Joe McCarthy - 2006 Deposit/Reimbursement Agreement17046 -07 JH:CKL 3 -23-06
This Agreement is dated as of March 23, 2006, and is by and between the City of Gilroy
(the "City ") and the owner of property (the "Owner ") identified below within Improvement
Area No. 1 of the City's Community Facilities District No. 2000 -1 (Highway 152) (the "CFD ")
created by the City under the Mello -Roos Community Facilities Act of 1982 (Sections 53311et
seq. California Government Code) (the "Act ") and provides for the use and reimbursement of
moneys received by the City from the Owner as a part of the process for issuance of bonds
secured by special taxes levied in Improvement Area No. 1.
RECITALS
A. The Owner has asked the City Council to consider the issuance of bonds for it to
help finance certain public capital facilities (the "Facilities ") required as part of the
development of the Owner's property;
B. The Owner has agreed to advance funds required by the City to assure the
payment of the certain costs of issuing the bonds, provided that such funds may be reimbursed
as provided herein; and
C. The City and the Owner now enter into this Agreement to specify the terms of
such advances and reimbursement.
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In consideration of the foregoing and the mutual covenants set forth herein, and for
other consideration the receipt and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
Section 1. The Deposit.
(a) Making the Deposit. The Owner hereby agrees to provide, in the form of
a cashier's check payable to the City, $12,000.00 (the "Deposit"), to be used by the City to
pay the fees and expenses charged to the City by an appraiserin connection with
valuation of the property in the CFD (the "Initial Costs "), by delivering such amount to
the City's Director of Administrative Services.
(b) Additional Amounts. The City and the Owner agree that the amount of
the deposit is based on estimates of the Initial Costs and if such costs are greater than
estimated, the Owner agrees to advance any additional amounts as determined to be
necessary by the City upon the request of the City. Unless and until it receives such
additional amounts, the City shall suspend all actions and proceedings for the bonds.
Such additional amounts shall be deemed part of the Deposit.
(c) Investment. The Deposit may be commingled with other funds of the
City for purposes of investment and safekeeping, but the City shall at all times maintain
records as to the expenditure of the Deposit. The City may use the Deposit as set forth
below. The Deposit shall be invested as provided lawful investments for the City in
accordance with the City's established investment policies.
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Section 2. Use of Deposit. The Deposit shall be used by the City only as follows:
(a) Initial Costs. The City may draw upon the Deposit to pay the Initial Costs
or such other purpose approved by Owner.
(b) Bonds Issued. If the bonds are issued by the City under the Act, the City
shall reimburse to the Owner, without interest, all amounts charged against the Deposit,
such reimbursement to be made solely from the proceeds of such bonds and only to the
extent otherwise permitted under the Act. As soon as practicable after the date of
issuance and delivery of such bonds, the City shall return the then unexpended Deposit
to the Owner, without interest, less an amount equal to any costs incurred by the City or
that the City is otherwise committed to pay, which costs would be subject to payment
under Section 2(a) above but have not yet been so paid by the City.
(c) No Bonds. If no bonds are issued, the City shall, as soon as practicable
after adoption of the resolution stating the intent of the City Council to terminate
proceedings under the Act with respect to the issuance of bonds for the CFD, return the
then unexpended Deposit to the Owner, without interest, less an amount equal to any
costs incurred by the City or that the City is otherwise committed to pay, which costs
would be subject to payment under Section 2(a) above but have not yet been so paid by
the City.
Section 3. Reimbursement of Other Costs. Nothing contained herein shall prohibit
reimbursement of other costs and expenses of the Owner incurred in connection with the CFD
from the proceeds of such bonds. Any such reimbursement shall be made solely from the
proceeds of such bonds and only to the extent otherwise permitted . under the Act and
otherwise provided for in a separate and specific acquisition or similar agreement.
Section 4. No Debt or Liability of City. This Agreement is not a debt or liability of the
City, as provided in Section 53314.9(b) of the Act. The City shall in no event be liable hereunder
other than for the return of the unexpended and uncommitted portions of the Deposit as
provided in Section 2 above. The City shall not be obligated to advance any of its own funds
with respect to any of the other purposes listed in Section 2(a) hereof. No member of the City
Council, officer, employee or agent of the City shall in any event be personally liable hereunder.
Section 5. No Obligations. The provisions of this Agreement shall in no way obligate the
City Council to complete proceedings to issue bonds, notes or other evidences of indebtedness
for the CFD.
Section 6. Severability. If any part of this Agreement is held to be illegal or
unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be
given effect to the fullest extent reasonably possible.
Section 7. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the parties hereto. In the event the Owner shall
assign its rights to receive any reimbursement, Owner agrees to provide the City with such
assurances as the City may reasonably require from the assignee of the Owner as to rights of
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reimbursement and the City reserves the rights to make any reimbursements payable jointly to
such persons as the City may reasonably expect to be paid.
Section 8. Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto with respect to its subject matter and supersedes any prior understanding or
agreement regarding such subject matter. This Agreement may not be amended or modified
(nor any provision hereof waived) except by written instrument signed by the parties.
Section 9. Counterpart. This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which taken together shall constitute one and the
same Agreement.
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Section 10. Effective. This Agreement shall be effective upon its execution.
City of Gilroy Owner
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