Loading...
HomeMy WebLinkAboutCC RES 88-074RESOLUTION NO. 88-74 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT AUTHORIZING THE ISSUANCE AND PROVIDING FOR THE SALE OF IMPROVEMENT BONDS IN CONNECTION WITH ASSESSMENT DZSTRICT NO. 87-1 THE CITY COUNCIL OF THE CITY OF PALM DESERT HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. Definitions. As used in this Resolution, the following terms shall have the meanings ascribed thereto, unless the context requires otherwise. "Bond Act" means the Improvement Bond Act of 1915, being Division 10 of the California Streets and Highways Code, commencing with Section 8500. "Bonds" means the improvement bonds authorized by and at any time outstanding pursuant to the provisions of this Resolution and as designated pursuant to Section 2 hereof. "Bond Year" means the one year period ending on September 2nd of each year during the term of the Bonds. "City" means the City of Palm Desert, California, a municipal corporation duly organized and validly existing pursu- ant to the Constitution and laws of the State of California. amended. "City Clerk" means the City Clerk of the City. "City Council" means the City Council of the City. "Code" means the Internal Revenue Code of 1986, as "County" means the County of Riverside. "Engineer's Report" means that certain Engineer's Report, as modified, approved by the City Council pursuant to Section 6 of its Resolution No. 88-73. "Federal Securities" means United States Treasury notes, bonds, bills or certificates of indebtedness, or other evidences of indebtedness whether in book entry form or otherwise secured by the full faith and credit of the United States of America; obligations issued by federal intermediate credit banks, federal land banks and banks for cooperatives; and also any securities now or hereafter authorized both the interest on and 880707 pf A895.NLS 3 principal of which are guaranteed directly or indirectly by the full faith and credit of the United States of America, and as and to the extent that such securities are eligible for the legal investment of City funds. "Financial Advisor" means Miller & Schroeder . _..�:,c�al, Inc. "Fis�al'Agent" means the Fiscal Agent appointed pursuant to Section 4 hereof, in its capacity as transfer agent, bond registrar and paying agent. "Gross Proceeds" means the sum of the following amounts: (i) original proceeds, being the amounts received by the City, or held by the Fiscal Agent as proceeds of the original issuance of the Bonds (after payment of all expenses of issuing the Bonds); (ii) investment proceeds, being amounts received at any time by the City or the Fiscal Agent, such as interest and dividends, resulting from the investment of proceeds of the Bonds, including profits and less losses received on such investment; (iii) amounts, other than original proceeds nd investment proceeds, held in any fund or account and reasonably expected to be used to pay principal of or interest on the Bonds; (iv) securities or obligations pledged as security for the payment of the Bonds by an ultimate obligor (or a related person) or the City; (v) amounts used to pay principal or interest with respect to the Bonds; and (vi) amounts received as a result of investing the amounts listed in clauses (i) through (v). "Improvement Fund" means the fund by that name created and established pursuant to Section 5.A hereof. "Investment Property" means any security or obligation (other than any tax-exempt bond and any demand deposit state and local government book entry federal security) in which Gross Proceeds are invested. "1913 Act" means the Municipal Improvement Act of 1913, being Division 12 of the California Streets and Highways Code, commencing with Section 10000. "Notice Inviting Bids" means the Notice Inviting Bids substantially in form attached hereto as Exhibit C. "Redemption Fund" means the fund by that name created and established pursuant to Section 5.B hereof. "Resolution" means this Resolution and includes subsequent amendments hereof and any Supplemental Resolution. "Resolution of Intention" means Resolution No. 88-51 of the City Council, as amended from time to time. � -2- 880707 pf A895.uLS 3 "Special Reserve Fund" means the fund by that name created and established pursuant to Section 5.0 hereof. "State" means the State of California. "Supplemental Resolution" means any resolution adopted by the City Council amendatory of or supplemental to this Resolution. "Treasurer" or "City Treasurer" means the City Treasurer of the City. Section 2. Tssuance of Bonds to Represent Unpaid Assessments. The City Council hereby authorizes the issuance of the Bonds under and pursuant to the provisions of the Bond Act and this Resolution to represent unpaid assessments in accordance with the List of Unpaid Assessments to be prepared by the City Treasurer and maintained on file in the office of the City Treasurer. The Bonds shall be designated "Improvement Bonds, City of Palm Desert, Assessment District No. 87-1, Issue of 1988 (Limited Obligation Improvement)." The Bonds shall be issued in denominations of $5,000 or integral multiples thereof, except for one Bond which shall mature on September 2, 1989 and which shall be in the amount by which the total aggregate principal amount of the Bonds exceeds an integral multiple of $5,000, or in the amount of $5,000 plus such excess. The Bonds shall be dated as of September 2, 1988. The Bonds shall mature and shall bear interest at the rate or rates set forth in the resolution of the City Council awarding the Bonds to the successful bidder who submits the best bid in accordance with the Notice Inviting Bids attached hereto as Exhibit C. The final maturity of the Bonds shall be September 2, 2008. Such unpaid assessments together with the interest paid thereon, during the term of the Bonds, shall remain and constitute a trust fund for the redemption and payment of the principal of the Bonds and for the interest due thereon, which unpaid assessments shall be payable in annual series corresponding in number to the number of serial maturities of the Bonds issued. An annual proportion of each unpaid assessment shall be payable in each year preceding the date of maturity of each of the several series of Bonds issued, sufficient to pay the Bonds when due, and such proportion of each unpaid assessment coming due in any year, together with the annual interest thereon, shall be payable in the same manner and at the same time and in the same installments as general taxes on real property are payable, and become delinquent at the same times and in the same proportionate amounts and, except for an additional penalty of two percent per month, bear the same proportionate penalties and interest after delinquency as do general taxes on real property. A record of the several installments of principal and interest on such unpaid assessments which are to be collected in each year during the term of the Bonds shall be kept in the office of the City Treasurer and in the -3- 880707 pf A895.L1LS 3 office of the Fiscal Agent. Except as provided in Paragraph C of Section 5 hereof, all sums received from the collection of such unpaid assessments and of the interest and penalties thereon shall be placed in the Redemption Fund, except that any amount collected to represent the costs of such collection shall be retained by the City Treasurer and paid into the general fund of the City. .Section 3. Form and Execution; Printing: Tem�orary Bonds. Th� Bonds shall be issued as fully registered bonds sub- stantially in the form set forth in Section 8652 of the Bond Act and as set forth in Exhibit A to this Resolution. The Bonds shall be signed by the City Clerk and City Treasurer and the seal of the City of Palm Desert shall be affixed. The City Council hereby authorizes the use upon the Bonds of a facsimile seal and a facsimile signature of the City Clerk and City Treasurer in place of a manual signature. The City Treasurer is hereby authorized and directed to cause the Bonds to be printed and prepared in accordance with this Resolution and upon completion and execution thereof to deliver the Bonds to the successful bidder. Until definitive Bonds shall be prepared, the City Treasurer �ay cause to be executed and delivered in lieu of such definitive Bonds and subject to the same provisions, limitations and conditions as are applicable in the case of definitive Bonds (except that they may be in any denominations authorized by the City Treasurer), one or more typed, printed, lithographed or enqraved temporary Bonds in fully registered form substantially of the same tenor and, until exchanged for definitive Bonds, entitled and subject to the same ■ benefits and provisions of this Resolution as definitive Bonds. If one or more temporary Bonds are provided, the City Clerk and the City Treasurer shall execute and furnish definitive Bonds without unnecessary delay and thereupon the temporary Bonds may be surrendered to the City Treasurer or Fiscal Agent in exchange for such definitive Bonds, without expense to the Bondholder. All temporary Bonds so surrendered shall be cancelled. The City Treasurer shall deliver or cause to be delivered the Bonds to the successful bidder upon receipt of the purchase price therefor and accrued interest on the Bonds to the date of delivery. The Bonds shall be authenticated by the Fiscal Agent. Section 4. Fiscal Agent: Fiscal Aaencv Agreement. The City Council hereby appoints Security Pacific National Bank as Fiscal Agent with respect to the Bonds. The Fiscal Agent shall keep a register showing the series, number, date, amount, rate of interest, and registered owner of each Bond, and the principal, premium, if any, and interest paid with respect to the Bonds from time to time, as provided in this Resolution. The Fiscal Agency Agreement, substantially in the form attached hereto as Exhibit B, is hereby approved, and the Mayor or any member of the City Council, the City Clerk, the City Treasurer or other City officer are hereby authori2ed and directed to execute the Fiscal Agency Agreement and to approve modifications and changes thereto which -4- 880707 pf A895.NLS 3 are not inconsistent with the terms of this Resolution or the proposal which shall be submitted by the Fiscal Agent. �ection 5. Establishment of Special Funds and Accounts. For administering the proceeds of the sale of Bonds and the payment of principal of and interest thereon, there are hereby created and established the following special funds and accounts: .(i) the Improvement Fund; (ii) the Redemption Fund; (iii) the Special Reserve Fund; and (iv) the Rebate Fund. A. Improvement Fund. There is hereby created by this Resolution with the City Treasurer a special fund called the "Improvement Fund." The moneys held by the City Treasurer shall be invested in those investments set forth in Section 8 hereof which by their terms shall mature not later than the earlier of (i) the date the City Treasurer determines that such moneys will be needed for the purposes set forth hereunder or (ii) one year. Except as provided in Paragraphs B and C of this Section 5, the proceeds of sale of the Bonds, together with all amounts paid on the assessments prior to the issuance of the Bonds, shall be deposited in the Improvement Fund. Disbursements from the Improvement Fund shall be made by the City Treasurer for the costs and expenses of the work, improvements, acquisitions and inci- dental costs set forth in the Engineer's Report. Moneys received by the City from the cash payments of assessments, contributions or any other source for the installation, construction and financing of the improvement described in the Resolution of Intention, together with the proceeds received from the sale of the Bonds, but not including the moneys required to be placed in the Special Reserve Fund nor any accrued interest which shall be placed in the Redemption Fund, shall be placed in the Improvement Fund. Disbursement from the Improvement Fund shall be made to pay the costs of such improvements, together with all costs and expenses incidental thereto, or to pay such other costs as may be permitted by the Bond Act or the 1913 Act. Any surplus remaining in the Improvement Fund after payment of all costs of such improvement, including, without limitation, repayment of incidental and other costs and expenses advanced by the City shall be used for one or more of the following purposes: 1. For transfer to the general fund of the City, pro- vided that the amount of any such transfer shall not exceed the lesser of $1,000 or five percent of the total amount expended from the Improvement Fund. 2. As a credit upon the assessment and any supple- mental assessment. 3. For the maintenance of such improvements. B. Redemption Fund. There is hereby created by this Resolution with the City Treasurer a special fund to be held by -5- 880707 pf A895.WLS 3 the Fiscal Agent called the "Redemption Fund." The moneys held by the Fiscal Agent in the Redemption Fund shall be invested pursuant to Section 8. Except as provided in Paragraph C of this Section 5, all swns received from the collection of the assess- ments and of the interest installments on the assessments, together with penalties thereon, if any, shall be transferred by the City Treasurer to the Fiscal Agent and deposited in the Redemption.Fund, which shall be a trust fund for the benefit of the registered owners of the Bonds. Payment of the Bonds at maturity, or at redemption prior to maturity, and all interest on the Bonds shall be made by the Fiscal Agent from the Redemption Fund. Not later than the day prior to any interest payment date, the City Treasurer shall transfer to the Fiscal Agent for deposit into the Redemption Fund moneys sufficient to pay the principal of and interest on the Bonds due on such interest payment date. Pending such transfer, all sums received by the City Treasurer from the collection of assessments shall be deposited into an account to be held by the City Treasurer and designated the "Assessment District No. 87-1, redemption fund account". C. �cecial Reserve Fund. There is hereby created by this Resolution with the City Treasurer a special fund to be held by the Fiscal Agent called the "Special Reserve Fund." There shall be deposited into the Special Reserve Fund from the of the sale of the Bonds an amount equal to 8.815 percent principal amount of the Bonds. The Special Reserve Fund administered as follows: 1. Whenever there are insufficient mone s in the � Y Redemption Fund to meet the next installment of principal of or interest on the Bonds due to delinquent installments of assess- ments or delays in the receipt of such installments, an amount necessary to pay such deficiency shall be transferred as an advance from the Special Reserve Fund to the Redemption Fund. The amount so advanced shall be reimbursed to the Special Reserve Fund from the proceeds of redemption or sale of the parcel for which payment of delinquent installments was made from the Special Reserve Fund, or from the delayed receipt of installments of assessments. 2. In the event unpaid assessments are paid to the City in cash prior to their final maturity date pursuant to the pro- visions of the Bond Act for the advance payment of assessments, such unpaid assessments shall be proportionately reduced by an amount equal to the ratio of the total amount initially provided for the Special Reserve Fund to the total amount originally assessed in the proceedings for the Bonds, and an amount equal to the reduction in such assessments as determined by the City shall be transferred by the Fiscal Agent from the Special Reserve Fund to the Redemption Fund. � a ; proceeds of the shall be -6- 880707 pf A895.WLS 3 3. Any income realized from the investment of moneys in the Special Reserve Fund which the City has determined would cause limitations imposed by Federal or State law, rules or regulations to be exceeded shall be specified in writing to the Fiscal Agent by the City Treasurer and placed in the Redemption Fund by the Fiscal Agent and credited upon the unpaid assessments in the manner specified in writing by the City Treasurer. 4. Whenever the balance in the Special Reserve Fund is sufficient to pay the principal of all outstanding Bonds, the interest thereon and the premium, if any, upon the prior redemp- tion thereof, collection of the principal and interest on the unpaid assessments shall be discontinued and the moneys in the Special Reserve Fund shall be transferred to the Redemption Fund for that purpose. Such balance shall be credited against the assessments remaininq unpaid in the manner provided by law and the amount apportioned to each unpaid assessment shall be credited against the last unpaid assessment installment, and, if the amount apportioned to each parcel exceeds the amount of the last installment, then such excess shall be credited against the next preceding unpaid assessment installment or installments until exhausted. In the event that the balance in the Special Reserve Fund at the time of liquidation exceeds the amount required to retire all outstanding Bonds, the excess shall be transferred to the City and apportioned by the City to each parcel upon which the individual assessment remained unpaid at the time the balance in the Special Reserve Fund was sufficient to retire all outstanding Bonds. The payments shall be made in cash to the respective owners of the parcels except that, if the excess is not greater than $1,000, the excess may be transferred to the general fund of the City. D. ��bate Fund. There is hereby created by this Resolution with the City Treasurer a special trust fund to be held by the Fiscal Agent called the "Rebate Fund." The Fiscal Agent shall keep such Rebate Fund separate and apart from all other funds and moneys held by it and shall administer such Rebate Fund as hereinafter provided. On behalf of and upon the written direction of the City Treasurer, the Fiscal Agent shall deposit Excess Investment Earnings (as that term is defined in this Paragraph D) into the Rebate Fund and upon the written direction of the City Treasurer the Fiscal Agent shall pay to the United States Department of the Treasury from the Rebate Fund (i) not later than 30 days after the end of the fifth "bond year" and not less frequently than once each five years after the preceding payment was due, a payment which, when aggregated with any prior payments, ensures that the City has paid to the United States Department of the Treasury an amount which is equal to 90 percent of the rebate requirement calculated as of the date of such payment or as of the previous calculation date; and (ii) not later than 30 days after the first date, when there are no outstanding Bonds, an amount of which, when aggregated with any prior -7- 88070T pf A895.w1S 3 payments, is equal to 100 percent of the rebate requirement (determined as of the first date when there are no outstanding Bonds). 1. The City Treasurer shall calculate Excess Investment Earnings in accordance with subparagraph 2 of this Paragraph D and shall instruct the Fiscal Agent to pay Excess Investment Ear-nings to the United States government in accordance with subparagraph 3 of this Paragraph D. The term "Excess Investment Earnings" means an amount equal to the sum of: a. the excess of (1) the aggregate amount earned from the delivery date on all Investment Property in which Gross Proceeds of the Bonds are invested (other than amounts attributable to an excess described in this subparagraph l.a), over (2) the amount that would have been earned if the yield on such Investment Property (other than amounts attributable to an excess described in this subparagraph i.a) had been equal to the yield on the Bonds, plus b. any income attributable to the excess described in subparagraph l.a of this Paragraph D. 2. At or prior to the last day of the first bond year, the City Treasurer shall calculate the Excess Investment Earnings and shall deposit the same into the Rebate Fund. There- after, prior to the last day of each bond year and on the date of the retirement of the Bonds, the City Treasurer shall calculate the amount of Excess Investment Earnings referenced in subpara- graphs l.a and l.b of this Paragraph D and direct corresponding transfers into the Rebate Fund. The City shall retain the services of a nationally recognized bond counsel, an Independent Certified Public Accountant or other person or entity qualified to make such calculation in accordance with the following: a. Except as provided in clause (ii), below, in determining the amount described in subparagraph l.a(1) of this Paragraph D, the aggregate amount earned on Investment Property shall include (i) all income realized under federal income tax accounting principles (whether or not the person earning such income is subject to federal income tax) with respect to such Investment Property and with respect to the reinvestment of investment receipts from such Investment Property (without regard to the transaction costs incurred in acquiring, carrying, selling or redeeming such Investment -8- 880707 pf A895.u1s 3 Property), including, but not limited to, gain or loss realized on the disposition of such Investment Property (without regard to when such gains are taken into account under Section 453 of the Code relatinq to the taxable year of inclusion of gross income), and income under Section 1272 of the Code (relating to oriqinal issue discount) and (ii) any unrealized gain or loss as of the date of retirement of the Bonds if any Investment Property is retained after such date. � b. In determining the amount described in subparagraph l.a of this Paragraph D, an obligation or security shall be treated as acquired for its fair market value at the time it becomes a Investment Property, so that gain or loss on the disposition of such an obligation or security shall be computed with reference to such fair market value as its adjusted basis. c. In determininq the amount described in subparagraph l.a(2) of this Paragraph D, the yield on the Bonds shall be determined based on the actual yield of the Bonds through maturity (with adjustments for discount or premium). d. In determining the amount described in sub- paragraph 2 of this Paragraph D, all income attributable to the excess described in subparagraph l.a of this Paragraph D must be taken into account, whether or not that income exceeds the yield with respect to the Bonds, and no amount may be treated as "negative arbitrage." 3. Upon direction of the City Treasurer, the Fiscal Agent shall pay Excess Investment Earnings to the United States of America in installments with the first payment to be made not later than 30 days after the end of the fifth bond year and with subsequent payments to be made not later than five 5 years after the preceding payment was due. The City Treasurer shall assure that each installment is in an amount equal to at least 90 percent of the Excess Investment Earnings with respect to the Bonds as of the close of the bond year. Upon the direction of the City Treasurer, which direction shall be given before 60 days after the retirement of the Bonds, the Fiscal Agent shall pay from the Rebate Fund, or the City shall pay directly, 100 percent of the theretofore unpaid Excess Investment Earnings of the Bonds. The Fiscal Agent or the City shall remit such payments to the United States of America at the address and in the manner directed by the City Treasurer prescribed by Treasury Regulations as the same may be in time to time in effect, together with such reports and statements prepared by the City Treasurer as may be prescribed by such Regulations. If the Fiscal Agent follows the written instructions as supplied by the City Treasurer, it shall be deemed to have complied with this Paragraph D and shall have no -9- sao�o� pf �a9s.u�s 3 responsibility to calculate Excess Investment Earnings or to take action in the absence of instructions from the City Treasurer. 4. In order to assure that Excess Znvestment Earnings are paid to the United States rather than to a third party, investments by the City in certificates of deposit and in investment aqreements shall be made only in accordance with the Regulations therefor as from time to time in effect. The City Treasurer sha11 give the Fiscal Agent instructions regarding such investments and the Fiscal Agent shall have no liability if it follows those instructions or if it fails to take any action in the absence of instructions. 5. The City shall keep and retain for a period of six years following the retirement of the Bonds records of the determinations made pursuant to this Paragraph D. The Fiscal Agent shall keep a record of all investments made with moneys on deposit in any Fund or Account held by it hereunder and shall provide such records to the City Treasurer at least quarterly. Such records shall contain a reference to the date of purchase, the date of sale, the purchase price, the sales price, the principal amount and rate of interest of each obligation purchased or sold. 6. Payments pursuant to this Paragraph D shall be made to the maximum extent possible from moneys on deposit in the Rebate Fund. In the event of any remaining deficiency in available moneys for the purposes of such transfer, such � deficiency shall be paid by the City from any available funds. � 7. Notwithstanding any provision in this Paragraph D to the contrary, in the event that the City has received an opinion of Counsel that pursuant to the provisions of Section 148(f)(4)(c) of the Code, the Bonds to be treated as meeting the requirements of paragraphs (2) and (3) of Section 148(f) of the Code, no payments need be made to the United States government and all amounts in the Rebate Fund shall be transferred to the Improvement Fund. The City shall provide the Fiscal Agent with certificates and other infonaation necessary for the Fiscal Agent to transmit to the United States Department of the Treasury the payments, statements and forms described above. The City shall advise the Fiscal Agent of any investment limitations that may arise requiring restrictions or modifications of any of the investments otherwise permitted under this Resolution, and shall provide the Fiscal Agent with such further supplemental instructions as may be appropriate in the circumstances, and the Fiscal Agent shall follow those instructions. # . � -10- 88070T pf A895.WLS 3 The City Treasurer may retain the services of a person or entity qualified to make the calculations and provide the direction necessary to comply with the provisions of this Section 5 . D. Section 6. Pavment of Bonds. The principal of (which shall be payable solely upon presentation and surrender of the Bond) and interest on the Bonds shall be payable at the office of the Fiscal Agent, by check or draft mailed by first class mail to the registered owner of each Bond at the owner's address appearing on the register maintained by the Fiscal Agent on the 15th day of the month preceding the date of interest payment or maturity of each Bond. Section 7. Lost, Destroyed. Mutilated or Stolen B s. In case any Bond shall become lost, destroyed, mutilated or stolen, upon proof of ownership satisfactory to the City and upon the surrender of such mutilated Bond, at the office of the Fi��cal Agent, or upon the receipt of evidence satisfactory to the C�.:y of such destruction, theft or loss, and upon receipt of indemnity satisfactory to the City and the Fiscal Agent, and upon payment of all expenses incurred by the City therefor, the City shall cause to be executed and delivered at the office of the Fiscal Agent a replacement Bond of the same maturity and for the same aggregate principal amount, of like tenor and date, in exchange and substitution for and upon cancellation of the muti- lated Bond, or in lieu of and in substitution for the Bond so lost, destroyed or stolen. If any such lost, destroyed, mutilated or stolen Bond shall have matured, payment of the amount due thereon may be made by the City upon receipt of like proof, indem- nity and payment of expenses. Any such replacement Bonds issued pursuant to this Section 7 shall be entitled to equal and propor- tionate benefits with all other Bonds issued hereunder, and the City and the Fiscal Agent shall not be required to treat both the original Bond and any replacement Bond as being outstanding for the purpose of determining the principal amount of Bonds which may be issued hereunder or for the purpose of determining any percentage of Bonds outstanding hereunder, but both the original and replacement Bond shall be treated as one and the same. Section 8. Investments. The moneys held by the Fiscal Agent shall be invested upon the written direction of the City in the followinq investments which by their terms shall mature not later than the earlier of (i) the date that such moneys will be needed for the purposes set forth hereunder or (ii) two years: A. Federal Securities including direct obliga- tions of (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America; -11- 880707 pf A895.u1s 3 B. Bonds, debentures or notes or other evidence of indebtedness payable in cash issued by any one or a combina- tion of any of the following federal agencies whose obligations represent full faith and credit of the United States of America: Export Import Bank of the United States, Federal Financing Bank, Farmer's Home Administration, Federal Housing Administration, Maritime Administration, Public Housing Authority, Government Natianal Mortgage Association; C. Certificates of deposit with commercial banks, savings and loans associations and mutual savings banks properly secured at all times by collateral security described in (A) and (B) above; D. The following investments fully insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation: (i) certificates of deposit, (ii) savings accounts, (iii) deposit accounts, or (iv) depository receipts of a bank, savings and loan associations and mutual savings banks; E. Commercial paper rated in one of the two highest rating categories by at least two nationally recognized rating agencies or commercial paper backed by a letter of credit or line of credit rated in one of the two highest rating categories; ■ F. Written repurchase agreements with any bank, savings institution or trust company (not the Fiscal Agent) which is insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, or with any broker-dealer with retail customers which falls under Securities Investors Protection Corporation protection, provided that such repurchase agreements are fully secured by obligations described in Paragraph A, above, or obligations of any agency or instru- mentality of the United States of America, and provided further that (i) such collateral is held by the Fiscal Agent or any agent acting solely for the Fiscal Agent during the term of such repurchase agreement, (ii) such collateral is not subject to loans or claims of third parties, (iii) such collateral has a market value (determined at least once every 14 days) at least equal to the amount invested in the repurchase agreement, (iv) the Fiscal Agent has a perfected first security interest in the collateral, (v) the agreement shall be for a term not longer than 270 days and (vi) the failure to maintain such collateral at the level required in (iii) above will require the Fiscal Agent to liquidate the collateral; G. Money market funds rated AAA by Standard & Poor's Corporation, or taxable government money market portfolios, restricted to obligations with maturities of one year or less, -12- 8ao�or pf �s9s.u�s 3 issued by or guaranteed as to payment of principal and interest by, the United States of America and repurchase agreements collateralized by such obligations; and In the absence of investment instructions to the Fiscal Agent, the Fiscal Agent shall invest solely in the investments set forth in Paragraph G of this Section 8. Value, as of any particu- lar time of determination, means the lower of cost or market value. Obligations purchased as an investment of moneys in any of such Funds or the Accounts therein shall be deemed at all times to be a part of such Fund or Account and the interest accruing there on and any gain realized from such investment shall be credited to such Fund or Account and any loss resulting from any such author- ized investment shall be charged to such Fund or Account without liability to the City or the officers thereof or to the Fiscal Agent. The C�ty or the Fiscal Aqent, as the case may be, shall sell at the best price obtainable or present for redemption any obligation so purchased whenever it shall be necessary to do so in order to provide moneys to meet any payment or transfer from such Fund or Account as required by this Resolution. Whenever reference is made to sums or moneys in a particular fund or account, or words of similar import are used, such reference shall include, without limitation, investments in such fund or account. Section 9. Registration and Transfer. The Bonds shall be negotiable only by transfer of registration. A Bond may be registered to a new owner by completing the assignment certifi- cate on the reverse of the Bond and delivering the Bond to the Fiscal Agent. Upon registration, a Bond may be replaced by one or more Bonds of the same maturity and aggregate amount in denominations of $5,000 or any integral multiple thereof. The Fiscal Agent shall not be required to register the transfer or exchange of any Bond (i) between 15 days prior to selection of Bonds for redemption and the date of mailing notice of redemption and (ii) as to any Bond selected for redemption. Section 10. Default. In the event of a default in the payment of any Bond or any installment of interest thereon, the registered owners shall have the remedies set forth in the Bond ACt. Section 11. Covenants. A. Foreclosure of Liens. If any installment of the principal or interest of any assessment levied in connection with Assessment District No. 87-1 becomes delinquent, the City Council shall cause an action to be filed in the Superior Court of the County of Riverside to foreclose the lien of the delin- quent assessment pursuant to Section 8830, � seg. of the Bond Act. Such action shall be filed not later than 150 days after the date of such delinquency. -13- 880707 pf A895.uLS 3 B. �se of Proceeds and Imorovements. All use of the improvements and works installed and constructed in connec- tion with Assessment District No. 87-1 by any person or entity is and shall be on the same basis as that of the general public, that is, neither the improvements nor any portion thereof shall be used for a„private business use" within the meaning of that tena under Section 141(b) of the Code. The City shall not take any action which would result in the Bonds being "arbitrage bonds" within the meaninq of Section 148 of the Code. No proceeds of the issue shall be used (directly or indirectly) to make or finance loans (other than loans described in Section 141(c)(2) of the Code) to persons other than governmental units. The City covenants and agrees to take no action which, in the opinion of counsel, would result in the interest received by the registered owners becoming taxable under federal income tax laws. Any opinion of such counsel may be based upon, insofar as it relates to factual matters, information which is in the possession of the City as shown by a certificate or opinion of, or representation by, an officer or officers of the City, unless such counsel knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such opinion may be based, as aforesaid, is erroneous. As used herein, "opinion of counsel" means a written opinion of an attorney or fina of attcrneys nationally recognized in the field of municipal bond law. The City hereby further covenants and agrees that it shall take no action and shall permit no action to be taken which would cause the Bonds to be federally guaranteed within the meaning of that term under Section 149(b) of � the Code. None of the foregoing covenants, agreements or duties shall be construed to require the expenditure in any manner for any purpose by the City of any funds other than the annual assessment principal and interest installments levied, collected and received by the City. Section 12. Prior Redemption. Each Bond outstanding may be redeemed and paid in advance of maturity on any March 2nd or September 2nd in any year by the Fiscal Agent giving at least 30 days but not more than 60 days notice to the registered owner thereof and by paying the principal amount thereof together with a premium equal to three percent of the principal plus interest to the date of redemption, unless sooner surrendered, in which event such intereat will be paid to the date of payment. Ninety days prior to the date selected for redemption, the City shall provide notice thereof to the Fiscal Agent. The Fiscal Agent shall call for redemption and redeem Bonds upon prepayment of assessments in amounts sufficient therefor. The Fiscal Agent shall select Bonds for redemption in the manner set forth in the Fiscal Agency Agreement attached hereto as Exhibit B. -14- 880707 pf A895.WLs 3 Section 13. Notice Inviting Bids. The Notice Inviting Bids, substantially in the form attached hereto as Exhibit C, is hereby approved, and the City Treasurer is hereby authorized and directed to approve modifications or changes thereto not incon- sistent with this Resolution. Section 14. Preliminary and Final Official Statement. The Financial.Advisor is hereby authorized to prepare a prelim- inary and final Official Statement regarding the Bonds to be furnished to prospective purchasers of the Bonds, such preliminary and final Official Statement to be substantially in the form and content of the draft of the preliminary Official Statement pre- sented to the City Council at this meeting and now on file in the office of the City Clerk. Section 15. Partial Invaliditv. If any section, para- graph, subdivision, sentence, clause or phrase of this Resolution shall for any reason be adjudged by any court of competent juris- diction to be unconstitutional, unenforceable or invalid, such judgment shall not affect the validity of the remaining portions of this Resolution. The City Council hereby declares that it would have adopted this Resolution and each and every other section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Bonds pur- suant hereto irrespective of the fact that any one or more sec- tions, paragraphs, subdivisions, sentences, clauses or phrases of this Resolution or the application thereof to any person or cir- cumstance, may be held to be unconditional, unenforceable or invalid. Section 16. General Authorization. The members of the City Council, the City Clerk, the City Treasurer and all other City officers, assistant or deputy officers, employees, consul- tants, legal counsel, bond counsel and the Financial Advisor are hereby authori2ed to do all acts and things which may be required of them by this Resolution, or which may be necessary or desirable in carrying out the issuance of the Bonds as provided by this Resolution and all matters incidental thereto, including, without limitation, provide notice inviting bids for the Bonds, report to the Auditor-Controller or other appropriate County official regarding the annual installments of unpaid assessments to be collected on the tax bill sufficient to pay principal and interest coming due on the Bonds, execute such agreements, certificates, receipts, opinions and other documents, including the preliminary and final Official Statements, and to deliver at the closing and delivery of the Bonds any and all of the foregoing as may be -15- s8o�o� pf n895.u�s 3 appropriate in the circumstances. All such acts and things here- tofore done are hereby approved, ratified and confirmed. 1988. PASSED, APPROVED AND ADOPTED this 14ti,day of July , AYES: CRITES,.KELLY, SNYDER, WILSON, & BENSON NOES: NONE ABSENT: NONE ABSTAIN: NONE ATTEST: �� � i „ , . �,. SHEILA R. GI IGAN, CITY ERK CITY OF PALM DESERT, C ORNIA r ; ��: .�• . / �� ' ' l� - JEAN M. BENSON, MAYOR -16- 880707 pf A895.MLS 3 UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF RIVERSIDE CITY OF PALM DESERT REGISTERED No. IMPROVEMENT BOND CITY OF PALM DESERT ASSESSMENT DISTRICT NO. 87-1 ISSUE OF 1988 (LIMITED OBLIGATION IMPROVEMENT) SERIES NO. INTEREST RATE MATURITY BOND CUSIP DATE DATE NUMBER REGISTERED $ Under and by virtue of the Improvement Bond Act of 1915, Division 10 (commencing with Section 8500) of the Streets • and Highways Code (the "Act"), the City of Palm Desert, County of Riverside, State of California, (the "City") will, out of the redemption fund for the payment of the bonds issued upon the unpaid portion of assessments made for the acquisition, work, and improvements more fully described in proceedings taken pursuant to Resolution of Intention No. 88-51, adopted by the City Counci2 of the City of Palm Desert on the 26th day of May, 1988, (as later amended), pay to or registered assigns, on the maturity date stated above, the principal sum of in lawful money of the United States of America and in like manner will pay interest from the interest payment date next preceding the date on which this bond is authenticated, unless this bond is authenticated and registered after the close of business on a "Record Date" (as hereinafter defined) and on or prior to an interest payment date, in which event it shall bear interest from such interest payment date, or unless this bond is authenticated and registered prior to March 2, 1989 in which event it shall bear interest from the Bond Date, until payment of such principal sum shall have been discharged, at the rate per annum stated above, payable semiannually on March 2 and September 2 in each year commencing on March 2, 1989. Both the principal hereof and redemption premium hereon are payable at Transfer Agent, Registrar, and Paying Agent, in California, and the interest hereon is payable by check as or draft mailed to the owner hereof at the owner's address as it appears on the records of the (issuing aqency or registration agent) or at such address as may have been filed with the Transfer Agent, Registrar and Paying Agent (issuing agency or registration agent) for that purpose, as of the 15th day of the month EXHIBIT A immediately preceding each interest payment date (the "Record Date"). This Bond shall not be entitled to any benefit under the Act or the Resolution authorizing issuance of the bonds (the "Resolution of Issuance"), or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the registration agent. IN WITNESS WHEREOF, the City of Palm Desert has caused this bond to be signed in facsimile by the Treasurer of said City and by its Clerk, and has caused its corporate seal to be reproduced in facsimile hereon all as of the day of , 1988. CITY OF PALM DESERT Clerk Treasurer [SEAL] � .� Certificate of Authentication and Registration This is one of the bonds described in the within mentioned Resolution of Issuance, which has been authenticated and registered on By -2- 880707 pf A895.u1s 3 ADDITIONAL PROVISIONS OF THE BOND This bond is one of several annual series of bonds of like date, tenor, and effect, but differing in amounts, maturities, and interest rates, issued by the City of Palm Desert under the Act and the Resolution of Issuance, for the purpose of providing means for paying for the improvements described in the proceedings; and is secured by the moneys in said redemption fund and by the unpaid portion of said assessments made for the payment of said improvements, and, including principal and interest, is payable exclusively out of said fund. This bond is transferable by the registered owner hereof, in person or by the owner's attorney duly authorized in writing, at the office of , subject to the terms and conditions provided in the Resolution of Issuance, including the payment of certain charges, if any, upon surrender and cancellation of this bond. Upon such transfer, a new registered bond or bonds, of any authorized denomination or denominations, of the same maturity, for the same aggregate principal amount, will be issued to the transferee in exchange therefor. Bonds shall be registered only in the name of an indi- vidual (including joint owners}, a corporation, a partnership, or a trust. The Fiscal Agent shall not be required to register the transfer or exchange of any bond (i) between 15 days prior to selection of bonds for redemption and (ii) as to any bond selected for redemption. The issuing agency and the registration agent may treat the owner hereof as the absolute owner for all purposes, and the issuing agency and the registration agent shall not be affected by any notice to the contrary. This bond or any portion of it in the amount of five thousand dollars ($5,000), or any integral multiple thereof, may be redeemed and paid in advance of maturity upon the second day of March or September in any year by giving at least 60 days' notice by registered mail to the registered owner hereof at the owner's address as it appears on the registration books of the registration agent by paying principal and accrued interest together with a premium equal to percentum of the principal. This bond is not subject to refunding pursuant to the procedures of Division 11 (commencing with Section 9000) or -3- 880707 pf A895.u1s 3 Division 11.5 (commencing with Section 9500j of the Streets and Highways Code prior to —� --- The City will not obligate itself to advance available funds from the City treasury to cure any deficiency which may occur in the bond redemption fund. � -4- aso�o� pf �s9s.u�s 3 FISCAL AGENCY AGREEMENT THIS AGREEMENT is made and entered into as of September 2, 1988, by and between the CITY OF PALM DESERT (the "City") and SECURITY PACIFIC NATIONAL BANK (the "Bank"): RECITALS• A. The City intends to issue its improvement bonds pursuant to Resolution No. 88-74 of the City (the "Bonds"); and B. The Bank, upon request of the City, is willing to act as Fiscal Agent for the Bonds at the Bank's offices located in the City of Los Angeles, California; and C. It is mutually desirable that an agreement be entered into between the parties pursuant to and in furtherance of such Resolution No. 88-74 to provide for such fiscal agent services. NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants herein contained, agree as follows: Section 1. The Bank shall perform only such duties expressly set forth on it as Fiscal Agent (Transfer Agent, Registrar and Paying Agent) pursuant to Resolution No. 88 -74 the City (the "Resolution") and this Agreement. as of Section 2. The Bank shall cause any or all of the Bonds to be honored in accordance with the terms thereof upon presenta- tion of the same for payment upon maturity to the Bank. The City shall cause to be made available to the Bank all funds necessary in order to so honor the Bonds and pay interest on the Bonds. The Bonds shall be payable as follows: MATURITY YEAR (September 2nd) MATURITY YEAR PRINCIPAL INTEREST (September AMOUNT RATE 2nd� PRINCIPAL AMOUNT INTEREST RATE I989 1990 1991 1992 1993 1994 1995 1996 1997 1998 $ 115,878.42 120,000.00 130,000.00 135,000.00 145,000.00 155,000.00 165,000.00 175,000.00 190,000.00 205,000.00 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 $ 220,000.00 235,000.00 255,000.00 275,000.00 300,000.00 320,000.00 350,000.00 375,000.00 405,000.00 440,000.00 EXHIBIT B The Bonds shall bear interest at the rates set forth above, payable March 2nd and September 2nd in each year, commencing on March 2, 1989. Interest shall be payable from the interest payment date next preceding the date of authentication unless a Bond is authenticated after the close of business on a Record Date (as hereinafter defined) and on or prior to an interest payment date, in which event interest shall be payable from such interest payment date or a Bond is �uthenticated prior to the close of business on the first Record Date, in which event interest shall be payable from September 2, 1988. The Bonds and the interest thereon are payable in lawful money of the United States of America, interest being payable by check or draft mailed by first class mail to the registered owners of the Bonds at the addresses thereof as shown on the registration books as of the fifteenth day of the month preceding each interest payment date (the "Record Date"j and principal being payable Section 3. The City shall cause to be deposited the annual installments of assessments with the Bank as set forth in the Reso- lution and there shall be deposited with the Bank an amount equal to the lesser of (i) the largest payment of interest and principal due on March 2nd and September 2nd in the same calendar year, or (ii) ten percent of the proceeds of the Bonds, as set forth in Paragraph C of Section 5 of the Resolution, and as further set forth in a certificate presented to the Fiscal Agent at the closing and delivery of the Bonds entitled "Instructions to Authenticate and � Deliver Bonds." The Bank shall invest such moneys as set forth in Section 8 of the Resolution. Section 4. The Bank shall render to the City semi- annual statements showing amounts deposited, paid or disbursed, and shall destroy all cancelled Bonds and furnish a certificate of destruction to the City. Section 5. The City shall pay to the Bank, on an annual basis, the fees set forth in the letter and schedule provided to the City by the Bank, plus all incidental expenses for which reimbursement is claimed pursuant to Section 6 hereof. �ection 6. In addition to the fees provided in Section 5, the City shall reimburse the Bank for out-of-pocket expenses, such as postage and mailing, necessarily incurred by the Bank in the performance of its duties hereunder. The City shall indemnify the Bank and hold it harmless against any loss, liability, expense or advance, including fees and expenses of counsel and other experts, incurred or made without negligence bad faith on the part of the Bank, in the exercise and perform- ance of its duties hereunder by the Bank, including expenses incurred in connection with defending itself against any claim liability arising under this Agreement or the Resolutions. or �� -2- 88070T pf A895.LILS 3 �� ,��ction 7. At least ten days prior to the first payment ,; or disbursement of principal or interest on the Bonds under the �� provisions of this Agreement, the City shall furnish the Bank with three specimen Bonds. Section 8. The terms and conditions of this Agreement are intended for the mutual benefit of the City and the Bank exclusively, and are not intended to give any third party any rights or claims, contractual or otherwise, hereunder. Section 9. The City agrees that the Bank shall not be required to honor any request made by anyone other than the City itself to stop payment on any lost, destroyed, mutilated or stolen Bond or to pay any such Bond upon which there may be an adverse claim. The City will in such instances qive the Bank written instructions as to the disposition of such adverse claim as the circumstances may warrant, and hereby agrees to hold the Bank harmless from any and all claims whenever the Bank acts in accordance with such instructions. �ection 10. For purposes of the closinq and delivery of the Bonds, the Fiscal Agent shall establish a special account to be known as the "Costs of Issuance Account." A portion of the proceeds of the Bonds which would otherwise be deposited into the Improvement Fund (which portion shall be set forth in the Instructions to Authenticate and Deliver the Bonds) shall be • deposited by the Fiscal Agent into such Costs of Issuance Account. Such Instructions shall also specify the amounts which are to be disbursed by the Fiscal Agent from such Costs of Issuance Account, including the name of the payee and the amount to be paid to such payee. Such amounts shall be disbursed to the payee by check at the closing and delivery of the Bonds. All amounts remaining in such account 180 days after such closing and delivery of the Bonds shall be paid forthwith to the City. Section 11. At least 90 days prior to the date selected by the City Treasurer for redemption prior to maturity of any Bond, the City shall provide the Fiscal Agent with written notice of such redemption. In selecting Bonds for redemption, the Fiscal Agent shall select Bonds for redemption in such a way that the ratio of the principal amount of outstanding Bonds to the principal amount of issued Bonds shall be approximately the same in each annual series insofar as possible. Within each annual series, Bonds shall be selected for redemption by lot. Section 12. Any moneys deposited with the Fiscal Agent for the payment of principal of, or interest or premium on, any Bonds and remaining unclaimed for six years after the principal of all the outstanding Bonds has become due and payable (whether at maturity or upon call for redemption) shall then be repaid to the City, and the owners of the Bonds shall thereafter be -3- 880707 pf A895.uLs 3 entitled to look only to the City for payment thereof, and all liability of the Fiscal Agent with respect to such moneys shall thereupon cease. Section 13. The Fiscal Agent (i) shall not be obli- gated to take any legal action hereunder which might in its judqment involve any expense or liability unless it has been furnished with reasonable indemnity; (ii) may rely on and shall be protected �n acting upon any certificate, instrument, opinion, notice, letter, telegram or other document, or any security, delivered to it and in good faith believed by it to be qenuine and to have been signed by the proper party or parties; (iii) may rely on and shall be protected in acting upon the written instructions of the City Treasurer and such employees and representatives of the City Treasurer as the City Treasurer may hereinafter designate in writinq; (iv) may consult counsel satisfactory to it (including counsel for the City and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered, or omitted by it hereunder in good faith and in accordance with the opinion of such counsel; and (v) shall not be liable for any error of judgment, or for any act done or step taken or omitted by it, in good faith, or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection therewith, except in the case of negligent perfonaance or omission. IN WITNESS WHEREOF the parties hereto have caused these � presents to be du�y executed as of the day and year first above written. CITY OF PALM DESERT [SEAL] City Treasurer SECURITY PACIFIC NATIONAL HANK, AS FISCAL AGENT By Title: -4- 880707 pf A895.1ILS 3 NOTICE INVITING BIDS NOT TO EXCEED $4,710,878.42 IMPROVEMENT BONDS CITY OF PALM DESERT ASSESSMENT DISTRICT N0. 87-1 ISSUE OF 1988 (LIMITED OBLIGATION IMPROVEMENT) NOTICE IS HEREBY GZVEN that sealed bids for the pur- chase of improvement bonds of the City of Palm Desert (the "City") will be received by the City up to the time and at the place specified below: Time: 11:00 A.M., Los Angeles Time August , 1988 Place: Richards, Watson & Gershon A Professional Corporation 333 South Hope Street 38th Floor Conference Room 1 Los Angeles, California 90071 OPENING OF BIDS: The bids will be received at the above time and place, will be opened by the Financial Advisor and Bond Counsel and will be presented to the City Council at its meeting to be held, later that day. ISSUE: Not to exceed $4,710,878.42 principal amount of improvement bonds designated "Improvement Bonds, City of Palm Desert, Assessment District No. 87-1, Issue of 1988 (Limited Obligation Improvement)" (the "Bonds"), consisting of fully registered Bonds, in denominations of $5,000 or any whole multiple thereof, except for one Bond which shall mature on September 2, 1989 and which shall be in the amount by which the total aggregate principal amount of the Bonds exceeds an integral multiple of $5,000 or in the amount of $5,000 plus such excess. PROCEEDINGS AND AUTHORITY FOR ISSUANCE: The assessment proceedings are authorized under and pursuant to the provisions of the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code, commencing with Section 10000) for the construction of certain public improvements, including appurtenances, with authorization for the Bonds being EXHIBIT C pursuant to the Improvement Bond Act of 1915 (Division 10 of the California Streets and Highways Code commencing with Section 8500) . 1988. DATE OF BONDS: The Bonds will be dated Septeinber 2, MATURITIES: The maturity schedule for the Bonds shall be determined at the expiration of the cash collection period, which is estimated to end August 15, 1988. After the expiration of the cash collection period and prior to the date of delivery of the Bonds, the aggregate principal amount of the Bonds to be issued will be certified by the Treasurer of the City. The maturity schedule for the Bonds will be arranged to provide for approximately level debt service so that the amount of principal maturing in each year plus the amount of interest payable in that year will be an aggregate amount that is approximately equal each year, with Bonds maturing on September 2nd of each year commencing in 1989 in multiples of $5,000, except that the first maturity, due September 2, 1989, may be in an amount other than a multiple of $5,000. For the purposes of calculating the best bid for the Bonds, the following Maturity Schedule, which assumes that Bonds will be issued for the full amount of levied assess- ments, shall be used. MATURITY YEAR 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 PRINCIPAL AMOUNT $ 115,878.42 120,000.00 130,000.00 135,000.00 145,000.00 155,000.00 165,000.00 175,000.00 190,000.00 205,000.00 MATURITY YEAR 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 INTEREST: The Bonds shall bear interest date at a rate or rates to be fixed upon the sale to exceed 12 percent per annum, payable March 2nd 2nd in each year, commencing on March 2, 1989. PRZNCIPAL AMOUNT $ 220,000.00 235,000.00 255,000.00 275,000.00 300,000.00 320,000.00 350,000.00 375,000.00 405,000.00 440,000.00 from their thereof but not and September PAYMENT: The Bonds and the interest thereon are pay- able in lawful money of the United 5tates of America, interest being payable by check or draft mailed by first class mail to the registered owners of the Bonds at the addresses thereof as shown on the registration books as of the fifteenth day of the month preceding each interest payment date, and principal being payable -2- 880707 pf A8%.uls 3 upon presentation and surrender of the Bonds at the corporate trust vffice of Security Pacific National Bank, Fiscal Agent (Transfer Agent, Registrar and Paying Agent) for the City, in Los Anqeles, California. FORM OF BONDS: The Bonds shall be issued in the form of fully registered Bonds. TR�4NSFER AND EXCHANGE: Transfer of ownership of a Bond or Bonds shall be made by exchanging the same for a new Bond or Bonds and transferring the registration of such Bond or Bonds on the registration books of the Fiscal Agent. REDEMPTION: Any bond may be redeemed, in any multiple of $5,000, on any March 2nd or September 2nd prior to its fixed maturity date, at the option of the City, upon giving the notice provided in the aforementianed Improvement Bond Act of 1915 and upon payment of the principal amount thereof and interest accrued thereon to the date of redemption, plus a redemption premium of three percent of the principal amount redeemed. If less than an entire Bond is redeemed, the Fiscal Agent shall prepare a Bond for the unredeemed portion which shall be returned to the registered owner of the Bond. SECURITY: The Bonds are issued upon and secured by unpaid assessments which, together with interest thereon, constitute a trust fund for the redemption and payment of the principal and interest on the Bonds. All the Bonds are secured by the moneys in the Redemption Fund established by the City Council during the proceedings and by the unpaid assessments levied to provide for payment of said improvements, and, including principal and interest, are payable exclusively out of such Redemption Fund. The unpaid assessments are collected in annual install- ments, together with interest on the declining balances, on the tax roll on which general taxes £or real property are collected and are payable and become delinquent at the same time and in the same proportionate amvunts and, except for an additional two percent penalty per month, bear the same penalties and interest and are subject to the same provisions for sale and redemption as apply to properties for non-payment of general taxes. If a delinquency occurs in the payment of any assess- ment installment, the City has the duty to transfer an amount equal to the delinquent installment from the Special Reserve Fund to the Redemption Fund. The City will not funds from the City Treasury in the Redemption Fund. obligate itself to advance available to cure deficiencies which may occur 88070T pf Il8%.vLS 3 -3- COVENANT FOR SUPERIOR COURT FORECLOSURE: In the event of a delinquency in the payment of any installment of an unpaid assessment, the City has covenanted to order institution of an action in the Superior Court of the State of California to fore- close the lien of such delinquent assessment, as authorized in Part 14 of Division 10 of the California Streets and Highways Code (the Improvement Bond Act of 1915) within 150 days following the date of such delinquency. SPECIAL RESERVE FUND: Resolution No. 88-74 of the City Council provides for the creation of a special reserve fund (the "Special Reserve Fund") to provide available funds, from which the City can advance the amount of any delinquent installment on unpaid assessments levied in the proceedings, and interest thereon, or the amount of any installment, the receipt of which has been delayed, into the Redemption Fund for the Bonds. Pay- ments from the Special Reserve Fund shall be deemed an advance to be reimbursed from the proceeds of redemption or sale of the properties with respect to which payment of delinquent assess- ments and interest thereon was paid, or from such delayed installments. The Special Reserve Fund shall be held and maintained ' by the City Treasurer as a separate trust account. Upon receipt of the proceeds from the sale of the Bonds, an amount equal to 8.815 percent of the principal amount of Bonds issued shall be deposited in the Special Reserve Fund. -4- 880707 pf A896.u1s 3 TERMS OF SALE Interest Rate: The rate or rates bid may not exceed 12 percent per annum, payable March 2nd and September 2nd in each year, commencing on March 2, 1989. The rate bid must be a multi- ple of one-eiqhth of one percent or one-twentieth of one percent or any combination thereof. All Bonds of the same maturity must bear the same interest rate and the rate bid for any maturity must be the sa�e or higher than the rate of the precedinq matur- ity. The rate on any maturity or group of maturities shall not be more than four percent hiqher than the rate on any other maturity or group of maturities. No Bond may bear more than one rate, and each Bond must bear interest at the rate specified in the bid from its date to its fixed maturity date. Any premium must be paid in a Federal Funds check as part of the purchase price and no bid will be accepted which provides for the cancellation and surrender of any interest payment or for the waiver of interest or other concession by the bidder as a substitute for payment in full of the purchase price. Sale of Bonds: The Bonds shall be sold for cash only and all bids must be for not less than all of the Bonds hereby offered for sale. Each bid shall state that the bidder offers accrued interest to the date of delivery, the purchase price, which shall not be less than 97 percent of the aggregate prin- cipal amount of the Bonds, the premium (if any), and the interest rate, not to exceed that specified herein, at which the bidder offers to buy the Bonds. Each bidder is requested, but not required, to state in the bid the net interest cost in dollars and the net interest rate determined thereby, which shall be considered informative only and not a part of the bid. Hiqhest Bidder; Printinq: The Bonds will be awarded to the highest responsible bidder or bidders considering the interest rates specified for the various maturities and the premium or discount offered, if any. The highest bid will be determined by deducting the amount of the premium (if any) from, or adding the amount of the discount (if any) to, the total amount of interest which the City would be required to pay from the date of the Bonds to the maturity dates thereof at the rate or rates specified in the bid, and the award will be made on the basis of the lowest net interest cost to the City. If two or more bids provide the same lowest net interest cost, the City Council shall determine by lot which bid shall be accepted, and such determination shall be final. The successful bidder must pay accrued interest from the date of the Bonds to the date of delivery thereof computed on a 360-day year basis. The cost of printing the Bonds will be borne by the City. -5- 860707 pf A846.MLS 3 Right of Rejection: The City Council reserves the right, in its sole discretion, to reject any and all bids and, to the extent not prohibited by law, to waive any irregularity or informality in any bid. Award of Bonds: The City Council will take action awarding the Bonds or rejecting all bids not later than 48 hours after the time herein prescribed for the receipt of bids; provided that��he award may be made after the expiration of the specified time if the bidder shall not have given to the City Clerk notice in writing of the withdrawal of such bid. Notice of the award will be given promptly to the successful bidder. Form of Bid: Each bid, together with the bid check, must be in a sealed envelope, addressed to the City, with the envelope and bid clearly marked "Bid for Improvement Bonds, City of Palm Desert, Assessment District No. 87-1, Zssue of 1988 (Limited Obligation Improvement)." Each bid must be unconditional and in accordance with the terms and conditions set forth, or permitted herein, and must be submitted on, or in substantial accordance with, bid forms provided by the City. CUSIP: CUSIP identification numbers may be imprinted on the Bonds, but such numbers shall not constitute a part of the contract evidenced by the Bonds and no liability shall attach to the City or any of the officers or agents thereof because of or on account of such numbers. Any error or omission with respect to such numbers shall not constitute cause for refusal by the successful bidder to accept delivery of and pay for the Bonds. Delivery and Pavment: Delivery of the Bonds will be made to the successful bidder at the office of Richards, Watson & Gershon, A Professional Corporation, Los Angeles, California. Payment for the Bonds must be made by Federal Funds check in the name of the City and immediately available funds upon delivery of the Bonds. Promot Deliverv, Cancellation for Late Deliverv: The Bonds are scheduled to be delivered to the successful bidder within 30 days following the sale thereof. If the City shall fail to execute the Bonds and tender them for delivery by twelve o'clock noon on the 60th day following the date of sale or the first business day thereafter if the 60th day is not a business day, the successful bidder may (subject to the conditions set forth below under the heading "Bid Check"), on that day or any time thereafter until delivery of the Bonds, withdraw its bid by serving notice of cancellation, in writing, to the City Clerk, in which event the City shall promptly return the good faith deposit. The City expects to make such delivery in the form of definitive Bonds, but reserves the right to make such delivery in the form of temporary Bonds, exchangeable for definitive Bonds, at no cost to the successful bidder. Accrued interest to the -6- 880707 pt A896.u1s 3 date of delivery of the Bonds shall be paid by the purchaser at .� the time of delivery. Bid Check: A certified or cashier's check drawn on a responsible bank or trust company in the amount of $50,000 pay- able to the order of the City, must accompany each bid as a guaranty that the bidder, if successful, will accept and pay for the Bonds in accordance with the terms of the bid. No interest shall be allowed on the good faith checks, and checks of the unsuccessful bidders will be promptly returned to each bidder's representative by hand delivery or registered mail. The check accompanying any accepted bid shall be cashed and the proceeds thereof applied to the purchase price. If such bid is accepted but not performed, unless such failure or performance shall be caused by any act or omission of the City, the proceeds of the check accompanying any accepted bid shall be retained by the City. Chanqe in Tax Exempt Status: At any time before the Bonds are tendered for delivery, the successful bidder may disaffirm and withdraw the bid if the interest received from obligations of the same type and character of the Bonds shall be declared to be included in gross income under present federal income tax laws, either by a ruling of the Internal Revenue Service or by a decision of any federal court, or shall be declared taxable by the terms of any federal income tax law enacted subsequent to the date of publication of this Notice Inviting Bids. Legal Opinion: The opinion of the Bond Counsel, Richards, Watson & Gershon, A Professional Corporation, Los Angeles, California, approving the validity of the Bonds and stating that, assuming continuing compliance with certain covenants of the City set forth in the Resolution authorizing the issuance of the Bonds, interest on the Bonds is exempt from income taxes of the United States of America under present federal income tax laws and that such interest is also exempt from personal income taxes of the State of California under present State income tax laws, will be furnished the successful bidder at or prior to the time of delivery of the Bonds at the expense of the City Council. Bond Counsel will express no opinion regarding the possible inclusion of interest in computing adjusted net book income or adjusted current earnings for pur- poses of the alternative minimum tax or the environmental tax which may be imposed on corporations which hold the Bonds. Bond Counsel will express no opinion regarding other federal income tax consequences caused by the receipt of interest on the Bonds. A copy of such opinion, certified by an officer of the City by facsimile signature, will be printed on the back of each Bond. No charge will be made to the purchaser for such opinion, print- ing or certification. -7- e8o�o� pf �s�.u�s 3 Closinq Documents: Zn addition to the opinion of Bond Counsel referred to above, at the time of payment for the delivery of the Bonds, the City Council will furnish the success- ful bidder with certain certificates and receipts, all to be dated as of the date of delivery. Official Statement: The City will furnish to the suc- cessful bidde=, at no charge, such number of copies of the Offi- cial Statement�as such bidder may reasonably request (but not to exceed 1000) for use in connection with any resale of the Bonds. iNFORMATION AVAILABLE: Requests for copies of the Preliminary Official Statement pertaining to the Bonds, the Bid Form, or for other information concerning the City, should be addressed to the City's Financial Advisor, Miller & Schroeder Financial, Inc., 505 Lomos Santa Fe Drive, Suite 100, Solana Beach, California 92075, telephone (619) 481-5894, Attention: Mr. Gregory B. Ballenger. ASSESSMENT DESCRIPTION AND AMOUNTS: For a description of the respective lots, pieces and parcels of land upon which the several assessments are levied and the Bonds are issued, and for other information, reference is made to the assessment on file in the Office of the City Clerk and upon confirmation to be filed for recordation in the Office of the County Recorder of the County of Riverside, California. Sheila R. Gillivan City Clerk City of Palm Desert -8- sso�o� pf �$�.u�s 3 OFFICIAL BID FORM BID FOR THE PURCHASE OF NOT TO EXCEED $4,710,878.42 IMPROVEMENT BONDS CITY OF PALM DESERT ASSESSMENT DISTRICT NO. 87-1 ISSUE OF 1988 (LIMITED OBLIGATION IMPROVEMENT) August _, 1988 Mayor and Members of the City Council City of Palm Desert, California Pursuant to the Notice Inviting Bids, we offer exceed $4,710,878.42 principal amount, all or designated as "Improvement Bonds, City of Palm Assessment District No. 87-1, Issue of 1988", described in such Notice Inviting Bids, at the rates MATURITY YEAR (September 2nd1 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 MATURITY YEAR PRINCIPAL INTEREST (September AMOUNT RATE 2nd) $ 115,878.42 120,000.00 130,000.00 135,000.00 145,000.00 155,000.00 165,000.00 175,000.00 190,000.00 205,000.00 and to pay therefor $ or less not more than three aggregate sum of $ Bonds), plus accrued delivery thereof. 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 to purchase not to none, of the Bonds Desert, particularly following interest PRINCIPAL AMOUNT INTEREST RATE $ 220,000.00 235,000.00 255,000.00 275,000.00 300,000.00 320,000.00 350,000.00 375,000.00 405,000.00 440,000.00 the par value thereof plus a premium of a discount of $ , which discount is percent of such par value (making an to be paid for the purchase of the interest on such Bonds to the date of -1- 880707 pf A8% .WIS 3 This bid is subject to all the terms and conditions of the Notice Inviting Bids, all of which terms and conditions are made a part hereof as though fully set forth in this bid. As specified in the Notice Inviting Bids, this bid is subject to acceptance not later than 48 hours after the expira- tion of the time for the receipt of bids, and the opinion of the Bond Counsel, Richards, Watson & Gershon, A Professional Corporation, Los Angeles, California, approving the validity of the Bonds, being furnished us (if we are the successful bidder) at the time of delivery of the Bonds at the expense of the City. There is enclosed herewith a certified or cashier's check in the amount of $50,000, payable to the order of the City. Our calculation of the net interest cost and net interest rate, which is considered to be informative only and not a part of the bid, is as follows: Total Interest Less Premium Plus Discount Net Interest Cost Net Interest Rate $ $ $ $ � Following is a list of inembers of our account on whose behalf this bid is made: r � � -2- aso7o7 pf ns9s.u�s 3 Respectfully submitted, Name: (Account Manager) By: Address: City: State: Telephone: -3- 880707 pf A8%.uls 3