24655000 moreno valley public financing authority lease revenue refunding bonds, series 2016

398 Pages·2016·3.68 MB·English

RATINGS: Insured: S&P: “AA”
Underlying: S&P: “A+”
NEW ISSUE – BOOK-ENTRY ONLY See the caption “RATINGS.”
In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel to the Authority (“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 Series 2016 Bonds is exempt
from State of California personal income taxes. Bond Counsel observes that interest on the Series 2016 Bonds is not excluded from gross income for federal income tax purposes
under Section 103 of the Internal Revenue Code of 1986. 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 Series 2016 Bonds. See “TAX MATTERS.”
$24,655,000
MORENO VALLEY PUBLIC FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS, SERIES 2016 (TAXABLE)
Dated: Date of Delivery Due: May 1, as shown on inside front cover page
The Moreno Valley Public Financing Authority Lease Revenue Refunding Bonds, Series 2016 (Taxable) (the “Series 2016 Bonds”) are payable from base rental payments
(the “Base Rental Payments”) to be made by the City of Moreno Valley (the “City”) to the Moreno Valley Public Financing Authority (the “Authority”) for the right to use
certain real property (collectively, the “Property”) pursuant to a Master Facilities Sublease, dated as of December 1, 2015, as amended by a First Amendment to Master Facilities
Sublease, dated as of December 1, 2016 (collectively, the “Facilities Sublease”), by and between the City, as sublessee, and the Authority, as sublessor. See the captions “THE
PROPERTY” and “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS.”
The Series 2016 Bonds are secured on a parity with the Moreno Valley Public Financing Authority Lease Revenue Bonds, Series 2015 (Taxable), issued in the aggregate
principal amount of $10,430,000 and currently outstanding in the aggregate principal amount of $10,255,000 (the “Series 2015 Bonds”).
The Series 2016 Bonds are being issued to provide funds: (i) to refund the remaining outstanding Moreno Valley Public Financing Authority 2007 Taxable Lease Revenue
Bonds; (ii) to purchase a municipal bond insurance policy (the “Policy”) from Assured Guaranty Municipal Corp. (“AGM” or the “Insurer”) to guarantee the payment of
principal of and interest on the Series 2016 Bonds; (iii) to purchase a municipal bond debt service reserve insurance policy (the “Reserve Policy”) from the Insurer for deposit
in the Reserve Fund for the Series 2016 Bonds; (iv) to fund capitalized interest on the Series 2016 Bonds through November 1, 2017; and (v) to pay the costs incurred in
connection with the issuance of the Series 2016 Bonds. See the captions “THE REFUNDING PLAN” and “SOURCES AND USES OF FUNDS.” The City has covenanted
under the Facilities Sublease to take such action as may be necessary to include all Base Rental Payments and Additional Payments due thereunder in its annual budgets, and to
make necessary annual appropriations for all such Base Rental Payments and Additional Payments. The City’s obligation to make Base Rental Payments is subject to abatement
during any period in which by reason of any material damage or destruction (other than by condemnation) there is substantial interference with the use and occupancy of the
Property by the City, in the proportion in which the cost of that portion of the Property rendered unusable bears to the cost of the whole of the Property. See the caption “RISK
FACTORS — Abatement.”
The Series 2016 Bonds are being issued in fully registered book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust
Company, New York, New York (“DTC”). Interest on the Series 2016 Bonds is payable semiannually on each May 1 and November 1, commencing May 1, 2017. Purchasers
will not receive certificates representing their interest in the Series 2016 Bonds. Individual purchases will be in principal amounts of $5,000 or integral multiples thereof.
Principal of and interest and premium, if any, on the Series 2016 Bonds will be paid by Wells Fargo Bank, National Association, as trustee (the “Trustee”), to DTC for subsequent
disbursement to DTC Participants, who are obligated to remit such payments to the Beneficial Owners of the Series 2016 Bonds. See the caption “THE SERIES 2016 BONDS
— Book-Entry Only System.”
The Series 2016 Bonds will be issued pursuant to a Master Trust Agreement, dated as of December 1, 2015, by and between the Authority and the Trustee (the “2015 Master
Trust Agreement”), as amended by that certain First Supplement to Master Trust Agreement, dated as of December 1, 2016, by and between the Authority and the Trustee (the
“First Supplement to the 2015 Master Trust Agreement,” and, together with the 2015 Master Trust Agreement, the “Trust Agreement”). The Series 2016 Bonds, the Series 2015
Bonds and any additional bonds issued pursuant to the Trust Agreement (“Additional Bonds”) are collectively referred to as the “Bonds.”
The Series 2016 Bonds are subject to optional redemption and mandatory sinking fund redemption prior to maturity and extraordinary redemption from insurance or
condemnation proceeds as described herein. See the caption “THE SERIES 2016 BONDS — Redemption.”
The Bonds are limited obligations of the Authority and are payable, as to interest thereon, principal thereof and any premiums upon the redemption of any
thereof, solely from the Revenues described herein, and the Authority is not obligated to pay them except from the Revenues. All of the Bonds 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 principal of and
redemption premiums, if any, on the Bonds as provided herein.
The Series 2016 Bonds are not a debt of the City, the State of the California (the “State”) or any of its political subdivisions, and neither the City, the State nor any
of its political subdivisions is liable thereon, nor in any event shall the Series 2016 Bonds be payable out of any funds or properties other than those of the Authority as
described herein. The Series 2016 Bonds do not constitute an indebtedness within the meaning of any constitutional or statutory limitation or restriction.
The scheduled payment of principal of and interest on the Series 2016 Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the
delivery of the Series 2016 Bonds by ASSURED GUARANTY MUNICIPAL CORP.
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS MUST
READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.
The Series 2016 Bonds will be offered when, as and if issued and received by the Underwriter, subject to the approval as to their validity by Orrick, Herrington & Sutcliffe
LLP, Los Angeles, California, Bond Counsel. Certain legal matters will be passed upon for the City and the Authority by the City Attorney and counsel to the Authority, and by
Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, as Disclosure Counsel, for the Underwriter by Norton Rose Fulbright US LLP, for
the Trustee by its counsel and for the Insurer by its counsel. It is anticipated that the Series 2016 Bonds will be available for delivery through the facilities of DTC on or about
December 15, 2016.
Dated: November 22, 2016
$24,655,000
MORENO VALLEY PUBLIC FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS, SERIES 2016 (TAXABLE)
MATURITY SCHEDULE
BASE CUSIP®†: 61685P
Maturity Date Principal
(May 1) Amount Interest Rate Yield Price CUSIP®†
2017 $ 855,000 1.000% 1.170% 99.935 DQ8
2018 825,000 1.500 1.630 99.823 DR6
2019 840,000 2.000 2.040 99.906 DS4
2020 850,000 2.250 2.360 99.643 DT2
2021 875,000 2.500 2.620 99.505 DU9
2022 895,000 2.750 2.910 99.206 DV7
2023 920,000 3.000 3.110 99.365 DW5
2024 945,000 3.000 3.260 98.304 DX3
2025 975,000 3.125 3.410 97.935 DY1
2026 1,005,000 3.250 3.560 97.544 DZ8
$6,875,000 4.000% Term Bond due May 1, 2032 – Yield 4.210%, Price: 97.636, CUSIP®†: EA2
$8,795,000 4.375% Term Bond due May 1, 2038 – Yield 4.590%, Price: 97.086, CUSIP®†: EB0
_________________________
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the
American Bankers Association by S&P Capital IQ. Copyright© 2016 CUSIP Global Services. All rights reserved. CUSIP® data herein is
provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS
database. CUSIP® numbers are provided for convenience of reference only. None of the City, the Authority or the Underwriter takes any
responsibility for the accuracy of such numbers.
No dealer, broker, salesperson or other person has been authorized by the City or the Authority to give
any information or to make any representations in connection with the offer or sale of the Series 2016 Bonds
other than those contained herein and, if given or made, such other information or representations must not be
relied upon as having been authorized by the City or the Authority. This Official Statement does not constitute
an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2016 Bonds by a
person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.
This Official Statement is not to be construed as a contract with the purchasers or Owners of the
Series 2016 Bonds. Statements contained in this Official Statement which involve estimates, forecasts or
matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be
construed as representations of fact.
The Underwriter has provided the following sentence for inclusion in this Official Statement:
The Underwriter has reviewed the information in this Official Statement in
accordance with, and as a part of, its responsibilities to investors under the
federal securities laws as applied to the facts and circumstances of this
transaction, but the Underwriter does not guarantee the accuracy or
completeness of such information.
This Official Statement and the information contained herein are subject to completion or amendment
without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the affairs of the City or the Authority
or any other parties described herein since the date hereof. These securities may not be sold nor may an offer
to buy be accepted prior to the time the Official Statement is delivered in final form. This Official Statement is
being submitted in connection with the sale of the Series 2016 Bonds referred to herein and may not be
reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the City. All
summaries of documents and laws are made subject to the provisions thereof and do not purport to be complete
statements of any or all such provisions.
Certain statements included or incorporated by reference in this Official Statement constitute
“forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act
of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of
the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the
terminology used such as “plan,” “expect,” “estimate,” “project,” “budget,” “intend” or similar words. Such
forward-looking statements include, but are not limited to, certain statements contained under the captions
“CITY FINANCIAL INFORMATION” and “RISK FACTORS.”
THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS
CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND
UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH 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 CITY DOES
NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING
STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT. IN EVALUATING SUCH
STATEMENTS, POTENTIAL INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS
FACTORS WHICH COULD CAUSE ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY
FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.
IN CONNECTION WITH THE OFFERING OF THE SERIES 2016 BONDS, THE
UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR
MAINTAIN THE MARKET PRICE OF THE SERIES 2016 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 SERIES 2016 BONDS TO CERTAIN DEALERS, DEALER BANKS, BANKS
ACTING AS AGENT AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICE
STATED ON THE INSIDE COVER PAGE HEREOF, AND SAID PUBLIC OFFERING PRICES
MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.
THE SERIES 2016 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH
ACT, AND HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS
OF ANY STATE.
The City maintains a website; however, information presented there is not a part of this Official
Statement and should not be relied upon in making an investment decision with respect to the Series 2016
Bonds.
Assured Guaranty Municipal Corp. (“AGM”) makes no representation regarding the Series 2016
Bonds or the advisability of investing in the Series 2016 Bonds. In addition, AGM has not independently
verified, makes no representation regarding, and does not accept any responsibility for the accuracy or
completeness of this Official Statement or any information or disclosure contained herein, or omitted
herefrom, other than with respect to the accuracy of the information regarding AGM supplied by AGM and
presented under the caption “BOND INSURANCE” and in Appendix G—“SPECIMEN MUNICIPAL BOND
INSURANCE POLICY.”
CITY OF MORENO VALLEY
MAYOR AND MEMBERS OF THE CITY COUNCIL
Dr. Yxstian Gutierrez, Mayor
Jeffrey J. Giba, Mayor Pro Tem
D. LaDonna Jempson, Councilmember
Jesse L. Molina, Councilmember
George E. Price, Councilmember
MORENO VALLEY PUBLIC FINANCING AUTHORITY
Dr. Yxstian Gutierrez, Chair
Jeffrey J. Giba, Vice Chair
D. LaDonna Jempson, Boardmember
Jesse L. Molina, Boardmember
George E. Price, Boardmember
STAFF
Michelle Dawson, City Manager/Authority Executive Director
Martin Koczanowicz, City Attorney
Marshall Eyerman, Chief Financial Officer/Authority Treasurer
Brooke McKinney, Treasury Operations Division Manager
Ahmad R. Ansari, City Public Works Director/City Engineer
Marie Macias, Interim City Clerk/Authority Secretary
SPECIAL SERVICES
Bond Counsel
Orrick, Herrington & Sutcliffe LLP
Los Angeles, California
Disclosure Counsel
Stradling Yocca Carlson & Rauth, a Professional Corporation
Newport Beach, California
Financial Advisor
Fieldman Rolapp & Associates, Inc.
Irvine, California
Trustee
Wells Fargo Bank, National Association
Los Angeles, California
Verification Agent
Grant Thornton LLP
Minneapolis, Minnesota
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TABLE OF CONTENTS
Page
INTRODUCTION ................................................................................................................................................ 1 
General .............................................................................................................................................................. 1 
Security for the Series 2016 Bonds ................................................................................................................... 1 
Book-Entry Only System .................................................................................................................................. 3 
Redemption ....................................................................................................................................................... 3 
Bond Insurance ................................................................................................................................................. 3 
Reserve Fund .................................................................................................................................................... 3 
Legal Matters .................................................................................................................................................... 3 
Miscellaneous ................................................................................................................................................... 3 
THE SERIES 2016 BONDS ................................................................................................................................. 4 
General .............................................................................................................................................................. 4 
Redemption ....................................................................................................................................................... 5 
Book-Entry Only System .................................................................................................................................. 7 
SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2016 BONDS ............................................. 8 
Pledge of Revenues ........................................................................................................................................... 8 
Base Rental Payments ....................................................................................................................................... 9 
Additional Payments ....................................................................................................................................... 10 
Abatement ....................................................................................................................................................... 10 
Substitution, Addition and Removal of Property ............................................................................................ 11 
Additional Bonds ............................................................................................................................................ 12 
Action on Default ............................................................................................................................................ 13 
Reserve Fund .................................................................................................................................................. 14 
Insurance ......................................................................................................................................................... 15 
BOND INSURANCE ......................................................................................................................................... 16 
Bond Insurance Policy .................................................................................................................................... 16 
Assured Guaranty Municipal Corp. ................................................................................................................ 16 
SOURCES AND USES OF FUNDS .................................................................................................................. 18 
BASE RENTAL PAYMENT SCHEDULE ....................................................................................................... 19 
THE REFUNDING PLAN ................................................................................................................................. 19 
General ............................................................................................................................................................ 19 
Verification ..................................................................................................................................................... 20 
THE PROPERTY ............................................................................................................................................... 20 
THE AUTHORITY ............................................................................................................................................ 23 
THE CITY .......................................................................................................................................................... 23 
General ............................................................................................................................................................ 23 
Largest Employers .......................................................................................................................................... 23 
Government and Administration ..................................................................................................................... 24 
Risk Management ........................................................................................................................................... 25 
CITY FINANCIAL INFORMATION ................................................................................................................ 25 
Accounting and Financial Reporting .............................................................................................................. 25 
General Economic Condition and Outlook of the City ................................................................................... 26 
Budget Procedure, Current Budget and Historical Budget Information ......................................................... 26 
Change in Fund Balance of the City General Fund ........................................................................................ 30 
General Fund Balance Sheets of the City ....................................................................................................... 31 
Property Taxes ................................................................................................................................................ 32 
Sales Taxes ..................................................................................................................................................... 35 
Utility Taxes ................................................................................................................................................... 35 
Other Taxes ..................................................................................................................................................... 35 
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TABLE OF CONTENTS
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Services ........................................................................................................................................................... 35 
State of California Motor Vehicle In-Lieu Payments ..................................................................................... 36 
Other Indebtedness ......................................................................................................................................... 36 
Retirement Contributions ................................................................................................................................ 39 
Other Post-Employment Benefits ................................................................................................................... 42 
City Investment Policy .................................................................................................................................... 44 
RISK FACTORS ................................................................................................................................................ 45 
General Considerations – Security for the Series 2016 Bonds ....................................................................... 45 
Abatement ....................................................................................................................................................... 45 
Natural Disasters ............................................................................................................................................. 46 
Hazardous Substances ..................................................................................................................................... 46 
Other Financial Matters .................................................................................................................................. 47 
Substitution, Addition and Removal of Property; Additional Bonds .............................................................. 47 
Limited Recourse on Default; No Acceleration of Base Rental ..................................................................... 48 
Possible Insufficiency of Insurance Proceeds ................................................................................................. 48 
Limitations on Remedies ................................................................................................................................ 49 
No Liability of Authority to the Owners ......................................................................................................... 50 
Secondary Market ........................................................................................................................................... 50 
Risks Associated with Bond Insurance ........................................................................................................... 50 
STATE OF CALIFORNIA BUDGET INFORMATION ................................................................................... 51 
State Budget .................................................................................................................................................... 51 
Budget for State Fiscal Year 2016-17 ............................................................................................................. 51 
Potential Impact of State Financial Condition on the City ............................................................................. 52 
Redevelopment Dissolution ............................................................................................................................ 52 
Future State Budgets ....................................................................................................................................... 54 
CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS ............ 54 
Article XIIIA of the State Constitution ........................................................................................................... 54 
Article XIIIB of the State Constitution ........................................................................................................... 55 
Proposition 62 ................................................................................................................................................. 55 
Proposition 218 ............................................................................................................................................... 56 
Unitary Property ............................................................................................................................................. 56 
Proposition 22 ................................................................................................................................................. 57 
Proposition 1A ................................................................................................................................................ 57 
Proposition 26 ................................................................................................................................................. 57 
Future Initiatives ............................................................................................................................................. 58 
TAX MATTERS................................................................................................................................................. 58 
U.S. Holders .................................................................................................................................................... 59 
Non-U.S. Holders ........................................................................................................................................... 60 
Foreign Account Tax Compliance Act (“FATCA”) — U.S. Holders and Non-U.S. Holders ........................ 61 
FINANCIAL ADVISOR .................................................................................................................................... 61 
CERTAIN LEGAL MATTERS ......................................................................................................................... 61 
ABSENCE OF LITIGATION ............................................................................................................................ 62 
UNDERWRITING ............................................................................................................................................. 62 
RATINGS ........................................................................................................................................................... 62 
CONTINUING DISCLOSURE .......................................................................................................................... 62 
FINANCIAL STATEMENTS OF THE CITY ................................................................................................... 63 
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MISCELLANEOUS ........................................................................................................................................... 64 

APPENDIX A SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL
DOCUMENTS ................................................................................................................... A-1
APPENDIX B AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE YEAR
ENDED JUNE 30, 2015 .................................................................................................... B-1
APPENDIX C PROPOSED FORM OF BOND COUNSEL OPINION .................................................... C-1
APPENDIX D PROPOSED FORM OF CONTINUING DISCLOSURE CERTIFICATE ....................... D-1
APPENDIX E BOOK-ENTRY ONLY SYSTEM .................................................................................... E-1
APPENDIX F GENERAL INFORMATION REGARDING THE CITY OF MORENO VALLEY
AND THE REGION ........................................................................................................... F-1
APPENDIX G SPECIMEN MUNICIPAL BOND INSURANCE POLICY ............................................. G-1

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