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HomeMy WebLinkAbout05/22/2013 Council Agenda Packetr - r � A R A NA { MARANA TOWN COUNCIL REGULAR COUNCIL MEETING NOTICE AND AGENDA 11555 W. Civic Center Drive, Marana, Arizona 85653 Council Chambers, May 22, 2013, at or after 7:00 PM Ed Honea, Mayor Patti Comerford, Vice Mayor David Bowen, Council Member Herb Kai, Council Member Carol McGorray, Council Member Jon Post, Council Member Roxanne Ziegler, Council Member Pursuant to A.R.S. § 38.431.02, notice is hereby given to the members of the Marana Town Council and to the general public that the Town Council will hold a meeting open to the public on May 22, 2013, at or after 7:00 PM located in the Council Chambers of the Marana Municipal Complex, 115 5 5 W. Civic Center Drive, Marana, Arizona. ACTION MAY BE TAKEN BY THE COUNCIL ON ANY ITEM LISTED ON THIS AGENDA. Revisions to the agenda can occur up to 24 hours prior to the meeting. Revised agenda items appear in italics. As a courtesy to others, please turn off or put in silent mode all pagers and cell phones. Meeting � imes Welcome to this Marana Town Council meeting. Regular Council meetings are usually held the first and third Tuesday of each month at 7:00 PM at the Marana Municipal Complex, although the date or time may change and additional meetings may be called at other times and /or places. Contact the Town Clerk or watch for posted agendas for other meetings. This agenda may be revised up to 24 hours prior to the meeting. In such a case a new agenda will be posted in place of this agenda. Speaking at Meeting If you are interested in speaking to the Council during the Call to the Public or Public Hearings, you must fill out a speaker card (located in the lobby outside the Council Chambers) and deliver it to the Town Clerk prior to the convening of the meeting. All persons attending the Council meeting, whether speaking to the Council or not, are expected to observe the Council rules, as well as the rules of politeness, propriety, decorum and good conduct. Any person interfering with the meeting in any way, or acting rudely or loudly will be removed from the meeting and will not be allowed to return. Accessibility To better serve the citizens of Marana and others attending our meetings, the Council Chambers are wheelchair and handicapped accessible. Persons with a disability may request a reasonable accommodation, Regular Council Meeting - May 22, 2013 - Page 1 of 295 such as a sign language interpreter, by contacting the Town Clerk at (520) 382 -1999. Requests should be made as early as possible to arrange the accommodation. Agendas Copies of the agenda are available the day of the meeting in the lobby outside the Council Chambers or online at www.marana.com by linking to the Town Clerk page under Agendas, Minutes and Recent Actions. For questions about the Council meetings, special services or procedures, please contact the Town Clerk, at 382- 1999, Monday through Friday from 8:00 AM to 5:00 PM. This Notice and Agenda Posted no later than Tuesday, May 21, 2013, 7:00 PM, at the Marana Municipal Complex, 11555 W. Civic Center Drive, the Marana Operations Center, 5100 W. Ina Road, and at www.marana.com on the Town Clerk page under Agendas, Minutes and Recent Actions. REGULAR COUNCIL MEETING CALL TO ORDER AND ROLL CALL PLEDGE OF ALLEGIANCE/INVOCATION/MOMENT OF SILENCE APPROVAL OF AGENDA CALL TO THE PUBLIC At this time any member of the public is allowed to address the Town Council on any issue within the jurisdiction of the Town Council, except for items scheduled for a Public Hearing at this meeting. The speaker may have up to three minutes to speak. Any persons wishing to address the Council must complete a speaker card located outside the Council Chambers and deliver it to the Town Clerk prior to the commencement of the meeting. Individuals addressing a meeting at the Call to the Public will not be provided with electronic technology capabilities beyond the existing voice amplification and recording capabilities in the facilities and the Town's overhead projector /document reader. Pursuant to the Arizona Open Meeting Law, at the conclusion of Call to the Public, individual members of the Council may respond to criticism made by those who have addressed the Council, and may ask staff to review the matter, or may ask that the matter be placed on a future agenda. PROCLAMATIONS MAYOR AND COUNCIL REPORTS: SUMMARY OF CURRENT EVENTS MANAGER'S REPORT: SUMMARY OF CURRENT EVENTS PRESENTATIONS CONSENT AGENDA The Consent Agenda contains items requiring action by the Council which are generally routine items not requiring Council discussion. A single motion and affirmative vote will approve all items on the Consent Agenda, including any resolutions or ordinances. Prior to a motion to approve the Consent Agenda, any Council member may remove any item from the Consent Agenda and that item will be discussed and voted upon separately. C 1: Resolution No. 2013 -047: Relating to Community Development; approving and authorizing the Mayor to execute Intergovernmental Agreement Amendment Number Two Regular Council Meeting - May 22, 2013 - Page 2 of 295 between Pima County and the Town of Marana for the management and implementation of the 2010 -2011 Community Development Block Grant program (T VanHook) C 2: Approval of April 30 and May 7, 2013 draft meeting minutes. (Jocelyn C. Bronson) LIQUOR LICENSES BOARDS, COMMISSIONS AND COMMITTEES B 1: [Marana Town Council acting as the Gladden Farms Community Facilities District Board of Directors] : A Resolution of the District Board of Gladden Farms Community Facilities District, a Community Facilities District of Arizona, approving a tentative budget for fiscal year 2013 -2014 pursuant to ARS §48 -716; setting a public hearing date on said tentative budget; filing statements and estimates of the operation and maintenance expenses of the district, the costs of capital improvements to be financed by the approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay general obligation bonds of the district, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the district; providing for notice of filing the statements and estimates, and notice of a public hearing on the portions of the statements and estimates not relating to debt service on general obligation bonds; and providing that this resolution shall be effective after its passage and approval according to law (Erik Montague) B 2: [Marana Town Council acting as the Gladden Farms (Phase II) Community Facilities District Board of Directors] : A Resolution of the District Board of Gladden Farms (Phase II) Community Facilities District, a Community Facilities District of Arizona, approving a tentative budget for fiscal year 2013 -2014 pursuant to ARS §48 -716; setting a public hearing date on said tentative budget; filing statements and estimates of the operation and maintenance expenses of the district, the costs of capital improvements to be financed by the approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay general obligation bonds of the district, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the district; providing for notice of filing the statements and estimates, and notice of a public hearing on the portions of the statements and estimates not relating to debt service on general obligation bonds; and providing that this resolution shall be effective after its passage and approval according to law (Erik Montague) B 3: [Marana Town Council acting as the Saguaro Springs Community Facilities District Board of Directors] : A Resolution of the District Board of Saguaro Springs Community Facilities District, a Community Facilities District of Arizona, approving a tentative budget for fiscal year 2013 -2014 pursuant to ARS §48 -716; setting a public hearing date on said tentative budget; filing statements and estimates of the operation and maintenance expenses of the district, the costs of capital improvements to be financed by the approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay general obligation bonds of the district, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the district; providing for notice of filing the statements and estimates, and notice of a public hearing on the portions of the statements and estimates not relating to debt service on general obligation bonds; and providing that this resolution shall be effective after its passage and approval according to law (Erik Montague) Regular Council Meeting - May 22, 2013 - Page 3 of 295 B 4: [Marana Town Council acting as the Vanderbilt Farms Community Facilities District Board of Directors] : A Resolution of the District Board of Vanderbilt Farms Community Facilities District, a Community Facilities District of Arizona, approving a tentative budget for fiscal year 2013 -2014 pursuant to ARS §48 -716; setting a public hearing date on said tentative budget; filing statements and estimates of the operation and maintenance expenses of the district, the costs of capital improvements to be financed by the approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay general obligation bonds of the district, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the district; providing for notice of filing the statements and estimates, and notice of a public hearing on the portions of the statements and estimates not relating to debt service on general obligation bonds; and providing that this resolution shall be effective after its passage and approval according to law (Erik Montague) COUNCIL ACTION A 1: Resolution No. 2013 -048: Relating to Budget; adopting the fiscal year 2013 -2014 tentative budget (Erik Montague) A 2: Resolution No. 2013 -049: Consideration and possible adoption of a resolution approving the sale and execution and delivery of pledged excise tax revenue and revenue refunding obligations evidencing a proportionate interest of the owners thereof in a purchase agreement from the Town; approving the form and authorizing the execution and delivery of such purchase agreement and other necessary agreements for such sale; delegating authority to determine certain matters and terms with respect to the foregoing; authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by this resolution and declaring an emergency (Frank Cassidy) A 3: Resolution No. 2013 -050: Consideration and possible adoption of a resolution authorizing the defeasance of payment obligations of the Town with respect to the Fourth Supplement to Amended and Restated Town Lease and Series 1982 Town Lease with Town of Marana Municipal Property Corporation as determined by the Finance Director of the Town; authorizing the taking of other actions necessary to the consummation of the transactions contemplated by this resolution and declaring an emergency (Erik Montague) ITEMS FOR DISCUSSION /POSSIBLE ACTION D 1: Relatin _ to Legislation and Government Actions; Discussion and possible action regarding all pending state, federal, and local legislation/government actions and on recent and upcoming meetings of other governmental bodies (Gilbert Davidson) EXECUTIVE SESSIONS Pursuant to A.R.S. § 38-431.03, the Town Council may vote to go into executive session, which will not be open to the public, to discuss certain matters. E 1: Executive Session pursuant to A.R.S. §38- 431.03 (A)(3), Council may ask for discussion or consultation for legal advice with the Town Attorney concerning any matter listed on this agenda. FUTURE AGENDA ITEMS Notwithstanding the mayor's discretion regarding the items to be placed on the agenda, if three or more Council members request that an item be placed on the agenda, it must be placed on the agenda for the second regular Town Council meeting after the date of the request, pursuant to Marana Town Code Regular Council Meeting - May 22, 2013 - Page 4 of 295 Section 2 -4 -2(B ADJOURNMENT Regular Council Meeting - May 22, 2013 - Page 5 of 295 WN f 7 w j orerZo 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 Council Chambers, May 22, 2013, 7:00 PM To: Mayor and Council From: T VanHook, Community Development Director Strategic Plan Focus Area: Community Item C 1 Strategic Plan Focus Area - Additional Information: When originally approved in November 2010, the following Strategic Plan discussion was presented for approval of the IGA. The supply of safe, affordable housing is a basic need in our community. The Town's CDBG funded Owner Occupied Housing Rehabilitation advances action strategies under the Community Building focus area by offering alternative funding for the rehabilitation of infrastructure in older neighborhoods and Colonias. Subject: Resolution No. 2013 -047: Relating to Community Development; approving and authorizing the Mayor to execute Intergovernmental Agreement Amendment Number Two between Pima County and the Town of Marana for the management and implementation of the 2010 -2011 Community Development Block Grant program Discussion: For FY 2010 -2011, the Town of Marana was awarded $115,000 for its participation in Pima County's Community Development Block Grant (CDBG) Program. These funds will be distributed from the County upon approval of the U.S. Department of Housing and Urban Development. This funding was allotted for Owner Occupied Housing Rehabilitation ($90,000) and Administration ($25,000). The original IGA covered equipment and services for these programs retroactively from July 1, 2010, running through June 30, 2011. This amendment extends the performance date through December 31, 2013, allowing staff to submit requests for the $2,585.14 remaining grant balance. Quarterly reports have been provided to Pima County as designated in the IGA. Financial Impact: This funding does not require any match or leveraged funding. All services will be provided with direct cost reimbursement. ATTACHMENTS: Name: Description: D Reso 2013- Type: Regular Council Meeting - May 22, 2013 - Page 6 of 295 047 approving 1- year extension of 2010- 2011 CDBG IGA Resolution 2013 -047 Resolution (00034101).doc D CDBG - FY 2010- 2011 Amendment 05- 2013.pdf IGA Pima County /Marana Exhibit Staff Recommendation: Staff recommends approval of the IGA extension. Commission Recommendation - if applicable: The Affordable Housing Advisory Commission unanimously recommended the funding packet submitted to Pima County for the 2010 -2011 Community Development Block Grant Program. Suggested Motion: I move to adopt Resolution No. 2013 -047, approving and authorizing the Mayor to execute Intergovernmental Agreement Amendment Number Two between Pima County and the Town of Marana for the management and implementation of the 2010 -2011 Community Development Block Grant program. Regular Council Meeting - May 22, 2013 - Page 7 of 295 MARANA RESOLUTION NO, 2013-047 TO COMMUNITY DEVELOPMENT; APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE INTERGOVERNMENTAL AGREEMENT AMENDMENT NUMBER TWO BETWEEN PIMA COUNTY AND THE TOWN OF MARANA FOR THE MANAGEMENT AND IMPLEMENTATION OF THE 2010 -2011 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM WHEREAS the Town of Marana recognizes the need to provide safe affordable housing and neighborhood infrastructure for its citizens and has applied for Community Development Block Grant (CDBG) funding for these purposes; and WHEREAS the Town and Pima County entered into an intergovernmental agreement effec- tive October 1, 2010 for implementation of the 2010 -2011 CDBG grant program which (with previ- ously- adopted extensions) terminated on December 31, 2012; and WHEREAS the Town and Pima County desire to extend the intergovernmental agreement for one year. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, AS FOLLOWS: SECTION 1. Intergovernmental agreement amendment number two between the Town of Marana and Pima County extending the IGA for implementation of the 2010 -2011 CDBG grant pro- gram attached to and incorporated by this reference in this resolution as Exhibit A is hereby ap- proved, and the Mayor is hereby authorized and directed to execute it for and on behalf of the Town of Marana. SECTION 2. The Town's Manager and staff are hereby directed and authorized to under- take all other and further tasks required or beneficial to carry out the terms, obligations, and objec- tives of the intergovernmental agreement as amended. PASSED AND ADOPTED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, this 22 day of May, 2013. Mayor Ed Honea ATTEST: APPROVED AS TO FORM: Jocelyn C. Bronson, Town Clerk Frank Cassidy, Town Attorney Marana Resolution 2013 -047 Regular Council Meeting - May 22, 2013 - Page 8 of 295 PIMA COUNTY COMMUNITY DEVELOPMENT AND NEIGHBORHOOD CONSERVATION DEPARTMENT INTERGOVERNMENTAL AGREEMENT AMENDMENT NUMBER 2 PROJECT NAME: Management and Implementation of the Community Development Block Grant Program CONTRACTOR: Town of Marana 11555 West Civic Center Drive Marana, AZ 85653 Contract Number: CT12*960 (01 -70 -M- 143632 -1010) Resolution Number: 2011-3 FUNDING: CDBG GRANT 101&19 ,[aA019�1 ORG. CONTRACT TERM: 10/01/10 to 12/31/11 TERMINATION DATE PRIOR AMENDS: 12/31/12 TERMINATION DATE THIS AMEND: 12/31/13 CONTRACT AMOUNT: $115,400.00 AMOUNT PRIOR AMENDMENTS: $ -0- AMOUNT THIS AMENDMENT: $ -0- REVISED CONTRACT AMOUNT: $ -0- INTERGOVERNMENTAL AGREEMENT AMENDMENT WHEREAS, the through the Community Development and Neighborhood Conservation Department has received CDBG funds from the U.S. Department of Housing and Urban Development to provide for CDBG projects in low and moderate income county communities; and WHEREAS, on January 4, 2011, the Board of Supervisors approved an Intergovernmental Agreement (IGA) between the Town of Marana ( "TOWN ") for the management and implementation of the Community Development Block Grant Program ( "CDBG ") projects described in the Project Summary attached as Exhibit A to original IGA; and WHEREAS, the IGA expires on December 31, 2012 before the CDBG projects will be completed and the allocated funds fully expended; and WHEREAS, COUNTY has determined that it is in the best interests of the residents of Pima County to extend the term of the IGA in order to allow TOWN to complete the remaining CDBG activities set forth in the IGA. NOW, THEREFORE, the Parties agree to amend ARTICLE 4 — TERM, to change the termination date: From: December 31, 2012 To: December 31, 2013 REMAINDER OF PAGE INTENTIONALLY LEFT BLANK Regular Council Meeting - May 22, 2013 - Page 9 of 295 All other provisions of this IGA, not specifically changed by this amendment, shall remain in effect and be binding upon the parties. This amendment shall be effective upon execution by the Chairman, Board of Supervisors, provided that it has been previously executed by the TOWN. IN WITNESS WHEREOF, the parties do hereby affix their signatures and do hereby agree to tarty out the terms of this Amendment and of the original IGA cited herein. PIMA COUNTY Chairman, Board of Supervisors DATE: ATTEST: Clerk of the Board Date: REVIEWED BY: Director, Community Development and Neighborhood Conservation Department TOWN OF MARANA Mayor: DATE: ATTEST: Town Clerk Date: The foregoing Intergovernmental Agreement between Pima County and the Town of Marana has been reviewed pursuant to A.R.S. §11 -952 by the undersigned, who have determined that it is in proper form and is within the powers and authority granted under the laws of the State of Arizona to those parties to the Intergovernmental Agreement represented by the undersigned. PIMA COUNTY TOWN OF MARANA � Count Attorne Date: 5 6 - 1 Town Attorney Date: Regular Council Meeting - May 22, 2013 - Page 10 of 295 WN f 7 4 MRAf11A } Amllerz() 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 Council Chambers, May 22, 2013, 7:00 PM To: Mayor and Council From: Jocelyn C. Bronson, Town Clerk Strategic Plan Focus Area: Not Applicable Subject: Approval of April 30 and May 7, 2013 draft meeting minutes. Discussion: ATTACHMENTS: Name: Description: Type: D 04- 30- 2013.docx April 30 minutes Cover Memo D 05 -07 -2013 SS.docx May 7 SS Cover Memo D 05- 07- 2013.docx May 7 Regular meeting Cover Memo Staff Recommendation: Suggested Motion: Item C 2 Regular Council Meeting - May 22, 2013 - Page 11 of 295 SPECIAL COUNCIL MEETING MINUTES 11555 W. Civic Center Drive Marana, Arizona 85653 Council Chambers, April 30, 2013, at or after 6:00 PM Ed Honea, Mayor Patti Comerford, Vice Mayor David Bowen, Council Member Herb Kai, Council Member Carol McGorray, Council Member Jon Post, Council Member Roxanne Ziegler, Council Member SPECIAL COUNCIL MEETING CALL TO ORDER AND ROLL CALL. Mayor Honea called the meeting to order at 6:02 p.m. Town Clerk Bronson called roll. All Council Members were present. PLEDGE OF ALLEGIANCE /INVOCATION /MOMENT OF SILENCE. Led by Mayor Honea. APPROVAL OF AGENDA. Motion to approve by Council Member Ziegler, second by Council Member Kai. Passed unanimously. CALL TO THE PUBLIC. No speaker cards were presented. PROCLAMATIONS PRESENTATIONS P 1: Presentation: Relating to Finance; Presentation of proposed financing structure for the acquisition of the Marana Wastewater Treatment Facility as well as possible refunding of certain outstanding Marana Municipal Property Corporation Revenue Bonds. Council Member Kai left the dais during the presentation. Presented by Erik Montague, who introduced Mark Reader of Stifel, Nicolaus & Company and Michael Cafiso of Greenburg, Traurig. Mr. Montague led off with some of the financing goals and assumptions with respect to the resolution of the wastewater acquisition. In addition to the money required to acquire the assets, money is also needed for initial improvements of about $1 M. Future improvements must also have a funding source. In Study Session Minutes —April 30, 2013 Page 1 of 12 Regular Council Meeting - May 22, 2013 - Page 12 of 295 December, staff spoke to Council about re- funding the general fund and for the town to be able to issue its own debt. Mark Reader noted that his firm has been actively engaged with town staff on this acquisition; he has been working on bond issues with the Town since the early 1990s. He specifically addressed the role of Stifel, Nicolaus which is to act as underwriter to the town to help structure, manage and underwrite the sale of obligation; and Greenberg Traurig, whose role is as special counsel to assist with all legal and disclosure related matters relating to the bonds. Mr. Reader reviewed the purpose and process of issuing bonds. The projects to be funded are the acquisition of wastewater utility assets for $16,670,000; reimbursement of costs to the Town's general fund of $4M; new money improvements to the wastewater plant of $1M, for a total of $21,670,000 and capitalized interest of $1,891,783. The number for the wastewater utility assets are estimated pursuant to the settlement agreement with Pima County and subject to change based on market conditions. Capitalized interest will be funded from June 26, 2013 to July 1, 2015. Mr. Reader then discussed the refunding of the Series 2003 bonds. He stated that the town does have an opportunity to refinance some of the old bonds which were issued for the purpose building the new town hall. The current outstanding balance is $14,160,00 at between 4% to 5 %. He believes the town can get a rate of somewhere in the range of high twos which would lower the cost of capital by over 2% which is substantial over the life of the remaining bond. When the savings were calculated, it was about $2.4M of cash flow savings to the town over the next 15 years. On a present value basis about $2.1 M, net of all costs. The savings have been structured on an annual basis, and the average annual savings is about $155K if the savings are taken equally over the next 15 years. Next he talked about an efficiency indicator for refinancing; the town is at about 14% which is good. Then he briefly reviewed some information on recent market activity, and he talked about "flight to quality," which means there are a lot of assets going into municipals. People seem to like bonds, strong rated bonds such as Marana has. They like tax exemptions, although it's under attack in Washington DC. Rates are still very strong for municipals. The interest rates are at historical lows. He next presented the preliminary sources and uses of funds and excise tax revenue obligation, Series 2013. The transaction will be about $38,605,689. Issuing bonds is an extremely important decision for a community with long - lasting implications. Mr. Reader reviewed the preliminary sources and uses of funds for excise tax revenue obligations, Series 2013. For the wastewater utility acquisition, the cost is estimated at $16,055,000 with a 20 -year amortization at 3.5% interest, a $1,360,000 annual debt service, capitalized interest through July 1, 2015. Debt service begins in 2015/16. New money improvement obligation for the wastewater utility reimbursement is estimated at $5M with a 20 -year amortization at 3.5% interest. Annual debt service of $400,000 with capitalized interest through July 1, 2015 begins in 2015/16. Refunding obligations are estimated at $12,905,000 with a 15 -year amortization. Study Session Minutes —April 30, 2013 Page 2 of 12 Regular Council Meeting - May 22, 2013 - Page 13 of 295 Council Member Post asked what would be happening to three years of collecting impact fees. Mr. Davidson responded that the town wants to build up an account that would be used for paying the debt. The plan is to set aside every dollar that comes in for impact fees for the next year or two so that there is enough cushion to be able to make those debt service payments. Mr. Montague also noted that the impact fee would be eligible for use of any allowable cost attributable for which the fee was established. This would be one of the eligible uses. We will be reviewing the impact fees and still don't know exactly what they'll look like, but the acquisition of the plant will be a key piece of that overall debt structure. The $1 M for interim improvements will provide the capacity for that over the next two to three years. Council Member Post reiterated that the next three years of impact fees will go toward debt repayment. Mr. Davidson stressed that every dollar that can be set aside for debt service payment can be critical to the way this is structured. Council Member Ziegler asked if staff has to come back to the Council for direction on how to spend that impact fee money. Mr. Montague responded that it's could be used for any purpose for which the impact fee was established. He then went on to give examples of projects for which the money could be used. Any long -term capital improvement plan would be brought before Council for approval. In answer to a question from Council Member Bowen, Mr. Montague stated that impact fees will be accounted for in its own fund, and as part of the annual budget process, it will be appropriated for either some specific project or for debt service attributable to this initial acquisition in an ongoing, going forward basis. Mayor Honea confirmed that this money has to be used for wastewater; the majority will be used for debt retirement, but should we need some need for the plant, that would be an acceptable legal use, with Council approval. Council Member Post asked if there were funds allocated now to do any work to the Rillito plant. Mr. Montague responded that improvement to that utility are not currently included for next year's funding program. It is his understanding that the town is still in the fact - finding process to determine the nature and deficiencies of that plant. It will be eligible if and when it becomes an asset and is conveyed to the town through a separate agreement. At that time, there will could be costs attributable to maintaining it, but as far as significant capital improvements to get it to operate more efficiently, the plan for action for that is still being formulated. Council Member Ziegler asked if the Rillito plant improvements would be eligible for the funds under discussion. Mr. Montague said that it's not likely that the Rillito plant was identified in the town's overall improvement program; it's probably not initially eligible. As far as how it will be included and what it will look like in the next evolution of the wastewater impact fee study, the consultant is still reviewing that. Mr. Montague continued that one of the positive things going into that responsibility, if and when we accept responsibility for it, it is a very small system. Mr. Reader continued his presentation with information on the bond transaction and debt structure components and a little bit about the credit rating process. What they are looking at for 2013 that was not done in the past is to eliminate a pretty expensive provision of the town's financing — that being a debt service reserve fund which was a set aside of 10% of the issue in a trust account. Although we're issuing about $36M of bonds, and would normally have to put aside $3.6M, since Marana is now a AA rated Study Session Minutes —April 30, 2013 Page 3 of 12 Regular Council Meeting - May 22, 2013 - Page 14 of 295 town and Erik Montague and his staff as well as management and legal have a proven record of fiscal responsibility, the reserve is not needed. Once we get this through the credit rating agencies, we feel confident that we will be able to eliminate that provision. So the savings would be about $3.6M. Our goal is to not have to do this in the future. Council Member Post asked if that 10% is currently set aside for bonds that the town owes on, to which Mr. Reader responded affirmatively. Council Member Post asked what will happen to that money. Mr. Reader responded that the town needs to keep that money set aside until the last bond payment on the newly issued bonds. Council Member Ziegler again asked when the $3.6M will be available to the town. Mr. Reader replied that the $3.6M that he referenced is the savings the town will get on the current 2013 transaction; that's money that doesn't have to be set aside. On the previous transactions, we had a set aside of 10 %. For the previous bond issues that the town has done, that set aside was required and must be kept until the bonds are paid off. The 2013 will be subordinate to the other bonds; they'll be paid behind those bonds because we're setting up a new line of credit. There are 1997, 2004 and 2008 bonds outstanding. This is not necessarily a bad thing. One of the things we'll try to do is to incorporate some release provisions. The town will be pledging some of it excise tax; this is very common for Arizona cities, towns and counties. This is very efficient and very secure. One of the things we'll try to incorporate into the structure with special counsel may be some release provisions. Once the investment becomes successful by gaining customers and achieving certain benchmarks, then we'll try to incorporate some release provisions so that eventually it will be a complete enterprise system. This is exactly what happened with Oro Valley when they bought their two water systems. Their water utility is now AA rated credit, very strong, and they no longer back it on the excise tax part. For Council Member Ziegler, Mr. Reader gave an example of successful benchmarks. A reasonable benchmark would be where your enterprise system grows such that you're able to meet your debt service payments with a bit of a cushion. Customer growth that is not dependent on just one significant user is another example. Council Member Bowen asked for clarification on a method of structuring whereby payments per year would rise, so they'd be lower in the beginning and higher later on as revenue picked up. It doesn't look like that is built into this deal. If that's true, how does that jibe with our revenue assumptions? Mr. Montague responded that there were three structures we looked at. One was assuming the County debt based on a repayment schedule; one was called level debt service where we have basically the same payment every year; and one was accelerated debt service — shorter in the front and longer in the back. We have looked at each of those scenarios. There are costs and benefits to each of those. One of the challenges to an accelerated debt service is there is a significant additional interest cost; most of early payments are almost all interest. From a cost benefit, in order to evaluate that structure, you would need to measure it against the projected inflows of resources. Under the current structure, what we're striving for is to maintain a level debt structure which allows the organization to make significant contributions toward the principal and not make payments of unnecessary debt interest. Some of that could change, but we're not anticipating it based on an update that we did on the analysis back in December. Council Member Bowen asked if there had been any major revisions to the projections on growth to which Mr. Montague replied that with respect to the reasonably conservative current numbers that we're using as a basis to identify the capacity for these Study Session Minutes —April 30, 2013 Page 4 of 12 Regular Council Meeting - May 22, 2013 - Page 15 of 295 initial and future improvements, there has not. He is working with the Planning Department in regard to the other town -wide impact fees to establish growth projects and structure. Mr. Reader then reviewed how Marana became a AA rated town with Standard & Poor's. The goal is to stay in the AA category for this transaction. The criteria to get to a particular rating is strong management, good leadership, the ability to manage growth, the budget and finances including reserves and liquidity, debt load, acquisition of assets, revenue stream for repayment, the local economy, the stability, diversity and magnitude of pledged revenues. The credit rating also depends strongly on the town's history of maintaining strong reserves and conservative budgeting. Mr. Reader's group is working on the rating materials now and expect to meet with the issuers in the next two weeks. He then concluded his presentation with the preliminary financing calendar, noting that the Council should adopt the resolution to authorize the issuance of bonds at its regular meeting on May 22. Mr. Cafiso will be walking Council through most of that presentation, and it will be necessary to have an emergency clause in the resolution since the financing has to close expeditiously under the rules of the IGA. The credit rating should be finalized on June 6, the obligations sale will occur during the week of June 17, they will recalculate escrow for the wastewater utility acquisition pursuant to the IGA and will work closely with Mr. Montague and Mr. Cassidy on that. June 27 is the current closing date to deposit the money and wire it to the County as required under the IGA. Mr. Reader responded to a question by Council Member Bowen, that general obligation refers to a property tax, so these are not secured by any form of a property tax. These bonds are secured by your excise taxes, local sales tax, state sales tax, state shared revenues and other miscellaneous revenues. Council Member Bowen asked what the market is like right now for municipal bonds at the size we're offering. Mr. Reader responded that our market is impacted by what goes on around the world, so right now we're fortunate to have a bull market in municipals because it's an asset class that people want to go into, and the rates are low and protected. He thinks there will be a demand for these bonds. Council Member Bowen asked how much cushion we have in our current revenue streams that will be paying for these right now. Are we even or ahead? Mr. Montague said that based on the scenario, for the first five years it's pretty close to break - even. P 2: Presentation: Relating to Budget; review, consideration and direction to staff regarding the fiscal year 2013-2014 managers recommended budget for the General Fund. Presented by Gilbert Davidson and Erik Montague. Mr. Davidson noted that budget presented is a reflection of the community's priorities as set forth in the Strategic Plan as well as the Council Study Session in January to highlight Council initiatives and program requests. This budget is structurally balanced between ongoing revenues /expenses and one -time revenue /expenses. This budget continues our investment initiative that we started several years ago in the deep part of the recession to have a clean, healthy and safe community. We want to be strategic in the allocation of resources. Mr. Montague will walk Council through the revenue outlook and then Gilbert will come back and highlight the recovery plan. Study Session Minutes —April 30, 2013 Page 5 of 12 Regular Council Meeting - May 22, 2013 - Page 16 of 295 Mr. Montague began with the FY 2014 revenue outlook beginning with revenue growth for the state of Arizona since 2004 through 2012, focusing on consumer confidence, unemployment and single family housing prices. Next he reviewed the sales tax numbers, focusing mostly on the largest revenues. There is about a 2% negative change from the FY 2013 budget primarily due to contracting revenues which are down about $1.2M. State Shared Revenues show an anticipated slight increase except for Auto Lieu with about a I% negative change. Licenses, fees and permits are expected to increase slightly over FY 2013. Mr. Montague concluded his summary with about a 3% overall positive increase for FY 2014. Mr. Davidson then talked about setting priorities in the economic recovery plan which focuses on the three primary areas of current staff, hiring for strategic positions and resources including facilities, tools and vehicles — all of which are included in the Strategic Plan. At is relates to current employees, there has been a set aside of approximately $577K that will be used for pay adjustments for the next fiscal year. Still in development is some general adjustment across the board and a one -time lump sum for employees, similar to what was done last December, dependent on number of years of service and position within the organization. This budget does reinvest back into current employees and their value to the organization and the community. They were also mindful of the class and compensation study going on right now. Phase II of that study will be finalized in the next fiscal year. There will be a number of recommendations coming out of that process after analyzing all the positions within the town, including market comparators as well as private sector indicators. There will most likely be positions within the organization that were below market. If we want to be competitive as an organization to attract the best and brightest, we will then develop a strategy for increasing those salary lines to make sure that we retain those individuals or bring in new people in the future. $504K, with $311 K from the general fund, as been designated for other pay and benefits such as special equity adjustments, health, retirement, disability insurance, etc. and $31 K for the Phase II compensation classification study. Also driven by the Strategic Plan is investment in people. We have identified some training and development opportunities for an investment of about $13M. One of the things we launched this year was a partnership with the University of Arizona to have them come in and talk about our culture and how we need to develop internal talent. Several years ago, we started programming vehicle replacement costs within department line items. With this investment, we'll have a fully funded vehicle replacement program at a cost of about $1.4M. The vast majority of that is for public safety. One of the big changes with our fleet, we have moved to a new police vehicle. The Ford Crown Victoria is being discontinued, and we did research on several vehicles and decided on a Chevy Caprice Interceptor package, which we'll be purchasing. It's the same color scheme but a different looking car. Also, within this budget, is our continued effort to make sure technology is available for employees and community benefit with server upgrades of $40K, eCitation Units in Phase II of $104K (after a pilot project was completed on their use) and in Development Study Session Minutes —April 30, 2013 Page 6 of 12 Regular Council Meeting - May 22, 2013 - Page 17 of 295 Services, CRW Trackit 9 upgrade for further efficiency for $25K. We will also be investing in general maintenance projects throughout the organization for $105K. The total investment for resources $1.4M. The last investment in the recovery process is for strategic positions which we have needed but not been able to fund since the depth of the recession. We knew as the economy recovered, we needed a plan which was developed by a committee of departments looking at growth demands on the organization. The first position is an Emergency Management and Safety Coordinator. This has been piece - mealed out to a variety of staff to deal with neighborhood needs. Coupled with that is added mandates by federal OSHA law and state requirements for training and equipment. Over the past couple of years there has been a rise in employee claims, some of which can be attributed to not having certain policies and procedures in place. We're now at a point of overtaxing individuals and committees to oversee these projects. Because people move around in various positions, there has been a lack of consistency in some of these projects up to and including no activity. This has been identified as a critical position, and will eventually have a bigger payoff as we have a better safety- trained staff and the ability to reduce claims. The Website Administrator is a position driven by the Strategic Plan and is one of the most valuable ways for people to get information. Again, the functions of this position has been done by committee and is affected by turnover within department and lack of consistency. The town has hosted this website, so that the back - end infrastructure is done by the private sector. It's difficult to make timely changes and modifications that we believe meet the needs of the community. The Building Inspector II position is in direct response to the number of residential structures now going up. At the height of the building boom, we had 11 positions in that department; we now have three. The review and inspection activity for the number of units we have going, and the ability to keep up with customer service and demand, is beyond the ability of the three that we have now, especially if any of them were sick. A police officer position is to maintain full staff. This is not a full new position. This was occupied by a person who moved into a sergeant role, and we did not fill that position but used some of the funding to supplement the sergeant's position. So this is reinstating that function so that the team it's assigned to is made whole. The Utilities Operation I position is part of the wastewater management to make sure we have enough staff to manage the north Marana plant but also our obligations at Rillito. This is an entry level position. We hope we can bring someone in with a baseline of skills and then work with the staff member to obtain addition certifications; someone we can help grow within our organization. The Civil Engineer position is within Utilities. This is a reassignment of a staff position, but in the long -term it will help to reduce external costs that we have now. This person will help us plan for some of our long -term infrastructure needs on the water and the wastewater side. The total investment is $503,785 including benefits. Mr. Montague then gave an overall financial summary for the general fund. The numbers for both FY 2013 and FY 2014 intentionally exclude contingency. Contingency we will appropriate in 2014. The contingency fund would provide for capacity expenditure authority for some unanticipated event. Current practice for use of that money would require Council approval for reallocation of resources for whatever purpose. On the revenue side, we're anticipating, based on the programs that were just described to you and others listed on the summary, about a 3% change. Currently, there Study Session Minutes —April 30, 2013 Page 7 of 12 Regular Council Meeting - May 22, 2013 - Page 18 of 295 are some significant changes in capital outlay. But with respect to a balanced budget, we've calculated about $1.6M in resources that are available for expenditures. Within capital outlay — a one -time resource — the remaining portion of roughly $400K of additional dollars that are not shown on capital outlay are in one -time projects and programs within contracting services and for operating supplies and equipment. So we've allocated 100% of those one -time revenues on one -time uses. For other sources and uses — meaning money coming into the organization or need to be transferred out, there is some change there. We anticipated in the current year getting a capital lease for the radio system improvement that are currently underway - that type of structure would not need to occur next year. In transfers, based on the current numbers, there is a reduction of about $64K or about 2 %. So year over year, we're showing a balanced budget or a total change in the fund balance of zero. As talked about earlier by Mark Reader, reserves are among the criteria rating agencies look at with respect to the health and condition of an entity. Reserves are excess revenues that are collected over a period of time and are then available to use for a specific purpose. Those are one -time revenues by nature. We don't hoard resources, so that any resources that are accumulated are accumulated through a thoughtful process for some future intended use — maybe a building, maybe a major capital improvement or contribution or some other one -time item. The town has done a significant job with respect to managing those fund balances and the required reserves. In 2007, we established a required reserve, and then by town policy we established a targeted reserve, that 25% of annual appropriations or expenditure authority. What that is intended to provide is the minimum balance in a rainy day fund such that you'd be able to meet your obligations for a reasonable period of time. And as a goal or strategy, you would not want to have less than that targeted capacity. We have been able to manage that reserve even though the depths of the great recession, we have been improving reserves modestly over the past number of years. We're currently on track to add somewhere in the neighborhood of about $1 M in reserves for FY 2013, and that's mostly as a result of increased development previously described, as well as some of the additional sales tax revenues that are coming in ahead of schedule. We are pushing about $19.3M in reserves which is the highest level of reserves we had for a number of years and is significant for us. Unless there's a need to meet again, the next time we'll be before you is on May 22 to adopt the tentative budget, and then on June 18, we'll bring before you for consideration the adoption of the comprehensive fees schedule and adoption of the final budget. Mr. Davidson answered questions from Council Member Bowen about dollars allocated for the strategic positions and whether that was reflective of the phasing in; is the intent to go out and hire these positions as quickly as possible or is there a prioritization, and if so, does the list reflect that prioritization? The list before Council tonight is not in any major order, although the committee ranked these. For instance, we had included the building inspector in previous year's requests, and it always had a trigger of an increase in building number. We've been able to get by, but this past year we've exceeded that expectation. The police officer is making sure that we've got good Study Session Minutes —April 30, 2013 Page 8 of 12 Regular Council Meeting - May 22, 2013 - Page 19 of 295 coverage, but at any given time we are down on the number of officers needed. The emergency management position and the website positions don't necessarily have a timeframe associated, but probably in the first quarter. It's not something that's absolutely critical if we don't find the right person. If there were to be a change within our budget structure from what we're estimating, we've got the capacity to delay or cancel any of these if need be, and we've done that in previous years. Council Member Ziegler noted that she had several questions beginning with reimbursement to the town's general fund of $4M for the wastewater project. Is that reflected in this year's budget? Mr. Montague replied that it's part of reserves, so the way it's structured to get into the business, within the general fund, we have a "due from," which means a receivable. So we have a receivable from the wastewater utility in an amount that's anticipated to be given back to the general fund at the appropriate time. So because it's still an asset, it's still included in reserves. As part of the current $18.3M, a portion of that is that amount of money that's expected back; it's in anticipation of some future reimbursement. The reimbursement is not tied to any specific project, program or activity — it's the replenishment of cash that would be redeployed by any other use of cash. Council Member Ziegler referred to a mention of the Downtown Redevelopment Fund. Is this a new fund? What is it? What are you doing with the $125K? You need to come in front of the Council to do something. Mr. Davidson noted that the Council took action on this about two weeks; there was a presentation given that highlighted a concept of taking the Economic Roadmap definition of what is our downtown area — it's from this building all the way to the interchange — taking the existing businesses that are here today, taking any new business that may come online, and 50% of the taxes that was collected from today's business and future businesses would go into a set aside account, and that account could be used to help build public infrastructure. One of the big challenges we are going to have in building a main street or a downtown, is that we do not have a lot of infrastructure. The numbers that we're dealing with are not going to solve these problems, but we're trying to be a partner with the private sector to put some dollars on the table, so that if someone came in and wanted to put in a new business, we would be willing to work with them to make it more attractive to build in north Marana. Council Member Ziegler: and will you come back to the Council before you get into that $125K? Mr. Davidson: the program outlined some of parameters, so the first part will be an investment of doing an infrastructure facilities master plan, so that will be some of the initial dollars as authorized by that policy to make sure what are all the costs associated with building a downtown. That will be presented to Council as "Here's the total potential bill...." Of what we're looking at, and then strategies with how we partner with the private sector. Individual projects under the current policy, if we did have business that wanted to come in, that will be triggered by the actual master plan. Council Member Ziegler: on a lot of your charts you said "from the general fund," "from the general fund," "from the general fund." Where are you getting the other money (that's not coming from the general fund)? Mr. Montague responded that the way it's shown, most of the funding is coming from the general operating fund, especially with operating costs or increases in pay and benefits. The other monies would be coming from any other fund that pays for employees. There is a certain portion of salaries that are paid for out of HURF funds related to street maintenance, as an example. A very small piece would be community development and other grants. Another piece would have to do with utility Study Session Minutes —April 30, 2013 Page 9 of 12 Regular Council Meeting - May 22, 2013 - Page 20 of 295 funds — airport, water and wastewater. Those are the largest examples. Specifically with training and development, one of the programs Chief Rozema was looking to advance in the next cycle has to do with using RICO funds. Council Member Ziegler noted that we have a contingency fund, a general fund, a reserve fund, an operating fund. On the reserve fund, what percentage of the budget is going into contingency fund? Mr. Montague: when I started with the town, we established a kind of arbitrary $1 M fund as a contingency fund. In the current year, we're looking to define that at 5 %. He defined contingency as the ability to handle an unexpected expense to provide for capacity. Council Member Ziegler: when we need to get into the contingency fund, will that come back to the Council? Mr. Montague responded affirmatively, again giving the requirement for authorization. His recollection of the last time staff came before Council to use the contingency fund is attributable to the settlement arrangement with United Casualty and Fire related to the sewer project. There were two large payments we were obligated to make. Council Member Ziegler: and I know I gave you an assignment regarding the sewer hookups in Honea Heights; I know you're looking those up for me, because I'm just a little concerned on how we spent the 30 hookups, and I didn't know that. Maybe it's just me that didn't know it, but that concerns me that we expended that at $12K a piece; that's a lot of money that I and the Council didn't personally know what we were spending, and I know you said that money was under a certain budget and it was allowed under this and allowed under that, and since we don't do line item, by line item, I don't want to be surprised. I'm not berating you, I'm just — I don't want to be surprised again. Did anyone else on the Council know that or was it just me? (Council Member Ziegler asked from the dais who knew about this. She indicated that only two people knew and didn't think that was a very good percentage.) Mr. Davidson addressed the Council and said that this project, as we learned about last week, has a long history. There was an initial grant that was obtained by the County, and under that grant the town had contributed, and when the Gladden Farms sewer went in, there were a number of homes along Moore Road that were automatically hooked up. Those were part of that 30 number. And then the grant helped to pay for an additional number of homes. Since that grant expired and all the issues with the contractor came up, there have been emergency situations where septics have completely failed, and the town through various meetings and initiatives hase tried to get people hooked into the system .... Council Member McGorray left the dais at 8:00 p.m. Council Member Ziegler: let me stop you right there, and maybe that's the point. I am in favor of helping anybody who truly needs help, but I think when you said the town jumped in and did all this stuff, I didn't know the town had jumped did and did all this stuff to help these people. Maybe somebody should have said something to the Council. Mr. Davidson: when the whole situation with the contractor was going on, all of that information was provided to the Council. Council Member Ziegler: I did not know that we were paying for hookups in Honea Heights out of our general fund until last week. I don't want to be surprised like that anymore. I'm not saying we shouldn't do it, it's got to go beyond the Mayor, and we need to be told what's going on. Again, I'm 100% for Study Session Minutes —April 30, 2013 Page 10 of 12 Regular Council Meeting - May 22, 2013 - Page 21 of 295 helping people who need the help, but I was really taken aback that we'd done 30 of these and not known about it. Council Member Bowen: right now we're in the process of drafting policies that will guide all of these kinds of things in the future, are we not? Mr. Davidson replied affirmatively. There were further comments from Council, including Council Member Kai's suggestion to invite members of the community affected by the town center development to add their comments at a public meeting on the issue of using their future tax money. Council Member Post noted that he was extremely impressed with this year's budget. Mr. Davidson concluded by saying that since he's been Town Manager, we've put money back into the savings, and we've never dipped into the emergency or contingency funds other than when there was a lawsuit that we had to finalize with a neighborhood. Every single year we have been able to put back into savings. We've always lived within the budgets that have been approved by this Council year in and year out. Most departments have had a little bit of surplus revenue that we've been able to put back into savings with an ongoing structured, balanced budget. We have never used contingency other than what was approved by Council. Motion by Vice Mayor Comerford to direct the Town Manager to incorporate the items discussed this evening in the preparation of the tentative budget which will be considered for possible adoption on May 22, 2013, seconded by Council Member Bowen. CONSENT AGENDA. Motion to approve by Council Member Post, second by Council Member Bowen. Motion approved 6 -0. C 1: Resolution No. 2013 -038: Relating to Personnel; approving and authorizing staff to implement employee benefits rates for fiscal year 2013-2014. LIQUOR LICENSES BOARDS, COMMISSIONS AND COMMITTEES COUNCIL ACTION ITEMS FOR DISCUSSION /POSSIBLE ACTION EXECUTIVE SESSIONS E 1: Executive Session pursuant to A.R.S. §38- 431.03 (A)(3), Council may ask for discussion or consultation for legal advice with the Town Attorney concerning any matter listed on this agenda. FUTURE AGENDA ITEMS Study Session Minutes —April 30, 2013 Page 11 of 12 Regular Council Meeting - May 22, 2013 - Page 22 of 295 Notwithstanding the mayor's discretion regarding the items to be placed on the agenda, if three or more Council members request that an item be placed on the agenda, it must be placed on the agenda for the second regular Town Council meeting after the date of the request, pursuant to Marana Town Code Section 2- 4 -2(B). ADJOURNMENT. Motion to adjourn by Council Member Post, second by Vice Mayor Comerford. Passed unanimously 6 -0. CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the Marana Town Council meeting held on April 30, 2013. I further certify that a quorum was present. Jocelyn C. Bronson, Town Clerk- Study Session Minutes —April 30, 2013 Page 12 of 12 Regular Council Meeting - May 22, 2013 - Page 23 of 295 MINUTES STUDY SESSION 11555 W. Civic Center Drive Marana, Arizona 85653 Council Chambers, May 7, 2013, at or after 6:00 PM Ed Honea, Mayor Patti Comerford, Vice Mayor David Bowen, Council Member Herb Kai, Council Member Carol McGorray, Council Member Jon Post, Council Member Roxanne Ziegler, Council Member CALL TO ORDER AND ROLL CALL. Mayor Honea called the meeting to order at 6:00 p.m. Town Clerk Bronson called roll. All Council Members were present. PLEDGE OF ALLEGIANCE /INVOCATION /MOMENT OF SILENCE. The Pledge of Allegiance will be given at the regular meeting following the study session. APPROVAL OF AGENDA. Motion to approve by Council Member McGorray, second by Council Member Ziegler. Passed unanimously. DISCUSSION /DIRECTION /POSSIBLE ACTION D 1: Presentation Relating to Development; presentation and discussion of the Marana Downtown Activity Center Conceptual Plan prepared by Arizona State University graduate students. (Cynthia Ross, AICP) Ms. Ross addressed Council to this item and introduced Professor Joochul Kim, associate professor in the department of Geographical Sciences and Urban Planning at Arizona State University, faculty advisor for this project. She noted that a group of 12 students worked on this project for approximately four months to develop a conceptual land use plan for the downtown activity center. Ms. Ross noted that the area of the downtown activity center is the same as is showcased in the Economic Development Roadmap — about two square miles. After tonight's presentation of their vision, at the end of the month, the students will be presenting their conceptual land use plan. Professor Kim addressed Council, noted that the students worked day and night to prepare this plan, and he emphasized that it was important to recognize this as a future plan for Marana. There is no right or wrong answer, and he asked for consideration of this as a serious project, knowing that it will take a long time for implementation to occur with input from Council and the community. Mailen Pankiwiscz and Study Session Minutes — May 7, 2013 Page 1 of 2 Regular Council Meeting - May 22, 2013 - Page 24 of 295 Adam Stanieri presented the Marana Downtown Activity Center Plan, highlighting the Lake District which includes retail /commercial, institutional, mixed use, public open space, multi- family housing, townhouses, research and development and light industrial uses. The Adventure District is located primarily on the east side of I -10 in the San Lucas /Adonis area, with a small institutional piece, a moderate commercial /retail piece and a large commercial recreation area. The Downtown Core proposes institutional, retail /commercial, townhouses, single family residences, multi - family housing, mixed use, public open space — about half of which currently exists. The Community Activity District is primarily commercial recreation, with a small amount of commercial /retail and moderate institutional space. The School District area located in their proposal is that which currently exists near Lon Adams and Grier Roads. Council was very complimentary of the work the students did. D 2: Presentation Relating to Community Development; presentation and discussion regarding Open Doors Community School in Marana (Jocelyn C. Bronson). Linda Zupi, Marana resident and Open Doors community School Board Member introduced CEO of Arizona Youth partnership, Daniel Stoltzfus, who gave a brief update on the status of the school. He also noted that he has taken a position back east and that Lori Malangone, Deputy Director of Arizona Youth Partnership will be the interim CEO and that the new principal for the school is Douglas Roe. Mr. Roe spoke to Council regarding his experience and his vision for the school. ADJOURNMENT. Motion to adjourn by Council Member McGorray, second by Council Member Bowen. Passed unanimously at 6:38 p.m. CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the Marana Town Council meeting held on May 7, 2013. I further certify that a quorum was present. Jocelyn C. Bronson, Town Clerk Study Session Minutes — May 7, 2013 Page 2 of 2 Regular Council Meeting - May 22, 2013 - Page 25 of 295 V N O I 9 MAIANA 7 ' ?jS MINUTES REGULAR COUNCIL MEETING 11555 W. Civic Center Drive, Marana, Arizona 85653 Council Chambers May 7, 2013, at or after 7:00 PM Ed Honea, Mayor Patti Comerford, Vice Mayor David Bowen, Council Member Herb Kai, Council Member Carol McGorray, Council Member Jon Post, Council Member Roxanne Ziegler, Council Member CALL TO ORDER AND ROLL CALL. Mayor Honea called the meeting to order at 7:00 p.m. Town Clerk Bronson called roll. All Council Members were present. PLEDGE OF ALLEGIANCE /INVOCATION /MOMENT OF SILENCE. Led by Mayor Honea. APPROVAL OF AGENDA. Vice Mayor Comerford moved to approve the agenda, first asking to move Item A.1. to the next regular meeting. Second by Council Member Bowen; passed unanimously. CALL TO THE PUBLIC. No speaker cards were presented. PROCLAMATIONS MAYOR AND COUNCIL REPORTS: SUMMARY OF CURRENT EVENTS. No reports. MANAGER'S REPORT: SUMMARY OF CURRENT EVENTS. Deputy Town Manager Post reported that the Council Executive Report was on the dais for Council information. PRESENTATIONS CONSENT AGENDA. Motion to approve by Council Member Bowen, second by Council Member Ziegler; passed unanimously. Meeting Minutes for May 7, 2013 Page 1 of 3 Regular Council Meeting - May 22, 2013 - Page 26 of 295 C 1: Resolution No. 2013 -039 Relating to Real Estate; authorizing the Mayor to execute a declaration of scrivener's error on behalf of the Town of Marana, correcting the receiving party's name on a 2002 quit claim deed from the Town of Marana C 2: Resolution No. 2013 -040: Relating to Utilities; approving and authorizing the Mayor to execute a one -year extension of the intergovernmental agreement between the Town of Marana and Pima County for provision of water consumption data and sewer user account billing services C 3: Resolution No. 2013 -041: Relating to Municipal Court; approving and authorizing the Mayor to execute an intergovernmental agreement between the Town of Marana and Pima County for provision of video -court hearings of municipal prisoners C 4: Resolution No. 2013 -042: Relating to Public Works; approving and authorizing the Mayor to execute an intergovernmental agreement between the Regional Transportation Authority and the Town of Marana for construction design and right -of -way acquisition for roadway improvements for Tangerine Road -- Dove Mountain Boulevard /Twin Peaks Road to La Canada Drive C 5: Resolution No. 2013 -043: Relating to Public Works; approving and authorizing the Mayor to execute an intergovernmental agreement between and among the Town of Marana, the Town of Oro Valley, and Pima County for the design and construction of roadway improvements for Tangerine Road -Dove Mountain Boulevard /Twin Peaks Road to La Canada Drive C 6: Resolution No. 2013 -044: Relating to the Police Department; approving and authorizing the Town Manager to execute a High Intensity Drug Trafficking Area (HIDTA) grant agreement between the City of Tucson (COT) and the Town of Marana to receive funding under COT Grant Number HT -13 -2314 C 7: Resolution No. 2013 -045: Relating to Parks and Recreation; approving and authorizing the Mayor to execute a cooperative utilization and license agreement between the Town of Marana and the Marana Marlins Swim Team for use of the Marana Pool facility at Ora Mae Ham Park C 8: Resolution No. 2013 -046: Relating to Development, Approving a Release of Assurances for San Lucas Block 6 and acceptance of public improvements maintenance. C 9: Approval of April 9, 2013 Study Session minutes and April 16, 2013 Council Meeting minutes. LIQUOR LICENSES. None BOARDS, COMMISSIONS AND COMMITTEES. None. COUNCIL ACTION. None. Meeting Minutes for May 7, 2013 Page 2 of 3 Regular Council Meeting - May 22, 2013 - Page 27 of 295 A 1: Resolution No. 2013 -047 Relating to Community Development; approving and authorizing the Town Manager to implement the Honea Heights Sanitary Sewer Conversion Project Emergency Connection Funding Policy ITEMS FOR DISCUSSION /POSSIBLE ACTION D 1: Relating to Legislation and Government Actions; Discussion and possible action regarding all pending state, federal, and local legislation/government actions and on recent and upcoming meetings of other governmental bodies. No report. EXECUTIVE SESSIONS. Motion to go into executive session on Item E.1 by Council Member McGorray, second by Vice Mayor Comerford; passed unanimously. E 1: Executive session pursuant to A.R.S. § 38- 431.03(A)(4), for discussion or consultation with the Town's attorneys concerning the lawsuit entitled Guerena vs. Pima County, Pima County Superior Court No. 020117686 (in which the Town of Marana is named as one of the co- defendants) E 2: Executive Session pursuant to A.R.S. §38- 431.03 (A)(3), Council may ask for discussion or consultation for legal advice with the Town Attorney concerning any matter listed on this agenda. FUTURE AGENDA ITEMS Notwithstanding the mayor's discretion regarding the items to be placed on the agenda, if three or more Council members request that an item be placed on the agenda, it must be placed on the agenda for the second regular Town Council meeting after the date of the request, pursuant to Marana Town Code Section 2- 4 -2(B). ADJOURNMENT. Motion to adjourn at 7:22 p.m. by Council Member Bowen, second by Council Member McGorray; passed unanimously. CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the Marana Town Council meeting held on May 7, 2013. I further certify that a quorum was present. Jocelyn C. Bronson, Town Clerk Meeting Minutes for May 7, 2013 Page 3 of 3 Regular Council Meeting - May 22, 2013 - Page 28 of 295 WN f 7 w j orerZo 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 Council Chambers, May 22, 2013, 7:00 PM To: Mayor and Council Item B 1 From: Erik Montague, District Treasurer and Chief Financial Officer Strategic Plan Focus Area: Not Applicable Subject: [Marana Town Council acting as the Gladden Farms Community Facilities District Board of Directors] : A Resolution of the District Board of Gladden Farms Community Facilities District, a Community Facilities District of Arizona, approving a tentative budget for fiscal year 2013 -2014 pursuant to ARS §48 -716; setting a public hearing date on said tentative budget; filing statements and estimates of the operation and maintenance expenses of the district, the costs of capital improvements to be financed by the approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay general obligation bonds of the district, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the district; providing for notice of filing the statements and estimates, and notice of a public hearing on the portions of the statements and estimates not relating to debt service on general obligation bonds; and providing that this resolution shall be effective after its passage and approval according to law Discussion: On or before July 15th, the District Treasurer submits to the District Board a proposed budget for the new fiscal year. The proposed budget includes statements and estimates of the operation and maintenance expenses of the District, the costs of capital improvements to be financed by the voter authorized ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and the amount to be raised to pay the District's general obligation bonds. The Treasurer has submitted the budget for FY 2013 -2014 and has filed the necessary statements and estimates. If the District Board approves this tentative budget for FY 2013 -2014, the attached notice will be published giving notice of filing the required statements and estimates, and giving notice of a public hearing on June 18, 2013 to receive comment on the tentative budget and, particularly, on the portions of the statements and estimates not relating to debt service on general obligation bonds. After the public hearing, the District Board may adopt a final budget by resolution and may order the fixing, levying and assessment of required ad valorem taxes. Financial Impact: Establishment of the tentative budget for fiscal year 2013 -2014. Regular Council Meeting - May 22, 2013 - Page 29 of 295 ATTACHMENTS: Name: Description: D 2014GFCFDTentativeResolution .pdf GFCFD Staff Recommendation: Type: Resolution Staff recommends adoption of Resolution No. GFCFD 2013 -02, adopting the tentative budget for fiscal year 2013 -2014 in the amount of $1,782,753. Suggested Motion: I move to adopt Resolution No. GFCFD 2013 -02; adopting the tentative budget for fiscal year 2013- 2014 in the amount of $1,782,753. Regular Council Meeting - May 22, 2013 - Page 30 of 295 RESOLUTION NO. GFCFD 2013 -02 GLADDEN FARMS COMMUNITY FACILITIES DISTRICT A RESOLUTION OF THE DISTRICT BOARD OF THE GLADDEN FARMS COMMUNITY FACILITIES DISTRICT, A COMMUNITY FACILITIES DISTRICT OF ARIZONA, APPROVING A TENTATIVE BUDGET FOR FISCAL YEAR 2013 -2014 PURSUANT TO ARS §48 -716; SETTING A PUBLIC HEARING DATE ON SAID TENTATIVE BUDGET; FILING STATEMENTS AND ESTIMATES OF THE OPERATION AND MAINTENANCE EXPENSES OF THE DISTRICT, THE COSTS OF CAPITAL IMPROVEMENTS TO BE FINANCED BY THE APPROVED AD VALOREM TAX LEVY, AND THE AMOUNT OF ALL OTHER EXPENDITURES FOR PUBLIC INFRASTRUCTURE AND ENHANCED MUNICIPAL SERVICES PROPOSED TO BE PAID FROM THE TAX LEVY AND OF THE AMOUNT TO BE RAISED TO PAY GENERAL OBLIGATION BONDS OF THE DISTRICT, ALL OF WHICH SHALL BE PROVIDED FOR BY THE LEVY AND COLLECTION OF AD VALOREM TAXES ON THE ASSESSED VALUE OF ALL THE REAL AND PERSONAL PROPERTY IN THE DISTRICT; PROVIDING FOR NOTICE OF FILING THE STATEMENTS AND ESTIMATES, AND NOTICE OF A PUBLIC HEARING ON THE PORTIONS OF THE STATEMENTS AND ESTIMATES NOT RELATING TO DEBT SERVICE ON GENERAL OBLIGATION BONDS; AND PROVIDING THAT THIS RESOLUTION SHALL BE EFFECTIVE AFTER ITS PASSAGE AND APPROVAL ACCORDING TO LAW. WHEREAS, on, February 17, 2004 the Mayor and Council of the Town of Marana ( "Town ") adopted Resolution No. 2004 -23 creating within Sections 33 and 34, R11 E, T 11 S, G &SRB &M of the Town the Gladden Farms Community Facilities District ( "GFCFD "), a community facilities district in accordance with ARS §48 -701 et seq. Arizona Revised Statutes, as amended, as described in Exhibit "A" attached hereto and expressly made a part hereof; and WHEREAS, GFCFD is a special purpose district for purposes of Article IX, Section 19, Constitution of Arizona, a tax - levying public improvement district for the purposes of Article XIII, Section 7, Constitution of Arizona, and a municipal corporation for all purposes of Title 35, Chapter 3, Articles 3, 3.1., 3.2, 4 and 5, Arizona Revised Statutes, as amended, and [except as otherwise provided in §48- 708(B), as amended] is considered to be a municipal corporation and political subdivision of the State of Arizona, separate and apart from the Town; and WHEREAS, a primary purpose for creating GFCFD was to finance construction and maintenance of certain public improvements needed for the Gladden Farms development through assessment of ad valorem taxes on all real and personal property within the development; and WHEREAS, in accordance with ARS § §48 -719 and 48 -723, a special election was held on May 18, 2004 wherein the qualified electors of GFCFD voted to issue general obligation bonds in the maximum amount of sixty nine million dollars ($69,000,000) to cover costs of constructing required public improvements, and to levy and collect an annual ad valorem tax at a rate not to exceed thirty cents (30¢) per one hundred dollars ($100) of assessed valuation for GFCFD operation and maintenance expenses; and Regular Council Meeting - May 22, 2013 - Page 31 of 295 WHEREAS, by Resolution GFCFD No. 2004 -03 (dated July 6, 2004) the GFCFD Board authorized the sale of up to two million three hundred thousand dollars ($2,300,000) aggregate principal amount of general obligation bonds, Series 2004 ( "2004 Bonds "); and by Resolution GFCFD No. 2006 -02 (dated June 6, 2006) the GFCFD Board authorized the sale of up to three million five hundred thousand dollars ($3,500,000) aggregate principal amount of general obligation bonds, Series 2006 ( "2006 Bonds "); and by Resolution GFCFD No. 2007 -03 (dated July 17, 2007) the GFCFD Board authorized the sale of up to three million five hundred thousand dollars ($3,500,000) aggregate principal amount of general obligation bonds, Series 2007 ( "2007 Bonds "); and by Resolution GFCFD No. 2010 -03 (dated August 17, 2010) the GFCFD Board authorized the sale of up to one million seven hundred and fifty thousand dollars ($1,750,000) aggregate principal amount of general obligation bonds, Series 2010 ( "2010 Bonds ") to fund public improvements for the development; and WHEREAS, GFCFD also entered into a standby contribution agreement with Gladden Forrest L.L.C., a limited liability company of Arizona ( "Gladden Forrest ") with respect to the 2004 Bonds, 2006 Bonds, 2007 Bonds and 2010 Bonds whereby Gladden Forrest shall make annual payments to GFCFD in order to maintain the tax rate at no more than two dollars fifty cents ($2.50) per one hundred dollars ($100) of secondary assessed valuation for debt service, given the tax base of GFCFD in each tax year; and WHEREAS, in accordance with ARS §§48-716 and 48 -723, the GFCFD Treasurer has submitted to the GFCFD Board a proposed budget for Fiscal Year 2013 -2014 which includes statements and estimates of the operation and maintenance expenses of GFCFD, the costs of capital improvements to be financed by the authorized ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay GFCFD general obligation bonds, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property within GFCFD; and WHEREAS, the GFCFD Board desires now to approve said tentative budget for Fiscal Year 2013 -2014 to publish notice of having filed the required statements and estimates, and to set a date (and publish a notice thereof) for a public hearing to receive comment on the tentative budget and, particularly, on the portions of the statements and estimates not relating to debt service on general obligation bonds; and WHEREAS, after said public hearing (and on or before October 1), the GFCFD Board expects to adopt a final budget by resolution; and WHEREAS, on or before the third Monday in August, the GFCFD Board also expects to order the fixing, levying and assessment of required ad valorem taxes and to cause certified copies of the order to be delivered to the Pima County Board of Supervisors and the Arizona Department of Revenue; NOW, THEREFORE, BE IT RESOLVED BY THE DISTRICT BOARD OF THE GLADDEN FARMS COMMUNITY FACILITIES DISTRICT, AS FOLLOWS: Regular Council Meeting - May 22, 2013 - Page 32 of 295 1. That that certain proposed budget prepared by the GFCFD Treasurer for Fiscal Year 2013 -2014, attached hereto and expressly made a part hereof as Exhibit "B ", is hereby tentatively approved. 2. That the statements and estimates of the operation and maintenance expenses of GFCFD, the costs of capital improvements to be financed by the approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay GFCFD general obligation bonds in Fiscal Year 2013 -2014 are hereby filed on forms of the Auditor General in accordance with ARS §§42-17101(3) and 48- 723(C), Arizona Revised Statutes, as amended, and are attached hereto and expressly made a part hereof as Exhibit "C ". 3. That a public hearing date of Tuesday, June 18, 2013, beginning at or after 7:00 p.m. in the council chambers of the Town of Marana Civic Center located at 11555 W. Civic Center Drive, Town of Marana, Arizona, is hereby set to consider said tentative budget (including, but expressly not limited to, consideration of those portions of the statements and estimates not relating to debt service on GFCFD general obligation bonds), and said notice (attached hereto and expressly made a part hereof as Exhibit "D ") shall be published once in The Daily Territorial no later than ten (10) days prior to said hearing date. 4. That if any provision in this Resolution is held invalid by a Court of competent jurisdiction, the remaining provisions shall not be affected but shall continue in full force and effect. law. 5. That this Resolution shall be effective after its passage and approval according to RESOLVED by the District Board of the Gladden Farms Community Facilities District this 22 day of May 2013. Ed Honea, Chairman District Board Gladden Farms Community Facilities District ATTEST: Jocelyn C. Bronson, District Clerk Gladden Farms Community Facilities District APPROVED AS TO FORM: Frank Cassidy, Legal Counsel Gladden Farms Community Facilities District Regular Council Meeting - May 22, 2013 - Page 33 of 295 EXHIBIT "A " GFCFD Map and Legal Description Regular Council Meeting - May 22, 2013 - Page 34 of 295 (D CQ k I UNSUBVI V I DED UNSUDDI V I DED 2 17 -- 43-0020 q q 217-43-0020 l - ._._... _ ......... ...... ... . ... ...... _....- .._.., :... -..... . •• L i L aa �� � l! r i� -.� .. -'.' - -' -'-- .- ._- .. : -116 !'E V7 ;N Ali I 1 7 1 W r i 1 r f i -4 1 r� 33 6A 4 3 w SCALE: N.T.S. ACRICUUVRE 217- 4' f� zs 35 9A D 35 TANGERINE ROAD 3 2 D DISTRICT GLADDEN FARES BLOCKS i TNRU 25 AND A,B,C.E, AND F BOOK 55 PAGE 60 r K z EXHIBIT A LEGAL DESCRIPTION OF PROPERTY TO BE INCLUDED IN THE DISTRICT ALL OF GLADDEN FARMS BLOCKS 1 THRU 25 AND A THRU F. EXCEPT BLOCK D, AS SHOWN ON THE PLAT RECORDED IN BOOK 55 OF MAPS AND PLATS AT PAGE 60, RECORDS OF THE PIMA COUNTY RECORDER, PIMA COUNTY, ARIZONA, BEING PORTIONS OF SECTIONS 33 AND 34 OF TOWNSHIP 11 SOUTH, RANGE 11 EAST, GILA AND SALT RIVER MERIDIAN, PIMA COUNTY, ARIZONA, FURTHER DESCRIBED AS FOLLOWS: COMMENCING AT A 'W" IRON PIN (NO TAG) AT THE NORTHEAST CORNER OF SAID SECTION 34; THENCE SOUTH 0 0 30'09" EAST 322.00 FEET UPON THE EAST LINE OF THE NORTHEAST QUARTER OF SAID SECTION 34 TO THE POINT OF BEGINNING; THENCE CONTINUE SOUTH 0 0 30'09" EAST 2322.59 FEET UPON SAID EAST LINE AND UPON THE EAST LINE OF SAID GLADDEN FARMS TO A '-w2" ALUMINUM CAPPED PIN, LS 7599, AT THE EAST QUARTER CORNER OF SAID SECTION 34; THENCE SOUTH 0 0 30'03" EAST 2644.34 FEET UPON THE EAST LINE OF THE SOUTHEAST QUARTER OF SAID SECTION 34 AND UPON SAID EAST LINE OF GLADDEN FARMS TO A 'W" IRON PIN, NO TAG, AT THE SOUTHEAST CORNER OF SAID SECTION 34; THENCE SOUTH 89 0 22'30" WEST 187.66 FEET UPON THE SOUTH LINE OF SAID SOUTHEAST QUARTER AND UPON THE SOUTH LINE OF SAID GLADDEN FARMS TO THE SOUTHEAST CORNER OF CMID WELL SITE NO. 18 AS SHOWN ON SAID PLAT; THENCE NORTH 0 0 37'30" WEST 100.00 FEET UPON THE EAST LINE OF SAID WELL SITE TO THE NORTHEAST CORNER THEREOF; THENCE SOUTH 89 0 22'30" WEST 75.00 FEET UPON THE NORTH LINE OF SAID WELL SITE TO THE NORTHWEST CORNER THEREOF; THENCE SOUTH 0 EAST 100.00 FEET UPON THE WEST LINE OF SAID WELL SITE TO THE SOUTHWEST CORNER THEREOF BEING ON SAID SOUTH LINE OF THE SOUTHEAST QUARTER; THENCE SOUTH 89 0 22'30" WEST 3885.04 FEET CONTINUING UPON THE SOUTH LINE OF SAID SOUTHEAST QUARTER AND UPON THE SOUTH LINE OF THE SOUTHWEST QUARTER OF SAID SECTION 34, BEING THE SOUTH LINE OF SAID GLADDEN FARMS, TO THE SOUTHWEST CORNER OF BLOCK B OF GLADDEN FARMS AS SHOWN ON SAID PLAT, BEING ON THE NORTHEASTERLY RIGHT OF WAY LINE OF SANDARIO ROAD AND A POINT ON THE ARC OF A NON— TANGENT CURVE CONCAVE SOUTHWESTERLY, THE RADIUS POINT OF SAID CURVE BEARS SOUTH 68 0 20'49" WEST, FOR REFERENCE, AN ALUMINUM CAPPED PIN, RLS 7599, AT THE SOUTHWEST CORNER OF SAID SECTION 34 BEARS SOUTH 89 0 22'30" WEST AT A DISTANCE OF 1124.04 FEET; THENCE THE FOLLOWING THREE COURSES UPON SAID RIGHT OF WAY LINE AND UPON SAID SOUTHWEST LINE OF BLOCK B: 1) NORTHWESTERLY UPON SAID ARC, TO THE LEFT, HAVING A RADIUS OF 746.20 FEET AND A CENTRAL ANGLE OF 48 0 17'38", FOR AN ARC DISTANCE OF 628.96 FEET TO A TANGENT LINE; A -1 Regular Council Meeting - May 22, 2013 - Page 36 of 295 2 ) NORTH 69 WEST 593.45 FEET TO A POINT ON THE ARC OF A TANGENT CURVE CONCAVE NORTHEASTERLY; 3) NORTHWESTERLY UPON SAID ARC, TO THE RIGHT, HAVING A RADIUS OF 160.99 FEET AND A CENTRAL ANGLE OF 69 0 26'33 ", FOR AN ARC DISTANCE OF 195.12 FEET TO A THE TANGENT EAST RIGHT OF WAY LINE OF SAID SANDARIO ROAD BEING THE WEST LINE OF SAID GLADDEN FARMS; THENCE NORTH 0 0 30'16" WEST 1862.79 FEET UPON SAID EAST RIGHT OF WAY LINE AND UPON SAID WEST LINE TO AN ANGLE POINT; THENCE SOUTH 89 0 29'44" WEST 30.04 FEET UPON SAID WEST LINE TO A " IRON PIN, NO TAG, AT THE WEST QUARTER CORNER OF SAID SECTION 34, BEING ALSO THE EAST QUARTER CORNER OF SAID SECTION 33; THENCE SOUTH 89 WEST 1321.01 FEET UPON SAID WEST LINE AND UPON THE SOUTH LINE OF THE NORTHEAST QUARTER OF SAID SECTION 33 TO AN ANGLE POINT; THENCE NORTH 0 0 34'17" WEST 2610.03 FEET UPON SAID WEST LINE TO THE NORTHWEST CORNER OF SAID GLADDEN FARMS, BEING A POINT ON THE SOUTH RIGHT OF WAY LINE OF MOORE ROAD PRIOR TO THE DEDICATION OF ADDITIONAL RIGHT OF WAY AS SHOWN ON SAID PLAT, BEING A LINE 30.00 FEET SOUTHERLY OF AND PARALLEL WITH THE NORTH LINE OF SAID NORTHEAST QUARTER OF SECTION 33; THENCE NORTH 89 0 20'24" EAST 1320.79 FEET UPON THE NORTH LINE OF SAID GLADDEN FARMS, UPON SAID PRIOR RIGHT OF WAY LINE AND UPON SAID PARALLEL LINE TO AN ANGLE POINT; THENCE NORTH 89 0 25'03" EAST 2634.98 FEET UPON SAID NORTH LINE, UPON SAID PRIOR RIGHT OF WAY LINE AND UPON A LINE PARALLEL WITH AND 30.00 FEET SOUTHERLY OF THE NORTH LINE OF THE NORTHWEST QUARTER OF SAID SECTION 34 TO AN ANGLE POINT; THENCE NORTH 89 0 25'03" EAST 2283.27 FEET UPON SAID NORTH LINE, UPON SAID PRIOR RIGHT OF WAY LINE AND UPON A LINE PARALLEL WITH AND 30.00 FEET SOUTHERLY OF THE NORTH LINE OF THE NORTHEAST QUARTER OF SAID SECTION 34; THENCE SOUTH 0 0 30'13" EAST 292.00 FEET; THENCE NORTH 89 0 25'03" EAST 357.00 FEET TO THE POINT OF BEGINNING. A -2 Regular Council Meeting - May 22, 2013 - Page 37 of 295 EXHIBIT "B " FY 2013 -2014 GFCFD Budget Regular Council Meeting - May 22, 2013 - Page 38 of 295 EXHIBIT B GLADDEN FARMS COMMUNITY FACILITIES DISTRICT (GFCFD) TENTATIVE BUDGET AND SUMMARY SCHEDULE OF ESTIMATED REVENUES AND EXPENDITURES FISCAL YEAR 2013 -14 Regular Council Meeting - May 22, 2013 - Page 39 of 295 FY 2013 FY 2013 FY 2013 Adopted Amended Estimated FY 2014 REVENUES Budget Budget Acutal Budget Property Tax - General (Operating) $ 49 $ 49 $ 48 $ 44 Property Tax- Secondary (Debt Service) 413 413 400 370 Developer Contributions 320 320 314 367 Total Revenues 783 783 763 782 EXPENDITURES CFD Administration 7 7 4 7 Costs of Issuance 100 100 - 100 Accounting /Auditing 2 2 1 2 Public Notification Expenses 2 2 500 2 Consultant Services 15 15 - 15 Outside Legal Counsel 5 5 - 5 Debt Service 695 695 695 694 Trustee Fees 6 6 4 6 Capital Improvements Acquisition 900 900 - 900 Replacement Reserve 50 50 - 50 Total Expenditures 1 1 706 1 Excess (Deficiency) of Revenues (1,000,000) (1,000,000) 57 (1,000,000) Over (Under) Expenditures Other Financing Sources (Uses) Bond Proceeds 1 1 - 1 Total Other Financing Sources 1 1 - 1 Excess (Deficiency) of Revenues and - - 57 - Other Financing Sources Over (Under) Expenditures and Other Financing Uses BEGINNING FUND BALANCE 583 583 644 701 ENDING FUND BALANCE $ 583 $ 583 $ 701 $ 701 Regular Council Meeting - May 22, 2013 - Page 39 of 295 EXHIBIT CI " GFCFD Statements and Estimates on Auditor General Forms Regular Council Meeting - May 22, 2013 - Page 40 of 295 (0 v 0 0 0 (0 v N N 0 w v (0 0 N o, TOWN OF MARANA Summary Schedule of Estimated Revenues and Expenditures /Expenses Fiscal Year 2014 EXPENDITURE LIMITATION COMPARISON 2013 2014 1. Budgeted expenditures /expenses $ 81,980,411 ESTIMATED 2. Add /subtract: estimated net reconciling items 3. Budgeted expenditures /expenses adjusted for reconciling items 81,980,411 82,882,224 ADOPTED FUND 5. Amount subject to the expenditure limitation REVENUES $ 82 6. EEC or voter - approved alternative expenditure limitation TOTAL $ BUDGETED ACTUAL BALANCE/ OTHER THAN INTERFUND FINANCIAL BUDGETED EXPENDITURES/ EXPENDITURES/ NET PROPERTY TAX PROPERTY OTHER FINANCING TRANSFERS RESOURCES EXPENDITURES/ EXPENSES* EXPENSES ** POSITION * ** REVENUES TAXES 2014 2014 AVAILABLE EXPENSES SOURCES <USES> IN <OUT> FUND 2013 2013 July 1, 2013 ** 2014 2014 2014 2014 1. General Fund Primary: $ 31 $ 28,102,207 $ $ $ 32,679,575 $ $ $ $ 2,725,636 $ 29,953,939 $ 31 2. Special Revenue Funds Secondary: 6,459,532 4 422 6,853,946 150,000 7 9,946,312 3. Debt Service Funds Available 8,337,551 8,337,551 2,542,353 5,540,472 8,082,825 8,453,732 4. Less: Amounts for Future Debt Retirement 5. Total Debt Service Funds 8,337,551 8,337,551 2,542,353 5,540,472 8,082,825 8,453,732 6. Capital Projects Funds 18,699,903 11 17,849,877 6 200 000 > > 2,655,146 21 394 731 > > 20 092 566 > > 7. Permanent Funds 8. Enterprise Funds Available 17,352,153 4 959 390 > > 7 309 690 > 6,959,270 12 935 675 > > 9. Less: Amounts for Future Debt Retirement 10. Total Enterprise Funds 17,352,153 4 959 390 > > 7 309 690 > 6,959,270 12 935 675 > > 11. Internal Service Funds 12. TOTAL ALL FUNDS $ 81,980,411 $ 57,104,767 $ $ 422,958 $ 67,194,711 $ 6,200,000 $ $ 5,690,472 $ 5,690,472 $ 73,817,669 $ 82,882,224 EXPENDITURE LIMITATION COMPARISON 2013 2014 1. Budgeted expenditures /expenses $ 81,980,411 $ 82,882,224 2. Add /subtract: estimated net reconciling items 3. Budgeted expenditures /expenses adjusted for reconciling items 81,980,411 82,882,224 4. Less: estimated exclusions 5. Amount subject to the expenditure limitation $ 81 $ 82 6. EEC or voter - approved alternative expenditure limitation $ $ =The city /town does not levy property taxes and does not have special assessment districts for which property taxes are levied. Therefore, Schedule B has been omitted. * Includes Expenditure /Expense Adjustments Approved in current year from Schedule E. ** Includes actual amounts as of the date the proposed budget was prepared, adjusted for estimated activity for the remainder of the fiscal year. * ** Amounts in this column represent Fund Balance /Net Position amounts except for amounts not in spendable form (e.g., prepaids and inventories) or legally or contractually required to be maintained intact (e.g., principal of a permanent fund). 4/13 SCHEDULE A TOWN OF MARANA Tax Levy and Tax Rate Information Fiscal Year 2014 * Includes actual property taxes collected as of the date the proposed budget was prepared, plus estimated property tax collections for the remainder of the fiscal year. RE4Council Meeting - May 22, 2013 - Page 42 of 295 SCHEDULE 6 2013 2014 1. Maximum allowable primary property tax levy. A.R.S. §42- 17051(A) $ $ 2. Amount received from primary property taxation in the current year in excess of the sum of that year's maximum allowable primary property tax levy. A.R.S. X42- 17102(A)(18) � 3. Property tax levy amounts A. Primary property taxes $ $ B. Secondary property taxes 462 646 422 958 C. Total property tax levy amounts $ $ 422 4. Property taxes collected* A. Primary property taxes (1) Current year's levy $ (2) Prior years' levies (3) Total primary property taxes $ B. Secondary property taxes (1) Current year's levy $ 462 (2) Prior years' levies (3) Total secondary property taxes $ 462,646 C. Total property taxes collected $ 462 5. Property tax rates A. City /Town tax rate (1) Primary property tax rate (2) Secondary property tax rate 2.8000 2.8000 (3) Total city /town tax rate 2.8000 2.8000 B. Special assessment district tax rates Secondary property tax rates - As of the date the proposed budget was prepared, the city /town was operating four special assessment districts for which secondary property taxes are levied. For information pertaining to these special assessment districts and their tax rates, please contact the city /town. * Includes actual property taxes collected as of the date the proposed budget was prepared, plus estimated property tax collections for the remainder of the fiscal year. RE4Council Meeting - May 22, 2013 - Page 42 of 295 SCHEDULE 6 TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 ReMaj Council Meeting - May 22, 2013 - Page 43 of 295 SCHEDULE C ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 GENERAL FUND Local taxes Sales taxes $ 19 $ 20 $ 19 Licenses and permits Building and development fees 1 2,356 2,544 Business and license fees 135 145 144 Franchise fees 325 324 325 Other licenses and fees 130 165 180 Intergovernmental State shared sales taxes 2 2 3 Urban revenue sharing 3 3 3 Auto lieu 1 1 1 Other 10 Charges for services Charges for services 381 405 396 Fines and forfeits Court fines and fees 570 668,540 625 Interest on investments Investment income 100 97 100 In -lieu property taxes Contributions Voluntary contributions 102 109 116 Miscellaneous Other miscellaneous 562 332 504 Total General Fund $ 31 $ 32 $ 32 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. ReMaj Council Meeting - May 22, 2013 - Page 43 of 295 SCHEDULE C TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. Rewls Council Meeting - May 22, 2013 - Page 44 of 295 SCHEDULE C ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 SPECIAL REVENUE FUNDS Highway user revenue $ 2 $ 2 $ 2 Affordable housing revolving 100 100 HOME 250 $ $ $ 2 2 2 Local JCEF $ 13 $ 12 $ 14 Fill the GAP 3 5 4 Local technology enhancement 116 124 118 Community development block grants 245 159 2 $ 377 $ 302 $ 2 Bed tax $ 732 $ 728 $ 754 Other grants and contributions 1 385 829 $ $ $ 2 1 1 Total Special Revenue Funds $ 5 $ 3 $ 6 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. DEBT SERVICE FUNDS Tangerine farms road improvement district $ 2 $ 2 $ 2 Gladden farms CFD debt 700 320 329 $ $ $ 2 2 2 Total Debt Service Funds $ 2 $ 2 $ 2 CAPITAL PROJECTS FUNDS Transportation $ 3 $ 2 $ 3 Impact fee funds 1 2 2 Other capital projects 10 7 490 Downtown reinvesement fund 125 Pima County bond fund 319 Regional transportation authority fund 10 $ $ $ 15 12 17 Tangerine farms road improvement district $ 60 $ 57 $ 60 Community facilities district (CFD) capital 277 49 Gladden farms CFD capital 37 Vanderbilt CFD capital 25 Saguaro Springs CFD capital 193 $ 337 $ 107 $ 316 Total Capital Projects Funds $ 15 $ 12 $ 17 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. Rewls Council Meeting - May 22, 2013 - Page 44 of 295 SCHEDULE C TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 ENTERPRISE FUNDS Water utility $ 3 $ $ 4 Airport 2 1 Wastewater utility 1 1 $ 8 $ $ 7 Total Enterprise Funds $ 8 $ $ 7 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. TOTAL ALL FUNDS $ 63,615,961 $ 51,267,182 $ 67,194,711 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. ReMaj Council Meeting - May 22, 2013 - Page 45 of 295 SCHEDULE C TOWN OF MARANA Other Financing Sources / <Uses> and Interfund Transfers Fiscal Year 2014 Total Enterprise Funds $ $ $ $ 309,690 TOTAL ALL FUNDS $ 6 $ $ 5 $ 5 Rg4ptMcouncil Meeting - May 22, 2013 - Page 46 of 295 SCHEDULE D OTHER FINANCING INTERFUND TRANSFERS 2014 2014 FUND SOURCES <USES> IN <OUT> GENERAL FUND Series 1997 debt $ $ $ $ 142,614 Series 2003 debt 1 Series 2004 debt 657 Series 2008 debt 395,018 Local Transportation Assistance Fund 100 Other grants 50 Total General Fund $ $ $ $ 2 SPECIAL REVENUE FUNDS Other grants $ $ $ 50,000 $ Local Transportation Assistance Fund 100 Total Special Revenue Funds $ $ $ 150 $ DEBT SERVICE FUNDS Series 1997 debt $ $ $ 347,840 $ Series 2003 debt 1 Series 2004 debt 657,775 Series 2008 debt 3 Total Debt Service Funds $ $ $ 5 $ CAPITAL PROJECTS FUNDS South Transportion Impact Fee $ $ $ $ 565 Transportation 2 Gladden Farms CFD 1 Saguaro Springs CFD 1 Water Utility 1 Wastewater Utility 3 Total Capital Projects Funds $ 6 $ $ $ 2 ENTERPRISE FUNDS Water Utility $ $ $ $ 205,226 Wastewater Utilitv 104.464 Total Enterprise Funds $ $ $ $ 309,690 TOTAL ALL FUNDS $ 6 $ $ 5 $ 5 Rg4ptMcouncil Meeting - May 22, 2013 - Page 46 of 295 SCHEDULE D TOWN OF MARANA Expenditures /Expenses by Fund Fiscal Year 2014 ADOPTED EXPENDITURE/ BUDGETED EXPENSE ACTUAL BUDGETED EXPENDITURES/ ADJUSTMENTS EXPENDITURES/ EXPENDITURES/ EXPENSES APPROVED FUND /DEPARTMENT 2013 2013 GENERAL FUND Non - departmental $ 1 $ 10 Mayor and council 289 Town manager 804 Town clerk 385 Human resources 632 Finance 841 Legal 757 Technology services 1 Strategic initiatives 394 Development services admin 126 Permits and records 535 Building safety 662 Planning 571 Engineering 1 Police 9 Courts 963 Public services admin 450 Public works 3 Parks and recreation 2 Community development 240 Capital outlay 2 Contingency 1 Total General Fund $ 31 $ SPECIAL REVENUE FUNDS Highway user revenue $ 3 $ Local transportation assistance 100 Revolving affordable housing 45 HOME 250 Local JCEF 40 Fill the GAP 31 Local technology 302 Community development block gr anl 333 Bed tax 732 Other grants and contributions 1 21b,1y1 (b3,bb f ) (10,000) (394,321) 03 53 (b,b00) 80 EXPENSES* 2013 $ 1 274,875 863,990 366 600,407 789,628 696 1 21 y, b43 548 629,132 542,952 1,028,336 9,113,449 914,954 427,912 2,919,545 2 298,669 2,176,355 $ 28 $ 2 92,000 41,400 230,000 37 28,520 278,150 307,229 673,716 Total Special Revenue Funds $ 6 $ $ 4 DEBT SERVICE FUNDS Series 1997 debt $ 363 $ $ 363 Series 2003 debt 1 1 Series 2004 debt 666 666 Series 2008 debt 3 3 Tangerine farms ID debt 2 2 Gladden farms CFD debt 700 700 Total Debt Service Funds $ 8 $ $ 8 CAPITAL PROJECTS FUNDS Transportation $ 2 $ $ 2 1/2 cent sales tax 331 304 Impact fee funds 1 1,206,292 Tangerine farms ID 60 55 Other capital projects 10 7 Downtown reinvestment fund Pima County bond fund Regional transportation authority CFD capital projects 3 Total Capital Projects Funds $ 18 $ 2b,b9b EXPENSES 2014 $ 639 289,568 1,132,887 254,217 644 948,294 737,238 2,057,719 2by,1 (I 641 802,707 585,176 1,973,476 10,589,408 988 436 2,273,330 3,016,619 374,484 1,298,032 1 $ 31 $ 4 100 70 b3 34,500 373 2 754,269 1,373,435 $ 9 $ 347 1,380,229 657 3,154,628 2,212,507 700 $ 8 $ 2 531, 743 2, 883, 707 60 591 125,000 319,740 10, 366, 806 2, 308, 732 $ 11 $ 20 ENTERPRISE FUNDS Water utility $ 4 $ $ 3 $ 7 Airport 2 375 1 Wastewater utility 10 687 3 Total Enterprise Funds $ 17 $ $ 4 $ 12 TOTAL ALL FUNDS $ 81 $ $ 57 $ 82 * Includes actual expenditures /expenses recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated expenditures /expenses for the remainder of the fiscal year. RI3r Council Meeting - May 22, 2013 - Page 47 of 295 SCHEDULE E TOWN OF MARANA Expenditures /Expenses by Department Fiscal Year 2014 R3r Council Meeting - May 22, 2013 - Page 48 of 295 SCHEDULE F ADOPTED EXPENDITURE/ BUDGETED EXPENSE ACTUAL BUDGETED EXPENDITURES/ ADJUSTMENTS EXPENDITURES/ EXPENDITURES/ EXPENSES APPROVED EXPENSES* EXPENSES DEPARTMENT /FUND 2013 2013 2013 2014 Town Manager: General Fund $ 804 $ 215 $ 863 $ 1 Bed Tax Fund 20,571 Department Total $ 804,196 $ 215,797 $ 863,990 $ 1,153,458 Development Services Admin : General Fund $ 126,151 $ 103,946 $ 219,843 $ 269,171 Bed Tax Fund 47 Department Total $ 126,151 $ 103,946 $ 219,843 $ 316,171 Police: General Fund $ 9 $ $ 9,113,449 $ 10 Other Grants 531,341 235,950 782,829 Department Total $ 10,124,445 $ $ 9,349,399 $ 11,372,237 Court: General Fund $ 963,109 $ $ 914,954 $ 988,884 Local JCEF 40,800 53,000 Fill the Gap 31,000 34,500 Local Tech Enhancement 302,337 47,955 373,598 Department Total $ 1,337,246 $ $ 962,909 $ 1,449,982 Public Works: General Fund $ 3,073 $ $ 2,919 $ 2 Highway User Revenue Fund 3,002,003 2,275,965 2,978,129 Other Capital Projects 3,976,463 1,256,950 Department Total $ 10,051,671 $ $ 6,452,460 $ 5,261,459 Community Development: General Fund $ 240 $ 80 $ 298 $ 374 R3r Council Meeting - May 22, 2013 - Page 48 of 295 SCHEDULE F TOWN OF MARANA Full -Time Employees and Personnel Compensation ` Fiscal Year 2014 10.45 $ v $ 44 $ n $ 29 Total Estimated ° Full -Time Employee Salaries Other Benefit Personnel 0. Equivalent (FTE) and Hourly Costs Retirement Costs Healthcare Costs Costs Compensation 7 FUND 2014 2014 2014 2014 2014 2014 rn rn 209 ° Grants and Contributions GENERAL FUND 283.48 $ 16.709.865 $ 2.069.621 $ 2.675.909 $ 581.207 = $ 22.036.602 7 v SPECIAL REVENUE FUNDS 1< N Highway User Revenue 10.45 $ 435 $ 44 $ 78 $ 29 = $ 587 N Pima County Bonds 151 15 29 13 209 ° Grants and Contributions 75 12 6 3 98 Bed Tax Fund 0.30 16 1 2 159 21 Local Technology Fund 1.00 29 3 10 254 44 Total Special Revenue Funds 11.75 $ 616 $ 63 $ 118 $ 43 = $ 961 o ENTERPRISE FUNDS N Water 19.10 $ 972 $ 99 $ 235 $ 23 = $ 1, 330, 636 C31 Wastewater 4.00 233 22 55 5 317 Airport 1.00 107 11 18 4 141 Total Enterprise Funds 24.10 $ 1 $ 133 $ 308 $ 33 = $ 1 TOTAL ALL FUNDS 319.33 $ 18,641,056 $ 2,266,533 $ 3,102,956 $ 657,592 1 = $ 24,787,905 4/13 SCHEDULE G EXHIBIT "D " GFCFD Published Notice GLADDEN FARMS COMMUNITY FACILITIES DISTRICT NOTICE OF FILING STATEMENTS AND ESTIMATES AND NOTICE OF PUBLIC HEARING NOTICE OF FILING STATEMENTS AND ESTIMATES OF THE OPERATION AND MAINTENANCE EXPENSES OF THE GLADDEN FARMS COMMUNITY FACILITIES DISTRICT, THE COSTS OF CAPITAL IMPROVEMENTS TO BE FINANCED BY THE AD VALOREM TAX LEVY, AND THE AMOUNT OF ALL OTHER EXPENDITURES FOR PUBLIC INFRASTRUCTURE AND ENHANCED MUNICIPAL SERVICES PROPOSED TO BE PAID FROM THE TAX LEVY AND OF THE AMOUNT TO BE RAISED TO PAY GENERAL OBLIGATION BONDS OF THE DISTRICT; AND NOTICE OF A PUBLIC HEARING ON THE PROPOSED FISCAL YEAR 2013 -2014 BUDGET OF THE DISTRICT, INCLUDING A HEARING ON THOSE PORTIONS OF THE STATEMENTS AND ESTIMATES NOT RELATING TO DEBT SERVICE ON GENERAL OBLIGATION BONDS. Notice is hereby given that statements and estimates have been filed in the Office of the District Clerk of the Gladden Farms Community Facilities District of the operation and maintenance expenses of the District, the costs of capital improvements to be financed by the voter - approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay general obligation bonds of the District, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the District. Notice is further given of a public hearing on the proposed Fiscal Year 2013 -2014 budget of the District, including (but not limited to) a hearing on those portions of the statements and estimates not relating to debt service on general obligation bonds, all pursuant to Arizona Revised Statutes §§48-716 and 48 -723. Such hearing will be held by the District Board on Tuesday, June 18, 2013, at or after 7:00 p.m. in the council chambers of the Town of Marana Civic Center, 11555 W. Civic Center Drive, Marana, Arizona. Copies of the budget are available from the Office of the District Treasurer, 11555 W. Civic Center Drive, Town of Marana, Arizona 85653, telephone number: (520) 382 -1900. Dated this day of 1 2013 /s/ Gilbert Davidson .......... ............................... District Manager Gladden Farms Community Facilities District Published: 1 2013 Regular Council Meeting - May 22, 2013 - Page 50 of 295 WN f 7 w j orerZo 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 Council Chambers, May 22, 2013, 7:00 PM To: Mayor and Council Item B 2 From: Erik Montague, District Treasurer and Chief Financial Officer Strategic Plan Focus Area: Not Applicable Subject: [Marana Town Council acting as the Gladden Farms (Phase II) Community Facilities District Board of Directors] : A Resolution of the District Board of Gladden Farms (Phase II) Community Facilities District, a Community Facilities District of Arizona, approving a tentative budget for fiscal year 2013 -2014 pursuant to ARS §48 -716; setting a public hearing date on said tentative budget; filing statements and estimates of the operation and maintenance expenses of the district, the costs of capital improvements to be financed by the approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay general obligation bonds of the district, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the district; providing for notice of filing the statements and estimates, and notice of a public hearing on the portions of the statements and estimates not relating to debt service on general obligation bonds; and providing that this resolution shall be effective after its passage and approval according to law Discussion: On or before July 15th, the District Treasurer submits to the District Board a proposed budget for the new fiscal year. The proposed budget includes statements and estimates of the operation and maintenance expenses of the District, the costs of capital improvements to be financed by the voter authorized ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and the amount to be raised to pay the District's general obligation bonds, as applicable. The Treasurer has submitted the budget for FY 2013 -2014 and has filed the necessary statements and estimates. If the District Board approves this tentative budget for FY 2013 -2014, the attached notice will be published giving notice of filing the required statements and estimates, and giving notice of a public hearing on June 18, 2013 to receive comment on the tentative budget and, particularly, on the portions of the statements and estimates not relating to debt service on general obligation bonds. After the public hearing, the District Board may adopt a final budget by resolution and may order the fixing, levying and assessment of required ad valorem taxes. Financial Impact: Establishment of the tentative budget for fiscal year 2013 -2014. Regular Council Meeting - May 22, 2013 - Page 51 of 295 ATTACHMENTS: Name: Description: Type: D 2014GFCFD2TentativeResolution .pdf GFCFDII Resolution Resolution Staff Recommendation: Staff recommends approval of Resolution GFCFD2 2013 -01, adopting the tentative budget for fiscal year 2013 -2014 in the amount of $430. Suggested Motion: I move to adopt Resolution GFCFD2 2013 -01; adopting the tentative budget for fiscal year 2013 -2014 in the amount of $430. Regular Council Meeting - May 22, 2013 - Page 52 of 295 RESOLUTION NO. GFCFD2 2013 -01 GLADDEN FARMS (PHASE II) COMMUNITY FACILITIES DISTRICT A RESOLUTION OF THE DISTRICT BOARD OF GLADDEN FARMS (PHASE II) COMMUNITY FACILITIES DISTRICT, A COMMUNITY FACILITIES DISTRICT OF ARIZONA, APPROVING A TENTATIVE BUDGET FOR FISCAL YEAR 2013 -2014 PURSUANT TO ARS §48 -716; SETTING A PUBLIC HEARING DATE ON SAID TENTATIVE BUDGET; FILING STATEMENTS AND ESTIMATES OF THE OPERATION AND MAINTENANCE EXPENSES OF THE DISTRICT, THE COSTS OF CAPITAL IMPROVEMENTS TO BE FINANCED BY THE APPROVED AD VALOREM TAX LEVY, AND THE AMOUNT OF ALL OTHER EXPENDITURES FOR PUBLIC INFRASTRUCTURE AND ENHANCED MUNICIPAL SERVICES PROPOSED TO BE PAID FROM THE TAX LEVY AND OF THE AMOUNT TO BE RAISED TO PAY GENERAL OBLIGATION BONDS OF THE DISTRICT, ALL OF WHICH SHALL BE PROVIDED FOR BY THE LEVY AND COLLECTION OF AD VALOREM TAXES ON THE ASSESSED VALUE OF ALL THE REAL AND PERSONAL PROPERTY IN THE DISTRICT; PROVIDING FOR NOTICE OF FILING THE STATEMENTS AND ESTIMATES, AND NOTICE OF A PUBLIC HEARING ON THE PORTIONS OF THE STATEMENTS AND ESTIMATES NOT RELATING TO DEBT SERVICE ON GENERAL OBLIGATION BONDS; AND PROVIDING THAT THIS RESOLUTION SHALL BE EFFECTIVE AFTER ITS PASSAGE AND APPROVAL ACCORDING TO LAW. WHEREAS, on, December 11, 2007, the Mayor and Council of the Town of Marana ( "Town ") adopted Resolution No. 2007 -221 creating, within the Town, Gladden Farms (Phase II) Community Facilities District ( "GFCFD2 "), a community facilities district in accordance with ARS §48 -701 et seq. Arizona Revised Statutes, as amended, as described in Exhibit "A" attached hereto and expressly made a part hereof; and WHEREAS, GFCFD2 is a special purpose district for purposes of Article IX, Section 19, Constitution of Arizona, a tax - levying public improvement district for the purposes of Article XIII, Section 7, Constitution of Arizona, and a municipal corporation for all purposes of Title 35, Chapter 3, Articles 3, 3.1., 3.2, 4 and 5, Arizona Revised Statutes, as amended, and [except as otherwise provided in §48- 708(B), as amended] is considered to be a municipal corporation and political subdivision of the State of Arizona, separate and apart from the Town; and WHEREAS, a primary purpose for creating GFCFD2 was to finance construction and maintenance of certain public improvements needed for the "Gladden Farms (Phase II)" development through assessment of ad valorem taxes on all real and personal property within such development; and WHEREAS, in accordance with ARS §§48-719 and 48 -723, a special election was held on May 13, 2008, wherein the qualified electors of GFCFD2 voted to issue general obligation bonds in the maximum amount of sixty million dollars ($60,000,000) to cover costs of constructing required public improvements, and to levy and collect an annual ad valorem tax at a rate not to exceed thirty cents (30¢) per one hundred dollars ($100) of assessed valuation for GFCFD2 operation and maintenance expenses; and Regular Council Meeting - May 22, 2013 - Page 53 of 295 WHEREAS, in accordance with ARS §§48-716 and 48 -723, the GFCFD2 Treasurer has submitted to the GFCFD2 Board a proposed budget for Fiscal Year 2013 -2014 which includes statements and estimates of the operation and maintenance expenses of GFCFD2, the costs of capital improvements to be financed by the authorized ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay GFCFD2 general obligation bonds, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property within GFCFD2; and WHEREAS, the GFCFD2 Board desires now to approve said tentative budget for Fiscal Year 2013 -2014 to publish notice of having filed the required statements and estimates, and to set a date (and publish a notice thereof) for a public hearing to receive comment on the tentative budget and, particularly, on the portions of the statements and estimates not relating to debt service on general obligation bonds; and WHEREAS, after said public hearing (and on or before October 1), the GFCFD2 Board expects to adopt a final budget by resolution; and WHEREAS, on or before the third Monday in August, the GFCFD2 Board also expects to order the fixing, levying and assessment of required ad valorem taxes and to cause certified copies of the order to be delivered to the Pima County Board of Supervisors and the Arizona Department of Revenue; NOW, THEREFORE, BE IT RESOLVED BY THE DISTRICT BOARD OF GLADDEN FARMS (PHASE II) COMMUNITY FACILITIES DISTRICT, AS FOLLOWS: 1. That that certain proposed budget prepared by the GFCFD2 Treasurer for Fiscal Year 2013 -2014, attached hereto and expressly made a part hereof as Exhibit "B ", is hereby tentatively approved. 2. That the statements and estimates of the operation and maintenance expenses of GFCFD2, the costs of capital improvements to be financed by the approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay GFCFD2 general obligation bonds in Fiscal Year 2013 -2014 are hereby filed on forms of the Auditor General in accordance with ARS §§42-17101(3) and 48- 723(C), Arizona Revised Statutes, as amended, and are attached hereto and expressly made a part hereof as Exhibit "C ". 3. That a public hearing date of Tuesday, June 18, 2013, beginning at or after 7:00 p.m. in the council chambers of the Town of Marana Civic Center located at 11555 W. Civic Center Drive, Town of Marana, Arizona, is hereby set to consider said tentative budget (including, but expressly not limited to, consideration of those portions of the statements and estimates not relating to debt service on GFCFD2 general obligation bonds), and said notice (attached hereto and expressly made a part hereof as Exhibit "D ") shall be published once in The Daily Territorial no later than ten (10) days prior to said hearing date. 2 Regular Council Meeting - May 22, 2013 - Page 54 of 295 4. That if any provision in this Resolution is held invalid by a court of competent jurisdiction, the remaining provisions shall not be affected but shall continue in full force and effect. law. 5. That this Resolution shall be effective after its passage and approval according to RESOLVED by the District Board of Gladden Farms (Phase II) Community Facilities District this 22 ° day of May, 2013. Ed Honea, Chairman District Board Gladden Farms (Phase II) Community Facilities District ATTEST: Jocelyn C. Bronson, District Clerk Gladden Farms (Phase II) Community Facilities District APPROVED AS TO FORM: Frank Cassidy, Legal Counsel Gladden Farms (Phase II) Community Facilities District 3 Regular Council Meeting - May 22, 2013 - Page 55 of 295 EXHIBIT "A " GFCFD2 Map and Legal Description Regular Council Meeting - May 22, 2013 - Page 56 of 295 GLA I ' A R BLOCKS 26 43 *�lox or = 1 000' 1 745 EAST RIVER ROAD - SUITE 101 ■ TUCSON, AZ 85718 520.795.1000 ENGINEERING COMPANY (FAX) 520.322.6956 Go \GLADDEN_ I ! \3308\c0ncept\3308_EXOVEn dgn TANGERINE FARMS ROAD LEGAL DESCRIPTION That part of Section 35, Township 11 South, Range 1 East, Gila and Salt River Meridian, Pima County, Arizona, lying South and West of the Southwest right of way line of the relocated Tucson- Picacho Highway, Federal Interstate Project 94, as it existed on May 15 1950; EXCEPT THEREFROM the right of way for Moore Road. formerly Grier Road, over the North 30 feet thereof, as shown on the map recorded in Rook 2 of Road Maps, Pages 126 through 129; AND EXCEPT THEREFROM the following well site belonging to Cortaro Water Users' Association: Marana Well No. 14 That portion of the Southeast quarter of the Northeast quarter of Section 35, Township 11 South, Range 11 East, Gila and Salt River Meridian, Pima County, Arizona, particularly bounded and described as follows: BEGINNING at a point which is 938.55 feet Westerly and 50 feet Northerly from the East quarter corner of said Section; THENCE Westerly 50 feet from and parallel to the East and West center line of said Section 35, a distance of 135 feet to a point; THENCE Northerly 1073.55 feet from and parallel to the East line of the said Southeast quarter of the Northeast quarter of Section 35, 100 feet to a point; THENCE Easterly 150 feet from and parallel to the East and West center line of said Section 35, 135 feet to a point; THENCE Southerly 938.65 feet from and parallel to the East line of the said Southeast quarter of the Northeast quarter of Seection 35, 100 feet to the POINT OF BEGINNING; AND EXCEPT THEREFROM the following portion conveyed to Cortaro Marana Irrigation District in the Deed recorded in Docket 1958, Page 585: BEGINNING at a point on the North line of said Section 35, said point being South 89"49'00" West, 591.06 feet from the Northeast corner of said Section 35; THENCE South 49 East along the Southwesterly right of way line of interstate 10, 357.77 feet; THENCE South 49' 53'00" East, 41 9.03 feet to the .East line of said Section 35; THENCE South 0 3" East, 32.81 feet along said East line; THENCE South 49 ° 53'00" West, 448.44 feet; THENCE North 49 10 37`00" West, 385.97 feet to the aforesaid North line of Section 35; Regular Council Meeting - May 22, 2013 - Page 58 of 295 •�i ..- .as:ca��eat: eat'.-: �6r. rv[ i::. w-•.: h[:+ rJe: aar:- n. s4: s.... ei�tl..:. witl 'ar�.e::vewaee�.w.....m.,e..•. ... -.: .. �... �. r... + a+ �a�.' aµaJ�M+ rk+ a+i�s�l'•s.ei.��ew.frrtA+a.��. . "vnmive•"ien� "' THENCE North 89 East. 38.44 feet to the POINT OF BEGINNING; AND EXCEPT THEREFROM a strip of land 11Of eet in width conveyed to the State of Ariozna, by and through its State Highway Commission in the Deed recorded in Docket 2003, Page 408 described as follows; BEGINNING at the point of Intersection of the existing Southwest right of way line of the existing Casa Grande- Tucson Highway with the East line of Section 35, from whence the Northeast corner of said Section 35 bears Northerly 359.70 feet THENCE North 49 ° 53'00" West along said existing Southwest right of way line, a distance of 325.42 feet; THENCE North 49 0 37'00' vilest continuing along said existing Southwest right of way line, a distance of 229.27 feet, to a point on the North fine of said Section; THENCE Westerly along said North section line,, a distance of 159.15 feet; THENCE South 49 0 37'00" East 357.77 feet; THENCE South 49 0 53`00" East 419.03 feet to a point on the aforesaid East line of Section 35; THENCE Northerly along East section line, a distance of 144,38 feet, to the POINT OF BEGINNING; AND EXCEPT THEREFROM the South 250.00 feet. Regular Council Meeting - May 22, 2013 - Page 59 of 295 EXHIBIT "B " FY 2013 -2014 GFCFD2 Budget Regular Council Meeting - May 22, 2013 - Page 60 of 295 EXHIBIT B GLADDEN FARMS (Phase II) COMMUNITY FACILITIES DISTRICT (GFCFD2) TENTATIVE BUDGET AND SUMMARY SCHEDULE OF ESTIMATED REVENUES AND EXPENDITURES FISCAL YEAR 2013 -14 FY 2013 FY 2013 FY 2013 Tentative Adopted Amended Estimated FY 2013 REVENUES Budget Budget Acutal Budget Property Tax - General (Operating) $ 152 $ 152 $ 146 $ 430 Property Tax- Secondary (Debt Service) - - - - Developer Contributions - - - - Total Revenues 152 152 146 430 EXPENDITURES CFD Administration Costs of Issuance Accounting /Auditing Public Notification Expenses Consultant Services Outside Legal Counsel Debt Service Trustee Fees Capital Improvements Acquisition Replacement Reserve Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Bond Proceeds Total Other Financing Sources Excess (Deficiency) of Revenues and Other Financing Sources Over (Under) Expenditures and Other Financing Uses 52 52 46 52 - - - 278 152 152 146 430 BEGINNING FUND BALANCE ENDING FUND BALANCE Regular Council Meeting - May 22, 2013 - Page 61 of 295 EXHIBIT CI " GFCFD2 Statements and Estimates on Auditor General Forms Regular Council Meeting - May 22, 2013 - Page 62 of 295 (0 v 0 0 0 (0 v N N 0 w v (0 rn w 0 N o, TOWN OF MARANA Summary Schedule of Estimated Revenues and Expenditures /Expenses Fiscal Year 2014 EXPENDITURE LIMITATION COMPARISON 2013 2014 1. Budgeted expenditures /expenses $ 81,980,411 ESTIMATED 2. Add /subtract: estimated net reconciling items 3. Budgeted expenditures /expenses adjusted for reconciling items 81,980,411 82,882,224 ADOPTED FUND 5. Amount subject to the expenditure limitation REVENUES $ 82 6. EEC or voter - approved alternative expenditure limitation TOTAL $ BUDGETED ACTUAL BALANCE/ OTHER THAN INTERFUND FINANCIAL BUDGETED EXPENDITURES/ EXPENDITURES/ NET PROPERTY TAX PROPERTY OTHER FINANCING TRANSFERS RESOURCES EXPENDITURES/ EXPENSES` EXPENSES ** POSITION * ** REVENUES TAXES 2014 2014 AVAILABLE EXPENSES SOURCES <USES> IN <OUT> FUND 2013 2013 July 1, 2013 ** 2014 2014 2014 2014 1. General Fund Primary: $ 31 $ 28,102,207 $ $ $ 32,679,575 $ $ $ $ 2,725,636 $ 29,953,939 $ 31 2. Special Revenue Funds Secondary: 6,459,532 4 422 6,853,946 150,000 7 9,946,312 3. Debt Service Funds Available 8,337,551 8,337,551 2,542,353 5,540,472 8,082,825 8,453,732 4. Less: Amounts for Future Debt Retirement 5. Total Debt Service Funds 8,337,551 8,337,551 2,542,353 5,540,472 8,082,825 8,453,732 6. Capital Projects Funds 18,699,903 11 17,849,877 6 200 000 > > 2,655,146 21 394 731 > > 20 092 566 > > 7. Permanent Funds 8. Enterprise Funds Available 17,352,153 4,959,390 7 268 960 309,690 6,959,270 12 935 675 9. Less: Amounts for Future Debt Retirement 10. Total Enterprise Funds 17,352,153 4,959,390 7 268 960 309,690 6,959,270 12 935 675 11. Internal Service Funds 12. TOTAL ALL FUNDS $ 81,980,411 $ 57,104,767 $ $ 422,958 $ 67,194,711 $ 6,200,000 $ $ 5,690,472 $ 5,690,472 $ 73,817,669 $ 82,882,224 EXPENDITURE LIMITATION COMPARISON 2013 2014 1. Budgeted expenditures /expenses $ 81,980,411 $ 82,882,224 2. Add /subtract: estimated net reconciling items 3. Budgeted expenditures /expenses adjusted for reconciling items 81,980,411 82,882,224 4. Less: estimated exclusions 5. Amount subject to the expenditure limitation $ 81 $ 82 6. EEC or voter - approved alternative expenditure limitation $ $ =The city /town does not levy property taxes and does not have special assessment districts for which property taxes are levied. Therefore, Schedule B has been omitted. * Includes Expenditure /Expense Adjustments Approved in current year from Schedule E. ** Includes actual amounts as of the date the proposed budget was prepared, adjusted for estimated activity for the remainder of the fiscal year. * ** Amounts in this column represent Fund Balance /Net Position amounts except for amounts not in spendable form (e.g., prepaids and inventories) or legally or contractually required to be maintained intact (e.g., principal of a permanent fund). 4/13 SCHEDULE A TOWN OF MARANA Tax Levy and Tax Rate Information Fiscal Year 2014 * Includes actual property taxes collected as of the date the proposed budget was prepared, plus estimated property tax collections for the remainder of the fiscal year. RE4Council Meeting - May 22, 2013 - Page 64 of 295 SCHEDULE 6 2013 2014 1. Maximum allowable primary property tax levy. A.R.S. §42- 17051(A) $ $ 2. Amount received from primary property taxation in the current year in excess of the sum of that year's maximum allowable primary property tax levy. A.R.S. X42- 17102(A)(18) � 3. Property tax levy amounts A. Primary property taxes $ $ B. Secondary property taxes 462 646 422 958 C. Total property tax levy amounts $ $ 422 4. Property taxes collected* A. Primary property taxes (1) Current year's levy $ (2) Prior years' levies (3) Total primary property taxes $ B. Secondary property taxes (1) Current year's levy $ 462 (2) Prior years' levies (3) Total secondary property taxes $ 462,646 C. Total property taxes collected $ 462 5. Property tax rates A. City /Town tax rate (1) Primary property tax rate (2) Secondary property tax rate 2.8000 2.8000 (3) Total city /town tax rate 2.8000 2.8000 B. Special assessment district tax rates Secondary property tax rates - As of the date the proposed budget was prepared, the city /town was operating four special assessment districts for which secondary property taxes are levied. For information pertaining to these special assessment districts and their tax rates, please contact the city /town. * Includes actual property taxes collected as of the date the proposed budget was prepared, plus estimated property tax collections for the remainder of the fiscal year. RE4Council Meeting - May 22, 2013 - Page 64 of 295 SCHEDULE 6 TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 ReMaj Council Meeting - May 22, 2013 - Page 65 of 295 SCHEDULE C ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 GENERAL FUND Local taxes Sales taxes $ 19 $ 20 $ 19 Licenses and permits Building and development fees 1756 2,356 2,544 Business and license fees 135 145 144 Franchise fees 325 324 325 Other licenses and fees 130 165 180 Intergovernmental State shared sales taxes 2 2 3 Urban revenue sharing 3 3 3 Auto lieu 1 1 1 Other 10 Charges for services Charges for services 381 405 396 Fines and forfeits Court fines and fees 570 668,540 625 Interest on investments Investment income 100 97 100 In -lieu property taxes Contributions Voluntary contributions 102 109 116 Miscellaneous Other miscellaneous 562 332 504 Total General Fund $ 31 $ 32 $ 32 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. ReMaj Council Meeting - May 22, 2013 - Page 65 of 295 SCHEDULE C TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. Rewls Council Meeting - May 22, 2013 - Page 66 of 295 SCHEDULE C ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 SPECIAL REVENUE FUNDS Highway user revenue $ 2 $ 2 $ 2 Affordable housing revolving 100 100 HOME 250 $ $ $ 2 2 2 Local JCEF $ 13 $ 12 $ 14 Fill the GAP 3 5 4 Local technology enhancement 116 124 118 Community development block grants 245 159 2 $ 377 $ 302 $ 2 Bed tax $ 732 $ 728 $ 754 Other grants and contributions 1 385 829 $ $ $ 2 1 1 Total Special Revenue Funds $ 5 $ 3 $ 6 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. DEBT SERVICE FUNDS Tangerine farms road improvement district $ 2 $ 2 $ 2 Gladden farms CFD debt 700 320 329 $ $ $ 2 2 2 Total Debt Service Funds $ 2 $ 2 $ 2 CAPITAL PROJECTS FUNDS Transportation $ 3 $ 2 $ 3 Impact fee funds 1 2 2 Other capital projects 10 7 490 Downtown reinvesement fund 125 Pima County bond fund 319 Regional transportation authority fund 10 $ $ $ 15 12 17 Tangerine farms road improvement district $ 60 $ 57 $ 60 Community facilities district (CFD) capital 277 49 Gladden farms CFD capital 37 Vanderbilt CFD capital 25 Saguaro Springs CFD capital 193 $ 337 $ 107 $ 316 Total Capital Projects Funds $ 15 $ 12 $ 17 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. Rewls Council Meeting - May 22, 2013 - Page 66 of 295 SCHEDULE C TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 ENTERPRISE FUNDS Water utility $ 3 $ $ 4 Airport 2 1 Wastewater utility 1 1 $ 8 $ $ 7 Total Enterprise Funds $ 8 $ $ 7 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. TOTAL ALL FUNDS $ 63,615,961 $ 51,267,182 $ 67,194,711 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. ReMaj Council Meeting - May 22, 2013 - Page 67 of 295 SCHEDULE C TOWN OF MARANA Other Financing Sources / <Uses> and Interfund Transfers Fiscal Year 2014 Total Enterprise Funds $ $ $ $ 309,690 TOTAL ALL FUNDS $ 6 $ $ 5 $ 5 Rg4ptMcouncil Meeting - May 22, 2013 - Page 68 of 295 SCHEDULE D OTHER FINANCING INTERFUND TRANSFERS 2014 2014 FUND SOURCES <USES> IN <OUT> GENERAL FUND Series 1997 debt $ $ $ $ 142,614 Series 2003 debt 1 Series 2004 debt 657 Series 2008 debt 395,018 Local Transportation Assistance Fund 100 Other grants 50 Total General Fund $ $ $ $ 2 SPECIAL REVENUE FUNDS Other grants $ $ $ 50,000 $ Local Transportation Assistance Fund 100 Total Special Revenue Funds $ $ $ 150 $ DEBT SERVICE FUNDS Series 1997 debt $ $ $ 347,840 $ Series 2003 debt 1 Series 2004 debt 657,775 Series 2008 debt 3 Total Debt Service Funds $ $ $ 5 $ CAPITAL PROJECTS FUNDS South Transportion Impact Fee $ $ $ $ 565 Transportation 2 Gladden Farms CFD 1 Saguaro Springs CFD 1 Water Utility 1 Wastewater Utility 3 Total Capital Projects Funds $ 6 $ $ $ 2 ENTERPRISE FUNDS Water Utility $ $ $ $ 205,226 Wastewater Utilitv 104.464 Total Enterprise Funds $ $ $ $ 309,690 TOTAL ALL FUNDS $ 6 $ $ 5 $ 5 Rg4ptMcouncil Meeting - May 22, 2013 - Page 68 of 295 SCHEDULE D TOWN OF MARANA Expenditures /Expenses by Fund Fiscal Year 2014 ADOPTED EXPENDITURE/ BUDGETED EXPENSE ACTUAL BUDGETED EXPENDITURES/ ADJUSTMENTS EXPENDITURES/ EXPENDITURES/ EXPENSES APPROVED FUND /DEPARTMENT 2013 2013 GENERAL FUND Non - departmental $ 1 $ 10 Mayor and council 289 Town manager 804 Town clerk 385 Human resources 632 Finance 841 Legal 757 Technology services 1 Strategic initiatives 394 Development services admin 126 Permits and records 535 Building safety 662 Planning 571 Engineering 1 Police 9 Courts 963 Public services admin 450 Public works 3 Parks and recreation 2 Community development 240 Capital outlay 2 Contingency 1 Total General Fund $ 31 $ SPECIAL REVENUE FUNDS Highway user revenue $ 3 $ Local transportation assistance 100 Revolving affordable housing 45 HOME 250 Local JCEF 40 Fill the GAP 31 Local technology 302 Community development block gr anl 333 Bed tax 732 Other grants and contributions 1 21b,1y1 (b3,bbf) (10,000) (394,321) 03 53 (b,b00) 80 EXPENSES* 2013 $ 1 274,875 863,990 366 600,407 789,628 696 1 21 y, b43 548 629,132 542,952 1,028,336 9,113,449 914,954 427,912 2,919,545 2 298,669 2,176,355 $ 28 $ 2 92,000 41,400 230,000 37 28,520 278,150 307,229 673,716 Total Special Revenue Funds $ 6 $ $ 4 DEBT SERVICE FUNDS Series 1997 debt $ 363 $ $ 363 Series 2003 debt 1 1 Series 2004 debt 666 666 Series 2008 debt 3 3 Tangerine farms ID debt 2 2 Gladden farms CFD debt 700 700 Total Debt Service Funds $ 8 $ $ 8 CAPITAL PROJECTS FUNDS Transportation $ 2 $ $ 2 1/2 cent sales tax 331 304 Impact fee funds 1 1,206,292 Tangerine farms ID 60 55 Other capital projects 10 7 Downtown reinvestment fund Pima County bond fund Regional transportation authority CFD capital projects 3 Total Capital Projects Funds $ 18 $ 2b,b9b EXPENSES 2014 $ 639 289,568 1,132,887 254,217 644 948,294 737,238 2,057,719 2by,1 (I 641 802,707 585,176 1,973,476 10,589,408 988 436 2,273,330 3,016,619 374,484 1,298,032 1 $ 31 $ 4 100 70 b3 34,500 373 2 754,269 1,373,435 $ 9 $ 347 1,380,229 657 3,154,628 2,212,507 700 $ 8 $ 2 531, 743 2, 883, 707 60 591 125,000 319,740 10, 366, 806 2, 308, 732 $ 11 $ 20 ENTERPRISE FUNDS Water utility $ 4 $ $ 3 $ 7 Airport 2 375 1 Wastewater utility 10 687 3 Total Enterprise Funds $ 17 $ $ 4 $ 12 TOTAL ALL FUNDS $ 81 $ $ 57 $ 82 * Includes actual expenditures /expenses recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated expenditures /expenses for the remainder of the fiscal year. RI3r Council Meeting - May 22, 2013 - Page 69 of 295 SCHEDULE E TOWN OF MARANA Expenditures /Expenses by Department Fiscal Year 2014 R3r Council Meeting - May 22, 2013 - Page 70 of 295 SCHEDULE F ADOPTED EXPENDITURE/ BUDGETED EXPENSE ACTUAL BUDGETED EXPENDITURES/ ADJUSTMENTS EXPENDITURES/ EXPENDITURES/ EXPENSES APPROVED EXPENSES* EXPENSES DEPARTMENT /FUND 2013 2013 2013 2014 Town Manager: General Fund $ 804 $ 215 $ 863 $ 1 Bed Tax Fund 20,571 Department Total $ 804,196 $ 215,797 $ 863,990 $ 1,153,458 Development Services Admin : General Fund $ 126,151 $ 103,946 $ 219,843 $ 269,171 Bed Tax Fund 47 Department Total $ 126,151 $ 103,946 $ 219,843 $ 316,171 Police: General Fund $ 9 $ $ 9,113,449 $ 10 Other Grants 531,341 235,950 782,829 Department Total $ 10,124,445 $ $ 9,349,399 $ 11,372,237 Court: General Fund $ 963,109 $ $ 914,954 $ 988,884 Local JCEF 40,800 53,000 Fill the Gap 31,000 34,500 Local Tech Enhancement 302,337 47,955 373,598 Department Total $ 1,337,246 $ $ 962,909 $ 1,449,982 Public Works: General Fund $ 3,073 $ $ 2,919 $ 2 Highway User Revenue Fund 3,002,003 2,275,965 2,978,129 Other Capital Projects 3,976,463 1,256,950 Department Total $ 10,051,671 $ $ 6,452,460 $ 5,261,459 Community Development: General Fund $ 240 $ 80 $ 298 $ 374 R3r Council Meeting - May 22, 2013 - Page 70 of 295 SCHEDULE F TOWN OF MARANA Full -Time Employees and Personnel Compensation ` Fiscal Year 2014 10.45 $ v $ 44 $ n $ 29 Total Estimated ° Full -Time Employee Salaries Other Benefit Personnel 0. Equivalent (FTE) and Hourly Costs Retirement Costs Healthcare Costs Costs Compensation 7 FUND 2014 2014 2014 2014 2014 2014 rn rn 209 ° Grants and Contributions GENERAL FUND 283.48 $ 16.709.865 $ 2.069.621 $ 2.675.909 $ 581.207 = $ 22.036.602 7 v SPECIAL REVENUE FUNDS 1< N Highway User Revenue 10.45 $ 435 $ 44 $ 78 $ 29 = $ 587 N Pima County Bonds 151 15 29 13 209 ° Grants and Contributions 75 12 6 3 98 Bed Tax Fund 0.30 16 1 2 159 21 Local Technology Fund 1.00 29 3 10 254 44 Total Special Revenue Funds 11.75 $ 616 $ 63 $ 118 $ 43 = $ 961 o ENTERPRISE FUNDS N Water 19.10 $ 972 $ 99 $ 235 $ 23 = $ 1, 330, 636 C31 Wastewater 4.00 233 22 55 5 317 Airport 1.00 107 11 18 4 141 Total Enterprise Funds 24.10 $ 1 $ 133 $ 308 $ 33 = $ 1 TOTAL ALL FUNDS 319.33 $ 18,641,056 $ 2,266,533 $ 3,102,956 $ 657,592 = $ 24,787,905 4/13 SCHEDULE G EXHIBIT "D " GFCFD2 Published Notice GLADDEN FARMS (PHASE II) COMMUNITY FACILITIES DISTRICT NOTICE OF FILING STATEMENTS AND ESTIMATES AND NOTICE OF PUBLIC HEARING NOTICE OF FILING STATEMENTS AND ESTIMATES OF THE OPERATION AND MAINTENANCE EXPENSES OF GLADDEN FARMS (PHASE II) COMMUNITY FACILITIES DISTRICT, THE COSTS OF CAPITAL IMPROVEMENTS TO BE FINANCED BY THE AD VALOREM TAX LEVY, AND THE AMOUNT OF ALL OTHER EXPENDITURES FOR PUBLIC INFRASTRUCTURE AND ENHANCED MUNICIPAL SERVICES PROPOSED TO BE PAID FROM THE TAX LEVY AND OF THE AMOUNT TO BE RAISED TO PAY GENERAL OBLIGATION BONDS OF THE DISTRICT; AND NOTICE OF A PUBLIC HEARING ON THE PROPOSED FISCAL YEAR 2013 -2014 BUDGET OF THE DISTRICT, INCLUDING A HEARING ON THOSE PORTIONS OF THE STATEMENTS AND ESTIMATES NOT RELATING TO DEBT SERVICE ON GENERAL OBLIGATION BONDS. Notice is hereby given that statements and estimates have been filed in the Office of the District Clerk of Gladden Farms (Phase II) Community Facilities District of the operation and maintenance expenses of the District, the costs of capital improvements to be financed by the voter - approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay general obligation bonds of the District, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the District. Notice is further given of a public hearing on the proposed Fiscal Year 2013 -2014 budget of the District, including (but not limited to) a hearing on those portions of the statements and estimates not relating to debt service on general obligation bonds, all pursuant to Arizona Revised Statutes §§48-716 and 48 -723. Such hearing will be held by the District Board on Tuesday, June 18, 2013, at or after 7:00 p.m. in the council chambers of the Town of Marana Civic Center, 11555 W. Civic Center Drive, Marana, Arizona. Copies of the budget are available from the Office of the District Treasurer, 11555 W. Civic Center Drive, Town of Marana, Arizona 85653, telephone number: (520) 382 -1900. Dated this day of 1 2013 /s/ Gilbert Davidson .......... ............................... District Manager Gladden Farms (Phase II) Community Facilities District Published: 1 2013 7 Regular Council Meeting - May 22, 2013 - Page 72 of 295 WN f 7 w j orerZo 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 Council Chambers, May 22, 2013, 7:00 PM To: Mayor and Council Item B 3 From: Erik Montague, District Treasurer and Chief Financial Officer Strategic Plan Focus Area: Not Applicable Subject: [Marana Town Council acting as the Saguaro Springs Community Facilities District Board of Directors] : A Resolution of the District Board of Saguaro Springs Community Facilities District, a Community Facilities District of Arizona, approving a tentative budget for fiscal year 2013 -2014 pursuant to ARS §48 -716; setting a public hearing date on said tentative budget; filing statements and estimates of the operation and maintenance expenses of the district, the costs of capital improvements to be financed by the approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay general obligation bonds of the district, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the district; providing for notice of filing the statements and estimates, and notice of a public hearing on the portions of the statements and estimates not relating to debt service on general obligation bonds; and providing that this resolution shall be effective after its passage and approval according to law Discussion: On or before July 15th, the District Treasurer submits to the District Board a proposed budget for the new fiscal year. The proposed budget includes statements and estimates of the operation and maintenance expenses of the District, the costs of capital improvements to be financed by the voter authorized ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and the amount to be raised to pay the District's bonds, as applicable. The Treasurer has submitted the budget for FY 2013 -2014 and has filed the necessary statements and estimates. If the District Board approves this tentative budget for FY 2013 -2014, the attached notice will be published giving notice of filing the required statements and estimates, and giving notice of a public hearing on June 18, 2013 to receive comment on the tentative budget and, particularly, on the portions of the statements and estimates not relating to debt service on general obligation bonds. After the public hearing, the District Board may adopt a final budget by resolution and may order the fixing, levying and assessment of required ad valorem taxes. Financial Impact: Establishment of the tentative budget for fiscal year 2013 -2014. Regular Council Meeting - May 22, 2013 - Page 73 of 295 ATTACHMENTS: Name: Description: D 2014SSCFDTentativeResolution .pdf SSCFD Staff Recommendation: Type: Resolution Staff recommends adoption of Resolution No. SSCFD 2013 -01, adopting the tentative budget for fiscal year 2013 -2014 in the amount of $1,198,250. Suggested Motion: I move to adopt Resolution No. SSCFD 2013 -01, adopting the tentative budget for fiscal year 2013- 2014 in the amount of $1,198,250. Regular Council Meeting - May 22, 2013 - Page 74 of 295 RESOLUTION NO. SSCFD 2013 -01 SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT A RESOLUTION OF THE DISTRICT BOARD OF SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT, A COMMUNITY FACILITIES DISTRICT OF ARIZONA, APPROVING A TENTATIVE BUDGET FOR FISCAL YEAR 2013 -2014 PURSUANT TO ARS §48 -716; SETTING A PUBLIC HEARING DATE ON SAID TENTATIVE BUDGET; FILING STATEMENTS AND ESTIMATES OF THE OPERATION AND MAINTENANCE EXPENSES OF THE DISTRICT, THE COSTS OF CAPITAL IMPROVEMENTS TO BE FINANCED BY THE APPROVED AD VALOREM TAX LEVY, AND THE AMOUNT OF ALL OTHER EXPENDITURES FOR PUBLIC INFRASTRUCTURE AND ENHANCED MUNICIPAL SERVICES PROPOSED TO BE PAID FROM THE TAX LEVY AND OF THE AMOUNT TO BE RAISED TO PAY GENERAL OBLIGATION BONDS OF THE DISTRICT, ALL OF WHICH SHALL BE PROVIDED FOR BY THE LEVY AND COLLECTION OF AD VALOREM TAXES ON THE ASSESSED VALUE OF ALL THE REAL AND PERSONAL PROPERTY IN THE DISTRICT; PROVIDING FOR NOTICE OF FILING THE STATEMENTS AND ESTIMATES, AND NOTICE OF A PUBLIC HEARING ON THE PORTIONS OF THE STATEMENTS AND ESTIMATES NOT RELATING TO DEBT SERVICE ON GENERAL OBLIGATION BONDS; AND PROVIDING THAT THIS RESOLUTION SHALL BE EFFECTIVE AFTER ITS PASSAGE AND APPROVAL ACCORDING TO LAW. WHEREAS, on, September 4, 2007, the Mayor and Council of the Town of Marana ( "Town ") adopted Resolution No. 2007 -152 creating, within the Town, Saguaro Springs Community Facilities District ( "SSCFD "), a community facilities district in accordance with ARS §48 -701 et seq. Arizona Revised Statutes, as amended, as described in Exhibit "A" attached hereto and expressly made a part hereof; and WHEREAS, SSCFD is a special purpose district for purposes of Article IX, Section 19, Constitution of Arizona, a tax - levying public improvement district for the purposes of Article XIII, Section 7, Constitution of Arizona, and a municipal corporation for all purposes of Title 35, Chapter 3, Articles 3, 3.1., 3.2, 4 and 5, Arizona Revised Statutes, as amended, and [except as otherwise provided in §48- 708(B), as amended] is considered to be a municipal corporation and political subdivision of the State of Arizona, separate and apart from the Town; and WHEREAS, a primary purpose for creating SSCFD was to finance construction and maintenance of certain public improvements needed for the "Saguaro Springs" development through assessment of ad valorem taxes on all real and personal property within such development; and WHEREAS, in accordance with ARS §§48-719 and 48 -723, a special election was held on November 21, 2007, wherein the qualified electors of SSCFD voted to issue general obligation bonds in the maximum amount of ninety nine million dollars ($99,000,000) to cover costs of constructing required public improvements, and to levy and collect an annual ad valorem tax at a rate not to exceed thirty cents (30¢) per one hundred dollars ($100) of assessed valuation for SSCFD operation and maintenance expenses; and Regular Council Meeting - May 22, 2013 - Page 75 of 295 WHEREAS, in accordance with ARS §§48-716 and 48 -723, the SSCFD Treasurer has submitted to the SSCFD Board a proposed budget for Fiscal Year 2013 -2014 which includes statements and estimates of the operation and maintenance expenses of SSCFD, the costs of capital improvements to be financed by the authorized ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay SSCFD general obligation bonds, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property within SSCFD; and WHEREAS, the SSCFD Board desires now to approve said tentative budget for Fiscal Year 2013 -2014 to publish notice of having filed the required statements and estimates, and to set a date (and publish a notice thereof) for a public hearing to receive comment on the tentative budget and, particularly, on the portions of the statements and estimates not relating to debt service on general obligation bonds; and WHEREAS, after said public hearing (and on or before October 1), the SSCFD Board expects to adopt a final budget by resolution; and WHEREAS, on or before the third Monday in August, the SSCFD Board also expects to order the fixing, levying and assessment of required ad valorem taxes and to cause certified copies of the order to be delivered to the Pima County Board of Supervisors and the Arizona Department of Revenue; NOW, THEREFORE, BE IT RESOLVED BY THE DISTRICT BOARD OF SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT, AS FOLLOWS: 1. That that certain proposed budget prepared by the SSCFD Treasurer for Fiscal Year 2013 -2014, attached hereto and expressly made a part hereof as Exhibit "B ", is hereby tentatively approved. 2. That the statements and estimates of the operation and maintenance expenses of SSCFD, the costs of capital improvements to be financed by the approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay SSCFD general obligation bonds in Fiscal Year 2013 -2014 are hereby filed on forms of the Auditor General in accordance with ARS §§42-17101(3) and 48- 723(C), Arizona Revised Statutes, as amended, and are attached hereto and expressly made a part hereof as Exhibit "C ". 3. That a public hearing date of Tuesday, June 18, 2013, beginning at or after 7:00 p.m. in the council chambers of the Town of Marana Civic Center located at 11555 W. Civic Center Drive, Town of Marana, Arizona, is hereby set to consider said tentative budget (including, but expressly not limited to, consideration of those portions of the statements and estimates not relating to debt service on SSCFD general obligation bonds), and said notice (attached hereto and expressly made a part hereof as Exhibit "D ") shall be published once in The Daily Territorial no later than ten (10) days prior to said hearing date. 2 Regular Council Meeting - May 22, 2013 - Page 76 of 295 4. That if any provision in this Resolution is held invalid by a court of competent jurisdiction, the remaining provisions shall not be affected but shall continue in full force and effect. law. 5. That this Resolution shall be effective after its passage and approval according to RESOLVED by the District Board of Saguaro Springs Community Facilities District this 22 day of May 2013. Ed Honea, Chairman District Board Saguaro Springs Community Facilities District ATTEST: Jocelyn C. Bronson, District Clerk Saguaro Springs Community Facilities District APPROVED AS TO FORM: Frank Cassidy, Legal Counsel Saguaro Springs Community Facilities District 3 Regular Council Meeting - May 22, 2013 - Page 77 of 295 EXHIBIT "A " SSCFD Map and Legal Description Regular Council Meeting - May 22, 2013 - Page 78 of 295 v 0 0 0 (DD cQ 1 N N 0 W CQ 0 h ` � ( 1 i - SU LLI AN >group An alysis. Knswers. Exhibit 1 -6 SAGUARO SPRINGS SITE PLAN Tucson MSA, AZ December 2006 Phasing Plan o un CL Un Twin Peaks Fed. - ti_ L mb rt Lary - elocki ' 1 7a .0.73 r te+ }k_ } P. 7G 39 f } ti II I / Of } '' � i Bloc sum f r 1� 1 l ok 1 11Z� �` - ` � ff' r1p � I j } r l k r # TIM y - �� 1' . ; -r Pd F •y • L r L_ i rT L Ph '1 Phase 2 I Phase 3 Phase 4A Phase 4B Source: Empire Companies SULLIVAN GROUP REAL ESTATE ADVISORS AZ387bMaps.xls ��IIIIIIIIIIIIIII1��� -�a Phasing Plan o un CL Un Twin Peaks Fed. - ti_ L mb rt Lary - elocki ' 1 7a .0.73 r te+ }k_ } P. 7G 39 f } ti II I / Of } '' � i Bloc sum f r 1� 1 l ok 1 11Z� �` - ` � ff' r1p � I j } r l k r # TIM y - �� 1' . ; -r Pd F •y • L r L_ i rT L Ph '1 Phase 2 I Phase 3 Phase 4A Phase 4B Source: Empire Companies SULLIVAN GROUP REAL ESTATE ADVISORS AZ387bMaps.xls staff consumag Inc. 201 Nod Bonita Avenue u 101 Tumn AZ 85745 -M Tel. (52D) 750-7474 Fax. (520) 7 X7470 antec. o CIA ntec PROPERTY TY DESC F I PTI N SAGUARO SPRINGS DESCRIPTION of property located in portions of Sections 17, 1 Range 1 East and a portion of Sect on 13, Township 12 South, Rayne 11 East, Gila and Salt River Meridian, Pima County, Arizona. Said property being more fully described as follows: Blocks 1 thru 19 and A thru D together with Lots 1 thru 9, A and B, as shown on the Block Plat for SAGUARO SPRINGS, recorded in Book of Maps and Plants, Page 23, in the office of the Pima County Recorder, Pima County, Arizona. Together with A portion of said Section 13, as described in Docket et 1 2208, Pare 1 961, Pima County Records. Excepting therefrom Lot B of said Block Plat Also excepting therefrom: That portion of Block 5 of said Block Plat to be dedicated for use as a school site, as recorded in Docket 12711 Page 10927, Pima County Records, Also excepting therefrom: That portion of Block 5 of said Bloch Plat to be dedicated for use as a park site, as recorded in Docket 12755, Page 4878, Pima County Records. Said panel containing a total area of 32,839,128 square feet or 753.88 acres of land, more or less. Disalaimer S ta ntec Consulting accepts no fia b ifity for this description if it has beery modified or reformatted in any way from its or -giaai format and content, or used for any purpose offer than that for which it was 017 1 ll intended. Prepared by Nathan L. Gardner, RLS 36785 Prepared on .lone 1, 2007 Prepared for and on behalf of Starntec Consulting Inc. Project Number 185621985 '.1active1185 21 SVots\ 21935 _propert - pmed_by_empire_D 0 14.do 1 Regular Council Meeting - May 22, 2013 - Page 80 of 295 EXHIBIT "B " FY 2013 -2014 SSCFD Budget Regular Council Meeting - May 22, 2013 - Page 81 of 295 SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT (SSCFD) TENTATIVE BUDGET AND SUMMARY SCHEDULE OF ESTIMATED REVENUES AND EXPENDITURES FISCAL YEAR 2013 -14 Regular Council Meeting - May 22, 2013 - Page 82 of 295 FY 2013 FY 2013 FY 2013 Adopted Amended Estimated FY 2014 REVENUES Budget Budget Acutal Budget Property Tax - General (Operating) $ 5 $ 5 $ 5 $ 4 Property Tax- Secondary (Debt Service) - - - - Developer Contributions 193 193 - 193 Total Revenues 198 198 5 198 EXPENDITURES CFD Administration 10 10 3 10 Costs of Issuance 250 250 - 100 Accounting /Auditing 2 2 350 2, 5 00 Public Notification Expenses 2 2 46 2 Consultant Services 15 15 - 15 Outside Legal Counsel 10 10 - 10 Debt Service 156 156 - 156 Trustee Fees 2 2 - 2 Capital Improvements Acquisition 2 2 - 800 Replacement Reserve 100 100 - 100 Total Expenditures 2 2 3 1 Excess (Deficiency) of Revenues (2,500,000) (2,500,000) 1 (1,000,000) Over (Under) Expenditures Other Financing Sources (Uses) Bond Proceeds 2 2 - 1 Total Other Financing Sources 2 2 - 1 1 000 1 000 Excess (Deficiency) of Revenues and - - 1 - Other Financing Sources Over (Under) Expenditures and Other Financing Uses BEGINNING FUND BALANCE 3 3 3 4 ENDING FUND BALANCE $ 3 $ 3 $ 4 $ 4 Regular Council Meeting - May 22, 2013 - Page 82 of 295 EXHIBIT CI " SSCFD Statements and Estimates on Auditor General Forms Regular Council Meeting - May 22, 2013 - Page 83 of 295 (0 v 0 0 0 (0 v N N 0 w v (0 00 0 N o, TOWN OF MARANA Summary Schedule of Estimated Revenues and Expenditures /Expenses Fiscal Year 2014 EXPENDITURE LIMITATION COMPARISON 2013 2014 1. Budgeted expenditures /expenses $ 81,980,411 ESTIMATED 2. Add /subtract: estimated net reconciling items 3. Budgeted expenditures /expenses adjusted for reconciling items 81,980,411 82,882,224 ADOPTED FUND 5. Amount subject to the expenditure limitation REVENUES $ 82 6. EEC or voter - approved alternative expenditure limitation TOTAL $ BUDGETED ACTUAL BALANCE/ OTHER THAN INTERFUND FINANCIAL BUDGETED EXPENDITURES/ EXPENDITURES/ NET PROPERTY TAX PROPERTY OTHER FINANCING TRANSFERS RESOURCES EXPENDITURES/ EXPENSES* EXPENSES ** POSITION * ** REVENUES TAXES 2014 2014 AVAILABLE EXPENSES SOURCES <USES> IN <OUT> FUND 2013 2013 July 1, 2013 ** 2014 2014 2014 2014 1. General Fund Primary: $ 31 $ 28,102,207 $ $ $ 32,679,575 $ $ $ $ 2,725,636 $ 29,953,939 $ 31 2. Special Revenue Funds Secondary: 6,459,532 4 422 6,853,946 150,000 7 9,946,312 3. Debt Service Funds Available 8,337,551 8,337,551 2,542,353 5,540,472 8,082,825 8,453,732 4. Less: Amounts for Future Debt Retirement 5. Total Debt Service Funds 8,337,551 8,337,551 2,542,353 5,540,472 8,082,825 8,453,732 6. Capital Projects Funds 18,699,903 11 17,849,877 6 200 000 > > 2,655,146 21 394 731 > > 20 092 566 > > 7. Permanent Funds 8. Enterprise Funds Available 17,352,153 4 959 390 > > 7 309 690 > 6,959,270 12 935 675 > > 9. Less: Amounts for Future Debt Retirement 10. Total Enterprise Funds 17,352,153 4 959 390 > > 7 309 690 > 6,959,270 12 935 675 > > 11. Internal Service Funds 12. TOTAL ALL FUNDS $ 81,980,411 $ 57,104,767 $ $ 422,958 $ 67,194,711 $ 6,200,000 $ $ 5,690,472 $ 5,690,472 $ 73,817,669 $ 82,882,224 EXPENDITURE LIMITATION COMPARISON 2013 2014 1. Budgeted expenditures /expenses $ 81,980,411 $ 82,882,224 2. Add /subtract: estimated net reconciling items 3. Budgeted expenditures /expenses adjusted for reconciling items 81,980,411 82,882,224 4. Less: estimated exclusions 5. Amount subject to the expenditure limitation $ 81 $ 82 6. EEC or voter - approved alternative expenditure limitation $ $ =The city /town does not levy property taxes and does not have special assessment districts for which property taxes are levied. Therefore, Schedule B has been omitted. * Includes Expenditure /Expense Adjustments Approved in current year from Schedule E. ** Includes actual amounts as of the date the proposed budget was prepared, adjusted for estimated activity for the remainder of the fiscal year. * ** Amounts in this column represent Fund Balance /Net Position amounts except for amounts not in spendable form (e.g., prepaids and inventories) or legally or contractually required to be maintained intact (e.g., principal of a permanent fund). 4/13 SCHEDULE A TOWN OF MARANA Tax Levy and Tax Rate Information Fiscal Year 2014 * Includes actual property taxes collected as of the date the proposed budget was prepared, plus estimated property tax collections for the remainder of the fiscal year. RE4Council Meeting - May 22, 2013 - Page 85 of 295 SCHEDULE 6 2013 2014 1. Maximum allowable primary property tax levy. A.R.S. §42- 17051(A) $ $ 2. Amount received from primary property taxation in the current year in excess of the sum of that year's maximum allowable primary property tax levy. A.R.S. X42- 17102(A)(18) � 3. Property tax levy amounts A. Primary property taxes $ $ B. Secondary property taxes 462 646 422 958 C. Total property tax levy amounts $ $ 422 4. Property taxes collected* A. Primary property taxes (1) Current year's levy $ (2) Prior years' levies (3) Total primary property taxes $ B. Secondary property taxes (1) Current year's levy $ 462 (2) Prior years' levies (3) Total secondary property taxes $ 462,646 C. Total property taxes collected $ 462 5. Property tax rates A. City /Town tax rate (1) Primary property tax rate (2) Secondary property tax rate 2.8000 2.8000 (3) Total city /town tax rate 2.8000 2.8000 B. Special assessment district tax rates Secondary property tax rates - As of the date the proposed budget was prepared, the city /town was operating four special assessment districts for which secondary property taxes are levied. For information pertaining to these special assessment districts and their tax rates, please contact the city /town. * Includes actual property taxes collected as of the date the proposed budget was prepared, plus estimated property tax collections for the remainder of the fiscal year. RE4Council Meeting - May 22, 2013 - Page 85 of 295 SCHEDULE 6 TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 ReMaj Council Meeting - May 22, 2013 - Page 86 of 295 SCHEDULE C ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 GENERAL FUND Local taxes Sales taxes $ 19 $ 20 $ 19 Licenses and permits Building and development fees 1 2,356 2,544 Business and license fees 135 145 144 Franchise fees 325 324 325 Other licenses and fees 130 165 180 Intergovernmental State shared sales taxes 2 2 3 Urban revenue sharing 3 3 3 Auto lieu 1 1 1 Other 10 Charges for services Charges for services 381 405 396 Fines and forfeits Court fines and fees 570 668,540 625 Interest on investments Investment income 100 97 100 In -lieu property taxes Contributions Voluntary contributions 102 109 116 Miscellaneous Other miscellaneous 562 332 504 Total General Fund $ 31 $ 32 $ 32 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. ReMaj Council Meeting - May 22, 2013 - Page 86 of 295 SCHEDULE C TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. Rewls Council Meeting - May 22, 2013 - Page 87 of 295 SCHEDULE C ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 SPECIAL REVENUE FUNDS Highway user revenue $ 2 $ 2 $ 2 Affordable housing revolving 100 100 HOME 250 $ $ $ 2 2 2 Local JCEF $ 13 $ 12 $ 14 Fill the GAP 3 5 4 Local technology enhancement 116 124 118 Community development block grants 245 159 2 $ 377 $ 302 $ 2 Bed tax $ 732 $ 728 $ 754 Other grants and contributions 1 385 829 $ $ $ 2 1 1 Total Special Revenue Funds $ 5 $ 3 $ 6 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. DEBT SERVICE FUNDS Tangerine farms road improvement district $ 2 $ 2 $ 2 Gladden farms CFD debt 700 320 329 $ $ $ 2 2 2 Total Debt Service Funds $ 2 $ 2 $ 2 CAPITAL PROJECTS FUNDS Transportation $ 3 $ 2 $ 3 Impact fee funds 1 2 2 Other capital projects 10 7 490 Downtown reinvesement fund 125 Pima County bond fund 319 Regional transportation authority fund 10 $ $ $ 15 12 17 Tangerine farms road improvement district $ 60 $ 57 $ 60 Community facilities district (CFD) capital 277 49 Gladden farms CFD capital 37 Vanderbilt CFD capital 25 Saguaro Springs CFD capital 193 $ 337 $ 107 $ 316 Total Capital Projects Funds $ 15 $ 12 $ 17 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. Rewls Council Meeting - May 22, 2013 - Page 87 of 295 SCHEDULE C TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 ENTERPRISE FUNDS Water utility $ 3 $ $ 4 Airport 2 1 Wastewater utility 1 1 $ 8 $ $ 7 Total Enterprise Funds $ 8 $ $ 7 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. TOTAL ALL FUNDS $ 63,615,961 $ 51,267,182 $ 67,194,711 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. ReMaj Council Meeting - May 22, 2013 - Page 88 of 295 SCHEDULE C TOWN OF MARANA Other Financing Sources / <Uses> and Interfund Transfers Fiscal Year 2014 Total Enterprise Funds $ $ $ $ 309,690 TOTAL ALL FUNDS $ 6 $ $ 5 $ 5 Rg4ptMcouncil Meeting - May 22, 2013 - Page 89 of 295 SCHEDULE D OTHER FINANCING INTERFUND TRANSFERS 2014 2014 FUND SOURCES <USES> IN <OUT> GENERAL FUND Series 1997 debt $ $ $ $ 142,614 Series 2003 debt 1 Series 2004 debt 657 Series 2008 debt 395,018 Local Transportation Assistance Fund 100 Other grants 50 Total General Fund $ $ $ $ 2 SPECIAL REVENUE FUNDS Other grants $ $ $ 50,000 $ Local Transportation Assistance Fund 100 Total Special Revenue Funds $ $ $ 150 $ DEBT SERVICE FUNDS Series 1997 debt $ $ $ 347,840 $ Series 2003 debt 1 Series 2004 debt 657,775 Series 2008 debt 3 Total Debt Service Funds $ $ $ 5 $ CAPITAL PROJECTS FUNDS South Transportion Impact Fee $ $ $ $ 565 Transportation 2 Gladden Farms CFD 1 Saguaro Springs CFD 1 Water Utility 1 Wastewater Utility 3 Total Capital Projects Funds $ 6 $ $ $ 2 ENTERPRISE FUNDS Water Utility $ $ $ $ 205,226 Wastewater Utilitv 104.464 Total Enterprise Funds $ $ $ $ 309,690 TOTAL ALL FUNDS $ 6 $ $ 5 $ 5 Rg4ptMcouncil Meeting - May 22, 2013 - Page 89 of 295 SCHEDULE D TOWN OF MARANA Expenditures /Expenses by Fund Fiscal Year 2014 ADOPTED EXPENDITURE/ BUDGETED EXPENSE ACTUAL BUDGETED EXPENDITURES/ ADJUSTMENTS EXPENDITURES/ EXPENDITURES/ EXPENSES APPROVED FUND /DEPARTMENT 2013 2013 GENERAL FUND Non - departmental $ 1 $ 10 Mayor and council 289 Town manager 804 Town clerk 385 Human resources 632 Finance 841 Legal 757 Technology services 1 Strategic initiatives 394 Development services admin 126 Permits and records 535 Building safety 662 Planning 571 Engineering 1 Police 9 Courts 963 Public services admin 450 Public works 3 Parks and recreation 2 Community development 240 Capital outlay 2 Contingency 1 Total General Fund $ 31 $ SPECIAL REVENUE FUNDS Highway user revenue $ 3 $ Local transportation assistance 100 Revolving affordable housing 45 HOME 250 Local JCEF 40 Fill the GAP 31 Local technology 302 Community development block gr anl 333 Bed tax 732 Other grants and contributions 1 21b,1y1 (b3,bb f ) (10,000) (394,321) 03 53 (b,b00) 80 EXPENSES* 2013 $ 1 274,875 863,990 366 600,407 789,628 696 1 21 y, b43 548 629,132 542,952 1,028,336 9,113,449 914,954 427,912 2,919,545 2 298,669 2,176,355 $ 28 $ 2 92,000 41,400 230,000 37 28,520 278,150 307,229 673,716 Total Special Revenue Funds $ 6 $ $ 4 DEBT SERVICE FUNDS Series 1997 debt $ 363 $ $ 363 Series 2003 debt 1 1 Series 2004 debt 666 666 Series 2008 debt 3 3 Tangerine farms ID debt 2 2 Gladden farms CFD debt 700 700 Total Debt Service Funds $ 8 $ $ 8 CAPITAL PROJECTS FUNDS Transportation $ 2 $ $ 2 1/2 cent sales tax 331 304 Impact fee funds 1 1,206,292 Tangerine farms ID 60 55 Other capital projects 10 7 Downtown reinvestment fund Pima County bond fund Regional transportation authority CFD capital projects 3 Total Capital Projects Funds $ 18 $ 2b,b9b EXPENSES 2014 $ 639 289,568 1,132,887 254,217 644 948,294 737,238 2,057,719 2by,1 (I 641 802,707 585,176 1,973,476 10,589,408 988 436 2,273,330 3,016,619 374,484 1,298,032 1 $ 31 $ 4 100 70 b3 34,500 373 2 754,269 1,373,435 $ 9 $ 347 1,380,229 657 3,154,628 2,212,507 700 $ 8 $ 2 531, 743 2, 883, 707 60 591 125,000 319,740 10, 366, 806 2, 308, 732 $ 11 $ 20 ENTERPRISE FUNDS Water utility $ 4 $ $ 3 $ 7 Airport 2 375 1 Wastewater utility 10 687 3 Total Enterprise Funds $ 17 $ $ 4 $ 12 TOTAL ALL FUNDS $ 81 $ $ 57 $ 82 * Includes actual expenditures /expenses recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated expenditures /expenses for the remainder of the fiscal year. RI3r Council Meeting - May 22, 2013 - Page 90 of 295 SCHEDULE E TOWN OF MARANA Expenditures /Expenses by Department Fiscal Year 2014 R3r Council Meeting - May 22, 2013 - Page 91 of 295 SCHEDULE F ADOPTED EXPENDITURE/ BUDGETED EXPENSE ACTUAL BUDGETED EXPENDITURES/ ADJUSTMENTS EXPENDITURES/ EXPENDITURES/ EXPENSES APPROVED EXPENSES* EXPENSES DEPARTMENT /FUND 2013 2013 2013 2014 Town Manager: General Fund $ 804 $ 215 $ 863 $ 1 Bed Tax Fund 20,571 Department Total $ 804,196 $ 215,797 $ 863,990 $ 1,153,458 Development Services Admin : General Fund $ 126,151 $ 103,946 $ 219,843 $ 269,171 Bed Tax Fund 47 Department Total $ 126,151 $ 103,946 $ 219,843 $ 316,171 Police: General Fund $ 9 $ $ 9,113,449 $ 10 Other Grants 531,341 235,950 782,829 Department Total $ 10,124,445 $ $ 9,349,399 $ 11,372,237 Court: General Fund $ 963,109 $ $ 914,954 $ 988,884 Local JCEF 40,800 53,000 Fill the Gap 31,000 34,500 Local Tech Enhancement 302,337 47,955 373,598 Department Total $ 1,337,246 $ $ 962,909 $ 1,449,982 Public Works: General Fund $ 3,073 $ $ 2,919 $ 2 Highway User Revenue Fund 3,002,003 2,275,965 2,978,129 Other Capital Projects 3,976,463 1,256,950 Department Total $ 10,051,671 $ $ 6,452,460 $ 5,261,459 Community Development: General Fund $ 240 $ 80 $ 298 $ 374 R3r Council Meeting - May 22, 2013 - Page 91 of 295 SCHEDULE F TOWN OF MARANA Full -Time Employees and Personnel Compensation ` Fiscal Year 2014 10.45 $ v $ 44 $ n $ 29 Total Estimated ° Full -Time Employee Salaries Other Benefit Personnel 0. Equivalent (FTE) and Hourly Costs Retirement Costs Healthcare Costs Costs Compensation 7 FUND 2014 2014 2014 2014 2014 2014 rn rn 209 ° Grants and Contributions GENERAL FUND 283.48 $ 16.709.865 $ 2.069.621 $ 2.675.909 $ 581.207 = $ 22.036.602 7 v SPECIAL REVENUE FUNDS 1< N Highway User Revenue 10.45 $ 435 $ 44 $ 78 $ 29 = $ 587 N Pima County Bonds 151 15 29 13 209 ° Grants and Contributions 75 12 6 3 98 Bed Tax Fund 0.30 16 1 2 159 21 Local Technology Fund 1.00 29 3 10 254 44 Total Special Revenue Funds 11.75 $ 616 $ 63 $ 118 $ 43 = $ 961 N o ENTERPRISE FUNDS N Water 19.10 $ 972 $ 99 $ 235 $ 23 = $ 1, 330, 636 C31 Wastewater 4.00 233 22 55 5 317 Airport 1.00 107 11 18 4 141 Total Enterprise Funds 24.10 $ 1 $ 133 $ 308 $ 33 = $ 1 TOTAL ALL FUNDS 319.33 $ 18,641,056 $ 2,266,533 $ 3,102,956 $ 657,592 1 = $ 24,787,905 4/13 SCHEDULE G EXHIBIT "D " SSCFD Published Notice SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT NOTICE OF FILING STATEMENTS AND ESTIMATES AND NOTICE OF PUBLIC HEARING NOTICE OF FILING STATEMENTS AND ESTIMATES OF THE OPERATION AND MAINTENANCE EXPENSES OF SAGUARO SPRINGS COMMUNITY FACILITIES DISTRICT, THE COSTS OF CAPITAL IMPROVEMENTS TO BE FINANCED BY THE AD VALOREM TAX LEVY, AND THE AMOUNT OF ALL OTHER EXPENDITURES FOR PUBLIC INFRASTRUCTURE AND ENHANCED MUNICIPAL SERVICES PROPOSED TO BE PAID FROM THE TAX LEVY AND OF THE AMOUNT TO BE RAISED TO PAY GENERAL OBLIGATION BONDS OF THE DISTRICT; AND NOTICE OF A PUBLIC HEARING ON THE PROPOSED FISCAL YEAR 2013 -2014 BUDGET OF THE DISTRICT, INCLUDING A HEARING ON THOSE PORTIONS OF THE STATEMENTS AND ESTIMATES NOT RELATING TO DEBT SERVICE ON GENERAL OBLIGATION BONDS. Notice is hereby given that statements and estimates have been filed in the Office of the District Clerk of Saguaro Springs Community Facilities District of the operation and maintenance expenses of the District, the costs of capital improvements to be financed by the voter - approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay general obligation bonds of the District, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the District. Notice is further given of a public hearing on the proposed Fiscal Year 2013 -2014 budget of the District, including (but not limited to) a hearing on those portions of the statements and estimates not relating to debt service on general obligation bonds, all pursuant to Arizona Revised Statutes §§48-716 and 48 -723. Such hearing will be held by the District Board on Tuesday, June 18, 2013, at or after 7:00 p.m. in the council chambers of the Town of Marana Civic Center, 11555 W. Civic Center Drive, Marana, Arizona. Copies of the budget are available from the Office of the District Treasurer, 11555 W. Civic Center Drive, Town of Marana, Arizona 85653, telephone number: (520) 382 -1900. Dated this day of 1 2013 /s/ Gilbert Davidson .......... ............................... District Manager Saguaro Springs Community Facilities District Published: 1 2013 Regular Council Meeting - May 22, 2013 - Page 93 of 295 WN f 7 w j orerZo 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 Council Chambers, May 22, 2013, 7:00 PM To: Mayor and Council Item B 4 From: Erik Montague, District Treasurer and Chief Financial Officer Strategic Plan Focus Area: Not Applicable Subject: [Marana Town Council acting as the Vanderbilt Farms Community Facilities District Board of Directors] : A Resolution of the District Board of Vanderbilt Farms Community Facilities District, a Community Facilities District of Arizona, approving a tentative budget for fiscal year 2013 -2014 pursuant to ARS §48 -716; setting a public hearing date on said tentative budget; filing statements and estimates of the operation and maintenance expenses of the district, the costs of capital improvements to be financed by the approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay general obligation bonds of the district, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the district; providing for notice of filing the statements and estimates, and notice of a public hearing on the portions of the statements and estimates not relating to debt service on general obligation bonds; and providing that this resolution shall be effective after its passage and approval according to law Discussion: On or before July 15th, the District Treasurer submits to the District Board a proposed budget for the new fiscal year. The proposed budget includes statements and estimates of the operation and maintenance expenses of the District, the costs of capital improvements to be financed by the voter authorized ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and the amount to be raised to pay the District's general obligation bonds. The Treasurer has submitted the budget for FY 2013 -2014 and has filed the necessary statements and estimates. If the District Board approves this tentative budget for FY 2013 -2014, the attached notice will be published giving notice of filing the required statements and estimates, and giving notice of a public hearing on June 18, 2013 to receive comment on the tentative budget and, particularly, on the portions of the statements and estimates not relating to debt service on general obligation bonds. After the public hearing, the District Board may adopt a final budget by resolution and may order the fixing, levying and assessment of required ad valorem taxes. Financial Impact: Establishment of the tentative budget for fiscal year 2013 -2014. Regular Council Meeting - May 22, 2013 - Page 94 of 295 ATTACHMENTS: Name: Description: Type: D 2014VFCFDTenativeResolution.pdf VFCFD Resolution Resolution Staff Recommendation: Commission Recommendation - if applicable: Staff recommends adoption of Resolution No. VFCFD 2013 -01, adopting the tentative budget for fiscal year 2013 -2014 in the amount of $28,052. Suggested Motion: I move to adopt Resolution No. VFCFD 2013 -01, adopting the tentative budget for fiscal year 2013- 2014 in the amount of $28,052. Regular Council Meeting - May 22, 2013 - Page 95 of 295 RESOLUTION NO. VFCFD 2013 -01 VANDERBILT FARMS COMMUNITY FACILITIES DISTRICT A RESOLUTION OF THE DISTRICT BOARD OF THE VANDERBILT FARMS COMMUNITY FACILITIES DISTRICT, A COMMUNITY FACILITIES DISTRICT OF ARIZONA, APPROVING A TENTATIVE BUDGET FOR FISCAL YEAR 2013 -2014 PURSUANT TO ARS §48 -716; SETTING A PUBLIC HEARING DATE ON SAID TENTATIVE BUDGET; FILING STATEMENTS AND ESTIMATES OF THE OPERATION AND MAINTENANCE EXPENSES OF THE DISTRICT, THE COSTS OF CAPITAL IMPROVEMENTS TO BE FINANCED BY THE APPROVED AD VALOREM TAX LEVY, AND THE AMOUNT OF ALL OTHER EXPENDITURES FOR PUBLIC INFRASTRUCTURE AND ENHANCED MUNICIPAL SERVICES PROPOSED TO BE PAID FROM THE TAX LEVY AND OF THE AMOUNT TO BE RAISED TO PAY GENERAL OBLIGATION BONDS OF THE DISTRICT, ALL OF WHICH SHALL BE PROVIDED FOR BY THE LEVY AND COLLECTION OF AD VALOREM TAXES ON THE ASSESSED VALUE OF ALL THE REAL AND PERSONAL PROPERTY IN THE DISTRICT; PROVIDING FOR NOTICE OF FILING THE STATEMENTS AND ESTIMATES, AND NOTICE OF A PUBLIC HEARING ON THE PORTIONS OF THE STATEMENTS AND ESTIMATES NOT RELATING TO DEBT SERVICE ON GENERAL OBLIGATION BONDS; AND PROVIDING THAT THIS RESOLUTION SHALL BE EFFECTIVE AFTER ITS PASSAGE AND APPROVAL ACCORDING TO LAW. WHEREAS, on April 19, 2005 the Mayor and Council of the Town of Marana ( "Town ") adopted Resolution No. 2005 -46 creating within Sections 26 and 27, RI I E, T 11 S G &SRB &M of the Town the Vanderbilt Farms Community Facilities District ( "VFCFD "), a community facilities district in accordance with ARS §48 -701 et seq., Arizona Revised Statutes, as amended, as described in Exhibit "A" attached hereto and expressly made a part hereof; and WHEREAS, VFCFD is a special purpose district for purposes of Article IX, Section 19, Constitution of Arizona, a tax - levying public improvement district for the purposes of Article XIII, Section 7, Constitution of Arizona, and a municipal corporation for all purposes of Title 35, Chapter 3, Articles 3, 3.1., 3.2, 4 and 5, Arizona Revised Statutes, as amended, and [except as otherwise provided in §48- 708(B), as amended] is considered to be a municipal corporation and political subdivision of the State of Arizona, separate and apart from the Town; and WHEREAS, a primary purpose for creating VFCFD was to finance construction and maintenance of certain public improvements needed for the Vanderbilt Farms development through assessment of ad valorem taxes on all real and personal property within the development; and WHEREAS, in accordance with ARS §§48-719 and 48 -723, a special election was held on June 28, 2005 wherein the qualified electors of VFCFD voted to issue general obligation bonds in the maximum amount of thirty one million five hundred thousand dollars ($31,500,000) to cover costs of constructing required public improvements, and to levy and collect an annual ad Regular Council Meeting - May 22, 2013 - Page 96 of 295 valorem tax at a rate not to exceed thirty cents (30¢) per one hundred dollars ($100) of assessed valuation for VFCFD operation and maintenance expenses; and WHEREAS, in accordance with ARS §§48-716 and 48 -723, the VFCFD Treasurer has submitted to the VFCFD Board a proposed budget for Fiscal Year 2013 -2014 which includes statements and estimates of the operation and maintenance expenses of VFCFD, the costs of capital improvements to be financed by the authorized ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay VFCFD general obligation bonds, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property within VFCFD; and WHEREAS, the VFCFD Board desires now to approve said tentative budget for Fiscal Year 2013 -2014 to publish notice of having filed the required statements and estimates, and to set a date (and publish a notice thereof) for a public hearing to receive comment on the tentative budget and, particularly, on the portions of the statements and estimates not relating to debt service on general obligation bonds; and WHEREAS, after said public hearing (and on or before October 1), the VFCFD Board expects to adopt a final budget by resolution; and WHEREAS, on or before the third Monday in August, the VFCFD Board also expects to order the fixing, levying and assessment of required ad valorem taxes and to cause certified copies of the order to be delivered to the Pima County Board of Supervisors and the Arizona Department of Revenue; NOW, THEREFORE, BE IT RESOLVED BY THE DISTRICT BOARD OF THE VANDERBILT FARMS COMMUNITY FACILITIES DISTRICT, AS FOLLOWS: 1. That that certain proposed budget prepared by the VFCFD Treasurer for Fiscal Year 2013 -2014, attached hereto and expressly made a part hereof as Exhibit "B ", is hereby tentatively approved. 2. That the statements and estimates of the operation and maintenance expenses of VFCFD, the costs of capital improvements to be financed by the approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay VFCFD general obligation bonds in Fiscal Year 2013 -2014 are hereby filed in accordance with ARS §§42-17101(3) and 48- 723(C), and are attached hereto and expressly made a part hereof as Exhibit "C ". 3. That a public hearing date of Tuesday, June 18, 2013, beginning at or after 7:00 p.m. in the council chambers of the Town of Marana Civic Center located at 11555 W. Civic Center Drive, Town of Marana, Arizona, is hereby set to consider said tentative budget (including, but expressly not limited to, consideration of those portions of the statements and estimates not relating to debt service on VFCFD general obligation bonds), and said notice 2 Regular Council Meeting - May 22, 2013 - Page 97 of 295 (attached hereto and expressly made a part hereof as Exhibit "D ") shall be published once in The Daily Territorial no later than ten (10) days prior to said hearing date. 4. That if any provision in this Resolution is held invalid by a Court of competent jurisdiction, the remaining provisions shall not be affected but shall continue in full force and effect. law. 5. That this Resolution shall be effective after its passage and approval according to RESOLVED by the District Board of the Vanderbilt Farms Community Facilities District this 22 day of May 2013. Ed Honea, Chairman District Board ATTEST: Jocelyn C. Bronson, District Clerk APPROVED AS TO FORM: Frank Cassidy, Legal Counsel 3 Regular Council Meeting - May 22, 2013 - Page 98 of 295 EXHIBIT "A " VFCFD Map and Legal Description Regular Council Meeting - May 22, 2013 - Page 99 of 295 Regular Council Meeting - May 22, 2013 - Page 100 of 295 EXHIBIT A LE DESCRIPTION OF THE PROPERTY Parcel I That portion of the South Half of Section 26 Township 11 South, Range 11 East, Gila and Salt River Rase and Meridian, Pim County, Arizona, lying Southerly and Westerly of that portion conveyed to Cortaro - Marana Irrigation District in Docket 1985 at page 243. EXCEPT the South 30 feet within the right of way of Grier Road #112 (Moore Road) as shown in Book 2 of Road Maps at page 126- AND EXCEPT the West 30 feet within the right of way of Postvale Road #28 as shown in Book 1 of Road Maps at page 70; AND EXCEPT that portion conveyed to the Town of Marana by Deed recorded in Docket 9014 at page 1524, more particularly described as follows: BEGINNING at the Northwest corner of the Southwest Quarter of said Section 26, Township 11 South, Range 11 East; THENCE North 89 degrees 45 minutes 37 seconds East, along the North line of said Southwest Quarter of Section 26, a distance of 1605.05 feet to a point in the Southwest right of way line of Interstate Highway 10; THENCE South 49 degrees 36 minutes 21 seconds East, along said Southwest right of way line, 47.90 feet; THENCE Northwesterly along a curve concave to the South having a radius of 25.00 feet and a central angle of 41 degrees 38 minutes 02 seconds, 18.17 feet; THENCE South 89 degrees 45 minutes 37 seconds West parallel to and 25.00 feeL South of the North line of said Southwest Quarter, 1569.80 feet; THENCE Southerly along a curve concave to the southeast having a radius of 25.00 feet and a central angle of 89 degrees 51 minutes 26 seconds, 39.21 feet; THENCE South 89 degrees 45 minutes 37 seconds West, 30.00 feet to a point in the West line of said Southwest Quarter of Section 26; THENCE North 00 degrees 05 minutes 49 seconds West, 49.94 feet to the POINT OF BEGINNING, EXCLUDING THEREFROM any portions previously dedi- cated as public right of way. A -1 MeetiA Ma�& 22, 29 i .Page 101 of 295 • "�.aw�i .. ii NKM1li�AIIV99]l��Y Jeearir= 3r'3W +Ma:.vdi•�.ev9ti�SC" aria?. �awi�fi. iss: K�.. �s: e.: r: s:. u: e.:.. r: rsi ';r...:�.r�3 4...r.... -...�. - .. .... v... 5�aw ..�xtui...sv�a4+•.ka.sw��1... �.n ...i �.•i..� . ... ... .... .. . r.... .. ..... ....r.., .. ....�.. ,...... .... .. -. .. .-.................... s, xx... wR3w, R• aisua�. a— as�a. n.. v.. n.. ....._ "..a...r......�.... �..n�..v...+. K..•,... -. ., Parcel II The South Half of Section 27, Township 11 South, Range 11 East, Gila and Salt River Base and Meridian, pima County, Arizona. EXCEPT the East 30 feet within the right of way of Postvale Road #28 as shown in Book 1 of Road Maps at page 70; AND EXCEPT the South 30 feet within the right of way of Grier Road #112 (Moore Road) as shown in Book 2 of Road Maps at page 127; AND EXCEPT the West 30 feet within the right of way of Grier Road #117 (Sandario Road) as shown in Book 2 of Road Maps at page 174, AND EXCEPT the North 25 feet within the right of way of Barnett Road as shown in Book 14 of Road Maps at page 21; AND EXCEPT any portion thereof within Farm Field Five, a subdivision of record in the office of the Pima County Recorder in Book 57 of Maps and Plats at page 2. AND EXCEPT that portion conveyed in Deed recorded in Docket 12459 at page 7508 and re- recorded in Docket 12485 at page 379, described as follows: A portion of the South Half of Section 27, Township 11 South, Range 11 East, Gila and Salt River Meridian, Pima County, Arizona, described as follows: Commencing at the South Quarter corner of said Section 27; Thence North 00 degrees 35 minutes 52 seconds West, along the mid- section line of said Section 27, a distance of 30.00 feet to the POINT OF BEGINNING; Thence South 89 degrees 25 minutes 06 seconds West, along a line 30.00 feet North of and parallel to the South line of said Section 27, a distance of 720.01 feet; Thence North 40 degrees 35 minutes 37 seconds West. a distance of 95.40 feet to the Southeast corner of FARM FIELD FIVE, a subdivision of record in Book 52 of Maps and Plats at page 2, records of Pima County, Arizona; Thence continue North 00 degrees 35 minutes 37 seconds West along the East line of said FARM FIELD FINE, a distance of 1325.37 feet to the Northeast corner thereof; Thence North 89 degrees 27 minutes 05 seconds East. a distance of 1271.45 feet to the beginning of a tangent curve concave to the North having a radius of 2045.00 feet; A-2 --.= Page 102 of 295 :. ,,,a.�.. —. ......�...,..=.. �. .....n.,....- ur-::,:,. �wW.. a�. �. �a.; mns> sT�.: �rx, w�_ m+.:= �. �•:• a.« sa. .+ss��.:�:,.y::=+�+:+.�:. -..... �..�:... �. .... . -.. .........a.,s:: e�:�::a•+ix�,�..:�.s.- w...w_,. ............ .. ..,...... ...... ......... ........ .... Thence Easterly, along said curve, through a central angle of 11 degrees 15 minutes 06 seconds, an arc distance of 401.59 feet to a point of tangency; Thence North 78 deg -rees 11 minutes 59 seconds East, a distance of 218.49 feet to the beginning of a tangent curve concave to the South- west, having a radius of 64.00 feet; Thence Easterly and Southerly along said curve, through a central angle of 90 degrees 00 minutes 00 seconds, an arc distance of 100.53 feet to a point of tangency; Thence South 11 degrees 48 minutes 01 seconds East,, a distance of 642.08 feet to the beginning of a tangent curve concave to the West, having a radius of 1955.00 feet; Thence South along said curve, through a central angle of 11 degrees 48 minutes 01 seconds, an arc distance of 402.64 feet to a point of tangency; Thence South 00 degrees 00 minutes 00 seconds West, a distance of 438.54 feet to a point on a line 30.00 feet North of and parallel to the South line of said Section 27; Thence South 89 degrees 25 minutes 03 seconds West, along said line, a distance of 1393.93 feet to the North -South mid - section line of said Section 27, and the POINT OF BEGINNING. D� TTT A portion of the South Half of Section 27, Township 11 South, Range 11 East, Gila and Salt River Meridian, Pima County, Arizona, described as follows: Commencing at the South Quarter corner of said Section 27; Thence North 00 degrees 35 minutes 52 seconds West, along the mid- section line of said Section 27, a distance of 30.00 feet to the POINT OF BEGINNING; Thence South 89 degrees 25 minutes 06 seconds West, along a line 30.00 feet North of and parallel to the South line of said Section 27, a distance of 720.01 feet; Thence North a0 degrees 35 minutes 37 seconds West, a distance of 95.40 feet to the Southeast corner of FARM FIELD FIVE. a subdivision of record in Book 52 of Maps and Plats at page 2, records of Pima County, Arizona; Thence continue North 04 degrees 35 minutes 37 seconds West along the East line of said FARM FIELD FIVE, a distance of 1325.37 feet to the Northeast corner thereof; A-3 Regular Council Meeting - May 22, 2013 - Page 103 of 295 �axrw.«.. �.-.a..,. s._.,.. �- �,. o��.,. isMk ....�..R...�tw.�....� � -�... .., �.. � :ti r _ .. � � -.... .. -- _.... �..�•... � ..�....,. ... -,.... .,. ..a.� -..,� �., . ... _., ,. ......... ...... .. � .. ._..A - - . .. _ .. ..... - -.. - ........ �„ Thence North 89 degrees 27 minutes 05 seconds East, a distance of 1271.45 feet to the beginning of a tangent curve concave to the North having a radius of 2045.00 feet; Thence Easterly, along said curve, through a central angle of 11 degrees 15 minutes 06 seconds, an arc distance of 401.59 feet to a point of tangency; Thence North 78 degrees 11 minutes 59 seconds East, a distance of 218.49 feet to the beginning of a tangent curve concave to the South - west, having a radius of 64.00 feet; Thence Easterly and Southerly along said curve, through a central angle of 90 degrees 00 minutes and 00 seconds, an arc distance of 100.53 feet to a point of tangency; Thence South 11 degrees 48 minutes 01 seconds East, a distance of 642.08 feet to the beginning of a tangent curve concave to the West, having a radius of 1955.00 feet, Thence South along said curve, through a central angle of 11 degrees 48 minutes 01 seconds, an arc distance of 402.64 feet to a point of tangency; Thence South 00 degrees 00 minutes 00 seconds West, a distance of 438.54 feet to a point on a line 34.00 feet North of and parallel to the South line of said Section 27; Thence South 89 degrees 25 minutes 03 seconds west, along said line, a distance of 1393.93 feet to the North -South mid -- section line of said Section 27, and the POINT OF BEGINNING. nom,. -r fn I TX Lots 1 through 248 and Common Areas "A" through "K" of FARM FIELD FIVE. a subdivision of Pima County, Arizona, according to the map of record in the office of the Pima County Recorder in Book 57 of Maps and Plats at page 2, as amended by Declaration of Scrivener's Error recorded in Docket 12369 at page 1453. A-4 Regular Council Meeting - May 22, 2013 - Page 104 of 295 EXHIBIT "B " FY 2013 -2014 VFCFD Budget Regular Council Meeting - May 22, 2013 - Page 105 of 295 EXHIBIT B VANDERBILT FARMS COMMUNITY FACILITIES DISTRICT (VFCFD) TENTATIVE BUDGET AND SUMMARY SCHEDULE OF ESTIMATED REVENUES AND EXPENDITURES FISCAL YEAR 2013 -14 FY 2013 FY 2013 FY 2013 Adopted Amended Estimated FY 2014 REVENUES Budget Budget Acutal Budget Property Tax - General (Operating) $ 2 $ 2 $ 2 $ 2 Pronerty Tax- Secondary (Debt Service) - - - - Developer Contributions 27 27 - 25 Total Revenues 30 30 2 28 EXPENDITURES CFD Administration 500 500 250 500 Costs of Issuance - - - - Accounting /Auditing 2 2 - 2 Public Notification Expenses 2 2 46 52 Consultant Services 15 15 - 15 Outside Legal Counsel 10 10 - 10 Debt Service - - - - Trustee Fees - - - - Capital Improvements Acquisition - - - - Replacement Reserve - - - - Total Expenditures 30 30 296 28 Excess (Deficiency) of Revenues - - 2 - Over (Under) Expenditures Other Financing Sources (Uses) Bond Proceeds - - - Total Other Financing Sources - - - Excess (Deficiency) of Revenues and - - 2 Other Financing Sources Over (Under) Expenditures and Other Financing Uses BEGINNING FUND BALANCE 27 27 25 27 ENDING FUND BALANCE $ 27 $ 27 $ 27 $ 27 Regular Council Meeting - May 22, 2013 - Page 106 of 295 EXHIBIT CI " VFCFD Statements and Estimates on Auditor General Forms Regular Council Meeting - May 22, 2013 - Page 107 of 295 (0 v 0 0 0 (0 v N N 0 w v (0 0 0 h N TOWN OF MARANA Summary Schedule of Estimated Revenues and Expenditures /Expenses Fiscal Year 2014 EXPENDITURE LIMITATION COMPARISON 2013 2014 1. Budgeted expenditures /expenses $ 81,980,411 ESTIMATED 2. Add /subtract: estimated net reconciling items 3. Budgeted expenditures /expenses adjusted for reconciling items 81,980,411 82,882,224 ADOPTED FUND 5. Amount subject to the expenditure limitation REVENUES $ 82 6. EEC or voter - approved alternative expenditure limitation TOTAL $ BUDGETED ACTUAL BALANCE/ OTHER THAN INTERFUND FINANCIAL BUDGETED EXPENDITURES/ EXPENDITURES/ NET PROPERTY TAX PROPERTY OTHER FINANCING TRANSFERS RESOURCES EXPENDITURES/ EXPENSES* EXPENSES ** POSITION * ** REVENUES TAXES 2014 2014 AVAILABLE EXPENSES SOURCES <USES> IN <OUT> FUND 2013 2013 July 1, 2013 ** 2014 2014 2014 2014 1. General Fund Primary: $ 31 $ 28,102,207 $ $ $ 32,679,575 $ $ $ $ 2,725,636 $ 29,953,939 $ 31 2. Special Revenue Funds Secondary: 6,459,532 4 422 6,853,946 150,000 7 9,946,312 3. Debt Service Funds Available 8,337,551 8,337,551 2,542,353 5,540,472 8,082,825 8,453,732 4. Less: Amounts for Future Debt Retirement 5. Total Debt Service Funds 8,337,551 8,337,551 2,542,353 5,540,472 8,082,825 8,453,732 6. Capital Projects Funds 18,699,903 11 17,849,877 6 200 000 > > 2,655,146 21 394 731 > > 20 092 566 > > 7. Permanent Funds 8. Enterprise Funds Available 17,352,153 4 959 390 > > 7 309 690 > 6,959,270 12 935 675 > > 9. Less: Amounts for Future Debt Retirement 10. Total Enterprise Funds 17,352,153 4 959 390 > > 7 309 690 > 6,959,270 12 935 675 > > 11. Internal Service Funds 12. TOTAL ALL FUNDS $ 81,980,411 $ 57 1 $ $ 422,958 1 $ 67,194,711 1 $ 6,200,000 1 $ 1 $ 5,690,472 1 $ 5,690,472 1 $ 73,817,669 1 $ 82,882,224 EXPENDITURE LIMITATION COMPARISON 2013 2014 1. Budgeted expenditures /expenses $ 81,980,411 $ 82,882,224 2. Add /subtract: estimated net reconciling items 3. Budgeted expenditures /expenses adjusted for reconciling items 81,980,411 82,882,224 4. Less: estimated exclusions 5. Amount subject to the expenditure limitation $ 81 $ 82 6. EEC or voter - approved alternative expenditure limitation $ $ =The city /town does not levy property taxes and does not have special assessment districts for which property taxes are levied. Therefore, Schedule B has been omitted. * Includes Expenditure /Expense Adjustments Approved in current year from Schedule E. ** Includes actual amounts as of the date the proposed budget was prepared, adjusted for estimated activity for the remainder of the fiscal year. * ** Amounts in this column represent Fund Balance /Net Position amounts except for amounts not in spendable form (e.g., prepaids and inventories) or legally or contractually required to be maintained intact (e.g., principal of a permanent fund). 4/13 SCHEDULE A TOWN OF MARANA Tax Levy and Tax Rate Information Fiscal Year 2014 * Includes actual property taxes collected as of the date the proposed budget was prepared, plus estimated property tax collections for the remainder of the fiscal year. RE4Council Meeting - May 22, 2013 - Page 109 of 295 SCHEDULE 6 2013 2014 1. Maximum allowable primary property tax levy. A.R.S. §42- 17051(A) $ $ 2. Amount received from primary property taxation in the current year in excess of the sum of that year's maximum allowable primary property tax levy. A.R.S. X42- 17102(A)(18) � 3. Property tax levy amounts A. Primary property taxes $ $ B. Secondary property taxes 462 646 422 958 C. Total property tax levy amounts $ $ 422 4. Property taxes collected* A. Primary property taxes (1) Current year's levy $ (2) Prior years' levies (3) Total primary property taxes $ B. Secondary property taxes (1) Current year's levy $ 462 (2) Prior years' levies (3) Total secondary property taxes $ 462,646 C. Total property taxes collected $ 462 5. Property tax rates A. City /Town tax rate (1) Primary property tax rate (2) Secondary property tax rate 2.8000 2.8000 (3) Total city /town tax rate 2.8000 2.8000 B. Special assessment district tax rates Secondary property tax rates - As of the date the proposed budget was prepared, the city /town was operating four special assessment districts for which secondary property taxes are levied. For information pertaining to these special assessment districts and their tax rates, please contact the city /town. * Includes actual property taxes collected as of the date the proposed budget was prepared, plus estimated property tax collections for the remainder of the fiscal year. RE4Council Meeting - May 22, 2013 - Page 109 of 295 SCHEDULE 6 TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 ReMaj Council Meeting - May 22, 2013 - Page 110 of 295 SCHEDULE C ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 GENERAL FUND Local taxes Sales taxes $ 19 $ 20 $ 19 Licenses and permits Building and development fees 1 2,356 2,544 Business and license fees 135 145 144 Franchise fees 325 324 325 Other licenses and fees 130 165 180 Intergovernmental State shared sales taxes 2 2 3 Urban revenue sharing 3 3 3 Auto lieu 1 1 1 Other 10 Charges for services Charges for services 381 405 396 Fines and forfeits Court fines and fees 570 668,540 625 Interest on investments Investment income 100 97 100 In -lieu property taxes Contributions Voluntary contributions 102 109 116 Miscellaneous Other miscellaneous 562 332 504 Total General Fund $ 31 $ 32 $ 32 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. ReMaj Council Meeting - May 22, 2013 - Page 110 of 295 SCHEDULE C TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. Rewls Council Meeting - May 22, 2013 - Page 111 of 295 SCHEDULE C ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 SPECIAL REVENUE FUNDS Highway user revenue $ 2 $ 2 $ 2 Affordable housing revolving 100 100 HOME 250 $ $ $ 2 2 2 Local JCEF $ 13 $ 12 $ 14 Fill the GAP 3 5 4 Local technology enhancement 116 124 118 Community development block grants 245 159 2 $ 377 $ 302 $ 2 Bed tax $ 732 $ 728 $ 754 Other grants and contributions 1 385 829 $ $ $ 2 1 1 Total Special Revenue Funds $ 5 $ 3 $ 6 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. DEBT SERVICE FUNDS Tangerine farms road improvement district $ 2 $ 2 $ 2 Gladden farms CFD debt 700 320 329 $ $ $ 2 2 2 Total Debt Service Funds $ 2 $ 2 $ 2 CAPITAL PROJECTS FUNDS Transportation $ 3 $ 2 $ 3 Impact fee funds 1 2 2 Other capital projects 10 7 490 Downtown reinvesement fund 125 Pima County bond fund 319 Regional transportation authority fund 10 $ $ $ 15 12 17 Tangerine farms road improvement district $ 60 $ 57 $ 60 Community facilities district (CFD) capital 277 49 Gladden farms CFD capital 37 Vanderbilt CFD capital 25 Saguaro Springs CFD capital 193 $ 337 $ 107 $ 316 Total Capital Projects Funds $ 15 $ 12 $ 17 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. Rewls Council Meeting - May 22, 2013 - Page 111 of 295 SCHEDULE C TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 ENTERPRISE FUNDS Water utility $ 3 $ $ 4 Airport 2 1 Wastewater utility 1 1 $ 8 $ $ 7 Total Enterprise Funds $ 8 $ $ 7 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. TOTAL ALL FUNDS $ 63,615,961 $ 51,267,182 $ 67,194,711 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. ReMaj Council Meeting - May 22, 2013 - Page 112 of 295 SCHEDULE C TOWN OF MARANA Other Financing Sources / <Uses> and Interfund Transfers Fiscal Year 2014 Total Enterprise Funds $ $ $ $ 309,690 TOTAL ALL FUNDS $ 6 $ $ 5 $ 5 Rg4ptMcouncil Meeting - May 22, 2013 - Page 113 of 295 SCHEDULE D OTHER FINANCING INTERFUND TRANSFERS 2014 2014 FUND SOURCES <USES> IN <OUT> GENERAL FUND Series 1997 debt $ $ $ $ 142,614 Series 2003 debt 1 Series 2004 debt 657 Series 2008 debt 395,018 Local Transportation Assistance Fund 100 Other grants 50 Total General Fund $ $ $ $ 2 SPECIAL REVENUE FUNDS Other grants $ $ $ 50,000 $ Local Transportation Assistance Fund 100 Total Special Revenue Funds $ $ $ 150 $ DEBT SERVICE FUNDS Series 1997 debt $ $ $ 347,840 $ Series 2003 debt 1 Series 2004 debt 657,775 Series 2008 debt 3 Total Debt Service Funds $ $ $ 5 $ CAPITAL PROJECTS FUNDS South Transportion Impact Fee $ $ $ $ 565 Transportation 2 Gladden Farms CFD 1 Saguaro Springs CFD 1 Water Utility 1 Wastewater Utility 3 Total Capital Projects Funds $ 6 $ $ $ 2 ENTERPRISE FUNDS Water Utility $ $ $ $ 205,226 Wastewater Utilitv 104.464 Total Enterprise Funds $ $ $ $ 309,690 TOTAL ALL FUNDS $ 6 $ $ 5 $ 5 Rg4ptMcouncil Meeting - May 22, 2013 - Page 113 of 295 SCHEDULE D TOWN OF MARANA Expenditures /Expenses by Fund Fiscal Year 2014 ADOPTED EXPENDITURE/ BUDGETED EXPENSE ACTUAL BUDGETED EXPENDITURES/ ADJUSTMENTS EXPENDITURES/ EXPENDITURES/ EXPENSES APPROVED FUND /DEPARTMENT 2013 2013 GENERAL FUND Non - departmental $ 1 $ 10 Mayor and council 289 Town manager 804 Town clerk 385 Human resources 632 Finance 841 Legal 757 Technology services 1 Strategic initiatives 394 Development services admin 126 Permits and records 535 Building safety 662 Planning 571 Engineering 1 Police 9 Courts 963 Public services admin 450 Public works 3 Parks and recreation 2 Community development 240 Capital outlay 2 Contingency 1 Total General Fund $ 31 $ SPECIAL REVENUE FUNDS Highway user revenue $ 3 $ Local transportation assistance 100 Revolving affordable housing 45 HOME 250 Local JCEF 40 Fill the GAP 31 Local technology 302 Community development block gr anl 333 Bed tax 732 Other grants and contributions 1 21b,1y1 (b3,bb f ) (10,000) (394,321) 03 53 (b,b00) 80 EXPENSES* 2013 $ 1 274,875 863,990 366 600,407 789,628 696 1 21 y, b43 548 629,132 542,952 1,028,336 9,113,449 914,954 427,912 2,919,545 2 298,669 2,176,355 $ 28 $ 2 92,000 41,400 230,000 37 28,520 278,150 307,229 673,716 Total Special Revenue Funds $ 6 $ $ 4 DEBT SERVICE FUNDS Series 1997 debt $ 363 $ $ 363 Series 2003 debt 1 1 Series 2004 debt 666 666 Series 2008 debt 3 3 Tangerine farms ID debt 2 2 Gladden farms CFD debt 700 700 Total Debt Service Funds $ 8 $ $ 8 CAPITAL PROJECTS FUNDS Transportation $ 2 $ $ 2 1/2 cent sales tax 331 304 Impact fee funds 1 1,206,292 Tangerine farms ID 60 55 Other capital projects 10 7 Downtown reinvestment fund Pima County bond fund Regional transportation authority CFD capital projects 3 Total Capital Projects Funds $ 18 $ 2b,b9b EXPENSES 2014 $ 639 289,568 1,132,887 254,217 644 948,294 737,238 2,057,719 2by,1 (I 641 802,707 585,176 1,973,476 10,589,408 988 436 2,273,330 3,016,619 374,484 1,298,032 1 $ 31 $ 4 100 70 b3 34,500 373 2 754,269 1,373,435 $ 9 $ 347 1,380,229 657 3,154,628 2,212,507 700 $ 8 $ 2 531, 743 2, 883, 707 60 591 125,000 319,740 10, 366, 806 2, 308, 732 $ 11 $ 20 ENTERPRISE FUNDS Water utility $ 4 $ $ 3 $ 7 Airport 2 375 1 Wastewater utility 10 687 3 Total Enterprise Funds $ 17 $ $ 4 $ 12 TOTAL ALL FUNDS $ 81 $ $ 57 $ 82 * Includes actual expenditures /expenses recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated expenditures /expenses for the remainder of the fiscal year. RI3r Council Meeting - May 22, 2013 - Page 114 of 295 SCHEDULE E TOWN OF MARANA Expenditures /Expenses by Department Fiscal Year 2014 R3r Council Meeting - May 22, 2013 - Page 115 of 295 SCHEDULE F ADOPTED EXPENDITURE/ BUDGETED EXPENSE ACTUAL BUDGETED EXPENDITURES/ ADJUSTMENTS EXPENDITURES/ EXPENDITURES/ EXPENSES APPROVED EXPENSES* EXPENSES DEPARTMENT /FUND 2013 2013 2013 2014 Town Manager: General Fund $ 804 $ 215 $ 863 $ 1 Bed Tax Fund 20,571 Department Total $ 804,196 $ 215,797 $ 863,990 $ 1,153,458 Development Services Admin : General Fund $ 126,151 $ 103,946 $ 219,843 $ 269,171 Bed Tax Fund 47 Department Total $ 126,151 $ 103,946 $ 219,843 $ 316,171 Police: General Fund $ 9 $ $ 9,113,449 $ 10 Other Grants 531,341 235,950 782,829 Department Total $ 10,124,445 $ $ 9,349,399 $ 11,372,237 Court: General Fund $ 963,109 $ $ 914,954 $ 988,884 Local JCEF 40,800 53,000 Fill the Gap 31,000 34,500 Local Tech Enhancement 302,337 47,955 373,598 Department Total $ 1,337,246 $ $ 962,909 $ 1,449,982 Public Works: General Fund $ 3,073 $ $ 2,919 $ 2 Highway User Revenue Fund 3,002,003 2,275,965 2,978,129 Other Capital Projects 3,976,463 1,256,950 Department Total $ 10,051,671 $ $ 6,452,460 $ 5,261,459 Community Development: General Fund $ 240 $ 80 $ 298 $ 374 R3r Council Meeting - May 22, 2013 - Page 115 of 295 SCHEDULE F TOWN OF MARANA Full -Time Employees and Personnel Compensation ` Fiscal Year 2014 10.45 $ v $ 44 $ n $ 29 Total Estimated ° Full -Time Employee Salaries Other Benefit Personnel 0. Equivalent (FTE) and Hourly Costs Retirement Costs Healthcare Costs Costs Compensation 7 FUND 2014 2014 2014 2014 2014 2014 rn rn 209 ° Grants and Contributions GENERAL FUND 283.48 $ 16.709.865 $ 2.069.621 $ 2.675.909 $ 581.207 = $ 22.036.602 7 v SPECIAL REVENUE FUNDS 1< N Highway User Revenue 10.45 $ 435 $ 44 $ 78 $ 29 = $ 587 N Pima County Bonds 151 15 29 13 209 ° Grants and Contributions 75 12 6 3 98 Bed Tax Fund 0.30 16 1 2 159 21 Local Technology Fund 1.00 29 3 10 254 44 Total Special Revenue Funds 11.75 $ 616 $ 63 $ 118 $ 43 = $ 961 o ENTERPRISE FUNDS N Water 19.10 $ 972, 971 $ 99, 067 $ 235, 244 $ 23, 354 = $ 1, 330, 636 C n Wastewater 4.00 233 22 55 5 317 Airport 1.00 107 11 18 4 141 Total Enterprise Funds 24.10 $ 1 $ 133 $ 308 $ 33 = $ 1 TOTAL ALL FUNDS 319.33 $ 18,641,056 $ 2,266,533 $ 3,102,956 $ 657,592 1 = $ 24,787,905 4/13 SCHEDULE G EXHIBIT "D " VFCFD Published Notice VANDERBILT FARMS COMMUNITY FACILITIES DISTRICT NOTICE OF FILING STATEMENTS AND ESTIMATES AND NOTICE OF PUBLIC HEARING NOTICE OF FILING STATEMENTS AND ESTIMATES OF THE OPERATION AND MAINTENANCE EXPENSES OF THE VANDERBILT FARMS COMMUNITY FACILITIES DISTRICT, THE COSTS OF CAPITAL IMPROVEMENTS TO BE FINANCED BY THE AD VALOREM TAX LEVY, AND THE AMOUNT OF ALL OTHER EXPENDITURES FOR PUBLIC INFRASTRUCTURE AND ENHANCED MUNICIPAL SERVICES PROPOSED TO BE PAID FROM THE TAX LEVY AND OF THE AMOUNT TO BE RAISED TO PAY GENERAL OBLIGATION BONDS OF THE DISTRICT; AND NOTICE OF A PUBLIC HEARING ON THE PROPOSED FISCAL YEAR 2013 -2014 BUDGET OF THE DISTRICT, INCLUDING A HEARING ON THOSE PORTIONS OF THE STATEMENTS AND ESTIMATES NOT RELATING TO DEBT SERVICE ON GENERAL OBLIGATION BONDS. Notice is hereby given that statements and estimates have been filed in the Office of the District Clerk of the Vanderbilt Farms Community Facilities District of the operation and maintenance expenses of the District, the costs of capital improvements to be financed by the voter - approved ad valorem tax levy, and the amount of all other expenditures for public infrastructure and enhanced municipal services proposed to be paid from the tax levy and of the amount to be raised to pay general obligation bonds of the District, all of which shall be provided for by the levy and collection of ad valorem taxes on the assessed value of all the real and personal property in the District. Notice is further given of a public hearing on the proposed Fiscal Year 2013 -2014 budget of the District, including (but not limited to) a hearing on those portions of the statements and estimates not relating to debt service on general obligation bonds, all pursuant to Arizona Revised Statutes §§48-716 and 48 -723. Such hearing will be held by the District Board on Tuesday, June 18, 2013, at or after 7:00 p.m. in the council chambers of the Town of Marana Civic Center, 11555 W. Civic Center Drive, Marana, Arizona. Copies of the budget are available from the Office of the District Treasurer, 11555 W. Civic Center Drive, Town of Marana, Arizona 85653, telephone number: (520) 382 -1900. Dated this day of 1 2013 /s/ Gilbert Davidson .......... ............................... District Manager Vanderbilt Farms Community Facilities District Published: 1 2013 7 Regular Council Meeting - May 22, 2013 - Page 117 of 295 WN f 7 w j orerZo 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 Council Chambers, May 22, 2013, 7:00 PM To: Mayor and Council From: Erik Montague, Finance Director Strategic Plan Focus Area: Commerce, Community, Heritage, Progress and Innovation, Recreation Item A 1 Strategic Plan Focus Area - Additional Information: Marana's strategic plan identifies financial sustainability as an overriding principle of Marana's strategic framework. Subject: Resolution No. 2013 -048: Relating to Budget; adopting the fiscal year 2013 -2014 tentative budget Discussion: In conformance with State law, the tentative budget must be adopted prior to the third Monday in July. The adoption of the tentative budget will set the maximum limit of expenditures (alternative expenditure limitation) for fiscal year 2013 -2014. The total budget may be reduced prior to final adoption, but cannot be increased. Additionally, Mayor and Council may reallocate funding among departments and /or programs. In coordination with Mayor and Council, staff has prepared a tentative budget of $82,882,224 for fiscal year 2013 -2014. This budget reflects the careful allocation of the Town's resources to Mayor and Council's goals. Additionally, this budget incorporates the Marana economic recovery plan which comprises three investment priorities: current employees, resources, and strategic positions. Council concurrence with the economic recovery plan at its study session on January 2013 formed the baseline for decisions made in preparing the tentative budget for fiscal year 2013 -2014. The budget has been structurally balanced with ongoing revenues used to fund ongoing expenditures. Total revenues anticipated for fiscal year 2013 -2014 are $67,617,669. Fund balances will be utilized for one -time expenditures, carryover requests and capital projects. The tentative budget reflects an addition of approximately 6.0 full time equivalent (FTE) positions from 313.33 FTE positions in FY 2013 to 319.33 FTE positions tentatively for fiscal year 2013 -2014. Positions were added in key areas that were determined to be critical to the mission of local government. The proposed Capital Improvement Plan (CIP) totals $26,428,235, or 32 %, of the tentative budget. The tentative budget is presented on forms prescribed by the Auditor General. The official budget forms will be published as required for two consecutive weeks in a newspaper of general circulation along with notices of public hearing on the final budget and the property tax levy. Regular Council Meeting - May 22, 2013 - Page 118 of 295 Council will then hold a public hearing on June 18, 2013 and consider final budget adoption thereafter. The proposed tentative budget reflects the prudent allocation of financial resources required to meet the policy direction and vision of Mayor and Council. Accordingly, staff recommends adoption of the tentative budget for fiscal year 2013-2014 at $82,882,224. Financial Impact: Establishment of the overall alternative annual expenditure limitation for fiscal year 2013 -2014, as approved. ATTACHMENTS: Name: Description: Type: D Reso 2013- 048 Tentative Budget 00034120.doc Reso2013 -048 Resolution D 2014 Official C T Budget Forms Tentative.pdf 2014 Auditor General Schedules Exhibit D 2014 5YR CIP SCHEDULE.pdf 2014 Tentative Five Year CIP Schedule Backup Material D 2014 Authorized Personnel Summary Tentative.pdf 2014 Authorized Position Summary Backup Material Staff Recommendation: Staff recommends approval of the fiscal year 2013 -2014 tentative budget. Suggested Motion: I move to adopt Resolution No. 2013 -048; adopting the fiscal year 2013 -2014 tentative budget. Regular Council Meeting - May 22, 2013 - Page 119 of 295 MARANA RESOLUTION NO. 2013-048 RELATING TO BUDGET; ADOPTING THE FISCAL YEAR 2013 -2014 TENTATIVE BUDGET WHEREAS in accordance with the provisions of Title 42, Chapter 17, Articles 1 -5, Arizona Revised Statutes (A.R.S.), the Town Council did, on April 30, 2013, make an estimate of the different amounts required to meet the public expenditures/ expenses for the ensuing year, also an estimate of revenues from sources other than direct taxation, and the amount to be raised by taxation upon real and personal property of the Town of Marana; and WHEREAS in accordance with said chapter of said title, and following due public notice, the Council will hold a public meeting on June 18, 2013, at which meeting any taxpayer is privileged to appear and be heard in favor of or against any of the proposed expenditures /expenses or tax levies; and WHEREAS the sums to be raised by taxation as specified in the budget attached hereto as Exhibit A may not exceed, in the aggregate amount, the expenditure limitation to be set by the Council on June 18, 2013. NOW, THEREFORE, BE IT RESOLVED by the Mayor and Council of the Town of Marana, Arizona, that the budget setting forth the estimates of revenues and expenditures /expenses, attached hereto as Exhibit A and incorporated herein by this reference, as increased, decreased or changed by the Town Council, is hereby adopted as the tentative budget for the Town of Marana for the fiscal year 2013 -2014. PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this 22 day of May, 2013. Mayor Ed Honea ATTEST: APPROVED AS TO FORM: Jocelyn C. Bronson, Town Clerk Frank Cassidy, Town Attorney Marana Fiscal Year 2013 -2014 Budget Resolution 2013 -048 Regular Council Meeting - May 22, 2013 - Page 120 of 295 (0 v 0 0 0 (0 v N N 0 w v (0 0 h N TOWN OF MARANA Summary Schedule of Estimated Revenues and Expenditures /Expenses Fiscal Year 2014 EXPENDITURE LIMITATION COMPARISON 2013 2014 1. Budgeted expenditures /expenses $ 81,980,411 ESTIMATED 2. Add /subtract: estimated net reconciling items 3. Budgeted expenditures /expenses adjusted for reconciling items 81,980,411 82,882,224 ADOPTED FUND 5. Amount subject to the expenditure limitation REVENUES $ 82 6. EEC or voter - approved alternative expenditure limitation TOTAL $ BUDGETED ACTUAL BALANCE/ OTHER THAN INTERFUND FINANCIAL BUDGETED EXPENDITURES/ EXPENDITURES/ NET PROPERTY TAX PROPERTY OTHER FINANCING TRANSFERS RESOURCES EXPENDITURES/ EXPENSES* EXPENSES ** POSITION * ** REVENUES TAXES 2014 2014 AVAILABLE EXPENSES SOURCES <USES> IN <OUT> FUND 2013 2013 July 1, 2013 ** 2014 2014 2014 2014 1. General Fund Primary: $ 31 $ 28,102,207 $ $ $ 32,679,575 $ $ $ $ 2,725,636 $ 29,953,939 $ 31 2. Special Revenue Funds Secondary: 6,459,532 4 422 6,853,946 150,000 7 9,946,312 3. Debt Service Funds Available 8,337,551 8,337,551 2,542,353 5,540,472 8,082,825 8,453,732 4. Less: Amounts for Future Debt Retirement 5. Total Debt Service Funds 8,337,551 8,337,551 2,542,353 5,540,472 8,082,825 8,453,732 6. Capital Projects Funds 18,699,903 11 17,849,877 6 200 000 > > 2,655,146 21 394 731 > > 20 092 566 > > 7. Permanent Funds 8. Enterprise Funds Available 17,352,153 4 959 390 > > 7 309 690 > 6,959,270 12 935 675 > > 9. Less: Amounts for Future Debt Retirement 10. Total Enterprise Funds 17,352,153 4 959 390 > > 7 309 690 > 6,959,270 12 935 675 > > 11. Internal Service Funds 12. TOTAL ALL FUNDS $ 81,980,411 $ 57 1 $ $ 422,958 1 $ 67,194,711 1 $ 6,200,000 1 $ 1 $ 5,690,472 1 $ 5,690,472 1 $ 73,817,669 1 $ 82,882,224 EXPENDITURE LIMITATION COMPARISON 2013 2014 1. Budgeted expenditures /expenses $ 81,980,411 $ 82,882,224 2. Add /subtract: estimated net reconciling items 3. Budgeted expenditures /expenses adjusted for reconciling items 81,980,411 82,882,224 4. Less: estimated exclusions 5. Amount subject to the expenditure limitation $ 81 $ 82 6. EEC or voter - approved alternative expenditure limitation $ $ =The city /town does not levy property taxes and does not have special assessment districts for which property taxes are levied. Therefore, Schedule B has been omitted. * Includes Expenditure /Expense Adjustments Approved in current year from Schedule E. ** Includes actual amounts as of the date the proposed budget was prepared, adjusted for estimated activity for the remainder of the fiscal year. * ** Amounts in this column represent Fund Balance /Net Position amounts except for amounts not in spendable form (e.g., prepaids and inventories) or legally or contractually required to be maintained intact (e.g., principal of a permanent fund). 4/13 SCHEDULE A TOWN OF MARANA Tax Levy and Tax Rate Information Fiscal Year 2014 * Includes actual property taxes collected as of the date the proposed budget was prepared, plus estimated property tax collections for the remainder of the fiscal year. RE4Council Meeting - May 22, 2013 - Page 122 of 295 SCHEDULE 6 2013 2014 1. Maximum allowable primary property tax levy. A.R.S. §42- 17051(A) $ $ 2. Amount received from primary property taxation in the current year in excess of the sum of that year's maximum allowable primary property tax levy. A.R.S. X42- 17102(A)(18) � 3. Property tax levy amounts A. Primary property taxes $ $ B. Secondary property taxes 462 646 422 958 C. Total property tax levy amounts $ $ 422 4. Property taxes collected* A. Primary property taxes (1) Current year's levy $ (2) Prior years' levies (3) Total primary property taxes $ B. Secondary property taxes (1) Current year's levy $ 462 (2) Prior years' levies (3) Total secondary property taxes $ 462,646 C. Total property taxes collected $ 462 5. Property tax rates A. City /Town tax rate (1) Primary property tax rate (2) Secondary property tax rate 2.8000 2.8000 (3) Total city /town tax rate 2.8000 2.8000 B. Special assessment district tax rates Secondary property tax rates - As of the date the proposed budget was prepared, the city /town was operating four special assessment districts for which secondary property taxes are levied. For information pertaining to these special assessment districts and their tax rates, please contact the city /town. * Includes actual property taxes collected as of the date the proposed budget was prepared, plus estimated property tax collections for the remainder of the fiscal year. RE4Council Meeting - May 22, 2013 - Page 122 of 295 SCHEDULE 6 TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 ReMaj Council Meeting - May 22, 2013 - Page 123 of 295 SCHEDULE C ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 GENERAL FUND Local taxes Sales taxes $ 19 $ 20 $ 19 Licenses and permits Building and development fees 1 2,356 2,544 Business and license fees 135 145 144 Franchise fees 325 324 325 Other licenses and fees 130 165 180 Intergovernmental State shared sales taxes 2 2 3 Urban revenue sharing 3 3 3 Auto lieu 1 1 1 Other 10 Charges for services Charges for services 381 405 396 Fines and forfeits Court fines and fees 570 668,540 625 Interest on investments Investment income 100 97 100 In -lieu property taxes Contributions Voluntary contributions 102 109 116 Miscellaneous Other miscellaneous 562 332 504 Total General Fund $ 31 $ 32 $ 32 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. ReMaj Council Meeting - May 22, 2013 - Page 123 of 295 SCHEDULE C TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. Rewls Council Meeting - May 22, 2013 - Page 124 of 295 SCHEDULE C ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 SPECIAL REVENUE FUNDS Highway user revenue $ 2 $ 2 $ 2 Affordable housing revolving 100 100 HOME 250 $ $ $ 2 2 2 Local JCEF $ 13 $ 12 $ 14 Fill the GAP 3 5 4 Local technology enhancement 116 124 118 Community development block grants 245 159 2 $ 377 $ 302 $ 2 Bed tax $ 732 $ 728 $ 754 Other grants and contributions 1 385 829 $ $ $ 2 1 1 Total Special Revenue Funds $ 5 $ 3 $ 6 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. DEBT SERVICE FUNDS Tangerine farms road improvement district $ 2 $ 2 $ 2 Gladden farms CFD debt 700 320 329 $ $ $ 2 2 2 Total Debt Service Funds $ 2 $ 2 $ 2 CAPITAL PROJECTS FUNDS Transportation $ 3 $ 2 $ 3 Impact fee funds 1 2 2 Other capital projects 10 7 490 Downtown reinvesement fund 125 Pima County bond fund 319 Regional transportation authority fund 10 $ $ $ 15 12 17 Tangerine farms road improvement district $ 60 $ 57 $ 60 Community facilities district (CFD) capital 277 49 Gladden farms CFD capital 37 Vanderbilt CFD capital 25 Saguaro Springs CFD capital 193 $ 337 $ 107 $ 316 Total Capital Projects Funds $ 15 $ 12 $ 17 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. Rewls Council Meeting - May 22, 2013 - Page 124 of 295 SCHEDULE C TOWN OF MARANA Revenues Other Than Property Taxes Fiscal Year 2014 ESTIMATED ACTUAL ESTIMATED REVENUES REVENUES* REVENUES SOURCE OF REVENUES 2013 2013 2014 ENTERPRISE FUNDS Water utility $ 3 $ $ 4 Airport 2 1 Wastewater utility 1 1 $ 8 $ $ 7 Total Enterprise Funds $ 8 $ $ 7 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. TOTAL ALL FUNDS $ 63,615,961 $ 51,267,182 $ 67,194,711 * Includes actual revenues recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated revenues for the remainder of the fiscal year. ReMaj Council Meeting - May 22, 2013 - Page 125 of 295 SCHEDULE C TOWN OF MARANA Other Financing Sources / <Uses> and Interfund Transfers Fiscal Year 2014 Total Enterprise Funds $ $ $ $ 309,690 TOTAL ALL FUNDS $ 6 $ $ 5 $ 5 Rg4ptMcouncil Meeting - May 22, 2013 - Page 126 of 295 SCHEDULE D OTHER FINANCING INTERFUND TRANSFERS 2014 2014 FUND SOURCES <USES> IN <OUT> GENERAL FUND Series 1997 debt $ $ $ $ 142,614 Series 2003 debt 1 Series 2004 debt 657 Series 2008 debt 395,018 Local Transportation Assistance Fund 100 Other grants 50 Total General Fund $ $ $ $ 2 SPECIAL REVENUE FUNDS Other grants $ $ $ 50,000 $ Local Transportation Assistance Fund 100 Total Special Revenue Funds $ $ $ 150 $ DEBT SERVICE FUNDS Series 1997 debt $ $ $ 347,840 $ Series 2003 debt 1 Series 2004 debt 657,775 Series 2008 debt 3 Total Debt Service Funds $ $ $ 5 $ CAPITAL PROJECTS FUNDS South Transportion Impact Fee $ $ $ $ 565 Transportation 2 Gladden Farms CFD 1 Saguaro Springs CFD 1 Water Utility 1 Wastewater Utility 3 Total Capital Projects Funds $ 6 $ $ $ 2 ENTERPRISE FUNDS Water Utility $ $ $ $ 205,226 Wastewater Utilitv 104.464 Total Enterprise Funds $ $ $ $ 309,690 TOTAL ALL FUNDS $ 6 $ $ 5 $ 5 Rg4ptMcouncil Meeting - May 22, 2013 - Page 126 of 295 SCHEDULE D TOWN OF MARANA Expenditures /Expenses by Fund Fiscal Year 2014 ADOPTED EXPENDITURE/ BUDGETED EXPENSE ACTUAL BUDGETED EXPENDITURES/ ADJUSTMENTS EXPENDITURES/ EXPENDITURES/ EXPENSES APPROVED FUND /DEPARTMENT 2013 2013 GENERAL FUND Non - departmental $ 1 $ 10 Mayor and council 289 Town manager 804 Town clerk 385 Human resources 632 Finance 841 Legal 757 Technology services 1 Strategic initiatives 394 Development services admin 126 Permits and records 535 Building safety 662 Planning 571 Engineering 1 Police 9 Courts 963 Public services admin 450 Public works 3 Parks and recreation 2 Community development 240 Capital outlay 2 Contingency 1 Total General Fund $ 31 $ SPECIAL REVENUE FUNDS Highway user revenue $ 3 $ Local transportation assistance 100 Revolving affordable housing 45 HOME 250 Local JCEF 40 Fill the GAP 31 Local technology 302 Community development block gr anl 333 Bed tax 732 Other grants and contributions 1 21b,1y1 (b3,bb f ) (10,000) (394,321) 03 53 (b,b00) 80 EXPENSES* 2013 $ 1 274,875 863,990 366 600,407 789,628 696 1 21 y, b43 548 629,132 542,952 1,028,336 9,113,449 914,954 427,912 2,919,545 2 298,669 2,176,355 $ 28 $ 2 92,000 41,400 230,000 37 28,520 278,150 307,229 673,716 Total Special Revenue Funds $ 6 $ $ 4 DEBT SERVICE FUNDS Series 1997 debt $ 363 $ $ 363 Series 2003 debt 1 1 Series 2004 debt 666 666 Series 2008 debt 3 3 Tangerine farms ID debt 2 2 Gladden farms CFD debt 700 700 Total Debt Service Funds $ 8 $ $ 8 CAPITAL PROJECTS FUNDS Transportation $ 2 $ $ 2 1/2 cent sales tax 331 304 Impact fee funds 1 1,206,292 Tangerine farms ID 60 55 Other capital projects 10 7 Downtown reinvestment fund Pima County bond fund Regional transportation authority CFD capital projects 3 Total Capital Projects Funds $ 18 $ 2b,b9b EXPENSES 2014 $ 639 289,568 1,132,887 254,217 644 948,294 737,238 2,057,719 2by,1 (I 641 802,707 585,176 1,973,476 10,589,408 988 436 2,273,330 3,016,619 374,484 1,298,032 1 $ 31 $ 4 100 70 b3 34,500 373 2 754,269 1,373,435 $ 9 $ 347 1,380,229 657 3,154,628 2,212,507 700 $ 8 $ 2 531, 743 2, 883, 707 60 591 125,000 319,740 10, 366, 806 2, 308, 732 $ 11 $ 20 ENTERPRISE FUNDS Water utility $ 4 $ $ 3 $ 7 Airport 2 375 1 Wastewater utility 10 687 3 Total Enterprise Funds $ 17 $ $ 4 $ 12 TOTAL ALL FUNDS $ 81 $ $ 57 $ 82 * Includes actual expenditures /expenses recognized on the modified accrual or accrual basis as of the date the proposed budget was prepared, plus estimated expenditures /expenses for the remainder of the fiscal year. RI3r Council Meeting - May 22, 2013 - Page 127 of 295 SCHEDULE E TOWN OF MARANA Expenditures /Expenses by Department Fiscal Year 2014 R3r Council Meeting - May 22, 2013 - Page 128 of 295 SCHEDULE F ADOPTED EXPENDITURE/ BUDGETED EXPENSE ACTUAL BUDGETED EXPENDITURES/ ADJUSTMENTS EXPENDITURES/ EXPENDITURES/ EXPENSES APPROVED EXPENSES* EXPENSES DEPARTMENT /FUND 2013 2013 2013 2014 Town Manager: General Fund $ 804 $ 215 $ 863 $ 1 Bed Tax Fund 20,571 Department Total $ 804,196 $ 215,797 $ 863,990 $ 1,153,458 Development Services Admin : General Fund $ 126,151 $ 103,946 $ 219,843 $ 269,171 Bed Tax Fund 47 Department Total $ 126,151 $ 103,946 $ 219,843 $ 316,171 Police: General Fund $ 9 $ $ 9,113,449 $ 10 Other Grants 531,341 235,950 782,829 Department Total $ 10,124,445 $ $ 9,349,399 $ 11,372,237 Court: General Fund $ 963,109 $ $ 914,954 $ 988,884 Local JCEF 40,800 53,000 Fill the Gap 31,000 34,500 Local Tech Enhancement 302,337 47,955 373,598 Department Total $ 1,337,246 $ $ 962,909 $ 1,449,982 Public Works: General Fund $ 3,073 $ $ 2,919 $ 2 Highway User Revenue Fund 3,002,003 2,275,965 2,978,129 Other Capital Projects 3,976,463 1,256,950 Department Total $ 10,051,671 $ $ 6,452,460 $ 5,261,459 Community Development: General Fund $ 240 $ 80 $ 298 $ 374 R3r Council Meeting - May 22, 2013 - Page 128 of 295 SCHEDULE F TOWN OF MARANA Full -Time Employees and Personnel Compensation ` Fiscal Year 2014 10.45 $ v $ 44 $ n $ 29 Total Estimated ° Full -Time Employee Salaries Other Benefit Personnel 0. Equivalent (FTE) and Hourly Costs Retirement Costs Healthcare Costs Costs Compensation 7 FUND 2014 2014 2014 2014 2014 2014 rn rn 209 ° Grants and Contributions GENERAL FUND 283.48 $ 16.709.865 $ 2.069.621 $ 2.675.909 $ 581.207 = $ 22.036.602 7 v SPECIAL REVENUE FUNDS 1< N Highway User Revenue 10.45 $ 435 $ 44 $ 78 $ 29 = $ 587 N Pima County Bonds 151 15 29 13 209 ° Grants and Contributions 75 12 6 3 98 Bed Tax Fund 0.30 16 1 2 159 21 Local Technology Fund 1.00 29 3 10 254 44 Total Special Revenue Funds 11.75 $ 616 $ 63 $ 118 $ 43 = $ 961 N o ENTERPRISE FUNDS N Water 19.10 $ 972, 971 $ 99, 067 $ 235, 244 $ 23, 354 = $ 1, 330, 636 C n Wastewater 4.00 233 22 55 5 317 Airport 1.00 107 11 18 4 141 Total Enterprise Funds 24.10 $ 1 $ 133 $ 308 $ 33 = $ 1 TOTAL ALL FUNDS 319.33 $ 18,641,056 $ 2,266,533 $ 3,102,956 $ 657,592 1 = $ 24,787,905 4/13 SCHEDULE G TOWN OF MARANA PROPOSED TENTATIVE 5 YEAR CIP PLAN Project Name 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 Adonis neighborhood Roadway Rehab & Drainage Improvements 297 1 Airport Safety Lighting & Signage 515 Airport Septic & Leach System 76 Airport Way Development Improvements 272 Alternative Agricultural Storage Basin 150 3 Arizona Pavillions /Westside Retail Intersection 518 Avra Road Bridge East of Brawley Wash 2 Barnett Linear Park & Flood Control Project 717 5 689 285 Barnett Well 1 Beard House Renovations 20 1 Blue Crossing Way Roadway Repair 310 Camino de Manana 75 Camino de Manana Z -Zone Floating Reservoir 800 Camino De Oeste, Rain Cloud To Moore 129 11 Camino Martin /Jeremy PI. - Pavement Restoration 12 403 3 CAP Allocation Purchase 450 450 450 450 450 CAP Trailhead Improvements 35 CMID Barnett Rd. Undergrounding 80 550 Constructed Recharge for Effluent 1 Continental Ranch Parcels 12A and 12B Pavement Restoration 39 1 Continental Ranch Parcel 16 Pavement Reconstrct 1 Continental Ranch Parcel 26 Pavement Reconstrct 281 2 Continental Ranch Parcel 28 Pavement Reconstrct 511 2 Continental Reserve Park Lighting 200 Cortaro Farms Road Reconstruction 2 2 Cortaro Road Multi -Modal Shared Use Path Connectivity Crosswalk 199 Cortaro Silverbell District Park 20 4 12 Costco Drive 750 92 Cracker Barrel Road Pavement Restoration 534,621 3,000 Regular Council Meeting - May 22, 2013 - Page 130 of 295 Page 1 of 3 Project Name 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 Dispatch Console Replacement 430 Downtown Sidewalk and Drainage Improvements 200 Fueling Station / Fleet Operations Center 700 Gladden Farms rd. Reconstruction: Lon Adams to Tangerine Farms 165 137 Honea Heights Neighborhood Redevelopment Project 3 Honea Heights Septic Conversions & Sidewalks 72 2 Ina Rd I -10 To Camino De La Tierra 45 1 Ina Rd. Right Turnbays onto Thornydale 560 224 Ina Road and Bridge, Silverbell Rd To I -10 709 4 18 Ina Road Landscaping: North Camino de Oeste to Meredith Blvd 120 Integrated Telemetry & SCADA 325 275 150 Linda Vista /Twin Peaks Interchange at I -10 3 3 2 Luckett Road 325 Marana Estates /Amole Circle- secondary Access 495 868 Marana Estates /Amole Cirlce - Pavement Restoration and Drainage repair 458 Marana Heritage and Cultural Park 1 310 Marana Main and Roundabout Settlement Repair 248 Marana Main Street 500 8 Marana Park & Ride 400 150 1 Marana Vista Estates Drainage repair 546 Marana WRF 2 4 4 4 4 Marana WRF Biosolids 300 Marana WRF expansion 700 Massengale Road - Pavement Restoration 5 305 2 MMC Generator system 325 Mobile Command Vehicle 300 Moore Rd - Camino de Oeste to Thornydale 321 7 Moore Rd DCR for Extension & Widening 1 1 Moore Rd. Widening 575 1 550 Multi -Use Facility (Police Operations Center /Station) 25 1 12 New 8 -inch Water Main from Wade & Ina Rd to the Springs reservoir 732 Regular Council Meeting - May 22, 2013 - Page 131 of 295 Page 2 of 3 Project Name 2013 -2014 2014 -2015 2015 -2016 2016 -2017 2017 -2018 New W +Zone Ora Mae Harn Park Reservoir 800 New Water Plant at Oshrin Park 750 North Sanders Road Water Plant 2 Ora Mae Harn Park - Ball Field Improvements 50 478 Ora May Harn Oark Parking Lot Reconstruction & Access Rd 260 Price Lane Drainage Improvements 109 Rattlesnake Pass 63 1 320 520 Rehabilitation of Transient, Open Tiedown, Helicopter and Terminal Aprons 370 2 Reservoir and booster station at Hartman Vistas well site 500 Sandra Road Construction 96 150 Santa Cruz Shared Use Path - Phase III 1 Santa Cruz Shared Use Path -El Rio to Avra Valley 106 775 Silverbell Rd Sanitary Sewer Interceptor Project 13 3 4 Silverbell Rd Sidewalk: Twin Peaks Rd to Coachline Blvd. 156 Tangerine Farms Extension: Clark Farms Blvd. to Marana Rd. 345 6 Tangerine Road Corridor I -10 to La Canada 9 5 15 24 4 Tangerine Road Traffic Interchange Improvements 6 307 12 68 Tangerine Road Water Plant 250 4 Thornydale /Tangerine Intersection 1 1 Thornydale Road - S. of Tangerine - Pavement Restoration 103 Thornydale Road, Tangerine To Saguaro Ranch 591 Tiffany Loop Drainage 3 Tortolita Mountain Trails 110 Town -wide Message Boards 140 Twin Peaks Interchange 202 Twin Peaks Well Water Plant 250 1 Update Airport Master Plan 300 Wade Rd /Pima Reserve Wet Crossing & Crosswalk 362 275 TOTAL 26,428,235 47,857,556 69,485,708 47,760,351 84,136,265 Regular Council Meeting - May 22, 2013 - Page 132 of 295 Page 3 of 3 Tentative Authorized Position Summary Schedule FY2013 -2014 Tentative Summary 2011 2012 2013 2013 2014 Department Actual Actual Adopted Amended Proposed Town Manager 6.03 7.13 7.13 9.63 10.63 Town Clerk 3.00 3.00 3.00 3.00 3.00 Human Resources 4.00 5.00 5.50 5.50 5.50 Finance 8.35 8.35 8.85 8.85 9.85 Legal 8.00 8.00 7.50 6.50 6.50 Technology Services 11.00 12.00 12.00 12.00 13.00 Strategic Initiatives 4.50 5.00 4.50 - - Community Development 3.00 3.00 3.00 4.00 4.00 Development Services Admin 2.00 1.00 2.00 3.00 3.00 Building Safety 5.00 6.00 8.00 8.00 9.00 Records & Permits 8.50 9.50 8.50 9.50 9.50 Planning 7.00 8.00 7.00 7.00 7.00 Engineering 16.60 15.00 11.00 11.00 21.00 Police 104.00 105.00 105.00 105.00 106.00 Courts 13.00 14.00 14.00 14.00 14.00 Public Services Admin 5.00 4.00 4.00 4.00 4.00 Operations & Maintenance 31.00 32.00 35.00 35.00 36.00 CIP 12.85 12.85 12.00 12.00 - Parks & Recreation 32.00 32.25 33.25 33.25 33.25 Water 18.00 18.10 18.10 18.10 19.10 Waste Water - - 3.00 3.00 4.00 Airport - - 1.00 1.00 1.00 TOTAL 302.83 309.18 313.33 313.33 319.33 Regular Council Meeting - May 22, 2013 - Page 133 of 295 WN f 7 w j orerZo 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 Council Chambers, May 22, 2013, 7:00 PM To: Mayor and Council Item A 2 From: Frank Cassidy, Town Attorney Strategic Plan Focus Area: Community Strategic Plan Focus Area - Additional Information: Community Initiative 1: Secure all necessary water resources and infrastructure Subject: Resolution No. 2013 -049: Consideration and possible adoption of a resolution approving the sale and execution and delivery of pledged excise tax revenue and revenue refunding obligations evidencing a proportionate interest of the owners thereof in a purchase agreement from the Town; approving the form and authorizing the execution and delivery of such purchase agreement and other necessary agreements for such sale; delegating authority to determine certain matters and terms with respect to the foregoing; authorizing the taking of all other actions necessary to the consummation of the transactions contemplated by this resolution and declaring an emergency Discussion: Town staff has been preparing for the sale of excise tax revenue and revenue refunding obligations (the "Obligations ") with the Town's bond counsel, Michael Cafiso of Greenberg Traurig, underwriter Mark Reader of Stifel Nicolaus & Company (formerly Stone & Youngberg), and underwriter's counsel Timothy Stratton of Gust Rosenfeld. The primary purposes of the Obligations are to fund the initial acquisition of and improvements to the Town's wastewater utility, in accordance with the April 9 settlement agreement with Pima County, and to refinance higher- interest 2003 bonds for the construction of the Town's municipal complex. Proceeds from the sale of the Obligations will also be used to reimburse the Town for legal and engineering fees, and includes capitalized interest through July 1, 2015 on the Obligations, except for the refunding component. A draft Preliminary Official Statement (the "POS") for the Obligations which is the subject of the Resolution being considered is provided as backup material in connection with this agenda item to allow the Mayor and Council members an opportunity to review and return questions or comments. The POS is required by the rules of the Securities and Exchange Commission ( "SEC ") before the Obligations can be purchased by an underwriter; a version of the POS, revised to reflect the result of the sale of the Obligations, will be sent to prospective purchasers in connection with sale of the Obligations. The POS must not contain any untrue statement of a material fact or omit to state a material fact required to make the statements therein not misleading. The POS has been assembled using information that is typically included in an Arizona municipality's preliminary official statement, is currently in draft form and will be reviewed and edited by Town officials and members of the group working on the sale and issuance of the Obligations before it is sent to potential investors. However, content of the POS is the sole responsibility of the Town, and statements by SEC officials in recent years have clarified that participation by Mayor and Council members in review of the POS is required Members should focus Regular Council Meeting - May 22, 2013 - Page 134 of 295 on the information about the Town and specifically financially- related matters in this regard Please return any questions or comments on the POS to Erik Montague by May 24, 2013. Other backup documents provided with this agenda item and associated with the Obligations include the current drafts of the purchase agreement and the trust agreement with Wells Fargo Bank, and the Obligation Purchase Agreement with Stifel Nicolaus. If adopted, the Resolution proposed for adoption by this item will authorize the Mayor and Town staff to prepare, finalize, and execute the various documents and undertake all necessary and prudent actions related to the sale of the Obligations. Financial Impact: If approved, this item will obligate the Town to pay a principal amount of up to $39,000,000, and a probable actual amount of approximately $33,775,000, over a 20 -year period. About $14,160,000 of this amount will refund existing higher- interest 2003 series bonds. The remainder will be used primarily for the initial acquisition and improvement of the Town's wastewater utility. More specific information is provided in the supporting materials. ATTACHMENTS: Name: Description: D Reso 2013- 049 Series 2013 Revenue obligations.docx Resolution 2013 -049 1) OS Marana, T of EXC REF, Srs 13 PRELIM sp 5- 20130513 Draft Preliminary Offering Statement 13 -13 DRAFT.pdf D 330263594 v 1 FIRST PURCHASE AGREEMENT.docx Wells Fargo Purchase Agreement D 330263641 v 1 FIRST TRUST AGREEMENT.docx Wells Fargo Trust Agreement D #1938847v2 Phoenix - AGR - Town of Marana ET Rev Rev Rfdq Oblig 2013 - Obligation Purchase Agreement.doc Stifel Nicolaus Obligation Purchase Agreement Staff Recommendation: Staff recommends approval of Resolution No. 2013 -049. Suggested Motion: I move to adopt Resolution No. 2013 -049. Type: Resolution Backup Material Backup Material Backup Material Backup Material Regular Council Meeting - May 22, 2013 - Page 135 of 295 RESOLUTION NO. 2013-049 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF TOWN OF MARANA, ARIZONA, APPROVING THE SALE AND EXECUTION AND DELIVERY OF NOT TO EXCEED $39,000,000 AGGREGATE PRINCIPAL AMOUNT OF PLEDGED EXCISE TAX REVENUE AND REVENUE REFUNDING OBLIGATIONS EVIDENCING A PROPORTIONATE INTEREST OF THE OWNERS THEREOF IN A FIRST PURCHASE AGREEMENT; APPROVING THE FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF SUCH PURCHASE AGREEMENT, A FIRST TRUST AGREEMENT, A CONTINUING DISCLOSURE UNDERTAKING, AN OBLIGATION PURCHASE CONTRACT AND OTHER NECESSARY AGREEMENTS; DELEGATING AUTHORITY TO THE MAYOR, MANAGER AND FINANCE DIRECTOR OF THE TOWN TO DETERMINE CERTAIN MATTERS AND TERMS WITH RESPECT TO THE FOREGOING; AUTHORIZING THE TAKING OF ALL OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION AND DECLARING AN EMERGENCY WHEREAS, the Mayor and Common Council of the Town of Marana, Arizona (the "Town "), have determined (i) to finance the costs to acquire certain wastewater treatment facilities for the Town and to make certain improvements thereto and (2) to refinance the lease purchase of a portion of the new municipal complex (MPC Series 2003) (together, the "Projects "), by entering into a First Purchase Agreement, to be dated as of the first day of the month of the dated date of the hereinafter described Obligations established as provided herein (the "Purchase Agreement "), with Wells Fargo Bank, N.A., as trustee (the "Trustee "), in its separate capacity as "Seller "; and WHEREAS, in connection with the Purchase Agreement, the Mayor and Common Council of the Town have deemed it necessary and desirable to provide for the sale and execution and delivery of pledged revenue and revenue refunding obligations, provided for by this Resolution (the "Obligations "), evidencing proportionate interests of the owners of the Obligations in payments to be made by the Town to the Trustee pursuant to the First Trust Agreement, to be dated as of the first day of the month of the dated date of the Obligations (the "Trust Agreement "), between the Trustee and the Town, such payments to be made pursuant to the Purchase Agreement; and WHEREAS, the payments represented by the Obligations will be secured by amounts received under the Purchase Agreement pursuant to which the Town will pledge Excise Tax Revenues and State Shared Revenues (as such terms are defined in the Purchase Agreement); and Marana Resolution 2013 -049 Page 1 of 6 Regular Council Meeting - May 22, 2013 - Page 136 of 295 WHEREAS, there have been presented to the Mayor and Common Council of the Town at the meeting at which this Resolution is being adopted (1) the proposed form of the Purchase Agreement; (2) the proposed form of the Trust Agreement; (3) the proposed form of a Continuing Disclosure Undertaking, to be dated the date of delivery of the Obligations (the "Undertaking "), from the Town necessary for purposes of compliance with Securities and Exchange Commission Rule 15c2 -12; (4) the proposed form of the Obligation Purchase Contract, to be dated the date of the sale of the Obligations (the "Purchase Contract "), by and between the Town and Stifel, Nicolaus & Company, Incorporated (the "Underwriter "), for the purchase of the Obligations and (5) the proposed form of the Preliminary Official Statement, to be dated the date of the dissemination thereof (the "Preliminary Official Statement "), relating to the Obligations, which, as to be revised after the sale of the Obligations, shall constitute the Official Statement, to be dated the date of sale of the Obligations (the "Official Statement "), relating to the Obligations; and WHEREAS, financing and refinancing of the costs of the Projects pursuant to the Purchase Agreement is in furtherance of the purposes of the Town and in the public interest; NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE TOWN OF MARANA, ARIZONA, THAT: approved. Section 1. (a) The execution and delivery of the Obligations by the Trustee is (b) The Manager or Finance Director of the Town are each authorized to determine on behalf of the Town the series name and designation of the Obligations; the date the Obligations are to be sold to the Underwriter; the total aggregate principal amount of the Obligations which are to be executed and delivered but not to exceed in the aggregate principal amount of $39,000,000; the date the Obligations are to be dated; the dates on which interest on the Obligations is to be payable and the interest rates per annum the Obligations are to bear; the dates the Obligations are to mature but not later than twenty -one (2 1) years from the date of the execution and delivery of the Obligations, the principal amounts to mature on such dates and the provisions for redemption thereof in advance of such dates; the obligations to be refinanced with proceeds of the sale of the Obligations and the exercise of prepayment and redemption provisions with respect thereto and the terms upon which the Obligations are to be sold to the Underwriter (including determinations of price, original issue discount and premium and underwriting compensation); provided, however, that the foregoing determinations shall not result in the yield on the Obligations, as calculated in accordance with Section 148 of the Code exceeding four and one -half percent (4.5 %). (c) The Manager and Finance Director of the Town are further each authorized to determine on behalf of the Town whether the purchase of an insurance policy securing payment of the Obligations or a surety bond or other reserve fund guaranty which would be a "qualified guarantee" for purposes of the Code would be advantageous to the Town or the terms of the financing represented by the Obligations. The Manager and Finance Director of the Town are each authorized to negotiate with and secure, with proceeds of the Obligations or otherwise, such an insurance policy or a reserve fund guaranty, or both, from one or more institutions, the claims - paying ability of which are then assigned one of the two highest rating 0 Regular Council Meeting - May 22, 2013 - Page 137 of 295 categories by a nationally recognized credit rating agency. The Mayor, Manager and Finance Director of the Town are each authorized to execute and deliver any instruments or documents necessary in connection with the purchase of any such insurance policy and /or reserve fund guaranty, including those making provision for the repayment of amounts advanced by the institutions issuing such insurance policy and /or reserve fund guaranty. (d) The forms and other terms of the Obligations, including the provisions for the signatures, authentication, payment, registration, transfer, exchange, redemption and number shall be as set forth in the Trust Agreement and are approved. Section 2 . The Obligations are to be sold to the Underwriter pursuant to the terms of the Purchase Contract as such terms are to be determined as provided hereinabove. Section 3. The form, terms and provisions of the Purchase Agreement, the Trust Agreement, the Purchase Contract and the Undertaking, in substantially the forms of such documents (including the Obligations and other exhibits thereto) presented at the meeting of the Mayor and Common Council of the Town at which this Resolution is being adopted are approved, with such final provisions, insertions, deletions and changes as determined as provided hereinabove and shall be approved by the Mayor of the Town, any other member of the Council, and, in the case of the Purchase Contract, the Manager of the Town, the execution of each such document being conclusive evidence of such approval, and the Mayor of the Town or any other member of the Council and, in the case of the Purchase Contact, the Manager of the Town, or the Clerk of the Town, where applicable, are authorized and directed, for and on behalf of the Town, to execute and deliver and attest or approve the Purchase Agreement, the Trust Agreement, the Purchase Contract and the Undertaking and to take all action to carry out and comply with the terms of such documents. Section 4. The distribution of the Preliminary Official Statement by the Underwriter is approved, and the Final Official Statement in substantially the form of the Preliminary Official Statement, with such changes or revisions therein from the form of the Preliminary Official Statement as may be approved by the Mayor of the Town or any other member of the Council executing the same, is approved, and the Mayor of the Town or any other member of the Council is authorized, empowered and directed, in the name and on behalf of the Town, to execute and deliver the same to the Underwriter and to execute and deliver instruments confirming that the Preliminary Official Statement is "deemed final" in accordance with Securities and Exchange Commission Rule 15(c)2 -12. Section 5. The Trustee (including in its separate capacities as Seller and the Escrow Trustee) is requested to take any and all action necessary in connection with the execution and delivery of the Purchase Agreement, the Trust Agreement, the Purchase Contract and the Undertaking and the sale and execution and delivery of the Obligations and is further authorized and directed to take such action as may be reasonable for the administration of the trusts so held by it. Section 6. The covenants and agreements contained the Purchase Agreement as to the pledge of and the lien on Excise Tax Revenues and State Shared Revenues and the 3 Regular Council Meeting - May 22, 2013 - Page 138 of 295 restriction on the issuance of further parity obligations secured by Excise Tax Revenues and State Shared Revenues are approved and confirmed. Section 7 . The Mayor, the Manager, the Finance Director and other officers of the Town, on behalf of the Town, are authorized and directed, without further order of the Mayor and Common Council of the Town, to do all such acts and things and to execute and deliver all such certificates, proceedings, agreements and other documents as may be necessary or convenient to be executed and delivered on behalf of the Town, to evidence compliance with, or further the purposes of, all the terms and conditions of this Resolution and the consummation of the transactions contemplated by the Preliminary Official Statement and the Official Statement and as may be necessary to carry out the terms and intent of this Resolution. Section 8 . All actions of the officers and agents of the Town which conform to the purposes and intent of this Resolution and which further the sale and execution and delivery of the Obligations as contemplated by this Resolution, whether heretofore or hereafter taken, are ratified, confirmed and approved. Section 9 . If any section, paragraph, clause or phrase of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or phrase shall not affect any of the remaining provisions of this Resolution. All orders, resolutions and ordinances or parts thereof inconsistent herewith are hereby waived to the extent only of such inconsistency. This waiver shall not be construed as reviving any order, resolution or ordinance or any part thereof. Section 10 . The immediate operation of the provisions of this Resolution is necessary for the preservation of the public peace, health and safety, particularly to immediately sell the Obligations to secure the best, available economic terms therefor, and an emergency is hereby declared to exist, and this Resolution will be in full force and effect from and after its passage by the Mayor and Common Council of the Town and it is hereby excepted from the referendum provisions of the Constitution and laws of the State of Arizona. After any of the Obligations are delivered by the Trustee to the Underwriter and upon receipt of payment therefor, this Resolution shall be and remain irrepealable until the Obligations and the interest and premium, if any, thereon shall have been fully paid, cancelled and discharged. CI Regular Council Meeting - May 22, 2013 - Page 139 of 295 PASSED AND ADOPTED by the Council and approved by the Mayor of the Town of Marana, Arizona, this 22nd day of May, 2013. .................................................... ............................... Mayor ATTEST: ......................................... ............................... Town Clerk- APPROVED AS TO FORM: Town Attorney 3 3 0263 5 82.1-5/13/2013 5 Regular Council Meeting - May 22, 2013 - Page 140 of 295 CERTIFICATION I hereby certify that the foregoing Resolution No. 2013 -049 was duly passed and adopted by the Mayor and Common Council of the Town of Marana, Arizona, at a regular meeting held on the 22nd day of May, 2013, and the vote was .......... ayes and .......... nays. ..................................................... ............................... Town Clerk Regular Council Meeting - May 22, 2013 - Page 141 of 295 o a 6, P= 0 o� o� —a . 0 0 o� 0 o a o � � o � � 4 �4-a� � o o •� o � � � ° o 0 o � ° � o i o � o O � O � a � � Na PRELIMINARY OFFICIAL STATEMENT DATED JUNE , 2013 NEW ISSUE — BOOK - ENTRY -ONLY RATING: See "RATING" herein. In the opinion of Greenberg Traurig, LLP, Special Counsel, assuming compliance with certain tax covenants, the portion of each installment payment made by the Town pursuant to the First Purchase Agreement and denominated as and comprising interest pursuant to the First Purchase Agreement and received by Owners of the Obligations (the "Interest Portion ') will be excludable from gross income for federal income tax purpose, will not be an item of tax preference for purposes of the alternative minimum tax for individuals and corporations (but will be taken into account in determining adjusted current earnings for purposes of computing such tax imposed on certain corporations) and will be exempt from income taxation under the laws of the State of Arizona so long as the Interest Portion is excludable from gross income for federal income tax purposes. See "TAX MATTERS" herein for a description of certain federal tax consequences of ownership of the Obligations. See also "TAX MATTERS — Original Issue Discount and Original Issue Premium " herein. $3397759000* DRAFT II TOWN OF MARANA, ARIZONA 5/13/13 PLEDGED EXCISE TAX REVENUE AND REVENUE REFUNDING OBLIGATIONS, SERIES 2013 Dated: Date of Delivery Due: January 1 and July 1, as shown on the inside front cover page The Pledged Excise Tax Revenue and Revenue Refunding Obligations, Series 2013 (the "Obligations ") will be executed and delivered to (i) finance the costs of the assets being acquired pursuant to the Intergovernmental Settlement Agreement entered into by and between Pima County, Arizona (the "County ") and the Town of Marana, Arizona (the "Town "), including reimbursement of certain legal and engineering expenses, and to make improvements (the "New Projects "); (ii) to refinance certain payments due pursuant to the Second Supplement to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of September 1, 2003, from the Town of Marana Municipal Property Corporation (the "Corporation ") to the Town of certain property (the "Existing Project" and with the New Projects, the "Projects "); (iii) to pay capitalized interest through July 1, 2015*; and (iv) to pay the costs and expenses relating to the execution and delivery of the Obligations. See "THE NEW PROJECTS" and "PLAN OF REFUNDING" herein. Interest represented by the Obligations will be payable semiannually on each January 1 and July 1, commencing January 1, 2014 *. The Obligations will be issuable as fully registered obligations without coupons and will be initially registered in the name of Cede & Co., as nominee of The Depository Trust Company ( "DTC "), New York, New York, which will act as securities depository for the Obligations. Beneficial ownership interests in the Obligations will be available to purchasers in amounts of $5,000 of principal due on a specific payment date and any integral multiple thereof only under the book - entry -only system maintained by DTC through brokers and dealers who are, or act through, DTC participants. Purchasers will not receive physical certificates. So long as any purchaser is the beneficial owner of an Obligation, such purchaser must maintain an account with a broker or a dealer who is, or acts through, a DTC participant to receive payment of principal and interest with respect to such Obligations. See APPENDIX G - "BOOK- ENTRY- ONLY SYSTEM" herein. SEE PAYMENT SCHEDULE ON INSIDE FRONT COVER PAGE The Obligations will be subject to optional [and mandatory] redemption prior to their stated payment dates as described under "THE OBLIGATIONS — Prepayment Provisions" herein *. The Obligations will be undivided, proportionate interests in the installment payments to be made by the Town pursuant to a First Purchase Agreement, to be dated as of June 1, 2013* (the "Purchase Agreement "), between the Town and Wells Fargo Bank, N.A., as trustee (the "Trustee "). The installment payments to be made by the Town will be payable from and secured by a limited pledge of Excise Tax Revenues and State Shared Revenues (both as defined herein), subject only to the paramount lien for the herein described Prior Lease. Except to the extent described herein, such pledge will be on a subordinate and secondary lien on the Town's pledge of Excise Tax Revenues and State Shared Revenues to the Prior Lease (as defined herein) and Additional Revenue Obligations (all as defined herein). See "SECURITY FOR AND SOURCES OF PAYMENT OF THE OBLIGATIONS" herein. THE OBLIGATIONS WILL BE SPECIAL, LIMITED REVENUE OBLIGATIONS OF THE TOWN AND WILL BE PAYABLE SOLELY FROM THE SOURCES DESCRIBED HEREIN. THE OBLIGATIONS WILL NOT BE GENERAL OBLIGATIONS OF THE TOWN OR THE STATE OF ARIZONA OR ANY POLITICAL SUBDIVISION THEREOF, AND THE FULL FAITH AND CREDIT OF THE TOWN, THE STATE OF ARIZONA OR ANY POLITICAL SUBDIVISION THEREOF WILL NOT BE PLEDGED FOR THE PAYMENT OF THE OBLIGATIONS. The Obligations are offered when, as and if issued by the Town and received by the underwriter identified below (the "Underwriter "), subject to the legal opinion of Greenberg Traurig, LLP, Special Counsel, as to validity and tax exemption. In addition, certain legal matters will be passed upon for the Underwriter by Gust Rosenfeld, P.L.C. It is expected that the Obligations will be available for delivery through the facilities of DTC on or about June 27, 2013 *. This cover page contains certain information with respect to the Obligations for convenience of reference only. It is not a summary of material information with respect to the Obligations. Investors must read this entire Official Statement to obtain information essential to the making of an informed investment decision with respect to the Obligations. RtgAf1p{6 hpp. May 22, 2013 -Page 142 of 295 STIFEL $33,775,000* TOWN OF MARANA, ARIZONA PLEDGED EXCISE TAX REVENUE AND REVENUE REFUNDING OBLIGATIONS, SERIES 2013 PAYMENT SCHEDULE* Base CUSIP® No. Payment Principal Interest Price or CUSIP® Payment Principal Interest Price or CUSIP® Date Amount Rate Yield No. Date Amount Rate Yield No. % % 1/1/2024 S 485,000 7/1/2024 1,575,000 1 / 1 /2025 510,000 7/1/2025 1,650,000 1 / 1 /2026 540,000 7/1/2026 1,735,000 1/1/2027 570,000 7/1/2027 1,820,000 1/1/2028 595,000 7/1/2028 1,915,000 7/1/2014 S 315,000 1/1/2015 345,000 7/1/2015 345,000 1/1/2016 355,000 7/1/2016 1,145,000 1/1/2017 365,000 7/1/2017 1,180,000 1/1/2018 380,000 7/1/2018 1,225,000 1/1/2019 395,000 7/1/2019 1,2 80,000 1/1/2020 415,000 7/1/2020 1,325,000 1 / 1 /2021 430,000 7/1/2021 1,385,000 1/1/2022 445,000 7/l/2022 1,440,000 1/1/2023 465,000 7/1/2023 1,500,000 S * Subject to change. 7/1/2029 1,385,000 7/1/2030 1,450,000 7/1/2031 1,525,000 7/1/2032 1,600,000 7/1/2033 1,685,000 Term Bond due July 1, 20 — % Yield CUSIP® No. �1> CUSIP® is a registered trademark of the American Bankers Association. Copyright© 1999 -2013 Standard & Poor's. Financial Services, LLC. All rights reserved. CUSIP® data herein is provided by Standard & Poor's CUSIP Service Bureau. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Service Bureau. CUSIP® numbers are provided for convenience of reference only. None of the Town, the Underwriter or their agents or counsel assumes responsibility for the accuracy of such numbers. Regular Council Meeting - May 22, 2013 - Page 143 of 295 REGARDING THIS OFFICIAL STATEMENT No dealer, broker, salesperson or other person has been authorized by the Town of Marana, Arizona (the "Town "), or Stifel, Nicolaus & Company, Incorporated (the "Underwriter "), to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the foregoing. 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 Obligations by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth in this Official Statement, which includes the cover page, inside front cover page and appendices hereto, has been obtained from the Town, the Arizona Department of Revenue, the Assessor, Treasurer and Finance Department of Maricopa County, Arizona, and other sources that are considered to be accurate and reliable and customarily relied upon in the preparation of similar official statements, but such information has not been independently confirmed or verified by the Town or the Underwriter, is not guaranteed as to accuracy or completeness, and is not to be construed as the promise or guarantee of the Town or the Underwriter. [A variety of other information, including financial information, concerning the Town is available from publications and websites of the Town and others. Any such information that is inconsistent with the information set forth in this Official Statement should be disregarded. No such information is a part of or incorporated into this Official Statement, except as expressly noted herein.] The Underwriter has provided the following sentence for inclusion in this Official Statement: "The Underwriter has reviewed the information in this Official Statement pursuant to its responsibilities to investors under the federal securities laws, but the Underwriter does not guarantee the accuracy or completeness of such information." The presentation of information, including tables of receipts from taxes and other sources, is intended to show recent historical information and is not intended to indicate future or continuing trends in the financial position or other affairs of the Town. All information, estimates and assumptions contained herein have been based on past experience and on the latest information available and are believed to be accurate and reliable, but no representations are made that such information, estimates and assumptions are correct, will continue, will be realized or will be repeated in the future. To the extent that any statements made in this Official Statement involve matters of forecasts, projections, opinions, assumptions, or estimates, whether or not expressly stated to be such, they are made as such and not as representations of fact or certainty, and no representation is made that any of these statements have been or will be realized. All forecasts, projections, assumptions, opinions or estimates are "forward looking statements" that must be read with an abundance of caution and that may not be realized or may not occur in the future. Information other than that obtained from official records of the Town has been identified by source and has not been independently confirmed or verified by the Town or the Underwriter and its accuracy cannot be guaranteed. The information and forward looking statements herein are subject to change without notice, and neither the 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 Town or any of the other parties or matters described herein since the date hereof. The Obligations will not be registered under the Securities Act of 1933, as amended, or any state securities law and will not be listed on any stock or other securities exchange in reliance upon certain exemptions. Neither the Securities and Exchange Commission nor any other federal, state or other governmental entity or agency will have passed upon the merits of the Obligations the accuracy or adequacy of this Official Statement or approved the Obligations for sale. The Town has undertaken to provide continuing disclosure as described in this Official Statement under the caption "CONTINUING DISCLOSURE" and in APPENDIX F — "FORM OF CONTINUING DISCLOSURE UNDERTAKING," all pursuant to Rule 15c2 -12 of the Securities and Exchange Commission. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OF EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE OBLIGATIONS OFFERED HEREBY 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 OBLIGATIONS TO CERTAIN DEALERS, INSTITUTIONAL INVESTORS AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE INSIDE FRONT COVER PAGE HEREOF AND SUCH PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER. The information in APPENDIX G — "BOOK- ENTRY -ONLY SYSTEM" attached hereto has been furnished by The Depository Trust Company and no representation is made by the Town or the Underwriter, or any of their counsel or agents, as to the accuracy or completeness of such information. (1) Regular Council Meeting - May 22, 2013 - Page 144 of 295 TABLE OF CONTENTS Page INTRODUCTORY STATEMENT ................................................................................................. ..............................1 THEOBLIGATIONS ...................................................................................................................... ..............................2 GeneralTerms ........................................................................................................................... ............................... 2 PrepaymentProvisions .............................................................................................................. ............................... 2 Registration and Transfer When Book - Entry -Only System Has Been Discontinued ................ ..............................3 PLANOF REFUNDING ................................................................................................................. ..............................4 Schedule of Obligations Being Refunded .................................................................................. ..............................4 THENEW PROJECTS .................................................................................................................. ............................... 5 SECURITY FOR AND SOURCES OF PAYMENT OF THE OBLIGATIONS ........................... ............................... 5 General...................................................................................................................................... ............................... 5 Pledge........................................................................................................................................ ............................... 5 CoverageRequirements ............................................................................................................ ............................... 6 AdditionalRevenue Obligations ............................................................................................... ............................... 6 ReserveFund ............................................................................................................................. ............................... 6 SOURCESAND USES OF FUNDS .............................................................................................. ............................... 7 ESTIMATED DEBT SERVICE REQUIREMENTS AND PROJECTED COVERAGE ............... ..............................8 EXCISE TAX REVENUES AND STATE SHARED REVENUES .............................................. ............................... 9 TownSales Taxes ...................................................................................................................... ..............................9 Licenses and Permits; Fines and Forfeitures ............................................................................. .............................10 State - Shared Revenues .............................................................................................................. .............................10 Historical and Projected Excise Tax Revenues and State Shared Revenues ............................. .............................12 LITIGATION................................................................................................................................. .............................13 LEGALMATTERS ....................................................................................................................... .............................13 TAXMATTERS ............................................................................................................................ .............................13 General...................................................................................................................................... .............................13 Original Issue Discount and Original Issue Premium ............................................................... .............................14 Information Reporting and Backup Withholding ...................................................................... .............................15 RATING......................................................................................................................................... .............................16 UNDERWRITING......................................................................................................................... .............................16 POLITICALCONTRIBUTIONS .................................................................................................. .............................16 RELATIONSHIP AMONG PARTIES .......................................................................................... .............................16 CONTINUINGDISCLOSURE ...................................................................................................... .............................16 FINANCIALSTATEMENTS ........................................................................................................ .............................17 CERTIFICATION CONCERNING OFFICIAL STATEMENT .................................................... .............................17 CONCLUDINGSTATEMENT ..................................................................................................... .............................18 APPENDIX A: TOWN OF MARANA, ARIZONA DEMOGRAPHIC AND ECONOMIC INFORMATION APPENDIX B: TOWN OF MARANA, ARIZONA — FINANCIAL DATA APPENDIX C: TOWN OF MARANA, ARIZONA — AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30 APPENDIX D: SUMMARY OF SELECT PROVISIONS OF PRINCIPAL DOCUMENTS APPENDIX E: FORM OF APPROVING LEGAL OPINION APPENDIX F: FORM OF CONTINUING DISCLOSURE UNDERTAKING APPENDIX G: BOOK - ENTRY -ONLY SYSTEM (ii) Regular Council Meeting - May 22, 2013 - Page 145 of 295 OFFICIAL STATEMENT $33,775,000* TOWN OF MARANA, ARIZONA PLEDGED EXCISE TAX REVENUE AND REVENUE REFUNDING OBLIGATIONS, SERIES 2013 INTRODUCTORY STATEMENT This Official Statement, which includes the cover page, the inside front cover page and the appendices hereto (this "Official Statement "), provides certain information concerning the Pledged Excise Tax Revenue and Refunding Obligations, Series 2013 (the "Obligations "), to be executed and delivered in the principal amount indicated on the inside front cover. The Obligations will be undivided, participating, proportionate interests in installment payments (the "Payments ") to be made by the Town of Marana, Arizona (the "Town "), pursuant to a First Purchase Agreement, to be dated as of June 1, 2013* (the "Purchase Agreement "), between the Town, as buyer, and Wells Fargo Bank, N.A., in its capacity as trustee (the "Trustee "), as seller. The Obligations are being executed and delivered to (i) finance the costs of the assets being acquired pursuant to the Intergovernmental Settlement Agreement entered into by and between Pima County, Arizona (the "County ") and the Town (the "New Projects "), including reimbursement of certain legal and engineering expenses, and to make improvements; (ii) to refinance certain payments due pursuant to the Second Supplement to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of September 1, 2003, from the Town of Marana Municipal Property Corporation (the "Corporation ") to the Town of certain property (the "Existing Project" and with the New Projects, the "Projects ") (the "Refunding "); (iii) to pay capitalized interest through July 1, 2015*; and (iv) to pay the costs and expenses relating to the execution and delivery of the Obligations. The Obligations will be executed and delivered pursuant to a First Trust Agreement, to be dated as of June 1, 2013* (the "Trust Agreement "), between the Town and the Trustee. Certain of the Trustee's interests under the Purchase Agreement, including, without limitation, the right to receive and collect the Payments and the right to force the Town to make the Payments, will be held by the Trustee for the benefit of the registered owners of the Obligations. See APPENDIX D - "SUMMARY OF SELECT PROVISIONS OF PRINCIPAL DOCUMENTS" in addition to the information herein below for descriptions of the terms of the Purchase Agreement and the Trust Agreement and the definition of terms not elsewhere defined herein. See APPENDIX A - "TOWN OF MARANA, ARIZONA — DEMOGRAPHIC AND ECONOMIC INFORMATION" and APPENDIX C - "TOWN OF MARANA, ARIZONA — AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30,2012" for information about the Town. The Payments will be payable from and secured by a pledge of Excise Tax Revenues and State Shared Revenues subject only to the paramount pledge for the Prior Lease, on parity with the pledge for the Additional Revenue Obligations. "Excise Tax Revenues" means revenues from the Town sales tax, license and permit fees and fines and forfeitures which the Town now collects; provided that the Mayor and Council of the Town may impose other transaction privilege taxes in the future, the uses of revenue from which will be restricted at the discretion of such Council. "State Shared Revenues" means revenues from amounts allocated or apportioned to the Town by the State of Arizona (the "State "), any political subdivision thereof or any other governmental unit or agency, except the share of the Town of any taxes which by State Law, rule or regulation must be expended for other purposes, such as motor vehicle fuel taxes. The Town has heretofore incurred a lease purchase obligation with the Corporation, with regard to issuance of certain bonds by the Corporation and thereafter supplemented such lease four times with regard to issuance of other bonds of the Corporation (as so supplemented, the "Prior Lease "). The Town irrevocable pledged, on a first lien * Subject to change. Regular Council Meeting - May 22, 2013 - Page 146 of 295 basis for the payment of amounts due under the Prior Lease, Excise Tax Revenues and State Share Revenues. See Table 5 for amounts which will remain due pursuant to the Prior Lease after execution and delivery of the Obligations. Pursuant to the Purchase Agreement, the Town will agree to incur no further obligations on parity with the pledge for the Prior Lease. So long as any amounts due thereunder remain unpaid or unprovided for, the Town may not further encumber Excise Tax Revenues and State Shared Revenues on a basis equal to the pledge for the Purchase Agreement unless certain requirements are satisfied. See SECURITY FOR AND SOURCES OF PAYMENT OF THE OBLIGATIONS — Additional Revenue Obligations" and, for detail about amounts due pursuant to the Purchase Agreement, APPENDIX B — "TOWN OF MARANA, ARIZONA — FINANCIAL INFORMATION." Brief descriptions of the security for the Obligations and of matters related to the Town are included in this Official Statement together with a summary of select provisions of the Purchase Agreement and the Trust Agreement. Such descriptions do not purport to be comprehensive or definitive. All references to the Purchase Agreement and the Trust Agreement are qualified in their entirety by reference to such documents, and references herein to the Obligations are qualified in their entirety by reference to the form thereof included in the Trust Agreement, copies of all of which are available for inspection at the designated corporate trust office of the Trustee. Capitalized terms not defined herein shall have the meanings set forth in APPENDIX D - "SUMMARY OF SELECT PROVISIONS OF PRINCIPAL DOCUMENTS - DEFINITIONS OF CERTAIN TERMS." Neither this Official Statement nor any statement that may have been made orally or in writing in connection herewith is to be considered as, or as part of, a contract with the original purchasers or subsequent owners or Beneficial Owners (as defined in APPENDIX G) of the Obligations. References to provisions of federal or State of Arizona (the "State" or "Arizona ") law, whether codified or uncodified, are references to those current provisions. Those provisions may be amended, repealed or supplemented. THE OBLIGATIONS General Terms The Obligations will be dated the date of initial authentication and delivery and initially will be registered only in the name of Cede & Co., the nominee of The Depository Trust Company, New York, New York ( "DTC ") under the book - entry -only system described in APPENDIX G (the "Book- Entry -Only System "). Beneficial ownership interests in the Obligations may be purchased through direct and indirect participants of DTC in amounts of $5,000 of principal due on a single payment date or integral multiples thereof. See APPENDIX G — "BOOK- ENTRY- ONLY SYSTEM." The Obligations will mature on the dates and in the principal amounts and bear interest from their dated date at the rates all as set forth on the inside front cover page of this Official Statement. Interest on the Obligations will accrue originally from the dated date of the Obligations and will be payable on January 1, 2014, and on each July 1 and January 1 thereafter (each an "Interest Payment Date ") until payment. Prepayment Provisions* Optional Prepayment. Principal represented by the Obligations payable before or on July 1, 20 , will not be subject to prepayment prior to their stated payment date. Principal represented by the Obligations payable on or after July 1, 20 , may be prepaid prior to maturity, in whole or in part on any date, in any order of maturity and by lot within any maturity, by the Town, on or after July 1, 20 , at a prepayment price equal to the principal amount thereof plus accrued interest on such principal to the date fixed for prepayment, but without premium. * Subject to change. Regular Council Meeting - May 22, 2013 - Page 147 of 295 Mandatory Prepayment. Principal represented by the Obligations maturing on July 1, 20_* (the "Term Obligations ") will be subject to mandatory prepayment and will be prepaid on July 1 of the respective years set forth below and in the principal amounts set forth below, by payment of a prepayment price equal to the principal amount of the Term Obligations then called for prepayment plus the interest accrued to the date fixed for prepayment, but without premium, as follows: Term Obligation due July 1, 20 Prepayment Date (July 1) Principal Amount (final payment) Whenever Term Obligations subject to mandatory prepayment are purchased, prepaid (other than pursuant to mandatory prepayment) or delivered by the Town to the Trustee for cancellation, the principal amount of the Term Obligations so retired shall satisfy and be credited against the mandatory prepayment requirements for such Term Obligations for such years as the Town may direct. Manner of Selection for Prepayment. Principal represented by the Obligations will be prepaid only in amounts of $5,000 payable on a specific payment date of a series or integral multiples thereof. The Town will, at least 45 days prior to the prepayment date, notify the Trustee of such prepayment date and of the payment dates of the Obligations and the principal amount of the Obligations of any such payment date of a series to be prepaid on such date. For the purposes of any prepayment of less than all of the Obligations due on a single payment date, the particular Obligations or portions of the Obligations to be prepaid will be selected through the procedures of DTC. For purposes of any prepayment of less than all of the Obligations payable on a single payment date, the particular Obligations or portions of the Obligations to be prepaid on a single payment date will be selected on a pro rata basis by the Trustee by lot not more than 45 days nor less than 30 days prior to the prepayment date. While the Town intends that allocations be made in accordance with the foregoing proportional provisions, the selection of the Obligations for prepayment will be subject to practices and procedures of DTC as in effect from time to time. Notice of Prepayment. Prepayment notices will be sent only to DTC by electronic media, not more than 60 nor less than 30 days prior to the date set for prepayment. See APPENDIX G — "BOOK- ENTRY -ONLY SYSTEM." Such notice will state that if, on the specified prepayment date, moneys for prepayment of all the Obligations to be prepaid together with interest to the date of prepayment, is held by the Trustee, then, from and after said date of prepayment, interest with respect to the Obligations will cease to accrue and become payable and that if such moneys are not so held, the prepayment will not occur. Registration and Transfer When Book - Entry -Only System Has Been Discontinued If the Book - Entry -Only System is discontinued, the Obligations will be transferred only upon the bond register maintained by the Trustee and one or more new Obligations, registered in the name of the transferee, of the same principal amount, payment and rate of interest as the surrendered Obligation or Obligations will be authenticated, upon surrender to the Trustee of the Obligation or Obligations to be transferred, together with an appropriate instrument of transfer executed by the transferor if the Trustee's requirements for transfer are met. The Corporation and the Town has chosen the fifteenth day of the month preceding an interest payment date as the "Record Date" for the Obligations. The Trustee may, but is not required to, transfer or exchange any Obligations during the period from the Record Date to and including the respective Interest Payment Date. The Trustee may, but is not required to, transfer or exchange any Obligations which have been selected for prior redemption. * Subject to change. Regular Council Meeting - May 22, 2013 - Page 148 of 295 The transferor will be responsible for all transfer fees, taxes, fees and any other costs relating to the transfer of ownership of individual Obligations. PLAN OF REFUNDING An amount of the net proceeds of the sale of the the Obligations, together with any other legally available funds, if applicable, will be deposited with the trustee for the below described obligations (the "Obligations Being Refunded ") in sufficient amounts, without further investment, to pay debt service when due or redeemed on the Obligations Being Refunded. Schedule of Obligations Being Refunded* Issue Series Payment of the Corporation Date Prepayment Municipal Facilities 7/1/2014 Revenue Bonds, 1/1/2015 Series 2003 7/1/2015 1/1/2016 Principal 7/1/2016 Prepayment 1/1/2017 7/1/2017 Amount 1/1/2018 Date 7/1/2018 CUSIP® 1/1/2019 Outstanding 7/1/2019 (July 1) 1/1/2020 No. 565748 7/1/2020 7/1/2023 5.000 7/1/2028 5.000 $14,160,000 $14,160,000 2,96000 2,96000 2013 0.0 6,03500 6,03500 2013 0.0 ER7 ES5 * Subject to change. �1> See footnote (1) to the inside front cover page. Upon delivery of the Obligations and such deposit of the proceeds, the Obligations Being Refunded will no longer be outstanding and will not be secured by Excise Tax Revenues and State Shared Revenues. 4 Regular Council Meeting - May 22, 2013 - Page 149 of 295 Prepayment Premium Principal Obligations Prepayment (as a Amount Being Date Percentage CUSIP® Coupon Outstanding Refunded (July 1) of Principal) No. 565748 4.125% $34500 $34500 2013 0.0% ECO 4.250 36000 36000 2013 0.0 ED8 4.250 36000 36000 2013 0.0 EE6 4.375 37500 37500 2013 0.0 EF3 4.375 37500 37500 2013 0.0 EG1 4.500 39000 39000 2013 0.0 EH9 4.500 39000 39000 2013 0.0 EJ5 4.500 41000 41000 2013 0.0 EK2 4.500 41000 41000 2013 0.0 ELO 4.625 42500 42500 2013 0.0 EM8 4.625 43000 43000 2013 0.0 EN6 4.800 44500 44500 2013 0.0 EP 1 4.800 45000 45000 2013 0.0 EQ9 7/1/2023 5.000 7/1/2028 5.000 $14,160,000 $14,160,000 2,96000 2,96000 2013 0.0 6,03500 6,03500 2013 0.0 ER7 ES5 * Subject to change. �1> See footnote (1) to the inside front cover page. Upon delivery of the Obligations and such deposit of the proceeds, the Obligations Being Refunded will no longer be outstanding and will not be secured by Excise Tax Revenues and State Shared Revenues. 4 Regular Council Meeting - May 22, 2013 - Page 149 of 295 THE NEW PROJECTS The New Projects consist of (i) the acquisition of the Marana Wastewater Reclamation Facility ( "MWRF ") from the County; (ii) the reimbursement of certain costs advanced by the Town in connection with acquisition of the MWRF; and (iii) design, permitting, construction and equipping, as applicable, of operational improvements to the MWRF, including new aeration and biodiffusers equipment, clarifier and headworks improvements, new influent lift station pumps, a flow metering device, sludge dewatering equipment, and associated electrical and control devices. SECURITY FOR AND SOURCES OF PAYMENT OF THE OBLIGATIONS General The Obligations will be special, limited revenue obligations, taking the form of undivided, participating, proportionate interests in the Payments. The obligation of the Town to make the Payments will be limited to payment from Excise Tax Revenues and State Shared Revenues and will in no circumstances constitute a general obligation or a pledge of the full faith and credit of the Town or the State or any political subdivisions thereof, or require the levy of, or be payable from the proceeds of, any ad valorem property taxes. Subject to the rights with respect to the Prior Lease, Excise Tax Revenues and State Shared Revenues in excess of amounts, if any, required to be deposited with or held by the Trustee for payments due under the Purchase Agreement will constitute surplus revenues and may be used by the Town for any lawful purpose for the benefit of the Town. The Town may also make the Payments from its other funds as permitted by law and as the Town determines from time to time, and the Trustee will thereafter have no claim to such other funds. Under the terms of the Trust Agreement, an irrevocable trust will be administered by the Trustee for the equal and proportionate benefit of the Owners of the Obligations, which trust includes: (1) all right, title and interest of the Trustee, as seller, in the Purchase Agreement and the right to (a) make claim for, collect or receive all amounts payable or receivable thereunder, (b) to bring actions and proceedings thereunder or for the enforcement of such rights, and (c) to do any and all other things which the Trustee is entitled to do thereunder; (2) amounts on deposit from time to time in the funds created pursuant to the Trust Agreement; and (3) any and all other property of any kind hereafter conveyed as additional security for the Obligations. See APPENDIX D - "SUMMARY OF SELECT PROVISIONS OF PRINCIPAL DOCUMENTS - THE TRUST AGREEMENT." Pledge The Payments will be secured, subject only to the payment and first lien and pledge for the Prior Lease after the Refunding, by a subordinate and second lien on and pledge of Excise Tax Revenues and State Shared Revenues on parity with the pledge and lien granted by the Town for the payment and security of Additional Revenue Obligations. No additional obligations will be incurred on a parity with the Prior Leases. The Payments will be coequal as to the pledge of and lien on Excise Tax Revenues and State Shared Revenues and share ratably, without preference, priority or distinction, as to the source or method of payment from Excise Tax Revenues and State Shared Revenues or security therefor. If at any time moneys are not sufficient to make the deposits and transfers required, any such deficiency will be made up from the first moneys thereafter received and available for such transfers under the terms of the Purchase Agreement and, with respect to payment from Excise Tax Revenues and State Shared Revenues after paying amounts due pursuant to the Prior Leases, pro rata with amounts due with respect to any Additional Revenue Obligations. The Purchase Agreement will not terminate so long as any of the Payments are due and owing pursuant to the terms of the Obligations. Payment of the principal and interest represented by the Obligations will not be secured by the Projects or property financed with the Obligations Being Refunded and the Owners of the Obligations have no claim or lien on the Refunding or any part thereof. THE PAYMENTS WILL NOT CONSTITUTE AN INDEBTEDNESS OR GENERAL OBLIGATION OF THE TOWN NOR WILL THE TOWN BE LIABLE FOR THE PAYMENTS FROM AD VALOREM PROPERTY Regular Council Meeting - May 22, 2013 - Page 150 of 295 TAXES. PURSUANT TO THE TRUST AGREEMENT, THE OBLIGATIONS WILL BE SPECIAL, LIMITED REVENUE OBLIGATIONS, PAYABLE SOLELY FROM THE PAYMENTS MADE PURSUANT TO THE PURCHASE AGREEMENT. THE OBLIGATIONS WILL NOT BE GENERAL OBLIGATIONS OF THE TOWN, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF AND WILL NOT REPRESENT OR CONSTITUTE A DEBT OR A DIRECT OR INDIRECT PLEDGE OF THE FULL FAITH AND CREDIT OF THE TOWN, THE STATE OR OF ANY POLITICAL SUBDIVISION THEREOF. Coverage Requirements To the extent permitted by applicable law, Excise Tax Revenues and State Shared Revenues will be retained and maintained so that the amounts received from Excise Tax Revenues and State Shared Revenues within and for the most recently completed fiscal year of the Town, will be equal to at least two (2) times the Annual Debt Service for the current fiscal year of the Town. If Excise Tax Revenues and State Shared Revenues for any such fiscal year shall not have been equal to at least two (2) times the Annual Debt Service for the current fiscal year of the Town or if at any time it appears that Excise Tax Revenues and State Shared Revenues will not be sufficient to meet such requirements, the Town will, to the extent permitted by applicable law, impose new exactions of the type of the components of the revenues which are Excise Tax Revenues, or increase the rates for the components of the revenues which are Excise Tax Revenues currently imposed by the Town fully sufficient at all times, after making allowances for contingencies and errors, in each fiscal year of the Town in order that (i) Excise Tax Revenues and State Shared Revenues will be sufficient to meet all such requirements and (ii) Excise Tax Revenues and State Shared Revenues will be reasonably calculated to attain the level as required by the first sentence of this paragraph. Additional Revenue Obligations "Additional Revenue Obligations" may be issued or incurred by the Town (or any financing conduit acting on behalf of the Town) which are on a parity with the Excise Tax Revenues and State Shared Revenues in the most recently completed Fiscal Year have amounted to at least two (2) times the Maximum Annual Debt Service. Reserve Fund The First Trust Agreement and the First Purchase Agreement establish a reserve fund to secure payment of the Obligations (the "Reserve Fund "), but provides that no deposits need to be made into the Reserve Fund if the Excise Tax Revenues and State Shared Revenues collected for the preceding fiscal year are at least two (2) times the highest aggregate debt service requirements on all Parity Obligations for the current or any future fiscal year (the "Reserve Requirement "). In the event that the Excise Taxes collected for the preceding fiscal year are less than two (2) times the highest aggregate debt service requirements on all Parity Obligations for any such fiscal year, the Town shall deposit into the Reserve Fund, on each Interest Payment Date, one -tenth (1/10th) of the highest aggregate debt service requirements on any Parity Obligations, except any for which a separate reserve fund is established or for which no reserve fund is required, until the amount in the Reserve Fund equals the highest aggregate debt service requirements on all Parity Obligations. Regular Council Meeting - May 22, 2013 - Page 151 of 295 SOURCES AND USES OF FUNDS Principal Amount Net Original Issue Premium (a) Total Sources of Funds Deposit to Acquisition Fund Payment to Escrow Trustee Deposit to Payment Fund — Capitalized interest account Payment of Costs of Issuance (b) Total Uses of Funds * Subject to change. $33 (a) Net premium consists of original issue premium on the Obligations less original issue discount (if any) with respect to the Obligations. (b) Includes Underwriter's compensation. Regular Council Meeting - May 22, 2013 - Page 152 of 295 ESTIMATED DEBT SERVICE REQUIREMENTS AND PROJECTED COVERAGE The following table sets forth the amounts required to pay annual debt service on the Prior Leases, net of the Obligations Being Refunded and the estimated annual debt service on the Obligations. TABLE 1 Schedule of Estimated Annual Debt Service Requirements and Projected Coverage (a) Town of Marana, Arizona Excise Tax Revenues and State Excise Tax Prior Shared * Subject to change. Maximum Annual Debt Service Coverage on the Obligations* (e) 6.46x (a) The amount of Excise Tax Revenues and State Shared Revenues used to calculate the coverage requirements for existing and projected debt service is the audited amount for fiscal year 2011 /12. See TABLE 5 — "EXCISE TAX REVENUES AND STATE SHARED REVENUES — Historical and Projected Excise Tax Revenues and State Shared Revenues Collections. " (b) Net of the Corporation's Municipal Facilities Revenue Bonds, Series 2008E being paid off on July 1, 2013 and net of the Obligations Being Refunded. (c) Excise Tax Revenues and State Shared Revenues (net of maximum amounts due with respect to the Prior Leases which have not been refunded) received in fiscal year 2011 /12. 8 Regular Council Meeting - May 22, 2013 - Page 153 of 295 Revenues Lease Revenues Plus: Estimated and State Payments Available The Obligations Combined Fiscal Shared After for Debt Estimated Debt Year Revenues (a) Refunding* (b) Service (c) Principal* Interest (d) Service* 2011/12 $ 33 $ 28 2012/13 $ 5 $ 5 2013/14 4 $ 315 $ 1 ()(g) 6 2014/15 3 690 1 (9) 6 2015/16 3 1 1 6 2016/17 3 1 1 6 2017/18 3 1 1 6 2018/19 3 1 1 6 2019/20 3 1 1 6 2020/21 3 1 1 6 2021/22 3 1 1 6 2022/23 3 1 1 6 2023/24 3 2 939 6 2024/25 3 2 836 6 2025/26 3 2 727 6 2026/27 3 2 613 6 2027/28 3 2 1 510 1 000 492 6 2028/29 1 382 1 2029/30 1 313 1 2030/31 1 240 1 2031/32 1 164 1 2032/33 1 84 1 $ 33 * Subject to change. Maximum Annual Debt Service Coverage on the Obligations* (e) 6.46x (a) The amount of Excise Tax Revenues and State Shared Revenues used to calculate the coverage requirements for existing and projected debt service is the audited amount for fiscal year 2011 /12. See TABLE 5 — "EXCISE TAX REVENUES AND STATE SHARED REVENUES — Historical and Projected Excise Tax Revenues and State Shared Revenues Collections. " (b) Net of the Corporation's Municipal Facilities Revenue Bonds, Series 2008E being paid off on July 1, 2013 and net of the Obligations Being Refunded. (c) Excise Tax Revenues and State Shared Revenues (net of maximum amounts due with respect to the Prior Leases which have not been refunded) received in fiscal year 2011 /12. 8 Regular Council Meeting - May 22, 2013 - Page 153 of 295 (d) Interest is estimated at 3.5% for the Obligations. (e) Debt service coverage is based on revenues available for debt service (see footnote (a)) compared to maximum annual debt service payments pursuant to the Purchase Agreement. (f) The first interest payment on the Obligations will be due on January 1, 2014. Thereafter, interest payments will be made semiannually on July I and January I until the final payment or prepayment of the Obligations. (g) Includes capitalized interest through July 1, 2015. EXCISE TAX REVENUES AND STATE SHARED REVENUES NO ASSURANCES CAN BE GIVEN THAT THE AMOUNT OF STATE SHARED SALES TAXES OR STATE SHARED INCOME TAXES DESCRIBED HEREINBELOW WILL NOT BE REDUCED OR ELIMINATED BY THE STATE LEGISLATURE IN THE FUTURE. Town Sales Taxes The Town's unrestricted transaction privilege (sales) tax is levied by the Town upon persons and entities on account of their business activities within the Town. The amount of tax due is calculated by applying the tax rate against the gross proceeds of sales or gross income derived from the business activities shown in the table below. TABLE 2 TRANSACTION PRIVILEGE (SALES) TAX RATES BY CATEGORY Category Rate Mining 2.0% Construction 4.0 Manufacturing 2.0 Transportation, communications and utilities 4.0 Wholesale trade 2.0 Retail trade 2.0 Restaurants and bars 2.0 Fire, insurance and real estate 2.0 Hotels and other lodging 6.0 Services 2.0 All others 2.0 9 Regular Council Meeting - May 22, 2013 - Page 154 of 295 The following table shows the amounts of the Town's unrestricted transaction privilege (sales) tax collections by industry classification for fiscal years 2007/08 through and including 2011/12, projected collections for fiscal year 2012/13 and proposed budgeted collections for fiscal year 2013/14. Industry Classification Mining Construction Manufacturing Transportation, communication and utilities Wholesale trade Retail trade Restaurants and bars Fire, insurance and real estate Hotels and other lodging Services All others Total (c) TABLE 3 TRANSACTION PRIVILEGE (SALES) TAX COLLECTIONS BY INDUSTRY CLASSIFICATION (a) Actual 2007/08 2008/09 2009/10 2010/11 2011/12 Proposed Projected Budgeted 2012/13 (b) 2013/14 (b) $ 33,335 $ 1,950 $ 3,729 $ 15,601 $ 15,732 $ 20,767 $ 15,000 9,885,085 6,450,530 4,448,469 4,870,797 5,782,644 5,109,828 4,879,836 183,545 154,594 138,817 123,524 128,089 126,016 145,967 2,459,656 2,522,671 2,768,198 2,927,271 2,985,979 3,168,416 3,374,515 528,937 339,051 184,203 194,392 233,850 313,520 292,166 9,380,086 8,554,331 8,673,055 8,667,896 8,804,206 9,259,585 9,178,225 1,407,901 1,384,914 1,555,032 1,658,180 1,789,232 1,786,111 1,810,255 1,616,223 903,810 1,050,046 1,253,481 1,350,977 1,253,019 1,271,318 626,656 508,199 1,378,271 1,914,004 1,991,767 1,891,336 1,655,413 1,056,309 1,002,992 1,057,433 982,631 1,026,443 964,899 986,810 141,735 581,380 404,852 192,137 430,042 169,311 177,962 $ 27,319,468 $ 22,404,422 $ 21,662,105 $ 22,799,914 $ 24,538,961 $ 24,062,808 $ 23,787,467 (a) Due to the Town's participation in the Arizona Department of Revenue ( "ADOR') sales tax collection program and ADOR's reporting of collections on a cash basis, the totals represented here may differ from the amounts shown for Town Sales Tax Collections in TABLE S. (b) Projected figures for fiscal year 2012113 and proposed budgeted figures for fiscal year 2013114 are unaudited amounts, subject to change upon finalization and audit. The budgeted amounts are 'forward- looking 1) statements which should be considered with an abundance of caution. (c) The sales tax totals in this table do not include nonrecurring sales tax audit revenues resulting from audits performed on behalf of the Town. Licenses and Permits; Fines and Forfeitures The Town imposes and collects a business license tax on the right to engage in business within the Town and the right to utilize certain Town property, an occupational license tax on certain occupations and various permit fees for engaging in certain activities within the Town, for the right to utilize certain Town property and for parks and recreation. The Town also imposes and collects fines and forfeitures for violation of State laws and Town ordinances relating to, among other things, traffic and parking offenses. State - Shared Revenues From time to time, bills are introduced in, and legislation enacted by, the Arizona Legislature to change the formulas used to allocate the State - Shared Sales Taxes, State - Shared Income Taxes and State - shared vehicle license tax, including proposed adjustments that would reduce the distribution to cities and towns. The possibility of changes in this respect are more likely to be adverse to the Town when the State is experiencing financial difficulties. The Town cannot determine whether any such measures will become law or how they might affect the revenues which comprise the State - Shared Revenues. In addition, initiative measures are circulated from time to time seeking to place on the ballot changes in Arizona law which would repeal or modify state sales taxes, state income taxes (the major source of funds for state revenue sharing) and vehicle license taxes. The Town cannot predict if any such 10 Regular Council Meeting - May 22, 2013 - Page 155 of 295 initiative measures will ever actually be submitted to the electors, what form the measures might take or the outcome of any such election. State Shared Income Taxes. Under current State law, Arizona cities and towns are preempted from imposing a local income tax. Cities and towns are, however, entitled by statutory formula to receive typically 15.00% of the net revenues of the State's personal and corporate income tax collections for the fiscal year which is two fiscal years prior to the current fiscal year. Distribution of such funds is made monthly based on the proportion of each city's or town's population to the total population of all incorporated cities and towns in the State as determined by the latest census. Reduced economic activity or reductions in the statutory formula share could adversely affect the Town's revenues. State - Shared Sales Taxes. Pursuant to statutory formula, cities and towns in Arizona receive a portion of the State - levied transaction privilege (sales) tax. The State transaction privilege (sales) tax is levied against the same categories of business activity as the Town's transaction privilege (sales) tax with the exception of food sales, which the State exempts from tax. As TABLE 4 indicates, the rate of taxation by the State varies among the different types of business activities taxed, with the most common effective rate being subject to the hereinafter described distribution share being 5.00% of the amount or volume of business transacted. Under current State law, the aggregate amount distributed to all Arizona cities and towns is equal to 25.00% of the "distribution share" of revenues attributable to each category of taxable activity. The allocation of each city and town of the revenues available to all cities and towns is based on their population relative to the aggregate population of all cities and towns as shown by the latest decennial or special census. State - levied transaction privilege (sales) taxes are collected by the State and are distributed monthly to cities and towns. TABLE 4 STATE SALES TAX TAXABLE ACTIVITIES, TAX RATES AND DISTRIBUTION SHARE Taxable Activities State Transaction Privilege (Sales) Tax Rates 0.60% 1.00% State Distribution Education Temporary Combined Tax Rate Base Tax Rate (a) Tax Rate (b) Tax Rate Transporting 5.000% 20.00% 0.60% 1.00% 6.600 Utilities 5.000 20.00 0.60 1.00 6.600 Telecommunications 5.000 20.00 0.60 1.00 6.600 Pipeline 5.000 20.00 0.60 1.00 6.600 Private car line 5.000 20.00 0.60 1.00 6.600 Publication 5.000 20.00 0.60 1.00 6.600 Job printing 5.000 20.00 0.60 1.00 6.600 Prime contracting 5.000 20.00 0.60 1.00 6.600 Owner builder sales 5.000 20.00 0.60 1.00 6.600 Amusement 5.000 40.00 0.60 1.00 6.600 Restaurant 5.000 40.00 0.60 1.00 6.600 Personal property rental 5.000 40.00 0.60 1.00 6.600 Retail (excluding food sales) 5.000 40.00 0.60 1.00 6.600 Transient lodging 5.500 50.00 N/A 1.00 6.500 Mining - non - metal, oil /gas 3.125 32.00 N/A N/A 3.125 Commercial lease 0.000 53.33 N/A N/A 0.000 Severance - metalliferous mining 2.500 80.00 N/A N/A 2.500 Use tax utilities 5.000 20.00 0.60 1.00 6.600 Jet fuel use tax (c) 40.00 N/A N/A (c) 11 Regular Council Meeting - May 22, 2013 - Page 156 of 295 N/A = Not applicable. (a) Represents the State transaction privilege (sales) tax rate approved by voters of the State in November 2000 (the "Education Tax') on certain of the categories of business activity at six - tenths of one percent (0.6%). The Education Tax collections are dedicated exclusively to education and are not distributed to the Town or pledged to the payment of debt service with respect to the Obligations. The effective dates for the Education Tax are June 1, 2001 through June 30, 2021. (b) Represents the State transaction privilege (sales) tax rate approved by voters of the State on May 18, 2010 (the "Temporary Tax') on certain of the categories of business activity at one percent (1.0 %). Two - thirds of the Temporary Tax collections are dedicated exclusively to primary and secondary education and the remaining one -third is dedicated exclusively to health and human services and public safety purposes. The Temporary Tax is not distributed to the Town or pledged to the payment of debt service with respect to the Obligations. The effective dates for the Temporary Tax are June 1, 2010 through May 31, 2013. (c) Does not include $0.0305 per gallon State tax on the retail sale of jet fuel, which tax is only levied on the first ten million gallons sold to each purchaser in each calendar year. Source: Arizona Department of Revenue. Historical and Projected Excise Tax Revenues and State Shared Revenues The following table sets forth the Town's actual Excise Tax Revenues and State Shared Revenues collections for fiscal years 2007/08 through and including 2011/12, projected collections for fiscal year 2012/13 and proposed budgeted collections for fiscal year 2013/14. TABLE 5 Category HISTORICAL AND PROJECTED EXCISE TAX REVENUES AND STATE SHARED REVENUES COLLECTIONS (a) Actual 2007/08 2008/09 2009/10 2010/11 2011/12 Proposed Projected Budgeted 2012/13 (b) 2013/14 (b) Town Sales Tax State - shared Sales Taxes State - shared Income Taxes Licenses and permits Fines and forfeitures and penalties $ 27,319,468 $ 22404422 $ 21,662,077 $ 22,947,818 $ 24,538,961 $ 24,099,842 $ 24,037467 2458,329 2,126,636 1,961,225 2,09903 2,73103 205,820 3,020,895 3,761,010 3,971447 3450478 2,601,218 2,950,734 3,57007 3,900421 2,965,068 1,951,817 2,150,360 2,502494 2,720,872 4,255,159 3,194,225 792,823 692,526 641484 53700 558,393 668,541 62500 $ 37,29608 $ 31,146,848 $ 29,865,624 $ 3008,293 $ 33,500,823 $ 35400,230 $ 34,77808 (a) The Obligations will be secured by a first lien and pledge on the Excise Tax Revenues subject to a prior pledge on the Prior Lease. See " SECURITYFOR AND SOURCES OF PAYMENT OF THE OBLIGATIONS — Generally. " Due to the Town's participation in the Arizona Department of Revenue ( "ADOR') sales tax collection program and ADOR's reporting of collections on a cash basis, the totals represented here may differ from the amounts shown for Town Sales Tax Collections in TABLE 3. (b) Projected figures for fiscal year 2012113 and proposed budgeted figures for fiscal year 2013114 are unaudited amounts, subject to change upon finalization and audit. The budgeted amounts are 'forward- looking , statements which should be considered with an abundance of caution. 12 Regular Council Meeting - May 22, 2013 - Page 157 of 295 LITIGATION respective rights to adopt or comply with the provisions of the documents under which the Obligations have been authorized or the validity or enforceability thereof or to consummate the transactions described therein or herein; nor is there any litigation or administrative action or proceeding threatened against the Town which, if decided adversely to the Town, as applicable, would impair the Town's ability to comply with all of the requirements of the documents under which the Obligations have been authorized or have a material adverse effect upon the financial condition of the Town. Representatives of the Town will deliver certificates to that effect at the time of the initial delivery of the Obligations. LEGAL MATTERS Legal matters incident to the execution and delivery of the Obligations and with regard to the tax - exempt status of the interest portion of the Obligations are subject to the legal opinion of Special Counsel, whose services have been retained by the Town. The signed legal opinion of Special Counsel, dated and premised on the law in effect as of the date of the Obligations, will be delivered to the Underwriter at the time of original delivery of the Obligations. The proposed text of the legal opinion is set forth as APPENDIX E — "FORM OF APPROVING LEGAL OPINION." The legal opinion to be delivered may vary from the text of APPENDIX E if necessary to reflect the facts and law existing on the date of delivery. The opinion will speak only as of its date, and subsequent distribution, by recirculation of this Official Statement or otherwise, should not be construed as a representation that Special Counsel has reviewed or expressed any opinion concerning any matters relating to the Obligations subsequent to the original delivery of the Obligations. From time to time, there are legislative proposals (and interpretations of such proposals by courts of law and other entities and individuals) that, if enacted, could alter or amend the property tax system of the State and numerous matters, both financial and non - financial, impacting the operations of school districts that could have a material impact on the Town and could adversely affect the secondary market value of the Obligations. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to obligations (such as the Obligations) issued prior to enactment. Certain legal matters will be passed upon for the Underwriter by Gust Rosenfeld, P.L.C., as counsel to the Underwriter. The various legal opinions to be delivered concurrently with the delivery of the Obligations express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. By rendering a legal opinion, the opinion giver does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of parties to the transaction. Nor does the rendition of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. TAX MATTERS General In the opinion of Special Counsel, under existing law, the portion of each of the Payments made by the Town pursuant to the Purchase Agreement and denominated as and comprising interest pursuant to the Purchase Agreement and received by the Owners of the Obligations (the "Interest Portion ") will be excludable from gross income for federal income tax purposes pursuant to Section 103(a) of the Code, will not be treated as an item of tax preference under Section 57 of the Code for purposes of the alternative minimum tax imposed on individuals and corporations (but will be taken into account in determining adjusted current earnings for purposes of computing such tax imposed on certain corporations) and will be exempt from Arizona income taxation so long as the Interest Portion is excludable from gross income for federal income tax purposes. Special Counsel expresses no opinion as to the treatment for federal or Arizona income tax purposes on the Interest Portion as to any other tax consequence relating to the Obligations. 13 Regular Council Meeting - May 22, 2013 - Page 158 of 295 The Code prescribes a number of qualifications and conditions for such interest to be and to remain excluded from gross income for federal income tax purposes, some of which, including provisions for potential payments by the Town to the federal government, require future or continuing compliance after delivery of the Obligations in order for the Interest Portion to be and to remain so excluded from the date of execution and delivery. Such opinion on such tax matters will be based on and will assume the accuracy of certain representations and certifications and compliance with certain continuing covenants of the Town contained in documents which are part of the transcript of proceedings for the Obligations and which are intended to evidence and assure that the Interest Portion will remain excluded from gross income for federal income tax purposes. Special Counsel will not independently verify the accuracy of the certifications and representations, or compliance with the covenants, made by the Town. Noncompliance with these requirements could cause the Interest Portion to be included in gross income for federal income tax purposes and to be subject to federal and Arizona income taxation retroactive to the date of execution and delivery of the Obligations. The Town has covenanted in the Purchase Agreement to take all such actions that may be required of them for the Interest Portion to be and remain excluded from gross income for federal income tax purposes and not to take any actions that would adversely affect that exclusion. Prospective purchasers of the Obligations should be aware that the ownership of the Obligations may result in other collateral federal tax consequences, including (i) the denial of a deduction for interest on indebtedness incurred or continued to purchase or carry the Obligations or, in the case of a financial institution, that portion of an owner's interest expense allocable to interest on an Obligation; (ii) the reduction of the loss reserve deduction for property and casualty insurance companies by fifteen percent (15 %) of certain items, including the Interest Portion; (iii) the inclusion of the Interest Portion in the earnings of certain foreign corporations doing business in the United States of America (the "United States ") for purposes of the branch profits tax; (iv) the inclusion of the Interest Portion in passive investment income subject to federal income taxation of certain Subchapter S corporations with Subchapter C earnings and profits at the close of the taxable year; and (v) the inclusion in gross income of the Interest Portion in the determination of the taxability of certain Social Security and Railroad Retirement benefits to certain recipients of such benefits. The nature and extent of the other tax consequences described above will depend on the particular tax status and situation of each owner of the Obligations. Prospective purchasers of the Obligations should consult their own tax advisors as to the impact of these other tax consequences. From time to time, there are legislative proposals suggested, debated, introduced or pending in Congress that, if enacted into law, could alter or amend one or more of the federal tax matters described above including, without limitation, the excludability from gross income of the Interest Portion, adversely affect the market price or marketability of the Obligations, or otherwise prevent the holders from realizing the full current benefit of the status of the interest thereon. It cannot be predicted whether or in what form any such proposal may be enacted, or whether, if enacted, any such proposal would apply to the Obligations. If enacted into law, such legislation could affect the market price or marketability of the Obligations. Prospective purchasers of the Obligations should consult their tax advisors as to the impact of any proposed or pending legislation. Special Counsel's opinions are based on existing law, which is subject to change. Such opinions are further based on factual representations made to Special Counsel as of the date thereof. Special Counsel assumes no duty to update or supplement its opinion to reflect any facts or circumstances that may thereafter come to Special Counsel's attention, or to reflect any changes in law that may thereafter occur or become effective. Moreover, Special Counsel's opinions are not a guarantee of a particular result, and are not binding on the Internal Revenue Service or the courts; rather, such opinions represent Special Counsel's professional judgment based on its review of existing law, and in reliance on the representations and covenants that it deems relevant to such opinion. Original Issue Discount and Original Issue Premium Certain of the Obligations as indicated on the inside front cover of this Official Statement ( "Discount Obligations "), were offered and will be sold to the public at an original issue discount ( "Original Issue Discount "). Original Issue Discount is the excess of the stated redemption price at maturity (the principal amount) over the "issue price" of a Discount Obligation. The issue price of a Discount Obligation is the initial offering price to the public (other than to bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Discount Obligations of the same maturity will be sold pursuant to that offering. For federal income tax purposes, Original Issue Discount accrues to the owner of a Discount Obligation over the period to maturity based on the constant yield method, compounded semiannually (or over a shorter permitted compounding interval 14 Regular Council Meeting - May 22, 2013 - Page 159 of 295 selected by the owner). The portion of Original Issue Discount that accrues during the period of ownership of a Discount Obligation (i) will be interest excludable from the owner's gross income for federal income tax purposes to the same extent, and subject to the same considerations discussed above, as other interest on the Obligations, and (ii) will be added to the owner's tax basis for purposes of determining gain or loss on the maturity, redemption, prior sale or other disposition of that Discount Obligation. A purchaser of a Discount Obligation in the initial public offering at the price for that Discount Obligation stated on the cover of this Official Statement who holds that Discount Obligation to maturity will realize no gain or loss upon the retirement of that Discount Obligation. Certain of the Obligations as indicated on the inside front cover of this Official Statement (the "Premium Obligations "), were offered and will be sold at an "issue price" in excess of their stated redemption price at maturity. That excess constitutes obligation premium. The issue price of a Premium Obligation is the initial offering price to the public (other than bond houses, brokers or similar persons acting in the capacity of underwriters or wholesalers) at which a substantial amount of the Premium Obligations of the same maturity is sold pursuant to that offering. For federal income tax purposes, obligation premium is amortized over the period to maturity of a Premium Obligation, based on the yield to maturity of that Premium Obligation (or, in the case of a Premium Obligation callable prior to its stated maturity, the amortization period and yield may be required to be determined on the basis of an earlier call date that results in the lowest yield on that Premium Obligation), compounded semiannually (or over a shorter permitted compounding interval selected by the owner). No portion of that obligation premium is deductible by the owner of a Premium Obligation. For purposes of determining the owner's gain or loss on the sale, redemption (including redemption at maturity) or other disposition of a Premium Obligation, the owner's tax basis in the Premium Obligation is reduced by the amount of obligation premium that accrues during the period of ownership. As a result, an owner may realize taxable gain for federal income tax purposes from the sale or other disposition of a Premium Obligation for an amount equal to or less than the amount paid by the owner for that Premium Obligation. A purchaser of a Premium Obligation in the initial public offering at the price for that Premium Obligation stated on the cover of this Official Statement who holds that Premium Obligation to maturity (or, in the case of a callable Premium Obligation, to its earlier call date that results in the lowest yield on that Premium Obligation) will realize no gain or loss upon the retirement of that Premium Obligation. Owners of Discount and Premium Obligations should consult their own tax advisors as to the determination for federal income tax purposes of the amount of Original Issue Discount or obligation premium properly accruable in any period with respect to the Discount or Premium Obligations and as to other federal tax consequences, and the treatment of Original Issue Discount and obligation premium for purposes of state and local taxes on, or based on, income. Information Reporting and Backup Withholding Interest paid on bonds such as the Obligations is subject to information reporting to the Internal Revenue Service. This reporting requirement does not affect the excludability of interest on the Obligations from gross income for federal income tax purposes. However, in conjunction with that information reporting requirement, the Code subjects certain non - corporate owners of Obligations, under certain circumstances, to "backup withholding" at the rates set forth in the Code, with respect to payments on the Obligations and proceeds from the sale of Obligations. Any amount so withheld would be refunded or allowed as a credit against the federal income tax of such owner of Obligations. This withholding generally applies if the owner of Obligations (i) fails to furnish the payor such owner's social security number or other taxpayer identification number ( " TIN "), (ii) furnished the payor an incorrect TIN, (iii) fails to properly report interest, dividends, or other "reportable payments" as defined in the Code, or (iv) under certain circumstances, fails to provide the payor or such owner's securities broker with a certified statement, signed under penalty of perjury, that the TIN provided is correct and that such owner is not subject to backup withholding. Prospective purchasers of the Obligations may also wish to consult with their tax advisors with respect to the need to furnish certain taxpayer information in order to avoid backup withholding. 15 Regular Council Meeting - May 22, 2013 - Page 160 of 295 RATING Standard & Poor's Financial Services, LLC ( "S &P ") has assigned the rating of " " to the Obligations. An explanation of the significance of a rating assigned by S &P may be obtained from S &P at 55 Water Street, New York, New York 10004. Such rating, if assigned, may be revised downward or withdrawn entirely by S &P, if, in its respective judgment, circumstances so warrant. Any downward revision or withdrawal of such rating may have an adverse effect on the market price or marketability of the Obligations. The Town has covenanted in its continuing disclosure undertaking that it will file notice of any formal change in any rating relating to the Obligations. See "CONTINUING DISCLOSURE" and APPENDIX F — "FORM OF CONTINUING DISCLOSURE UNDERTAKING" herein. UNDERWRITING The Obligations will be purchased by the Underwriter at an aggregate purchase price of $ , pursuant to an obligation purchase contract (the "Obligation Purchase Contract ") entered into by and between the Town and the Underwriter. If the Obligations are sold to produce the yields shown on the inside front cover page hereof, the Underwriter's compensation will be $ The Obligation Purchase Contract provides that the Underwriter will purchase all of the Obligations so offered if any are purchased. The Underwriter may offer and sell the Obligations to certain dealers (including dealers depositing bonds into unit investment trusts) and others at prices higher or yields lower than the public offering prices or yields stated on the inside front cover page hereof. The initial offering yields set forth on the inside front cover page may be changed, from time to time, by the Underwriter. POLITICAL CONTRIBUTIONS To the best of its knowledge, the Underwriter has not made political contributions, other than those, if any, permitted under applicable securities regulations, to any person who sought a seat on the Town Council at its last election or, to the best of their knowledge, any prior election. RELATIONSHIP AMONG PARTIES Special Counsel and counsel to the Underwriter have and continue to represent the Underwriter with respect to financings other than for the Town and will continue to do so if requested in the future. Special Counsel and counsel to the Underwriter have also previously acted as special counsel with respect to other obligations underwritten by the Underwriter and will continue to do so if requested in the future. CONTINUING DISCLOSURE The Town, as the obligated entity with respect to the Obligations, has covenanted for the benefit of certain owners of the Obligations to provide certain financial information and operating data relating to the Town by not later than February 1 in each year commencing February 1, 2014 (the "Annual Reports "), and to provide notices of the occurrence of certain enumerated events (the "Notices of Listed Events "). The Annual Reports, the Notices of Listed Events and any other required filing will be filed by the Town with the Municipal Securities Rulemaking Board (the "MSRB ") through the MSRB's Electronic Municipal Market Access system, each described in APPENDIX F — "FORM OF CONTINUING DISCLOSURE UNDERTAKING." The form of the undertaking, the specific nature of the information to be contained in the Annual Reports and the Notices of Listed Events is set forth in APPENDIX F. These covenants will be made in order to assist the Underwriter in complying with the Securities and Exchange Commission Rule 15c2- 12(b)(5) (the "Rule "). A failure by the Town to comply with these covenants must be reported in accordance with the Rule and must be considered by any broker, dealer or municipal securities dealer before recommending the purchase or sale of the Obligations in the secondary market. Consequently, such a failure may adversely affect the transferability and liquidity of the Obligations and their market price. Also pursuant to Arizona Law, the ability of the Town to comply with such covenants is subject to annual appropriation of funds 16 Regular Council Meeting - May 22, 2013 - Page 161 of 295 sufficient to provide for the costs of compliance with such covenants. Should the Town not comply with such covenants due to a failure to appropriate for such purpose, the Town has covenanted to provide notice of such fact to the MSRB. Absence of continuing disclosure, due to non - appropriation or otherwise, could adversely affect the Obligations and specifically their market price and transferability. The Town has been in compliance with all existing continuing disclosure undertakings in all material respects over the last five years. FINANCIAL STATEMENTS The financial statements of the Town for the period ended June 30, 2012, a copy of which are included in APPENDIX C — "TOWN OF MARANA, ARIZONA — AUDITED ANNUAL FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30 2012" of this Official Statement, includes the Town's financial statements for the fiscal year ended June 30, 2012 that were audited by Henry & Horne, LLP, Certified Public Accountants, to the extent indicated in its report thereon. The Town has not requested the consent of Henry & Horne, LLP to include its report and Henry & Horne, LLP has performed no procedures subsequent to rendering its report on the financial statements. Representatives of the Town are not aware of any facts that would make such audited financial statements misleading. THE FINANCIAL STATEMENTS INCLUDED IN APPENDIX C OF THIS OFFICIAL STATEMENT ARE CURRENT AS OF THEIR DATE ONLY AND MAY NOT REPRESENT THE CURRENT FINANCIAL CONDITION OF THE TOWN. CERTIFICATION CONCERNING OFFICIAL STATEMENT The documents delivered in connection with the issuance of the Obligations will include a certificate to the effect that, to the knowledge of appropriate representatives of the Town after appropriate review, the statements contained in this Official Statement relating to the Town were at the time of the sale, and at the time of delivery of the Obligations, true, correct and complete in all material respects and were not misleading and did not omit matters which, in light of the circumstances under which they are made, would make such statements not misleading. 17 Regular Council Meeting - May 22, 2013 - Page 162 of 295 CONCLUDING STATEMENT The summaries or descriptions of provisions in the Purchase Agreement and the Trust Agreement contained herein and all references to other materials not purporting to be quoted in full are only brief outlines of certain provisions thereof and do not constitute complete statements of such provisions and do not summarize all the pertinent provisions of such documents. All projections, forecasts and other information in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the Town and the purchasers or holders of any of the Obligations. The attached APPENDICES A through G are integral parts of this Official Statement and must be read together with all of the foregoing statements. This Official Statement has been prepared on direction of the Town and has been approved by and executed for and on behalf of the Town by its authorized representative indicated below. TOWN OF MARANA, ARIZONA I' Mayor 18 Regular Council Meeting - May 22, 2013 - Page 163 of 295 APPENDIX A TOWN OF MARANA, ARIZONA - GENERAL ECONOMIC AND DEMOGRAPHIC INFORMATION The following information concerning the Town is for background information only. No attempt has been made to determine what part, if any, of the data presented is applicable to the Town; consequently, no representation is made as to the relevance of the data to the Town or the Obligations. THE OBLIGATIONS WILL BE PAYABLE ONLY FROM AND SECURED BY THE AMOUNTS DESCRIBED UNDER THE HEADING "SECURITY FOR AND SOURCES OF PAYMENT OF THE OBLIGATIONS. " THE OBLIGATIONS WILL NOT BE A GENERAL OBLIGATION OF THE TOWN. General The Town is located one mile north of the border of the City of Tucson, Arizona ( "Tucson "), and just south of the northern border of Pima County, Arizona (the "County "). The Town encompasses an approximate area of 300 square miles and sits at an elevation of 2,055 feet above sea level. The Town was incorporated in 1977. POPULATION STATISTICS (a) Data as of July 2012. Source: Arizona Department of Commerce, Population Statistics Unit and the U.S. Census Bureau. Municipal Government and Organization The Town operates under the Council - Manager form of government. The Mayor and six council members are elected at large for staggered four -year terms. The Town Council appoints a Town Manager who has full responsibility for carrying out council policies and administering Town operations. Functions of government and operation are provided by a staff of approximately 365 full -time employees. The Town provides police services and water to its residents. Tucson Electric Power Corporation and Trico Electric Cooperative provide electricity to the Town's residents. Southwest Gas Corporation provides natural gas. Water is provided by the Town, as well as certain public and private providers. Sewer services are provided by the County. Telephone services are provided by CenturyLink. Waste disposal and sanitation services are provided by various private disposal companies. Economy The economy of the Town and the area surrounding the Town has historically been dominated by agricultural activities. Though agriculture is still a large contributor to the economy, commercial, retail and industrial elements are becoming large contributors. The Town's agricultural elements include a variety of irrigated crops. A -1 Regular Council Meeting - May 22, 2013 - Page 164 of 295 Town of Pima State of Marana County Arizona 2012 Estimate (a) 36 990 6 2010 Census 34 980 6 2000 Census 13 843 5 1990 Census 2 666 3 1980 Census 1 531 2 1970 Census 1 351 1,775,399 (a) Data as of July 2012. Source: Arizona Department of Commerce, Population Statistics Unit and the U.S. Census Bureau. Municipal Government and Organization The Town operates under the Council - Manager form of government. The Mayor and six council members are elected at large for staggered four -year terms. The Town Council appoints a Town Manager who has full responsibility for carrying out council policies and administering Town operations. Functions of government and operation are provided by a staff of approximately 365 full -time employees. The Town provides police services and water to its residents. Tucson Electric Power Corporation and Trico Electric Cooperative provide electricity to the Town's residents. Southwest Gas Corporation provides natural gas. Water is provided by the Town, as well as certain public and private providers. Sewer services are provided by the County. Telephone services are provided by CenturyLink. Waste disposal and sanitation services are provided by various private disposal companies. Economy The economy of the Town and the area surrounding the Town has historically been dominated by agricultural activities. Though agriculture is still a large contributor to the economy, commercial, retail and industrial elements are becoming large contributors. The Town's agricultural elements include a variety of irrigated crops. A -1 Regular Council Meeting - May 22, 2013 - Page 164 of 295 The commercial elements of the economy have developed due to the growth of the Town and the growth of Tucson. The Town has become a retail trade center for suburban northern Tucson and the rural outlying areas surrounding the Town. Also, the Town's proximity between Phoenix and Tucson has attracted business. Many residents commute from the Town to the Tucson metropolitan area for employment as well. The following table is a partial list of major employers within the Town. Employer Marana Unified School District No. 6 Wal -Mart Marana Aerospace Solutions, Inc. Town of Marana Sargent Controls & Aerospace FLSmidth Krebs Fry's Food and Drug Marana Health Center Coca -Cola Bottling Comcast of Arizona Costco Wholesale Trico Electric Cooperative Inc. Home Depot Lowe's Asarco LLC Target MAJOR EMPLOYERS Town of Marana, Arizona Approximate Number of Description Employees Education 1 Retail 450 Air center 400 Government 300 Aerospace manufacturing 255 Separation equipment and manufacturing 250 Grocery 240 Healthcare 195 Food and beverage distribution 170 Telecommunications 150 Retail warehouse 130 Electric utility 130 Retail home improvement 125 Retail home improvement 125 Copper refining and smelting 115 Retail 100 Source: 2013 Hoover's Inc. and the Town's Comprehensive Annual Financial Report for the fiscal year ended June 30, 2012. The following table illustrates the unemployment averages for the Town, the County, the State and the United States. UNEMPLOYMENT AVERAGES Calendar Town of Pima State of United States Year Marana County Arizona of America 2013 (a) 6.0% 6.9% 7.9% 7.7% 2012 6.1 7.3 8.3 8.1 2011 7.6 8.3 9.2 8.9 2010 8.0 8.7 9.5 9.7 2009 7.6 8.3 9.1 9.3 2008 5.1 5.6 5.9 5.8 (a) Data as through March 2013. Source: Arizona Office of Unemployment and Population Statistics, in cooperation with the U.S. Department of Labor, Bureau of Labor Statistics. A -2 Regular Council Meeting - May 22, 2013 - Page 165 of 295 Commerce The Town is home to numerous retail establishments that accommodate the needs of the Town's growing population. See "EXCISE TAX REVENUES AND STATE SHARED REVENUES — TABLE 3 — TRANSACTION PRIVILEGE (SALES) TAX COLLECTIONS BY INDUSTRY CLASSIFICATION" and " TABLE 5 — HISTORICAL AND PROJECTED EXCISE TAX REVENUES AND STATE SHARED REVENUES COLLECTIONS" in this Official Statement. Education Primary education in the Town is provided by the Marana Unified School District's 11 public elementary schools, one intermediate school, two junior high schools and three high schools. Pima Community College and The University of Arizona offer undergraduate education and graduate programs. Transportation Industry, business and residents benefit from the transportation provided by Interstate 10, linking the Town with Tucson and the City of Phoenix, Arizona. The Marana Northwest Regional Airport and the Pinal Air Park each have two runways and are within close proximity to the Town. Residents have access to the Tucson International Airport located in Tucson for international, national, regional and local air service. Within Tucson are also passenger bus lines traveling national, regional and local routes. Tourism Many recreational opportunities are within an hour's drive of the Town. Picacho Peak State Park, site of Arizona's only Civil War battle, is 15 miles north. The Town's camping, picnic areas and nature trails are noted for colorful spring wildflowers. In the Santa Catalina Mountains is Catalina State Park, 20 miles east of the Town. Saguaro National Monument (west portion) is a few miles south of the Town. Within the monument is the world famous Arizona - Sonora Desert Museum with native wildlife exhibits and Old Tucson Studios. Other attractions include Biosphere II, Kitt Peak, Pima Air Museum, and the San Xavier Mission. A -3 Regular Council Meeting - May 22, 2013 - Page 166 of 295 APPENDIX B TOWN OF MARANA, ARIZONA - FINANCIAL DATA THE OBLIGATIONS WILL BE PAYABLE ONLY FROM AND SECURED BY THE AMOUNTS DESCRIBED UNDER THE HEADING "SECURITY FOR AND SOURCES OF PAYMENT OF THE OBLIGATIONS." THE OBLIGATIONS WILL NOT BE A GENERAL OBLIGATION OF THE TOWN. Current Year Statistics (For Fiscal Year 2012/13) Town of Marana, Arizona General Obligation Bonds Outstanding Excise Tax Revenue and State Shared Revenue - Secured Obligations Outstanding and to be Outstanding Improvement Bonds Outstanding Water Revenue - Secured Obligations Outstanding Primary Assessed Valuation Secondary Assessed Valuation Estimated Net Full Cash Value Estimated Fiscal Year 2013/14 Statistics Town of Marana, Arizona Estimated Primary Assessed Valuation Estimated Secondary Assessed Valuation Estimated Net Full Cash Value * Subject to change. (a) Includes the Obligations and is net of the Obligations Being Refunded. None $ 74 1 330 1 000 * (a)(b) 20,171,000 4,602,000 429 (c) 435 (c) 3 (d) $ 409,126,871 (c)(e) 413 (c) (e) 3,273,180,132 (d) (e) (b) Net of the approximate principal amount of $3, 000, 000 of the Corporation's Municipal Facilities Revenue Bonds, Series 2008A being paid off on July 1, 2013. (c) State property taxes are divided into two categories: primary and secondary. Secondary property taxes are those taxes and assessments imposed to pay principal and interest on bonded indebtedness and certain other obligations, those imposed for special districts other than school districts and those imposed to exceed a budget, expenditure or tax limitation pursuant to voter approval. Primary property taxes are all ad valorem taxes other than secondary property taxes. Annual increases in the valuation of certain types of property for primary property tax purposes and the amount of primary property taxes which may be levied in any year are subject to certain limitations. These limitations do not apply with respect to secondary property taxes. See "PROPERTY TAXES — Ad Valorem Taxes — Property Tax Assessment Ratios" for the method of determination of such categories. (d) Estimated net full cash value is the total market value of the property less net exempt property within the Town. (e) Estimated. Although the final official valuations are not expected to differ materially from the estimated valuations, the valuations are subject to positive or negative adjustments until approved by the Board of Supervisors of the County no later than August 19, 2013. Source: State and County Abstract of the Assessment Roll, Arizona Department of Revenue, Property Tax Rates and Assessed Values, Arizona Tax Research Association and Assessor of the County. B -1 Regular Council Meeting - May 22, 2013 - Page 167 of 295 STATEMENTS OF BONDED INDEBTEDNESS General Obligation Bonds Outstanding Town of Marana, Arizona Total General Obligation Bonds Outstanding None Excise Tax Revenue Obligations Outstanding and to be Outstanding Town of Marana, Arizona and Town of Marana Municipal Development Corporation Total Net Excise Tax Revenue and State Shared Revenue Obligations Outstanding and to be Outstanding $ 74,3 3 0,000 * * Subject to change. (a) The Corporation's Municipal Facilities Revenue Bonds are payable from payments made by the Town pursuant to leases entered into between the Town of Marana Municipal Development Corporation as lessor and the Town as lessee. (b) Net of the approximate principal amount of $3, 000, 000 of the Corporation's Municipal Facilities Revenue Bonds, Series 2008A being paid off on July 1, 2013. Total Improvement Bonds, Outstanding (a) Final Maturity Issue Original Date Balance Date Amount Description (January 1) Outstanding 12/28/2006 $25,77400 Tangerine Farms Road Improvement District 2026 $ 20,171,000 Total Improvement Bonds Outstanding $ 20,171,000 (a) Improvement district bonded debt is payable from special assessments levied on the property benefited by the financed improvements. Such bonds are a contingent liability of the Town to the extent of any delinquent assessments. B -2 Regular Council Meeting - May 22, 2013 - Page 168 of 295 Final Less: Balance Maturity Obligations Outstanding Issue Original Date Balance Being and to be Series Amount (July 1) Outstanding Refunded* Outstanding* 1997 (a) $8,175,000 2022 $ 2,550,000 $ 2,550,000 2003 (a) 19,700,000 2028 14,835,000 ($14,160,000) 675,000 2004 (a) 8,675,000 2025 6,025,000 6,025,000 2008A (a) 31,090,000 2028 28,140,000 28,140,000 2008B (a) 8,700,000 2028 6,165,000 3,165,000 (b) Total Excise Tax Revenue and State Shared Revenue - Secured Obligations Outstanding $ 40,555,000 * Plus: The Obligations 33,775,000 * Total Net Excise Tax Revenue and State Shared Revenue Obligations Outstanding and to be Outstanding $ 74,3 3 0,000 * * Subject to change. (a) The Corporation's Municipal Facilities Revenue Bonds are payable from payments made by the Town pursuant to leases entered into between the Town of Marana Municipal Development Corporation as lessor and the Town as lessee. (b) Net of the approximate principal amount of $3, 000, 000 of the Corporation's Municipal Facilities Revenue Bonds, Series 2008A being paid off on July 1, 2013. Total Improvement Bonds, Outstanding (a) Final Maturity Issue Original Date Balance Date Amount Description (January 1) Outstanding 12/28/2006 $25,77400 Tangerine Farms Road Improvement District 2026 $ 20,171,000 Total Improvement Bonds Outstanding $ 20,171,000 (a) Improvement district bonded debt is payable from special assessments levied on the property benefited by the financed improvements. Such bonds are a contingent liability of the Town to the extent of any delinquent assessments. B -2 Regular Council Meeting - May 22, 2013 - Page 168 of 295 Total Water Revenue - Secured Obligations Outstanding (a) Town of Marana, Arizona Final Maturity Issue Original Date Series Amount (January 1) 2009 $5,250,000 2029 Total Water Revenue - Secured Obligations Outstanding Balance Outstanding $ 402,000 $ 402,000 (a) Represents funds borrowed under Loan Agreements with the Water Infrastructure Finance Authority of Arizona. Direct Bonded Debt, Legal Limitation and Unused Borrowing Capacity Town of Marana, Arizona The Arizona Constitution provides that the general obligation bonded indebtedness for a municipality for general municipal purposes may not exceed six percent of the secondary assessed valuation of the taxable property in that municipality. In addition to the six percent limitation for general municipal purpose bonds, municipalities may issue general obligation bonds up to an additional twenty percent of the secondary assessed valuation for supplying water, artificial light, or sewers, and for the acquisition and development of land for open space preserves, parks, playgrounds and recreational facilities and public safety, law enforcement, transportation and fire and emergency services facilities. Fiscal Year 2012113 (a) General Municipal Purpose Bonds 6% Limitation $ 26,129,041 Water, Light, Sewer, Open Space, Park and Public Safety, Law Enforcement, Transportation and Fire and Emergency Services Facilities Bonds 20% Limitation $ 87,09603 Direct General Obligation Bonds Outstanding - Unused 6% Borrowing Capacity $ 26,129,041 Direct General Obligation Bonds Outstanding - Unused 20% Borrowing Capacity $ 87,09603 (a) See table entitled "Secondary Assessed Valuation by Property Classification " herein. B -3 Regular Council Meeting - May 22, 2013 - Page 169 of 295 Estimated Fiscal Year 2013/14 (a) (b) General Municipal Purpose Bonds 6% Limitation $ 2403,561 Water, Light, Sewer, Open Space, Park and Public Safety, Law Enforcement, Transportation and Fire and Emergency Services Facilities Bonds 20% Limitation $ 82,678,539 Direct General Obligation Bonds Outstanding - Unused 6% Borrowing Capacity $ 2403,561 Direct General Obligation Bonds Outstanding - Unused 20% Borrowing Capacity $ 82,678,539 (a) See table entitled "Secondary Assessed Valuation by Property Classification " herein. (b) Estimated. Although the final official valuations are not expected to differ materially from the estimated valuations, the valuations are subject to positive or negative adjustments until approved by the Board of Supervisors of the County no later than August 19, 2013. Source: State and County Abstract of the Assessment Roll, Arizona Department of Revenue and Property Tax Rates and Assessed Values, Arizona Tax Research Association. Direct and Overlapping General Obligation Bonded Debt Town of Marana, Arizona [Ratios to be updated] B -4 Regular Council Meeting - May 22, 2013 - Page 170 of 295 General Proportion Applicable Obligation to the Town (a) Bonded Approximate Net Debt Overlapping Jurisdiction Debt (b) Percent Amount State of Arizona None 0.77% None Pima County $456,14500 5.33 $ 24,312,529 Pima County Community College District 1,3 5 5,000 5.33 72,222 Avra Valley Fire District 291,000 2.83 8,235 Northwest Fire District 31,590,000 41.48 13,103,532 Gladden Farms Community Facilities District 8,55000 100.00 8,55000 Flowing Wells Unified School District No. 8 22,37000 100.00 22,37000 Marana Unified School District No. 6 48,74500 55.08 26,848,746 Town of Marana None 100.00 None Net Direct and Overlapping General Obligation Bonded Debt $ 95,265,263 B -4 Regular Council Meeting - May 22, 2013 - Page 170 of 295 (a) Proportion applicable to the Town is computed on the ratio of secondary assessed valuation for 2012113. (b) Does not include outstanding principal amounts of certificates of participation, revenue obligations, loan obligations, improvement bonds, or other debt not secured by ad valorem property taxes. Includes total stated principal amount of general obligation bonds outstanding, however, does not include presently authorized but unissued general obligation bonds of such jurisdictions which may be issued in the future as indicated in the following table. Additional bonds may be authorized by voters within overlapping jurisdictions pursuant to future elections. Overlapping Jurisdiction Pima County Avra Valley Fire District [To be updated] Gladden Farms Community Facilities District Marana Unified School District No. 6 Town of Marana General Obligation Bonds Authorized but Unissued $78, 681, 000 4,135, 000 59, 5 70, 000 14,325,000 None Also does not include the obligation of the Central Arizona Water Conservation District ( " CA WCD') to the United States Department of the Interior (the "Department of the Interior' ), for repayment of certain capital costs for construction of the Central Arizona Project ("CAP'), a major reclamation project that has been substantially completed by the Department of the Interior. The obligation is evidenced by a master contract between CA WCD and the Department of the Interior. In April 2003, the United States and CA WCD agreed to settle litigation over the amount of the construction cost repayment obligation, the amount of the respective obligations for payment of the operation, maintenance and replacement costs and the application of certain revenues and credits against such obligations and costs. Under the agreement, CAWCD's obligation for substantially all of the CAP features that have been constructed so far will be set at $1.646 billion, which amount assumes (but does not mandate) that the United States will acquire a total of 667,724 acre feet of CAP water for federal purposes. The United States will complete unfinished CAP construction work related to the water supply system and regulatory storage stages of CAP at no additional cost to CA WCD. Of the $1.646 billion repayment obligation, 73% will be interest bearing and the remaining 27% will be non - interest bearing. These percentages will be fixed for the entire 50 year repayment period, which commenced October 1, 1993. CA WCD is a multi - county water conservation district having boundaries coterminous with the exterior boundaries of Arizona's Maricopa, Pima and Pinal Counties. It was formed for the express purpose of paying administrative costs and expenses of the CAP and to assist in the repayment to the United States of the CAP capital costs. Repayment will be made from a combination of power revenues, subcontract revenues (i.e., agreements with municipal, industrial and agricultural water users for delivery of CAP water) and a tax levy against all taxable property within CA WCD 's boundaries. At the date of this Official Statement, the tax levy is limited to 14 cents per $100 of secondary assessed valuation, of which 10 cents is being levied. (See Sections 48 -3 715 and 48 -3 715.02, Arizona Revised Statutes.) There can be no assurance that such levy limit will not be increased or removed at any time during the life of the contract. Source: The various entities and Property Tax Rates and Assessed Values, Arizona Tax Research Association, State and County Abstract of the Assessment Roll, Arizona Department of Revenue and Assessor of the County. B -5 Regular Council Meeting - May 22, 2013 - Page 171 of 295 Direct and Overlapping General Obligation Bonded Debt Ratios Town of Marana, Arizona As % of Net Direct General Obligation Bonded Debt Net Direct and Overlapping General Obligation Debt As % of Town's 2012/13 Estimated Net Full Cash Value None None None $2 21.88% 2.78% Source: Property Tax Rates and Assessed Values, Arizona Tax Research Association, State and County Abstract of the Assessment Roll, Arizona Department of Revenue and the Arizona Department of Commerce, Population Statistics Unit and the U.S. Census Bureau. Other Long -Term Obligations Town of Marana, Arizona The Town does not currently have any capital lease - purchase agreements or other long -term obligations in effect. RETIREMENT SYSTEM Retirement Benefits The Town contributes to the plans described below and as referenced in Note 10 in APPENDIX C — "TOWN OF MARANA, ARIZONA — AUDITED ANNUAL FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30 2012." Benefits are established by State statute and generally provide retirement, death, long -term disability, survivor and health insurance premium benefits. The Arizona State Retirement System ( "ASRS "), a cost - sharing, multiple employee defined benefit plan in which the Town participates, has reported increases in its unfunded liabilities. The most recent annual reports for the ASRS may be accessed at: https: / /www.azasrs.gov /web /FinancialReports.do. The board for the ASRS previously adopted contribution rates for fiscal years 2011/12, 2012/13 and 2013/14. For the fiscal year ended June 30, 2012, active plan members were required by statute to contribute at the actuarially determined rate of 10.74 percent (10.50 percent retirement and 0.24 percent long -term disability) of the members' annual covered payroll. For fiscal year 2012/13 (beginning July 1, 2012), active plan members were required by statute to contribute at the actuarially determined rate of 11.14 percent (10.90 percent retirement and 0.24 percent long -term disability) of the members' annual covered payroll. For fiscal year 2013/14 (beginning July 1, 2013), active ASRS plan members will be required by statute to contribute at the actuarially determined rate of 11.54% (11.30% retirement pension and health insurance and 0.24% long -term disability) of the members' annual covered payroll, with additional increases currently scheduled through fiscal year 2017/18. Enacted State legislation made changes to how the ASRS operates, effective July 1, 2011, which includes requiring employers to pay an alternative contribution rate for retired members of the ASRS that return to work, changing the age at which an employee can retire without penalty based upon years of service, limiting permanent increases in retirement benefits and establishing a Defined Contribution and Retirement Study Committee (as defined in the legislation) that will review the feasibility and cost to changing the current defined benefit plan to a defined contribution plan. B -6 Regular Council Meeting - May 22, 2013 - Page 172 of 295 Town's Per Capita 2012/13 Bonded Debt Secondary Population Assessed at 36,957 Valuation As % of Town's 2012/13 Estimated Net Full Cash Value None None None $2 21.88% 2.78% Source: Property Tax Rates and Assessed Values, Arizona Tax Research Association, State and County Abstract of the Assessment Roll, Arizona Department of Revenue and the Arizona Department of Commerce, Population Statistics Unit and the U.S. Census Bureau. Other Long -Term Obligations Town of Marana, Arizona The Town does not currently have any capital lease - purchase agreements or other long -term obligations in effect. RETIREMENT SYSTEM Retirement Benefits The Town contributes to the plans described below and as referenced in Note 10 in APPENDIX C — "TOWN OF MARANA, ARIZONA — AUDITED ANNUAL FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30 2012." Benefits are established by State statute and generally provide retirement, death, long -term disability, survivor and health insurance premium benefits. The Arizona State Retirement System ( "ASRS "), a cost - sharing, multiple employee defined benefit plan in which the Town participates, has reported increases in its unfunded liabilities. The most recent annual reports for the ASRS may be accessed at: https: / /www.azasrs.gov /web /FinancialReports.do. The board for the ASRS previously adopted contribution rates for fiscal years 2011/12, 2012/13 and 2013/14. For the fiscal year ended June 30, 2012, active plan members were required by statute to contribute at the actuarially determined rate of 10.74 percent (10.50 percent retirement and 0.24 percent long -term disability) of the members' annual covered payroll. For fiscal year 2012/13 (beginning July 1, 2012), active plan members were required by statute to contribute at the actuarially determined rate of 11.14 percent (10.90 percent retirement and 0.24 percent long -term disability) of the members' annual covered payroll. For fiscal year 2013/14 (beginning July 1, 2013), active ASRS plan members will be required by statute to contribute at the actuarially determined rate of 11.54% (11.30% retirement pension and health insurance and 0.24% long -term disability) of the members' annual covered payroll, with additional increases currently scheduled through fiscal year 2017/18. Enacted State legislation made changes to how the ASRS operates, effective July 1, 2011, which includes requiring employers to pay an alternative contribution rate for retired members of the ASRS that return to work, changing the age at which an employee can retire without penalty based upon years of service, limiting permanent increases in retirement benefits and establishing a Defined Contribution and Retirement Study Committee (as defined in the legislation) that will review the feasibility and cost to changing the current defined benefit plan to a defined contribution plan. B -6 Regular Council Meeting - May 22, 2013 - Page 172 of 295 The ASRS has reported increases in its unfunded liabilities. [The effect of the increase in the ASRS' unfunded liabilities on the Town, or on the Town's and its employees' future annual contribution to the ASRS, are projected to increase in future years.] The Arizona Public Safety Personnel Retirement System ( "PSPRS "), an agent, multiple employer defined pension plan and an agent, multiple employer defined benefit health insurance premium plan in which the Town participates, has reported increases in its unfunded liabilities. The PSPRS has reported increases in its unfunded liabilities. The most recent annual reports for the PSPRS may be accessed at: http: / /www.psprs.com /sys psprs /AnnualReports /cato annual rpts psprs.htm The effect of the increase in the PSPRS's unfunded liabilities is expected to result in significantly increased contributions by the Town and its employees, however the specific impact on the Town and its employee's future annual contributions to the PSPRS, cannot be determined at this time. For the year ended June 30, 2012, active PSPRS members were required by statute to contribute 8.65 percent of the members' annual covered payroll, and the participating State agencies were required to contribute at the actuarially determined rates for their portion of the plan of 16.06 to 84.55 percent, as applicable, the aggregate of such employee and employer contributions being the total actuarially required amount. The health insurance premium portion of the contribution was set at 1.34 to 5.53 percent of covered payroll. The Corrections Officers Retirement Plan ( "CORP "), an agent multiple- employer defined benefit plan that covers certain State employees whose primary duties require direct inmate contact, for which the State Legislature establishes and may amend active plan members' and the State's contribution rates, has reported increases in its unfunded liabilities. The most recent annual reports for the CORP may be accessed at: http: / /www. psprs. com/ syscorp/ Annualreports /catoAnnualrptsCORP.htm The effect of the increase in the CORP's unfunded liabilities is expected to result in increased contributions by the State and its employees, however the specific impact on the State, or on the State's and its employees' future annual contributions to the CORP, cannot be determined at this time. For the year ended June 30, 2012, active CORP members were required by statues to contribute 8.41 percent of the members' annual covered payroll, and the participating State agencies were required to contribute at the actuarially determined rates for their portion of the plan of 7.88 to 8.39 percent, as applicable, the aggregate of such employee and employer contributions being the total actuarially required amount. The health insurance premium portion of the contribution rate was actuarially set at 1.27 to 1.53 percent of covered payroll. The Elected Officials Retirement Plan (EORP), a cost sharing multiple- employer defined benefit plan that covers State elected officials and judges, for which the State Legislature establishes and may amend active plan members' contribution rate, has reported increases in its unfunded liabilities. The most recent annual reports for the EORP may be accessed at http: // www. psprs. com/ syseolp/ AnnuaIReports /catoannualrptsEORP.htm The Town also contributes to the Volunteer Firefighters' Relief and Pension Fund (the "VFRPF "), a defined contribution plan which provides pensions to volunteer firefighters only. The VFRPF is administered by State statute, requiring both the employee and the Town to make contributions equal to 5.00% of the employee's compensation. Some monies are also received from the State. After 20 years of service as a volunteer firefighter, he or she is entitled to a monthly pension determined by the board of trustees of the VFRPF in an amount not to exceed $400. If the volunteer firefighter resigns before completing 20 years of service, he or she is entitled to a refund of his or her contributions only, but not to the Town's contributions, amounts received from the State or earnings on any contributions. The authority to establish and amend plan benefit provisions rests with the Town Council. For the fiscal year ended June 30, 2012, the payroll for employees covered by VFRPF required no contributions. The Government Accounting Standards Board adopted Government Accounting Standards Board Statement Number 68, Accounting and Financial Reporting for Pensions ( " GASB 68 "), which, beginning with fiscal years starting after June 15, 2014, requires cost - sharing employers to report their "proportionate share" of the plan's net pension liability in their government -wide financial statements. GASB 68 will also require that the cost - sharing employer's pension expense component include its proportionate share of the plan's pension expense, the net effect of annual changes in the employer's proportionate share and the annual differences between the employer's actual contributions and its proportionate share. The Town's employees participate in the pension plan provided by the B -7 Regular Council Meeting - May 22, 2013 - Page 173 of 295 State. Both the Town and each covered employee contribute to the State plan. The new reporting requirements imposed by GASB 68 will change the financial statements of the Town, but what the specific effect will be in unknown at this time. Other Post - Employment Retirement Benefits Pursuant to Government Accounting Standards Board Statement Number 45, Accounting by Employers for Post - Employment Benefits Other than Pensions ( " GASB 45 "), the Town is required to report the actuarially accrued cost of post- employment benefits, other than pension benefits ( "OPEB "), such as health and life insurance for current and future retirees. GASB 45 requires that such benefits be recognized as current costs over the working lifetime of employees and, to the extent such costs are not pre - funded, requires the reporting of such costs as a financial statement liability. The Town currently does not offer any OPEB. The Town's employees, their spouses and survivors may be eligible for certain retiree health care benefits under health care programs provided by the State. Employees on long -term disability and their spouses also may qualify for retiree health care benefits through the State. Such individuals may obtain the health care benefits offered by the State by paying 100% of the applicable health care insurance premium, net of any subsidy provided by the State. The benefits are available to all retired participants in the State's health care program. The Town does not currently make payments for OPEB costs for such retirees. B -8 Regular Council Meeting - May 22, 2013 - Page 174 of 295 GENERAL FUND Below are the Town general fund revenues, expenditures and changes in fund balance for the budgeted fiscal year 2013/14, projected figures for fiscal year 2012/13 and audited fiscal years 2007/08 through and including 2011/12. THIS INFORMATION IS NOT INTENDED TO INDICATE FUTURE OR CONTINUING TRENDS OF THE FINANCIAL AFFAIRS OF THE TOWN. General Fund Town of Marana, Arizona Audited 2007/08 2008/09 2009/10 2010/11 2011/12 Proposed Projected Budgeted 2012/13 (a) 2013/14 (a) FUND BALANCE ATBEGINNING OF YEAR $21,090,899 $20,183,840 $14,484,412 $15,091,576 $16,377,638 $ 18,297,562 $ 19,356,832 REVENUES Town sales tax $19,651,082 $17,674,072 $19,437,875 $ 20,512,419 $ 21,597,158 $ 20,080,948 $ 19,498,321 Intergovernmental 7,531,634 7,401,235 6,465,491 5,724,962 6,944,530 7,650,056 8,244,233 Licenses, fees and permits 2,307,878 1,932,797 2,150,360 2,502,494 2,720,872 3,829,676 3,194,225 Fines, forfeitures and penalties 716,983 692,514 641,484 537,680 558,393 668,541 625,000 Charges for services 979,797 705,758 621,415 430,084 455,852 405,012 396,701 Lease income 987,107 543,298 554,833 647,163 91,580 125,000 125,000 Contributions 60,788 38,474 59,202 5,211 183,030 109,802 116,525 Investment income 569,125 289,180 93,965 74,348 59,388 100,000 100,000 Other 387,187 283,337 720,931 608,638 633,696 332,334 379,570 TOTAL REVENUES $ 33,191,581 $ 29,560,665 $ 30,745,556 $ 31,042,999 $ 33,244,499 $ 33,301,368 $ 32,679,575 ADJUSTMENTS Transfers in Transfers out Prior period adjustment TOTAL FUNDS AVAILABLE FOR EXPENDITURES EXPENDITURES Current: General government Public safety Highways and streets Health and welfare Economic and community development Culture and recreation Capital outlay TOTAL EXPENDITURES $ - $ - $ 304,594 $ - $ - $ - $ - (2,096,763) (3,133,764) (2,430,075) (2,667,794) (2,951,103) (2,839,259) (2,774,552) (230,925) - - - - - - $ 51,954,792 $ 46,610,741 $ 43,104,487 $ 43,466,781 $ 46,671,034 $ 48,759,671 $ 49,261,855 $ 8,239,993 $ 8,465,154 $ 8,309,412 $ 9,046,341 $ 8,177,503 $ 7,263,101 $ 9,199,456 10,181,339 10,849,085 9,724,369 8,987,481 10,248,140 10,867,447 11,528,864 2,303,668 2,354,147 1,263,028 1,282,571 1,791,721 1,900,828 2,015,635 129,757 112,949 75,342 59,668 - - - 4,537,988 4,318,036 4,424,243 4,090,462 4,092,036 4,341,219 4,603,423 3,266,690 3,664,641 3,309,101 2,551,556 2,603,702 2,762,253 2,929,090 3,111,517 2,362,317 907,416 1,071,064 1,460,370 2,267,991 1,128,555 $ 31,770,952 $ 32,126,329 $ 28,012,911 $ 27,089,143 $ 28,373,472 $ 29,402,839 $ 31,405,023 FUND BALANCE AT END OF YEAR $ 20,183,840 $ 14,484,412 $ 15,091,576 $ 16,377,638 $ 18,297,562 $ 19,356,832 $ 17,856,832 (a) Projected figures for fiscal year 2012113 and proposed budgeted figures for fiscal year 2013114 are unaudited amounts, subject to change upon finalization and audit. The budgeted amounts are 'forward- looking ly statements which should be considered with an abundance of caution. Does not include reimbursement of certain legal and engineering costs associated with the acquisition of the New Projects. B -9 Regular Council Meeting - May 22, 2013 - Page 175 of 295 NOTE: The following data and other information are given as background concerning the Town. Under no circumstances will the Obligations be payable from ad valorem property taxes of the Town. Secondary Assessed Valuation by Property Classification Town of Marana, Arizona Class Estimated 48 59 74 99 2013/14 2012/13 2011/12 2010/11 2009/10 Secondary Secondary Secondary Secondary Secondary Assessed Assessed Assessed Assessed Assessed Valuation (a) Valuation Valuation Valuation Valuation Commercial, Industrial, Utilities & Mines $ 123 $ 127 $ 126 $ 129 $ 127 Agricultural and Vacant 48 59 74 99 112,112,160 Residential (owner occupied) 204 213 230 253 266 Residential (rental) 35 34 24 26 25 Railroad 1 1 1 1 1,114,211 Certain Government Property Improvements 56 60 61 58 55 Totals* $ 413 $ 435 $ 456 $ 509 $ 532 * Totals may not add due to rounding. (a) Estimated. Although the final official valuations are not expected to differ materially from the estimated valuations, the valuations are subject to positive or negative adjustments until approved by the Board of Supervisors of the County no later than August 19, 2013. Source: State and County Abstract of the Assessment Roll, Arizona Department of Revenue and Property Tax Rates and Assessed Values, Arizona Tax Research Association. Estimated Net Full Cash Valuation Town of Marana, Arizona Estimated Fiscal Net Full Cash Year Valuation (a) 2013/14 (b) 2012/13 2011/12 2010/11 2009/10 2008/09 $ 3,273,180,132 3,429,23906 300,514,419 4,010,175,655 4,176,95 1,678 4,184,198,308 (a) The estimated net full cash value is the total market value of property within the Town less the estimated exempt property within the Town. (b) Estimated. Although the final official valuations are not expected to differ materially from the estimated valuations, the valuations are subject to positive or negative adjustments until approved by the Board of Supervisors of the County no later than August 19, 2013. Source: State and County Abstract of the Assessment Roll, Arizona Department of Revenue, Property Tax Rates and Assessed Values, Arizona Tax Research Association and Finance Department of the County. B -10 Regular Council Meeting - May 22, 2013 - Page 176 of 295 APPENDIX C TOWN OF MARANA, ARIZONA AUDITED ANNUAL FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2012 The following audited annual financial statements are for the fiscal year ended June 30, 2012. These are the most recent financial statements available to the Town. These financial statements are not current and may not represent the current financial condition of the Town. Such audited financial statements are the most recent available for the Town, are not current and, therefore, must be considered with an abundance of caution. The Town has not requested the consent of Henry & Horne, LLP, Certified Public Accountants to include its report herein, and Henry & Horne, LLP has performed no procedures subsequent to rendering its report on the financial statements. Regular Council Meeting - May 22, 2013 - Page 177 of 295 APPENDIX D SUMMARY OF SELECT PROVISIONS OF PRINCIPAL DOCUMENTS DEFINITIONS OF CERTAIN TERMS In addition to the terms defined elsewhere herein, the following terms shall, for all purposes of the Trust Agreement and the Purchase Agreement have the following meanings: " Acquisition Fund means the fund of that name established pursuant to the Trust Agreement. " Additional Revenue Obli at ions means any additional obligations which may hereafter be issued or incurred by the Town (or any financing conduit acting on behalf of the Town) having a lien upon and payable from Excise Tax Revenues and State Shared Revenues on a parity with, and in compliance with the terms of, the Purchase Agreement. " Annual Debt Service Requirement means the amount to be paid in any Fiscal Year with respect to the Prior Lease and the Parity Obligation during such Fiscal Year. " Certificates of Completion means the notice of completion, filed with the Trustee by the Town Representative, stating that the Property has been acquired. " Completion Date means the date on which the Certificate of Completion is filed with the Trustee by the Town Representative. " Debt Service Coverage means the amount of Excise Tax Revenues and State Shared Revenues for the most recently completed Fiscal Year divided by the Maximum Annual Debt Service. " Debt Service Reserve Fund means the fund of that name established pursuant to the Trust Agreement. " Defeasance Obli at ions are those obligations described in the Trust Agreement by such term. " Depository Trustee means any bank or trust company, which may include the Trustee, designated by the Town, with a combined capital and surplus of least Fifty Million Dollars ($50,000,000) and subject to supervision or examination by federal or State of Arizona authority. " Event of Default means an event of default under the Purchase Agreement as described under the subheading "THE PURCHASE AGREEMENT — Default; Remedies Upon Default." " Maximum Annual Debt Service means, for any Fiscal Year, the greatest Annual Debt Service Requirement for the then - current or any succeeding fiscal year of the Town. " Outstanding " refers to Obligations issued in accordance with the Trust Agreement, excluding: (i) Obligations which have been exchanged or replaced, or delivered to the Trustee for credit against a mandatory prepayment installment; (ii) Obligations which have been paid; (iii) Obligations which have become due and for the payment of which moneys have been duly provided to the Trustee; and (iv) Obligations for which there have been irrevocably set aside with a Depository Trustee sufficient moneys or obligations permitted by the Purchase Agreement and the Trust Agreement bearing interest at such rates and with such maturities as will provide sufficient funds to pay the principal of and premium, if any, and interest represented by such Obligations provided, however, that if principal represented by any such Obligations is to be prepaid, the Town shall have taken all action necessary to prepay such Obligations and notice of such prepayment shall have been duly mailed in accordance with the procedures under which such Obligations were issued or irrevocable instructions so to give such notices shall have been given to the Trustee. D -1 Regular Council Meeting - May 22, 2013 - Page 178 of 295 " Owner " or any similar term, when used with respect to an Obligation means the person in whose name such Obligation shall be registered. " Parity at ions means the Purchase Agreement and any Additional Revenue Obligations. " Payment Fund means the fund by that name established pursuant to the Trust Agreement. " Prior Lease means the Amended and Restated Town Lease and Series 1992 Town Lease, dated as of October 1, 1997, as amended by the First Amendment to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of January 1, 2000, the Combined Operations Center Property Ground Lease and Second Amendment to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of April 1, 2002, and the Third Amendment to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of September 1, 2003, and supplemented by the First Supplement to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of February 1, 2000, the Second Supplement to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of September 1, 2003, the Third Supplement to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of August 1, 2004, and the Fourth Supplement to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of August 1, 2008 by and between the Town and the Corporation. " Reserve Requirement means, at the time of the deposit to the Debt Service Reserve Fund then required, the Maximum Annual Debt Service, provided, however, that such amount shall not exceed the least of (a) ten percent (10 %) of the net proceeds of the Obligations at the time of original delivery, (b) the greatest amount to be paid in any subsequent Fiscal Year with respect to the Obligations at the time of original delivery or (c) one hundred twenty -five percent (125 %) of the average annual debt service at the time of original delivery with respect to the Obligations. " Town Representative means the Town Manager, the Finance & Budget Director or any other person authorized by the Town Manager or the Mayor and Council to act on behalf of the Town with respect to the Trust Agreement. THE TRUST AGREEMENT The following, in addition to the information under the headings "THE OBLIGATIONS" and "SECURITY FOR AND SOURCES OF PAYMENT OF TH EOBLIGATIONS," is a summary of certain provisions of the Trust Agreement to which document, in its entirety, reference is hereby made for a more complete description of its terms. Acquisition Fund The Trustee will pay the costs to acquire the Projects and refinance portions of the Prior Lease. Amounts in the Acquisition Fund will be used to pay principal of and interest on the Obligations if sufficient funds are otherwise available to make such payments when due. On the Completion Date, subject to the limitations in the Trust Agreement, all remaining moneys in the Acquisition Fund shall be transferred to the Payment Fund and applied by the Trustee to the Payments due from the Town on the next succeeding Interest Payment Date with respect to the Obligations. Debt Service Reserve Fund The Trustee will deposit in to the Debt Service Reserve Fund amounts paid pursuant to the Purchase Agreement as described under the subheading "SECURITY FOR AND SOURCES OF PAYMENT OF THE OBLIGATIONS — Reserve Fund." Commencing on the fifteenth (15th) business day of the month following a payment made from the Debt Service Reserve Fund, the Trustee will deposit into the Debt Service Reserve Fund pursuant to the Purchase Agreement one - twelfth (1/12) of the amount required to restore the Debt Service Reserve Fund to an amount equal to the Reserve Requirement. Amounts in the Debt Service Reserve Fund will be withdrawn (i) on the fourth (4th) business day immediately preceding any payment date for the Obligations and used solely for the purpose of paying the scheduled interest on or principal of the Obligations in the event that no money of the Town is made available therefor pursuant to the Purchase Agreement or (ii) otherwise for the retirement of all Obligations then Outstanding. The Trustee will withdraw the amount of any excess from such fund and deposit it to the Payment Fund. D -2 Regular Council Meeting - May 22, 2013 - Page 179 of 295 Payment Fund The Payment Fund will also be established by the Trustee. The moneys in the Payment Fund will be applied by the Trustee solely to pay principal, interest and premium, if any, represented by the Obligations. Separate Funds Moneys and investments properly paid into and held in the funds established under the Trust Agreement will not be subject to the claims of the owners of the Additional Revenue Obligations, and the Owners of the Obligations shall have no claim or lien upon any moneys or investments properly paid into and held in the funds and accounts established under the proceedings for the Additional Revenue Obligations. Protection of Lien The Trustee and the Town will not make or create or suffer to be made or created any assignment or lien having priority or preference over the assignment and lien of the Trust Agreement, and no obligations the payment of which is secured by a superior or equal claim on or interest in property or revenues pledged will be issued or delivered by either except in lieu of, or upon transfer of registration or exchange of, any Obligation. Investments Authorized; Allocation of Earnings Upon order of the Town, moneys held by the Trustee will be invested and re- invested in certain investments permitted by the Trust Agreement having the highest yield reasonably obtainable. The Trustee may purchase from, or sell to, itself or any affiliate, as principal or agent, investments and may invest in funds to which the Trustee or any of its affiliates provide services as an investment advisor. The Trustee may act as purchaser or agent in the making or disposing of any investment. Any income, profit or loss on such investments will be deposited in or charged to the respective funds from which such investments were made, and any interest on any deposit of funds will be deposited in the fund from which such deposit was made, except as otherwise provided. At the direction of the Town, any such income, profit or interest will be applied if necessary to pay any rebate due with respect to the Obligation pursuant to the Internal Revenue Code. Appointment of the Trustee The Town will maintain as the Trustee a bank or trust company with a combined capital and surplus of at least $50,000,000, and subject to supervision or examination by federal or State authority so long as any of the Obligations are Outstanding. If such bank or trust company publishes a report of condition at least annually pursuant to law or to the requirements of any supervising or examining authority, then the combined capital and surplus of such bank or trust company will be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Liability of the Trustee; Standard of Care Except with respect to its authority and power generally and authorization to execute the Trust Agreement, the recitals of facts, covenants and agreements in the Trust Agreement and the Obligations will be taken as statements, covenants and agreements of the Town, and the Trustee will assume no responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of the Trust Agreement or of the Obligations or will incur any responsibility in respect thereof, other than in connection with the duties or obligations in the Trust Agreement or in the Obligations assigned to or imposed upon them, respectively. Prior to the occurrence of an Event of Default, or after the timely cure of an Event of Default, the Trustee will perform only such duties as are specifically set forth in this Trust Agreement. After the occurrence of an Event of Default, the Trustee will exercise such of the rights and powers vested in it, and use the same degree of care and skill in such exercise, as a prudent indenture trustee would exercise under the circumstances in the conduct of the affairs of the Trustee. Merger or Consolidation Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided that such company shall be eligible as described hereinabove, shall be the successor to the Trustee without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding. Protection and Rights of the Trustee The Trustee will be protected and will incur no liability in acting or proceeding in good faith upon any document which it shall in good faith believe to be genuine and to have been passed or signed by the proper board or person or to have been prepared and furnished pursuant to any of the provisions of the Trust Agreement, and the Trustee will be under no duty to make any investigation or inquiry as to D -3 Regular Council Meeting - May 22, 2013 - Page 180 of 295 any statements contained or matters referred to in any such document, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements. The Trustee will not be bound to recognize any person as an Owner of any Obligation or to take any action at the request thereof unless such Obligation will be deposited with the Trustee and satisfactory evidence of the ownership of such Obligation will be furnished to the Trustee. The Trustee may consult with counsel with regard to legal questions, and the opinion of such counsel will be full and complete authorization and protection in respect of any action taken or suffered by it in good faith. Whenever in the administration of its duties under the Trust Agreement, the Trustee deems it necessary or desirable that a matter be proved or established prior to taking or suffering any action thereunder, such matter (unless other evidence in respect thereof be specifically prescribed) will be deemed to be conclusively proved and established by the certificate of the appropriate representative of the Town and such certificate will be full warranty to the Trustee for any action taken or suffered under the provisions of the Trust Agreement 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. The Trustee may become the Owner of the Obligations with the same rights it would have if it were not the Trustee; may acquire and dispose of other bonds or evidence of indebtedness of the Town with the same rights it would have if it were not the Trustee; and may act as a depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of Obligations, whether or not such committee shall represent the Owners of the majority in principal amount of the Obligations then Outstanding. The Trustee will not be answerable for the exercise of any discretion or power under the Trust Agreement or for anything whatever in connection with the funds established thereunder, except only for its own willful misconduct or negligence. No provision in the Trust Agreement will require the Trustee to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers. The Trustee will not be required to take notice or be deemed to have notice of an Event of Default, except for nonpayment of amounts due under the Trust Agreement or the Purchase Agreement, unless the Trustee has actual notice thereof or is specifically notified in writing of such default by the Town or the Owners of at least twenty -five percent (25 %) in aggregate principal amount of the Obligations then Outstanding. The Town will from time to time, as agreed upon between the Town and the Trustee, pay to the Trustee reasonable compensation for its services, including an hourly rate based fee after an Event of Default and will reimburse the Trustee for all its advances and expenditures, including but not limited to advances to, and reasonable fees and expenses of, independent appraisers, accountants, consultants, counsel, agents and attorneys -at -law or other experts employed by it in the exercise and performance of its powers and duties. Removal of the Trustee The Trustee may be removed by the Town (if not in default) or by the Owners of a majority in aggregate principal amount of the Obligations. The Trustee may also resign effective upon the appointment of a successor Trustee by the Town. Amendments Permitted The Trust Agreement and the Purchase Agreement may be modified or amended at any time by a supplemental or amending agreement which will become effective upon the written consent of the Owners of a majority in aggregate principal amount of the Obligations then Outstanding, exclusive of certain disqualified Obligations. No such modification or amendment will (1) extend or have the effect of extending the final payment of principal represented by any Obligation or reducing the interest rate represented thereby or extending the time of payment of interest, or reducing the amount of principal thereof, without the express consent of the Owner of such Obligation, or (2) reduce or have the effect of reducing the percentage of Obligations required for the affirmative vote or written consent to an amendment or modification of the Trust Agreement or the Purchase Agreement, or (3) modify any of the rights or obligations of the Trustee without its written assent thereto. D -4 Regular Council Meeting - May 22, 2013 - Page 181 of 295 For the purpose of any supplemental agreement to make any amendment which may be made upon consent of the Owners of a majority of the Obligations pursuant to the Trust Agreement. The Trust Agreement and the Purchase Agreement may be modified or amended at any time by a supplemental or amending agreement, without the consent of any Owners, but only (1) to provide for additions or modifications to the Projects, (2) to add to the covenants and agreements of any party, other covenants to be observed, or to surrender any right or power reserved in the Trustee (for its own behalf) or the Town, (3) to secure additional revenues or provide additional security or reserves for payment of the Obligations, (4) to comply with the requirements of any state or federal securities laws or the Trust Indenture Act of 1939, as from time to time amended, if required by law or regulation lawfully issued thereunder, (5) to provide for the appointment of a successor trustee pursuant to the terms of the Trust Agreement, (6) to preserve the exclusion of interest represented by the Obligations from gross income for purposes of federal or State income taxes and to preserve the power of the Town to continue to issue bonds or other obligations the interest on which is likewise exempt from federal and State income taxes, (7) to cure, correct or supplement any ambiguous or defective provision in the Trust Agreement or the Purchase Agreement, (8) with respect to rating matters, or (9) in regard to questions arising under the Trust Agreement or under the Purchase Agreement, as the parties to the Trust Agreement or the Purchase Agreement may deem necessary or desirable and which will not adversely affect the interests of the Owners of the Obligations. Any such supplemental or amending agreement will become effective upon execution and delivery by the parties to the Trust Agreement or the Purchase Agreement. Procedure for Amendment With Written Consent of Obligation Owners A copy of the proposed supplemental or amending agreement, together with a consent request, must be mailed to each Owner of an Obligation, but failure to mail copies of such supplemental or amending agreement and request does not affect the validity of the supplemental or amending agreement when assented to by a majority in principal amount of the Obligations then Outstanding (exclusive of Obligations then disqualified). The supplemental or amending agreement will not become effective until the required Owners have consented and the Trustee has mailed notice to the Owners of the Obligations stating in substance that such supplemental or amending agreement has been consented to by the Owners of the required percentage of Obligations and will become effective (but failure to mail copies of said notice shall not affect the validity of such supplemental or amending agreement or consents thereto). Disqualified Obligations Obligations owned or held by or for the account of the Town or by any person directly or indirectly controlled by, or under direct or indirect common control with the Town (except any Obligations held in any pension or retirement fund) will not be deemed Outstanding for the purpose of any vote, consent, waiver or other action or any calculation of Outstanding Obligations provided for in the Trust Agreement, and will not be entitled to vote upon, consent to, or take any other action provided therein. No Liability of the Town for the Trustee Performance The Town will have no obligation or liability to any of the other parties or to the Owners with respect to the performance by the Trustee of any duty imposed upon it under the Trust Agreement Remedies Upon Default; No Acceleration If an Event of Default shall happen, then and in each and every such case during the continuance of such Event of Default, the Trustee may, or upon request of the Owners of a majority in aggregate principal amount of the Obligations then Outstanding and receiving indemnity satisfactory to it shall, exercise one or more of the remedies granted pursuant to the Purchase Agreement; provided, however, that notwithstanding anything in the Trust Agreement or in the Purchase Agreement to the contrary, there will be no right under any circumstances to accelerate the payment dates of the Obligations or otherwise to declare any of the Payments not then past due or in default to be immediately due and payable. Application of Funds All moneys received by the Trustee pursuant to any right given or action taken pursuant to the provisions of the Trust Agreement or the Purchase Agreement shall be applied by the Trustee in the order following, in the case of the Obligations, upon presentation of the several Obligations, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid: First to the payment of the fees, costs and expenses of the Trustee and then of the Obligation Owners in declaring such Event of Default, including reasonable compensation to its or their agents, attorneys and counsel and D -5 Regular Council Meeting - May 22, 2013 - Page 182 of 295 Second to the payment of the whole amount then owing and unpaid with respect to the Obligations and, with interest on the overdue principal and installments of interest at the rate of twelve percent (12 %) per annum (but such interest on overdue installments of interest shall be paid only to the extent funds are available therefor following payment of principal and interest and interest on overdue principal, as aforesaid), and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid with respect to the Obligations, then to the payment of such principal and interest without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, ratably to the aggregate of such principal and interest. Institution of Leal Proceedings If one or more Events of Default shall happen and be continuing, the Trustee in its discretion may, and upon the written request of the Owners of a majority in aggregate principal amount of the Obligations then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of the Owners of Obligations by a suit in equity or action at law for the specific performance of any covenant or agreement contained in the Trust Agreement. Power of the Trustee to Control Proceedings In the event that the Trustee, upon the happening of an Event of Default, shall have taken any action, it will have full power, in the exercise of its discretion for the best interests of the Owners of the Obligations, with respect to the continuance, or disposal of such action; provided, however, that the Trustee will not discontinue, or otherwise dispose of any litigation, without the consent of a majority in aggregate principal amount of the Obligations Outstanding. Limitation on Obli!ation Owners' Right to Sue No Owner of any Obligation will have the right to institute any action, for any remedy, unless (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of at least a majority in aggregate principal amount of all the Obligations then Outstanding shall have made written request upon the Trustee to exercise the powers granted or to institute such action, in its own name; (c) said Owners shall have tendered to the Trustee reasonable indemnity; and (d) the Trustee shall have not complied with such request for a period of sixty (60) days. No one or more Owners of Obligations will have any right in any manner whatever by their action to enforce any right under the Trust Agreement, except in the manner therein provided, and all proceedings with respect to an Event of Default will be pursued in the manner therein provided and for the equal benefit of all Owners of the Outstanding Obligations. The right of any Owner of any Obligation to receive payment of said Owner's proportionate interest in the Payments as the same become due, or to institute suit for the enforcement of such payment, will not be impaired or affected without the consent of such Owner. Defeasance If and when all Outstanding Obligations shall be paid and discharged in anyone or more of the following ways: (a) by paying or causing to be paid the principal and interest represented by such Obligations Outstanding, as and when the same become due and payable; (b) by depositing with a Depository Trustee, in trust for such purpose, at or before the payment date therefor, money which, together with the amounts then on deposit in the Payment Fund is fully sufficient to payor cause to be paid all principal and interest represented by such Obligations Outstanding; or (c) by depositing with a Depository Trustee, in trust for such purpose, any Defeasance Obligations which are non - callable in such amount as shall be certified to the Trustee and the Town by a national firm of certified public accountants acceptable to both the Trustee and the Town, as being fully sufficient, together with the interest to accrue thereon and moneys then on deposit in the Payment Fund together with the interest to accrue thereon, to pay and discharge or cause to be paid and discharged all principal and interest represented by such Obligations at their respective payment dates; notwithstanding that any Obligations shall not have been surrendered for payment, all obligations of the Trustee and the Town with respect to all Outstanding Obligations will cease and terminate, except only the obligation of the D -6 Regular Council Meeting - May 22, 2013 - Page 183 of 295 Trustee to payor cause to be paid, from funds deposited pursuant to paragraphs (b) or (c) above and paid to the Trustee by the Depository Trustee, to the Owners of the Obligations not so surrendered and paid all sums due with respect thereto, and in the event of deposits pursuant to paragraphs (b) or (c), the Obligations will continue to represent direct and proportionate interests of the Owners thereof in such funds. If any Obligation or portion thereof will not mature within sixty (60) days of the deposit referred to in paragraphs (b) or (c) above, the Trustee shall give notice of such deposit by first class mail to the Owners. No Obligation may be so provided for based on prepayment unless the Trustee has mailed irrevocable notice of prepayment for such Obligations or the Town has given the Trustee irrevocable instructions to prepay such Obligations. THE PURCHASE AGREEMENT The following, in addition to the information under the headings "INTRODUCTORY STATEMENT" and "SECURITY FOR AND SOURCES OF PAYMENT OF THE OBLIGATIONS," is a summary of certain provisions of the Purchase Agreement to which document, in its entirety, reference is hereby made for a more complete description of its terms. Purchase /Sale Pursuant to the Purchase Agreement, the Town will sell and convey any interest it has in the Existing Projects to the Trustee, and the Trustee, in turn, will sell and convey to the Town, and the Town will buy and accept from the Trustee, the Existing Projects. Payments The obligation of the Town to make the Payments will be limited to amounts from Excise Tax Revenues and State Shared Revenues. The Town will receive a credit against amounts due with respect to the Payments and to replenish the Debt Service Fund equal to any amounts held and available in the Payment Fund and the Debt Service Fund, respectively. The obligations of the Town to make the Payments from the sources described and to perform and observe the other agreements contained in the Purchase Agreement will be absolute and unconditional and will not be subject to any defense or any right of set -off, abatement, counterclaim, or recoupment arising out of any breach of the Trustee of any obligation to the Town or otherwise, or out of indebtedness or liability at any time owing to the Town by the Trustee. Until such time as all of the Payments shall have been fully paid or provided for, the Town (i) will not suspend or discontinue the Payments, (ii) will perform and observe all other agreements contained in the Purchase Agreement, and (iii) will not terminate the Purchase Agreement for any cause. Providing for Payment The Town may provide for the payment of any of the Payments in anyone or more of the following ways: (a) by paying such Payment as and when the same becomes due and payable at its scheduled due date or on a date on which it can be prepaid; (b) by depositing the with a Depository Trustee, in trust for such purposes, money which, together with the amounts then on deposit with the Trustee and available for such Payment is fully sufficient to make, or cause to be made, such Payment at its scheduled due date or on a date on which it can be prepaid; or (c) by depositing with a Depository Trustee, in trust for such purpose, any Defeasance Obligations which are non - callable, in such amount as shall be certified by a national firm of certified public accountants acceptable to the Trustee and the Town as being fully sufficient, together with the interest to accrue thereon and moneys then on deposit with the Trustee and available for such Payment, to make, or cause to be made, such Payment at its scheduled due date or on a date on which it can be prepaid. Upon any partial prepayment of a Payment, each installment of interest which shall thereafter be payable as a part of the subsequent Payments shall be reduced, taking into account the interest rate or rates on the Obligations remaining D -7 Regular Council Meeting - May 22, 2013 - Page 184 of 295 outstanding after the partial prepayment, so that the interest remaining payable as a part of the subsequent Payments shall be sufficient to pay the interest on such outstanding Obligations when due. Default; Remedies Upon Default (i) Upon (A) the nonpayment of the whole or any part of certain amounts due pursuant to the Purchase Agreement at the time when the same are to be paid as provided in the Purchase Agreement or the Trust Agreement, (B) the violation by the Town of any other covenant or provision of the Purchase Agreement or the Trust Agreement, (C) the occurrence of an event of default with respect to the Prior Lease or any Additional Revenue Obligations, or (D) the insolvency or bankruptcy of the Town as the same may be defined under any law of the United States of America or the State of Arizona, or any voluntary or involuntary action of the Town or others to take advantage of, or to impose, as the case may be, any law for the relief of debtors or creditors, including a petition for reorganization, and (ii) if such default has not been cured (A) in the case of nonpayment of such amounts as required under the Purchase Agreement or the Trust Agreement on the due date, or the nonpayment of principal and interest due with respect to the Prior Lease or any Additional Revenue Obligations on their due dates; (B) in the case of the breach of any other covenant or provision of the Trust Agreement or the Purchase Agreement not cured within sixty (60) days after notice in writing from the Trustee specifying such default; and (C) in the case of any default under the Prior Lease or any Additional Revenue Obligations after any notice and passage of time provided for under the proceedings under which such obligations were issued then, (iii) subject to the limitations of the Trust Agreement, the Trustee may take whatever action at law or in equity, including the remedy of specific performance, may appear necessary or desirable to collect such amounts payable by the Town under the Trust Agreement or the Purchase Agreement then due (but not the Payments and such other amounts accruing), or to enforce performance and observance of any pledge, obligation, agreement, or covenant of the Town under the Trust Agreement or the Purchase Agreement and with respect to the Excise Tax Revenues, without notice and without giving any bond or surety to the Town or anyone claiming under the Town, have a receiver appointed of the amounts of the Excise Tax Revenues which are pledged to the payment of amounts due thereunder, with such powers as the court making such appointment shall confer (and the Town will irrevocably consent to such appointment); provided, however, that under no circumstances may the Payments be accelerated. The obligations of the Town under the Purchase Agreement, including, without limitation, its obligation to pay the Payments, will survive any action brought, and the Town will continue to pay the Payments and perform all other obligations provided in the Purchase Agreement; provided, however, that the Town will be credited with any amount received by the Trustee. D -8 Regular Council Meeting - May 22, 2013 - Page 185 of 295 APPENDIX E FORM OF APPROVING LEGAL OPINION DRAFT [LETTERHEAD OF GREENBERG TRAURIG, LLP] [Closing Date] Wells Fargo Bank, N.A. Re: Pledged Excise Tax Revenue and Revenue Refunding Obligations, Series 2013 Representing Proportionate Interests of the Owners Thereof in Purchase Price Payments to be Made by Town of Marana, Arizona, to Wells Fargo Bank, N.A., as Trustee We have examined the transcript of proceedings (the "Transcript ") relating to the execution and delivery by Wells Fargo Bank, N.A. (the "Trustee ") of the Pledged Excise Tax Revenue and Revenue Refunding Obligations, Series 2013 (the "Obligations "), pursuant to a First Trust Agreement, dated as of June 1, 2013 (the "Trust Agreement "), between the Trustee and Town of Marana, Arizona (the "Town "). Each of the Obligations is an undivided, participating, proportionate interest in certain payments to be made by the Town pursuant to a First Purchase Agreement, dated as of June 1, 2013 (the "Purchase Agreement "), between the Trustee as seller and the Town as buyer to finance certain projects for the Town. In addition, we have examined such other proceedings, proofs, instruments, certificates and other documents as well as such other materials and such matters of law as we have deemed necessary or appropriate for the purposes of the opinions rendered herein below. In such an examination, we have examined originals (or copies certified or otherwise identified to our satisfaction) of the foregoing and have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to the original documents of all documents submitted to us as copies and the accuracy of the statements contained in such documents. As to any facts material to our opinion, we have, when relevant facts were not independently established, relied upon the aforesaid documents contained in the Transcript. We have also relied upon the opinions of the Town Attorney delivered even date herewith as to the matters provided therein. opinion: Based upon such examination, we are of the opinion that, under the law existing on the date of this 1. The Obligations, the Trust Agreement and the Purchase Agreement are legal, valid, binding and enforceable in accordance with their respective terms, except that the binding effect and enforceability thereof and the rights thereunder are subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws in effect from time to time affecting the rights of creditors generally; except to the extent that the enforceability thereof and the rights thereunder may be limited by the application of general principles of equity and, as to the Trust Agreement, except to the extent that the enforceability of the indemnification provisions thereof may be affected by applicable securities laws. E -1 Regular Council Meeting - May 22, 2013 - Page 186 of 295 Wells Fargo Bank, N.A. Page 2 2. The obligations of the Town pursuant to the Purchase Agreement with respect to payment of principal and interest with respect to the Obligations are solely from the revenues and other moneys pledged and assigned pursuant to the Trust Agreement to secure such payments. Those revenues and other moneys include payments required to be made by the Town pursuant to the Purchase Agreement, and the obligation of the Town to make those payments is secured by a limited pledge of amounts from "Excise Tax Revenues" and "State Shared Revenues" as described in, and provided by, the Purchase Agreement. Such payments are not secured by an obligation or pledge of any moneys raised by taxation other than the specified taxes; the Obligations do not represent or constitute a debt or pledge of the general credit of the Town and the Purchase Agreement, including the obligation of the Town to make the payments required thereunder, does not represent or constitute a debt or pledge of the general credit of the Town. 3. (a) Subject to the assumption stated in the last sentence of this paragraph, the portion of each payment made by the Town pursuant to the Purchase Agreement, denominated and comprising interest with respect to the Obligations and received by the beneficial owners of the Obligations (the "Interest Portion "), is excludable from the gross income of the beneficial owners thereof for federal income tax purposes. Furthermore, the Interest Portion is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however the Interest Portion is taken into account in determining adjusted current earnings for purposes of computing the alternative minimum tax imposed on certain corporations. (We express no opinion regarding other federal tax consequences resulting from the receipt or accrual of the Interest Portion on, or ownership or disposition of, the Obligations.) The Internal Revenue Code of 1986, as amended (the "Code "), includes requirements which the Town must continue to meet after the execution and delivery of the Obligations in order that the Interest Portion not be included in gross income for federal income tax purposes. The failure of the Town to meet these requirements may cause the Interest Portion to be included in gross income for federal income tax purposes retroactive to their date of issuance. The Town has covenanted in the Purchase Agreement to take the actions required by the Code in order to maintain the exclusion from gross income for federal income tax purposes of the Interest Portion. In rendering the opinion expressed in this paragraph, we have assumed continuing compliance with the tax covenants referred to hereinabove that must be met after the execution and delivery of the Obligations in order that the Interest Portion not be included in gross income for federal tax purposes. (b) Assuming the Interest Portion is so excludable for federal income tax purposes, the Interest Portion is exempt from income taxation under the laws of the State of Arizona. (We express no opinion regarding other State tax consequences resulting from the receipt or accrual of the such interest on, or ownership or disposition of, the Obligations.) Our opinion represents our legal judgment based upon our review of the law and the facts we deem relevant to render such opinion and is not a guarantee of a result. This opinion is given as of the date hereof, and we assume no obligation to review or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Respectfully submitted, E -2 Regular Council Meeting - May 22, 2013 - Page 187 of 295 APPENDIX F FORM OF CONTINUING DISCLOSURE UNDERTAKING n - P A F T $33 TOWN OF MARANA, ARIZONA PLEDGED EXCISE TAX REVENUE AND REVENUE REFUNDING OBLIGATIONS, SERIES 2013 [Closing Date] (CUSIP Base No.: ) CONTINUING DISCLOSURE UNDERTAKING This Continuing Disclosure Undertaking (this "Undertaking ") is executed and delivered by Town of Marana, Arizona (the "Town "), in connection with the execution and delivery of $33,775,000* principal amount of Pledged Excise Tax Revenue and Revenue Refunding Obligations, Series 2013, Representing Proportionate Interests of the Owners Thereof in Purchase Price Payments to be Made by Town of Marana, Arizona, to Wells Fargo Bank, N.A., as trustee (the "Obligations "). The Obligations are being executed and delivered pursuant to a First Trust Agreement, dated as of June 1, 2013 (the "Trust Agreement "), by and between the Town and Wells Fargo Bank, N.A., as trustee (the "Trustee "). The Town covenants and agrees as follows: 1. Definitions. In addition to those defined hereinabove, the terms set forth below shall have the following meanings in this Undertaking, unless the context clearly otherwise requires: Fxhihit T Annual Financial Information means the financial information and operating data set forth in Annual Financial Information Disclosure means the dissemination of disclosure concerning Annual Financial Information and the dissemination of the Audited Financial Statements as set forth in Section 4. Audited Financial Statements means the audited financial statements of the Town prepared pursuant to the standards and as described in Exhibit I . Commission means the Securities and Exchange Commission. Dissemination Agent means any agent designated as such in writing by the Town and which has filed with the Town a written acceptance of such designation, and such agent's successors and assigns. EMMA means the Electronic Municipal Market Access system of the MSRB. Information regarding submissions to EMMA is available at http: / /emma.msrb.org. Exchange Act means the Securities Exchange Act of 1934, as amended. * Subject to change. F -1 Regular Council Meeting - May 22, 2013 - Page 188 of 295 Final Official Statement means the Final Official Statement relating to the Obligations, dated 1 2013. GAAP means generally accepted accounting principles, as applied to governmental units as modified by the laws of the State. Listed Event means the occurrence of events set forth in Exhibit H. in Section 5. Listed Events Disclosure means dissemination of disclosure concerning a Listed Event as set forth MSRB means the Municipal Securities Rulemaking Board. Participating Underwriter means each broker, dealer or municipal securities dealer acting as an underwriter in the primary offering of the Obligations. Purchase Agreement means the First Purchase Agreement, dated as of June 1, 2013, by and between the Town and the Trustee, in its separate capacity as "Seller." Exchange Act. Rule means Rule 15c2 -12 adopted by the Securities and Exchange Commission under the State means the State of Arizona. 2. Purpose of this Undertaking. This Undertaking is executed and delivered by the Town as of the date set forth below, for the benefit of the beneficial owners of the Obligations and in order to assist the Participating Underwriter in complying with the requirements of the Rule. The Town represents that it will be the only obligated person with respect to the Obligations at the time the Obligations are delivered to the Participating Underwriter and that no other person is expected to become so committed at any time after such delivery of the Obligations. follows: 3. CUSIP Number /Final Official Statement. The CUSIP Numbers of the Obligations are as CUSIP No. Maturity 4. Annual Financial Information Disclosure. Subject to Section 8 of this Undertaking, the Town shall disseminate its Annual Financial Information and its Audited Financial Statements, if any (in the form and by the dates set forth in Exhibit 1) , through EMMA. F -2 Regular Council Meeting - May 22, 2013 - Page 189 of 295 If any part of the Annual Financial Information can no longer be generated because the operations to which it is related have been materially changed or discontinued, the Town will disseminate a statement to such effect as part of its Annual Financial Information for the year in which such event first occurs. If any amendment is made to this Undertaking, the Annual Financial Information for the year in which such amendment is made shall contain a narrative description of the reasons for such amendment and its impact on the type of information being provided. 5. Listed Events Disclosure. Subject to Section 8 of this Undertaking, the Town shall disseminate in a timely manner, but in not more than ten (10) business days, its Listed Events Disclosure through EMMA. Notwithstanding the foregoing, notice of optional or unscheduled redemption of any of the Obligations or defeasance of any Obligations need not be given under this Undertaking any earlier than the notice (if any) of such redemption or defeasance is given to the owners of the Obligations pursuant to the terms of the Obligations. Whether events subject to the standard "material" Would be material shall be determined under applicable federal securities laws. 6. Consequences of Failure of the Town to Provide Information. The Town shall give notice in a timely manner through EMMA of any failure to provide Annual Financial Information Disclosure when the same is due hereunder. In the event of a failure of the Town to comply with any provision of this Undertaking, the beneficial owner of any Obligation may seek mandamus or specific performance by court order, to cause the Town to comply with its obligations under this Undertaking. A default under this Undertaking shall not be deemed an event of default under the Purchase Agreement or the Trust Agreement, and the sole remedy available to such owners of the Obligations under this Undertaking in the event of any failure of the Town to comply with this Undertaking shall be an action to compel performance. 7. Amendments; Waiver. Notwithstanding any other provision of this Undertaking, the Town by certified resolution or ordinance authorizing such amendment or waiver, may amend this Undertaking, and any provision of this Undertaking may be waived only if: (a) The amendment or waiver is 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 the Town, or type of business conducted; (b) This Undertaking, as amended or affected by such waiver, would have complied with the requirements of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) The amendment or waiver does not materially impair the interests of the beneficial owners of the Obligations, as determined by parties unaffiliated with the Town (such as the Trustee) or by approving vote of the owners of the Obligations pursuant to the Trust Agreement at the time of the amendment. The Annual Financial Information containing amended operating data or financial information resulting from such amendment or waiver, if any, shall explain, in narrative form, the reasons for the amendment or waiver and the impact of the change in the type of operating data or financial information being provided. If an amendment or waiver is made specifying GAAP to be followed in preparing financial statements and such changes are material, 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. Such comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles in the presentation of the financial information in order to provide information to investors to enable them to evaluate the ability of the Town to meet its obligations. To the extent reasonably feasible, such comparison also shall be quantitative. If the accounting principles of the Town change or F -3 Regular Council Meeting - May 22, 2013 - Page 190 of 295 the fiscal year of the Town changes, the Town shall file a notice of such change in the same manner as for a notice of Listed Event. 8. Termination of Undertaking. This Undertaking shall be terminated hereunder if the Town shall no longer have liability for any obligation on or relating to repayment of the Obligations under the Trust Agreement. 9. Dissemination Agent. The Town may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Undertaking, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. 10. Additional Information. Nothing in this Undertaking shall be deemed to prevent the Town from disseminating any other information, using the means of dissemination set forth in this Undertaking or any other means of communication, or including any other information in any Annual Financial Information Disclosure or notice of occurrence of a Listed Event, in addition to that which is required by this Undertaking. If the Town chooses to include any information from any document or notice of occurrence of a Listed Event in addition to that which is specifically required by this Undertaking, the Town shall have no obligation under this Undertaking to update such information or include it in any future Annual Financial Information Disclosure or Listed Events Disclosure. 11. Beneficiaries. This Undertaking has been executed in order to assist the Participating Underwriter in complying with the Rule; however, this Undertaking shall inure solely to the benefit of the Town, the Dissemination Agent, if any, and the beneficial owners of the Obligations, and shall create no rights in any other person or entity. 12. Recordkeeping. The Town shall maintain records of all Annual Financial Information Disclosure and Listed Events Disclosure including the content of such disclosure, the names of the entities with whom such disclosure was filed and the date of filing such disclosure. 13. Assignment. The Town shall not transfer obligations under the First Purchase Agreement unless the transferee agrees to assume all obligations of the Town under this Undertaking or to execute an undertaking meeting the requirements of the Rule. F -4 Regular Council Meeting - May 22, 2013 - Page 191 of 295 14. Governing Law. This Undertaking shall be governed by the laws of the State. To the extent applicable by provision of law, this Undertaking is subject to cancellation pursuant to Section 38 -511, Arizona Revised Statutes, as amended, the provisions of which are incorporated herein by the reference. Dated: [Closing Date] ATTEST: ...................................................... ............................... Town Clerk ACKNOWLEDGED FOR PURPOSES OF SECTION 11(c) OF THE PURCHASE AGREEMENT BY WELLS FARGO BANK, N.A., AS TRUSTEE By................................................. ............................... Title: ....................................................................... ATTACHMENTS: TOWN OF MARANA, ARIZONA By............................................................... ............................... Mayor Exhibit I - Annual Financial Information and Timing and Audited Financial Statements Exhibit II - Events for Which Listed Events Disclosure Is Required F -5 Regular Council Meeting - May 22, 2013 - Page 192 of 295 EXHIBIT I ANNUAL FINANCIAL INFORMATION AND TIMING AND AUDITED FINANCIAL STATEMENTS "Annual Financial Information" means financial information and operating data of the type contained in the Final Official Statement in TABLE 3 - "TRANSACTION PRIVILEGE (SALES) TAX COLLECTION BY INDUSTRY CLASSIFICATION" and TABLE 5 - "HISTORICAL AND PROJECTED EXCISE TAX REVENUES AND STATE SHARED REVENUES" (actual results for most recently completed fiscal year only). All or a portion of the Annual Financial Information and the Audited Financial Statements as set forth below may be included by reference to other documents which have been submitted through EMMA or filed with the Commission. If the information included by reference is contained in a final official statement, the final official statement must be available from the MSRB. The Town shall clearly identify each such item of information included by reference. Annual Financial Information exclusive of Audited Financial Statements will be provided through EMMA by February 1 of each year, commencing February 1, 2014, 210 days after the last day of the Town's fiscal year. Audited Financial Statements as described below should be filed at the same time as the Annual Financial Information. If Audited Financial Statements are not available when the Annual Financial Information is filed, unaudited financial statements shall be included, to be followed up by Audited Financial Statements when available. Audited Financial Statements will be prepared according to GAAP. Audited Financial Statements will be provided through EMMA within 30 days after availability to the Town. If any change is made to the Annual Financial Information as permitted by Section 4 of the Agreement, the Town will disseminate a notice of such change as required by Section 4, including changes in fiscal year or GAAP. I -1 Regular Council Meeting - May 22, 2013 - Page 193 of 295 EXHIBIT II EVENTS FOR WHICH LISTED EVENTS DISCLOSURE IS REQUIRED 1. Principal and interest payment delinquencies. 2. Non - payment related defaults, if material. 3. Unscheduled draws on debt service reserves reflecting financial difficulties. 4. Unscheduled draws on credit enhancements reflecting financial difficulties. 5. Substitution of credit or liquidity providers, or their failure to perform. 6. 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 notices or determinations, in each case, with respect to the tax status of the security, or other Listed Events affecting the tax status of the security. 7. Modifications to the rights of security holders, if material. 8. Bond calls, if material, or tender offers. 9. Defeasances. 10. Release, substitution or sale of property securing repayment of the securities, if material. 11. Rating changes. 12. Bankruptcy, insolvency, receivership or similar events of the Town, being if any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Town 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 Town, or if such jurisdiction has been assumed by leaving the existing governing 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 Town. 13. The consummation of a merger, consolidation or acquisition involving the Town or the sale of all or substantially all of the assets of the Town, 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, if material. 14 Appointment of a successor or conditional trustee or the change of name of a trustee, if material. II -1 Regular Council Meeting - May 22, 2013 - Page 194 of 295 APPENDIX G BOOK - ENTRY -ONLY SYSTEM The Depository Trust Company ( "DTC "), New York, New York, will act as securities depository for the Obligations. The Obligations 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 Obligation certificate will be issued for each payment of each series of the Obligations, each in the aggregate principal amount of such payment, and will be deposited with DTC. DTC, the world's largest securities 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 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments (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 is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. 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" and together with the Direct Participants, the "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. Purchases of the Obligations under the DTC system must be made by or through Direct Participants, which will receive a credit for the Obligations on DTC's records. The ownership interest of each actual purchaser of each Obligation ( "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 Obligations 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 Securities, except in the event that use of the book -entry system for the Obligations is discontinued. To facilitate subsequent transfers, all Obligations 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 Obligations with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Obligations; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities 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. 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 Obligations may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed amendments G -1 Regular Council Meeting - May 22, 2013 - Page 195 of 295 to the Obligation documents. For example, Beneficial Owners of Obligations may wish to ascertain that the nominee holding the Obligations 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 Trustee and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Obligations 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. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Obligations unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Town 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 Obligations are credited on the record date (identified in a listing attached to the Omnibus Proxy). Redemption proceeds, distributions, and dividend payments on the Obligations will be made to Cede & Co., 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 the Town 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, the Trustee or the Town, 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 the Town or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. A Beneficial Owner shall give notice to elect to have its Obligations purchased or tendered, through its Participant, to a remarketing agent, and shall effect delivery of such Obligations by causing the Direct Participant to transfer the Participant's interest in the Obligations, on DTC's records, to a remarketing agent. The requirement for physical delivery of Obligations in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Obligations are transferred by Direct Participants on DTC's records and followed by a book -entry credit of tendered Obligations to a remarketing agent's DTC account. DTC may discontinue providing its services as depository with respect to the Obligations at any time by giving reasonable notice to the Town or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Obligation certificates are required to be printed and delivered. The Town may decide to discontinue use of the system of book -entry -only transfers through DTC (or a successor securities depository). In that event, Obligation certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book -entry system has been obtained from sources that the Town believes to be reliable, but none of the Town, the Underwriter or their agents and counsel take responsibility for the accuracy thereof. G -2 Regular Council Meeting - May 22, 2013 - Page 196 of 295 DRAFT 05/19/12 06/13/12 04/03/13 05/08/13 FIRST PURCHASE AGREEMENT by and between WELLS FARGO BANK, N.A., as Seller and THE TOWN OF MARANA, ARIZONA, as Purchaser Dated as of 1 Regular Council Meeting - May 22, 2013 - Page 197 of 295 TABLE OF CONTENTS Pie Section1. Term and Payments ....................................................................... ..............................2 Section 2. Pledge; Limited Obligations ......................................................... ..............................3 Section 3. Surplus and Deficiency of Revenues from Excise Taxes and State Shared Revenues..................................................................................... ..............................4 Section 4. Parity Lien Obligations ................................................................. ..............................4 Section 5. Town Control over Revenue Collection ....................................... ..............................4 Section 6. Certain Matters with Respect to Projects ...................................... ..............................5 Section7. Providing for Payment .................................................................. ..............................6 Section8. Term of Agreement ....................................................................... ..............................6 Section 9. Default; Remedies Upon Default .................................................. ..............................7 Section10. Assignment ................................................................................... ..............................8 Section 11. Federal Law Provisions ................................................................. ..............................8 Section 12. Covenant as to Conflict of Interest; Other Statutory Restrictions ............................12 Section13. Miscellaneous .............................................................................. .............................13 (i) Regular Council Meeting - May 22, 2013 - Page 198 of 295 FIRST PURCHASE AGREEMENT THIS FIRST PURCHASE AGREEMENT, dated as of 1 2013 (this "Agreement "), by and between the TOWN OF MARANA, ARIZONA, a municipal corporation under the laws of the State of Arizona ( "Town "), as purchaser hereunder, and WELLS FARGO BANK, N.A., a national banking association ( "Trustee "), in its capacity as trustee under the First Trust Agreement, dated as of even date herewith (the "Trust Agreement "), by and between Trustee and Town and seller hereunder, WITNESSETH: WHEREAS, the Mayor and Common Council of Town have determined that it will be beneficial for the citizens of Town for Town to finance the costs of the New Projects (as such term and all other undefined terms used herein are defined in the Trust Agreement) and refinance the lease purchase of the Existing Project; and WHEREAS, for such purposes, the Mayor and Common Council of Town requested that Trustee sell and execute and deliver the Obligations and the Trustee has, as described in the Trust Agreement, caused deposits to be made to the Acquisition Fund and the Costs of Issuance Fund and amounts to be paid to the trustee for the bonds secured by the lease purchase so refinanced as provided in the Trust Agreement; and WHEREAS, Town is a municipal corporation duly incorporated and validly existing under the laws of the State; the Constitution and the laws of the State authorize Town to enter into this Agreement and the transactions contemplated by this Agreement; Town has duly authorized and executed this Agreement; this Agreement is a lawful, valid and binding obligation of Town, enforceable against Town in accordance with its terms; all required procedures for execution and performance of this Agreement, including publication of notice, public hearing or competitive bidding, if applicable, have been or will be complied with in a timely manner; the Payments will be paid when due out of funds which are legally available for such purposes; neither the execution and delivery of this Agreement or the Trust Agreement, nor the fulfillment of or compliance with the terms and conditions hereof or thereof nor the consummation of the transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which Town is now a party or by which Town is bound, or constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of Town; Town has disclosed in writing to Trustee all facts that do or will materially adversely affect the properties, operations or financial condition of Town and that any financial statements, notices or other written statements provided by Town to Trustee pursuant hereto will not contain any untrue statement of a material fact or omit any material fact necessary to make such statements or information not misleading and the Projects comply with all applicable environmental laws, rules and regulations (including, without limitation, all federal, state and local laws) and with Title III of the Americans with Disabilities Act and the regulations issued thereunder by the United States Department of Justice concerning accessibility of places of public accommodation and commercial facilities if and to the extent such Act and regulations apply to the Proj ects; and Regular Council Meeting - May 22, 2013 - Page 199 of 295 WHEREAS, Trustee has full legal authority and is duly empowered to enter into this Agreement and has taken all actions necessary to the execution and delivery hereof; NOW THEREFORE, PURSUANT TO LAW AND FOR AND IN CONSIDERATION OF THE MUTUAL COVENANTS HEREINAFTER CONTAINED, IT IS HEREBY AGREED AS FOLLOWS: Section 1. Term and Payments. (a) Trustee hereby sells and conveys to Town, and Town hereby buys and accepts from Trustee, the New Projects. In order to refinance the costs of the Existing Project which have not been paid to date pursuant to the terms hereof, Town sells and conveys any interests it has in the Existing Project to Trustee, without warranty, for the sum of $10.00 and other valuable consideration had and received. For the amounts payable pursuant hereto (including the Payments), Trustee in turn hereby sells and conveys back to Town, without warranty, and Town hereby purchases from Trustee, any interests Trustee has in the Existing Project. (Town acknowledges that the right of Trustee to sell the Existing Project arises out of the deposit for the benefit of Town with the trustee for the bonds secured by the lease purchase which financed the Existing Project and that it is receiving good and valuable consideration from both such sales.) (b) Trustee shall have no further obligation to provide funds for the New Projects, and Town shall be entitled to sole and exclusive possession of the Projects. (c) As the purchase price, Town shall pay the Payments to Trustee. (The Interest Portion is interest for purposes of the Code.) This Agreement shall be deemed and construed to be a "net purchase agreement," and the Payments shall be an absolute net return to Trustee, free and clear of any expenses or charges whatsoever, except as otherwise specifically provided herein. Town shall further also pay to Trustee (1) on the July 15 following the Fiscal Year in which the Debt Service Coverage is less than two (2) times and each January 15 and July 15 thereafter, an amount equal to one tenth (1 /10) of the amount required to fund and maintain the Debt Service Reserve Fund in an amount equal to the Reserve Requirement until such time as the amount on deposit in the Debt Service Reserve Fund shall equal the Reserve Requirement and (2) on the fifteenth (15th) day of each month, following a payment made on the Obligations from the Debt Service Reserve Fund, an amount equal to one - twelfth (1/12) of the amount which, when added to the balance then in the Debt Service Reserve Fund, shall be equal to the Reserve Requirement. The Debt Service Coverage for each Fiscal Year shall be calculated by the Town Representative and certified to the Trustee by the Town Representative prior to or on the January 15 following such Fiscal Year. Town shall further also pay to Trustee its fees and expenses in accordance with the provisions of the Trust Agreement. Town shall further also pay all amounts necessary for compliance with the Continuing Disclosure Undertaking. 0 Regular Council Meeting - May 22, 2013 - Page 200 of 295 (d) The obligation of Town to pay the amounts described in paragraph (c) hereof (including the Payments) from the sources described herein and to comply with the other provisions hereof shall be absolute and unconditional and shall not be subject to any defense or any right of set -off, abatement, counterclaim, or recoupment arising out of any breach of Trustee by any obligation to Town or otherwise, or out of indebtedness or liability at any time owing to Town by Trustee. Until such time as all of the payments described in paragraph (c) hereof (including the Payments) shall have been fully paid or provided for, Town (i) shall not suspend or discontinue the same, (ii) shall comply with the other provisions hereof and (iii) shall not terminate this Agreement for any cause, including, without limiting the generality of the foregoing, failure of Trustee or any other person to acquire the Projects, the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Projects or the taking by eminent domain of title to or temporary use of any or all of the Projects, commercial frustration of purpose, abandonment of the Projects by Town, any change in the tax or other laws of the United States of America or of the State or any political subdivision of either or any failure of Trustee to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Trust Agreement or this Agreement. Nothing contained in this Section shall be construed to release Trustee from the performance of any of the agreements on its part herein or in the Trust Agreement contained and in the event Trustee shall fail to perform any such agreements on its part, Town may institute such action against Trustee as Town may deem necessary to compel performance so long as such action does not abrogate the obligations of Town contained in the first sentence of this paragraph. (e) Any of the payments described in paragraph (c) hereof (including the Payments) due on a day which is not a Business Day may be made on the next Business Day and will be deemed to have been made on the date due. in writing to Town. (f) Amounts payable to Trustee shall be paid by the means specified Section 2. Pledge; Limited Obli ations. (a) Excise Tax Revenues and State Shared Revenues are hereby irrevocably pledged by Town to the payment of all amounts described in Section 1(c) hereof (including the Payments), and payments of such amounts shall be secured, subject only to the paramount and first pledge and lien for the Prior Lease, on parity with the pledge and lien hereby granted by Town for the payment and security of any Additional Revenue Obligations. Notwithstanding the right to do so pursuant to the Prior Lease, Town shall not cause the issuance or incurrence of "Additional Obligations" (as such term is defined in the Prior Lease.) Town shall make said payments from Excise Tax Revenues and State Shared Revenues (first making the Payments and thereafter making the other required payments). All of such payments are coequal as to the pledge of and lien on Excise Tax Revenues and State Shared Revenues and share ratably, without preference, priority or distinction, as to the source or method of payment from Excise Tax Revenues and State Shared Revenues or security therefor. (b) Town shall remit to Trustee from Excise Tax Revenues and State Shared Revenues all amounts due under this Agreement in the amounts and at the times and for 3 Regular Council Meeting - May 22, 2013 - Page 201 of 295 the purposes as required herein. The obligation of Town to make payments of any amounts due under this Agreement, including amounts due after default or termination hereof, is limited to payment from Excise Tax Revenues and State Shared Revenues and shall under no circumstances constitute a general obligation or a pledge of the full faith and credit of Town, the State or any of its political subdivisions, or require the levy of, or be payable from the proceeds of, any ad valorem property taxes. (c) Town may, at the sole option of Town, make payments due pursuant to Section 1 hereof from its other funds as permitted by law and as Town shall determine from time to time, but Trustee acknowledges that it has no claim hereunder to such other funds. No part of the purchase price payable pursuant to this Agreement shall be payable out of any ad valorem property taxes imposed by Town or from bonds or other obligations, the payment of which Town's general taxing authority is pledged, unless (i) the same shall have been duly budgeted by Town according to law, (ii) such payment or payments shall be within the budget limitations of the statutes of the State and (iii) any such bonded indebtedness or other obligation is within the debt limitations of the Constitution of the State. Section 3. Surplus and Deficiency of Revenues from Excise Taxes and State Shared Revenues Subject to the rights with respect to the Prior Lease, Excise Tax Revenues and State Shared Revenues in excess of amounts, if any, required to be deposited with or held by Trustee for payments due under this Agreement shall constitute surplus revenues and may be used by Town for any lawful purpose for the benefit of Town, including the payment of obligations to which Excise Tax Revenues and State Shared Revenues may from time to time be pledged on a basis subordinate hereto. If at any time the moneys in the funds held for payment of amounts due under this Agreement are not sufficient to make the deposits and transfers required, any such deficiency shall be made up from the first moneys thereafter received and available for such transfers under the terms of this Agreement and, with respect to payment from Excise Tax Revenues and State Shared Revenues, pro rata, as applicable, with amounts due with respect to any Additional Revenue Obligations, and the transfer of any such sum or sums to said fund as may be necessary to make up any such deficiency shall be in addition to the then - current transfers required to be made pursuant hereto. Section 4. Parity Lien Obli ations Additional Revenue Obligations may be incurred but only if Excise Tax Revenues plus State Shared Revenues, when combined mathematically for such purpose only, in the most recently completed Fiscal Year, shall have amounted to at least two (2) times the Maximum Annual Debt Service. Section 5. Town Control over Revenue Collection (a) To the extent permitted by applicable law, Excise Tax Revenues shall be retained and maintained so that the amounts received from Excise Tax Revenues plus State Shared Revenues, when combined mathematically for such purpose only, all within and for the most recently completed Fiscal Year, shall have been equal to at least two (2) times the Annual Debt Service for the current Fiscal Year. If Excise Tax Revenues plus State Shared Revenues for any such Fiscal Year shall not have been equal to at least one and one - quarter (1.25) times the Annual Debt Service for the current Fiscal Year or if at any time it appears that Excise Tax Revenues plus State Shared Revenues will not be sufficient to meet such CI Regular Council Meeting - May 22, 2013 - Page 202 of 295 requirements, Town shall, to the extent permitted by applicable law, impose new exactions of the type of the excise taxes which will be part of the excise taxes or increase the rates for the excise taxes currently imposed fully sufficient at all times, after making allowance for contingencies and errors, in each Fiscal Year in order that (i) Excise Tax Revenues plus State Shared Revenues will be sufficient to meet all current requirements hereunder and (ii) Excise Tax Revenues plus State Shared Revenues will be reasonably calculated to attain the level as required by the first sentence of this paragraph. (b) The Excise Tax Revenue Fund established in connection with the Prior Lease is hereby expanded to provide for the purposes of this Agreement and, after paying therefrom amounts for the purposes described in the Prior Lease and herein, such Fund may be reduced to zero, including by transferring any such balance to the General Fund of Town. Section 6. Certain Matters with Respect to Projects (a) Except with respect to its power and authority to enter into this Agreement and to perform its covenants hereunder, Trustee has made and makes no representation or warranty, express or implied, and assumes no obligation with respect to the title, merchantability, condition, quality or fitness of the Projects for any particular purpose or the conformity of the Projects to any plans, specifications, construction contract, purchase order, model or sample, or as to their design, construction, delivery, installation, construction oversight and operation or their suitability for use by Town after completion. All such risks shall be borne by Town without in any way excusing Town from its obligations under this Agreement, and Trustee shall not be liable to Town for any damages on account of such risks. Except with respect to any acts by Trustee which are not undertaken at the request of Town or with the prior approval of Town, Town waives all claims against Trustee growing out of the acquisition of the Projects. Trustee shall have no liability to Town for any failure of any contractor to perform any contract or other undertaking with respect to the Projects in any respect. Trustee shall have no obligation to obtain or insure compliance with any required permits or approval procedures with respect to the Projects. In the event of any defect in any item of the Projects or other claim with respect to the Projects, recourse of Town shall be against the contractors, manufacturers, suppliers, etc. of the Projects and, where applicable, the person selling the property to Trustee, and not against Trustee. For such purpose, Trustee hereby assigns and transfers to Town the right, title and interest of Trustee in and to all representations, warranties, guarantees and service agreements relating to the New Projects made or entered into by Trustee and by any contractor, manufacturers, suppliers, etc. of the New Projects. Trustee further designates Town as its attorney -in -fact granting to Town the right to initiate and take all actions necessary to enforce any and all construction contracts and all such warranties and service agreements. Trustee is entering into this Agreement solely as Trustee, shall not be personally liable hereunder and shall be afforded the same rights, protections, immunities and indemnities acting hereunder as afforded to it as Trustee under the Trust Agreement. Notwithstanding anything to the contrary herein, at no time shall the Trustee be listed in the chain of title to the Projects. (b) Trustee hereby irrevocably appoints Town as its sole and exclusive agent to act for and on behalf of Trustee in acquiring the New Projects and refinancing the costs of the Existing Project. As such agent, Town shall have full authority to do all things necessary 5 Regular Council Meeting - May 22, 2013 - Page 203 of 295 to bring about the financing of the New Projects and refinancing the costs of the Existing Project. Trustee shall not be liable, responsible or accountable for the acts of Town as its agent hereunder, and Town hereby assumes all responsibility for the performance of such duties. Should any shortfall or deficiency occur in the Acquisition Fund, the Town shall immediately pay such amounts to Trustee for deposit in the applicable Acquisition Fund. (c) Notwithstanding any other terms or provisions of this Agreement, the interest of Trustee in the Projects is solely in its capacity as Trustee for the purpose of facilitating the financing or refinancing of the Projects, and Trustee shall not have the power, authority or obligation to assume any responsibility for the overall management or maintenance of the Projects, including, without limitation, any day -to -day decision - making or operational aspects of the Projects. Section 7. Providing for Payment. Town may provide for the payment of any of the Payments in any one or more of the following ways: (a) by paying such Payment as provided herein as and when the same becomes due and payable at its scheduled due date pursuant to Section 1 hereof or on a date on which it can be prepaid; (b) by depositing with a Depository Trustee, in trust for such purposes, money which, together with the amounts then on deposit with Trustee and available for such Payment is fully sufficient to make, or cause to be made, such Payment at its scheduled due date or on a date on which it can be prepaid or (c) by depositing with a Depository Trustee, in trust for such purpose, any Government Obligations which are noncallable, in such amount as shall be certified to Trustee and Town, by a national firm of certified public accountants acceptable to both Trustee and Town, as being fully sufficient, together with the interest to accrue thereon and moneys then on deposit with Trustee and available for such Payment, to make, or cause to be made, such Payment at its scheduled due date or on a date on which it can be prepaid. Upon any partial prepayment of a Payment, each installment of interest which shall thereafter be payable as a part of the subsequent Payments shall be reduced, taking into account the interest rate or rates on the Obligations remaining outstanding after the partial prepayment so that the interest remaining payable as a part of the subsequent Payments shall be sufficient to pay the interest on such outstanding Obligations when due. Section 8. Term of Agreement This Agreement shall not terminate so long as any payments are due and owing pursuant to the Obligations. Subject to Section 7 hereof, upon full payment or provision for payment and in consideration of the timely payment of all of the amounts described in Section 1(c) hereof (including the Payments) and provided that Town has performed all the covenants and agreements required by Town to be performed, this Agreement shall cease and expire. The obligations of Town under this Agreement, including, without limitation, its obligation to pay the Payments, shall survive any action brought as provided in the next Section hereof, and Town shall continue to pay the Payments and perform Regular Council Meeting - May 22, 2013 - Page 204 of 295 all other obligations provided in this Agreement; provided, however, that Town shall be credited with any amount received by Trustee pursuant to actions brought under the next Section hereof. Section 9. Default; Remedies Upon Default (a) (i) Upon (A) the nonpayment of the whole or any part of any of the amounts described in Section 1(c) hereof (including the Payments) at the time when the same are to be paid as provided herein or in the Trust Agreement, (B) the violation by Town of any other covenant or provision of this Agreement or the Trust Agreement, (C) the occurrence of an event of default with respect to the Prior Lease or any Additional Revenue Obligations or (D) the insolvency or bankruptcy of Town as the same may be defined under any law of the United States of America or the State, or any voluntary or involuntary action of Town or others to take advantage of, or to impose, as the case may be, any law for the relief of debtors or creditors, including a petition for reorganization, and (ii) if such default has not been cured (A) in the case of nonpayment of any of the amounts described in Section 1(c) hereof (including the Payments) as required hereunder or under the Trust Agreement on the due date or the nonpayment of principal or interest due with respect to the Prior Lease or any Additional Revenue Obligations on their due dates; (B) in the case of the breach of any other covenant or provision of the Trust Agreement or this Agreement not cured within sixty (60) days after notice in writing from Trustee specifying such default and (C) in the case of any other default under any of the Prior Lease or any Additional Revenue Obligations after any notice and passage of time provided for under the proceedings under which such obligations were issued then, (iii) subject to the limitations of the Trust Agreement and the Continuing Disclosure Undertaking, Trustee may take whatever action at law or in equity, including the remedy of specific performance, may appear necessary or desirable to collect the Payments and any other amounts payable by Town under the Trust Agreement or this Agreement then due (but not the Payments and such other amounts accruing), or to enforce performance and observance of any pledge, obligation, agreement or covenant of Town under the Trust Agreement or this Agreement, and with respect to Excise Tax Revenues and State - Shared Revenues, without notice and without giving any bond or surety to Town or anyone claiming under Town, have a receiver appointed of Excise Tax Revenues and State Shared Revenues which are pledged to the payment of amounts due hereunder, with such powers as the court making such appointment shall confer (and Town does hereby irrevocably consent to such appointment); provided, however, that under no circumstances may the Payments be accelerated. Each right, power and remedy of Trustee provided for in this Agreement shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for herein, or, unless prohibited by the terms hereof, now or hereafter existing at law or in equity or by statute or otherwise, in any jurisdiction where such rights, powers and remedies are sought to be enforced, and the exercise or beginning of the exercise by Trustee of any one or more of the 7 Regular Council Meeting - May 22, 2013 - Page 205 of 295 rights, powers or remedies provided for herein or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by either party of any or all of such other rights, powers or remedies. The failure to insist upon strict performance of any of the covenants or agreements herein set forth shall not be considered or taken as a waiver or relinquishment for the future of the rights of Trustee to insist upon a strict compliance by Trustee with all the covenants and conditions hereof. Town shall, upon not less than 10 days' prior request by Trustee, execute, acknowledge and deliver to Trustee a statement in writing certifying that this Agreement is unmodified and in full force and effect (or, if this Agreement has been modified, that it is in full force and effect except as modified, and stating the modification), and the dates to which the amounts payable hereunder have been paid in advance, if any. (b) Trustee shall in no event be in default in the performance of any of its obligations hereunder unless and until Trustee shall have failed to perform such obligation within 30 days or such additional time as is reasonably required to correct any such default after notice by Town properly specifying wherein Trustee has failed to perform any such obligation. No default by Trustee shall relieve Town of its obligations to make the various payments herein required, so long as any of the Obligations remain outstanding; however, Town may exercise any other remedy available at law or in equity to require Trustee to remedy such default so long as such remedy does not interfere with or endanger the payments required to be made to Trustee under the Trust Agreement. Section 10. Assignment. (a) Except as otherwise provided herein, Town shall not assign, transfer, pledge or hypothecate or otherwise dispose of this Agreement or any interest therein and any assignment in contravention hereof shall be void. (b) Subject to the terms of the Trust Agreement, all and every part of the right, title and interest in and to this Agreement and all payments of any kind due or which become due to Trustee hereunder are sold, pledged, assigned and transferred pursuant to the Trust Agreement. Section 11. Federal Law Provisions (a) (i) No direction for the making of any investment or other use of the proceeds of any of the Obligations shall be made which would cause the Obligations to be "arbitrage bonds" as that term is defined in section 148 (or any successor provision thereto) of the Code or "private activity bonds" as that term is defined in section 141 (or any successor provision thereto) of the Code, and the requirements of such sections and related regulations of the Code shall be complied with throughout the term of the Obligations. (Particularly, Town shall be the owner of the Projects for federal income tax purposes. Town shall not enter into any management or service contract with any entity other than a governmental entity for the operation of any portion of the Projects unless the management or service contract complies with the requirements of Revenue Procedure 97 -13 or such other authority as may control at the time or any lease or other arrangement with any entity other than a governmental entity that gives such entity special legal entitlements with respect to any portion of the Projects). Also, the E'� Regular Council Meeting - May 22, 2013 - Page 206 of 295 payment of principal and interest with respect to the Obligations shall not be guaranteed (in whole or in part) by the United States or any agency or instrumentality of the United States. The proceeds of the Obligations, or amounts treated as proceeds of the Obligations, shall not be invested (directly or indirectly) in federally insured deposits or accounts, except to the extent such proceeds may be so invested for an initial temporary period until needed for the purpose for which the Obligations are being executed and delivered, may be so used in making investments in a bona fide debt service fund or may be invested in obligations issued by the United States Treasury. Town shall comply with the procedures and covenants contained in any arbitrage rebate provision or separate agreement executed in connection with the execution and delivery of the Obligations (initially those in subsection (b)) for so long as compliance is necessary in order to maintain the exclusion from gross income for federal income tax purposes of the Interest Portion. In consideration of the purchase and acceptance of the Obligations by the owners from time to time thereof and of retaining such exclusion and as authorized by Title 35, Chapter 3, Article 7, Arizona Revised Statutes, Town shall, and the appropriate officials of Town are hereby directed, to take all action required to retain such exclusion or to refrain from taking any action prohibited by the Code which would adversely affect in any respect such exclusion. (ii) (A) Town shall take all necessary and desirable steps, as determined by the Mayor and Common Council of Town, to comply with the requirements hereunder in order to ensure that the Interest Portion is excluded from gross income for federal income tax purposes under the Code; provided, however, compliance with any such requirement shall not be required in the event Town receives a Special Counsel's Opinion that either compliance with such requirement is not required to maintain the exclusion from gross income of the Interest Portion or compliance with some other requirement will meet the requirements of the Code. In the event Town receives such a Special Counsel's Opinion, the parties agree to amend this Agreement to conform to the requirements set forth in such opinion. (B) If for any reason any requirement hereunder is not complied with, Town shall take all necessary and desirable steps, as determined by Town, to correct such noncompliance within a reasonable period of time after such noncompliance is discovered or should have been discovered with the exercise of reasonable diligence and Town shall pay any required interest or penalty under hereinafter described Regulations section 1.148 -3(h) with respect to the Code. (C) The procedures required by any arbitrage rebate provision or separate agreement executed in connection with the issuance of the Obligations shall be complied with for so long as compliance is necessary pursuant to the Code. (b) (i) Undefined terms used in this subsection shall have the meanings given to them in the Code and Regulations. (ii) Unless an exception available pursuant to the Regulations applies as indicated in a Special Counsel's Opinion or a written statement of an expert consultant employed pursuant to paragraph (vii) hereof, within 60 days after the end of each Bond Year, Town shall cause the Rebate Requirement to be calculated and shall pay to the United States of America: I Regular Council Meeting - May 22, 2013 - Page 207 of 295 (A) not later than 60 days after the end of the fifth Bond Year and every fifth Bond Year thereafter, an amount which, when added to the future value of all previous Rebate Payments with respect to the Obligations (determined as of such Computation Date), is equal to at least 90% of the sum of the Rebate Requirement (determined as of the last day of such Bond Year) plus the future value of all previous Rebate Payments with respect to the Obligations (determined as of the last day of such Bond Year); and (B) not later than 60 days after the retirement of the last Obligation, an amount equal to 100% of the Rebate Requirement (determined as of the date of retirement of the last Obligation). Each Rebate Payment required to be made under this Section shall be filed on or before the date such payment is due, with the Internal Revenue Service at the appropriate location and with required forms and other materials, currently by addressing it to IRS Service Center, Ogden, Utah 84201, and accompanying it with IRS Form 8038 -T. (iii) No Nonpurpose Investment shall be acquired for an amount in excess of its fair market value. No Nonpurpose Investment shall be sold or otherwise disposed of for an amount less than its fair market value. (iv) For purposes of paragraph (iv), whether a Nonpurpose Investment has been purchased or sold or disposed of for its fair market value shall be determined as follows: (A) The fair market value of a Nonpurpose Investment generally shall be the price at which a willing purchaser would purchase the Nonpurpose Investment from a willing seller in a bona fide arm's length transaction. Fair market value shall be determined on the date on which a contract to purchase or sell the Nonpurpose Investment becomes binding. (B) Except as provided in Subsection (vi) or (vii), a Nonpurpose Investment that is not of a type traded on an established securities market, within the meaning of Code section 1273, is rebuttably presumed to be acquired or disposed of for a price that is not equal to its fair market value. (C) If a United States Treasury obligation is acquired directly from or sold or disposed of directly to the United States Treasury, such acquisition or sale or disposition shall be treated as establishing the fair market value of the obligation. (v) The purchase price of a certificate of deposit that has a fixed interest rate, a fixed payment schedule and a substantial penalty for early withdrawal is considered to be its fair market value if the yield on the certificate of deposit is not less than: obligations of the United States; and (A) the yield on reasonably comparable direct 10 Regular Council Meeting - May 22, 2013 - Page 208 of 295 (B) the highest yield that is published or posted by the provider to be currently available from the provider on reasonably comparable certificates of deposit offered to the public. (vi) A guaranteed investment contract shall be considered acquired and disposed of for an amount equal to its fair market value i£ (A) A bona fide solicitation in writing for a specified guaranteed investment contract, including all material terms, is timely forwarded to all potential providers. The solicitation must include a statement that the submission of a bid is a representation that the potential provider did not consult with any other potential provider about its bid, that the bid was determined without regard to any other formal or informal agreement that the potential provider has with Town or any other person (whether or not in connection with the Obligations), and that the bid is not being submitted solely as a courtesy to Town or any other person for purposes of satisfying the requirements in the Regulations that Town receive bids from at least one reasonably competitive provider and at least three providers that do not have a material financial interest in the Obligations. (B) All potential providers have an equal opportunity to bid, with no potential provider having the opportunity to review other bids before providing a bid. (C) At least three reasonably competitive providers (i.e. having an established industry reputation as a competitive provider of the type of investments being purchased) are solicited for bids. At least three bids must be received from providers that have no material financial interest in the Obligations (e.g., a lead underwriter within 15 days of the issue date of the Obligations or a financial advisor with respect to the investment) and at least one of such three bids must be from a reasonably competitive provider. If Town uses an agent to conduct the bidding, the agent may not bid. (D) The highest - yielding guaranteed investment contract for which a qualifying bid is made (determined net of broker's fees) is purchased. (E) The determination of the terms of the guaranteed investment contract takes into account as a significant factor the reasonably expected deposit and drawdown schedule for the amounts to be invested. (F) The terms for the guaranteed investment contract are commercially reasonable (i.e. have a legitimate business purpose other than to increase the purchase price or reduce the yield of the guaranteed investment contract). (G) The provider of the investment contract certifies the administrative costs (as defined in Regulations section 1.148 -5(e)) that it pays (or expects to pay) to third parties in connection with the guaranteed investment contract. (H) Town retains until three years after the last outstanding Obligation is retired, (1) a copy of the guaranteed investment contract, (2) a receipt 11 Regular Council Meeting - May 22, 2013 - Page 209 of 295 or other record of the amount actually paid for the guaranteed investment contract, including any administrative costs paid by Town and a copy of the provider's certification described in (G) above, (3) the name of the person and entity submitting each bid, the time and date of the bid, and the bid results and (4) the bid solicitation form and, if the terms of the guaranteed investment contract deviate from the bid solicitation form or a submitted bid is modified, a brief statement explaining the deviation and stating the purpose of the deviation. (vii) Such experts and consultants shall be employed by Town to make, as necessary, any calculations in respect of rebates to be made to the United States of America in accordance with section 148(f) of the Code with respect to the Obligations. (c) Town shall comply with and carry out all of the provisions of the Continuing Disclosure Undertaking, dated even date with the date of original execution and delivery of the Obligations (the "Continuing Disclosure Agreement "), provided that such costs of compliance shall be payable solely from the Excise Tax Revenues and the State Shared Revenues. Notwithstanding any other provision of this Agreement, failure of Town to comply with the Continuing Disclosure Agreement shall not be considered an event of default; however, the Trustee may (and, at the request of the original purchaser of the Obligations or the owners of at least 25% aggregate principal amount in outstanding Obligations and receipt of indemnity to its satisfaction, shall) take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause Town to comply with its obligations under this Section. The Trustee is not responsible for monitoring or verifying compliance by the Town with the Continuing Disclosure Agreement. Section 12. Covenant as to Conflict of Interest; Other Statutory Restrictions (a) To the extent applicable by provision of law, Trustee acknowledges that this Agreement is subject to cancellation pursuant to Section 38-511, Arizona Revised Statutes, the provisions of which are incorporated herein and which provides that Town may within three (3) years after its execution cancel any contract (including this Agreement) without penalty or further obligation made by Town if any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of Town is at any time while the contract or any extension of the contract is in effect, an employee or agent of any other party to the contract in any capacity or a consultant to any other party to the contract with respect to the subject matter of the contract. The cancellation shall be effective when written notice is received by all other parties to the contract unless the notice specifies a later time. Trustee covenants not to employ as an employee, an agent or, with respect to the subject matter of this Agreement, a consultant, any person significantly involved in initiating, negotiating, securing, drafting or creating this Agreement on behalf of Trustee within three years from the execution of this Agreement, unless a waiver of Section 38 -511, Arizona Revised Statutes, is provided by Town. No basis exists for Town to cancel this Agreement pursuant to Section 38-511, Arizona Revised Statutes, as of the date hereof. (b) To the extent applicable under Section 41 -4401, Arizona Revised Statutes, Trustee shall comply with all federal immigration laws and regulations that relate to its employees and its compliance with the "e- verify" requirements under Section 23-214(A), Arizona Revised Statutes. The breach by Trustee of the foregoing shall be deemed a material 12 Regular Council Meeting - May 22, 2013 - Page 210 of 295 breach of this Agreement and may result in the termination of the services of Trustee by Town. Town retains the legal right to randomly inspect the papers and records of Trustee to ensure that Trustee is complying with the above - mentioned warranty. Trustee shall keep such papers and records open for random inspection during normal business hours by Town. Trustee shall cooperate with the random inspections by Town including granting Town entry rights onto its property to perform such random inspections and waiving its respective rights to keep such papers and records confidential. (c) Pursuant to Sections 35-391.06 and 35-393.06, Arizona Revised Statutes, Trustee does not have a scrutinized business operation in Sudan or Iran. For the purpose of this subsection, the term "scrutinized business operations" shall have the meanings set forth in Section 35 -391 and 35 -393, Arizona Revised Statutes, as applicable. If Town determines that Trustee submitted a false certification, Town may impose remedies as provided by law including terminating the services of Trustee. Section 13. Miscellaneous. (a) No covenant or obligation herein to be performed by Town may be waived except by the written consent of Trustee, and a waiver of any such covenant or obligation or a forbearance to invoke any remedy on any occasion shall not constitute or be treated as a waiver of such covenant or obligation as to any other occasion and shall not preclude Trustee from invoking such remedy at any later time prior to the cure by Town of the condition giving rise to such remedy. (b) This Agreement shall be construed and governed in accordance with the laws of the State in effect from time to time. (c) The recitals set forth at the beginning of this Agreement are incorporated in this Agreement by this reference. This Agreement constitutes the entire agreement between the parties and shall not be modified, waived, discharged, terminated, amended, supplemented, altered or changed in any respect except by a written document signed by both Trustee and Town, subject to the restrictions with regard thereto provided by the Trust Agreement. (d) Any term or provision of this Agreement found to be prohibited by law or unenforceable or which would cause this Agreement to be invalid, prohibited by law or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without, to the extent reasonably possible, causing the remainder of this Agreement to be invalid, prohibited by law or unenforceable. (e) The captions set forth herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. 13 Regular Council Meeting - May 22, 2013 - Page 211 of 295 (f) Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, successors, assigns and personal representatives, as the case may be. Any person or entity acquiring any interest in or to the right, title or interest of Trustee herein shall be and have the rights of a third party beneficiary hereunder. (g) This Agreement may be executed in any number of counterparts, each of which shall be regarded as an original and all of which shall constitute but one and the same instrument. 14 Regular Council Meeting - May 22, 2013 - Page 212 of 295 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. Trustee: WELLS FARGO BANK, N.A., as seller By----------------------------------------------------------------------------------- Printed Name: Title: ------------------------------------------------------------------------ - - - - -- Town: TOWN OF MARANA, ARIZONA, a municipal corporation under the laws of the State of Arizona, as purchaser By----------------------------------------------------------------------------------- Mayor ATTEST: By---------------------------------------------------------------------- Town Clerk- 3 3 0263 5 94.1-5/13/2013 15 Regular Council Meeting - May 22, 2013 - Page 213 of 295 SCHEDULE Payment Total Date Principal Interest Pam 01/01/14 $ 07/01/14 01/01/15 07/01 /15 01/01/16 07/01/16 01/01/17 07/01/17 01/01/18 07/01 /18 01/01/19 07/01/19 01/01/20 07/01/20 01/01/21 07/01/21 01/01/22 07/01 /22 01/01/23 07/01/23 01/01/24 07/01 /24 01/01/25 07/01 /25 01/01/26 07/01/26 01/01/27 07/01 /27 01/01/28 07/01 /28 01/01/29 07/01/29 01/01/30 07/01/30 Total Page 1 of Schedule Regular Council Meeting - May 22, 2013 - Page 214 of 295 DRAFT 05/19/12 06/13/12 04/03/13 05/08/13 FIRST TRUST AGREEMENT by and between WELLS FARGO BANK, N.A., as Seller and THE TOWN OF MARANA, ARIZONA, as Purchaser Dated as of 1 Regular Council Meeting - May 22, 2013 - Page 215 of 295 TABLE OF CONTENTS Pie ARTICLE I DEFINITIONS Section 1.1. Definitions ......................................................................... ............................... 3 ARTICLE II SPECIAL REVENUE OBLIGATIONS Section 2.1. Authorization of the Obligations .................................... ............................... 15 Section 2.2. Date; Interest Accrual ..................................................... ............................... 15 Section 2.3. Payment Amounts and Dates and Interest Rates ............ ............................... 15 Section 2.4. Interest on Obligations .................................................... ............................... 15 Section2.5. Form ................................................................................ ............................... 16 Section2.6. Execution ........................................................................ ............................... 16 Section 2.7. Book -Entry Only System ................................................ ............................... 16 Section 2.8. Application of Proceeds .................................................. ............................... 17 Section 2.9. Transfer and Exchange ................................................... ............................... 17 Section 2.10. Obligations Mutilated, Lost, Destroyed or Stolen .......... ............................... 17 Section2.11. Payment ........................................................................... ............................... 18 Section 2.12. Execution of Documents and Proof of Ownership ......... ............................... 19 Section 2.13. Obligation Register ......................................................... ............................... 20 Section 2.14. Payment of Unclaimed Amounts .................................... ............................... 20 ARTICLE III APPLICATION OF PROCEEDS RECEIVED BY TRUSTEE; ACQUISITION FUND Section 3.1. Establishment and Application of Acquisition Fund ...... ............................... 20 ARTICLE IV PREPAYMENT OF OBLIGATIONS Section 4.1. Prepayment Provisions .................................................... ............................... 21 Section 4.2. Selection of Obligations for Prepayment ........................ ............................... 21 Section 4.3. Notice of Prepayment; Effect .......................................... ............................... 22 Section 4.4. Partial Prepayment of Obligation .................................... ............................... 23 ARTICLE V PAYMENT FUND; DEBT SERVICE RESERVE FUND Section 5.1. Trustee's Rights in Purchase Agreement ........................ ............................... 23 Section 5.2. Establishment and Application of Payment Fund ........... ............................... 23 Section 5.3. Establishment and Application of Debt Service Reserve Fund ..................... 24 Section 5.4. Transfers of Investment Earnings to Payment Fund ....... ............................... 24 Section5.5. Surplus ............................................................................ ............................... 25 (i) Regular Council Meeting - May 22, 2013 - Page 216 of 295 TABLE OF CONTENTS (continued) Pie ARTICLE VI MONEYS IN FUNDS; INVESTMENT; CERTAIN TAX COVENANTS Section 6.1. Held in Trust ................................................................... ............................... 25 Section 6.2. Investments Authorized .................................................. ............................... 25 Section6.3. Accounting ...................................................................... ............................... 25 Section 6.4. Allocation of Earnings .................................................... ............................... 25 Section 6.5. Valuation and Disposition of Investments ...................... ............................... 26 Section 6.6. Limitation of Investment Yield ....................................... ............................... 26 Section 6.7. Other Tax Covenants ...................................................... ............................... 26 ARTICLE VII THE TRUSTEE Section 7.1. Appointment of Trustee .................................................. ............................... 27 Section 7.2. Liability of Trustee; Standard of Care ............................ ............................... 27 Section 7.3. Merger or Consolidation ................................................. ............................... 27 Section 7.4. Protection and Rights of the Trustee ............................... ............................... 27 Section 7.5. Compensation of Trustee ................................................ ............................... 30 Section 7.6. Removal and Resignation of Trustee .............................. ............................... 30 Section 7.7. Appointment of Agent .................................................... ............................... 31 Section7.8. Commingling .................................................................. ............................... 31 Section7.9. Records ........................................................................... ............................... 31 ARTICLE VIII MODIFICATION OR AMENDMENT OF AGREEMENTS Section 8.1. Amendments Permitted ................................................... ............................... 31 Section 8.2. Procedure for Amendment With Written Consent of Obligation Owners............................................................................ ............................... 32 Section 8.3. Disqualified Obligations ................................................. ............................... 33 Section 8.4. Effect of Supplemental Trust Agreement ....................... ............................... 33 Section 8.5. Endorsement or Replacement of Obligations Delivered After Amendments................................................................... ............................... 34 Section 8.6. Amendatory Endorsement of Obligations ...................... ............................... 34 ARTICLE IX COVENANTS, NOTICES Section 9.1. Compliance With and Enforcement of Purchase Agreement ........................ 34 Section 9.2. Observance of Laws and Regulations ............................. ............................... 34 Section 9.3. Recordation and Filing .................................................... ............................... 34 Section 9.4. Further Assurances .......................................................... ............................... 35 Section 9.5. Notification to the Town of Failure to Make Payments . ............................... 35 Section 9.6. Business Days ................................................................. ............................... 35 (ii) Regular Council Meeting - May 22, 2013 - Page 217 of 295 TABLE OF CONTENTS (continued) Pie ARTICLE X LIMITATION OF LIABILITY Section 10.1. Limited Liability of the Town ......................................... ............................... 35 Section 10.2. No Liability of the Town for Trustee Performance ........ ............................... 35 Section 10.3. Indemnification of the Trustee ........................................ ............................... 35 Section 10.4. Opinion of Counsel ......................................................... ............................... 36 ARTICLE XI EVENTS OF DEFAULT AND REMEDIES OF OBLIGATION OWNERS Section 11.1. Seller's Rights held in Trust ........................................... ............................... 37 Section 11.2. Remedies Upon Default; No Acceleration ..................... ............................... 37 Section 11.3. Application of Funds ....................................................... ............................... 37 Section 11.4. Institution of Legal Proceedings ..................................... ............................... 38 Section11.5. Non - waiver ..................................................................... ............................... 38 Section 11.6. Power of Trustee to Control Proceedings ....................... ............................... 38 Section 11.7. Limitation on Obligation Owners' Right to Sue ............. ............................... 38 ARTICLE XII MISCELLANEOUS Section12.1. Defeasance ...................................................................... ............................... 39 Section12.2. Notices ............................................................................ ............................... 40 Section 12.3. Incorporation of State Statutes ........................................ ............................... 40 Section 12.4. Governing Law ............................................................... ............................... 41 Section 12.5. Binding Effect and Successors ........................................ ............................... 41 Section 12.6. Execution In Counterparts ............................................... ............................... 41 Section 12.7. Destruction of Cancelled Obligations ............................. ............................... 41 Section12.8. Headings ......................................................................... ............................... 42 Section 12.9. Parties Interested Herein ................................................. ............................... 42 Section 12.10. Waiver of Notice ............................................................. ............................... 42 Section 12.11. Severability of Invalid Provisions ................................... ............................... 42 EXHIBIT A -FORM OF OBLIGATION EXHIBIT B -FORM OF PAYMENT REQUEST FORM EXHIBIT C -FORM OF REIMBURSEMENT REQUEST FORM (iii) Regular Council Meeting - May 22, 2013 - Page 218 of 295 FIRST TRUST AGREEMENT THIS FIRST TRUST AGREEMENT, dated as of 1 2013 (together with any duly authorized, executed and delivered supplement thereto, this "Trust Agreement "), by and between WELLS FARGO BANK, N.A., a national banking association, as trustee, or any successor thereto acting as trustee pursuant to this Trust Agreement and in its capacity as "Seller" pursuant to the hereinafter described Purchase Agreement (the "Trustee "), and THE TOWN OF MARANA, ARIZONA, a municipal corporation under the laws of the State of Arizona (the "Town "); WITNESSETH: WHEREAS, the Mayor and Common Council of the Town have determined that it will be beneficial to the citizens of the Town to finance the costs of the assets being acquired pursuant to the Intergovernmental Settlement Agreement entered into by and between Pima County, Arizona, and the Town and certain improvements thereto (the "New Projects ") and to refinance the lease purchase of a project which is the subject of the herein defined Prior Lease, specifically a portion of the new municipal complex (the "Existing Project" and, with the New Projects, the "Projects "); and WHEREAS, for such purposes, the Mayor and the Council of the Town requested that the Trustee sell and execute and deliver Pledged Excise Tax Revenue and Revenue Refunding Obligations, Series 2013, in the principal amount of $ ,000 (the "Obligations "), and the Trustee has, as described in this Trust Agreement, caused deposits to be made to the Acquisition Fund (as such term and all other terms not otherwise defined hereinabove are hereinafter defined) and amounts to be paid to the trustee for bonds secured by the Prior Lease as provided herein; NOW, THEREFORE, in consideration for the Obligations executed, delivered and Outstanding under this Trust Agreement; the acceptance by the Trustee of the trusts created herein; the purchase and acceptance of the Obligations by the Owners, and to secure the payment of principal and interest (to the extent provided herein) represented by the Obligations, the rights of the Owners of the Obligations and the performance and the observance of the covenants and conditions contained in the Obligations, the Purchase Agreement and herein, and the performance and the observance of all of the covenants and conditions contained therein, the Town absolutely and irrevocably pledges and assigns to the Trustee, and the Trustee hereby declares an irrevocable trust and acknowledges its acceptance of all right, title and interest in and to the following described trust estate, which shall be administered by the Trustee according to the provisions of this Trust Agreement and for the equal and proportionate benefit of the Owners of Obligations: A. All right, title and interest of Seller in, under and pursuant to the Purchase Agreement, the Payments and any other amounts payable by the Town under the Purchase Agreement and the present and continuing right to (i) make claim for, collect or cause to be collected, receive or cause to be received all such revenues, receipts and other sums of money payable or receivable thereunder, (ii) to bring acts and proceedings thereunder or for the Regular Council Meeting - May 22, 2013 - Page 219 of 295 enforcement of such rights, and (iii) to do any and all other things which the Seller is or may become entitled to do thereunder; B. Amounts on deposit from time to time in the funds created pursuant hereto, subject to the provisions of this Trust Agreement permitting the application thereof for the purposes and on the terms and conditions set forth herein; and C. Any and all other real or personal property of any kind from time to time hereafter by delivery or by writing of any kind specifically conveyed, pledged, assigned or transferred, as and for additional security hereunder for the Obligations, by Seller or by anyone on its behalf or with its written consent, in favor of the Trustee, which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof, TO HAVE AND TO HOLD, all and singular, the trust estate, including all additional property which by the terms hereof has or may become subject to the encumbrance of this Trust Agreement, unto the Trustee and its successors and assigns, forever, subject, however, to the rights of the Town, its successors and assigns, under the Purchase Agreement; IN TRUST, however, for the equal and proportionate benefit and security of the Owners from time to time of the Obligations executed and delivered hereunder and Outstanding, none of the Obligations being entitled to priority or distinction one over the other in the application of the Excise Tax Revenues and the State Shared Revenues pledged by the Purchase Agreement to the Payments, regardless of the delivery of any of the Obligations prior to the delivery of any other of the Obligations, or regardless of the time or times principal represented by any Obligations are paid or are subject to prepayment with respect to principal represented thereby, all of the Obligations being co -equal as to the pledge of and lien on the Excise Tax Revenues and the State Shared Revenues pledged for the Payments thereof and sharing ratably, without preference, priority or distinction, as to the source or method of payment from the Excise Tax Revenues or the State Shared Revenues or security therefor and conditioned, however, that if the Town shall well and truly pay or cause to be paid fully and promptly when due all indebtedness, liabilities, obligations and sums at any time secured hereby, including interest and attorneys' fees, and shall promptly, faithfully and strictly keep, perform and observe or cause to be kept, performed and observed all of its covenants, warranties and agreements contained herein, this Trust Agreement shall be and become void and of no further force and effect; otherwise, the same shall remain in full force and effect, and upon the trust and subject to the covenants and conditions hereafter set forth. For such purposes, the Town and the Trustee hereby agree as follows: 2 Regular Council Meeting - May 22, 2013 - Page 220 of 295 ARTICLE I DEFINITIONS Section 1.1. Definitions In addition to the terms defined in the first paragraph hereof and in the Recitals hereto and in the Purchase Agreement and unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Trust Agreement, have the meanings herein specified. " Acquisition Fund means the fund by that name established pursuant to Article III and held by the Trustee. " Additional Revenue Obligations means any additional obligations which may hereafter be issued or incurred by the Town (or any financing conduit acting on behalf of the Town) having a lien upon and payable from the Excise Tax Revenues and the State Shared Revenues on a parity with, and in compliance with the terms of, the Purchase Agreement. " Annual Debt Service means the amount to be paid in any Fiscal Year with respect to the Prior Lease and the Parity Obligations for payment of principal and interest requirements. " Authorized Denominations means $5,000 of principal represented by the Obligations of a series due on a specific payment date or integral multiples thereof. " Bond Year means each one -year period beginning on the day after the expiration of the preceding Bond Year. The first Bond Year shall begin on the date of issue of the Obligations and shall end on the date selected by the Town, provided that the first Bond Year shall not exceed one calendar year. The last Bond Year shall end on the date of retirement of the last Obligation. " Bond Yield means the discount rate that produces a present value equal to the Issue Price of all unconditionally payable payments of principal, interest and fees for qualified guarantees within the meaning of Regulations section 1.148 -4(f) and amounts reasonably expected to be paid as fees for qualified guarantees in connection with the applicable series of the Obligations as determined under Regulations section 1.148 -4(b), recomputed if required by Regulations section 1.148- 4(b)(4) or 4(h)(3). Bond Yield shall . The present value of all such payments shall be computed as of the date of issue of the Obligations and using semiannual compounding on the basis of a 360 -day year. " Business Day means any day of the week other than a Saturday, Sunday or a day which shall be in the State a legal holiday or a day on which the Trustee is authorized or obligated by law or executive order to close or a day on which the Federal Reserve is closed as modified by the effect of Section 9.6. " Certificate of Completion means the notice of completion, filed with the Trustee by the Town Representative, stating that the New Projects have been acquired. 3 Regular Council Meeting - May 22, 2013 - Page 221 of 295 " Closing Date means the day when the Obligations, duly executed by the Trustee, are delivered to the original purchaser thereof. " Code " means the Internal Revenue Code of 1986, as amended. References to the Code and Sections thereof include applicable regulations and temporary regulations thereunder and any successor provisions to those Sections, regulations or temporary regulations and any applicable regulations or temporary regulations issued pursuant to the Internal Revenue Code of 1954. " Completion Date means the date on which the Certificate of Completion is filed with the Trustee by the Town Representative. " Continuing Disclosure Undertaking means the Continuing Disclosure Undertaking, dated the date of the Obligations, by the Town. " Corporate Trust Office means the office of the Trustee designated in Section 12.2 or any successor corporate trust office. " Debt Service Coverage means the amount of the Excise Taxes Revenues plus the State Shared Revenues for the most recently completed Fiscal Year divided by the Maximum Annual Debt Service. " Debt Service Reserve Fund means the fund of that name established pursuant to Article V and held by the Trustee. " Defaulted Interest has the meaning provided in Section 2.11(d). " Defeasance Obligations means, to the extent permitted by law, (1) cash, (2) non - callable direct obligations of the United States of America ( "Treasuries "), (3) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, (4) pre- refunded municipal obligations rated "AAA" and "Aaa" by S &P and Moody's, respectively, (5) securities eligible for "AAA" defeasance under then - existing criteria of S &P or (6) any combination of the foregoing. " Depository Trustee means any bank or trust company, which may include the Trustee, designated by the Town, with a combined capital and surplus of at least Fifty Million Dollars ($50,000,000) and subject to supervision or examination by federal or State of Arizona authority. writing to the Town. " Designated Office means the office designated as such by the Trustee in " means The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York, and its successors and assigns. 0 Regular Council Meeting - May 22, 2013 - Page 222 of 295 " Electronically " means with respect to notice, one transmitted through a timesharing terminal, computer network or facsimile machine, if operative as between any two parties, or if not operative, by telephone (promptly confirmed in writing). " Event of Default means an event of default under the Purchase Agreement as provided in Section 9 thereof. " Excise Tax Revenues means revenues from the Town sale taxes, license and permit fees and fines and forfeitures which the Town now collects; provided that the Mayor and Common Council of the Town may impose other transaction privilege taxes in the future, the uses of revenue from which will be restricted, at the discretion of such Council. " Financing Documents means this Trust Agreement and the Purchase Agreement. " Fiscal Year means the fiscal year of the Town, currently the period July 1 through June 30. " Government Obligations means direct noncallable obligations of, or direct noncallable obligations of the timely payment of the principal of and interest on, which is fully and unconditionally guaranteed by, the United State of America. " Gross Proceeds means: (i) any amounts actually or constructively received by Town from the sale of the applicable series of the Obligations but excluding amounts used to pay accrued interest on the Obligations within one year of the date of issuance of the Obligations; (ii) transferred proceeds of the applicable series of the Obligations under Regulations section 1.148 -9; (iii) any amounts actually or constructively received from investing amounts described in (i), (ii) or this (iii) and (iv) replacement proceeds of the applicable series of the Obligations within the meaning of Regulations section 1.148 -1(c). Replacement proceeds include amounts reasonably expected to be used directly or indirectly to pay debt service on the applicable series of the Obligations, pledged amounts where there is reasonable assurance that such amounts will be available to pay principal or interest on the applicable series of the Obligations in the event the Town or the Trustee encounters financial difficulties and other replacement proceeds within the meaning of Regulations section 1.148- 1(c)(4). Whether an amount is Gross Proceeds is determined without regard to whether the amount is held in any fund or account established under this Trust Agreement. " Independent Counsel means an attorney duly admitted to the practice of law before the highest court of the state in which such attorney maintains an office and who is 5 Regular Council Meeting - May 22, 2013 - Page 223 of 295 not an employee of the Town or the Trustee and which may include the counsel giving a Special Counsel's Opinion. " Interest Payment Date means each January 1 and July 1, while the principal represented by any Obligations are Outstanding provided that, pursuant to Section 9.6, if any such day is not a Business Day, any payment due on such date may be made on the next Business Day, without additional interest and with the same force and effect as if made on the specified date for such payment. " Interest Portion means the amounts of each of the Payments in the column in the Schedule attached to the Purchase Agreement designated "Interest," denominated as and comprising interest pursuant to the Purchase Agreement and received by the Owners of the Obligations. " Investment Property means any security, obligation (other than a tax - exempt bond within the meaning of Code section 148(b)(3)(A)), annuity contract or investment - type property within the meaning of Regulations section 1.148 -1(b). " means the United States Treasury, Internal Revenue Service. " Issue Price means the initial offering price to the public (not including bond houses and brokers, or similar persons or organizations acting in the capacity of underwriters of wholesalers) at which price a substantial amount of the applicable series of the Obligations was sold, less any bond insurance premium and reserve surety bond premium. Issue price shall be determined as provided in Regulations section 1.148 -1(b). "Market Value" means the indicated bid value of the investment or investments to be valued as shown in The Wall Street Journal or any publication having general acceptance as a source of valuation of the same or similar types of securities or any securities pricing service available to or used by the Trustee and generally accepted as a source of valuation. " Maximum Annual Debt Service means, for any Fiscal Year, the greatest Annual Debt Service for the then - current or any succeeding Fiscal Year. " Moody's means Moody's Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, " Moody's" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Town by notice to the Trustee. " Nonpurpose Investment means any Investment Property acquired with Gross Proceeds and which is not acquired to carry out the governmental purposes of the Obligations. " Notification " shall have the meaning provided in Section 10.3. 0 Regular Council Meeting - May 22, 2013 - Page 224 of 295 " Outstanding " refers to Obligations issued in accordance with this Trust Agreement, excluding: (i) Obligations which have been exchanged or replaced, or delivered to the Trustee for credit against a mandatory prepayment installment with respect to principal represented thereby; (ii) Obligations which have been paid; (iii) Obligations which have become due and for the payment of which moneys have been duly provided to the Trustee; and (iv) Obligations for which there have been irrevocably set aside with a Depository Trustee sufficient moneys or obligations permitted hereby and by the Purchase Agreement bearing interest at such rates and with such maturities as will provide sufficient funds to pay the principal, interest and premium, if any, represented by such Obligations, provided, however, that if principal represented by any such Obligations is to be prepaid, the Town shall have taken all action necessary to prepay such Obligations and notice of such prepayment shall have been duly mailed in accordance with the proceedings under which such Obligations were issued or irrevocable instructions so to give such notice shall have been given to the Trustee. " Owner " or any similar term, when used with respect to an Obligation means the person in whose name such Obligation shall be registered. Revenue Obligations. " Parit y Obligations means the Purchase Agreement and any Additional " Payment Fund means the fund by that name established pursuant to Article V hereof and held by the Trustee. attached hereto. " Payment Request Form means the form set forth in Exhibit B which is " Payments " means the "Payments" required to be paid by the Town pursuant to Section 1(c) of the Purchase Agreement and as set forth in the Schedule to the Purchase Agreement, subject to the provisions of Section 5.2(b). permitted by law: " Permitted Investments means any of the following, to the extent 1. (A) Cash (fully insured by the Federal Deposit Insurance Corporation), (B) Direct obligations (other than an obligation subject to variation in principal repayment) of the United States of America ( "U.S. Treasury Obligations "), (C) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (D) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (E) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated. 7 Regular Council Meeting - May 22, 2013 - Page 225 of 295 2. Federal Housing Administration debentures. 3. The listed obligations of government- sponsored agencies which are not backed by the full faith and credit of the United States of America: A. Federal Home Loan Mortgage Corporation (FHLMC or "Freddie Mac ") Participation Certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) and Senior debt obligations; B. Farm Credit Banks (formerly Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives) Consolidated system -wide bonds and notes; C. Federal Home Loan Banks (FHL Banks) Consolidated debt obligations and D. Federal National Mortgage Association (FNMA or "Fannie Mae ") Senior debt obligations and Mortgage - backed securities (excluded are stripped mortgage securities which are purchased at prices exceeding the portion of their unpaid principal amounts). 4. Unsecured certificates of deposit, including those placed by a third party pursuant to an agreement between the Trustee and the Town, time deposits, and bankers' acceptances (having maturities of not more than 365 days) of any bank, including the Trustee or any of its affiliates, the short -term obligations of which are rated "A -1 +" or better by S &P and "Prime -1" or better by Moody's. 5. Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks which have capital and surplus of at least $15 million. 6. Commercial paper (having original maturities of not more than 270 days) rated "A -1 +" or better by S &P and "Prime -1" or better by Moody's. 7. Money market mutual funds rated "AAm" or "AAm -G" or higher by S &P or, if rated by Moody's, "Prime -1" or better by Moody's, including, without limitation any mutual fund for which the Trustee or an affiliate of the Trustee serves as investment manager, administrator, shareholder servicing agent, and /or custodian or subcustodian, notwithstanding that the Trustee or an affiliate of the Trustee receives fees from funds for services rendered, the Trustee collects fees for services rendered pursuant to this Trust Agreement, which fees are separate from the fees received from such funds and services performed for such funds and pursuant to this Trust Agreement may at times duplicate those provided to such funds by the Trustee or an affiliate of the Trustee. 0 Regular Council Meeting - May 22, 2013 - Page 226 of 295 8 . "State Obligations ", which means: A. Direct general obligations of any state of the United States of America or any subdivision or agency thereof to which is pledged the full faith and credit of a state, the unsecured general obligation debt of which is rated "A3" by Moody's and "A" by S &P, or higher, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated; B. Direct general short -term obligations of any state agency or subdivision or agency thereof described in (A) above and rated "A-I+" or better by S &P and "MIG -1 " by Moody's and C. Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (B) above and rated "AA -" or better by S &P and "Aa -3" or better by Moody's. 9. Pre - refunded municipal obligations rated "AAA" by S & P and "Aaa" by Moody's meeting the following requirements: A. The municipal obligations are not subject to redemption prior to maturity or the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; B. The municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations; C. The principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations ( "Verification "); D. The cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations; E. No substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new Verification and F. The cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent. 0 Regular Council Meeting - May 22, 2013 - Page 227 of 295 10. Repurchase agreements: With any domestic bank, or domestic branch of a foreign bank, the long term debt of which is rated at least "A -" by S &P and "A -3" by Moody's; or any broker - dealer with "retail customers" or a related affiliate thereof which broker- dealer has, or the parent company (which guarantees the provider) of which has, long -term debt rated at least "A -" by S &P and "A -3" by Moody's, which broker- dealer falls under the jurisdiction of the Securities Investors Protection Corporation; or any other entity rated "A -" or better by S &P and "A -3" for better by Moody's (each a "Provider "), provided that: A. Permitted collateral shall include U.S. Treasury Obligations, or senior debt obligations of GNMA, FNMA or FHLMC (no collateralized mortgage obligations shall be permitted for these providers), and collateral levels must be at least 102% of the total principal when the collateral type is U.S. Treasury Obligations, 103% of the total principal when the collateral type is GNMA's and 104% of the total principal when the collateral type is FNMA and FHLMC ( "Collateral "); B. The Trustee or a third party acting solely as agent therefore or for the Town (the "Custodian ") has possession of the Collateral or the Collateral has been transferred to the Custodian in accordance with applicable state and federal laws (other than by means of entries on the transferor's books) and such Collateral shall be marked to market; C. The Collateral shall be marked to market on a daily basis and the Provider or the Custodian shall send monthly reports to the Trustee, the Town setting forth the type of Collateral, the Collateral percentage required for that Collateral type, the market value of the collateral on the valuation date and the name of the Custodian holding the Collateral; D. The repurchase agreement shall state and an opinion of counsel shall be rendered at the time such Collateral is delivered that the Custodian has a perfected first priority security interest in the Collateral, any substituted Collateral and all proceeds thereof and E. The repurchase agreement shall provide that if during its term the Provider's rating by either Moody's or S &P is withdrawn or suspended or falls below "A -" by S &P or "A -3" by Moody's, as appropriate, the provider must, notify the Town and the Trustee within five (5) days of receipt of such notice. Within ten (10) days of receipt of such notice, the Provider shall either: provide a written guarantee acceptable to the Town, post Collateral or assign the agreement to a Provider. If the Provider does not perform a remedy within ten (10) Business Days, the Provider shall, at the direction of the Trustee (who shall give such direction if so directed by the Town) repurchase all Collateral and terminate the repurchase agreement, with no penalty or premium to the Town or the Trustee. 10 Regular Council Meeting - May 22, 2013 - Page 228 of 295 11. Investment agreements with a domestic or foreign bank or corporation, the long -term debt of which, or, in the case of a guaranteed corporation the long -term debt, or, in the case of a monoline financial guaranty insurance company, claims paying ability, of the guarantor is rated at least "AA -" by S &P and "Aa3" by Moody's (each an "Eligible Provider "); provided that: A. Interest payments are to be made to the Trustee at times and in amounts as necessary to pay debt service (or, if the investment agreement is the Acquisition Fund, construction draws) on the Obligations; B. The invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven days' prior notice; the Trustee and the Town hereby agree to give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium paid; C. The Eligible Provider shall send monthly reports to the Trustee and the Town setting forth the balance the Town or the Trustee has invested with the Eligible Provider and the amounts and dates of interest accrued and paid by the Eligible Provider; D. The investment agreement shall state that is an unconditional and general obligation of the Eligible Provider, and is not subordinated to any other obligation of, the provider thereof or, if the Eligible Provider is a bank, the agreement or the opinion of counsel shall state that the obligation of the Eligible Provider to make payments thereunder ranks pari passu with the obligations of the Eligible Provider to its other depositors and its other unsecured and unsubordinated creditors; E. The Town and the Trustee shall receive an opinion of domestic counsel to the Eligible Provider that such investment agreement is legal, valid, binding and enforceable against the provider in accordance with its terms; F. The Town and the Trustee shall receive an opinion of foreign counsel to the Eligible Provider (if applicable) that the investment agreement has been duly authorized, executed and delivered by the Eligible Provider and constitutes the legal, valid and binding obligation of the Eligible Provider, enforceable against the Eligible Provider in accordance with its terms, the choice of law of the state set forth in the investment agreement is valid under that country's laws and a court in such country would uphold such choice of law, and any judgment rendered by a court in the United States would be recognized and enforceable in such country; during its term: G. The investment agreement shall provide that if 11 Regular Council Meeting - May 22, 2013 - Page 229 of 295 (1) the Eligible Provider's rating by either S &P or Moody's falls below "AA -" or "Aa3," the provider shall, at its option, within ten (10) days of receipt of publication of such downgrade, either (A) provide a written guarantee acceptable to the Town, (B) post Eligible Collateral (as hereinafter defined) with the Town, the Custodian free and clear of any third party liens or claims, or (C) assign the agreement to an Eligible Provider, or (D) repay the principal of and accrued but unpaid interest on the investment; (2) the Eligible Provider's rating by either S &P or Moody's is withdrawn or suspended or falls below "A -" or "A -3 ", the Eligible Provider must, at the direction of the issuer or the trustee (who shall give such direction if so directed by the Town), within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the investment, in either case with no penalty or premium to the issuer or trustee; H. In the event the Eligible Provider is required to collateralize, permitted collateral shall include U.S. Treasury Obligations, or senior debt obligations of GNMA, FNMA or FHLMC (no collateralized mortgage obligations shall be permitted for these providers) and collateral levels must be 102% of the total principal when the collateral type is U.S. Treasury Obligations, 103% of the total principal when the collateral type is GNMA's and 104% of the total principal when the collateral type is FNMA and FHLMC ( "Eligible Collateral "). In addition, the Eligible Collateral shall be marked to market on a daily basis and the provider or Custodian shall send monthly reports to the Trustee and the Town setting forth the type of collateral, the collateral percentage required for that collateral type, the market value of the collateral on the valuation date and the name of the Custodian holding the Eligible Collateral; I. The investment agreement shall state and an opinion of counsel shall be rendered, in the event Eligible Collateral is required to be pledged by the Eligible Provider under the terms of the investment agreement, at the time such Eligible Collateral is delivered, that the Custodian has a perfected first priority security interest in the Eligible Collateral, any substituted collateral and all proceeds thereof and J. The investment agreement must provide that if during its term: the Eligible Provider shall default in its payment obligations, the Eligible Provider's obligations under the investment agreement shall, at the direction of the Town or the Trustee (who shall give such direction if so directed by the Town), be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Town or the Trustee, as appropriate, and the Eligible Provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc., the Eligible Provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be repaid to the Town or the Trustee, as appropriate. 12 Regular Council Meeting - May 22, 2013 - Page 230 of 295 12. Interests in the Local Government Investment Pool established pursuant to Arizona Revised Statutes Section 35 -326. " Prior Lease means the Amended and Restated Town Lease and Series 1992 Town Lease, dated as of October 1, 1997, as amended by the First Amendment to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of January 1, 2000, the Combined Operations Center Property Ground Lease and Second Amendment to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of April 1, 2002, and the Third Amendment to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of September 1, 2003, and supplemented by the First Supplement to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of February 1, 2000, the Second Supplement to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of September 1, 2003, the Third Supplement to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of August 1, 2004, and the Fourth Supplement to Amended and Restated Town Lease and Series 1992 Town Lease, dated as of August 1, 2008 by and between the Town and the Town of Marana Municipal Property Corporation. "Project Costs" means, with respect to the New Projects, all architectural, engineering, soils, survey, archaeology, demolition, construction management fees, development fees, contingencies and other related costs of installation, construction and other matters necessary for the New Projects and all costs incurred by Trustee or the Town with respect to the transaction to which this Trust Agreement pertains. "Purchase Agreement" means the First Purchase Agreement, dated as of 1 2013 by and between the Trustee, as seller, and the Town, as purchaser. "Rebate Pa means any payment within the meaning of Regulations section 1.148 -3 (d)(1) with respect to a Nonpurpose Investment. "Rebate Requirement" means, for each Bond Year and for the applicable series of the Obligations, at any time the excess of the future value of all Receipts over the future value of all Rebate Payments. For purposes of calculating the Rebate Requirement the Bond Yield shall be used to determine the future value of Receipts and Rebate Payments in accordance with Regulations section 1.148 -3(c). The Rebate Requirement is zero for any Nonpurpose Investment meeting the requirements of a rebate exception under section 148(f)(4) of the Code or Regulations section 1.148 -7. "Receipt" means any receipt within the meaning of Regulations section 1.148- 3(d)(2) with respect to a Nonpurpose Investment. "Regular Record Date" means the close of business on the fifteenth day of the month preceding each Interest Payment Date. "Regulations" means the sections 1.148 -1 through 1.148 -11 and section 1.150 -1 of the regulations of the United States Department of the Treasury promulgated under the Code, including and any amendments thereto or successor regulations. 13 Regular Council Meeting - May 22, 2013 - Page 231 of 295 attached hereto. " Reimbursement Request Form means the form set forth in Exhibit C " Reserve Requirement means, at the time of the deposit to the Debt Service Reserve Fund then required, the Maximum Annual Debt Service; provided, however, that such amount shall not exceed the least of (a) ten percent (10 %) of the net proceeds of the Obligations at the time of original delivery, (b) the greatest amount to be paid in any subsequent Fiscal Year with respect to the Obligations at the time of original delivery or (c) one hundred twenty -five percent (125%) of the average annual debt service at the time of original delivery. " Responsible Officer means, when used with respect to the Trustee, the president, any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any senior associate, any associate or any other officer of the Trustee within the Corporate Trust Office customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the Corporate Trust Office because of such person's knowledge of and familiarity with the particular subject and having direct responsibility for the administration of this Trust Agreement. " &P " means Standard & Poor's Financial Services, LLC, a limited liability company organized and existing under the laws of the State of New York, its successors and assigns, and, if such company shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, "S &P" shall be deemed to refer to any other nationally recognized securities rating agency designated by the Town by notice to the Trustee. " Securities Depository means a "clearing agency" (securities depository) registered under Section 17A of the Securities Exchange Act of 1934, as amended. " SLGS " means Time Deposit United States Treasury Securities, State and Local Government Series. " Special Counsel's Opinion means an opinion signed by an attorney or firm of attorneys of nationally recognized standing in the field of law relating to municipal bonds selected by the Town. " Special Record Date has the meaning provided in Section 2.11(d). "State" means the State of Arizona. " State Shared Revenues means revenues from amounts allocated or apportioned to the Town by the State, any political subdivision thereof or any other governmental unit or agency, except the share of the Town of any taxes which by State law, rule or regulation must be expended for other purposes, such as motor vehicle fuel taxes. " Town Representative means the Town Manager, the Town Finance Director or any other person authorized by the Town Manager or the Mayor and Common Council to act on behalf of the Town with respect to this Trust Agreement. 14 Regular Council Meeting - May 22, 2013 - Page 232 of 295 Words importing persons include firms, associations and corporations, and the singular and plural forms of words shall be deemed interchangeable wherever appropriate. ARTICLE II SPECIAL REVENUE OBLIGATIONS Section 2.1. Authorization of the Obligations The Trustee is hereby authorized and directed to execute and deliver to the original purchaser thereof, the Obligations, evidencing proportionate ownership interests in the Payments. In no event shall the Obligations be deemed liabilities, debts or obligations of the Trustee. Section 2.2. Date; Interest Accrual Each Obligation shall be dated the Closing Date, and interest represented thereby shall be payable from such date or from the most recent Interest Payment Date to which interest has previously been paid or made available for payment with respect to the Outstanding Obligations. Section 2.3. Payment Amounts and Dates and Interest Rates The Obligations shall be in Authorized Denominations. Principal represented by the Obligations shall be payable on the dates and in the principal amounts, and interest represented thereby shall be computed at the rates, as shown below: Maturity Date Principal Interest (July 1 ) Amount Rates- 2014 $ 1 000 % 2015 ,000 2016 ,000 2017 ,000 2018 ,000 2019 ,000 2020 ,000 2021 ,000 2022 ,000 2023 ,000 2024 ,000 2025 ,000 2026 ,000 2030 ,000 Section 2.4. Interest on Obligations Interest represented by the Obligations shall be payable semiannually on January 1 and July 1 of each year commencing 1 20 , to and including the date of payment or prepayment of the amount of principal represented by the Obligations. Said interest shall represent the portion of the Payments designated as interest and coming due during the six -month period preceding each Interest Payment Date with respect to the Obligations. The proportionate share of the portion of the Payments designated as 15 Regular Council Meeting - May 22, 2013 - Page 233 of 295 interest with respect to any Obligation shall be computed by multiplying the portion of Payments designated as principal with respect to such Obligation by the rate of interest applicable to such Obligation (on the basis of a 360 -day year of twelve 30 -day months). Section 2.5. Form The Obligations shall be in fully registered, certificated form. The form of the Obligations shall be substantially in the form set forth in Exhibit A hereto. Section 2.6. Execution The Obligations shall be executed by and in the name of the Trustee by the manual signature of an authorized representative of the Trustee. If any representative whose signature appears on any Obligation ceases to be such representative before the Closing Date, such signature shall nevertheless be as effective as if the representative had remained in office until the Closing Date. Any Obligation may be executed on behalf of the Trustee by such person as at the actual date of the execution of such Obligation shall be the proper authorized representative of the Trustee although at the nominal date of such Obligation such person shall not have been such authorized representative of the Trustee. No Obligation shall be valid or become obligatory for any purpose or shall be entitled to any security or benefit under this Trust Agreement unless and until executed and delivered by the Trustee. The execution by the Trustee of any Obligation shall be conclusive evidence that the Obligation so executed has been duly authorized and delivered hereunder and is entitled to the security and benefit of this Trust Agreement. Section 2.7. Book- Entry Only System The Trustee and the Town may from time to time enter into, and discontinue, an agreement with a Securities Depository which is the Owner of the Obligations, to establish procedures with respect to the Obligations not inconsistent with the provisions of this Trust Agreement; provided, that, notwithstanding any other provisions of this Trust Agreement, any such agreement may provide that different provisions for notice to the Securities Depository may be set forth herein and that a legend shall appear on each Obligation so long as the Obligations are subject to such agreement. With respect to Obligations registered in the name of a Securities Depository (or its nominee), neither the Trustee nor the Town shall have any obligation to any of its members or participants or to any person on behalf of whom an interest is held in the Obligations. It is hereby acknowledged that the Town and the Trustee intend to enter into an agreement with DTC in connection with the execution and delivery of the Obligations, and while such agreement is in effect, the procedures established therein shall apply to the Obligations notwithstanding any other provisions of this Trust Agreement to the contrary. As long as DTC is the Securities Depository with respect to the Obligations, the Trustee shall be a "DTC Direct Participant." The Trustee shall not have any responsibility or obligation to DTC participants or the persons for whom they act as nominees with respect to the Obligations regarding accuracy of any records maintained by DTC or DTC participants, the payments by DTC or DTC participants of any amount in respect of principal, interest or premium, if any, represented by the Obligations, any notice which is permitted or required to be given to or by Owners hereunder (except such notice as is required to be given by the Town to the Trustee or to DTC), or any consent given or any other action taken by DTC as Owner. 16 Regular Council Meeting - May 22, 2013 - Page 234 of 295 Section 2.8. Application of Proceeds The proceeds received by the Trustee from the sale of the Obligations shall forthwith be applied by the Trustee as follows, in the following order of priority: (1) $ shall be deposited in the Payment Fund, (2) $ shall be paid to Wells Fargo Bank, N.A., as the trustee pursuant to Section 10.02 of the Trust Indenture, dated as of October 1, 1997, to discharge all of the remaining bonds secured by the Series 2003 Supplemental Trust Indenture, dated as of September 1, 2003 and (3) the balance shall be deposited in the Acquisition Fund. Section 2.9. Transfer and Exchange. (a) Any Obligation may, in accordance with its terms, be transferred upon the registration books for the Obligation required to be kept pursuant to the provisions of Section 2.13 by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Obligation for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Trustee, duly executed. Whenever any Obligation or Obligations shall be surrendered for transfer, the Trustee shall execute and deliver a new Obligation or Obligations in fully registered form of the series and same payment date and interest rate and for a like aggregate payment amount. (b) Obligations may be exchanged at the Designated Office for a like aggregate payment amount of Obligations of Authorized Denominations of the same series and same payment date and interest rate. In connection with any such exchange or transfer of Obligations, the Owner requesting such exchange or transfer shall, as a condition precedent to the exercise of the privilege of making such exchange or transfer, remit to the Trustee an amount sufficient to pay any tax or other governmental charge required to be paid, other than one imposed by the Town (which will not be payable by the Trustee), or any fee or expense of the Trustee or the Town with respect to such exchange or transfer. (c) The Trustee may, but shall not be obligated to, exchange or register the transfer of an Obligation (i) if principal represented by the Obligation is to be prepaid, in whole or in part, or (ii) during a period of fifteen (15) days preceding the giving of a notice of prepayment. If an Obligation subject to such prepayment is to be transferred after having been selected for prepayment, any notice of prepayment which has been given to the transferor shall be binding on the transferee and a copy of the notice of prepayment shall be delivered by the Trustee to the transferee along with the duly registered Obligation or Obligations. Section 2.10. Obligations Mutilated, Lost, Destroyed or Stolen. If any Obligation shall become mutilated, the Trustee, at the expense of the Owner of said Obligation, shall execute and deliver a new Obligation of like series and tenor and payment date and amount in exchange and substitution for the Obligation so mutilated, but only upon surrender to the Trustee of the Obligation so mutilated. Any mutilated Obligation so surrendered to the Trustee shall be cancelled by it and redelivered to, or upon the order of, the Owner of such Obligation. If 17 Regular Council Meeting - May 22, 2013 - Page 235 of 295 any Obligation shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee, and, if such evidence is satisfactory to the Trustee and, if an indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Owner of such Obligation, shall execute and deliver a new Obligation of like series and tenor and payment date and amount and numbered as the Trustee shall determine in lieu of and in substitution for the Obligation so lost, destroyed or stolen. The Trustee may require payment of an appropriate fee for each new Obligation delivered under this Section and of the expenses which may be incurred by the Trustee in carrying out the duties under this Section. Any Obligation issued under the provisions of this Section in lieu of any Obligation alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits of this Trust Agreement with all other Obligations secured by this Trust Agreement. The Trustee shall not be required to treat both the original Obligation and any replacement Obligation as being Outstanding for the purpose of determining the principal amount of Obligations which may be executed and delivered hereunder or for the purpose of determining any percentage of Obligations Outstanding hereunder, but both the original and replacement Obligation shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of delivering a new Obligation for an Obligation which has been mutilated, lost, destroyed or stolen, and which has become due, the Trustee may make payment with respect to such Obligation upon receipt of the aforementioned indemnity. Section 2.11. Payment (a) Payment of interest due represented by any Obligation on any Interest Payment Date shall be made to the person appearing on the registration books for the Obligation maintained by the Trustee as the Owner thereof as of the Regular Record Date immediately preceding such Interest Payment Date, such interest to be paid by check mailed on the date due by first class mail to such Owner at the address thereof as it appears on such registration books, payable in lawful money of the United States of America. (b) The principal and premium, if any, represented by any Obligations shall be payable in lawful money of the United States of America upon surrender when due at the Designated Office. (c) Interest and, if satisfactory arrangements for surrender are made with the Trustee, principal and premium, if any, payable to any Securities Depository or to any Owner of $1,000,000 or more in principal amount of Obligations shall be paid by wire transfer in immediately available funds to an account in the United States of America if the Owner makes a written request of the Trustee at least twenty (20) days before the Interest Payment Date specifying the account address. The notice may provide that it shall remain in effect for subsequent payments until otherwise requested in a subsequent written notice. (d) Any interest represented by any Obligation which is payable on, but is not punctually paid or duly provided for on, any Interest Payment Date ( "Defaulted Interest ") shall forthwith cease to be payable to the Owner on the relevant Regular Record Date solely by virtue of such Owner having been such Owner. Such Defaulted Interest shall thereupon be paid, together with interest thereon at the same rate per annum as such Defaulted Interest, by the Trustee (out of funds provided to it by the Town) to the persons in whose names HD Regular Council Meeting - May 22, 2013 - Page 236 of 295 such Obligations are registered at the close of business on a special record date for the payment of such portion of Defaulted Interest as may then be paid from the sources herein provided (the "Special Record Date "). When the Trustee has funds available to pay the Defaulted Interest and interest thereon, the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest and interest thereon which shall be not more than fifteen (15) nor less than ten (10) days prior to the date of the proposed payment by the Trustee. The Trustee shall promptly cause notice of the proposed payment of such Defaulted Interest and interest thereon and the Special Record Date therefor to be mailed, first class postage prepaid, to each Owner of an Obligation at his address as it appears in the registration books by the Trustee for the Obligation not less than ten (10) days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and interest thereon and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest and interest thereon shall be paid to the persons in whose names the Obligation are registered on such Special Record Date. Section 2.12. Execution of Documents and Proof of Ownership. (a) Any request, direction, consent, revocation of consent or other instrument in writing required or permitted by this Trust Agreement to be signed or executed by Obligation Owners may be in any number of concurrent instruments of similar tenor, and may be signed or executed by such Owners in person or by their attorneys or agents appointed by an instrument in writing for that purpose, or by any bank, trust company or other depository for such Obligations. Proof of the execution of any such instrument, or of any instrument appointing any such attorney or agent, and of the ownership of Obligations shall be sufficient for any purpose of this Trust Agreement (except as otherwise herein provided), if made in the following manner: (1) The fact and date of the execution by any Owner or the attorney or agent thereof of any such instrument and of any instrument appointing any such attorney or agent, may be proved by a certificate, which need not be acknowledged or verified, of an officer of any bank or trust company located within the United States of America, or of any notary public, or other officer authorized to take acknowledgments of deeds to be recorded in such jurisdictions, that the persons signing such instruments acknowledged the execution thereof. Where any such instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such certificate shall also constitute sufficient proof of his authority. (2) The fact of the ownership of Obligations by any person and the amount, the payment date and the numbers of such Obligations and the date of his holding the same be proved on the registration books maintained pursuant to Section 2.13. (b) Nothing contained in this Article II shall be construed as limiting the Trustee to such proof, it being intended that the Trustee may accept any other evidence of the matters herein stated which the Trustee may deem sufficient. Any request or consent of the Owner of any Obligation shall bind every future Owner of the same Obligation in respect of anything done or suffered to be done by the Trustee in pursuance of such request or consent. 19 Regular Council Meeting - May 22, 2013 - Page 237 of 295 Section 2.13. Obligation Register The Trustee will keep or cause to be kept, at the Designated Office, sufficient books for the registration and transfer of each series of the Obligations which shall at all times during regular business hours on any Business Day be open to inspection by the Town and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Obligations as hereinbefore provided. Section 2.14. Payment of Unclaimed Amounts. In the event any check for payment of interest represented by an Obligation is returned to the Trustee unendorsed or is not presented for payment within two (2) years from its payment date or any Obligation is not presented for payment of principal when due, including because of prepayment, if funds sufficient to pay such interest or principal due upon such Obligation shall have been made available to the Trustee for the benefit of the Owner thereof, it shall be the duty of the Trustee to hold such funds, without liability for interest thereon, for the benefit of the Owner of such Obligation who shall thereafter be restricted exclusively to such funds for any claim of whatever nature relating to such Obligation or amounts due thereunder. The obligation of the Trustee to hold such funds shall continue for two years and six months (subject to applicable escheat laws) following the date on which such interest or principal payment became due, whether on the date due or the date fixed for prepayment, or otherwise, at which time the Trustee shall surrender such unclaimed funds so held to the Town, whereupon any claim of whatever nature by the Owner of such Obligation arising under such Obligation shall be made upon the Town. ARTICLE III APPLICATION OF PROCEEDS RECEIVED BY TRUSTEE; ACQUISITION FUND Section 3.1. Establishment and Application of Acquisition Fund. (a) The Trustee shall establish a special trust fund designated as the "Town of Marana Series 2013 Acquisition Fund" (herein referred to as the "Acquisition Fund "), shall keep such fund separate and apart from all other funds and moneys held by it and shall administer such fund as provided in this Trust Agreement. (b) (1) Upon receipt of a duly executed, applicable Payment Request Form, the Trustee shall remit to the payee designated in the Payment Request Form, the amount requested to be paid in such Payment Request Form for Project Costs within three (3) Business Days following submission of such Payment Request Form. Notwithstanding the foregoing, the Trustee shall apply moneys on deposit in the Acquisition Fund to reimburse the Town for any Project Costs with respect to the Projects incurred or advanced by the Town within three (3) Business Days of receipt of a duly executed Reimbursement Request Form. (2) On the Completion Date, the Trustee shall transfer any remaining amounts in the Acquisition Fund to the Payment Fund to be applied only to the Payments due from the Town on the next succeeding Interest Payment Date and the Acquisition Fund shall be closed. 20 Regular Council Meeting - May 22, 2013 - Page 238 of 295 (3) Any amount remaining in the Acquisition Fund upon the occurrence of an Event of Default shall not be disbursed as provided in this Section, but shall be immediately transferred to the Payment Fund and used only to pay principal and interest represented by the Obligations. ARTICLE IV PREPAYMENT OF OBLIGATIONS Section 4.1. Prepayment Provisions. (a) Principal represented by the Obligations payable before or on July 1 2023, is not subject to prepayment. Principal represented by the Obligations payable on or after July 1, 2024, is subject to prepayment in such order and from such principal amount payable selected by the Town and by lot within such principal amount by such methods as may be selected by the Trustee (or if held in book -entry form in any manner acceptable to DTC) from prepayments made by the Town pursuant to Section 7 of the Purchase Agreement, in whole or in part on any date on or after July 1, 2023, at a price equal to the principal amount thereof to be prepaid, together with accrued interest to the date fixed for prepayment, but without premium. (b) Principal represented by the Obligations payable on July 1, 20 , shall be prepaid on July 1 of the years indicated and in the amounts indicated at a price equal to the amount thereof plus interest accrued to the date of prepayment, but without premium: Year Prepaid Principal Amount Prepaid 20 $ ,000 20 ,000 20 ,000 Whenever Obligations subject to mandatory prepayment are purchased, prepaid (other than because of mandatory prepayment) or are delivered by the Town to the Trustee for cancellation, the principal amount of the Obligations represented thereby so retired shall satisfy and be credited against the mandatory prepayment therefor in any order specified by the Town. (c) For purposes of any prepayment of less than all of the Taxed Obligations payable in any year, the particular Taxed Bonds to be prepaid will be selected by the Trustee on a pro rata basis. Section 4.2. Selection of Obligations for Prepa Principal represented by the Obligations shall be prepaid only in the amounts of $5,000 of principal represented by each or integral multiples thereof. The Town shall, at least forty -five (45) days prior to the prepayment date, notify the Trustee of such prepayment date and of the payment dates of the Obligations and the payment amount of principal represented by the Obligations due on any such payment date to be prepaid on such date. For the purposes of any prepayment of less than all of the Obligations payable on a single payment date, if the Obligations are not held in a book- entry- only system as described in Section 2.7, the particular Obligations or portions of Obligations payable on the date(s) selected to be prepaid shall be selected by the Trustee by lot in accordance 21 Regular Council Meeting - May 22, 2013 - Page 239 of 295 with its standard procedures not more than forty -five (45) nor less than thirty (30) days prior to the prepayment date by such selection methods as the Trustee shall in its sole discretion deem appropriate and fair; provided, however, that such selection methods shall provide for the selection of Obligations or portions thereof for prepayment in principal amounts of $5,000 or integral multiples thereof such that any $5,000 Obligation or $5,000 portion of an Obligation payable on the date selected shall be as likely to be called for prepayment as any other such $5,000 Obligation or $5,000 portion thereof. The Trustee shall promptly notify the Town in writing of the Obligations so selected for prepayment, and the Town will provide the Trustee within thirty (30) days a recomputed payment schedule for the Purchase Agreement. Notwithstanding the foregoing, the Securities Depository for Obligations held in a book- entry- only system shall select the Obligations for prepayment from Obligations maturing in a given year according to its stated procedures. While the Town intends that allocations be made in accordance with the foregoing proportional provisions, the selection of Taxed Obligations for prepayment shall be subject to practices and procedures of the Securities Depository as in effect from time to time. Section 4.3. Notice of Prepayment; Effect. (a) The Trustee shall cause notice of any prepayment hereunder, other than payment at maturity, to be mailed to the Owners of all of the Obligations to be prepaid at the addresses appearing in the Register kept for such purpose pursuant to Section 2.13. Each such notice shall (1) be sent no more than 60 nor less than 30 calendar days prior to the prepayment date, (2) identify the Obligations to be prepaid (specifying the CUSIP numbers, if any, assigned to the Obligations), (3) specify with respect to the Obligations being prepaid their date of issue, their final payment date, their prepayment date and their prepayment price, (4) set forth the name, address and telephone number of the person from whom information pertaining to the prepayment may be obtained, and (5) state that on the prepayment date the Obligations to be prepaid will be payable at the Designated Office, that from that date interest will cease to accrue and that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Obligations. No defect affecting any Obligation, whether in the notice of prepayment or the delivery thereof (including any failure to mail such notice), shall affect the validity of the prepayment proceedings for any other Obligations. (b) If at the time of mailing of notice of an optional prepayment of principal represented by Obligations, there has not been deposited with the Trustee moneys or Defeasance Obligations sufficient to prepay all Obligations subject to such prepayment and the requirements of (e) below are not satisfied, then such notice shall state that the prepayment is conditional upon the deposit of moneys or Defeasance Obligations sufficient for the prepayment with the Trustee and satisfaction of such requirements not later than the opening of business on the prepayment date, and such notice will be of no effect and such Obligations shall not be prepaid unless such moneys or Defeasance Obligations are so deposited and such requirements in (e) below are met. (c) Any notice of prepayment shall be mailed by first class mail, postage prepaid; provided that any notice of prepayment given to any Owner of $1,000,000 or more in aggregate principal amount of Obligations also shall be transmitted electronically. A 22 Regular Council Meeting - May 22, 2013 - Page 240 of 295 certificate of the Trustee shall conclusively establish the mailing or delivery of any such notice for all purposes. (d) Notice having been mailed in the manner provided in (b) above, the Obligations and portions thereof, principal which is represented thereby, shall become due and payable on the prepayment date, and upon presentation and surrender of such Obligation at the place or places specified in that notice, shall be paid at the prepayment price, plus interest accrued to the prepayment date. (e) If the money or Governmental Obligations for the prepayment of all of the portion of principal represented by the Obligations to be prepaid, together with interest accrued thereon to the prepayment date, is held by the Trustee on the prepayment date, so as to be available therefor on that date, then from and after the prepayment date such principal thereof to be prepaid shall cease to bear interest, and, the Obligations or portion thereof represented thereby no longer shall be considered to be Outstanding hereunder. If those moneys shall not be so available on the prepayment date, such principal shall continue to bear interest, until paid, at the same rate as they would have borne otherwise. (f) All moneys deposited in the Payment Fund and held by the Trustee for the prepayment of such portions of principal represented by particular Obligations shall be held in trust for the account of the Owners of such Obligations and shall be paid to them, respectively, upon presentation and surrender of those Obligations. Section 4.4. Partial Prepayment of Obligation Upon surrender of any Obligation, the principal portion of which has been prepaid in part only, the Trustee shall execute and deliver to the Owner thereof, at the expense of the Town, a new Obligation or Obligations of Authorized Denominations equal in aggregate payment amount to the unpaid portion of the Obligation surrendered and due on the same payment date. ARTICLE V PAYMENT FUND; DEBT SERVICE RESERVE FUND Section 5.1. Trustee's Riizhts in Purchase Agreement The Trustee holds in trust hereunder all of its rights and duties in the Purchase Agreement, including but not limited to all of the rights to receive and collect all of the Payments and all other amounts required to be deposited in the Payment Fund and the Debt Service Reserve Fund pursuant to the Purchase Agreement or pursuant hereto. All of the Payments and such other amounts to which the Seller may at any time be entitled shall be paid directly to the Trustee in trust, and all of the Payments collected or received by the Trustee shall be held by the Trustee in trust hereunder in the Payment Fund and the Debt Service Reserve Fund for the benefit of the Owners. Section 5.2. Establishment and Application of Payment Fund. (a) The Trustee shall establish a special trust fund designated as the "Series 2013 Pledged Revenue Obligations Payment Fund" (herein referred to as the "Payment Fund "). So long as any Obligations are Outstanding, the Town shall have no beneficial right or 23 Regular Council Meeting - May 22, 2013 - Page 241 of 295 interest in the Payment Fund or the moneys deposited therein, except only as provided in this Trust Agreement, and such moneys shall be used and applied by the Trustee as hereinafter set forth. (b) Not less than ten (10) Business Days prior to each Interest Payment Date, the Trustee shall notify the Town of the amount required to be paid, after taking into account amounts which will be transferred to the Payment Fund in accordance herewith, on or before such Interest Payment Date, so that a sufficient amount will then be on deposit for both principal and interest represented by the Obligations then due. All amounts received by the Trustee as Payments pursuant to the Purchase Agreement or as transfers pursuant hereto shall be deposited in the Payment Fund. (c) All amounts in the Payment Fund shall be used and withdrawn by the Trustee solely for the purpose of paying the principal, interest and premium, if any, represented by the Obligations as the same shall become due and payable, in accordance with the provisions of Articles II and IV. Section 5.3. Establishment and Application of Debt Service Reserve Fund. (a) The Trustee shall establish a special trust fund designated as the "Series 2013 Pledged Revenue Obligations Debt Service Reserve Fund" (herein referred to as the "Debt Service Reserve Fund "). So long as any Obligations are Outstanding, the Town shall have no beneficial right or interest in the Debt Service Reserve Fund or the moneys deposited therein, except only as provided in this Trust Agreement, and such moneys shall be used and applied by the Trustee as hereinafter set forth. (b) (1) The Trustee shall deposit into the Debt Service Reserve Fund amounts paid pursuant to Section 1 of the Purchase Agreement. (2) Amounts in the Debt Service Reserve Fund shall be withdrawn and transferred to the Payment Fund (i) on any payment date for the Obligations and used solely for the purpose of paying scheduled interest or principal represented by the Obligations in the event that no money of the Town is made available therefor pursuant to the Purchase Agreement or (ii) otherwise for the retirement of all of the Obligations then Outstanding. (3) If immediately before any transfer described in Section 5.3 the amount in the Debt Service Reserve Fund exceeds an amount equal to the Reserve Requirement and if the Town is not then in default under the Purchase Agreement, the Trustee shall transfer the amount to the Payment Fund. Section 5.4. Transfers of Investment Earnings to Payment Fund With the same limitation described in Section 3.1(b)(3), except as otherwise directed by the Town, the Trustee shall, on or before the next Interest Payment Date occurring on July 1, transfer any income or profit on the investment of moneys in the funds hereunder to the Payment Fund. 24 Regular Council Meeting - May 22, 2013 - Page 242 of 295 Section 5.5. Sur lus. Any surplus remaining in any of the funds created hereunder, after prepayment and payment or provision for prepayment and payment of all Obligations, including accrued interest and prepayment premium, if any, and payment of any applicable fees, expenses or indemnities to the Trustee, or provision for such prepayment and payment having been made to the satisfaction of the Trustee, shall be withdrawn by the Trustee and remitted to the Town. Amounts held in the Acquisition Fund shall not be used for such purpose without a Special Counsel's Opinion that such action shall not adversely affect the Direct Payments. ARTICLE VI MONEYS IN FUNDS; INVESTMENT; CERTAIN TAX COVENANTS Section 6.1. Held in Trust The moneys and investments held by the Trustee under this Trust Agreement are irrevocably held in trust for the benefit of the Owners of the Obligations and for the purposes herein specified, and such moneys, and any income or interest earned thereon, shall be expended only as provided in this Trust Agreement and shall not be subject to levy or attachment or lien by or for the benefit of any creditor of the Town or any Owner of the Obligations. Section 6.2. Investments Authorized Upon written order of the Town Representative and subject to the limitations provided herein, moneys held by the Trustee hereunder shall be invested and reinvested by the Trustee, to the maximum extent practicable in Permitted Investments having the highest yield reasonably obtainable. The Town Representative shall direct such investment in specific Permitted Investments. Such investments, if registrable, shall be registered in the name of the Trustee and shall be held by the Trustee. The Trustee may purchase or sell to itself or any affiliate, as principal or agent, investments authorized by this Section. Such investments and reinvestments shall be made giving full consideration to the time at which funds are required to be available. The Trustee may act as purchaser or agent in the making or disposing of any investment. The Trustee shall have no obligation to invest and reinvest any cash held by it hereunder in the absence of timely and specific written direction from the Town Representative. In no event shall the Trustee be liable for the selection of investments. The Trustee may conclusively rely upon such written direction from the Town Representative as to both the suitability and legality of the directed investments. The Town acknowledges that regulations of the Comptroller of the Currency grant the Town the right to receive brokerage confirmations of the security transactions as they occur, at no additional cost. To the extent permitted by law, the Town specifically waives compliance with 12 Code of Federal Regulations 12 and hereby notifies the Trustee that no brokerage confirmations need be sent relating to the security transactions as they occur. Section 6.3. Accounting The Trustee shall furnish to the Town, not less than semiannually, an accounting (which may be in the form of its customary statement) of all investments made by the Trustee. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with Section 6.2. Section 6.4. Allocation of Earnings Any income, profit or loss on such investments shall be deposited in or charged to the respective funds from which such investments were made, and any interest on any deposit of funds shall be deposited in the fund from which 25 Regular Council Meeting - May 22, 2013 - Page 243 of 295 such deposit was made, except as otherwise provided herein. At the direction of the Town Representative, any such income, profit or interest shall be transferred and applied if necessary to pay amounts due pursuant to section 148 of the Code. Section 6.5. Valuation and Disposition of Investments For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued at Market Value. The Trustee may sell or present for redemption, any Permitted Investment so purchased by the Trustee whenever it shall be necessary in order to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from such investment. Section 6.6. Limitation of Investment Yield In the event the Town is of the opinion that it is necessary to restrict or limit the yield on the investment of any amounts paid to or held by the Trustee hereunder in order to avoid the Obligations, or any of them, being considered "arbitrage bonds" within the meaning of section 148 of the Code, the Town Representative may issue to the Trustee a written certificate to such effect (along with appropriate instructions), in which event the Trustee will take such action as is instructed so to restrict or limit the yield on such investment in accordance with the specific instructions contained in such certificate, irrespective of whether the Trustee shares such opinion. Section 6.7. Other Tax Covenants In consideration of the acceptance and execution of the Purchase Agreement by the Trustee and the purchase by the Owners of the Tax - Exempt Obligations, from time to time, and in consideration of retaining the exclusion of the portion of each Payment denominated as and comprising interest pursuant to the Purchase Agreement and received by the Owners of the Tax - Exempt Obligations for federal income tax purposes, the Town shall, from time to time, neither take nor fail to take any action, which action or failure to act is within its power and authority and would result in such portion of each such Payment becoming subject to inclusion in gross income for federal income tax purposes under either laws existing on the date of execution of the Purchase Agreement or such laws as they may be modified or amended or tax laws later adopted. The Town shall comply with such requirement(s) and will take any such action(s) as are necessary to prevent such portion of each such Payment from becoming subject to inclusion in gross income for federal income tax purposes. Such requirements may include but are not limited to making further specific covenants; making truthful certifications and representations and giving necessary assurances; complying with all representations, covenants and assurances contained in certificates or agreements required by any Special Counsel's Opinion; to pay to the United States of America any required amounts representing rebates of arbitrage profits relating to the Obligations; filing forms, statements and supporting documents as may be required under the federal tax laws; limiting the term of and yield on investments made with moneys held pursuant to this Trust Agreement and limiting the use of the proceeds of the Obligations and property financed thereby. 26 Regular Council Meeting - May 22, 2013 - Page 244 of 295 ARTICLE VII THE TRUSTEE Section 7.1. Appointment of Trustee The Town hereby authorizes and directs the Trustee to, and the Trustee shall, execute and deliver the Purchase Agreement, as Seller, and receive all moneys required to be deposited with the Trustee hereunder and shall allocate, use and apply the same as provided in this Trust Agreement. The Town shall maintain as the Trustee a bank or trust company with a combined capital and surplus of at least Fifty Million Dollars ($50,000,000), and subject to supervision or examination by federal or State authority, so long as any of the Obligations are Outstanding. If such bank or trust company 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 purpose 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. Section 7.2. Liability of Trustee; Standard of Care Except with respect to its authority and power generally and authorization to execute this Trust Agreement, the recitals of facts, covenants and agreements herein, in the Purchase Agreement and in the Obligations shall be taken as statements, covenants and agreements of the Town, and the Trustee assumes no responsibility for the correctness of the same, or makes any representations as to the validity hereof or sufficiency of this Trust Agreement, the Purchase Agreement or of the Obligations or shall incur any responsibility in respect hereof or thereof, other than in connection with the duties or obligations herein or in the Obligations assigned to or imposed upon them, respectively. Prior to the occurrence of an Event of Default, or after the timely cure of an Event of Default, the Trustee shall perform only such duties as are specifically set forth in this Trust Agreement and no implied obligations or covenants should be read into this Trust Agreement against the Trustee. After the occurrence of an Event of Default, the Trustee shall exercise such of the rights and powers vested in it, and use the same degree of care and skill in such exercise, as a prudent person would exercise under the circumstances in the conduct of the affairs of the Trustee. Section 7.3. Merger or Consolidation Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided that such company shall be eligible under Section 7.1, shall be the successor to the Trustee without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding. Section 7.4. Protection and Rights of the Trustee. (a) The Trustee shall be protected and shall incur no liability in acting or proceeding in good faith upon any resolution, notice, telegram, request, consent, waiver, certificates, statements, affidavit, voucher, bond, requisition or other paper or document which it shall in good faith believe to be genuine and to have been passed or signed by the proper board or person or to have been prepared and furnished pursuant to any of the provisions of this Trust Agreement, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument, but may accept and rely upon 27 Regular Council Meeting - May 22, 2013 - Page 245 of 295 the same as conclusive evidence of the truth and accuracy of such statements. The Trustee shall not be bound to recognize any person as an Owner of any Obligation or to take any action at his request unless such Obligation shall be deposited with the Trustee and satisfactory evidence of the ownership of such Obligation shall be furnished to the Trustee. The Trustee may consult with counsel with regard to legal questions, and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith in accordance therewith. (b) Whenever in the administration of its duties under this Trust Agreement, 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) shall be deemed to be conclusively proved and established by the certificate of the Town Representative and such certificate shall be full warranty to the Trustee for any action taken or suffered under the provisions of this Trust Agreement 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. (c) The Trustee may become the Owner of the Obligations with the same rights it would have if it were not Trustee; may acquire and dispose of other bonds or evidence of indebtedness of the Town with the same rights it would have if it were not the Trustee and may act as a depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of Obligations, whether or not such committee shall represent the Owners of the majority in principal amount of the Obligations then Outstanding. (d) The recitals, statements and representations by the Town contained in this Trust Agreement, the Purchase Agreement or in the Obligations shall be taken and construed as made by and on the part of the Town and not by the Trustee, and the Trustee does not assume, and shall not have, any responsibility or obligation for the correctness of any thereof. (e) The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder, and the Trustee shall not be answerable for the default or misconduct of any such attorney, agent, or receiver selected by it with reasonable care. The Trustee shall not be answerable for the exercise of any discretion or power under this Trust Agreement or for anything whatever in connection with the funds and accounts established hereunder, except only for its own willful misconduct or gross negligence. (f) No provision in this Trust Agreement shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability (including, without limitation, any and all environmental liability) in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not reasonably assured to it. W Regular Council Meeting - May 22, 2013 - Page 246 of 295 (g) The Trustee shall not be accountable for the use or application by the Town or any other party of any funds which the Trustee has released in accordance with the terms of this Trust Agreement. (h) The Trustee makes no representation or warranty, express or implied, as to the title, value, design, compliance with specifications or legal requirements, quality, durability, operation, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by the Town of the Projects. In no event shall the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising from the Purchase Agreement or this Trust Agreement for the acquisition of the Projects. (i) Notwithstanding any provision in this Trust Agreement or the Purchase Agreement to the contrary, the Trustee shall not be required to take notice or be deemed to have notice of an Event of Default, except an Event of Default under Section 9(a)(i)(A) of the Purchase Agreement, unless a Responsible Officer of the Trustee has actual notice thereof or is specifically notified in writing of such default by the Town or the Owners of at least twenty -five percent (25 %) in aggregate principal amount of all Obligations then Outstanding. 0) The Trustee agrees to accept and act upon instructions of directions pursuant to this Trust Agreement sent by unsecured email, facsimile transmission or other similar unsecured electronic methods, provided, however, that, the Trustee shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If the Town elects to give the Trustee email or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, the Trustee's understanding of such instructions shall be deemed controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee's reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Town agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties. (k) The Trustee shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force maj eure. The term "force maj eure" means an occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care. Force maj eure shall include acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar occurrences. (1) The Trustee shall have no responsibility or liability with respect to any information, statements or recitals in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of those Obligations. 29 Regular Council Meeting - May 22, 2013 - Page 247 of 295 (m) The permissive right of the Trustee to do things enumerated in this Trust Agreement shall not be construed as a duty, and the Trustee shall not be answerable for other than its gross negligence or willful default. The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the Projects. (n) Before taking any action under this Trust Agreement relating to an Event of Default or in connection with its duties under this Trust Agreement other than making payments of principal and interest represented by the Obligations as they become due, the Trustee may require that a satisfactory indemnity bond be furnished for the reimbursement of all expenses to which it may be put and to protect it against all liability, including, but not limited to, any liability arising directly or indirectly under any federal, state or local statute, rule, law or ordinance related to the protection of the environment or hazardous substances and except liability which is adjudicated, to have resulted from its gross negligence or willful default in connection with any action so taken. (o) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of not less than a majority in aggregate principal amount of the Obligations then outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Trust Agreement. Section 7.5. Compensation of Trustee The Town shall from time to time, pursuant to a fee schedule agreed to between the Town and the Trustee (which schedule may be amended in writing), pay to the Trustee reasonable compensation for its services, including but not limited to advances to, and reasonable fees and expenses of, independent appraisers, accountants, consultants, counsel, agents and attorneys -at -law or other experts employed by it in the exercise and performance of its powers and duties hereunder. When the Trustee incurs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law. Section 7.6. Removal and Resiunation of Trustee (a) The Town (but only if no Event of Default has occurred and is continuing) or the Owners of a majority in aggregate principal amount of all Obligations Outstanding, at any time upon thirty (30) days' prior written notice, and for any reason, may remove the Trustee and any successor thereto, but any such successor shall be a bank or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least Fifty Million Dollars ($50,000,000) and subject to supervision or examination by federal or State authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or 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. 30 Regular Council Meeting - May 22, 2013 - Page 248 of 295 (b) The Trustee may at any time resign by giving written notice to the Town. Upon receiving such notice of resignation, the Town shall promptly appoint a successor trustee by an instrument in writing; provided, however, that in the event that the Town does not appoint a successor trustee within thirty (30) days following receipt of such notice of resignation or its giving notice of removal, the retiring Trustee may petition the appropriate court having jurisdiction to appoint a successor trustee. Any resignation or removal of the Trustee and appointment of a successor trustee shall become effective upon acceptance of appointment by the successor trustee. The Trustee and the Town shall execute any documents reasonably required to effect the transfer of rights and obligations of the Trustee to the successor trustee subject, however, to the terms and conditions herein set forth, including, without limitation, the right of the predecessor Trustee to be paid and reimbursed in full for its reasonable charges and expenses (including reasonable fees and expenses of its counsel) and the indemnification under Sections 7.4 and 10.3. Upon such acceptance, the successor trustee shall mail notice thereof to the Owners of the Obligations at their respective addresses set forth on the registration books for the Obligations maintained pursuant to Section 2.13. Section 7.7. Appointment of Agent The Trustee may appoint an agent or agents to exercise any of the powers, rights or remedies granted to the Trustee under this Trust Agreement and to hold title to property or to take any other action which may be desirable or necessary. Section 7.8. Commingling The Trustee may commingle any of the funds held by it pursuant to this Trust Agreement in a separate fund or funds for investment purposes only; provided, however, that all funds or accounts held by the Trustee hereunder shall be accounted for separately notwithstanding such commingling by the Trustee. Section 7.9. Records The Trustee shall keep complete and accurate records of all moneys received and disbursed under this Trust Agreement, which shall be available for inspection by the Town, or any of its agents, at any time, upon reasonable prior notice, during regular business hours. The Trustee shall provide the Town Representative with semiannual reports of funds transactions and balances. ARTICLE VIII MODIFICATION OR AMENDMENT OF AGREEMENTS Section 8.1. Amendments Permitted (a) This Trust Agreement and the rights and obligations of the Owners of the Obligations and the Purchase Agreement and the rights and obligations of the parties thereto, may be modified or amended at any time by a supplemental or amending agreement which shall become effective when the written consent of the Owners of a majority in aggregate principal amount of all Obligations then Outstanding, exclusive of Obligations disqualified as provided in Section 8.3, shall have been filed with the Trustee. No such modification or amendment shall adversely affect the Direct Payments or (1) extend or have the effect of extending the final payment of principal represented by any Obligation or reducing the interest represented thereby or extending the time of payment of interest, or reducing the amount of 31 Regular Council Meeting - May 22, 2013 - Page 249 of 295 principal thereof or reducing any premium payable upon the prepayment thereof, without the express consent of the Owner of such Obligation, or (2) reduce or have the effect of reducing the percentage of Obligations required for the affirmative vote or written consent to an amendment or modification of this Trust Agreement or the Purchase Agreement, or (3) modify any of the rights or obligations of the Trustee without its written assent thereto. Any such supplemental or amending agreement shall become effective as provided in Section 8.2. (b) This Trust Agreement and the rights and obligations of the Owners of the Obligations, and the Purchase Agreement and the rights and obligations of the parties thereto, may be modified or amended at any time by a supplemental or amending agreement, without the consent of any such Owners, but only (1) to provide for additions or modifications to the Projects, (2) to add to the covenants and agreements of any party, other covenants to be observed, or to surrender any right or power herein reserved to the Trustee (for its own behalf) or the Town, (3) to secure additional revenues or provide additional security or reserves for payment of the Obligations, (4) to comply with the requirements of any state or federal securities laws or the Trust Indenture Act of 1939, as from time to time amended, if required by law or regulation lawfully issued thereunder, (5) to provide for the appointment of a successor trustee pursuant to the terms hereof, (6) to preserve the exclusion of interest represented by the Obligations from gross income for purposes of federal or State income taxes and to preserve the power of the Town to continue to issue bonds or incur other obligations the interest on which is likewise exempt from federal and State income taxes, (7) to cure, correct or supplement any ambiguous or defective provision contained herein or therein, (8) with respect to rating matters or (9) in regard to questions arising hereunder or thereunder, as the parties hereto or thereto may deem necessary or desirable and which shall not materially, adversely affect the interests of the Owners of the Obligations as evidenced by a Special Counsel Opinion delivered by the Town to the Trustee. Any such supplemental or amending agreement shall become effective upon execution and delivery by the parties hereto or thereto as the case may be. The Trustee may rely upon the Special Counsel's Opinion as conclusive evidence that any such supplemental or amending agreement complies with this Section. (awn ers _ Section 8.2. Procedure for Amendment With Written Consent of Obli a tion (a) This Trust Agreement and the Purchase Agreement may be amended by supplemental or amending agreement as provided in this Section in the event the consent of the Owners of the Obligations is required pursuant to Section 8.1. A copy of such supplemental or amending agreement, together with a request to the Owners of the Obligation for their consent thereto, shall be mailed by the Trustee to each Owner of an Obligation at the address thereof as set forth on the registration books for the Obligations maintained pursuant to Section 2.13, but failure to mail copies of such supplemental or amending agreement and request shall not affect the validity of the supplemental or amending agreement when assented to as provided in this Section 8.2. (b) Such supplemental or amending agreement shall not become effective unless there shall be filed with the Trustee the written consent of the Owners of a majority in principal amount of all Obligations then Outstanding (exclusive of Obligations 32 Regular Council Meeting - May 22, 2013 - Page 250 of 295 disqualified as provided in Section 8.3) and a notice shall have been mailed as hereinafter in this Section provided. The consent of an Owner of an Obligation shall be effective only if accompanied by proof of ownership of the Obligations for which such consent is given, which proof shall be such as is permitted by Section 2.12. Any such consent shall be binding upon the Owner of the Obligation giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Trustee prior to the date when the notice hereinafter in this Section provided for has been mailed. (c) After the Owners of the required percentage of Obligations shall have filed their consents to such supplemental or amending agreement, the Trustee shall mail a notice to the Owners of the Obligations in the manner hereinbefore provided in this Section for the mailing of such supplemental or amending agreement of the notice of adoption thereof, stating in substance that such supplemental or amending agreement has been consented to by the Owners of the required percentage of Obligations and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of such supplemental agreement or consents thereto). A record, consisting of the papers required by this Section to be filed with the Trustee, shall be conclusive proof of the matters therein stated. Such supplemental or amending agreement shall become effective upon the mailing of such last- mentioned notice, and such supplemental or amending agreement shall be deemed conclusively binding upon the parties hereto and the Owners of all Obligations after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within sixty (60) days. Section 8.3. Disqualified Obligations Obligations owned or held by or for the account of the Town or by any person directly or indirectly controlled by, or under direct or indirect common control with the Town (except any Obligations held in any pension or retirement fund) shall not be deemed Outstanding for the purpose of any vote, consent, waiver or other action or any calculation of Outstanding Obligations provided for in this Trust Agreement and shall not be entitled to vote upon, consent to, or take any other action provided for in this Trust Agreement; provided, however, that in determining whether the Trustee shall be protected in relying upon any such approval or consent of an Owner, only Obligations which a Responsible Officer of the Trustee actually knows to be owned or held by the Town, or by any person directly or indirectly controlled by, or under direct or indirect common. control with the Town (except any Obligations held in any pension or retirement fund) shall be deemed not to be Outstanding unless all Obligations are so owned, in which case such Obligations shall be considered Outstanding for the purpose of such determination. Section 8.4. Effect of Supplemental Trust Agreement From and after the time any supplemental or amending agreement becomes effective pursuant to this Article VIII, this Trust Agreement or the Purchase Agreement, as the case may be, shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations of the parties hereto or thereto and all Owners of Obligations Outstanding, as the case may be, shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any supplemental or amending agreement shall be deemed to be part of the terms and conditions of this Trust Agreement or the 33 Regular Council Meeting - May 22, 2013 - Page 251 of 295 Purchase Agreement, as the case may be, for any and all purposes. The Trustee may require each Owner, before his consent provided for in this Article VIII shall be deemed effective, to reveal whether the Obligations as to which such consent is given are disqualified as provided in Section 8.3. Section 8.5. Endorsement or Replacement of Obligations Delivered After Amendments. The Trustee may determine that Obligations delivered after the effective date of any action taken as provided in this Article shall bear a notation, by endorsement or otherwise, in form approved by the Trustee, as to such action. In that case, upon demand of the Owner of any Obligation Outstanding at such effective date and presentation of his Obligation for the purpose at the office of the Trustee, a suitable notation shall be made on such Obligation. The Trustee may determine that the delivery of substitute Obligations, so modified as in the opinion of the Trustee is necessary to conform to such Obligation Owners' action, which substitute Obligations shall thereupon be prepared, executed and delivered. In that case, upon demand of the Owner of any Obligation then Outstanding, such substitute Obligation shall be exchanged at the Designated Office of the Trustee, without cost to such Owner, for an Obligation of the same character then Outstanding, upon surrender of such Outstanding Obligation. Section 8.6. Amendatory Endorsement of Obligations. The provisions of this Article shall not prevent any Obligation Owner from accepting any amendment or supplement as to the particular Obligations held thereby, provided that proper notation thereof is made on such Obligations. ARTICLE IX COVENANTS, NOTICES Section 9.1. Compliance With and Enforcement of Purchase Agreement. The Town shall perform all obligations and duties imposed on it under the Purchase Agreement and shall not do or permit anything to be done, or omit or refrain from doing anything, in any case where any such act done or permitted to be done, or any such omission of or refraining from action, would or might be an Event of Default. The Town, immediately upon receiving or giving any notice, communication or other document in any way relating to or affecting any such action will deliver the same, or a copy thereof, to the Trustee. Section 9.2. Observance of Laws and Reuulations. The Town shall well and truly keep, observe and perform all valid and lawful obligations or regulations now or hereafter imposed on it by contract, or prescribed by any law of the United States of America, or of the State, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of any and every right, privilege or franchise now owned or hereafter acquired by the Town, including its right to exist and carry on business as a political subdivision, to the end that such rights, privileges and franchises shall be maintained and preserved, and shall not become abandoned, forfeited or in any manner impaired. Section 9.3. Recordation and Filing The Town shall file this Trust Agreement (or a memorandum thereof or a financing statement with respect thereto), and all such documents as may be required by law (and shall take all further actions which may be 34 Regular Council Meeting - May 22, 2013 - Page 252 of 295 necessary or be reasonably required by the Trustee), all in such manner, at such times and in such places as may be required by law in order fully to preserve, protect and perfect the security of the Trustee and the Owners. Section 9.4. Further Assurances. The Trustee (at the reasonable request of the Town) and the Town shall make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Trust Agreement and the Purchase Agreement and for the better assuring and confirming unto the Owners the rights and benefits provided herein. Section 9.5. Notification to the Town of Failure to Make Payments The Trustee shall notify the Town of any failure by the Town to make any Payment or other payment required under the Purchase Agreement to be made to the Trustee, in writing and within one (1) Business Day of any such failure. Such notice shall not be a prerequisite for the occurrence of an Event of Default. Section 9.6. Business Day. Except as otherwise required herein, if this Trust Agreement or the Purchase Agreement requires any party to act on a specific day and such day is not a Business Day, such party need not perform such act until the next succeeding Business Day, and such act shall be deemed to have been performed on the day required. ARTICLE X LIMITATION OF LIABILITY Section 10.1. Limited Liability of the Town. Except for the payment of Payments from the Excise Tax Revenues and the State Shared Revenues when due in accordance with the Purchase Agreement and the performance of the other covenants and agreements of the Town contained in the Purchase Agreement and herein, the Town shall have no pecuniary obligation or liability to any of the other parties or to the Owners with respect to this Trust Agreement or the terms, execution, delivery or transfer of the Obligations or the distribution of Payments to the Owners by the Trustee. Section 10.2. No Liability of the Town for Trustee Performance. The Town shall have no obligation or liability to any of the other parties or to the Owners with respect to the performance by the Trustee of any duty imposed upon it under this Trust Agreement. Section 10.3. Indemnification of the Trustee. (a) To the extent permitted by law, the Town shall indemnify and save the Trustee and its officers, directors, agents and employees, harmless for, from and against all claims, losses, costs, expenses, liability and damages, including legal fees and expenses, arising out of: (1) the use, maintenance, condition or management of, or from any work or thing done on, the Projects or any portion thereof or interest therein by the Town; (2) any breach or default on the part of the Town in the performance of any of its obligations under this Trust Agreement and any other agreement made and entered into for purposes of the Projects or any interest therein; (3) any act of negligence of the Town or of any of its agents, contractors, servants, 35 Regular Council Meeting - May 22, 2013 - Page 253 of 295 employees or licensees with respect to the Projects; (4) any act of negligence of any assignee of, or purchaser from, the Town or of any of its or their agents, contractors, servants, employees or licensees with respect to the Projects; (5) the acquisition of the Projects or any interest therein; (6) the actions of any other party, including but not limited to the operation or use of the Projects or interest therein by the Town; (7) the ownership of the Projects or interest therein, (8) the exercise and performance by the Trustee of its powers and duties hereunder, under the Purchase Agreement or the Obligations or in connection with any document or transaction contemplated herewith or therewith, or (9) any untrue statement or alleged untrue statement of any material fact or omission or alleged omission to state a material fact necessary to make the statements made, in light of the circumstances under which they were made, not misleading in any official statement or other offering circular utilized in connection with the sale of the Obligations, including the costs and expenses of defending itself against any claim of liability arising under this Trust Agreement. No indemnification will be made under this Section or elsewhere in this Trust Agreement for willful misconduct, gross negligence or breach of duty under this Trust Agreement by the Trustee, or by its officers, agents, employees, successors or assigns. As security for the payment of amounts due under Section 7.5 and this Section, the Trustee shall be secured under this Trust Agreement by a lien prior to that for the Obligations. The obligations of the Town hereunder for indemnification under this Section shall remain valid and binding notwithstanding, and shall survive, the payment or prepayment of principal represented by the Obligations or resignation or removal of the Trustee or the termination of this Trust Agreement. (b) Promptly after determining that any event or condition which requires or may require indemnification by the Town hereunder exists or may exist, or after receipt of notice of the commencement of any action in respect of which indemnity may be sought hereunder, the Trustee shall notify the Town in writing of such circumstances or action (the "Notification "). Failure to give such notification shall not affect the right of the Trustee to receive the indemnification provided for herewith. Upon giving of the Notification, the Trustee shall cooperate fully with the Town in order that the Town may defend, compromise or settle any such matters or actions which may result in payment by the Town hereunder. The Town shall give the Trustee notice of its election within fifteen (15) days after receiving the Notification whether the Town, at its sole cost and expense, shall represent and defend the Trustee in any claim or action which may result in a request for indemnification hereunder. If the Town timely gives the notice that it will represent and defend the Trustee thereafter, the Trustee shall not settle or compromise or otherwise interfere with the defense or undertakings of the Town hereunder. The Town shall not settle or compromise any claim or action against the Trustee without the written approval of the Trustee, except to the extent that the Town shall pay all losses and the Trustee shall be fully released from such claim or action. If the Town either fails to timely give its notice or notifies the Trustee that the Town will not represent and defend the Trustee, the Trustee may defend, settle, compromise or admit liability as it shall determine in the reasonable exercise of its discretion, at the expense of the Town. In the event the Town is required to and does indemnify the Trustee as herein provided, the rights of the Town shall be subrogated to the rights of the Trustee to recover such losses or damages from any other person or entity. Section 10.4. Opinion of Counsel Before being required to take any action, the Trustee may require an opinion of Independent Counsel acceptable to the Trustee, which 36 Regular Council Meeting - May 22, 2013 - Page 254 of 295 opinion shall be made available to the other parties hereto upon request, or a verified certificate of any party hereto, or both, concerning the proposed action. If it does so in good faith, the Trustee shall be absolutely protected in relying thereon. ARTICLE XI EVENTS OF DEFAULT AND REMEDIES OF OBLIGATION OWNERS Section 11.1. Seller's Rights held in Trust As provided herein, the Trustee holds in trust hereunder all of the Seller's rights in and to the Purchase Agreement, including without limitation all of the Seller's rights to exercise such rights and remedies conferred on the Seller pursuant to the Purchase Agreement as may be necessary or convenient to enforce payment of the Payments and any other amounts required to be deposited in the Payment Fund and enforcement of the pledge of the Excise Revenues and the State Shared Revenues for the payment of the Obligations. Section 11.2. Remedies Upon Default; No Acceleration If an Event of Default shall happen, then and in each and every such case during the continuance of such Event of Default, the Trustee may, or upon request of the Owners of a majority in aggregate principal amount of the Obligations then Outstanding and receiving indemnity satisfactory to it shall, exercise one or more of the remedies granted pursuant to the Purchase Agreement; provided, however, that notwithstanding anything herein or in the Purchase Agreement to the contrary, there shall be no right under any circumstances to accelerate the payment dates of the Obligations or otherwise to declare any of the Payments not then past due or in default to be immediately due and payable. Section 11.3. Application of Funds All moneys received by the Trustee pursuant to any right given or action taken pursuant to the provisions of this Article XI or Section 9 of the Purchase Agreement shall be applied by the Trustee in the order following, in the case of the Obligations, upon presentation of the several Obligations, and the stamping thereon of the payment if only partially paid, or upon the surrender thereof if fully paid: First to the payment of the fees, costs and expenses of the Trustee and then of the Obligation Owners in declaring such Event of Default, including reasonable compensation to its or their agents, attorneys and counsel and Second to the payment of the whole amount then owing and unpaid with respect to the Obligations and, with interest on the overdue principal and installments of interest at the rate of twelve percent (12 %) per annum (but such interest on overdue installments of interest shall be paid only to the extent funds are available therefor following payment of principal and interest and interest on overdue principal, as aforesaid), and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid with respect to the Obligations, then to the payment of such principal and interest without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, ratably to the aggregate of such principal and interest. 37 Regular Council Meeting - May 22, 2013 - Page 255 of 295 Section 11.4. Institution of Legal Proceedings If one or more Events of Default shall happen and be continuing, the Trustee in its discretion may, and upon the written request of the Owners of a majority in aggregate principal amount of all Obligations then Outstanding, and upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or the rights of the Owners of Obligations by a suit in equity or action at law for the specific performance of any covenant or agreement contained herein. Section 11.5. Non - waiver Except as otherwise provided in this Article, the Obligation Owners have the right to institute suit to enforce and collect the Payments as provided in the Purchase Agreement. No delay or omission of the Trustee or of any Owner of any of the Obligations to exercise any right or power arising upon the happening of any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein, and every power and remedy given by this Article to the Trustee or the Owners of Obligations may be exercised from time to time and as often as shall be deemed expedient by the Trustee or the Obligation Owners. Section 11.6. Power of Trustee to Control Proceedings In the event that the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of a majority in aggregate principal amount of the Obligations then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Obligations, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, without the consent of a majority in aggregate principal amount of the Obligations Outstanding. Section 11.7. Limitation on Obligation Owners' Right to Sue (a) No Owner of any Obligation issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Trust Agreement, unless (1) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default hereunder; (2) the Owners of at least a majority in aggregate principal amount of all Obligations then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (3) said Owners shall have tendered to the Trustee indemnity satisfactory to it against the costs, expenses, and liabilities to be incurred in compliance with such request and (4) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee. (b) Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Obligations of any remedy hereunder; it being understood and intended that no one or more Owners of Obligations shall have any right in any manner whatever by his or their action to enforce any right under this Trust Agreement, except in the manner herein provided, and that all proceedings at law or in equity with respect to an Event of Default shall be instituted, had and W Regular Council Meeting - May 22, 2013 - Page 256 of 295 maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Obligations. (c) The right of any Owner of any Obligation to receive payment of said Owner's proportionate interest in the Payments as the same become due, or to institute suit for the enforcement of such payment, shall not be impaired or affected without the consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Trust Agreement. ARTICLE XII MISCELLANEOUS Section 12.1. Defeasance (a) If and when any Outstanding Obligation or portion thereof shall be paid and discharged in any one or more of the following ways: (1) By paying or causing to be paid the principal, interest and premium, if any, represented by such Obligations Outstanding, as and when the same become due and payable; (2) By depositing with a Depository Trustee, in trust for such purpose, at or before the payment date therefor, money which, together with the amounts then on deposit in the Payment Fund is fully sufficient to pay or cause to be paid all principal, interest and premium, if any, due represented by such Outstanding Obligations; or (3) By depositing with a Depository Trustee, in trust for such purpose, any Defeasance Obligations which are noncallable in such amount as shall be certified to the Trustee and the Town in a report (the "Verification ") by an independent firm of nationally recognized certified public accountants acceptable to the Trustee and the Town, as being fully sufficient, together with the interest to accrue thereon and moneys then on deposit in the Payment Fund together with the interest to accrue thereon, to pay and discharge or cause to be paid and discharged all principal, interest and premium, if any represented by such Obligations at their respective payment or prepayment dates, which deposit may be made in accordance with the provisions of Section 7 of the Purchase Agreement; notwithstanding that any Obligations shall not have been surrendered for payment, all obligations of the Trustee and the Town with respect to such Outstanding Obligations shall cease and terminate, except only the obligation of the Trustee to pay or cause to be paid, from funds deposited pursuant to subsections (2) or (3) of this Section and paid to the Trustee by the Depository Trustee, to the Owners of the Obligations not so surrendered and paid all sums due with respect thereto, and in the event of deposits pursuant to subsections (2) or (3), the Obligations shall continue to represent direct and proportionate interests of the Owners thereof in such funds. 39 Regular Council Meeting - May 22, 2013 - Page 257 of 295 (b) Any funds held by the Trustee, at the time of one of the events described in paragraph (a) of this Section, which are not required for the payment to be made to Owners or for the payment of any other amounts due and payable by the Town hereunder or under the Purchase Agreement, shall be paid over to the Town. (c) Any Obligation or portion thereof in Authorized Denominations may be paid and discharged as provided in this Section; provided however, that if principal represented by any such Obligation is to be prepaid, notice of such prepayment shall have been given in accordance with the provisions hereof or the Town shall have submitted to the Trustee instructions to be irrevocable as to the date upon which such Obligation or portion thereof is to be prepaid and as to the giving of notice of such prepayment; and provided further, that if any such Obligation or portion thereof will not be payable within sixty (60) days of the deposit referred to in subsections (2) or (3) of this Section, the Trustee shall give notice of such deposit by first class mail to the Owners. (d) No Obligation may be provided for as described in this Section if, as a result thereof, or of any other action in connection with which the provisions for payment of such Obligation is made, the interest payable on any Obligation is thereby made includable in gross income for federal income tax purposes. The Trustee, the Depository Trustee, and the Town may rely upon a Special Counsel's Opinion to the effect that the provisions of this subsection will not be breached by so providing for the payment of any Obligations. Section 12.2. Notices All written notices to be given under this Trust Agreement shall be given by overnight delivery or courier or by mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective upon deposit in the United States of America mail, postage prepaid or, in the case of personal delivery, upon delivery to the address set forth below: If to the Town: Town of Marana, Arizona 11555 West Civic Center Drive Marana, Arizona 85653 Attention: Town Manager If to the Trustee: Wells Fargo Bank, N.A. 101 North First Avenue, Suite 1600 Phoenix, Arizona 85003 Attention: Corporate Trust Services (LM-AZ-Xl6P) Section 12.3. Incorporation of State Statutes (a) As required by the provisions of Section 38 -511, Arizona Revised Statutes, notice is hereby given that the Town may, within three years after its execution, cancel any contract, without penalty or further obligation, made by the Town if any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of the Town is, at any time while the contract or any extension of the contract is in effect, an employee or agent of any other party to the contract in any capacity or a consultant to any other party of the .O Regular Council Meeting - May 22, 2013 - Page 258 of 295 contract with respect to the subject matter of the contract. The cancellation shall be effective when written notice is received by all other parties to the contract unless the notice specifies a later time. The Trustee covenants not to employ as an employee, an agent or, with respect to the subject matter of this Trust Agreement, a consultant, any person significantly involved in initiating, negotiating, securing, drafting or creating this Trust Agreement on behalf of the Town within three years from the execution of this Trust Agreement, unless a waiver of Section 38-511, Arizona Revised Statutes, is provided by the Town. No basis exists for the Town to cancel this Trust Agreement pursuant to Section 38 -511, Arizona Revised Statutes, as of the date hereof. (b) To the extent applicable under Section 41 -440, Arizona Revised Statutes, the Trustee shall comply with all federal immigration laws and regulations that relate to its employees and its compliance with the "e- verify" requirements under Section 23-214(A), Arizona Revised Statutes. The breach by the Trustee of the foregoing shall be deemed a material breach of this Trust Agreement and may result in the termination of the services of the Trustee. The Town retains the legal right to randomly inspect the papers and records of the Trustee to ensure that the Trustee is complying with the above - mentioned warranty. The Trustee shall keep such papers and records open for random inspection during normal business hours by the Trustee. The Trustee shall cooperate with the random inspections by the Town including granting the Town entry rights onto its property to perform such random inspections and waiving its respective rights to keep such papers and records confidential. (c) Pursuant to Sections 35-391.06 and 35-393.06, Arizona Revised Statutes, the Trustee does not have a scrutinized business operation in Sudan or Iran. For the purpose of this Section the term "scrutinized business operations" shall have the meanings set forth in Section 35-391 and 35-393, Arizona Revised Statutes, as applicable. If the Town determines that the Trustee submitted a false certification, the Town may impose remedies as provided by law including terminating the services of the Trustee. Section 12.4. Governin Law This Trust Agreement shall be construed and governed in accordance with the laws of the State. Section 12.5. Binding Effect and Successors This Trust Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Whenever in this Trust Agreement either the Town or the Trustee is named or referred to, such reference shall be deemed to include successors or assigns thereof, and all the covenants and agreements in this Trust Agreement contained by or on behalf of the Town or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 12.6. Execution in Counterparts This Trust Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same Trust Agreement. Section 12.7. Destruction of Cancelled Obli ations Whenever in this Trust Agreement provision is made for the surrender to or cancellation by the Trustee and the delivery to the Town of any Obligations, the Trustee may destroy such Obligations and deliver a certificate of such destruction to the Town instead. 41 Regular Council Meeting - May 22, 2013 - Page 259 of 295 Section 12.8. Headings The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Trust Agreement. All references herein to "Articles ", "Sections ", and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Trust Agreement; and the words "herein ", "hereof', "hereunder" and other words of similar import refer to this Trust Agreement as a whole and not to any particular Article, Section or subdivision hereof. Section 12.9. Parties Interested Herein Nothing in this Trust Agreement or the Obligations, expressed or implied, is intended or shall be construed to confer upon, or to give or grant to, any person or entity, other than the Town, the Trustee and the Owners, any legal or equitable right, remedy or claim under or by reason of this Trust Agreement or any covenant, condition or stipulation hereof, and all covenants, stipulations, provisions and agreements in this Trust Agreement contained by and on behalf of the Town shall be for the sole and exclusive benefit of the Town, the Trustee and the Owners of the Obligations. Section 12.10. Waiver of Notice Whenever in this Trust Agreement the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Section 12.11. Severability of Invalid Provisions In case any one or more of the provisions contained in this Trust Agreement or in the Obligations shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such invalidity, illegality or unenforceability shall not affect any other provision of this Trust Agreement, and this Trust Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The parties hereto hereby declare that they would have entered into this Trust Agreement and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the delivery of the Obligations pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses or phrases of this Trust Agreement may be held illegal, invalid or unenforceable. [Remainder of page left blank intentionally] 42 Regular Council Meeting - May 22, 2013 - Page 260 of 295 IN WITNESS WHEREOF, the parties have executed this Trust Agreement as of the day and year first above written. WELLS FARGO BANK, N.A., as Trustee By ................................................ ............................... PrintedName: ...................................................... Title: ....................... ............................... TOWN OF MARANA, ARIZONA By ................................................ ............................... Mayor ATTEST: Town Clerk- 3 3 0263 641.1-5/13/2013 43 Regular Council Meeting - May 22, 2013 - Page 261 of 295 F.XHTRTT A (Form of Obligation) Number: R...... Principal Amount: $ ....................... Unless this Obligation is presented by an authorized representative of The Depository Trust Company of New York, a New York corporation ( "DTC "), to the Trustee (or any successor registrar) for registration of transfer, exchange, or payment, and any Obligation 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 otherwise by or to any person is wrongful inasmuch as the registered owner hereof, Cede & Co., has an interest herein.* PLEDGED EXCISE TAX REVENUE AND REVENUE REFUNDING OBLIGATION, SERIES 2013 Evidencing a Proportionate Interest of the Owner Hereof in Payments to be Made by THE TOWN OF MARANA, ARIZONA to ........................................ .............................., as Trustee Interest Rate Maturity Date Dated Date CUSIP ..........% July 1, 20.... 1 2013 .......... REGISTERED OWNER: CEDE & CO.* PRINCIPAL AMOUNT: ........................................................... ............................... DOLLARS THIS IS TO CERTIFY THAT the registered owner identified above, or registered assigns, as the registered owner of this Pledged Excise Tax Revenue and Revenue Refunding Obligation, Series 2013 (this "Obligation ") is the owner of an undivided, participatory, proportionate interest in the right to receive certain "Payments" under and defined in that certain First Purchase Agreement, dated as of 1, 2013 (the "Purchase Agreement'), by and between ....... ............................... (the "Trustee "), and the Town of Marana, Arizona, a municipal corporation under the laws of the State of Arizona (the "Town "), which Payments and other rights and interests under the Purchase Agreement are held by the Trustee in trust under that certain First Trust Agreement, dated as of , 2013 (the "Trust Agreement'), by and * Included only while DTC is the Securities Depository. A -1 Regular Council Meeting - May 22, 2013 - Page 262 of 295 between the Town and the Trustee. The Trustee maintains a corporate trust office for payment and transfer of this Obligation (the "Designated Office "). The registered owner of this Obligation is entitled to receive, subject to the terms of the Purchase Agreement, on the payment date set forth above, the principal amount set forth above, representing a portion of the payments due designated as principal coming due and to receive semiannually on January 1 and July 1 of each year commencing 1 20 (the "Interest Payment Dates "), until payment in full of said portion of principal or prepayment prior thereto, the registered owner's proportionate share of the payments designated as interest coming due during the period commencing on the last date on which interest was paid and ending on the day prior to the Interest Payment Date or, if no interest has been paid, from the Dated Date specified above. Said interest is the result of the multiplication of said principal by the interest rate per annum set forth above. Interest shall be calculated on the basis of a 360 -day year composed of twelve (12) months of thirty (30) days each. Said amounts representing the registered owner's share of the Payments designated as interest are payable in lawful money of the United States of America by check mailed when due by first class mail by the Trustee to the registered owner in whose name this Obligation is registered at the close of business on the fifteenth (15th) day of the calendar month next preceding the Interest Payment Date at the address thereof as it appears on the registration books for the Obligations maintained by the Trustee. Said amounts representing the registered owner's share of the Payments designated as principal are payable when due upon surrender of this Obligation at the Designated Office. Principal, interest or premium, if any, payable to any owner of $1,000,000 or more in principal amount of the series of obligations of which this Obligation is a part (the "Obligations ") may be paid by wire transfer in immediately available funds to an account in the United States of America if the owner makes a written request of the Trustee at least twenty (20) days before the date of payment specifying the account address. The notice may provide that it shall remain in effect for subsequent payments until otherwise requested in a subsequent written notice. The Trustee has no obligation or liability to the registered owners of the Obligations for the payment of interest or principal represented by the Obligations. The Trustee's sole obligations are to administer, for the benefit of the registered owners of the Obligations, the various funds and accounts established pursuant to the Trust Agreement. (The recitals, statements, covenants and representations made in this Obligation shall be taken and construed as made by and on the part of the Town, and not by the Trustee, and the Trustee does not assume, and shall not have, any responsibility or obligation for the correctness of any thereof.) This Obligation has been executed and delivered by the Trustee pursuant to the terms of, and for the purposes described in, the Trust Agreement. The Town is authorized to enter into the Purchase Agreement and the Trust Agreement under the laws of the State of Arizona and by resolution of the Mayor and Common Council of the Town adopted 1 2013 (the "Resolution "). Reference is hereby made to the Purchase Agreement and the Trust Agreement (copies of which are on file at the Designated Office) for further definitions, the terms, covenants and provisions pursuant to which the Obligations are delivered, the rights thereunder of the registered owners of the Obligations, the terms under which the Trust A -2 Regular Council Meeting - May 22, 2013 - Page 263 of 295 Agreement or the Purchase Agreement may be modified or supplemented, the rights, duties and immunities of the Trustee and the security for, and the rights and obligations of the Town under the Purchase Agreement (including with respect to certain obligations secured on a senior lien basis by, and to be secured on a parity with, the security for the Payments and to certain limitations on such security), to all of the provisions of which Purchase Agreement and Trust Agreement the registered owner of this Obligation, by acceptance hereof, assents and agrees. (To the extent and in the manner permitted by the terms of the Trust Agreement, the provisions of the Trust Agreement and the Purchase Agreement may be amended by the parties thereto with the written consent of the owners of a majority in aggregate principal represented by all Obligations then outstanding, and may be amended without such consent under certain circumstances but in no event such that the interests of the owners of the Obligations are adversely affected, provided that no such amendment shall impair the right of any owner to receive in any case such owner's proportionate share of any Payment thereof in accordance with such owner's Obligation.) The obligation of the Town to make the Payments does not represent or constitute a general obligation of the Town for which the Town is obligated to levy or pledge any form of taxation nor does the obligation to make the Payments under the Purchase Agreement constitute an indebtedness of the Town, the State of Arizona or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction or otherwise. Neither the Trustee nor the registered owners of the Obligations shall have any right under any circumstances to accelerate the payment date of the Obligations or otherwise declare any of the Payments not then past due or in default to be immediately due and payable. (This Obligation represents an interest in a limited obligation of the Town (as described herein), and no member of the Mayor and Common Council, officer or agent, as such, past, present or future, of the Town shall be personally liable for the payment hereof.) The Obligations are executed and delivered only in fully registered form in denominations of $5,000 of principal represented by the Obligations due on a specific payment date or integral multiples thereof. The Obligations shall not be transferable or exchangeable, except as provided in the Trust Agreement. This Obligation may be exchanged for an Obligation or Obligations of like series and aggregate payment amount in authorized denominations having the same maturity date and interest rate. This Obligation is transferable by the registered owner hereof, in person or by his attorney duly authorized in writing, at the Designated Office, but only in the manner, subject to the limitations and upon payment of the charges provided in the Trust Agreement and upon surrender and cancellation of this Obligation. Upon such transfer a new Obligation or Obligations, of authorized denomination or denominations, for the same series and aggregate principal amount will be delivered to the transferee in exchange therefor. The Town and the Trustee may treat the registered owner hereof as the absolute owner hereof for all purposes, whether or not this Obligation shall be overdue, and the Town and the Trustee shall not be affected by any notice to the contrary. A -3 Regular Council Meeting - May 22, 2013 - Page 264 of 295 The Trustee may require a registered owner, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes or governmental charges required by law in connection with the exchange or transfer. The Trustee may, but shall not be obligated to, exchange or register the transfer of this Obligation (i) if this Obligation has been selected for prepayment, in whole or in part, or (ii) during a period of fifteen (15) days preceding the giving of a notice of prepayment. If this Obligation is transferred after having been selected for prepayment, any notice of prepayment which has been given to the transferor shall be binding on the transferee, and a copy of the notice of prepayment shall be delivered by the Trustee to the transferee along with the duly registered Obligation or Obligations. The registered owner of this Obligation shall have no right to enforce the provisions of the Trust Agreement or the Purchase Agreement or to institute any action to enforce the covenants thereof, or to take any action with respect to a default thereunder or hereunder, or to institute, appear in or defend any suit or other proceedings with respect thereto, except as provided in the Trust Agreement. Principal represented by the Taxed Obligations payable before or on July 1, 2023, is not subject to prepayment. Principal represented by the Taxed Obligations payable on or after July 1, 2024, is subject to prepayment in such order and from such principal amounts payable as may be selected by the Town, in whole or in part on any date on or after July 1, 2023, at a price equal to the principal amount to be prepaid, together with accrued interest to the date fixed for prepayment but without premium. Principal represented by the Taxed Obligations payable on July 1, 2030, shall be prepaid on July 1 of the years indicated and in the principal amounts indicated at a price equal to the amount thereof plus interest accrued to the date of prepayment, but without premium: Year Prepaid Principal Amount Prepaid 20 $ ,000 20 ,000 20 ,000 This Obligation shall not be entitled to any security or benefit under the Trust Agreement until executed by the Trustee. ME Regular Council Meeting - May 22, 2013 - Page 265 of 295 IN WITNESS WHEREOF, this Obligation has been executed and delivered by the Trustee, acting pursuant to the Trust Agreement. Date of Execution: ....... ............................... ............................... .............................., as Trustee By ................................................. ............................... Authorized Representative A -5 Regular Council Meeting - May 22, 2013 - Page 266 of 295 ASSIGNMENT FOR VALUE RECEIVED, the undersigned ....... ............................... (the "Transferor "), hereby sells, assigns and transfers unto ....... ............................... (the "Transferee "), whose address is ............................................. ............................... and whose social security number (or other federal tax identification number) is PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF TRANSFEREE the within certificate and all rights thereunder, and hereby irrevocably constitutes and pp as attorney to register the transfer of the within certificate on the books kept for registration and registration of transfer thereof, with full power of substitution in the premises. Date: ...................... ............................... SIGNATURES) GUARANTEED BY: .......................................... ............................... Firm or Bank .......................................... ............................... Authorized Signature Signature(s) guaranteed by a guarantor institution participating in the Securities Transfer Agents Medallion Program or other guarantee program acceptable to the Trustee or Registrar ............................................. ............................... NOTICE: No transfer will be registered and no new certificate will be issued in the name of the Transferee, unless that signature(s) to this assignment correspond(s) with the name as it appears on the face of the within certificate in every particular, without alteration or enlargement or any change whatever and name, address and the Social Security Number or federal employee identification number of the Transferee is supplied The following abbreviations when used in the inscription on the face of the within certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common iJNIF GIFT /TRANS MIN ACT - .. ............................... Custodian for .. ............................... (Gust.) (Minor) under Uniform Gifts /Transfers to Minors Act of .. ............................... (State) Additional abbreviations may also be used though not in list above. Regular Council Meeting - May 22, 2013 - Page 267 of 295 EXHIBIT B (Form of Payment Request Form) Payment Request Form Application No........... The Trustee is hereby requested to pay from the "Acquisition Fund" established by the First Trust Agreement, dated as of 1, 2013 (the "Trust Agreement "), between the Town of Marana, Arizona (the "Town "), and ................. ............................... , as trustee (the "Trustee ") to the person or corporation designated below as "Payee," the sum set forth below such designation, in payment of the Project Costs (as such term and other undefined terms used herein are defined in the Trust Agreement) with respect to the New Projects described below. The amount shown below is due and payable under a purchase order or contract with respect to such costs described below and has not formed the basis of any prior request for payment. Payee: ................................................... ............................... Address or Wiring Instructions: .......................................... ............................... Amount: ......................................... ............................... . Description of costs or portion thereof authorized to be paid to the Payee: ....................................... ............................... The Town acknowledges that it has received and inspected items related to such costs and has found each item thereof so described to be in good condition, in conformity with the Town's specifications and satisfactory for the Town's purposes and in accordance with the applicable purchase order or contract. Notwithstanding anything herein to the contrary, the Town shall not be deemed to have waived or released the Payee from any liability or obligation to the Town in the event the Town's acknowledgment herein is discovered to be inaccurate in any respect as to any item described above. �I Regular Council Meeting - May 22, 2013 - Page 268 of 295 By execution of this Payment Request Form, the Town requests and approves the payment of the amount stated above to Payee set forth above. DATED: ......................... 20.... Town Representative Please forward payment to Payee at the following address: IM Regular Council Meeting - May 22, 2013 - Page 269 of 295 EXHIBIT C (Form of Reimbursement Request Form) Reimbursement Request Form Application No........... The Trustee is hereby requested to pay from the "Acquisition Fund" established by the Trust Agreement, dated as of 1, 2013 (the "Trust Agreement "), between the Town of Marana, Arizona (the "Town "), and ..................... .............................., as trustee (the "Trustee "), to the Town, the sum set forth below as reimbursement of (all /a portion) of the Project Costs (as such term and other undefined terms used herein are defined in the Trust Agreement) with respect to the New Projects described below. Payment of the amount, shown below was made by the Town on 20........, as evidenced by ............................. attached hereto, as full /partial payment of ........................... .............................., also attached hereto. The amount shown below was paid by the Town and has not formed the basis of any prior request for payment. The Town acknowledges that it has received and has inspected items related to such costs and has found each item thereof so described to be in good condition, in conformity with the Town's specifications and satisfactory for the Town's purposes. Notwithstanding anything herein to the contrary, the Town shall not be deemed to have waived or released any entity named on the attached documentation, from any liability or obligation to the Town in the event the Town's acknowledgment herein is discovered to be inaccurate in any respect as to any item described below. Amount: ........................................ requested: Description of costs or portion thereof for which reimbursement is hereby DATED: .... .............................. ...................................................... ............................... Town Representative Dated Received: ....... .............................. 20.... C -1 Regular Council Meeting - May 22, 2013 - Page 270 of 295 TOWN OF MARANA, ARIZONA $33 PLEDGED EXCISE TAX REVENUE AND REVENUE REFUNDING OBLIGATIONS, SERIES 2013 OBLIGATION PURCHASE AGREEMENT June 17, 2013 Mayor and Common Council Town of Marana, Arizona 115 5 5 West Civic Drive Marana, Arizona 85653 The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (the "Underwriter "), acting on its own behalf, offers to enter into the following agreement (this "Obligation Purchase Agreement ") with the Town of Marana, Arizona (the "Issuer "), which, upon the written acceptance by the Issuer of this offer, shall be binding upon the Issuer and upon the Underwriter. This offer is made subject to the written acceptance hereof by the Issuer on or before 5:00 p.m., Mountain Standard Time, on the date indicated above and shall be subject to withdrawal by the Underwriter upon notice delivered to the Issuer at any time prior to the acceptance hereof by the Issuer. (Terms not otherwise defined in this Obligation Purchase Agreement shall have the same meanings set forth in the Official Statement (as such term is defined herein)). 1. Purchase and Sale of the Obli ations (a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter shall purchase from Wells Fargo, N.A., as trustee (the "Trustee "), and the Issuer shall cause the Trustee to sell and execute and deliver to the Underwriter, all, but not less than all, of the Issuer's Pledged Excise Tax Revenue and Revenue Refunding Obligations, Series 2013 in the principal amount of $33,775,000.00 (the "Obligations "), at the aggregate purchase price of $ (which represents the aggregate principal amount of the Obligations, plus [net] original issue premium of $ , less underwriter's compensation of $ ). (b) Inasmuch as this purchase and sale represents a negotiated transaction, the District further acknowledges and agrees that: (i) the transaction contemplated by this Obligation Purchase Agreement is an "arm's length," commercial transaction between the Issuer 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 Issuer; (ii) the Underwriter has not assumed any advisory or fiduciary responsibility to the Issuer with respect to the transaction TS2:dlh 1938847.2 5/10/2013 1 Regular Council Meeting - May 22, 2013 - Page 271 of 295 contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the Issuer on other matters); (iii) the Underwriter is acting solely in its capacity as underwriter for its own accounts and not as agent or fiduciary to the Issuer; (iv) the only obligations the Underwriter has to the Issuer with respect to the transaction contemplated hereby expressly are set forth in this Obligation Purchase Agreement; and (v) the Issuer has consulted its own legal, accounting, tax, and other advisors, as applicable, to the extent it has deemed appropriate. The Issuer also hereby acknowledges that Greenberg Traurig, LLP, "Special Counsel," has represented the Underwriter in financing transactions for other political subdivisions and hereby waives any conflict of interest that may exist as a result of such representation. (c) The Obligations shall (i) be dated, (ii) mature on the dates and in the principal amounts, (iii) bear interest at the rates payable commencing 1 20 , and semiannually thereafter on each January 1 and July 1, and (iv) be subject to redemption, all as set forth on the respective Schedules hereto. The terms of the Obligations shall be as otherwise described in, and shall be executed and delivered by the Trustee pursuant to, a Trust Agreement, to be dated as of , 20 (the "Trust Agreement "), substantially in the form previously submitted to the Underwriter with only such changes therein as shall be mutually agreed upon between the Underwriter and the Issuer. The Obligations represent undivided proportionate interests in a Purchase Agreement, to be dated as of , 20 (the "Purchase Agreement "), between the Issuer and the Trustee, as seller. 2. Public Offering. The Underwriter shall make a bona fide public offering of all of the Obligations at prices not to exceed the public offering prices set forth on the Schedule hereto and may subsequently change such offering prices without any requirement of prior notice. The Underwriter may offer and sell any portion of the Obligations to certain dealers (including dealers depositing the Obligations into investment trusts) and others at prices lower than the public offering prices stated on the Schedules hereto. 3. The Official Statement. (a) The Preliminary Official Statement, dated 1 20 (the "Preliminary Official Statement "), relating to the Obligations, including the cover page, the inside front cover page and appendices thereto, has been prepared for use in connection with the public offer, sale and distribution of the Obligations by the Underwriter, and the Issuer hereby ratifies the use by the Underwriter prior to the date hereof of the Preliminary Official Statement in connection with the public offering of the Obligations. The Issuer hereby deems, as of its date, the Preliminary Official Statement "final" (except for permitted omissions) by the Issuer for purposes of Section (b)(1) of Section 240.15c2 -12, General Rules and Regulations, Securities Exchange Act of 1934, as amended (the "Rule "). (b) The Issuer shall deliver or cause to be delivered to the Underwriter within seven (7) business days after the acceptance by the Issuer of this Obligation Purchase Agreement and, in the event the Closing (as such term is hereinafter defined) is held less than seven (7) business days from the date hereof, upon request of the Underwriter, in sufficient time TS2:dlh 1938847.2 5/10/2013 2 Regular Council Meeting - May 22, 2013 - Page 272 of 295 to accompany any confirmation requesting payment from any customers of the Underwriter, a reasonable number of copies of the Final Official Statement, dated of even date herewith (the "Official Statement" but if the Official Statement shall be amended prior to the date of delivery of the Obligations, the term "Official Statement" shall refer to such document as amended), relating to the Obligations, including the cover page, the inside front cover page and appendices thereto, which shall be determined on behalf of the Issuer by the Finance Director of the Issuer to be a "final official statement" for purposes of Sections (b)(3) and (4) of the Rule by his execution thereof, the Final Official Statement to be substantially in the form of the Preliminary Official Statement with only such changes therein as shall be necessary to conform to the terms of this Obligation Purchase Agreement and with such other changes and amendments to the date thereof as have been accepted by the Underwriter. (c) The Official Statement shall be prepared for use in connection with the public offering, sale and distribution of the Obligations by the Underwriter, and the Issuer hereby authorizes the Official Statement and the information therein contained and the Town Documents (as such term is hereinafter defined) to be used by the Underwriter in connection with the public offering and sale of the Obligations. (d) The Issuer shall not adopt any amendment to the Official Statement to which, after having been furnished with a copy, the Underwriter shall object in writing or which shall be disapproved by herein defined Special Counsel or the Underwriter. (e) As of the date of acceptance hereof by the Issuer and until twenty - five (25) days after the original execution and delivery of the Obligations, the statements and information in the Official Statement shall be, and the statements and information in the Preliminary Official Statement, as of its date were, true, correct and complete in all material respects, and the statements and information in the Official Statement will not, and the statements and information in the Preliminary Official Statement as of its date did not, include any untrue statement of a material fact or omit to state any material fact necessary in order to make such statements and information, in light of the circumstances under which they will be or were made, not misleading in any material respect. (f) If, after the date of this Obligation Purchase Agreement and until 25 days after the original execution and delivery of the Obligations, any fact or event occurs which might or would cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make the statements therein, not misleading, or if it is necessary to amend the Official Statement to comply with law, the Issuer shall notify the Underwriter and provide the Underwriter with such information as it may from time to time request, and if, in the opinion of the Underwriter such fact or event requires preparation and publication of an amendment to the Official Statement, the Issuer shall forthwith prepare and furnish, at the expense of the Issuer (in a form and manner approved by the Underwriter), a reasonable number of copies of amendments to the Official Statement so that the statements in the Official Statement as so amended will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or so that the Official Statement will comply with law. If such notifications shall be subsequent to the TS2:dlh 1938847.2 5/10/2013 3 Regular Council Meeting - May 22, 2013 - Page 273 of 295 Closing, the Issuer shall furnish such legal opinions, certificates, instruments and other documents as the Underwriter may deem necessary to evidence the truth and accuracy of such amendment to the Official Statement. 4. Representations and Warranties and Agreements of the Issuer The undersigned, on behalf of the Issuer, but not individually, hereby represents and warrants to and covenants with the Underwriter that: (a) The Issuer is a municipal corporation duly incorporated and validly existing under the laws of the State of Arizona (the "State "), and has full and legal right, power and authority, and at the date of the Closing shall have full legal right, power and authority under the resolution of the Mayor and Town Council of the Issuer authorizing the sale and execution and delivery of the Obligations adopted on May 22, 2013 (the "Resolution "), (i) to enter into, execute and deliver this Obligation Purchase Agreement; the Purchase Agreement; the Trust Agreement; a written undertaking by the Issuer to provide ongoing disclosure about the Issuer for the benefit of certain owners of the Obligations as required under paragraph (b)(5) of the Rule in form and substance satisfactory to the Underwriter (the "Undertaking "), which shall be substantially in the form described in the Official Statement, with such changes as may be agreed to in writing by the Underwriter; a depository trust agreement, to be dated as of June 1, 2013 (the "Depository Trust Agreement "), by and between the Issuer and [will we have a Depository Trustee "J, as depository trustee (the "Depository Trustee ") and all documents required hereunder and thereunder to be executed and delivered by the Issuer (this Obligation Purchase Agreement, the Purchase Agreement, the Resolution, the Trust Agreement, the Undertaking, the Depository Trust Agreement and the other documents referred to in this clause (i) hereinafter referred to as the "Town Documents "), (ii) to cause the sale and execution and delivery of the Obligations to the Underwriter as provided herein, (iii) to carry out and consummate the transactions contemplated by the Town Documents and the Official Statement, (iv) to construct and operate the Projects (as such term is defined in the Purchase Agreement) and (v) to approve, execute and authorize the use and distribution, as applicable, of the Preliminary Official Statement and the Official Statement, and the Issuer has complied, and shall at the Closing be in compliance in all respects, with all applicable provisions of law and the Town Documents as they pertain to such transactions; (b) By all necessary official action prior to or concurrently with the acceptance hereof, the Mayor and Council of the Issuer have duly authorized all necessary action to be taken for (i) the adoption of the Resolution and the execution and delivery and sale of the Obligations, (ii) the approval, execution and delivery of, and the performance by the Issuer of the obligations on its part, contained in the Obligations and the Town Documents and (iii) the consummation by it of all other transactions contemplated by the Official Statement, the Town Documents and any and all such other agreements and documents as may be required to be executed, delivered and/or received by the Issuer in order to carry out, give effect to and consummate the transactions contemplated herein and in the Official Statement, and the Resolution (A) authorizes the execution and delivery of the Town Documents and the Obligations as well as the approval, execution and authorization of the use and distribution of the Preliminary Official Statement and the Official Statement and the selling of the Obligations to TS2:dlh 1938847.2 5/10/2013 0 Regular Council Meeting - May 22, 2013 - Page 274 of 295 the Underwriter, (B) has been duly and validly adopted by the Issuer and (C) is in full force and effect; (c) This Obligation Purchase Agreement has been duly executed and delivered by the Issuer, and the other of the Town Documents (when the other of the Town Documents are executed and delivered by the other parties thereto) constitute legal, valid and binding obligations of the Issuer, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights; the Obligations, when executed and delivered and paid for in accordance with the Trust Agreement and this Obligation Purchase Agreement, shall constitute legal, valid and binding obligations entitled to the benefits of the Trust Agreement and enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws and principles of equity relating to or affecting the enforcement of creditors' rights and upon the execution and delivery of the Obligations as aforesaid, the Purchase Agreement and the Trust Agreement shall provide, for the benefit of the holders from time to time of the Obligations, the legally valid and binding pledge of and lien they purport to create as set forth in the Purchase Agreement and the Trust Agreement; (d) The Issuer is not in breach of or default in any material respect under any applicable constitutional provision, law or administrative regulation of the State 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 Issuer is a party or to which the Issuer is or any of its property or assets are otherwise subject; no event has occurred and is continuing which constitutes or with the passage of time or the giving of notice, or both, would constitute a default or event of default by the Issuer under any of the foregoing or the Town Documents and the execution and delivery of the Obligations, the Town Documents and the adoption of the Resolution and compliance with the provisions on the part of the Issuer contained therein shall not conflict with or constitute a breach of or default under any constitutional provision, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Issuer is a party or to which the Issuer is or to which any of its property or assets are otherwise subject nor shall any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Issuer to be pledged to secure the Obligations or under the terms of any such law, regulation or instrument, except as provided by the Obligations and the Town Documents; (e) All authorizations, approvals, licenses, permits, consents, orders and other matters of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the Issuer, of its obligation under the Town Documents and the Obligations have been duly obtained or, with respect to the acquisition and construction of the Project, the Issuer has no reason to believe they shall not be obtained, except for such approvals, consents and orders as may be required under the "blue sky" or securities laws of any jurisdiction in connection with the offering and sale of the Obligations and including particularly, but not by TS2:dlh 1938847.2 5/10/2013 5 Regular Council Meeting - May 22, 2013 - Page 275 of 295 way of limitation, all reports required to be filed by the Issuer pursuant to Section 35 -501, Arizona Revised Statutes, as amended, and, except as otherwise indicated in the Official Statement, the Issuer has been and is in material compliance with all prior continuing disclosure undertakings undertaken by it pursuant to the Rule; (f) The Obligations and the Town Documents conform to the descriptions thereof contained in the Official Statement, and the proceeds of the sale of the Obligations shall be applied as described in the Official Statement; (g) There is no legislation, action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or threatened against the Issuer (i) affecting the existence of the Issuer or the titles of its officers to their respective offices; or (ii) affecting or seeking to prohibit, restrain or enjoin the sale or execution and delivery of the Obligations or the levy, collection and pledge of Excise Tax Revenues and State Shared Revenues (each as described in the Official Statement) or the construction and operation of the Project; or (iii) in any way contesting or affecting the validity or enforceability of the Obligations or the Town Documents, or contesting the exclusion from gross income of interest on the Obligations for State income tax purposes or of interest on the Obligations for federal income tax purposes; or (iv) contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto; or (v) contesting the formation or powers of the Issuer or any authority for the sale and execution and delivery of the Obligations, the adoption of the Resolution or the execution and delivery of the Town Documents; or (vi) which, if decided adversely to the Issuer, would have a materially adverse effect on the financial condition of the Issuer or (vii) is there any basis therefor, wherein an unfavorable decision, ruling or finding would adversely affect the validity or enforceability of the Obligations or the Town Documents; (h) The Issuer has not granted a lien on, made a pledge of or agreed to apply the Excise Tax Revenues, State Shared Revenues and other moneys payable under the Purchase Agreement, except as provided or permitted in the Purchase Agreement or as described in the Official Statement; (i) Unless the Official Statement is amended or supplemented pursuant to paragraph (f) of Section 3 of this Obligation Purchase Agreement, at all times subsequent to the acceptance by the Issuer hereof, during the period up to and including the date of the Closing, the Official Statement, as of its date, did not, as of the date hereof, does not and, hereafter, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, misleading; 0) The Issuer shall apply, or cause to be applied, the proceeds from sale of the Obligations as provided in and subject to all of the terms and provisions of the Town Documents and shall not take or omit to take any action which action or omission will adversely affect exclusion from gross income for federal income tax purposes or for State income tax purposes of the interest on the Obligations; TS2:dlh 1938847.2 5/10/2013 0 Regular Council Meeting - May 22, 2013 - Page 276 of 295 (k) The Issuer shall furnish such information and execute such instruments and take such action in cooperation with the Underwriter as the Underwriter may reasonably request (i) to (A) qualify the Obligations for offer and sale under the "blue sky" or other securities laws and regulations of such States and other jurisdictions in the United States as the Underwriter may designate and (B) determine the eligibility of the Obligations for investment under the laws of such States and other jurisdictions and (ii) to continue such qual- ifications in effect so long as required for the distribution of the Obligations (provided, however, that the Issuer shall not be required to qualify as a foreign corporation or to file any general or special consents to service of process under the laws of any jurisdiction) and shall advise the Underwriter immediately of receipt by the Issuer of any notification with respect to the suspension of the qualification of the Obligations for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose; (1) The audited financial statements of the Issuer contained in the Official Statement fairly present the financial position and results of operations and changes in fund balances of the Issuer as of the dates and for the periods therein set forth; the Issuer has no reason to believe that such financial statements have not been prepared in accordance with generally accepted accounting principles consistently applied; since June 30th of the last fiscal year presented in the audited financial statements of the Issuer included in the Official Statement, the Issuer has not incurred any material liabilities, direct or contingent, nor has there been any material adverse change in the financial position, results of operations or condition, financial or otherwise, of the Issuer that is not described in the Official Statement, whether or not arising from transactions in the ordinary course of business and prior to the Closing, there will be no adverse change of a material nature in such financial position, results of operations or condition, financial or otherwise, of the Issuer; (m) The Issuer is not a party to any contract or agreement or subject to any restriction, the performance of or compliance with which may have a material adverse affect on the financial condition, operations or prospects of the Issuer or ability of the Issuer to comply with all the requirements set forth in the Official Statement, the Resolution, the Town Documents or the Obligations; (n) Prior to the Closing, the Issuer will not offer or issue any bonds, notes or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by any of the revenues or assets which will secure the Obligations without the prior approval of the Underwriter; (o) The representations of the Issuer set forth herein and in the Resolution and the Town Documents are, as of the date hereof, true and correct, and between the date hereof and the date of the Closing, the Issuer shall not take any action that will cause the representations and warranties made herein to be untrue as of the date of the Closing; and (p) The officers and officials of the Issuer executing the Official Statement, the Resolution, the Town Documents and the Obligations and the officers and officials of the Issuer listed on the certificate of the Issuer to be delivered at the Closing have been or will have been duly appointed and are or will be qualified to serve as such officers and TS2:dlh 1938847.2 5/10/2013 7 Regular Council Meeting - May 22, 2013 - Page 277 of 295 officials of the Issuer, and any certificate, signed by any official of the Issuer authorized to do so in connection with the transactions contemplated by this Obligation Purchase Agreement shall be deemed a representation and warranty by the Issuer to the Underwriter as to the statements made therein. 5. Closing. (a) At 8:00 a.m. Mountain Standard Time, on , 20 , or at such other time and date as shall have been mutually agreed upon by the Issuer and the Underwriter (the "Closing "), the Issuer shall, subject to the terms and conditions hereof, cause the Trustee to provide for the execution and delivery of the Obligations to or on behalf of the Underwriter, duly executed, together with the other documents hereinafter mentioned, and the Underwriter shall, subject to the terms and conditions hereof, accept such delivery and pay the purchase price of the Obligations as set forth in Section 1 of this Obligation Purchase Agreement by a certified or bank cashier's check or checks or wire transfer payable in immediately available funds to the Trustee. Payment for the Obligations as aforesaid shall be made at the offices of Special Counsel or such other place as shall have been mutually agreed upon by the Issuer and the Underwriter. (b) Delivery of the Obligations shall be made through The Depository Trust Company, New York, New York, including, if provided for by the Underwriter, a "Fast Automated Securities Transfer." The Obligations shall be delivered in definitive fully registered form, bearing CUSIP numbers without coupons, all as provided in the Trust Agreement, and shall be made available to the Underwriter at least one business day before the Closing for purposes of inspection. 6. Closing Conditions The Underwriter has entered into this Obligation Purchase Agreement in reliance upon the representations, warranties, covenants and agreements of the Issuer contained herein and in reliance upon the representations, warranties, covenants and agreements to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Issuer of its obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the obligations of the Underwriter under this Obligation Purchase Agreement to purchase, to accept delivery of and to pay for the Obligations shall be conditioned upon the performance by the Issuer of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing and shall also be subject to the following additional conditions, including the delivery by the Issuer of such documents as are enumerated herein, in form and substance reasonably satisfactory to the Underwriter: (a) The representations and warranties of the Issuer and the Trustee contained herein and in the Resolution and the Town Documents shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing; (b) The Issuer and the Trustee shall have performed and complied with all covenants, agreements and conditions required by the Town Documents to be performed or complied with by it prior to or at the Closing; TS2:dlh 1938847.2 5/10/2013 0 • Regular Council Meeting - May 22, 2013 - Page 278 of 295 (c) At the date of the Closing, (i) the Town Documents and the Obligations shall be in full force and effect in the form heretofore approved by the Underwriter and shall not have been amended or modified; (ii) the Official Statement shall not have been amended or supplemented, except in any such case as may have been agreed to by the Underwriter and (iii) all actions of the Issuer required to be taken by the Issuer shall be performed in order for Special Counsel and Gust Rosenfeld, P.L.C., as counsel to the Underwriter ( "Counsel to the Underwriter ") to deliver their respective opinions referred to hereafter; (d) At the date of the Closing, all official action of the Issuer relating to the Obligations and the Town Documents shall be in full force and effect and shall not have been amended, modified or supplemented; (e) At or prior to the Closing, the Town Documents shall have been duly executed and delivered by the Issuer and the Trustee shall have duly executed and delivered the Obligations; (f) At the date of the Closing, there shall not have occurred any change or any development involving a prospective change in the Project, in the condition, financial or otherwise, or in the revenues or operations of the Issuer, from that set forth in the Official Statement that, in the judgment of the Underwriter, is material and adverse and that makes it, in the judgment of the Underwriter, impractical to market the Obligations on the terms and in the manner contemplated in the Official Statement; (g) At the date of the Closing, no "event of default" shall have occurred or be existing under the Town Documents nor shall any event have occurred which, with the passage of time or the giving of notice, or both, shall constitute an event of default under the Town Documents; (h) The Issuer shall not have failed to pay principal or interest when due on any of its outstanding obligations for borrowed money; (i) All steps to be taken, all instruments and other documents to be executed and all other legal matters in connection with the transactions contemplated by this Obligation Purchase Agreement shall be reasonably satisfactory in legal form and effect to the Underwriter; 0) At or prior to the Closing, the Underwriter shall have received two copies of the transcript of all proceedings of the Issuer relating to the execution and delivery of the Obligations, certified, as necessary, by appropriate officials of the Issuer, including, but not limited to, the following opinions, certificates and other documents: (1) An unqualified approving opinion of Greenberg Traurig, LLP as special counsel ( "Special Counsel ") as to the Obligations, dated the date of the Closing, addressed to the Issuer and substantially in the form included in the Official Statement; TS2:dlh 1938847.2 5/10/2013 0 Regular Council Meeting - May 22, 2013 - Page 279 of 295 (2) The supplemental opinion of Special Counsel, dated the date of the Closing, addressed to the Underwriter and substantially in the form attached hereto as Exhibit A; (3) An opinion of the Town Attorney that the Town (i) is duly incorporated and validly existing as a municipal corporation and political subdivision under the Constitution and laws of the State of Arizona, (ii) has duly adopted the Resolution and (iii) the adoption and approval of the Resolution and compliance with the respective provisions thereof under the circumstances contemplated thereby does not and will not in any material respect conflict with or constitute on the part of the Town a breach of or default under any agreement or other instrument to which the Town is a party, ordinance, administrative regulation, court order or consent decree to which the Town is subject; (4) An opinion of the Town Attorney that, based on an investigation of the records of the Superior Court of Pima County and the United States District Court, District of Arizona, Tucson Division, there is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body pending or, to his knowledge (upon due inquiry), threatened (i) in any way affecting the powers of the Issuer, the existence of the Issuer or the title to office of any of the officials of the Issuer, (ii) seeking to restrain or enjoin the sale or execution and delivery of the Obligations, or the levy, collection and pledge of the Excise Tax Revenues and State Shared Revenues to be levied to pay the principal of and interest on the Obligations, (iii) in any way contesting or affecting the validity or enforceability of the Obligations, the Town Documents or any agreements entered into in connection therewith, (iv) contesting in any way the completeness or accuracy of the Official Statement, (v) which may adversely affect the Issuer or its properties or (vi) questioning the exclusion from gross income of interest on the Obligations for federal income tax purposes or for State income tax purposes; nor, to the best knowledge of such counsel, is there any reasonable basis therefor; (5) An opinion of the Counsel to the Underwriter dated the date of the Closing, addressed to the Underwriter and substantially in the form attached hereto as Exhibit B; (6) A certificate, dated the date of Closing and signed by the Mayor, the Town Clerk and the Finance Director of the Issuer, to the effect that to the best of their knowledge (i) the representations and warranties of the Issuer contained herein are true and correct in all material respects on and as of the date of the Closing with the same effects if made on the date of the Closing; (ii) there is no action, suit, proceeding, inquiry or investigation by or before any court, governmental agency, public board or body pending or threatened in any way affecting the existence of the Issuer or the titles of its officials to their respective positions, or seeking to restrain or to enjoin the sale or delivery of the Obligations, or the levy and collection of the Excise Tax Revenues imposed and levied or to be imposed and levied to pay all the principal of and interest on the Obligations, or the imposition thereof, or in any way contesting or affecting the validity or enforceability of the Obligations or the Town Documents, or contesting in any way the completeness or accuracy of the Official Statement or the exclusion from gross income of interest on the Tax - Exempt Obligations for federal income tax purposes or State TS2:dlh 1938847.2 5/10/2013 10 Regular Council Meeting - May 22, 2013 - Page 280 of 295 income tax purposes, or contesting the powers of the Issuer or its authority with respect to the Obligations or the Town Documents and (iii) the Issuer has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing; (7) A certificate, dated the date of the Closing and signed by the Finance Director of the Issuer, to the effect that to the best of his knowledge (i) the Official Statement does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) the financial statements of the Issuer contained in the Official Statement fairly present the financial position and results of operations and changes in fund balances of the Issuer as of the dates and for the periods therein set forth and the Issuer has no reason to believe that such financial statements have not been prepared in accordance with generally accepted accounting principles consistently applied; (iii) since June 30 of the last fiscal year presented in the audited financial statements of the Issuer included in the Official Statement, the Issuer has not incurred any material liabilities, direct or contingent, nor has there been any material adverse change in the result of operations or financial condition of the Issuer that is not described in the Official Statement, whether or not arising from transactions in the ordinary course of business, nor are there any deficits in any fund of the Issuer except as disclosed in the Official Statement; (iv) no event affecting the Issuer has occurred since the date of the Official Statement that should be disclosed in the Official Statement for the purpose of which it is to be used or which it is necessary to disclose therein with respect to the Issuer in order to make the statement or information therein in the light of the circumstances under which they were made or set forth not misleading in any material respect; (v) the Issuer is in compliance with the financial requirements contained in the Prior Lease as defined in the Trust Agreement and Purchase Agreement, and other than contained in Section 1 of the Purchase Agreement, there are no incurrence test coverage requirements applicable to the Obligations; and (vi) the Issuer is not otherwise in default under the Prior Lease; (8) A specimen of the Obligations; (9) A certified copy of the Resolution; (10) A counterpart original of the Official Statement manually executed on behalf of the Issuer by the Finance Director of the Town; (11) Anon- arbitrage certificate with respect to the Obligations of the Issuer in form and substance satisfactory to Special Counsel; (12) The filing copy of the Information Return Form 8038 -G (IRS) for the Obligations and of the Report Relating to Bond and Security Issuance (Arizona Department of Revenue) for the Obligations; (13) An executed copy of each of the Town Documents; (14) Certificates and receipts, dated the date of Closing, signed by an authorized representative of the Trustee and the Depository Trustee and in form and substance satisfactory to Special Counsel and the Underwriter; TS2:dlh 1938847.2 5/10/2013 11 Regular Council Meeting - May 22, 2013 - Page 281 of 295 (15) A certificate or certificates, dated the date of the Closing, signed by an authorized representative of the Trustee and in form and substance satisfactory to Special Counsel and the Underwriter, in which such official to the best of his /her knowledge after due investigation states that (i) the representations and warranties of the Trustee contained in the Trust Agreement and the Purchase Agreement are true and correct in all material respects as of the date of the Closing, the Trustee has duly executed and delivered the Trust Agreement and the Purchase Agreement and the Trustee has complied with all agreements and satisfied all conditions on its part to be performed or satisfied under the Trust Agreement and the Purchase Agreement at or prior to the Closing and (ii) no litigation is pending or threatened against the Trustee before any judicial, quasi-judicial or administrative forum (A) to restrain or enjoin the performance by the Trustee of its obligations and duties under the Trust Agreement and the Purchase Agreement, (B) in any way contesting or affecting any authority for, or the validity of, the Obligations or the applications of the proceeds of the Obligations or (C) in any way contesting the existence or corporate trust powers of the Trustee, together with evidence of the authority of the Trustee to execute and deliver, as applicable, the Trust Agreement, the Purchase Agreement and the Obligations and an incumbency certificate; (16) Such additional opinions, letters, certificates, instruments and other comments as the Underwriter may reasonably deem necessary to satisfy conditions to the execution and delivery of the Obligations and to evidence the truth and accuracy as of the Closing, or prior to such time, of the representations, warranties and covenants of the Issuer and the due performance or satisfaction by the Issuer of all agreements then to be performed and all conditions then to be satisfied by the Issuer. (All of the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Obligation Purchase Agreement shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to the Underwriter.) If the Issuer shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Obligations contained in this Obligation Purchase Agreement, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Obligations shall be terminated for any reason permitted by this Obligation Purchase Agreement, this Obligation Purchase Agreement shall terminate and neither the Underwriter nor the Issuer shall be under any further obligation hereunder, except that the respective obligations of the Issuer and the Underwriter set forth in Section 8(c) hereof shall continue in full force and effect. 7. Termination The Underwriter shall have the right to cancel its obligation to purchase the Obligations if, between the date of this Obligation Purchase Agreement and the Closing, the market price or marketability of the Obligations shall be materially adversely affected, in the sole judgment of the Underwriter, by the occurrence of any of the following: (a) Legislation shall be enacted by or introduced in the Congress of the United States or recommended to the Congress for passage by the President of the United States, or the Treasury Department of the United States or the Internal Revenue Service or any TS2:dlh 1938847.2 5/10/2013 12 Regular Council Meeting - May 22, 2013 - Page 282 of 295 member of the Congress or the State legislature or favorably reported for passage to either House of the Congress by any committee of such House to which such legislation has been referred for consideration, a decision by a court of the United States or of the State or the United States Tax Court shall be rendered, or an order, ruling, regulation (final, temporary or proposed), press release, statement or other form of notice by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be made or proposed, the effect of any or all of which would be, directly or indirectly, to affect the tax status of the Town, its securities (including the Obligations) or the interest thereon, or any tax exemption granted or authorized by the Internal Revenue Code of 1986, as amended, or the statutes of the State of Arizona; (b) Legislation introduced in or 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 Obligations, including any or all underlying arrangements, are not exempt from registration under or other requirements of the 1933 Act, or that the Trust Agreement is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, or that the issuance, offering, or sale of obligations of the general character of the Obligations, 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 law as amended and then in effect; (c) Any state "blue sky" or securities commission or other governmental agency or body shall have withheld registration, exemption or clearance of the offering of the Obligations as described herein, or issued a stop order or similar ruling relating thereto; (d) A general suspension of trading in securities on the New York- Stock Exchange or the American Stock Exchange, the establishment of minimum prices on either such exchange, the establishment of material restrictions (not in force as of the date hereof) upon trading securities generally by any governmental authority or any national securities exchange, or a general banking moratorium declared by federal, State of New York, or State officials authorized to do so; (e) The New York Stock Exchange or other national securities exchange or any governmental authority, shall impose, as to the Obligations or as to obligations of the general character of the Obligations, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; (f) Any amendment to the federal or State Constitution or action by any federal or State court, legislative body, regulatory body, or other authority materially adversely affecting the tax status of the Issuer, its property, income securities (or interest TS2:dlh 1938847.2 5/10/2013 13 Regular Council Meeting - May 22, 2013 - Page 283 of 295 thereon), or the validity or enforceability of the Issuer's pledge of any portion of the Excise Tax Revenues or State Shared Revenues; (g) 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 Official Statement, or has the effect that the Official Statement contains any untrue statement of 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; (h) There shall have occurred since the date of this Obligation Purchase Agreement any materially adverse change in the affairs or financial condition of the Issuer; (i) The United States shall have become engaged in hostilities which have resulted in a declaration of war or a national emergency or there shall have occurred any other outbreak or escalation of hostilities or a national or international calamity or crisis, financial or otherwise; 0) Any fact or event shall exist or have existed that, in the Underwriter's judgment, requires or has required an amendment of or supplement to the Official Statement; (lc) There shall have occurred any suspension or downgrading or any notice shall have been given of (i) any intended or potential suspension or downgrading or (ii) any review or possible change that does not indicate a possible upgrade, in the rating accorded any of the Issuer's obligations (including the rating to be accorded the Obligations); (1) United States Treasury Certificate of Indebtedness, Notes or Bonds -State and Local Government Series or acceptable open market securities shall be unavailable for purchase and /or delivery in the amounts, maturities and prices or yields required pursuant to the Depository Trust Agreement; or (m) The purchase of and payment for the Obligations by the Underwriter, or the resale of the Obligations by the Underwriter, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission. 8. Expenses (a) The Underwriter shall be under no obligation to pay, and the Issuer shall pay, any expenses incident to the performance of the obligations of the Issuer hereunder, including, but not limited to (i) the cost of preparation and printing of the Obligations, the Preliminary Official Statement, the Official Statement, the Resolution and the Town Documents in reasonable quantities and all other documents (other than as set forth in the next succeeding paragraph) prepared in connection with the transactions contemplated hereby, (ii) the fees and TS2:dlh 1938847.2 5/10/2013 14 Regular Council Meeting - May 22, 2013 - Page 284 of 295 disbursements of Special Counsel, the Trustee, the Depository Trustee, the Verification Agent and Counsel to the Underwriter, (iii) the fees and disbursements of any other engineers, accountants, and other experts, consultants or advisers retained by the Issuer, (iv) the fees for bond ratings and of DTC, and (v) reasonable miscellaneous, normally occurring, "out -of- pocket" expenses incurred by the Underwriter in connection with the sale and execution and delivery of the Obligations. (b) The Underwriter shall pay (i) all advertising expenses in connection with the public offering of the Obligations and (ii) all other expenses incurred by it in connection with the public offering of the Obligations. (c) If this Obligation Purchase Agreement shall be terminated by the Underwriter because of any failure or refusal on the part of the Issuer to comply with the terms or to fulfill any of the conditions of this Obligation Purchase Agreement or if for any reason the Issuer shall be unable to perform its obligations under this Obligation Purchase Agreement, the Issuer shall reimburse the Underwriter for all "out -of- pocket" expenses (including the fees and disbursements of Counsel to the Underwriter) reasonably incurred by the Underwriter in connection with this Obligation Purchase Agreement or the offering contemplated hereunder. 9. Notices Any notice or other communication to be given to the Issuer under this Obligation Purchase Agreement may be given by delivering the same in writing at the address set forth on the first page of this Obligation Purchase Agreement to the attention of the Finance Director, and any notice or other communication to be given to the Underwriter under this Obligation Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, Suite 280, 2555 East Camelback Road, Phoenix, Arizona 85016, Attention: B. Mark Reader, Managing Director. 10. Parties in Interest. This Obligation Purchase Agreement as heretofore specified shall constitute the entire agreement between us and is made solely for the benefit of the Issuer and the Underwriter (including successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. This Obligation Purchase Agreement may not be assigned by the Issuer. All of the representations, warranties and agreements of the Issuer contained in this Obligation Purchase Agreement shall remain operative and in full force and effect, regardless of (i) any investigations made by or on behalf of the Underwriter; (ii) delivery of and payment for the Obligations pursuant to this Obligation Purchase Agreement and (iii) any termination of this Obligation Purchase Agreement. 11. Effectiveness. This Obligation Purchase Agreement shall become effective upon the acceptance hereof by the Issuer and shall be valid and enforceable at the time of such acceptance. 12. Choice of Law. This Obligation Purchase Agreement shall be governed by and construed in accordance with the law of the State of Arizona. 13. ' Sever . If any provision of this Obligation Purchase Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in TS2:dlh 1938847.2 5/10/2013 15 Regular Council Meeting - May 22, 2013 - Page 285 of 295 any particular case in any jurisdiction or jurisdictions or in all jurisdictions because it conflicts with any provisions of any Constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or circumstance or of rendering any other provision or provisions of this Obligation Purchase Agreement invalid, inoperative or unenforceable to any extent whatever. 14. Business Day For purposes of this Obligation Purchase Agreement, "business day" means any day on which the New York Stock Exchange is open for trading. 15. Section Headings. Section headings have been inserted in this Obligation Purchase Agreement as a matter of convenience of reference only, and it is agreed that such section headings are not a part of this Obligation Purchase Agreement and will not be used in the interpretation of any provisions of this Obligation Purchase Agreement. 16. Counterparts. This Obligation Purchase Agreement may be executed in several counterparts each of which shall be regarded as an original (with the same effect as if the signatures thereto and hereto were upon the same document) and all of which shall constitute one and the same document. 17. Notice Concerning Cancellation of Contracts. As required by the provisions of Section 38 -511, Arizona Revised Statutes, as amended, notice is hereby given that the State, its political subdivisions (including the Issuer) or any department or agency of either may, within three (3) years after its execution, cancel any contract, without penalty or further obligation, made by the State, its political subdivisions or any of the departments or agencies of either if any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of the State, its political subdivisions or any of the departments or agencies of either is, any time while the contract or any extension of the contract is in effect, an employee or agent of any other party to the contract in any capacity or a consultant to any other party of the contract with respect to the subject matter of the contract. The cancellation shall be effective when written notice from the Governor or the chief executive officer or governing body of the political subdivision is received by all other parties to the contract unless the notice specifies a later time. The State, its political subdivisions or any department or agency of either may recoup any fee or commission paid or due to any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of the State, its political subdivisions or any department or agency of either from any other party to the contract arising as the result of the contract. This Section is not intended to expand or enlarge the rights of the Issuer hereunder except as required by such Section. Each of the parties hereto hereby certifies that it is not presently aware of any violation of such Section which would adversely affect the enforceability of this Obligation Purchase Agreement and covenants that it shall take no action which would result in a violation of such Section. TS2:dlh 1938847.2 5/10/2013 16 Regular Council Meeting - May 22, 2013 - Page 286 of 295 If you agree with the foregoing, please sign the enclosed counterpart of this Obligation Purchase Agreement and return it to the Underwriter. This Obligation Purchase Agreement shall become a binding agreement between you and the Underwriter when at least the counterpart of this letter shall have been signed by or on behalf of each of the parties hereto. Very truly yours, STIFEL, NICOLAUS & COMPANY, INCORPORATED B Name: Title: B. Mark Reader Managing Director Time of Execution: , 2013 at PM (MST) THE TOWN OF MARANA, ARIZONA B Printed Name: Title: ATTEST: , Town Clerk TS2:dlh 1938847.2 5/10/2013 17 Regular Council Meeting - May 22, 2013 - Page 287 of 295 SCHEDULE A TOWN OF MARANA, ARIZONA $33 PLEDGED EXCISE TAX REVENUE AND REVENUE REFUNDING OBLIGATIONS, SERIES 2013 Maturity Date (July 1) 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 §0 Dated the Date of Their Initial Authentication and Delivery Principal Amn»nt Interest R ntP % Term Obligation due July 1, 2030 — Yield: Yield Optional Prepayment of Obligations. The principal represented by the Obligations maturing on or before July 1, 2023 are not subj ect to call for prepayment prior to maturity. The Obligations maturing on or after July 1, 2024 are subject to call for prepayment prior to maturity, at the option of the Town, in whole or in part, on any date on or after July 1, 2023, by the payment of a prepayment price equal to the principal amount of each Obligation called for prepayment plus accrued interest to the date fixed for prepayment, but without premium. Mandatory Prepayment of the Obligations. The Obligations maturing on July 1, 2030 (the "Term Obligation ") will be subject to mandatory prepayment and will be prepaid on July 1 of the respective years set forth below and in the amounts set forth below, by payment of a prepayment price equal to the principal amount of the Term Obligation then called for prepayment plus the interest accrued to the date fixed for prepayment, but without premium, as follows: TS2:dlh 1938847.2 5/10/2013 A -1 Regular Council Meeting - May 22, 2013 - Page 288 of 295 Term Obligation due July 1, 2030* Prepayment Date Principal (July 1) Amount 20 20 20 20 20 TS2:dlh 1938847.2 5/10/2013 A -2 Regular Council Meeting - May 22, 2013 - Page 289 of 295 EXHIBIT A [Letterhead of Greenberg Traurig, LLP] [Form of Supplemental Opinion] TS2:dlh 1938847.2 5/10/2013 B -1 Regular Council Meeting - May 22, 2013 - Page 290 of 295 Stifel, Nicolaus & Company, Incorporated Page 2 EXHIBIT B [Letterhead of Gust Rosenfeld, P.L.C.] 1 20 Stifel, Nicolaus & Company, Incorporated Phoenix, Arizona Re: Town of Marana, Arizona Pledged Excise Tax Revenue and Revenue Refunding Obligations, Series 2013 This opinion is rendered pursuant to the Obligation Purchase Agreement, dated , 20 (the "Obligation Purchase Agreement "), between you and the Town of Marana, Arizona (the "Town "), relating to your purchase of the Town of Marana, Arizona $33,775,000 Pledged Excise Tax Revenue and Revenue Refunding Obligations, Series 2013 dated even date herewith (the "Obligations "), and as counsel to you solely for your use in connection with your purchase of the Obligations. For such purpose, we have examined the Official Statement, dated , 20 (the "Official Statement "), relating to the Obligations as well as certain other documents, including certificates, opinions and records, and made certain investigations concerning applicable laws as we considered to be appropriate for the purpose of rendering this opinion. For such purpose, we have assumed the authenticity of all original documents and the conformity to original documents of all copies of documents, the accuracy and completeness of all certificates and records as to factual matters, the authenticity of all signatures on documents and the legal capacity of signers to execute the documents. In addition to reviewing the documents referenced above, we have also participated in telephone conferences with your representatives and representatives of the Town and Special Counsel concerning the contents of the Official Statement and related matters. We have also relied upon certifications of the Town, the opinion of , as the Town Attorney, and the opinions of Special Counsel delivered on this date in connection with the execution and delivery of the Obligations. While we have not undertaken to verify independently, and are not expressing any view upon, and do not assume responsibility for, the accuracy, completeness or fairness of the contents of the Official Statement, we are not aware at present of any information that came to our attention in the course of our performance of the services referred to herein that leads us to believe that the Official Statement, at its date or as of this date, contained or contains, TS2:dlh 1938847.2 5/10/2013 i Regular Council Meeting - May 22, 2013 - Page 291 of 295 Stifel, Nicolaus & Company, Incorporated Page 3 respectively, any untrue statement of a material fact or omitted or omits, respectively, to state any material fact necessary in order to make the statements made in the Official Statement, in light of the circumstances under which they were made, not misleading. We express no view as to (a) any information included in Appendix C to the Official Statement or under the heading "LITIGATION" in the Official Statement, (b) any information relating to The Depository Trust Company, New York, New York, or the status of the interest to be paid on the Obligations for federal or State income tax purposes or (c) any financial, technical or statistical data included or incorporated by reference in the Official Statement. This opinion is furnished solely for your benefit and may not, without our prior express written consent, be relied upon by any other person or entity. Respectfully submitted, TS2:dlh 1938847.2 5/10/2013 Regular Council Meeting - May 22, 2013 - Page 292 of 295 WN f 7 w J orerZo 11555 W. CIVIC CENTER DRIVE, MARANA, ARIZONA 85653 Council Chambers, May 22, 2013, 7:00 PM To: Mayor and Council From: Erik Montague, Finance Director Strategic Plan Focus Area: Not Applicable Item A 3 Subject: Resolution No. 2013 -050: Consideration and possible adoption of a resolution authorizing the defeasance of payment obligations of the Town with respect to the Fourth Supplement to Amended and Restated Town Lease and Series 1982 Town Lease with Town of Marana Municipal Property Corporation as determined by the Finance Director of the Town; authorizing the taking of other actions necessary to the consummation of the transactions contemplated by this resolution and declaring an emergency Discussion: The Town currently has a financial obligation in the principal amount of $6,165,000 arising out of the Municipal Facilities Revenue Bonds, Series 2008B. Town staff anticipates that the Town will soon have funding in hand to pay off (defease) these bonds, including funding currently held by the Town and reimbursement the Town anticipates receiving within the next couple months from the Arizona Department of Transportation relating to the Twin Peaks freeway interchange project. If approved, this item will authorize defeasance of these payment obligations at a time and in an amount the Finance Director determines most advantageous to the Town. Financial Impact: If adopted, this resolution will authorize he Finance Director to reduce the Town's outstanding indebtedness by a principal amount of up to $6,165,000. ATTACHMENTS: Name: Description: D Reso 2013- 050 Series 20086 Defeasance.docx Reso 2013 -050 Staff Recommendation: Staff recommends adoption of Resolution No. 2013 -050. Suggested Motion: I move to adopt Resolution No. 2013 -050. Type: Resolution Regular Council Meeting - May 22, 2013 - Page 293 of 295 MARANA RESOLUTION NO. 2013 -050 RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF MARANA, ARIZONA, AUTHORIZING THE DEFEASANCE OF PAYMENT OBLIGATIONS OF THE TOWN WITH RESPECT TO THE FOURTH SUPPLEMENT TO AMENDED AND RESTATED TOWN LEASE AND SERIES 1982 TOWN LEASE WITH TOWN OF MARANA MUNICIPAL PROPERTY CORPORATION AS DETERMINED BY THE FINANCE DIRECTOR OF THE TOWN; AUTHORIZING THE TAKING OF OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION AND DECLARING AN EMERGENCY WHEREAS, the Mayor and Council of the Town of Marana, Arizona ( the "Town ") , have determined to pay an amount ( the "Deposit") pursuant to the Fourth Supplement To Amended and Restated Town Lease and Series 1982 Town Lease, dated as of August 1, 2008, by and between the Town and the Town of Marana Municipal Property Corporation (the "Corporation ") , which, by giving effect to the earliest prepayment allowed thereby, results in the obligations of the Town thereunder with respect to the Municipal Facilities Revenue Bonds, Series 2008B (the "Bonds ") of the Corporation being considered paid in part under the terms provided hereby; NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, ARIZONA, THAT: Section 1 . The Finance Director of the Town is hereby authorized to determine the amount (up to the full principal amount of the bonds, currently $6,165,000) and date of payment of the Deposit, the payments of the Bonds to which the Deposit are to be applied and the disposition of the Deposit until applied to make such payments of the Bonds. Section 2 . The Mayor or, in the absence thereof, Vice Mayor and Clerk of the Town are hereby authorized and directed, for and on behalf of the Town, to sign and attest and deliver, respectively, any documents necessary in connection with the purpose hereof. Section 3 . (A) If any section, paragraph, clause or provision of this Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Resolution. Regular Council Meeting - May 22, 2013 - Page 294 of 295 (B) All orders and resolutions or parts thereof, inconsistent herewith, are hereby waived to the extent only of such inconsistency. This waiver shall not be construed as reviving any order or resolution or any part thereof. (C) The immediate operation of this Resolution is necessary for the defeasance on the most attractive terms available to the Town of portions of the amounts due with respect to the Town Lease and the resulting preservation of the public health and welfare; an emergency is hereby declared to exist. This Resolution shall be in full force and effect from and after its passage and approval by the Mayor and Council of the Town, as required by law and this Resolution is hereby exempt from the referendum provisions of the constitution and laws of the State of Arizona pursuant to Section 19- 142(B), Arizona Revised Statutes, as amended. PASSED AND ADOPTED this 22 day of May, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ed Honea, Mayor, Town of Marana, Arizona ATTEST: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jocelyn Bronson, Clerk, Town of Marana, Arizona APPROVED AS TO FORM: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Frank Cassidy, Town Attorney, Town of Marana, Arizona Resolution 2013 -050 5/13/2013 2 Regular Council Meeting - May 22, 2013 - Page 295 of 295