction of the Mount Umunhum Road Improvement Project as described
above. Project expenses are eligible for Measure AA reimbursement.
BOARD COMMITTEE REVIEW
Given the high level of Board interest in the Summit Project and associated public access and
roadway improvements, this item is being brought directly to the full Board.
PUBLIC NOTICE
Public notice of this Agenda Item was provided as required by the Brown Act. Additional public
notice was provided to interested parties and Mount Umunhum Road neighbors.
Related to this item, a neighborhood meeting was held on February 25, 2016 at the Los Gatos
Adult Recreation Center where District staff presented the draft roadway designs and plans to
Attachment 1
R-16-62 Page 6
neighboring private property owners, residents whose driveways are connected to Mount
Umunhum Road, and a representative from San Jose Water Company. The District will
coordinate closely with these residents and neighbors prior to and during construction of the
roadway improvements. Eight neighbors and members of the public attended the meeting, where
comments focused on potential security issues on the roadway and neighboring properties once
public vehicular traffic is allowed to the summit of Mount Umunhum. These comments have
been incorporated into the Project where appropriate.
CEQA COMPLIANCE
The Project was evaluated as part of the Environmental Impact Report (EIR) and Mitigated
Monitoring Plan (MMP) approved by the Board on October 17, 2012, for the Mount Umunhum
Environmental Restoration and Public Access Project in Sierra Azul Open Space Preserve (R-12-
104). In 2015, the District prepared an Addendum to the 2012 EIR to analyze minor
modifications to the Summit and Road improvements that included installation of gates and
fencing, and acquiring a road access easement to Mount Thayer for District vehicles, contractors,
and emergency access only (no general public access). The EIR Addendum analyzed these
modifications to the Project to fulfill the requirements of the California Environmental Quality
Act (CEQA)
NEXT STEPS
If approved, the General Manager will direct staff to move forward with the public bidding
process for construction of the Mount Umunhum Road Improvement Project as set out herein.
Once the bidding process is completed, in approximately mid-July, staff will present the results
to the Board for consideration of award of contract for construction of the road improvements.
Award of the contract for construction and the construction itself will be subject to the District’s
successful resolution of its concurrent judicial proceedings to obtain possession of the necessary
road rights.
Attachments
1. Proposed Mount Umunhum Road Improvement Bid Plan Set
2. Sandis Preliminary Peer-Review of Proposed Mount Umunhum Road Bid Plan Set
Responsible Department Head:
Jane Mark, AICP, Planning Manager, Planning Department
Jason Lin, Engineering and Construction Manager, Engineering & Construction Department
Prepared by:
Zachary Alexander, Capital Project Manager II, Engineering and Construction Department
Attachment 1
Resolutions/2016/R-16-_FY2016-17BudgetAdjust_MtUmRd 1
RESOLUTION NO. 16-___
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT AMENDING
THE BUDGET FOR FISCAL YEAR 2016-17
WHEREAS, on June 22, 2016 the Board of Directors of the Midpeninsula Regional
Open Space District adopted the Fiscal Year 2016-17 Budget and Action Plan; and
WHEREAS, unanticipated expenses associated with the Mt Umunhum Road
Rehabilitation Project have arisen and additional funds are required to complete the project;
and
WHEREAS, the General Manager recommends amending the FY 2016-17 Budget and
Action Plan to reflect the increased costs of the project;
NOW, THEREFORE, The Board of Directors of the Midpeninsula Regional Open
Space District does resolve as follows:
SECTION ONE. Amend the Budget and Action Plan for the Midpeninsula Regional
Open Space District for the Fiscal Year 2016-17 as follows:
Project Name Current Budget Revised Budget
Mt Umunhum Road
Rehabilitation Project
$3,566,400 $6,331,072
SECTION TWO. Monies are hereby appropriated in accordance with said budget.
SECTION THREE. Except as herein modified, the FY 2016-17 Budget and Action
Plan, Resolution No. 16-25 as amended, shall remain in full force and effect.
* * * * * * * * * * * * * * * * * * * *
PASSED AND ADOPTED by the Board of Directors of the Midpeninsula Regional
Open Space District on ___, 2016, at a Regular Meeting thereof, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST: APPROVED:
Secretary
Board of Directors
President
Board of Directors
Attachment 2
Resolutions/2016/R-16-_FY2016-17BudgetAdjust_MtUmRd 2
APPROVED AS TO FORM:
General Counsel
I, the District Clerk of the Midpeninsula Regional Open Space District, hereby certify
that the above is a true and correct copy of a resolution duly adopted by the Board of Directors
of the Midpeninsula Regional Open Space District by the above vote at a meeting thereof duly
held and called on the above day.
District Clerk
Attachment 2
R-16-82
Meeting 16-18
August 10, 2016
AGENDA ITEM 9
AGENDA ITEM
Award of Contract to D-Line Constructors for Construction Services for the Mount Umunhum
Summit Project at Sierra Azul Open Space Preserve for a Base Amount Not-to-Exceed
$7,385,000 and a Separate 10% Contingency
GENERAL MANAGER’S RECOMMENDATIONS
1. Approve the Mount Umunhum Summit Project Design and Plans, and delegate to the
General Manager or designee the authority to approve any necessary changes to the Project
Design and Plans, and Direct that the “As Built” Designs Come Back to the Board for Final
Approval.
1.2.Authorize the General Manager to enter into contract with D-Line Constructors of Oakland,
CA, for a not-to-exceed base contract amount of $7,385,000,
2.3.Authorize a 10% construction contract contingency in the amount of $738,500 to be reserved
for unanticipated issues, thus allowing a total contract amount not-to-exceed $8,123,500.
3.4.Adopt a Resolution approving a budget adjustment in the amount of $3,466,450 to the Fiscal
Year 2016-17 Budget.
SUMMARY
A Request for Bids was issued on May 11, 2016 for the Mount Umunhum Summit Project
(Project). One (1) bid proposal was received and opened on Monday, June 13, 2016. The low
bidder, D-Line Constructors, presented a complete and responsive bid package. An FYI
memorandum was provided on June 22, 2016 to inform the Board of the bid result. The FYI
memorandum also discussed important factors that affected the bid, including site remoteness
and a strong construction market. Four (4) options were provided for the Board to consider.
Since the issuance of the FYI memorandum, the General Manager directed District staff to
contract with a third party cost estimating consultant, Cumming Construction Management, to
provide an independent cost estimate to determine whether the one (1) bid received represents
fair market value. The third party cost estimate arrived at $6,923,454, approximately 14% lower
than the received bid. Based on relevant market research, the 14% difference is within the
tolerance of the fair market value for a Capital Improvement Project of this type. Construction
bid data from 2015 showed that for projects with only one (1) bid, the estimate to bid differential
was 25 to 50% over the estimate. Projects that received 2 to 3 bids resulted in bids 10 to 25%
over the estimate. Therefore, the General Manager recommends awarding the contract for
construction of the Project to D-Line Constructors, for a base contract amount of $7,385,000 and
R-16-82 Page 2
allow for a 10% contingency to address unanticipated construction issues as the work progresses,
for a total not-to-exceed amount of $8,123,500. In addition, given that the cost of construction
has increased substantially as compared to when the budget estimates were first prepared, a line
item budget adjustment of $3,466,450 is required to proceed with implementation.
MEASURE AA
A 5-year Measure AA (MAA) Project List was approved by the Board at their October 29, 2014
meeting and includes the Project as part of MAA Portfolio #23, Mount Umunhum Public Access
and Interpretation Projects, with a total funding allocation of $27.972 Million. This contract is
well within the remaining Measure AA funds and serves to further the goals of Portfolio #23 by
providing the necessary construction of the Mount Umunhum public access facilities to open the
summit for public recreational use.
DISCUSSION
Background
In 1986, the Midpeninsula Regional Open Space District (District) acquired the former Almaden
Air Force Station and all of its remaining facilities on Mount Umunhum and Mount Thayer (R-
86-20) with the intent to restore the area to a natural condition and provide public access. In
October 2010, Restoration Design Group (RDG) was retained to begin schematic design of
public access elements on the summit. On August 10, 2011, the Board approved an award of
contract for the preparation of demolition contract documents for the demolition of existing
buildings, with the exception of the radar tower, with the work being subsequently completed in
early 2013. In August 2015, the Board approved the Final Design Development Options for the
Project and Final Construction Documents were completed in May 2016 for inclusion in the
Request for Bids.
The purpose of the Project is to provide access to the summit for the public to enjoy the restored
natural environment. Public access elements include site amenities that the Board previously
approved in August 2015 (Final Design Development Options, R-15-126), November 2015
(Interpretive Design Development Options, R-15-160), December 2015 (EIR Addendum Project
Modifications, R-15-166), and March 2016 (Final Design for Shelters and Stair, R-16-26), which
include the installation of the following elements:
• Two weather shelters, one at the summit and one at the trailhead area
• A vehicular turn-around at the summit with ADA parking stalls
• An ADA, surfaced pathway around the East and West Summits
• A ceremonial circle near the West Summit
• East Summit viewing area
• Guardrails and site appropriate safety elements
• Final grading and site topographic restoration
• Upper and lower summit stairs
• Parking area with roughly 50 stalls, including 3 ADA stalls
• Vault toilet at the parking area
• Emergency helicopter landing zone
• Rehabilitation of roughly 1/3 mile of summit roadway
R-16-82 Page 3
• Water storage tanks and associated infrastructure
• Stormwater infrastructure, including bioretention basins
• District standard split-rail fencing.
• Two emergency call boxes, one at the summit and one at the parking lot
Contractor Selection
The Request for Bids was issued on May 11, 2016, and was sent to contractors, subcontractors
and consultants who had requested to be notified of the project. Legal notices were posted in the
San Jose Mercury News, Santa Cruz Sentinel, and five Builder’s Exchange programs. The
Invitation to Bid was also posted on the District website.
Two pre-bid meetings/site walks were held at the project site on May 12, 2016, and May 16,
2016, and were attended by a total of six (6) prime contractors. Sealed bids were due on June 13,
2016, and one (1) bid was received in the amount of $7,885,000. In order to achieve the design
intent while reducing the project costs, District staff engaged with the contractor to value
engineer (VE) some of the elements through minor re-design and material substitution. An
initial VE exercise was conducted on June 23, 2016 with RDG, D-Line Constructors, and
District staff. Numerous material substitutions and minor design revisions were mutually
identified that allows the bid to be reduced by $500,000. Further collaboration with D-Line will
likely occur if a contract is awarded to identify additional material substitutions for further
savings.
Staff contacted the references provided by D-Line and received positive feedback, confirming
the firm has successfully completed similar projects in a responsive, on-time, and craftsman-like
manner. Those projects include Sausal Creek Restoration in Dimond Park and UCSF Benioff
Children’s Hospital in Oakland.
In addition, the General Manager directed District staff to engage with an independent third party
construction cost estimate to analyze the fair market value of the bid, as only one was received.
This cost estimate analysis was conducted by Cumming Construction Management and received
on July 22, 2016. The estimate was done without the estimator’s knowledge of the bid results,
used the same information that was given to potential bidders, and took into consideration the
unique factors characteristic of this project. The report revealed a construction cost estimate of
$6,923,454, which is 14% lower than the received bid. Specifically, the breakdown of bid versus
the construction cost estimate and engineer’s estimate can be seen in the table below (includes
base and alternates):
Source Base Bid
Alt 1:
Upper
Stairs
Alt 2:
Lower
Stairs
Alt 3:
Trailhead
Weather
Shelter
Alt 4:
Water
Tank Area
Total Bid:
Base Bid
plus Alts 1-4
D-Line
Constructors
(6-13-16 Bid)
$6,300,000
$520,000
$540,000
$425,000
$100,000
$7,885,000
Third Party
Construction
Cost (Estimate
7-22-16)
$5,837,773 $273,358 $252,441 $392,374 $167,508 $6,923,454
R-16-82 Page 4
Engineer’s
Estimate
6-20-16)
$6,131,453 $388,700 $412,600 $398,075 $142,255 $7,473,083
According to a presentation by the City and County of San Francisco and other sources presented
in the August 4, 2016 FYI Memo, the 14% difference is within the tolerance of the fair market
value for a Capital Improvement Project of this type. Construction bid data from 2015 showed
that for projects that received only one (1) bid, the estimate to bid differential was 25 to 50%
over the estimate. Projects that received 2 to 3 bids resulted in 10 to 25% over the estimate.
Upon careful review of the Bid Proposal, contractors' relevant experience and qualifications,
third party cost estimate, and input from RDG’s design team, the General Manager recommends
awarding the contract to D-Line Constructors who is the lowest responsible and responsive
bidder.
Contract Contingency
A 10% contingency amount is an industry standard to manage a project of this size and type and
is required to address unforeseen conditions that may be encountered during execution of the
work. Unit pricing was included on the bid form to allow negotiation with the contractor should
unforeseen situations arise. Unanticipated issues that may arise at this particular project site
include the proper handling and disposal of unexpected, and potentially hazardous, buried
material given the site’s former use as an air force station, and the addition of new and specific
final construction elements to seamlessly merge the Summit Project elements with the Road
Project elements.
ALTERNATIVES
There are numerous alternatives for how to proceed, each with its own set of pros-and-cons. The
following summarizes the benefits and risks of four options, including Recommended Option 1:
Option 1: Recommended. Award a base contract for $7.385M, which includes the deduction
of approximately $500,000 of VE items.
Pros:
- Includes all public access elements approved by the Board.
- Per conversations with the District CFO and Controller, plus a review of District
finances, the District retains sufficient funds both under Measure AA and in cash flow
reserve to fund the contract and the contract is fully eligible for Measure AA
reimbursement.
- Bid is within 14% of the 3rd Party Cost Estimate and 4% of the final Engineer’s
Estimate. These differentials are on the lower end of what would be expected for this
project had 2 to 3 bids been received, and therefore deemed to represent fair market
value. Moreover, research shows that neighboring public agencies are also receiving bids
higher than their estimates and that this trend will unlikely change in the short term.
- Retain high confidence of receiving a quality product constructed by a well-qualified
firm. Staff have contacted references provided by D-Line and received positive
feedback, confirming the firm has successfully completed similar projects in a
R-16-82 Page 5
responsive, on-time, and craftsman-like manner. Those projects include Sausal Creek
Restoration in Dimond Park and UCSF Benioff Children’s Hospital in Oakland.
- Would meet the Spring 2017 Grand Opening schedule.
Cons:
- Only one bid was received. As a result, the engineer’s cost estimate was revised to
reflect the 100% bid plan set and a third party cost estimate was obtained to analyze the
fair market value of the one bid received.
- The single bid is higher than the amount budgeted, requiring a budget line item increase.
Fortunately, the District retains sufficient cash flow reserve funds to cover this increase
and the cost is eligible for full Measure AA reimbursement.
Option 2: Remove the Trailhead Weather Shelter (Bid Alternative #3) from the Contract at
approximately $425,000, along with approximately $500,000 of VE items, for a reduced Award
of Contract of approximately $6,900,000.
Pros:
- Includes the majority of the elements approved by the Board.
- Would continue to receive a high quality product.
- Per conversations with the District CFO and Controller, plus a review of District
finances, the District retains sufficient funds both under Measure AA and in cash flow
reserve to fund the contract and the contract is fully eligible for Measure AA
reimbursement.
- Reduces the contract by additional $425,000.
- The Trailhead Shelter can be installed at a later date, if desired by the Board.
- Would meet the Spring 2017 Grand Opening schedule.
Cons:
- The value in building the Shelter while the contractor is already mobilized is lost, likely
adding to the overall total cost of construction at a later date.
- A major visitor amenity is either removed from the site or its construction is delayed.
- If the Shelter is constructed at a later date:
Overall Project cost is likely to increase with inflation.
Temporary impacts to public access would result to accommodate construction
within an open and active public use area.
Option 3: Reject current bid, provide minor design changes without significantly altering
Board-approved design elements, and re-bid.
Pros:
- Upon a successful re-bid of the Project, the District may receive multiple bids to more
fully understand construction costs under current market conditions.
- May potentially receive a bid that is lower than the current bid; however, current trends
indicate a potential for receiving a higher bid.
R-16-82 Page 6
- May includes a majority of the elements approved by the Board.
- May still receive a high quality product.
Cons:
- May run into the risk of the low bidder being less qualified for this type of work.
- May encounter the same situation of receiving only a single bid, or worse - no bids.
- Bid(s) received may be higher. Research indicates that neighboring agencies that went
out to bid again have received bids much higher than the corresponding engineer’s
estimate. Indications are that this trend will not change in the near future.
- Incurs additional consultant design fees to assist with the re-bidding.
- A revised schedule could put the Spring 2017 opening date in jeopardy, not only because
of the additional time needed to re-bid, but also the majority of the construction work
would be conducted during the winter/spring when rain and snow can affect the schedule.
Option 4: Reject current bid, redesign the project to allow Phased Construction, and re-bid.
Pros:
- Provides the flexibility to construct the Project in separate phases, allowing smaller
amounts of budget to be spent annually.
- Bids for the first phase of work would likely be substantially lower than the current bid,
and likely within the current budgeted amount.
Cons:
- May run into the risk of the low bidder being less qualified for this type of work.
- May encounter the same situation of receiving only a single bid, or worse - no bids.
- Bid(s) received may be higher.
- Phasing projects typically results in overall higher total construction costs due to multiple
mobilization efforts by different contractors.
- The Summit would likely not open to the public in Spring 2017 given that construction
may not begin until December 2016, at best.
- Incurs additional consultant design fees to create phased construction plans and re-bid
each phase separately.
FISCAL IMPACT
The District’s Fiscal Year 2016-17 Action Plan and Budget includes $5,423,250 for completion
of the Mount Umunhum Summit Project to cover the construction costs, allowances for
contingencies and unforeseen conditions, and consultant fees for general conditions, construction
oversight and administration, and special inspections.
A budget line item adjustment is requested from the Board in the amount of a $3,466,450
increase for a total of $8,889,700 to the Fiscal Year 2016-17 Budget to fully fund the remaining
R-16-82 Page 7
construction work. If the Board approves the General Manager’s recommendation, it is
anticipated the project will be 100% complete in the Spring of 2017.
Given that there are two budget line item adjustments being recommended as part of the August
10, 2016 Board meeting that affect Portfolio 23, the following table is provided to outline the
Measure AA Portfolio budget, costs to date, and the fiscal implications related to the Mount
Umunhum Summit and Road Projects:
Budget (in $millions)
MAA 23 Portfolio Total $27.97
Spent to Date: $4.08
Encumbrances: $0.3
Mount Umunhum Summit Project: $8.89*
Mount Umunhum Road Project: $6.33*
Balance Remaining (Proposed): $8.37
* These amounts include the proposed construction contracts and other expected expenses to complete the project,
including special inspections, construction administration, etc.
BOARD COMMITTEE REVIEW
No Board Committee review is required for this phase of the Project.
PUBLIC NOTICE
Public notice of this Agenda Item was provided per the Brown Act. No additional notice is
required.
CEQA COMPLIANCE
On June 12, 2012 (refer to Report R-12-59), the Board approved the adoption of a Final
Environmental Impact Report for the Mount Umunhum Environmental Restoration and Public
Access Project. In 2015, the District prepared the first Addendum to the 2012 EIR to analyze
minor modifications to the Summit and Road improvements that included installation of gates
and fencing, and acquiring a road access easement to Mount Thayer for District vehicles,
contractors, and emergency access only (no general public access). In July 2016, the District
prepared a second Addendum to the 2012 EIR to analyze minor modifications to the Road
Project that included: 1) installation of a total of approximately 180 linear feet of retaining walls,
in three locations along Mount Umunhum Road, to provide slope stability for road widening; and
2) increasing the number of truck haul trips for transporting excavated material from project
construction activities, and routing all excavated material haul trips to Mount Thayer where the
material will be used as part of the previously proposed landform restoration (R-12-91).
In summary, taken together, the EIR and its two Addenda fully analyzed the Summit Project, in
compliance with the requirements of the California Environmental Quality Act
(CEQA). Awarding the contract for construction of the Mount Umunhum Summit Project is
consistent with the EIR and the approved Addenda for implementation of the Mount Umunhum
Environmental Restoration and Public Access Plan. No new significant environmental effects or
a substantial increase in the severity of previously identified significant effects would result
beyond what was analyzed in the EIR.
R-16-82 Page 8
NEXT STEPS
Upon approval by the Board of Directors, the General Manager will enter into a contract with D-
Line Constructors, to perform construction of all Summit Public Access elements (excluding any
radar tower repairs). The project is scheduled to begin in August 2016 and be completed by
Spring 2017.
Attachments:
1. June 13, 2016 FYI Memo
2. August 4, 2016 FYI Memo
3. Resolution Amending the Budget for Fiscal Year 2016-17
Responsible Department Head:
Jay Lin, Engineering and Construction Manager
Prepared by:
Damon Adlao, Engineering and Construction Capital Project Manager III
Assuming VE efforts are successful, a recommendation for Award of Contract and a line item
budget increase will be presented to the Board in July. RDG is currently working on a revised
independent final engineer’s estimate (an update as of the March 2016 estimate) that will be used as
a tool to analyze in more detail the contractor’s bid by line item.
MOUNT UMUNHUM ROAD REHABILITATION PROJECT IMPACTS
Given the manifestation of the current competitive construction market and premium required for
the project’s site remoteness, the Mount Umunhum Road Rehabilitation Project (Road Project) may
also experience similar budget constraints. The FY2016-17 Action Plan and Budget allocated $3
million for the repair contract and the revised engineer’s estimate that was just recently provided on
June 8, 2016 anticipates a cost of $4.35 million. The Road Project released for bid on June 10,
2016, and is expecting bid results on July 8, 2016. Bid results along with the General Manager’s
recommendations will be presented to the Board in July. Unlike the Summit Project, the Road
Project contains discreet elements that can be removed to substantially decrease the cost without
significantly impacting the Project goals. These elements were included for ease of long-term
maintenance of the road.
Lessons Learned
Staff has reflected significantly on the factors and issues that arose as part of the Summit Project to
identify lessons learned and actions that will be taken in the future to avoid repeating this situation,
as detailed below:
LESSONS LEARNED FUTURE CORRECTIVE ACTIONS
In a “hot” construction market, the Engineer’s
estimate may still be lower than the actual
construction bid, particularly when competition
for project dollars is low or non-existent.
Hire third party cost estimating firm for (1)
high-cost projects, (2) projects with high level
of uncertainty, and (3) projects with usual
circumstances or scopes. Third party cost
estimating firm such as Leland Saylor
Associates, Cummings Construction, and
RSMeans typically have a better feel for
construction inflation, the site remoteness
factor, and availability of construction
companies and supply. A third party cost
estimation would also serve to verify the
engineer’s assumptions and identify any
potential gaps in cost line items.
Greater awareness of variability in the current
construction markets is needed internally to
help raise concerns early on.
Provide staff training and development.
Identify and attend construction-related
seminars and events to help staff stay abreast of
current construction industry standards, costs,
and market trends.
Attachment 1
DATE: August 4, 2016
MEMO TO: Board of Directors
FROM: Stephen E. Abbors, General Manager
SUBJECT: Preview of the Mount Umunhum Summit Project Bid Results and Recommendation
This FYI memorandum is provided in advance of the August 10, 2016 Board meeting when the
Board will consider an award a contract for construction services for the Mount Umunhum Summit
Project (Project). This memorandum is deliberately timed to allow the Board an opportunity to
synthesize the information and provide staff with any questions in advance of the meeting.
Based on the following important considerations, including the fully-evaluated conclusion that the
single bid received represents fair market value when compared to market trends and the results of a
third party cost estimate and a revised engineer’s estimate, the Board will be asked to consider
approval of the contract in its entirety as bid by D-Line Constructors with the “value engineering”
deductions as defined in this memorandum.
Important Considerations
1. Results of a newly revised engineer’s cost estimate and a professional, third-party cost
estimate indicate that the bid received represents fair market value. This conclusion
considers recent market trends in the Bay Area and a key understanding that when 2 to 3
bids are received, which would be the most that could be expected for this particular project
given its scope, lack of onsite utilities, and remote location, bids received are expected to be
10% to 25% above the engineer’s estimate. Our analysis indicates that the one bid received
is 14% above the third party estimate and 4% above the newly revised engineer’s estimate,
and thus within the lower end of what is expected based on trend analysis.
2. The Project is fully eligible for Measure AA reimbursement under Portfolio 23, which
allocated $27.972M for “Mt. Umunhum Public Access and Interpretation Projects” and
specifically calls for the opening of “Mt. Umunhum for multi-use public access to summit
via road and trail”.
3. The District retains sufficient funds in the cash flow reserve to fully fund the Project with no
subsequent negative impacts to District finances over the course of the next 30 years.
4. Meeting a Spring 2017 Grand Opening date provides the opportunity to highlight the
opening of the Mount Umunhum summit as one of the District’s first, substantial, regional
public access projects funded though Measure AA within the first three years following
voter approval of the bond measure.
Attachment 2
5. The opening of the summit has received high support from the public and major
stakeholders who are closely following and eagerly awaiting completion of the Project, and
was one of the highest ranking Vision Plan Priority Actions based on input received at
public workshops, via the online engagement tool, and Community Advisory Committee.
6. The District has invested over 8 years of focused effort to: seek outside funds for the Project
(including $3.2M of federal funds and $1M of Coastal Conservancy funds); conduct lead-
based paint and asbestos abatement; demolish dilapidated structures; prepare the public
access and restoration plan; certify the EIR; acquire the necessary road rights for public
access; and prepare the site for new visitor-serving amenities.
As mentioned in an earlier FYI memorandum dated June 22, 2016, the Project bid received came in
higher than the first revised engineer’s estimate (which was based on 90% construction documents).
As a result, I directed District staff to perform the following “next steps” prior to making a final
recommendation to the Board:
• Negotiate specific elements of the project with the bidder, D-Line Constructors (D-Line), to
reduce total construction costs (known as “value engineering” or “VE”).
• Engage with the design consultant, Restoration Design Group (RDG), to update the
engineer’s estimate from 90% to 100% construction documents to compare this latest and
most complete estimate with the bid received.
• Retain an expert third party construction cost estimator, Cumming Construction
Management (Cumming), to provide an independent construction cost estimate.
Below are the conclusions and findings arising from these “next steps” and my recommendation for
how to proceed along with a list of alternative actions with pros-and-cons, including budget
implications.
DISCUSSION
Staff engaged with D-Line Constructors and RDG to VE some of the elements through minor re-
design and material substitution on June 23, 2016. These discussions revealed numerous material
substitutions and minor design revisions to reduce the bid by approximately $500,000. If a contract
is awarded, further negotiation with D-Line during the course of construction could realize
additional cost reductions.
At the time that the bid was released, the District did not have the most current engineer’s cost
estimate. The latest engineer’s estimate only reflected Project elements at the 90% construction
documents level. Many Project elements that affect the cost were missing from that engineer’s
estimate since they were added late in the design to address new permitting requirements, improve
visitor circulation and safety, and reduce future maintenance requirements and costs, including:
• Additional flight of stairs with landings as viewing alcoves to connect the first set of stairs to
the parking lot;
• Roadway improvements from the flag pole to the summit (roughly 1/3-mile of road);
• Additional roadway infrastructure;
• Detailed hand and guard rails;
• Metal detailing with a long-lasting weatherproof finish;
• A non-combustible roof framing system for the weather shelters;
• Upgrade in materials, scale, and size of both weather shelters;
Attachment 2
• Increase in the number of site boulders;
• A sustainable natural resin paving system to stabilize ADA pedestrian paths;
• Metal edging along pedestrian pathways;
• Additional timber benches;
• Additional water tanks;
• Additional stone steps within planting restoration areas;
• Rock “mulching” within restoration areas and bioretention swales;
• Increase in the size and number of bioretention swales; and
• More substantial edge conditions along roadways and turnaround area (thickened edges and
small stemwalls) necessary for road support and additional engineering.
RDG provided a new, updated 100% construction document engineer’s estimate of $7,470,000 on
June 20, 2016 that reflects the final Bid Documents.
Concurrent with the VE and revised consultant cost estimate, staff also retained Cumming to
provide an independent, expert third party cost estimate. D-Line’s bid result and RDG’s new
engineer’s estimate were not shared with Cumming in order for the estimate to be truly independent
and unbiased. Cumming submitted an estimated construction cost of approximately $6,923,454.
The following table provides a summary of the budget, bids, and estimates.
Cost Description Total Cost % Difference
from Budget
% Difference from
New Estimates
Action Plan and Budget allocation for the
construction contract (based on an initial
engineer’s estimate of late 2015)
$4.02M (total
project budget =
$5.42M)
--
Engineer’s Estimate based on 90% Plans
(March 9, 2016)
$5.47M +36%
Revised Engineer’s Estimate based on
100% Plans (June 20, 2016)
$7.47M +86%
3rd Party Cost Estimate (July 21, 2016) $6.92M +72%
D-Line Bid (June 13, 2016) $7.8M +94% +4% from revised
engineer’s estimate;
+14% from 3rd party
estimate
D-Line Bid after Value Engineering
Deductions (July 29, 2016)
$7.3M +82%
Research indicates that similar to this Project, capital improvement projects across the state and
nation have recently experienced bids much higher than were originally estimated, and indications
are that this trend will continue in the foreseeable future. Findings are provided below:
Public Works bids in general are coming in higher than the engineer’s estimate. The Golden
Gate Bridge (GGB) District received two (2) bids to install steel net on the bridge to deter
suicides. The project was estimated at $76M, but the bids came in at $142M and $174M.
The current construction market is strong. Project costs are higher than past years. City and
County of San Francisco provided a presentation on October 19, 2015 describing the current
greater Bay Area construction trend as follows:
Attachment 2
- Construction bid data from 2015 shows that for projects that received only one (1)
bid, the estimate to bid differential was 25 to 50% over the estimate. Projects that
received 2 to 3 bids were 10 to 25% over the estimate.
- Strong construction demand continues to be a major construction escalation driver.
- Bidding environment remains favorable for contractors/subcontractors.
- Bid Index shows 12.5% increase in local bid estimates over the past year.
- Local experts are using 2016 escalation rates of 4.0% to 6.0%.
Re-bidding a project may lead to complications and other negative impacts. City of San
Jose Thompson Creek Trail Improvement Project’s initial bid resulted in eight (8) bidders
with the low bid approximately 70% over the engineer’s estimate. The City of San Jose re-
scoped and re-bid the project but only received four (4) bids. The low bidder from the initial
bid also filed a protest on the second bid. Re-bidding a project could have negative results
such as receiving fewer and higher cost bids, as well as other complications.
If the Board does approve the contract as bid (including deducted VE items), an increase in the
budget of approximately $3M will be needed for the Summit Project. The Board can expect to see a
resolution included as a second item in the award of contract agenda report to authorize the
additional funds that would be necessary to move forward in awarding the contract.
ALTERNATIVES
There are numerous alternatives for how to proceed, each with its own set of pros-and-cons. The
following list summarizes the benefits and risks of each, beginning with Recommended Option 1:
Option 1: Recommended. Award a base contract for $7.3M, which includes the deduction of
approximately $500,000 of VE items.
Pros:
- Includes all public access elements approved by the Board.
- Per conversations with the District CFO and Controller, plus a review of District finances,
the District retains sufficient funds both under Measure AA and in cash flow reserve to fund
the contract and the contract is fully eligible for Measure AA reimbursement.
- Bid is within 14% of the 3rd Party Cost Estimate and 4% of the final Engineer’s Estimate.
These differentials are on the lower end of what would be expected for this project had 2 to
3 bids been received, and therefore deemed to represent fair market value. Moreover,
research shows that neighboring public agencies are also receiving bids higher than their
estimates and that this trend will unlikely change in the short term.
- Retain high confidence of receiving a quality product constructed by a well-qualified firm.
Staff have contacted references provided by D-Line and received positive feedback,
confirming the firm has successfully completed similar projects in a responsive, on-time,
and craftsman-like manner. Those projects include Sausal Creek Restoration in Diamond
Park and UCSF Benioff Children’s Hospital in Oakland.
- Would meet the Spring 2017 Grand Opening schedule.
Cons:
- Only one bid was received. As a result, the engineer’s cost estimate was revised to reflect
the 100% bid plan set and a third party cost estimate was obtained to analyze the fair market
value of the one bid received.
Attachment 2
- The single bid is higher than the amount budgeted, requiring a budget line item increase.
Fortunately, the District retains sufficient cash flow reserve funds to cover this increase and
the cost is eligible for full Measure AA reimbursement.
Option 2: Remove the Trailhead Weather Shelter (Bid Alternative #3) from the Contract at
approximately $425,000, along with approximately $500,000 of VE items, for a reduced Award of
Contract of approximately $6,900,000.
Pros:
- Includes the majority of the elements approved by the Board.
- Would continue to receive a high quality product.
- Per conversations with the District CFO and Controller, plus a review of District finances,
the District retains sufficient funds both under Measure AA and in cash flow reserve to fund
the contract and the contract is fully eligible for Measure AA reimbursement.
- Reduces the contract by additional $425,000.
- The Trailhead Shelter can be installed at a later date, if desired by the Board.
- Would meet the Spring 2017 Grand Opening schedule.
Cons:
- The value in building the Shelter while the contractor is already mobilized is lost, likely
adding to the overall total cost of construction at a later date.
- A major visitor amenity is either removed from the site or its construction is delayed.
- If the Shelter is constructed at a later date:
Overall Project cost is likely to increase with inflation.
Temporary impacts to public access would result to accommodate construction within
an open and active public use area.
Option 3: Reject current bid, provide minor design changes without significantly altering Board-
approved design elements, and re-bid.
Pros:
- Upon a successful re-bid of the Project, the District may receive multiple bids to more fully
understand construction costs under current market conditions.
- May potentially receive a bid that is lower than the current bid; however, current trends
indicate a potential for receiving a higher bid.
- May includes a majority of the elements approved by the Board.
- May still receive a high quality product.
Cons:
- May run into the risk of the low bidder being less qualified for this type of work.
- May encounter the same situation of receiving only a single bid, or worse - no bids.
- Bid(s) received may be higher. Research indicates that neighboring agencies that went out
to bid again have received bids much higher than the corresponding engineer’s estimate.
Indications are that this trend will not change in the near future.
- Incurs additional consultant design fees to assist with the re-bidding.
Attachment 2
- A revised schedule could put the Spring 2017 opening date in jeopardy, not only because of
the additional time needed to re-bid, but also the majority of the construction work would be
conducted during the winter/spring when rain and snow can affect the schedule.
Option 4: Reject current bid, redesign the project to allow Phased Construction, and re-bid.
Pros:
- Provides the flexibility to construct the Project in separate phases, allowing smaller amounts
of budget to be spent annually.
- Bids for the first phase of work would likely be substantially lower than the current bid, and
likely within the current budgeted amount.
Cons:
- May run into the risk of the low bidder being less qualified for this type of work.
- May encounter the same situation of receiving only a single bid, or worse - no bids.
- Bid(s) received may be higher.
- Phasing projects typically results in overall higher total construction costs due to multiple
mobilization efforts by different contractors.
- The Summit would likely not open to the public in Spring 2017 given that construction may
not begin until December 2016, at best.
- Incurs additional consultant design fees to create phased construction plans and re-bid each
phase separately.
Based on the analysis above and the important considerations that are listed on page 1, I will be
asking the Board to consider approval of the contract in its entirety with the “value engineering”
deductions as bid by D-Line Constructors on August 10.
Attachment 2
Resolutions/2016/R-16-_FY2016-17BudgetAdjust_MtUmSummit 1
RESOLUTION NO. 16-___
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT AMENDING
THE BUDGET FOR FISCAL YEAR 2016-17
WHEREAS, on June 22, 2016 the Board of Directors of the Midpeninsula Regional
Open Space District adopted the Fiscal Year 2016-17 Budget and Action Plan; and
WHEREAS, unanticipated expenses associated with the Mount Umunhum Summit
Project have arisen and additional funds are required to complete the project; and
WHEREAS, the General Manager recommends amending the FY 2016-17 Budget and
Action Plan to reflect the increased costs of the project;
NOW, THEREFORE, The Board of Directors of the Midpeninsula Regional Open
Space District does resolve as follows:
SECTION ONE. Amend the Budget and Action Plan for the Midpeninsula Regional
Open Space District for the Fiscal Year 2016-17 as follows:
Project Name Current Budget Revised Budget
Mount Umunhum
Summit Project
$5,423,250 $8,889,700
SECTION TWO. Monies are hereby appropriated in accordance with said budget.
SECTION THREE. Except as herein modified, the FY 2016-17 Budget and Action
Plan, Resolution No. 16-25 as amended, shall remain in full force and effect.
* * * * * * * * * * * * * * * * * * * *
PASSED AND ADOPTED by the Board of Directors of the Midpeninsula Regional
Open Space District on August 10, 2016, at a Regular Meeting thereof, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST: APPROVED:
Secretary
Board of Directors
President
Board of Directors
Attachment 3
APPROVED AS TO FORM:
General Counsel
I, the District Clerk of the Midpeninsula Regional Open Space District, hereby certify
that the above is a true and correct copy of a resolution duly adopted by the Board of Directors
of the Midpeninsula Regional Open Space District by the above vote at a meeting thereof duly
held and called on the above day.
District Clerk
Attachment 3
R-16-82
Meeting 16-18
August 10, 2016
AGENDA ITEM 9
AGENDA ITEM
Award of Contract to D-Line Constructors for Construction Services for the Mount Umunhum
Summit Project at Sierra Azul Open Space Preserve for a Base Amount Not-to-Exceed
$7,385,000 and a Separate 10% Contingency
GENERAL MANAGER’S RECOMMENDATIONS
1. Authorize the General Manager to enter into contract with D-Line Constructors of Oakland,
CA, for a not-to-exceed base contract amount of $7,385,000,
2. Authorize a 10% construction contract contingency in the amount of $738,500 to be reserved
for unanticipated issues, thus allowing a total contract amount not-to-exceed $8,123,500.
3. Adopt a Resolution approving a budget adjustment in the amount of $3,466,450 to the Fiscal
Year 2016-17 Budget.
SUMMARY
A Request for Bids was issued on May 11, 2016 for the Mount Umunhum Summit Project
(Project). One (1) bid proposal was received and opened on Monday, June 13, 2016. The low
bidder, D-Line Constructors, presented a complete and responsive bid package. An FYI
memorandum was provided on June 22, 2016 to inform the Board of the bid result. The FYI
memorandum also discussed important factors that affected the bid, including site remoteness
and a strong construction market. Four (4) options were provided for the Board to consider.
Since the issuance of the FYI memorandum, the General Manager directed District staff to
contract with a third party cost estimating consultant, Cumming Construction Management, to
provide an independent cost estimate to determine whether the one (1) bid received represents
fair market value. The third party cost estimate arrived at $6,923,454, approximately 14% lower
than the received bid. Based on relevant market research, the 14% difference is within the
tolerance of the fair market value for a Capital Improvement Project of this type. Construction
bid data from 2015 showed that for projects with only one (1) bid, the estimate to bid differential
was 25 to 50% over the estimate. Projects that received 2 to 3 bids resulted in bids 10 to 25%
over the estimate. Therefore, the General Manager recommends awarding the contract for
construction of the Project to D-Line Constructors, for a base contract amount of $7,385,000 and
allow for a 10% contingency to address unanticipated construction issues as the work progresses,
for a total not-to-exceed amount of $8,123,500. In addition, given that the cost of construction
has increased substantially as compared to when the budget estimates were first prepared, a line
item budget adjustment of $3,466,450 is required to proceed with implementation.
R-16-82 Page 2
MEASURE AA
A 5-year Measure AA (MAA) Project List was approved by the Board at their October 29, 2014
meeting and includes the Project as part of MAA Portfolio #23, Mount Umunhum Public Access
and Interpretation Projects, with a total funding allocation of $27.972 Million. This contract is
well within the remaining Measure AA funds and serves to further the goals of Portfolio #23 by
providing the necessary construction of the Mount Umunhum public access facilities to open the
summit for public recreational use.
DISCUSSION
Background
In 1986, the Midpeninsula Regional Open Space District (District) acquired the former Almaden
Air Force Station and all of its remaining facilities on Mount Umunhum and Mount Thayer (R-
86-20) with the intent to restore the area to a natural condition and provide public access. In
October 2010, Restoration Design Group (RDG) was retained to begin schematic design of
public access elements on the summit. On August 10, 2011, the Board approved an award of
contract for the preparation of demolition contract documents for the demolition of existing
buildings, with the exception of the radar tower, with the work being subsequently completed in
early 2013. In August 2015, the Board approved the Final Design Development Options for the
Project and Final Construction Documents were completed in May 2016 for inclusion in the
Request for Bids.
The purpose of the Project is to provide access to the summit for the public to enjoy the restored
natural environment. Public access elements include site amenities that the Board previously
approved in August 2015 (Final Design Development Options, R-15-126), November 2015
(Interpretive Design Development Options, R-15-160), December 2015 (EIR Addendum Project
Modifications, R-15-166), and March 2016 (Final Design for Shelters and Stair, R-16-26), which
include the installation of the following elements:
• Two weather shelters, one at the summit and one at the trailhead area
• A vehicular turn-around at the summit with ADA parking stalls
• An ADA, surfaced pathway around the East and West Summits
• A ceremonial circle near the West Summit
• East Summit viewing area
• Guardrails and site appropriate safety elements
• Final grading and site topographic restoration
• Upper and lower summit stairs
• Parking area with roughly 50 stalls, including 3 ADA stalls
• Vault toilet at the parking area
• Emergency helicopter landing zone
• Rehabilitation of roughly 1/3 mile of summit roadway
• Water storage tanks and associated infrastructure
• Stormwater infrastructure, including bioretention basins
• District standard split-rail fencing.
• Two emergency call boxes, one at the summit and one at the parking lot
R-16-82 Page 3
Contractor Selection
The Request for Bids was issued on May 11, 2016, and was sent to contractors, subcontractors
and consultants who had requested to be notified of the project. Legal notices were posted in the
San Jose Mercury News, Santa Cruz Sentinel, and five Builder’s Exchange programs. The
Invitation to Bid was also posted on the District website.
Two pre-bid meetings/site walks were held at the project site on May 12, 2016, and May 16,
2016, and were attended by a total of six (6) prime contractors. Sealed bids were due on June 13,
2016, and one (1) bid was received in the amount of $7,885,000. In order to achieve the design
intent while reducing the project costs, District staff engaged with the contractor to value
engineer (VE) some of the elements through minor re-design and material substitution. An
initial VE exercise was conducted on June 23, 2016 with RDG, D-Line Constructors, and
District staff. Numerous material substitutions and minor design revisions were mutually
identified that allows the bid to be reduced by $500,000. Further collaboration with D-Line will
likely occur if a contract is awarded to identify additional material substitutions for further
savings.
Staff contacted the references provided by D-Line and received positive feedback, confirming
the firm has successfully completed similar projects in a responsive, on-time, and craftsman-like
manner. Those projects include Sausal Creek Restoration in Dimond Park and UCSF Benioff
Children’s Hospital in Oakland.
In addition, the General Manager directed District staff to engage with an independent third party
construction cost estimate to analyze the fair market value of the bid, as only one was received.
This cost estimate analysis was conducted by Cumming Construction Management and received
on July 22, 2016. The estimate was done without the estimator’s knowledge of the bid results,
used the same information that was given to potential bidders, and took into consideration the
unique factors characteristic of this project. The report revealed a construction cost estimate of
$6,923,454, which is 14% lower than the received bid. Specifically, the breakdown of bid versus
the construction cost estimate and engineer’s estimate can be seen in the table below (includes
base and alternates):
Source Base Bid
Alt 1:
Upper
Stairs
Alt 2:
Lower
Stairs
Alt 3:
Trailhead
Weather
Shelter
Alt 4:
Water
Tank Area
Total Bid:
Base Bid
plus Alts 1-4
D-Line
Constructors
(6-13-16 Bid)
$6,300,000
$520,000
$540,000
$425,000
$100,000
$7,885,000
Third Party
Construction
Cost (Estimate
7-22-16)
$5,837,773 $273,358 $252,441 $392,374 $167,508 $6,923,454
Engineer’s
Estimate
6-20-16)
$6,131,453 $388,700 $412,600 $398,075 $142,255 $7,473,083
R-16-82 Page 4
According to a presentation by the City and County of San Francisco and other sources presented
in the August 4, 2016 FYI Memo, the 14% difference is within the tolerance of the fair market
value for a Capital Improvement Project of this type. Construction bid data from 2015 showed
that for projects that received only one (1) bid, the estimate to bid differential was 25 to 50%
over the estimate. Projects that received 2 to 3 bids resulted in 10 to 25% over the estimate.
Upon careful review of the Bid Proposal, contractors' relevant experience and qualifications,
third party cost estimate, and input from RDG’s design team, the General Manager recommends
awarding the contract to D-Line Constructors who is the lowest responsible and responsive
bidder.
Contract Contingency
A 10% contingency amount is an industry standard to manage a project of this size and type and
is required to address unforeseen conditions that may be encountered during execution of the
work. Unit pricing was included on the bid form to allow negotiation with the contractor should
unforeseen situations arise. Unanticipated issues that may arise at this particular project site
include the proper handling and disposal of unexpected, and potentially hazardous, buried
material given the site’s former use as an air force station, and the addition of new and specific
final construction elements to seamlessly merge the Summit Project elements with the Road
Project elements.
ALTERNATIVES
There are numerous alternatives for how to proceed, each with its own set of pros-and-cons. The
following summarizes the benefits and risks of four options, including Recommended Option 1:
Option 1: Recommended. Award a base contract for $7.385M, which includes the deduction
of approximately $500,000 of VE items.
Pros:
- Includes all public access elements approved by the Board.
- Per conversations with the District CFO and Controller, plus a review of District
finances, the District retains sufficient funds both under Measure AA and in cash flow
reserve to fund the contract and the contract is fully eligible for Measure AA
reimbursement.
- Bid is within 14% of the 3rd Party Cost Estimate and 4% of the final Engineer’s
Estimate. These differentials are on the lower end of what would be expected for this
project had 2 to 3 bids been received, and therefore deemed to represent fair market
value. Moreover, research shows that neighboring public agencies are also receiving bids
higher than their estimates and that this trend will unlikely change in the short term.
- Retain high confidence of receiving a quality product constructed by a well-qualified
firm. Staff have contacted references provided by D-Line and received positive
feedback, confirming the firm has successfully completed similar projects in a
responsive, on-time, and craftsman-like manner. Those projects include Sausal Creek
Restoration in Dimond Park and UCSF Benioff Children’s Hospital in Oakland.
- Would meet the Spring 2017 Grand Opening schedule.
R-16-82 Page 5
Cons:
- Only one bid was received. As a result, the engineer’s cost estimate was revised to
reflect the 100% bid plan set and a third party cost estimate was obtained to analyze the
fair market value of the one bid received.
- The single bid is higher than the amount budgeted, requiring a budget line item increase.
Fortunately, the District retains sufficient cash flow reserve funds to cover this increase
and the cost is eligible for full Measure AA reimbursement.
Option 2: Remove the Trailhead Weather Shelter (Bid Alternative #3) from the Contract at
approximately $425,000, along with approximately $500,000 of VE items, for a reduced Award
of Contract of approximately $6,900,000.
Pros:
- Includes the majority of the elements approved by the Board.
- Would continue to receive a high quality product.
- Per conversations with the District CFO and Controller, plus a review of District
finances, the District retains sufficient funds both under Measure AA and in cash flow
reserve to fund the contract and the contract is fully eligible for Measure AA
reimbursement.
- Reduces the contract by additional $425,000.
- The Trailhead Shelter can be installed at a later date, if desired by the Board.
- Would meet the Spring 2017 Grand Opening schedule.
Cons:
- The value in building the Shelter while the contractor is already mobilized is lost, likely
adding to the overall total cost of construction at a later date.
- A major visitor amenity is either removed from the site or its construction is delayed.
- If the Shelter is constructed at a later date:
Overall Project cost is likely to increase with inflation.
Temporary impacts to public access would result to accommodate construction
within an open and active public use area.
Option 3: Reject current bid, provide minor design changes without significantly altering
Board-approved design elements, and re-bid.
Pros:
- Upon a successful re-bid of the Project, the District may receive multiple bids to more
fully understand construction costs under current market conditions.
- May potentially receive a bid that is lower than the current bid; however, current trends
indicate a potential for receiving a higher bid.
- May includes a majority of the elements approved by the Board.
- May still receive a high quality product.
R-16-82 Page 6
Cons:
- May run into the risk of the low bidder being less qualified for this type of work.
- May encounter the same situation of receiving only a single bid, or worse - no bids.
- Bid(s) received may be higher. Research indicates that neighboring agencies that went
out to bid again have received bids much higher than the corresponding engineer’s
estimate. Indications are that this trend will not change in the near future.
- Incurs additional consultant design fees to assist with the re-bidding.
- A revised schedule could put the Spring 2017 opening date in jeopardy, not only because
of the additional time needed to re-bid, but also the majority of the construction work
would be conducted during the winter/spring when rain and snow can affect the schedule.
Option 4: Reject current bid, redesign the project to allow Phased Construction, and re-bid.
Pros:
- Provides the flexibility to construct the Project in separate phases, allowing smaller
amounts of budget to be spent annually.
- Bids for the first phase of work would likely be substantially lower than the current bid,
and likely within the current budgeted amount.
Cons:
- May run into the risk of the low bidder being less qualified for this type of work.
- May encounter the same situation of receiving only a single bid, or worse - no bids.
- Bid(s) received may be higher.
- Phasing projects typically results in overall higher total construction costs due to multiple
mobilization efforts by different contractors.
- The Summit would likely not open to the public in Spring 2017 given that construction
may not begin until December 2016, at best.
- Incurs additional consultant design fees to create phased construction plans and re-bid
each phase separately.
FISCAL IMPACT
The District’s Fiscal Year 2016-17 Action Plan and Budget includes $5,423,250 for completion
of the Mount Umunhum Summit Project to cover the construction costs, allowances for
contingencies and unforeseen conditions, and consultant fees for general conditions, construction
oversight and administration, and special inspections.
A budget line item adjustment is requested from the Board in the amount of a $3,466,450
increase for a total of $8,889,700 to the Fiscal Year 2016-17 Budget to fully fund the remaining
construction work. If the Board approves the General Manager’s recommendation, it is
anticipated the project will be 100% complete in the Spring of 2017.
Given that there are two budget line item adjustments being recommended as part of the August
10, 2016 Board meeting that affect Portfolio 23, the following table is provided to outline the
Measure AA Portfolio budget, costs to date, and the fiscal implications related to the Mount
Umunhum Summit and Road Projects:
R-16-82 Page 7
Budget (in $millions)
MAA 23 Portfolio Total $27.97
Spent to Date: $4.08
Encumbrances: $0.3
Mount Umunhum Summit Project: $8.89*
Mount Umunhum Road Project: $6.33*
Balance Remaining (Proposed): $8.37
* These amounts include the proposed construction contracts and other expected expenses to complete the project,
including special inspections, construction administration, etc.
BOARD COMMITTEE REVIEW
No Board Committee review is required for this phase of the Project.
PUBLIC NOTICE
Public notice of this Agenda Item was provided per the Brown Act. No additional notice is
required.
CEQA COMPLIANCE
On June 12, 2012 (refer to Report R-12-59), the Board approved the adoption of a Final
Environmental Impact Report for the Mount Umunhum Environmental Restoration and Public
Access Project. In 2015, the District prepared the first Addendum to the 2012 EIR to analyze
minor modifications to the Summit and Road improvements that included installation of gates
and fencing, and acquiring a road access easement to Mount Thayer for District vehicles,
contractors, and emergency access only (no general public access). In July 2016, the District
prepared a second Addendum to the 2012 EIR to analyze minor modifications to the Road
Project that included: 1) installation of a total of approximately 180 linear feet of retaining walls,
in three locations along Mount Umunhum Road, to provide slope stability for road widening; and
2) increasing the number of truck haul trips for transporting excavated material from project
construction activities, and routing all excavated material haul trips to Mount Thayer where the
material will be used as part of the previously proposed landform restoration (R-12-91).
In summary, taken together, the EIR and its two Addenda fully analyzed the Summit Project, in
compliance with the requirements of the California Environmental Quality Act
(CEQA). Awarding the contract for construction of the Mount Umunhum Summit Project is
consistent with the EIR and the approved Addenda for implementation of the Mount Umunhum
Environmental Restoration and Public Access Plan. No new significant environmental effects or
a substantial increase in the severity of previously identified significant effects would result
beyond what was analyzed in the EIR.
NEXT STEPS
Upon approval by the Board of Directors, the General Manager will enter into a contract with D-
Line Constructors, to perform construction of all Summit Public Access elements (excluding any
radar tower repairs). The project is scheduled to begin in August 2016 and be completed by
Spring 2017.
R-16-82 Page 8
Attachments:
1. June 13, 2016 FYI Memo
2. August 4, 2016 FYI Memo
3. Resolution Amending the Budget for Fiscal Year 2016-17
Responsible Department Head:
Jay Lin, Engineering and Construction Manager
Prepared by:
Damon Adlao, Engineering and Construction Capital Project Manager III
Assuming VE efforts are successful, a recommendation for Award of Contract and a line item
budget increase will be presented to the Board in July. RDG is currently working on a revised
independent final engineer’s estimate (an update as of the March 2016 estimate) that will be used as
a tool to analyze in more detail the contractor’s bid by line item.
MOUNT UMUNHUM ROAD REHABILITATION PROJECT IMPACTS
Given the manifestation of the current competitive construction market and premium required for
the project’s site remoteness, the Mount Umunhum Road Rehabilitation Project (Road Project) may
also experience similar budget constraints. The FY2016-17 Action Plan and Budget allocated $3
million for the repair contract and the revised engineer’s estimate that was just recently provided on
June 8, 2016 anticipates a cost of $4.35 million. The Road Project released for bid on June 10,
2016, and is expecting bid results on July 8, 2016. Bid results along with the General Manager’s
recommendations will be presented to the Board in July. Unlike the Summit Project, the Road
Project contains discreet elements that can be removed to substantially decrease the cost without
significantly impacting the Project goals. These elements were included for ease of long-term
maintenance of the road.
Lessons Learned
Staff has reflected significantly on the factors and issues that arose as part of the Summit Project to
identify lessons learned and actions that will be taken in the future to avoid repeating this situation,
as detailed below:
LESSONS LEARNED FUTURE CORRECTIVE ACTIONS
In a “hot” construction market, the Engineer’s
estimate may still be lower than the actual
construction bid, particularly when competition
for project dollars is low or non-existent.
Hire third party cost estimating firm for (1)
high-cost projects, (2) projects with high level
of uncertainty, and (3) projects with usual
circumstances or scopes. Third party cost
estimating firm such as Leland Saylor
Associates, Cummings Construction, and
RSMeans typically have a better feel for
construction inflation, the site remoteness
factor, and availability of construction
companies and supply. A third party cost
estimation would also serve to verify the
engineer’s assumptions and identify any
potential gaps in cost line items.
Greater awareness of variability in the current
construction markets is needed internally to
help raise concerns early on.
Provide staff training and development.
Identify and attend construction-related
seminars and events to help staff stay abreast of
current construction industry standards, costs,
and market trends.
Attachment 1
DATE: August 4, 2016
MEMO TO: Board of Directors
FROM: Stephen E. Abbors, General Manager
SUBJECT: Preview of the Mount Umunhum Summit Project Bid Results and Recommendation
This FYI memorandum is provided in advance of the August 10, 2016 Board meeting when the
Board will consider an award a contract for construction services for the Mount Umunhum Summit
Project (Project). This memorandum is deliberately timed to allow the Board an opportunity to
synthesize the information and provide staff with any questions in advance of the meeting.
Based on the following important considerations, including the fully-evaluated conclusion that the
single bid received represents fair market value when compared to market trends and the results of a
third party cost estimate and a revised engineer’s estimate, the Board will be asked to consider
approval of the contract in its entirety as bid by D-Line Constructors with the “value engineering”
deductions as defined in this memorandum.
Important Considerations
1. Results of a newly revised engineer’s cost estimate and a professional, third-party cost
estimate indicate that the bid received represents fair market value. This conclusion
considers recent market trends in the Bay Area and a key understanding that when 2 to 3
bids are received, which would be the most that could be expected for this particular project
given its scope, lack of onsite utilities, and remote location, bids received are expected to be
10% to 25% above the engineer’s estimate. Our analysis indicates that the one bid received
is 14% above the third party estimate and 4% above the newly revised engineer’s estimate,
and thus within the lower end of what is expected based on trend analysis.
2. The Project is fully eligible for Measure AA reimbursement under Portfolio 23, which
allocated $27.972M for “Mt. Umunhum Public Access and Interpretation Projects” and
specifically calls for the opening of “Mt. Umunhum for multi-use public access to summit
via road and trail”.
3. The District retains sufficient funds in the cash flow reserve to fully fund the Project with no
subsequent negative impacts to District finances over the course of the next 30 years.
4. Meeting a Spring 2017 Grand Opening date provides the opportunity to highlight the
opening of the Mount Umunhum summit as one of the District’s first, substantial, regional
public access projects funded though Measure AA within the first three years following
voter approval of the bond measure.
Attachment 2
5. The opening of the summit has received high support from the public and major
stakeholders who are closely following and eagerly awaiting completion of the Project, and
was one of the highest ranking Vision Plan Priority Actions based on input received at
public workshops, via the online engagement tool, and Community Advisory Committee.
6. The District has invested over 8 years of focused effort to: seek outside funds for the Project
(including $3.2M of federal funds and $1M of Coastal Conservancy funds); conduct lead-
based paint and asbestos abatement; demolish dilapidated structures; prepare the public
access and restoration plan; certify the EIR; acquire the necessary road rights for public
access; and prepare the site for new visitor-serving amenities.
As mentioned in an earlier FYI memorandum dated June 22, 2016, the Project bid received came in
higher than the first revised engineer’s estimate (which was based on 90% construction documents).
As a result, I directed District staff to perform the following “next steps” prior to making a final
recommendation to the Board:
• Negotiate specific elements of the project with the bidder, D-Line Constructors (D-Line), to
reduce total construction costs (known as “value engineering” or “VE”).
• Engage with the design consultant, Restoration Design Group (RDG), to update the
engineer’s estimate from 90% to 100% construction documents to compare this latest and
most complete estimate with the bid received.
• Retain an expert third party construction cost estimator, Cumming Construction
Management (Cumming), to provide an independent construction cost estimate.
Below are the conclusions and findings arising from these “next steps” and my recommendation for
how to proceed along with a list of alternative actions with pros-and-cons, including budget
implications.
DISCUSSION
Staff engaged with D-Line Constructors and RDG to VE some of the elements through minor re-
design and material substitution on June 23, 2016. These discussions revealed numerous material
substitutions and minor design revisions to reduce the bid by approximately $500,000. If a contract
is awarded, further negotiation with D-Line during the course of construction could realize
additional cost reductions.
At the time that the bid was released, the District did not have the most current engineer’s cost
estimate. The latest engineer’s estimate only reflected Project elements at the 90% construction
documents level. Many Project elements that affect the cost were missing from that engineer’s
estimate since they were added late in the design to address new permitting requirements, improve
visitor circulation and safety, and reduce future maintenance requirements and costs, including:
• Additional flight of stairs with landings as viewing alcoves to connect the first set of stairs to
the parking lot;
• Roadway improvements from the flag pole to the summit (roughly 1/3-mile of road);
• Additional roadway infrastructure;
• Detailed hand and guard rails;
• Metal detailing with a long-lasting weatherproof finish;
• A non-combustible roof framing system for the weather shelters;
• Upgrade in materials, scale, and size of both weather shelters;
Attachment 2
• Increase in the number of site boulders;
• A sustainable natural resin paving system to stabilize ADA pedestrian paths;
• Metal edging along pedestrian pathways;
• Additional timber benches;
• Additional water tanks;
• Additional stone steps within planting restoration areas;
• Rock “mulching” within restoration areas and bioretention swales;
• Increase in the size and number of bioretention swales; and
• More substantial edge conditions along roadways and turnaround area (thickened edges and
small stemwalls) necessary for road support and additional engineering.
RDG provided a new, updated 100% construction document engineer’s estimate of $7,470,000 on
June 20, 2016 that reflects the final Bid Documents.
Concurrent with the VE and revised consultant cost estimate, staff also retained Cumming to
provide an independent, expert third party cost estimate. D-Line’s bid result and RDG’s new
engineer’s estimate were not shared with Cumming in order for the estimate to be truly independent
and unbiased. Cumming submitted an estimated construction cost of approximately $6,923,454.
The following table provides a summary of the budget, bids, and estimates.
Cost Description Total Cost % Difference
from Budget
% Difference from
New Estimates
Action Plan and Budget allocation for the
construction contract (based on an initial
engineer’s estimate of late 2015)
$4.02M (total
project budget =
$5.42M)
--
Engineer’s Estimate based on 90% Plans
(March 9, 2016)
$5.47M +36%
Revised Engineer’s Estimate based on
100% Plans (June 20, 2016)
$7.47M +86%
3rd Party Cost Estimate (July 21, 2016) $6.92M +72%
D-Line Bid (June 13, 2016) $7.8M +94% +4% from revised
engineer’s estimate;
+14% from 3rd party
estimate
D-Line Bid after Value Engineering
Deductions (July 29, 2016)
$7.3M +82%
Research indicates that similar to this Project, capital improvement projects across the state and
nation have recently experienced bids much higher than were originally estimated, and indications
are that this trend will continue in the foreseeable future. Findings are provided below:
Public Works bids in general are coming in higher than the engineer’s estimate. The Golden
Gate Bridge (GGB) District received two (2) bids to install steel net on the bridge to deter
suicides. The project was estimated at $76M, but the bids came in at $142M and $174M.
The current construction market is strong. Project costs are higher than past years. City and
County of San Francisco provided a presentation on October 19, 2015 describing the current
greater Bay Area construction trend as follows:
Attachment 2
- Construction bid data from 2015 shows that for projects that received only one (1)
bid, the estimate to bid differential was 25 to 50% over the estimate. Projects that
received 2 to 3 bids were 10 to 25% over the estimate.
- Strong construction demand continues to be a major construction escalation driver.
- Bidding environment remains favorable for contractors/subcontractors.
- Bid Index shows 12.5% increase in local bid estimates over the past year.
- Local experts are using 2016 escalation rates of 4.0% to 6.0%.
Re-bidding a project may lead to complications and other negative impacts. City of San
Jose Thompson Creek Trail Improvement Project’s initial bid resulted in eight (8) bidders
with the low bid approximately 70% over the engineer’s estimate. The City of San Jose re-
scoped and re-bid the project but only received four (4) bids. The low bidder from the initial
bid also filed a protest on the second bid. Re-bidding a project could have negative results
such as receiving fewer and higher cost bids, as well as other complications.
If the Board does approve the contract as bid (including deducted VE items), an increase in the
budget of approximately $3M will be needed for the Summit Project. The Board can expect to see a
resolution included as a second item in the award of contract agenda report to authorize the
additional funds that would be necessary to move forward in awarding the contract.
ALTERNATIVES
There are numerous alternatives for how to proceed, each with its own set of pros-and-cons. The
following list summarizes the benefits and risks of each, beginning with Recommended Option 1:
Option 1: Recommended. Award a base contract for $7.3M, which includes the deduction of
approximately $500,000 of VE items.
Pros:
- Includes all public access elements approved by the Board.
- Per conversations with the District CFO and Controller, plus a review of District finances,
the District retains sufficient funds both under Measure AA and in cash flow reserve to fund
the contract and the contract is fully eligible for Measure AA reimbursement.
- Bid is within 14% of the 3rd Party Cost Estimate and 4% of the final Engineer’s Estimate.
These differentials are on the lower end of what would be expected for this project had 2 to
3 bids been received, and therefore deemed to represent fair market value. Moreover,
research shows that neighboring public agencies are also receiving bids higher than their
estimates and that this trend will unlikely change in the short term.
- Retain high confidence of receiving a quality product constructed by a well-qualified firm.
Staff have contacted references provided by D-Line and received positive feedback,
confirming the firm has successfully completed similar projects in a responsive, on-time,
and craftsman-like manner. Those projects include Sausal Creek Restoration in Diamond
Park and UCSF Benioff Children’s Hospital in Oakland.
- Would meet the Spring 2017 Grand Opening schedule.
Cons:
- Only one bid was received. As a result, the engineer’s cost estimate was revised to reflect
the 100% bid plan set and a third party cost estimate was obtained to analyze the fair market
value of the one bid received.
Attachment 2
- The single bid is higher than the amount budgeted, requiring a budget line item increase.
Fortunately, the District retains sufficient cash flow reserve funds to cover this increase and
the cost is eligible for full Measure AA reimbursement.
Option 2: Remove the Trailhead Weather Shelter (Bid Alternative #3) from the Contract at
approximately $425,000, along with approximately $500,000 of VE items, for a reduced Award of
Contract of approximately $6,900,000.
Pros:
- Includes the majority of the elements approved by the Board.
- Would continue to receive a high quality product.
- Per conversations with the District CFO and Controller, plus a review of District finances,
the District retains sufficient funds both under Measure AA and in cash flow reserve to fund
the contract and the contract is fully eligible for Measure AA reimbursement.
- Reduces the contract by additional $425,000.
- The Trailhead Shelter can be installed at a later date, if desired by the Board.
- Would meet the Spring 2017 Grand Opening schedule.
Cons:
- The value in building the Shelter while the contractor is already mobilized is lost, likely
adding to the overall total cost of construction at a later date.
- A major visitor amenity is either removed from the site or its construction is delayed.
- If the Shelter is constructed at a later date:
Overall Project cost is likely to increase with inflation.
Temporary impacts to public access would result to accommodate construction within
an open and active public use area.
Option 3: Reject current bid, provide minor design changes without significantly altering Board-
approved design elements, and re-bid.
Pros:
- Upon a successful re-bid of the Project, the District may receive multiple bids to more fully
understand construction costs under current market conditions.
- May potentially receive a bid that is lower than the current bid; however, current trends
indicate a potential for receiving a higher bid.
- May includes a majority of the elements approved by the Board.
- May still receive a high quality product.
Cons:
- May run into the risk of the low bidder being less qualified for this type of work.
- May encounter the same situation of receiving only a single bid, or worse - no bids.
- Bid(s) received may be higher. Research indicates that neighboring agencies that went out
to bid again have received bids much higher than the corresponding engineer’s estimate.
Indications are that this trend will not change in the near future.
- Incurs additional consultant design fees to assist with the re-bidding.
Attachment 2
- A revised schedule could put the Spring 2017 opening date in jeopardy, not only because of
the additional time needed to re-bid, but also the majority of the construction work would be
conducted during the winter/spring when rain and snow can affect the schedule.
Option 4: Reject current bid, redesign the project to allow Phased Construction, and re-bid.
Pros:
- Provides the flexibility to construct the Project in separate phases, allowing smaller amounts
of budget to be spent annually.
- Bids for the first phase of work would likely be substantially lower than the current bid, and
likely within the current budgeted amount.
Cons:
- May run into the risk of the low bidder being less qualified for this type of work.
- May encounter the same situation of receiving only a single bid, or worse - no bids.
- Bid(s) received may be higher.
- Phasing projects typically results in overall higher total construction costs due to multiple
mobilization efforts by different contractors.
- The Summit would likely not open to the public in Spring 2017 given that construction may
not begin until December 2016, at best.
- Incurs additional consultant design fees to create phased construction plans and re-bid each
phase separately.
Based on the analysis above and the important considerations that are listed on page 1, I will be
asking the Board to consider approval of the contract in its entirety with the “value engineering”
deductions as bid by D-Line Constructors on August 10.
Attachment 2
Resolutions/2016/R-16-_FY2016-17BudgetAdjust_MtUmSummit 1
RESOLUTION NO. 16-___
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
MIDPENINSULA REGIONAL OPEN SPACE DISTRICT AMENDING
THE BUDGET FOR FISCAL YEAR 2016-17
WHEREAS, on June 22, 2016 the Board of Directors of the Midpeninsula Regional
Open Space District adopted the Fiscal Year 2016-17 Budget and Action Plan; and
WHEREAS, unanticipated expenses associated with the Mount Umunhum Summit
Project have arisen and additional funds are required to complete the project; and
WHEREAS, the General Manager recommends amending the FY 2016-17 Budget and
Action Plan to reflect the increased costs of the project;
NOW, THEREFORE, The Board of Directors of the Midpeninsula Regional Open
Space District does resolve as follows:
SECTION ONE. Amend the Budget and Action Plan for the Midpeninsula Regional
Open Space District for the Fiscal Year 2016-17 as follows:
Project Name Current Budget Revised Budget
Mount Umunhum
Summit Project
$5,423,250 $8,889,700
SECTION TWO. Monies are hereby appropriated in accordance with said budget.
SECTION THREE. Except as herein modified, the FY 2016-17 Budget and Action
Plan, Resolution No. 16-25 as amended, shall remain in full force and effect.
* * * * * * * * * * * * * * * * * * * *
PASSED AND ADOPTED by the Board of Directors of the Midpeninsula Regional
Open Space District on August 10, 2016, at a Regular Meeting thereof, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST: APPROVED:
Secretary
Board of Directors
President
Board of Directors
Attachment 3
APPROVED AS TO FORM:
General Counsel
I, the District Clerk of the Midpeninsula Regional Open Space District, hereby certify
that the above is a true and correct copy of a resolution duly adopted by the Board of Directors
of the Midpeninsula Regional Open Space District by the above vote at a meeting thereof duly
held and called on the above day.
District Clerk
Attachment 3
R-16-100
Meeting 16-18
August 10
AGENDA ITEM 10
AGENDA ITEM
Determination of Compensability for Diversity Outreach Ad Hoc Committee Meetings
GENERAL MANAGER’S RECOMMENDATION
Discuss and determine whether the meetings of the Diversity Outreach Ad Hoc Committee
should be compensable.
SUMMARY
On June 22, 2016, the Board approved formation of the Diversity Outreach Ad Hoc Committee,
and President Kishimoto appointed Directors Harris, Kishimoto, and Riffle to serve on this
Committee. Board Policy 1.04 (Board Committees) authorizes the Board to form ad hoc
committees to study “specific matters and provide recommendations to the Board on such
matters.” Additionally, Board Policy 6.03 (Compensation of Directors and Payment of Expense)
states attendance at an ad hoc committee meeting shall be compensable when determined to be
so by the Board. When forming the Diversity Outreach Ad Hoc Committee, the Board did not
determine whether to make the committee’s meeting compensable. This item is before the Board
so the determination may be made.
MEASURE AA
This is not a Measure AA project.
DISCUSSION
In December 2012, the Board discussed several changes to the Board Committee structure and
charges in order to streamline the work of the committees and fold the work of the ad hoc
committees into the charges of the standing committees. In February 2013, the Board approved
several amendments to the Rules of Procedure to eliminate the former ad hoc committees and
formalize the structure and charges of the five standing Board Committees. Ad hoc committees
are required by the Brown Act to be temporary and have a defined purpose and a time frame to
accomplish that purpose. Since the update to the Board’s Committee structure, several ad hoc
committees have been formed and have since sunsetted or dissolved due to their temporary
nature and/or completion of their assigned task. The Capital Finance Ad Hoc Committee (2013-
14) meetings were compensable, but meetings of the Measure AA Implementation (2014-15),
Board Retreat (Winter 2015), and Board Retreat (Fall 2015) ad hoc committees were not
compensated. Prior to the Committee restructuring in 2013, all committees were compensable.
R-16-100 Page 2
Per Board policy on Compensation of Directors and Payment of Expenses, the maximum
allowable total compensation per Board member shall be one hundred dollars ($100.00) per day
and five hundred dollars ($500.00) per calendar month, irrespective of the number of meetings
attended each day or each month (Chapter 6, Policy 6.03). When forming the Diversity Outreach
Ad Hoc Committee, the Board did not establish the committee as a compensable committee; a
determination is requested at this time.
FISCAL IMPACT
If the Board determines the meetings of the Diversity Outreach Ad Hoc Committee are
compensable, it may result in a modest fiscal impact. The Fiscal Year 2016-17 Budget does not
include a specific allocation for this committee. However, the Budget may be sufficient
depending on the total number of compensable meetings that are scheduled for the committee.
BOARD COMMITTEE REVIEW
This item was not previously reviewed by a Board Committee, and formation of the Diversity
Outreach Ad Hoc Committee was approved by the full Board on June 22, 2016.
PUBLIC NOTICE
Public notice was provided as required by the Brown Act.
CEQA COMPLIANCE
This item is not a project subject to the California Environmental Quality Act.
NEXT STEPS
If the Board determines the Diversity Outreach Ad Hoc Committee is compensable, the District
Clerk will include attendance at the meetings on the Directors’ Compensation Reports.
Attachments
1. R-16-81 Formation of the Diversity Outreach Ad Hoc Committee
2. Board Policy 1.04 Board Committees
3. Board Policy 6.03 Compensation of Directors and Payment of Expenses
Responsible Department Head:
Steve Abbors, General Manager
Prepared by:
Jennifer Woodworth, District Clerk/Assistant to the General Manager
R-16-81
Meeting 16-14
June 22, 2016
AGENDA ITEM 5
AGENDA ITEM
Formation of the Diversity Outreach Ad Hoc Committee
GENERAL MANAGER’S RECOMMENDATION
Direct the formation of a new Diversity Outreach Ad Hoc Committee, and authorize the Board
President to appoint three Directors to serve on the Diversity Outreach Ad Hoc Committee.
SUMMARY
At its May 25, 2016 meeting, the Board directed staff to return at a future Board meeting with a
report to authorize formation of a Diversity Outreach Ad Hoc Committee to provide guidance in
implementing the District’s Strategic Plan Goal to “Develop and implement a comprehensive
public outreach strategy utilizing the entire District organization, including the engagement of
diverse communities and enhanced public education programs”. The Diversity Outreach Ad Hoc
Committee would be in place for a period of one year.
MEASURE AA
This is not a Measure AA project.
DISCUSSION
The Board’s Strategic Plan has long-focused in building and strengthening diverse partnerships,
increasing public outreach, and utilizing the entirety of the organization to accomplish these
goals. The Board President has suggested formation of a Diversity Outreach Ad Hoc Committee
to increase Board member involvement in increasing outreach to and involvement of diverse
communities.
Board Policy 1.04 (Board Committees) authorizes the Board to form ad hoc committees to study
“specific matters and provide recommendations to the Board on such matters.” In order to
increase the District’s outreach to diverse partners and communities, the General Manager
recommends the formation of an Ad Hoc Committee to provide guidance and assistance to the
Board and staff on effective, creative strategies to encourage civic engagement of communities;
promote efforts to build relationships with cultural groups and leaders; and advise and support
District efforts to increase and continue public outreach to multicultural and diverse
communities. Key items anticipated for discussion and involvement by the Committee include:
promote and collaborate with non-profit community organizations and educational programs,
engage with communities through public meetings to increase awareness about the District and
R-16-81 Page 2
its projects, explore strategies to better reflect the diversity of the surrounding community in
District activities and functions, and expand existing partnerships and enter into new, non-
traditional partnerships to complete projects and improve programs that serve a diverse
community.
FISCAL IMPACT
Formation of a new Diversity Outreach Ad Hoc Committee may result in a modest fiscal impact
if the Board selects to make these meetings compensable. Per Board policy on Compensation of
Directors and Payment of Expenses, the maximum allowable total compensation per Board
member shall be one hundred dollars ($100.00) per day and five hundred dollars ($500.00) per
calendar month, irrespective of the number of meetings attended each day or each month
(Chapter 6, Policy 6.03). The new Fiscal Year 2016-17 Budget does not include a specific
allocation for the proposed new Ad Hoc Committee. However, the Budget may be sufficient
depending on the total number of compensable meetings that are scheduled next fiscal year.
BOARD COMMITTEE REVIEW
This item was not previously reviewed by a Board Committee.
PUBLIC NOTICE
Notice was provided pursuant to the Brown Act.
CEQA COMPLIANCE
This proposed action is not a project under the California Environmental Quality Act (CEQA)
and no environmental review is required.
NEXT STEPS
Upon approval by the Board, Committee members would be appointed by the Board President.
Responsible Department Head:
Steve Abbors, General Manager
Prepared by:
Jennifer Woodworth, District Clerk/Assistant to the General Manager
Midpeninsula Regional Open Space District
Board Policy Manual
Board Committees Policy 1.04
Chapter 1 – Administration & Government
Effective Date: Revised Date: 11/13/13
Prior Versions:
Board Policy 1.04 Page 1 of 3
Committees of the Board
Upon passage of a motion by a majority of Board members in open session at a regular or
special meeting, standing or ad hoc committees composed of less than a quorum of Board
members may be established and members appointed for the study of specific matters and
provide recommendations to the Board on such matters. Ad hoc committees are temporary
committees established to accomplish a specified task, do not have permanent subject matter
jurisdiction, and must sunset within a year. Standing committees have ongoing and permanent
subject matter jurisdiction. The presiding officer of the Board shall appoint the committee
members with the consent of the Board. The President may serve on standing and ad hoc
committees, and as a voting alternate.
Standing Committees
The following shall be standing committees of the Board with subject matter jurisdiction to
perform the designated duties as set out herein and as assigned by the Board:
(a) Action Plan and Budget Committee: Reviews the proposed budget and any required
midyear budget amendments; makes budget recommendations to the Board; reviews
Action Plan and Strategic Plan implementation; and receives reports from the District
Controller concerning investments of District funds and current and long-term fiscal
analyses.
(b) Legislative, Funding and Public Affairs Committee: Reviews and makes
recommendations to the Board on the proposed two-year legislative program; reviews
policy matters related to the Board Policy Manual and other Board policies and
regulations as assigned by the Board; reviews matters concerning District funding, public
affairs, and outreach; and reviews requests for naming District facilities, lands and
preserves.
(c) Planning and Natural Resources Committee: Reviews Use and Management Plans,
Resource Management Plans, amendments, and issues (including consistency with
related Board policies; conducts site tours relating to these matters as needed (includes
trail use, facilities, structures, and resource management items).
(d) Real Property Committee: Reviews leases; reviews consistency with Board rental
policies concerning District real property; conducts site tours for potential real property
purchases and disposition of structures at time of purchase.
Board Policy 1.04 Page 2 of 3
The Real Property Committee set forth the following guidelines for site tours of real
property purchases:
1. Properties of regional significance
2. Coastal properties
3. Conservation partnership projects
4. Grant funded projects
5. Properties with known strong public interest
6. Large properties
7. Properties with significant habitable structures
8. Properties with significant or unique use and management issues
The Real Property Committee set forth the following guidelines for not holding site
tours:
1. Remote properties with poor roadway access
2. Properties with existing hazardous or unsafe conditions
3. Property owners not willing to have a public tour at their property
4. Small, minor or inholding properties
(e) Board Appointee Evaluation Committee: Reviews performance and employment
contracts of Board appointed employees: General Manager, General Counsel, and District
Controller.
Other matters may be referred to an appropriate Standing Committee with prior approval of
the Board. Such matters shall first be placed on a Board agenda by any Board Member or the
General Manager for Board approval.
The General Manager may also refer matters directly to an appropriate Standing Committee as
needed to implement the District’s Action Plan.
Three Board members shall be appointed to serve on each standing committee.
Appointments to the Action Plan and Budget Committee shall normally be made at the first
regular meeting in January. The Treasurer shall be one of the three members of the Action Plan
and Budget Committee.
Appointments to the Board Appointee Evaluation Committee shall include the Board President
and Vice President as two of the three members of the Committee.
Appointments to other standing committees shall be made at the first regular meeting
following the meeting at which officers of the Board are elected.
Standing Committee Meeting Notification
Agendas for meetings of standing committees of the Board shall be posted in a location that is
freely accessible to members of the public and posted on the District’s website at least 72 hours
before the meeting. The agenda shall include the time and location for the meeting and a brief
description of each item of business to be transacted or discussed at the meeting. Whenever
Board Policy 1.04 Page 3 of 3
possible, notices of standing committee meetings shall also be listed in advance on agendas for
regular or special Board meetings. Agendas for standing committee meetings shall be
forwarded to each person who usually receives an agenda for regular meetings and to each
person who has requested notification of meetings of a particular committee.
Midpeninsula Regional Open Space District
Board Policy Manual
Compensation of Directors
and Payment of Expenses
Policy 6.03
Chapter 6 - General
Effective Date: Revised Date: 11/13/13
Prior Versions:
Board Policy 6.03 Page 1 of 1
Public Resources Code § 5536 and 5536.5.
Members of the Board shall receive one hundred dollars ($100.00) for each attendance at a
Board meeting. A Board meeting includes a special meeting, a continued meeting, a closed
session, a public hearing, or a meeting of a standing committee of the Board. Attendance at an
ad hoc committee meeting shall be compensable when determined to be so by the Board. Only
Board members, who are members of the committee, or authorized substitutes appointed by
the presiding officer, may be compensated for attendance at the meeting. A committee of the
Board includes a committee of one and Board-appointed representatives on a committee
established by other organizations. The maximum total compensation per Board member
allowable under this section shall be one hundred dollars ($100.00) per day and five hundred
dollars ($500.00) per calendar month.
DATE: August 10, 2016
MEMO TO: MROSD Board of Directors
FROM: Stephen E. Abbors, General Manager
SUBJECT: Proposed Prospect Road Parking Area (Net Canopy) Safety Structure at Fremont
Older Open Space Preserve
_____________________________________________________________________________
The Fremont Older Parking Area Public Safety Improvement Project (Attachment 1) includes
design, permitting and construction of a net canopy structure to protect Preserve visitors and
vehicles from errant golf balls entering the parking area from the adjacent Saratoga County Club
golf course. Staff, with the assistance of a licensed landscape architect, has completed the
necessary design and permitting to solicit bids to construct the safety structure. Staff presented
the structure design to the Planning and Natural Resources (PNR) Committee and the community
on July 11, 2016. Previously, the PNR Committee received an informational presentation on the
proposed design and construction of a safety structure on October 21, 2014 (R-14-128). The
Board approved the contract for the canopy design and related construction administration on
January 14, 2015 (R-15-11). The purpose of this memorandum is to preview the final structure
design and construction schedule and to prepare the Board for their upcoming consideration of a
necessary Use and Management Plan Amendment and award of contract to proceed with
construction. The Board will be asked to consider both items at the same time for expediency
given that the project will soon be ready for construction. Funds for this project are included
within the Board-approved Fiscal Year 2016-17 Budget and Action Plan.
FINAL STRUCTURE DESIGN
The recommended horizontal safety netting structure design (Attachment 2) includes sixteen (16)
15-foot high steel posts installed along the perimeter of the parking area with a mesh golfing
netting strung horizontally taut between the posts, creating a 7,150-square foot protective netting
surface. The ability to locate the posts at key points along the boundary of the parking area
would allow the netting structure to avoid several large oak trees and their canopies. A section of
15-foot tall vertical mesh golf netting will also be attached to the steel posts on the southern edge
of the parking area to ensure complete protection from low trajectory golf balls.
As part of the permit approval process for this structure, District staff has worked closely with
the Santa Clara County Fire Marshall Office to develop a comprehensive ongoing maintenance
plan to ensure the structure does not pose a fire safety hazard. Once the structure is installed, as
part of the permit conditions for construction, the District will be required to comply with the
following maintenance requirements:
• Monthly scheduled blowing events, or as needed per inspections;
• Bi-weekly inspections during fire season;
• Daily District ranger patrols through parking area;
• Response to emergency issues within parking area by the resident District ranger;
• Annual inspections to ensure adequate distance from overhanging vegetation and top of
the safety netting structure
• As needed, removal of overhanging limbs to provide adequate distance and clearance
The netting system has been designed to be retractable to allow for easy access, cleaning, and
maintenance of the net structure to help the District meet these maintenance requirements.
Finally, there is an existing standard District pipe gate (Gate FO01) located on Prospect Road at
the Preserve property line that is currently kept open, in part for ease of passage for in-holding
residents that live further down on Prospect Road. In order to keep the parking area with the
new canopy structure secure when the Preserve is closed and allow residents to easily open and
close the gate for their access, I will be recommending that Gate FO01 be replaced with an
automated gate as part of this Project.
BOARD APPROVALS AND COMMUNICATIONS
The Planning and Natural Resources Committee met on July 11, 2016 at the Prospect Road
Parking Area to receive an informational presentation on the project and to consider forwarding a
recommendation to amend the Preserve’s Use and Management Plan to the full Board. Several
members of the public attended, asking specific questions related to the design of the structure
and indicating overall support of the project. Committee members inquired about impacts of the
structure on wildlife and the necessity and timeline of the Use and Management Plan
Amendment. Based on staff’s consultation with both the designer and with maintenance staff
from a local golf course that has a similar protective net structure, the likelihood for potential
bird entrapment would be infrequent. However, given the existing trees around the parking area,
the net structure would need to be regularly monitored. District staff would be prepared to
carefully remove any trapped birds during routine check-in of the net structure. A Use and
Management Plan amendment is necessary given that the proposed horizontal safety netting
structure would result in a new physical structure at the Preserve. If the permitting process
proceeds as anticipated, this amendment and the award of contract for construction will be
bought to the Board for consideration as one agenda item in September to increase efficiency by
streamlining Board review time.
Prospect Road Parking Area Safety Structure Tentative Schedule:
Task Date
PNR Committee and Community Meeting – Present plan and
proposed construction schedule July 11, 2016
Bid Release (pending permit issuance) August 2016
Bid Opening September 2016
Board Meeting – approval of Use and Management Plan
Amendment and Construction Contract September 2016
Prospect Road Parking Area Safety Structure Construction
Parking area will need to be closed for duration of construction
October/
November 2016
Anticipated re-opening of Prospect Road Parking Area November 2016
Attachments:
1. Prospect Road Parking Area Site Map
2. Prospect Road Parking Area Safety Structure Perspective View
Midpeninsula RegionalOpen Space District
: Prospect Road Staging Area, Fremont Older Open Space Preserve
October, 2014
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(MROSD)MROSD Preserve
While the District strives to use the best available digital data, this data does not represent a legal survey and is merely a graphic illustration of geographic features.
Fr e mo n t Old e r Op e n S p a c ePr e se r v e Area ofDetailFremont Older Open Space Preserve
This map was used by G.Laustenfor the October 21, 2014 PNR Committee Meeting.
Prospect Road Staging Area
Saratoga Country Club Golf Course
C o r a O l d e r Tr a i l
ProspectRd
Men's Tee
Women's Tee
PERSPECTIVE VIEW TO EAST
PARKING PROTECTION STRUCTURE
Fremont Older Open Space Preserve
DATE: August 10, 2016
MEMO TO: Board of Directors
THROUGH: Stephen E. Abbors, General Manager
FROM: Matt Baldzikowski, Senior Resource Management Specialist
SUBJECT: Salmonid Habitat Restoration Projects, San Gregorio Creek
_____________________________________________________________________________
This memorandum describes two in-stream fisheries habitat restoration projects that will be
implemented within San Gregorio Creek, the first scheduled for September 2016, and the second
in September 2017. The fish habitat restoration projects will entail strategically anchoring
redwood logs in-stream to benefit Coho Salmon (an endangered species), and Steelhead rainbow
trout (listed as a threatened species). Both of these species have experienced significant
population declines statewide, with Coho Salmon nearly extirpated south of San Francisco.
A significant factor which is limiting habitat for both species is the historic reduction of in-
stream wood (identified in the San Gregorio Creek Watershed Management Plan, 2010, and the
National Marine Fisheries Service Recovery Plan for Central California Coast Coho Salmon,
NMFS, 2012). The subject restoration projects are located within an area designated by the
NMFS as a “Core Area” with first priority for restoration, critical for Coho Salmon survival.
Large wood in-stream creates structural complexity within the stream which is utilized by Coho
Salmon and Steelhead throughout their life cycles. Wood creates high-flow refuge for fish,
important for spawning adults to rest and hold while moving upstream for spawning, and also
provides juvenile fish with a place to escape high flows which could otherwise prematurely flush
them from the stream system. Additionally, wood creates scour of the stream bed, sorting gravels
and cobbles, resulting in quality spawning gravels as well as washing away silt which is
detrimental to eggs in the gravels. This same scour also creates pools, which are essential for
juvenile Coho Salmon and 1-2-year-old juvenile Steelhead, prior to their migration out to sea.
Finally, in-stream wood also provides critical escape cover from predators throughout the
salmonids life cycle.
The recent purchase of the former Driscoll “Apple Orchard” / “Event Center” properties
included critical frontage on San Gregorio Creek, where beneficial in-stream habitat restoration
projects could be undertaken. The Peninsula Open Space Trust (POST) purchased the property
in 2012. District staff identified the potential habitat restoration value to the San Mateo County
Resource Conservation District (RCD) who had secured grant funding to investigate and develop
in-stream fisheries restoration projects, with a particular focus on San Gregorio Creek, following
the completion of the 2010 San Gregorio Creek Watershed Management Plan.
District staff worked with staff from the RCD and POST during the development of these
projects, contributing $15,000 toward project design at the Apple Orchard project location, and
$20,000 for design work at the Event Center location. The RCD utilized the design work in
successful grant applications for implementation to the California Department of Fish and
Wildlife Fisheries Restoration Grant Program (FRGP) in 2014 (Apple Orchard) and 2015 (Event
Center).
The design for the Apple Orchard project, set for implementation this September, included an
understanding between the RCD and POST to provide locally sourced redwood for the project.
Nine (9) redwood trees of approximately 24” diameter will be felled on the property for project
use. Specific trees were carefully selected, reviewed, and approved by then landowner POST,
the RCD, the forester/ contractor, and were also observed/ acknowledged by District staff at the
time. The trees to be utilized are smaller trees from a substantial, relatively dense stand located
away from the creek edge which are accessible to project site locations. One additional MROSD
tree will be removed and used from the Event Center location for the project to be implemented
next year (with additional trees donated by the neighboring project partner Optimist Volunteers
for Youth Camp).
An example of the Project Engineer’s site design for San Gregorio Creek at the Apple Orchard is
included on the following page. Also included is an example of a fish habitat restoration
structure constructed on the Clackamas River in Oregon to benefit Coho salmon, Steelhead, and
Chinook salmon. Construction techniques and habitat structures at the Apple Orchard project site
will be similar to the Oregon example provided.
Both San Gregorio Creek projects are identified in the Revised Adopted Measure AA 5-Year
Project List, adopted March 25, 2015, under Portfolio #7. Project 7-3 Fisheries Enhancement –
Apple Orchard, will be implemented this September. $17,250 is approved in the FY2016-2017
budget for the Apple Orchard project. Project 7-4 Fisheries Enhancement – Event Center, will be
implemented in September 2017. The District will contribute $30,000 to help implement Project
7.4. This funding will be included in the FY2017-2018 budget.
The project will be overseen by the RCD with the help of a contracted Registered Professional
Forester (Blencowe Watershed Management), who have substantial experience with similar
salmonid restoration projects, working in conjunction with a Licensed Timber Operator familiar
with felling, moving, and securing logs. District staff will also be present on-site during the
project to provide biological monitoring and a District representative during implementation.
Above: San Gregorio Creek site example, on “Apple Orchard” portion of parcel. Note lack of
wood in stream reach, resulting in simplified habitat complexity.
Large wood placement example, to create complex salmonid habitat.
DATE: August 10, 2016
MEMO TO: MROSD Board of Directors
FROM: Shelly Lewis, Public Affairs Manager
THROUGH: Stephen E. Abbors, General Manager
SUBJECT: Vida Verde Nature Center Grant Report
_____________________________________________________________________________
In September 2015, the Midpeninsula Regional Open Space District (District) awarded Vida
Verde Nature Education (Vida Verde) a $10k grant to support its outdoor education program for
inner-city, low income youth. This grant was aligned with the Board of Directors’ Fiscal Year
2016-17 Strategic Plan Goals and Objectives for the engagement of diverse communities and
enhanced public education programs.
The following attachment is a grant report from Vida Verde highlighting services provided and
outcomes. According to the report, the District’s grant specifically enabled a 5th grade class from
East Palo Alto Charter School to attend a three-day outdoor education program.
Vida Verde is a unique outdoor education program that is specifically designated to ensure
success and long-term positive impacts for urban, low-income youth. The non-profit
organization is located in San Gregorio, California adjacent to the District’s La Honda Creek
Open Space Preserve. They serve youth from the entire Bay Area including those who live
within District boundaries.
Attachment: Vida Verde Nature Education Grant Report.
Vida Verde
Nature Education
Educational Equity in the Outdoors
Vida Verde Nature Education
5540 La Llonda toad
.an G'regoria. C4 94074
P: 650-747-9288
www.Vveducation.org
info@Vveducation.org
2015-16 Grant Report
In September of 2015, Vida Verde was pleased to receive a grant in the amount of $10,000 from
the Midpeninsula Regional Open Space District to support our outdoor education programs for
inner-city, low-income youth. The following report outlines the impact of the grant and the
project, and our success in meeting the goals set forth in the initial proposal.
Who We Served
During the 2015-16 school year, Vida Verde provided free programs for 774 4th -6th grade students
from the Bay Area, along with their teachers and parent chaperones. 99% of the students were
minorities, over 85% qualified for free/reduced-price lunch programs at school, and none would
otherwise have had the opportunity to participate in a similar program due to the costs. The
MROSD grant specifically enabled a 5th grade class of students from East Palo Alto Charter School
(EPACS) to attend an unforgettable three-day program at Vida Verde on September 22-24, 2015.
Activities and Services Provided
Vida Verde served 31 classes of students during 2015-16. Each class, including the 5th graders of
EPACS, was provided with lessons and activities that address California state educational standards,
and with myriad opportunities to learn, explore, and adventure in the outdoor classroom of the
rocky coast, redwood forest, and on our educational farm. Each student participated in five core
activities:
(1) Nature Hike in the Redwoods,
(2) Goat Milking & Cheese Making,
(3) Tidepool, Beach & Marsh Exploration,
(4) Night-time Hike and Trust Walk, and
(5) Organic Farm Tour & Taste.
Throughout the trip, focus was placed on
science standards, personal
responsibility, teamwork and leadership,
environmental awareness, public lands,
and healthy food choices. In addition,
the students enjoyed cooking, eating
and cleaning up as a class, teambuilding
games, exercise, a campfire, camping
out in our magnificent teepees and more!
The activities were "first-time" experiences for the majority of children served. To ensure the
students' success, the trip was carefully structured with eye-opening, fun activities coupled with
clear and attainable expectations, consistency, and opportunities to recognize and reflect upon
successes. With this foundation in place, the programs positively and powerfully impacted the
students' academic performance, character development, and connection to the outdoors.
Outcomes
Vida Verde utilizes a multifaceted approach to evaluate
progress in achieving programmatic excellence:
1. On a weekly basis, we analyze both quantitative and
qualitative results of post -program evaluations from teachers.
2. We read and review letters from each student detailing
his/her experience.
3. We conduct ongoing, internal instructor evaluations which
include observation in the field, both peer -to -peer
observations and observations by our Head of Program and
Executive Director.
Through these evaluation processes, we measure our success,
as well as make changes and improvements where needed.
We set four main objectives, with a goal of receiving the highest possible
from at least 80% of teachers in post -program evaluations. Outcomes from the 2015-16 school
year are as follows:
• 82% reported A Marked Improvement (highest possible rating) in students' classroom
learning and science test scores.
• 97% reported A Marked Improvement in students' teamwork, self-confidence and personal
responsibility.
• 85% reported A Marked Improvement in students' overall experiences when they return to
school.
• 94% reported A Marked Improvement in students' awareness of and interest in
environmental issues.
ratings in each category
In addition:
• 98% rated the overall benefit to students "Exceptional" (highest possible rating).
• 98% rated student enjoyment "Exceptional".
Teachers had the following to say after their trip to Vida Verde this year:
"Children's curiosity + fresh eyes to learn + camp = life changing. 1 love watching children play in
the dirt, develop their teamwork skills and laugh with one another - priceless! Sometimes children
just need one experience to change their global perspective."
— Brittney O'Brien, 5th Grade Teacher, East Palo Alto Charter School
"Vida Verde is one of the strongest outdoor education programs in the state! Not only are they
weaving in instruction throughout all the engaging lessons, they are teaching sustainability which
is what the next generation needs most."
— Katie Doyle, 4th Grade Teacher, Daly City
"Students love Vida Verde because Vida Verde connects
them with a part of their world they are disconnected
from for most of their life up to this point. They enjoy the
exploratory education, the challenge of doing new and
maybe unusual or unimaginable things like standing in a
burned out Redwood, kissing a banana slug, or taking a
solo hike at night."
— Andrew Aguilar, 4th Grade Teacher, San Jose
Looking Ahead:
We feel extremely positive about Vida Verde's future! Scheduling for the 2016-17 school year will
be completed in the next several weeks, with returning teachers and principals eager to bring their
students to Vida Verde and an already growing waiting list. We plan to serve another 750 students
in the coming year. Alongside our programs, Vida Verde is currently focused on the following
organizational goals and activities:
• Increasing staff diversity.
• Re -designing staff professional development in order to significantly reinforce and capture
the model and culture of Vida Verde.
• Enhancing the organization's ability to recruit, support, and retain highly effective staff
through the revamping of our HR policies and the creation of a new Employee Handbook.
• Executing a capital campaign to purchase and fully develop our home site.
The future looks bright and we're excited about the positive changes and improvements to come.
The support of the Midpeninsula Regional Open Space District made a significant impact on our
overall success, and on the lives of the urban students we served together. We're grateful for this
fruitful partnership, and we hope it will continue into the future as we work towards educational
equity in the outdoors.
.
1
Jennifer Woodworth
From:Jennifer Woodworth
Sent:Wednesday, August 10, 2016 9:41 AM
Subject:Board Questions Re: 8/10/16 Agenda
Good morning all,
Please find staff’s answers below in blue in response to questions submitted regarding tonight’s agenda. Thank you.
Director Kishimoto
Item 6: Mt. Um EIR addendum
* 11,000 cubic yards more excavated and to be moved: how does that compare with volume we have moved already on
Mt. Um (roughly)?
According to field staff, the volume of sidecast material already moved at Mount Umunhum is roughly 7,000 cubic yards.
* Also, I looked at table 1 where we are near the threshold for NOx daily emissions. Adding 100 one‐way, 1.7 mile
trips/day ‐ 10 g of NOx/mile= about 4 pounds additional per day, not 2 pounds?
The EIR Consultant used detailed assumptions, modeling input parameters and a standardized Road Construction
Emissions Model, which is recommended by the Air Quality Management Districts in the region to calculate the
pollutant emissions for the air quality section of the EIR and Addendum. In both cases the District used very conservative
values and numbers to generate the Maximum Daily Emissions for the Total Construction Phase of 52.4 NOx lb/day.
Based on this modeling, the Phase 2 project pollutant emission remains below the Bay Area Air Quality Management
District Significance Threshold of 54 NOx lbs/day (Table 1 in the Addendum). The 1.9 lbs/day of NOx that would be
generated by the Project is a direct output of analyzing multiple variables and parameters that include but are not
limited to: project length of time, project type, off‐road emission factors, haul truck capacity and etc. Trip miles per day
is one of many parameters that the model considers. Thus the results would not equate to approximately 4 lbs/day of
additional NOx.
As one of the modeling assumptions, the District recommended the maximum outer limit values of soil material and
truck traffic that could be generated from the projects to ensure that the emissions generated was the absolute
maximum conservative estimate for the work. We anticipate that the projects’ emissions will result in a much lower NOx
level.
Results from the model are shown in Appendix 1, which was not included as part of the Board packet because it is over
150 pages of numbers and tables. For your convenience, the detailed modeling results in Technical Appendix 1 is
attached to this email and is also posted on the website at http://www.openspace.org/our‐work/projects/mount‐
umunhum‐summit‐project .
Also, on the Mt. Um overall projections which show $8.93 Million “remaining” ‐ what else is projected to be needed if
anything?
The remaining amount of $8.93 million for Portfolio 23 is designated for additional land purchases to preserve open
space and complete new wildlife corridors. Remaining funds may also be used to fund any additional trail
connections. Note that that District to date has been working on establishing a major trail connection to the summit via
the Mount Umunhum Trail, which may also serve as a spur trail of and connection to the regional Bay Area Ridge Trail.
2
Below is the specific language related to Measure AA Portfolio 23 as described in the Expenditure Plan with embedded
comments related to the status of each commitment:
Sierra Azul: Mt. Umunhum Public Access and Interpretation Projects ‐ $27,972,000 Open Mt. Umunhum for multi‐use
public access to summit via road and trail (both the Summit and Road Projects accomplish this commitment). Open Bay
Area Ridge Trail and nearby trail connections (Mount Umunhum Trail and the trails that are part of the Summit Project
serve to accomplish this commitment). Preserve additional open space and complete wildlife corridor (to date, Measure
AA funds have been used to purchase the Meyer Property to help accomplish this commitment).
One more question about Mt. Um projects: report notes the road projects contains discreet elements that can be
removed to substantially decrease cost without significantly impacting project goals. Are there some that staff
recommends?
The primary goal of the Road Project is to provide safe public vehicular access to the summit of Mount Umunhum via
Mt. Umunhum Road. Given our analysis that the low bid received is below both the revised engineer's estimate and the
third party cost estimate, the General Manager recommends implementing all of the project elements that were
approved by the Board during the May 25, 2016 Special Board Meeting.
Had our analysis determined that the low bid was substantially higher than the two estimates, project elements that
improve the life expectancy of the road and associated infrastructure and reduce long‐term maintenance and
operational costs for the District would have been recommended for potential removal to reduce up front construction
costs. These elements include:
‐ Installation of a double chip seal road surface
‐ Installation of concrete barriers along the road
‐ Shallow & deep pavement repairs
‐ Expanded inlet structures
‐ Installation of inlet structure headwall
Since the bid received is below fair market value, the General Manager recommends retaining all the project elements
to avoid increasing future long‐term maintenance costs for the District.
Jennifer Woodworth, MMC
District Clerk/ Assistant to the General Manager
jwoodworth@openspace.org
Midpeninsula Regional Open Space District
330 Distel Circle, Los Altos, CA 94022
P: (650) 691-1200 - F: (650) 691-0485
E‐mail correspondence with the Midpeninsula Regional Open Space District (and attachments, if any) may be subject to
the California Public Records Act, and as such may therefore be subject to public disclosure unless otherwise exempt
under the Act.
1
Jennifer Woodworth
From:Jennifer Woodworth
Sent:Friday, August 5, 2016 3:58 PM
Subject:Meeting Materials for 8/10/16
Attachments:Construction Cost Index.pdf
Good afternoon,
The meeting materials for the 8/10/16 Board meeting have been sent. Also please find the response below in blue to a
question submitted regarding the FYI sent yesterday. If you have any other questions regarding the Board packet, please
submit by 10:00 am Tuesday to allow staff enough time to research and respond. Thank you.
Jen
Director Kishimoto
Thanks for this more comprehensive analysis and, importantly, alternatives. One piece of info I’d like to request is an
idea of how much construction cost index has gone up and down over e.g. the past 20 years. As example, I found this on
line: http://www.turnerconstruction.com/content/files/CostIndex2012Qrtr1.pdf
Please see attached PDF for data provided by Turner Construction for the past 20 years, dating back to 1996. This cost
index is a National representation. We’ve also included data from Cumming Construction Management, the District’s
Third Party Cost Estimator, showing cost index specifically for the Bay Area dating back to 2003, as well as projections for
the next three years. To put the projections into context and for ease of explanation, a project estimated at $1,000,000
in 2016 would likely cost $1,065,000 in 2017 and $1,221,156 in 2020, 22% higher than today’s estimated value. Please
also note the large negative (‐) change in the cost index during 2008 and 2009 for Cumming and Turner,
respectively. The reason for the difference in year could be attributed to how each organization account for the end of
their Fiscal Year.
Jennifer Woodworth, MMC
District Clerk/ Assistant to the General Manager
jwoodworth@openspace.org
Midpeninsula Regional Open Space District
330 Distel Circle, Los Altos, CA 94022
P: (650) 691-1200 - F: (650) 691-0485
E‐mail correspondence with the Midpeninsula Regional Open Space District (and attachments, if any) may be subject to
the California Public Records Act, and as such may therefore be subject to public disclosure unless otherwise exempt
under the Act.