County of Santa Clara Finance Agency Controller-Treasurer

County Government Center 70 West Hedding Street, East Wing 2nd floor San Jose, California 95110-1705 (408) 299-5206 FAX 287-7629

NOTICE OF NO OBJECTION TO ROPS

Monday, September 16, 2013

City of Morgan Hill Successor Agency 17575 Peak Avenue Morgan Hill, CA 95037

City of Morgan Hill Oversight Board 17575 Peak Avenue Morgan Hill, CA 95037

Depm1ment of Finance 915 L Street Sacramento, CA 95814

ROPS Period: January 1,2014 to June 30, 2014 - ROPS 13-14B

Successor Agency: City of Morgan Hill

To the Successor Agency, Oversight Board, and Department of Finance:

Pursuant to Health and Safety Code section 34182.5, our office has reviewed the Recognized Obligation Payment Schedule (ROPS) submitted by the above-noted successor agency for the above-noted period. After reviewing all items and funding sources, the Santa Clara County Auditor-Controller does not object to any items or funding sources on the submitted ROPS.

Please note that items and/or funding sources not questioned during this review are subject to subsequent review if they are included on a future ROPS. We also reserve the right to object to an item and/or funding source (including, but not limited to, the use offund balance) on a future ROPS, even if no objection was made on a preceding ROPS.

Board of Supervisors: Mike Wasserman, Cindy Chavez, Dave Cortese, Ken Yeager, S. Joseph Simitian County Executive: Jeffrey V. Smith

Page 1 of2

Notice of No Objection to ROPS Monday, September 16, 2013

Additionally, pursuant to Health and Safety Code section 34186(a), the County Auditor­Controller may audit the prior period payments and the prior period estimated versus actual payments repOlted on the ROPS . Tlus audit is ongoing, and tlus letter does not apply to the true­up of prior period payments.

Sincerely yours,

-f~~ Irene Lui, C.P.A. Controller-Treasurer County of Santa Clara

Attaclmlent: ROPS 13-14B as submitted to the County Auditor-Controller by Successor Agency on September 16, 2013

Page 2 of2

Recognized Obligation Payment Schedule (ROPS 13-148) - Summary Filed for the January 1,2014 through June 30, 2014 Period

Name of Successor Agency: Morgan Hill

Name of County: Santa Clara

Current Period Requested Funding for Outstanding Debt or Obligation

Enforceable Obligations Funded with Non-Redevelopment Property Tax Trust Fund (RPTTF) Funding A Sources (S+C+D):

B Bond Proceeds Funding (ROPS Detail)

C Reserve Balance Funding (ROPS Detail)

D

E

F

G

H

Other Funding (ROPS Detail)

Enforceable Obligations Funded with RPTTF Funding (F+G):

Non-Administrative Costs (ROPS Detail)

Administrative Costs (ROPS Detail)

Current Period Enforceable Obligations (A+E):

Successor Agency Self-Reported Prior Period Adjustment to Current Period RPTTF Requested Funding

Enforceable Obligations funded with RPTTF (E):

J Less Prior Period Adjustment (Report of Prior Period Adjustments Column U)

K Adjusted Current Period RPTTF Requested Funding (I-J)

County Auditor Controller Reported Prior Period Adjustment to Current Period RPTTF Requested Funding

L Enforceable Obligations funded with RPTTF (E):

M Less Prior Period Adjustment (Report of Prior Period Adjustments Column AS)

N Adjusted Current Period RPTTF Requested Funding (L-M)

Certification of OverSight Board Chairman: Pursuant to Section 34177(m) of the Health and Safety code, I hereby certify that the above is a true and accurate Recognized Obligation Payment Schedule for the above named agency.

Name

lsi 15

Signature

Six-Month Total

$ 32,343,922

32,194,574

149,348

$ 8,204,618

7,965,373

239,245

$ 40,548,540

8,204,618

(119,949)

$ 8,084,669

8,204,618

Title

Date

Recognized Obligation Payment Schedule (ROPS) 13-14B - Report of Fund Balances (Report Amounts in Whole Dollars)

Pursuant to Health and Safety Code section 34177(1), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obliQation.

A B C 0 E F G H I I J K

Fund Sources

Bond Proccods Reserve Balance Other RPTTF

Review balances retained for

Bonds Issued Bonds Issued approved RPTTF balances Rent, on or before on or after enforceable retained for bond Grants,

Fund Balance Information_by_ROPS Period lWlfl0 01101/11 obligations reserves Interest. Etc. Non-Admin Admin Total Comments

ROPS III Actuals (01/01/13·6130/13) Beginning Availablo Fund Balance (Actual 01101/131 Note that for the RPTTF, 1 + 2 should tie to columns L and a in the

1 Report of Prior Period Atfustments (PPAs) 28.1 11 .904 9,636.875 2.452.371 $ 40.201.150 Revenuellncome (Actual 06130/13) Note thai the RPTTF amounts should tie to the ROPS III distributions from the County Auditor-

2 Controller 43,691 7,118.063 338.518 65,090 $ 7,565,362

Expenditures for ROPS 111 Enforceable Obligations (Actual 06130/13) Note that for the RPTTF, 3 + 4 should tie to columns N

3 and S in the Report of PPAs 2.717.594 11 .358.451 435.168 , 14,511.213 Retention of Available Fund Balance (Actual 06/30/13l Note that the Non-Admin RPTTF amount should only include the retention of

4 reserves for debt service approved in RapS III $

Raps III RPTTF Prior Period Adjustment Note that the net Non-Admin and Admin RPTTF amounts should tie to columns 0 and T in No entry required

S the Report of PPAs. 119,949 $ 119.949

• Endina Actual Available Fund Balance (1 + 2 - 3 ·4·5) $ 25,438,001 $ -I • $ 9,636,875 $ fl.788,017 $ f96,65O $ 65,090 $ 33,135.350

Raps 13-14A Estimate (07/01fI3 - 12131113)

Beginning AV<lUabl0 Fund Balance (Actual 07/01/13) (C, 0, E, G, 7 and 1- 4+ 6, F c H4+ F6, and H = 5 + 6) $ 25,438,001 $ $ $ 9,636,875 $ (I ,788,017 • 23,299 $ 65,090 $ 33255,299

Revenuellncome (Estim<lte 12(31/13) Note that the RPTTF amounts should tie to the RapS 13-14A

8 distributions from the County Auditor-Controller 2,422,534 $ 2,422,534

Expenditures for 13-14A Enforcoable Obligations 9 (Estimate 12(31/13) 4.940.161 202.700 $ 5,142.861

Retention of Available Fund Balance (Estimato 12(31/13) Note lhatthe RPTTf amounts may include the retention of reserves

10 for debt service approved in ROPS 13-14A 151 $ 1S1

11 EndinQ Estimated Available Fund Balance f7 + 8 - 9 -10) $ 25,438,001 $ $ S 9,636,875 $ {1 ,788.017 $ {2,494,328 $ 1137,761 S 30,534,821

Rceoonlzed Oblig<loUon PlIyment Schedulo (ROPS 113-146· ROPS 00U1! ~nwty 1, 2014 through June 30, 2014

(RctpartAn><lllnlsInWholeDon:n)

A , C • , , G H , , , , M M • , ,"00 -..

Nor.-R __ pment Property Tax T"",I Fund ~~ ""' Coomw;v~eemonr C<>nU:>ctIAgreemcn! TOblOutsbnclng

11""'11 ~ N~"'" , o..bI Obi ~tion ObI' mk>n T "-'~cu!1Qn 0:01" T.",n\n.,loonO:olo "M o..-l lor'll? " P I:'c! Area ~b!OtObi MiOtl RMlre-d BondProceodll R""""", 8ni:lnce Otlmr Fund\!. Non-Adm'n Ad ",ln SIx-MOtIIh TOI~I 189331195 • 11\<151.( 1493018 , , n ,

" 405<18504 0 1 200e Ta. AJ locnllOtl B.ond. s.:me. A Be.,.,. ISlUed On or "'",'" 9/112033 B3n~ ot NewYorl< Mellon Pr1nc: IPal p.:Iymcnla 0/0 de AgU3 , , " Belore 12131' 10

2 2008 T3, Al locntlOtl BGflllt Se""" A eo.,.,. In ued On or "''''''' 9"12033 B3n~ ot NowYorl< MollOn Inler",,1 p.:Iy",onl5 0/0 de AgU3 , , " Beforo '213"'0

3 2008 T". Al location Bondi SerUII A Bo.,.,. Issued On or 2/2112008 91112033 SIOM & Yoo ngDC.glStllel Rcmnrl<etlr>g I"" 0/0 de Ag un 25,000 M 25,000 , 25,000

" Baforo 12131110 Nicol"", 4 2OOf! Ta. AlIoc:>IIOtI Bond_ s.:me. A So.,.,. 1 •• 1Utd On Of 212112013 9/112013 ScotJ,,8nn~ L~n~ .... I..(;rad't fei! 0/0 de Agu:> , , " 8ofore 12131110

5 200e T;I)< AlIoc:>non Bondi SerICS A Bendl iHuod On Of "''''''' 9/112033 ScOMa..nk -,~ OJO de Ag un ' .500 M ' .500 , '.500 " 8ofOlo 12131110

6 2006 T;I)< AlIoc;)"OIl Bondi SenM A Bondi IIeuad On or "''''''''' .,""" Fraser & As1oO<:,'II"" t""O~1 IIn:>1Ie1.:l1 comult:>nt. per 0/0 de Ag"" 6.6" M ,"," , 6.6'"

" Belo,o 12131110 InI!Illnllent ...... 7 2006 T3): AlK>callOf'l Bond. SeriM A BonOs IMuod On or "''''''' .,""" 6:>nk 01 Now York Mellon T",..IO<I bDn~ 10<1 0,0 de Agun n." M '"

, "'" " BeIOln 12131110

8 Annu:ll AudIt Bondi IHued On or 7'112009 1213112013 Moss. L""'I & H:I~O'n' Annualnuon 0,0 de Agua , , Betore ' 213"'0

9 RCA l~1 Ctourosd Bondi IMuod On Ot 11112011 """"" RII;h;oO'OS W3ISOn & RCA Bond eounsol OjodeAgu:> , , BeIO/ft 12131110 Go_

t o ::,:cedme;:o"~dellYe<yotl;)Ot)d BoncIIlHuecr On Ot "''''''' '"""" Successor Agency ::.:::::::. delrvery 01 DOnd OjOdeAgU" , ,

Betore 12131"0 11 Sbl .. HELP loan ThtM-PllrtyloaM '''''''''''' 101712013 51;010 01 CA loan trom ',"",0 tor down p:ryrnent OjOdeAgua , , --12 Hou!ung Imple""""""on II"" MlICdtllllOOUl 11112014 """"" Succ_Ag/!nC}' Col! 10 t=~':'3"" delIVer proJOCb OjOdeAgUol , , .. """' ... 13 CtP InspeebOns Contr.K:1 I ~mprowmentI1ntroslr 11/112010 111112012 COO Consult3nts· InspectIOn SoIVlCC1I (Per ,&Qreemenl OJOde Agua 173,850 N 173,850 , 173,850

"~. ElmlbifO 14 CIP Tes(jng COf'ltroc! I ~"'proYemOntI1nfr.>\ltr 11/912010 100'15J2012 RMA Gtgup 01 Nort~ Tesljng_ O/Od"Agua , ,

~,. C31llon\l:.· 15 Clp Property ItCqu)srtlon III\P<CIVI!fT\«Vlnlra:.l r 100'112007 """"" NOSSAMAN UP CIP propcny :>CqUIMion (P« O/OdOAgUlI 29,499 N 29,499 , :n,.(99

UClur~ .""",,,.11 Ex!Iltoo 0

16 ~.:;:;"r:~Der of Commerc.. (~I on MlKell:>nClOW 612812011 """"" Morgan Hill C~;)mDer 01 $eMce :>g retlm,,"1 Ojode Agun , , Com",erce

17 P"rI< 1011<>:.,,,, ",,,,, .. II ,,,,,,,,,,,, "',I'XIOO "'10100 c:~ " RlCm .... PtJbhC P~rI<, lot In downtown O· dn "' 317 437 N " , ,S 507

18 L _ ~I Coo,,",,1 "''''''" II ~ .......... 1111X114 6IJOQ014 C...,IdI~rb ,'nd I I M' ~Icou"""1 o d .. "' ,

19 SERAF SERAFIERAF """" 6I3OJ201 6 Morg;)n Hili Houslr>g Lalln to moe{ I t:.tO requ lremenl O/OdeAgua 1,625,339 M , .~

20 SERAF SERAFIERAF 2/17/2010 """"" Mo'g3n 1"111 HOUSing Lean 10 mfHlIlbl~ (<!'qulroment 0/0 dc Ag u:> 4,311 ,000 N , ."

21 Exce ... tl;llll~1)' lind property pool ACI"'lnCtlltl 1111201,( """"" ABAG-Pl.AN Corpot:lUon Exeo" 11 3D1lity poot IMuroncc 0/0 de Ag ua 3,402 M '" , '''' I""ur:;once .~N C"'llII'ftII

:22 Non-HOUSIng, Non-CIP OIHo/ullOIl Aud ita "'12014 """"" Succcuor Ag~nc:y Cost 10 Impl~mcnl nnd deltvf!r prejectS Ojo dC AgU:> , , l",pI."n""'~loon "I'td ~ry Cost & oDlIg:.U"","

23 Ann,,"''''- lOt Dond ~"ue-S&P Berm IHuad On or "'''''''' .,""" 5I;ond;lrd & Poor. ArInual ,_ 01 bond r:ttv!g OjodeAglQ , , BelOIe 12/31110

2.( BUII.mw.1d BM!- ScuIh ConIIInICDon Improwmenlltnl ....,1I' ~1'2OI201 1 """"" RGW ConsUucoon, Inc, Conatrucuon 01 8utte"IeIIl B/Yd 0j0 de AgU3 33&.51~ M lJEI,574 • 3311,57~ ~,.

25 8U11er1 ... 1d 8M!- ScuIh ConIIuIUng Improwrncn\llnl l1llll' 71271201' 11112013 MH EnglnceMg Co. CoMult3rrt..:~ 01 BunIll'l,.,1d 0,0 de Agu:> , , ... ~ ~,. , .. 26 Buner1,.,1d 8M!- South ContIngency ImprowmentI1nt .... tr ~f2OI201' """"" RGW ConaInIcIlon, Inc, ConatrucUon 01 Bune"",1d B/Yd 0,0 de AgU3 , ,

~.

27 8U11erHeIIl 8MS- ScuIh Pl'operty Impro...emctII/Inlroslr 1/1/2014 """"" RoyalDaICS Prcpcrty acqu.nlon lOt 8urrerfield OjOdeAgu3 , , ""'~- ~. , ..

28 BunMieId BMS-Soulh 0esIgn Improvernont/lnl .... tr '"""'" , 2IJOl2(l12 Mark Tho ...... & Comp.:lny. Consu!L:Int-eontlructlon 01 Buttlll'lieid o,odCAgu:> 440.47.( M 440,'(7~ , .(40,.(74

-~ ~. ,~. , .. "'" """",rrt EICI'IIbot 0 29 Bunerl...td 8fYO.SouUt l.eg:ll ImproycmenVtnl .... lr 31112011 """"" J_, F~y, Oefoorto & l.eg.:JISCIVlCc-e_IOtICClltl'3ClS OjOdeAgua 57.769 M 57,769 , 57,769

""',~ ~. """" p,)._Ag<~n!El<NbrIO JO H:lle A""n\lC'l Ex!('n$1OtI ImproYIImenVlnlr;tl!r 41121201 1 """''' M3rk ThoITlM & Comp.:lny. CoMuIt3nI-H31e A .... I'.xI .... 1OtI (S.:ln!:l OjOdcAgua 613,110 N 673,110 , 6'73,110

~. ,~. TOtMlt)(Per AgroementExhlbil 0)

J1 Underground Mooterey ImprovemcnVlnl'3lIlr 712912011 4/J0/'2012 GI3c~1one Del.lgn· UndCfgroy.,.,lr>g Momeroy Rd Ullbtle$ O/OdOAgu3 , , ~".

32 U""~rgroo"" Utll~"'" I"'PfOYIImenVlnf'3Itr 1/' /20 ' 4 """"" UMorg,Ound centroctOl Underg.oYndlng MOtIle(cy Rd Ulllnl"" O/OdeAgua , , UClu,e

33 Wes! LrtIje U:>gIlO Cr"" ~ 1",_",cnVlnlr:..rr """"" """"" SANTA ClARA VAllEY CtIIt .~~nr>g IIgroemen! lor f lood 0/0 de Ag U3 3,000,000 " 1,381,377 , 1,381,377 UClu'o WATER OIST eOnlrOI

3.ot Downlown PM<'Ir>g ImprOllOmenVlntra~tr 11112014 """"" SUC CCS/lOl Ag~ncy no.lgn, InDtl<!'Ctk>n . • UMlY a"" 0/0 de Agun , , UC!uro eonotruetlen

3S Downlown S!leelSC~pc Impravo",entllntr:l8tr 11112014 """"" SUcceseor Agency Dellgn, Inopectk>n. I UNey and Ojo de AgY~ , , uc!urn eonstrue!IO "

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Recognized Obligation Payment Schedule 13-14B - Notes January 1, 2014 through June 30, 2014

Item # Notes/Comments Assumes Refunding Revenue Bonds, Series 2013A and B will be sold and close prior to December 31, 201 3. If for some reason the refunding does not occur by

1 December 31 , 2013 then this enforceable obligation will need to be resurrected and paid out of RPTTF during the ROPS 13-14B period Assumes Refunding Revenue Bonds, Series 2013A and B will be sold and close prior to December 31, 2013. Iftor some reason the refunding does not occur by

2 December 31 , 2013 then this enforceable obligation will need to be resurrected and paid out of RPTTF during the ROPS 13-14B period Assumes Refunding Revenue Bonds, Series 2013A and B will be sold on Monday, November 18, 2013 and close on Monday, December 2,2013. ROPS 13-14A assumed only two months of remarketing fee (July and August 2013) , but now it appears that five months of remarketing fee will need to be paid (originally assumed July and August 2013, plus September, October and November 2013). If for some reason the refunding does not occur by December 31 , 2013 then this enforceable

3 obligation will increase further, as the original 2008 variable-rate demand obligation tax allocation bonds remain outstanding even longer. 4 See items 118 through 121 below

Assumes Refunding Revenue Bonds, Series 2013A and B will be sold on Monday, November 18, 2013 and close on Monday, December 2, 2013. ROPS 13-14A assumed only two months of draw fee (July and August 2013), but now it appears that five months of draw fee will need to be paid (originally assumed July and August 2013, plus September, October and November 2013) . If for some reason the refunding does not occur by December 31, 2013 then this enforceable obligation will

5 increase further, as the original 2008 variable-rate demand obligation tax allocation bonds remain outstanding even longer. 6 Independent financial consultant services are required under both the original 2008 trust indenture and the new 2013 trust indenture 7 Trustee bank fee applies to both 2008 and 2013 bonds

13 Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara : Exhibit D 15 Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara: Exhibit D 28 Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara: Exhibit D 29 Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara: Exhibit D 30 Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill , and the Successor Agency and the County of Santa Clara: Exhibit D 38 Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill , and the Successor Agency and the County of Santa Clara: Exhibit C

Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill , and the Successor Agency and the County of Santa Clara: Pg. 7 Prior Expenditures of 62 Bond Proceeds

Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara: Pg. 7 Prior Expenditures of 63 Bond Proceeds

Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara: Pg. 7 Prior Expenditures of 64 Bond Proceeds

Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara: Pg. 7 Prior Expenditures of 65 Bond Proceeds 68 Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara: Exhibit D 74 Originally approved in ROPS III , for same dollar amount as listed here 82 Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara: Exhibit C 91 Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara : Exhibit D 95 Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara: Exhibit C 96 Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara : Exhibit C 97 Per County Agreement dated May 2013, between MHEDC, City of Morgan Hill, and the Successor Agency and the County of Santa Clara: Exhibit B

109 Estimate based on past work performed by this vendor for similar services

Recognized Obligation Payment Schedule 13-14B - Notes January 1, 2014 through June 30, 2014

Item # Notes/Comments 111 Estimate based on past work performed by this vendor for similar services 113 Estimate based on past work performed by this vendor for similar services 114 Estimate based on past work performed by this vendor for similar services

Assumes Refunding Revenue Bonds, Series 2013A and B will be sold and close prior to December 31 , 2013. Dollar amount for principal payment ensuring level annual total debt service payment is estimate based on term structure of interest rates prevailing during first week of September 2013. Dollar amount represents

116 principal payments for the entire 12 months of the bond year, per the Trust Indenture for the Series 2013A and B Revenue Refunding Bonds. Assumes Refunding Revenue Bonds, Series 2013A and B will be sold and close prior to December 31 , 2013. Dollar amount for interest payment ensuring level annual total debt service payment is estimate based on term structure of interest rates prevailing during first week of September 2013. Dollar amount represents interest

117 payments for the entire 12 months of the bond year, per the Trust Indenture for the Series 2013A and B Revenue Refunding Bonds. If, as expected, the refunding bonds do sell and close by December 31, then bond proceeds will be used to pay this enforceable obligation to the Bank of Nova Scotia.

118 However, if refunding bonds are not sold and closed by December 31, 2013, this is to be paid from RPTIF. If, as expected , the refunding bonds do sell and close by December 31 , then bond proceeds will be used to pay this enforceable obligation to Chapman and Cutler

119 LLP. However, if refunding bonds are not sold and closed by December 31 , 2013, this is to be paid from RPTIF. If, as expected, the refunding bonds do sell and close by December 31 , then bond proceeds will be used to pay this enforceable obligation to Fasken Martineau

120 DuMoulin LLP. However, if refunding bonds are not sold and closed by December 31 , 2013, this is to be paid from RPTIF. If, as expected, the refunding bonds do sell and close by December 31 , then bond proceeds will be used to pay this enforceable obligation to the Bank of Novia Scotia.

121 However, if refunding bonds are not sold and closed by December 31 , 2013, this is to be paid from RPTIF.