HomeMy WebLinkAboutRes 06-113 and 06-114 PD Highlands AD 04-01 Deferral ProgramCITY OF PALM DESERT
CITY MANAGERS OFFICE
STAFF REPORT
TO: Honorable Mayor and City Council Members
SUBJECT: PALM DESERT HIGHLANDS ASSESSMENT DISTRICT
NO. 04-01 ASSESSMENT DEFERRAL PROGRAM
SUBMITTED BY: Carlos Ortega, Bill Strausz, Patrick Conlon
DATE: July 13, 2006
ATTACHMENTS: 1) Resolution No. 06-113
2) Resolution No. 06-114
RECOMMENDATION
By Minute Motion:
1. Adopt Resolution No. 06-113 establishing a deferred payment
option and a deferral program for Assessment District No. 04-01.
2. Adopt Resolution No. 06-114 authorizing the issuance of bonds
for Assessment District No. 04-01 and authorize the purchase of
said bonds by the City Treasurer.
EXECUTIVE SUMMARY
This action is needed to create a third payment option available to all property owners
within the above Assessment District. This option would allow property owners to defer
all payment on this assessment until transfer of ownership or thirty years, whichever
comes first. At that time the assessment plus interest must be paid, in full, to the City.
This action is also necessary to allow the City to set up a special deferral fund, which
will fund the program and allow the City Treasurer to buy the bonds which will finance
the construction.
BACKGROUND
The City Council recently formed the Highlands Utility Undergrounding Assessment
District.
By way of background, on April 6, 2004, property owners submitted a petition to initiate
proceedings to form the Assessment District. On April 13, 2006, the City Council
Staff Report
Assessment District No. 04-01 Deferral Program
July 13, 2006
Page 2 of 5
adopted a resolution of intention to form the Assessment District and a resolution
preliminarily approving the engineer's report prepared for the district and setting a public
hearing. On June 8, 2006, the City Council held the public hearing, tabulated ballots,
and adopted a resolution confirming the assessment and ordering the undergrounding
improvements. On June 8, 2006, the City Council also adopted a resolution authorizing
the issuance of bonds for the Assessment District.
The assessment was recorded in the City offices on June 9, 2006 and in the County
Recorder's office on June 15, 2006. Notice of the assessment was mailed to property
owners in the Assessment District on June 15, 2006, and notice of the assessment was
published on June 27 and July 4, 2006.
The notice mailed to the property owners informed them of the 30-day cash collection
period which ended on July 10, 2006. Property owners who prepay their assessments
within the 30-day cash collection period avoid the costs associated with issuing bonds,
such as the underwriter's discount. Following the expiration of the cash collection period
the City may issue bonds to represent any assessments, which then remain unpaid.
Property owners for which bonds are issued will be obligated to make annual
assessment installment payments, which the City will use to pay debt service on the
bonds. The annual assessment installments are billed on the County property tax bill
each year.
Pursuant to the City Council's June 8th resolution authorizing the issuance of bonds,
the City Council was scheduled to sell the bonds to the underwriter selected by the City
Council. It was anticipated that the bonds would be structured to provide level annual
debt service payments, and to provide for a three percent bond redemption premium for
the first five years (a penalty set by statute and payable by a property owner who pays
off his or her assessment within the first five years after the bonds are issued).
The construction contract is scheduled to be awarded on August 24, 2006. After this
date, the contractor is no longer required to hold open its bid. To ensure that the City
has bond proceeds available prior to the expiration of the contractor's bid and to meet
the County's deadline for placing assessment installments on the tax roll for the coming
fiscal year, the bond sale is scheduled to close on or about August 10th.
Purchase of Bonds by City and Assessment Deferral Program
Staff has been exploring ways to reduce the costs to the property owners and ease the
assessment burden. Two options available to the City to accomplish this result are: (i)
the City may sell the bonds to the City Treasurer instead of to the underwriter and (ii)
the City Council may establish an assessment deferral program for property owners,
which includes the establishment of a deferral fund to be funded from the City's General
Fund. Both actions would require the City Council to adopt authorizing resolutions,
which are attached.
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Staff Report
Assessment District No. 04-01 Deferral Program
July 13, 2006
Page 3 of 5
a. Purchase of Bonds by the City Treasurer.
In lieu of selling bonds to the underwriter, the City Treasurer may purchase the bonds.
This would result in a savings of certain costs typically associated with the sale of bonds
such as the underwriter's discount, a reserve fund for the bonds funded from bond
proceeds, printing the official statement, etc. In order for the City Treasurer to purchase
the bonds, the City Council must adopt the attached resolution, which authorizes the
City Treasurer to do so. This resolution would repeal the June 8th resolution, which
authorized the sale of the bonds to the underwriter. If the City Council adopts the
attached resolution, the City must deposit the par amount of the bonds in the
improvement fund established for the assessment district on the closing date for the
bonds. Moneys in the improvement fund will then be used to pay the contractor. The par
amount of the bonds will be reduced by the amounts of any assessments which are
paid off by property owners during the 30-day cash collection period. The City, as the
sole bond owner, would be repaid from the annual assessment installments billed to the
property owners each year on the tax roll. If any property owners decide to pay off their
assessments after the sale of the bonds, we believe the City could waive the statutory
three percent redemption premium described above.
b. Assessment Deferral Program.
The City Council may create a deferral program whereby the City establishes a deferral
fund and deposits General Fund moneys into the fund in the amount necessary to make
assessment payments on behalf of participating property owners. The City would draw
on the deferral fund to pay off assessments or make annual assessment installment
payments on behalf of participating property owners. Any payment by the City would
constitute an interest -bearing loan to the property owner, and each participating
property owner would be required to execute a promissory note in favor of the City and
a deed of trust in favor of the City securing the promissory note. Any such loan must be
repaid to the City, with interest, upon the earlier of the transfer of the home to a new
owner or the final maturity of the bonds. The City Council may establish the deferral
program and deferral fund by adoption of the attached resolution.
The attached resolution directs the City Clerk to mail a notice to the property owners in
the Assessment District informing them about the deferral program. As described
above, the City previously mailed a notice to the property owners informing them of the
then two available options-- paying the assessment in cash during the 30-day cash
collection period or having bonds issued and paying the assessment through annual
assessment installments collected on the tax roll. The additional notice would inform the
property owners of an additional option-- taking a loan from the City to pay the
assessment. This additional notice could be mailed and published after adoption of the
attached resolution.
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Staff Report
Assessment District No. 04-01 Deferral Program
July 13, 2006
Page 4of5
Because of the timing issues related to the award of the construction contract and
placing the assessment installments on the County tax bill, the bond sale is still
scheduled to occur on or about August 10, 2006.
Given the limited amount of time between the Council meeting of July 13th and August
10th, and considering that there are over 100 property owners in the Assessment
District, it is not feasible to implement the deferral program (including doing title work
and having property owners execute all the required loan documents) prior to the sale of
the bonds in August. Therefore, we recommend that the City proceed with the bond
issue in August and implement the deferral program thereafter. The schedule set forth
below would provide for implementation of the deferral program prior to the first half of
the 2006-07 assessment installment becoming due on December 10th. (Certain of the
dates in the schedule set forth below are flexible.)
DATE
ACTION
July 13, 2006
City Council considers resolutions authorizing sale of the
bonds to the City Treasurer and establishing deferral
program and deferral fund.
Week of August 1,
Mail and publish notice of the deferral program. The
2006
notice will provide a deadline for the property owners to
notify the City of their desire to participate in the
program and a deadline for them to execute all required
loan documents.
On or about August 10,
The City Treasurer purchases the bonds. The par
2006
amount of the bonds will be reduced by the amounts of
any assessments which were paid off by property
owners during the 30-day cash collection period.
On or about August 10,
Enroll with the County the fiscal year 2006-07
2006
assessment installments for any property owners who
did not pay off their assessments during the 30-day cash
collection period. The 2006-07 assessment installment
is due one-half on December 10, 2006 and one-half on
April 10, 2007.
August 25, 2006
Deadline for property owners to notify the City that they
want to participate in the deferral program. Begin title
work. Circulate draft loan documents.
November 15, 2006
Deadline for property owners to execute all required
loan documents. Record deeds of trust.
After November 15,
City Treasurer deposits into the deferral fund the full
2006
amount of money required to fund the loans. City
requests the County to issue revised tax bills to reflect
the elimination of the 2006-07 assessment installment.
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Staff Report
Assessment District No. 04-01 Deferral Program
July 13, 2006
Page 5of5
The City will use monies in the deferral fund to pay off assessments for participating
property owners; moneys in the deferral fund will be transferred to the redemption fund
and used to call bonds. This will result in a transfer of moneys from the deferral fund
back to the City's General Fund.
It should be noted that when an assessment is paid off, the City must remove the
assessment lien recorded against the property in the County Recorder's office. This
means the City will no longer be able to look to the protection afforded to the City by the
assessment lien —which is a "super -priority' lien that is prior to any mortgages or deeds
of trust. Instead, the City's loan will be secured solely by the deed of trust, which would
be iu� nior and subordinate to any existing mortgages, deeds of trust, judgment liens and
any other existing liens.
As an alternative to the City using moneys in the deferral fund to pay off a property
owner's assessment early, a property owner may desire that the City use moneys in the
deferral fund to instead pay for assessment installments. This is permissible, but we
recommend that the City limit this alternative to the first five years following the bond
sale. This will result in moneys from the deferral fund being transferred to the City's
General Fund within five years as opposed to over the life of the bonds.
We recommend that the deferral program also be made available to any property
owners who may have paid off their assessments during the cash collection period prior
to the issuance of bonds and the attached resolution so provides. Moneys in the
deferral fund would be used to reimburse participating property owners for their cash
payment.
Submitted by: Approved by:
Patqick Conlon Carlos Orte f
Special Projects Administrator Ciltyy M Hager
* Waived further reading and adopted: CITY COUN�iL ACTION:
1) Resolution No. 06-113. establishing a APPROVED DENIED
deferred payment option and a deferral RE I OTHE
program for Assessment District No. 04-01; 5r aS • al)d
2) Resolution No. 06-114, authorizing the MHETIN DATE %• 0 - r, ja
issuance of bonds for Assessment District AYES:
No. 04-01 and authorize the purchase of said ABSENT •
bonds by the City Treasurer. ABSTAIN•
3-0 (Spiegel ABSENT) VERIFIED BY:
Original on File with City Clerk's Office
GAC4MgrtJane Stanley\Word Files\Pat ConlonXReports & MemosWat Conlon Staff Report Template.doc
RESOLUTION NO. 06-113
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM DESERT CREATING AND ESTABLISHING A
DEFERRAL FUND AND A DEFERRAL PROGRAM FOR THE
HIGHLANDS UTILITY UNDERGROUNDING ASSESSMENT
DISTRICT NO. 04-01
RECITALS:
A. The City Council of the City of Palm Desert, California (the "City") by its
Resolution No. 06-49 (the "Resolution of Intention") declared its intention to form the Highlands
Utility Undergrounding Assessment District No. 04-01(the "Assessment District") pursuant to
the provisions of the Municipal Improvement Act of 1913 (California Streets and Highways
Code Section 10000, e� seec .) (the "1913 Act") and ordered the preparation and filing of a report
(the "Engineer's Report") with the City Council and provided that bonds would be issued
thereunder pursuant to the provisions of the Improvement Bond Act of 1915 (California Streets
and Highways Code Section 8500, et seq.) (the "Bond Act").
B. By its Resolution No. 06-50, the City Council preliminarily approved the
Engineer's Report.
C. Following notice duly given in accordance with law, the City Council held
a public hearing regarding the Resolution of Intention and the Engineer's Report.
D. Following the public hearing, pursuant to its Resolution No. 06-86, the
City Council confirmed the assessments for the Assessment District and ordered the proposed
improvements set forth in the Engineer's Report, as modified, to be made.
E. Notice to property owners of the recordation of the assessment and of the
30-day period within which assessments were to be paid in cash has been duly given and the 30-
day cash collection period has expired.
F. The City Council desires to issue its City of Palm Desert, Highlands
Utility Undergrounding Assessment District No. 04-01, Limited Obligation Improvement Bonds,
Series 2006 under and pursuant to the Bond Act to represent those assessments which remain
unpaid. The official who has been designated as the collection officer for cash payments of such
assessments has filed with the City Clerk a list of all assessments which remain unpaid, which
list may be modified from time to time by such official.
G. The City Council desires to have the City Treasurer invest in and purchase
the bonds from the City.
H. The City Council desires to establish a deferral fund and a deferral
program under the 1913 Act for the benefit of property owners in the Assessment District.
P6401-0001\901211v2.doc
RESOLUTION NO. 06-113
I. Sections 10700, et seq. of the 1913 Act provide that the City Council may
determine, by resolution, to allow property owners in the Assessment District to defer payment
of their assessments.
J. Eighty percent (80%) or more of the area of the Assessment District is
developed for residential use.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM
DESERT HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS:
Section 1. The above recitals, and each of them, are true and correct.
Section 2. The City Council hereby resolves that all property owners in the
Assessment District may defer payment of their assessments subject to the criteria and
procedures described below.
Section 3. There is hereby created and established a special fund to be held in the
treasury of the City entitled the "Highlands Utility Undergrounding Assessment District No. 04-
01 Deferral Fund" (the "Deferral Fund"). The City Treasurer is hereby authorized and directed
to deposit into the Deferral Fund, on the date determined by the City Manager, an amount
sufficient to payoff the assessments, in whole or in part, or to pay designated assessment
installments (as determined by the City Manager), on behalf of all property owners in the
Assessment District who meet the criteria and follow the procedures described below for deferral
in accordance with the Deferral Program described below. The amount authorized to be
deposited into the Deferral Fund shall be the amount determined by the City Manager, but shall
not exceed the aggregate amount of payments of principal and interest to maturity on bonds
issued to represent unpaid assessments in the Assessment District, together with other amounts
authorized by the City Manager for loan -related costs and fees (which may include, but are not
limited to, title insurance premiums and recording fees). The yield on investment earnings on
amounts deposited into such Deferral Fund shall not exceed the yield on such bonds. The City
Treasurer, subject to direction by the City Manager, shall maintain the Deferral Fund and shall,
from time to time, make transfers and disbursements of moneys from such Deferral Fund to
effectuate the purposes of this Resolution.
Section 4. There is hereby created and established the "Highlands Utility
Undergrounding Assessment District No. 04-01 Deferral Program" (the "Deferral Program").
All property owners in the Assessment District are eligible to participate in the Deferral
Program, subject to the criteria and procedures described below. Amounts deposited into the
Deferral Fund on behalf of a property owner in the Assessment District shall constitute an
interest bearing loan by the City to the property owner. The criteria for participation by a
property owner in the Deferral Program shall include the execution by the property owner of a
loan agreement or promissory note, or both, and a deed of trust (with assignment of rents,
security agreement and fixture filing) securing the repayment of and other obligations under the
City's loan, all in a form and substance satisfactory to the City Manager (the "Loan
Documents"). Such procedures shall include the property owner notifying the City Treasurer of
the property owner's desire to participate in the Deferral Program by a date to be determined by
the City Manager, and the property owner executing the Loan Documents by a date to be
2
P6401-0001\901211v2.doc
RESOLUTION NO. 06-113
determined by the City Manager. The criteria and procedures may include any other terms and
provisions which the City Manager determines are necessary or desirable to implement the
Deferral Program.
Section 5. The principal of the loan, together with interest determined at the rate
and by the method established by the City Manager (which shall not exceed 6.5 percent per
annum), shall be due and payable upon the earlier of (i) the date on which the parcel of real
property upon which the assessment was levied is transferred or (ii) the date of the last maturity
of the bonds issued to represent unpaid assessments; however, notwithstanding the foregoing,
principal and interest shall be due on such other date or dates as may be determined by the City
Manager consistent with the other terms of this Resolution and the criteria and procedures for the
Deferral Program described herein.
Section 6. No deferral arrangement may restrict, reduce, or eliminate any remedy
of a bondholder provided by the 1913 Act in the event of a default.
Section 7. The City Clerk is hereby authorized and directed to publish in a
newspaper of general circulation, and to mail to the property owners in the Assessment District,
a notice regarding the Deferral Program at the time and in the form and manner as determined by
the City Manager.
Section 8. The officers and staff of the City are hereby authorized and directed,
jointly and severally, to do any and all things and to execute, record, and deliver any and all
documents which they may deem necessary or advisable in order to effectuate the purposes of
this Resolution, and any such actions previously taken by such officers are hereby ratified and
confirmed.
PASSED, APPROVED and ADOPTED this day of
,20064 at a regular meeting of the Palm Desert City Council by the
following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
RACHELLE D. KLASSEN, CITY CLERK
CITY OF PALM DESERT, CALIFORNIA
JIM FERGUSON, MAYOR
3
P6401-00011901211v2.doc
RESOLUTION NO. 06-114
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM DESERT PROVIDING FOR THE ISSUANCE OF
LIMITED OBLIGATION IMPROVEMENT BONDS,
AUTHORIZING THE CITY TREASURER TO PURCHASE THE
BONDS AND REPEALING RESOLUTION NO. 06-87
RECITALS:
A. The City Council of the City of Palm Desert, California (the "City") by its
Resolution No. 06-49 (the "Resolution of Intention") declared its intention to form the Highlands
Utility Undergrounding Assessment District No. 04-01 (the "Assessment District") pursuant to
the provisions of the Municipal Improvement Act of 1913 (California Streets and Highways
Code Section 10000, et s�.) (the "1913 Act") and ordered the preparation and filing of a report
(the "Engineer's Report") with the City Council and provided that bonds would be issued
thereunder pursuant to the provisions of the Improvement Bond Act of 1915 (California Streets
and Highways Code Section 8500, et se�.) (the "Bond Act").
B. Pursuant to its Resolution No. 06-50, the City Council preliminarily
approved the Engineer's Report.
C. Following notice duly given in accordance with law, the City Council held
a public hearing regarding the Resolution of Intention and the Engineer's Report.
D. Following the public hearing, pursuant to its Resolution No. 06-86, the
City Council confirmed the assessments for the Assessment District and ordered the proposed
improvements set forth in the Engineer's Report, as modified, to be made (the "Project").
E. Notice to property owners of the recordation of the assessment and of the
30-day period within which assessments were to be paid in cash has been duly given and the 30-
day cash collection period has expired.
F. The City Council desires to issue its City of Palm Desert, Highlands
Utility Undergrounding Assessment District No. 04-01, Limited Obligation Improvement Bonds,
Series 2006 (the "Bonds") under and pursuant to the Bond Act to represent those assessments
which remain unpaid. The official who has been designated as the collection o�'icer for cash
payments of such assessments has filed with the City Treasurer a list of all assessments, which
remain unpaid, as amended from time to time (the "List of Unpaid Assessments").
G. The City Council desires to have the City Treasurer invest in and purchase
the Bonds from the City pursuant to the proposal of the City Treasurer to purchase the Bonds
which is file in the offce of the City Clerk.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM
DESERT, CALIFORNIA HEREBY FINDS, DETERNIlNES, RESOLVES AND ORDERS AS
FOLLOWS:
P6401-0001\901153v2.doc
RESOLDTION NO. 06-114
SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION:
AUTHORIZATION AND PURPOSE OF BONDS; EOUAL SECURTTY.
Section 1.1. Def nitions. The following terms shall, for all purposes of this
Resolution and of any Supplemental Resolution and of the Bonds, and of any certificate, opinion
or other document herein mentioned, have the following meanings:
"Assessment" means the assessment levied by the City pursuant to the Bond Act
under the proceedings taken pursuant to the Resolution of Intention, constituting a first lien and
charge upon the real property within the Assessment District.
"Assessment District" means the Highlands Utility Undergrounding Assessment
District No. 04-01 in the City.
"Assessment Installments" means the installments of principal, interest and
premium, if any, to be paid on the unpaid Assessment by the owners of real property within the
Assessment District.
"Authorized Investments" means any obligation in which the City may lawfully
invest its funds.
"Authorized Representative of the City" means the Mayor, the City Manager and
any other person designated by such officers and authorized to act on behalf of the City pursuant
to this Resolution or any Supplemental Resolution.
"Bond Act" means the Improvement Bond Act of 1915, being Division 10 of the
California Streets and Highways Code, commencing with Section 8500.
"Bond Counsel" means the law firm of Richards, Watson & Gershon, A
Professional Corporation, Los Angeles, California, or another firm of attorneys of favorable
national reputation in the field of municipal bond law.
"Bond Date" means the dated date of the Bonds, which shall be the Closing Date.
"Bonds" means the limited obligation improvement bonds authorized by and at
any time Outstanding pursuant to the provisions of this Resolution and as designated pursuant to
Section 2.3 hereof.
"Business Day" means any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the State or the Federal Reserve System aze authorized or
obligated by law or executive order to be closed.
"City" means the City of Palm Desert, California.
"City Council" means the City Council of the City.
"City Treasurer" means the City Treasurer of the City.
P6401-00011901153dL.doc
RESOLIITION N0. 06-114
"Closing Date" means the date of delivery of the Bonds to or upon the order of
the Purchaser.
"Code" means the Internal Revenue Code of 1986, as amended.
"County" means the County of Riverside, California.
"Federal Securities" means those securities described in Sections 1360 and 1360.1
of the California Financial Code and includes United States Treasury notes, bonds, bills or
certificates of indebtedness, or obligations for which the faith and credit of the United States are
pledged for the payment of principal and interest, including the guazanteed portions of small
business administration loans so long as the loans are obligations for which the faith and credit of
the United States are pledged for the payment of principal and interest.
"Fiscal Year" means any twelve-month period extending from July 1 st in one
calendar year to June 30th of the succeeding calendar year, both dates inclusive, or any other
twelve-month period selected and designated by the City as its official fiscal year period.
"Improvement Fund" means the fund by that name created and established
pursuant to Section 4.1 hereof.
"Independent Public Accountant" means any certified public accountant or firm
of certified public accountants appointed and paid by the City, who, or each of whom (i) is in
fact independent and not under domination of the City; (ii) does not have any substantial interest,
direct or indirect, in the City; and (iii) is not connected with the City as an of�icer or employee of
the City but who may be regularly retained to make annual or other audits of the books of, or
reports to, the City.
"Interest Payment Date" means March 2 and September 2 in each year, beginning
March 2, 2007 and continuing thereafter so long as any Bonds remain Outstanding.
"List of Unpaid Assessments" means the list of all Assessments, which remain
unpaid, prepared by the superintendent of streets pursuant to Section 8620 of the Bond Act and
on file with the City Treasurer, as amended from time to time.
"Maturity Date" means the date specified in any Bond on which the principal of
such Bond becomes due and payable.
"1913 Act" means the Municipal Improvement Act of 1913, being Division 12 of
the California Streets and Highways Code, commencing with Section 10000.
"Outstanding", when used as of any particular time with reference to Bonds,
means {subject to the provisions of Section 9.6) all Bonds theretofore executed, issued and
delivered by the City under this Resolution except (i) Bonds theretofore cancelled by the City
Treasurer or surrendered to the City Treasurer for cancellation, (ii) Bonds paid within the
meaning of Section 6, and (iii) Bonds in lieu of or in substitution for which other Bonds shall
have been executed, issued and delivered pursuant to this Resolution.
3
P6401-00011901153v2.doc
RESOLDTION N0. 06-114
"Owner" when used with respect to any Bond, means the person in whose name
the ownership of such Bond is registered on the Registration Books maintained by the City.
"Principal Payment Date" mean September 2 of each year, commencing
September 2, 2007.
"Project" means the works and utility undergrounding improvements described in
the Engineer's Report for the Assessment District, approved by the City Council by its
Resolution No. 06-86 and to be financed in part with the proceeds of the Bonds.
"Purchaser" means the City Treasurer.
"Record Date" means, with respect to any Interest Payment Date, the fifteenth day
of the calendar month immediately preceding the month in which such Interest Payment Date
occurs, whether or not such day is a Business Day.
"Redemption Date" means, with respect to any Bonds, the date on which such
Bonds have been called for redemption pursuant to the terms of this Resolution prior to their
Maturity Date.
"Redemption Fund" means the fund by that name created and established
pursuant to Section 4.1 hereof.
"Registration Books" means the records maintained by the City Treasurer
pursuant to Section 2.9 hereof for the registration and transfer of ownership of the Bonds.
"Resolution" means this Resolution and includes subsequent amendments hereof
and any Supplemental Resolution.
"Resolution of Intention" means Resolution No. 06-49, as amended, of ttte City
Council referred to in the recitals hereof.
"State" means the State of California.
"Supplemental Resolution" means any resolution adopted by the City Council
amendatory of or supplemental to this Resolution.
"Tax Certificate" means the Certificate Regarding Compliance With Certain Tax
Matters dated the Closing Date relating to the requirements of certain provisions of the Code, as
each such certifcate may from time to time be modified or supplemented in accordance with the
terms thereof.
Section 1.2. Rules of Construction. All references in this Resolution to
"Sections," and other subdivisions, unless indicated otherwise, are to the corresponding Sections
or subdivisions of this Resolution; and the words "herein," "hereof," "hereunder," and other
words of similar import refer to this Resolution as a whole and not to any particular Section or
subdivision hereof.
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RESOLUTION N0. 06-114
Section 1.3. Authorization and Purqose of Bonds. The City has reviewed all
proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result
of such review, and hereby finds and determines that all things, conditions and acts required by
law to exist, happen and be performed precedent to and in the issuance of the Bonds do exist,
have happened and have been performed in due time, form and manner as required by law, and
the City is now authorized, pursuant to each and every reyuirement of law, to issue the Bonds in
the manner and form as in this Resolution provided. The City Council hereby authorizes the
issuance of the Bonds pursuant to the Bond Act and this Resolution to represent unpaid
Assessments in accordance with the List of Unpaid Assessments for the purpose of financing the
Project.
Section 1.4. Eaual Securitv. In consideration of the acceptance of the Bonds by
the Owners thereof, this Resolution shall be deemed to be and shall constitute a contract between
the City and the Owners of the Bonds; and the covenants and agreements herein set forth to be
performed on behalf of the City shall be for the equal and proportionate benefit, security and
protection of all Owners of the Bonds without preference, priority or distinction as to security or
otherwise of any of the Bonds over any of the others by reason of the number or date thereof or
the time of sale, execution or delivery thereof, or otherwise for any cause whatsoever, except as
expressly provided therein or herein.
SECTION 2. THE BONDS.
Section 2.1. Eaualitv of Bonds. Pled�e of Assessment Installments. The City
hereby pledges, in trust for the protection and security of the Owners, all of its right, title and
interest in the Assessment Installments, and all other funds, accounts and sub-accounts created
hereunder for the payment of principal of, premium (if any), and interest on the Bonds. Pursuant
to the Bond Act and this Resolution, the Bonds shall be and are equally secured by a pledge of
and lien upon the Assessment Installments, and the amounts on deposit in the aforementioned
funds and accounts.
The Bonds and interest thereon are not payable from the general funds of the City.
Neither the credit nor the taxing power of the City is pledged for the payment of the Bonds or the
interest thereon, and no Owner of the Bonds may compel the exercise of any taxing power by the
City or force the forfeiture of any of its property. The principal of, and premium (if any) and
interest on the Bonds are not a debt of the City nor a legal or equitable pledge, charge, lien or
encumbrance upon any of its property, or upon any of its income, receipts or revenues.
Section 2.2. Collection of Assessments. The unpaid Assessment Installments
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 Installment 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 bear the same
proportionate penalties and interest after delinquency as do general taxes on real property.
Nothing in this Resolution or in any Supplemental Resolution shall preclude the redemption
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RESOLDTION NO. 06-114
prior to maturity of any Bonds or the payment of the Bonds from proceeds of refunding bonds
issued under any law of the State.
Section 2.3. Issuance of Bonds to Reoresent Unnaid Assessments. The Bonds, in
the aggregate principal amount of not to exceed $3,530,000 shall be issued as provided in this
Resolution upon the security of the Assessment in accordance with the provisions of the
Resolution of Intention and the Bond Act and the proceedings conducted thereunder. The Bonds
shatl be designated as described in Recital F hereof and the aggregate principal amount of the
Bonds shall be equal to the aggregate amount of unpaid Assessments, as calculated by the City
Treasurer pursuant to Section 8621 of the Bond Act. The Bonds shall be issued only in fully
registered form without coupons in the denomination of $5,00� or any integral multiple thereof,
or in such other denomination or denominations as determined by the City Treasurer. The
principal amount of the Bonds maturing each year shall be other than an amount equal to an even
annual proportion of the aggregate principal amount of the Bonds, and the amount of principal
maturing in each year plus the amount of interest payable in that year shall be an aggregate
amount that is substantially equal each year, except for the moneys falling due on the first
maturity date of the Bonds which shall be adjusted to reflect the amount of interest earned from
the date when the Bonds bear interest to the date when the first interest is payable on the Bonds.
The Bonds shall be serial bonds and be dated the Closing Date and shall bear interest at a rate or
rates which shall not exceed 6.5 percent per annum (calculated on the basis of a 360-day year of
twelve months) and shall mature on September 2 of each year during the term of the bonds, but
the final maturity of the Bonds shall not be on a date that is later than 39 years from the 2nd of
September next succeeding 12 months from the dated date of the Bonds. The rate or rates and
the maturity dates of the Bonds shall be as determined by the City Manager, but within the
parameters described above.
Section 2.4. Medium and Pavment. Principal of, and premium (if any) and
interest on the Bonds shall be payable in lawful money of the United States of America. Interest
with respect to each Bond shall accrue from the Bond Date. Interest on any Bond shall be
payable from the Interest Payment Date next preceding the date of authentication of that Bond,
unless (i) such date of authentication is an Interest Payment Date, in which event interest shall be
payable from such date of authentication, (ii) the date of authentication is after a Record Date but
prior to the immediately succeeding Interest Payment Date, in which event interest shall be
payable from such Interest Payment Date, or (iii) the date of authentication is prior to the close of
business on the first Record Date, in which event interest shall be payable from the Bond Date;
provided, however, that if at the time of authentication of such Bond, interest is in default,
interest on that Bond shall be payable from the last Interest Payment Date to which the interest
has been paid or made available for payment. Principal of and interest on any Bond shall be paid
by check of the City mailed by the City Treasurer on or before the Interest Payment Date by first
class mail, postage prepaid, to the person whose name appears in the Registration Books as the
Owner of such Bond as of the close of business on the Record Date, to the address that appears
on the Registration Books (or in such other manner as determined by the City Treasurer if the
City is the sole owner of the Bonds), provided that the payment of principal of the Bonds on the
final maturity date and the payment of the principal of the Bonds and any premium due upon the
redemption thereof shall be payable upon presentation and sunender thereof at maturity or
earlier redemption at the office of the City Treasurer.
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RESOLDTION NO. 06-114
Each Bond shall bear interest until its principal sum has been paid; provided,
however, that if at the maturity date of any Bond, or if at the redemption date of any Bond which
has been duly called for redemption as herein provided, funds are available for the payment or
redemption thereof in full accordance with the terms of this Resolution, the Bond shall then
cease to bear interest.
Section 2.5. Form of Bonds and Certificate of Authentication and Re�istration.
The Bonds shall be sold to the Purchaser and shall be initially issued in the form of a fully
registered bond or bonds registered in the name of the Purchaser. The form of the Bond, the
form of the certificate of authentication and the form of registration thereon shall be substantially
in the form attached hereto as Exhibit A and incorporated herein by this reference. The Bonds
may be printed, lithographed or typewritten and may contain such reference to any of the
provisions of this Resolution as may be appropriate.
Section 2.6. Execution and Authentication. The Bonds shall be executed by the
manual or facsimile signature of the City Treasurer and attested by the manual or facsimile
signature of the City Clerk and the seal of the City (or a facsimile thereo� shall be impressed,
imprinted, engraved or otherwise reproduced thereon. In case any one or more of the officers
who shall have signed or sealed any of the Bonds shall cease to be such of�icer before the Bonds
so signed and sealed have been authenticated and delivered by the City Treasurer (including new
Bonds delivered pursuant to the provisions hereof with reference to the transfer and exchange of
Bonds or to lost, stolen, destroyed or mutilated Bonds), such Bonds may, nevertheless, be
authenticated and delivered as herein provided, and may be issued as if the persons who signed
or sealed such Bonds had not ceased to hold such offices.
The Bonds shall bear thereon a certificate of authentication and registration, in the
form set forth in Exhibit A hereto, executed by the manual or facsimile signature of the City
Treasurer. Qnly such Bonds as shall bear thereon such certificate of authentication and
registration shall be entitled to any right or benefit under this Resolution, and no Bond shall be
valid or obligatory for any purpose until such certifcate of authentication and registration shall
have been duly executed by the City Treasurer.
Section 2.7. Re�istration of Exchan�e or Transfer. The registration of any Bond
may, in accordance with its terms, be transferred upon the Registration Books by the person in
whose name it is registered, in person or by his or her duly authorized attorney, upon surrender
of such Bond for cancellation at the o�ce of the City Treasurer, accompanied by delivery of a
written instrument of transfer in a form acceptable to the City Treasurer and duly executed by the
Owner or his or her duly authorized attorney. Bonds may be exchanged at the office of the City
Treasurer for a like aggregate principal amount of Bonds of other authorized denominations.
The City will not charge for any new Bond issued upon any exchange, but may require the
Owner requesting such exchange to pay any tax or other governmental charge required to be paid
with respect to such exchange. Whenever any Bond or Bonds shall be surrendered for
registration of transfer or exchange, the City Treasurer shall authenticate and deliver a new Bond
or Bonds; provided that the City Treasurer shall not be reyuired to register transfers or make
exchanges of (i) Bonds for a period of 15 days next preceding the date of any selection of Bonds
to be redeemed, or (ii) any Bonds chosen for redemption.
�
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RESOLDTION NO. 06-114
Section 2.8. Mutilated. Lost. Destroved or Stolen Bonds. If any Bond shall
become mutilated, the City Treasurer, at the expense of the Owner of such Bond, shall execute,
and the City Treasurer shall thereupon authenticate and deliver, a new Bond of like series, tenor,
maturity and aggregate principal amount in authorized denomination in exchange and
substitution for the Bond so mutilated, but only upon sunender to the City Treasurer of the Bond
so mutilated. Every mutilated Bond so surrendered to the City Treasurer shall be cancelled and
destroyed. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss,
destruction or theft may be submitted to the City Treasurer and, if such evidence be satisfactory
to the City Treasurer and indemnity satisfactory to the City Treasurer shall be given, the City
Treasurer, at the expense of the Owner, shall execute, and the City Treasurer shall thereupon
authenticate and deliver, a new Bond of like series and tenor in lieu of and in substitution for the
Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been
called for redemption, instead of issuing a substitute Bond the City Treasurer may pay the same
without surrender thereof upon receipt of indemnity satisfactory to the City Treasurer). The City
Treasurer may require payment of a reasonable fee for each new Bond issued under this
Section 2.8 and of the expenses which may be incurred by the City and the City Treasurer. Any
Bond issued under the provisions of this Section 2.8 in lieu of any Bond alleged to be lost,
destroyed or stolen shall constitute an original contractual obligation on the part of the City
whether or not the Bond alleged to be lost, destroyed or stolen be at any time enforceable by
anyone, and shall be equally and proportionately entitled to the benefits of this Resolution with
all other Bonds secured by this Resolution.
Section 2.9. Reeistration Books. The City Treasurer will keep or cause to be
kept, at the office of the City, sufficient books for the registration and transfer of the Bonds, and,
upon presentation for such purpose, the City Treasurer shall, under such reasonable regulations
as he or she may prescribe, register or transfer or cause to be registered or transferred, on the
Registration Books, Bonds as herein provided.
The City may treat the Owner of any Bond whose name appears on the
Registration Books as the absolute Owner of such Bond for any and all purposes, and the City
shall not be affected by any notice to the contrary. The City may rely on the address of the
Owner as it appears in the Registration Books for any and all purposes. It shall be the duty of
each Owner to give written notice to the City of any change in such Owner's address so that the
Registration Books may be revised accordingly.
Section 2.10. Validitv of the Bonds. The validity of the authorization and
issuance of the Bonds shall not be dependent upon the completion of the Project or upon the
performance by any person of his obligation with respect to the Project.
Section 2.11. Refundin� of Bonds. The Bonds may be refunded by the City
pursuant to Division 11.5 of the California Streets and Highways Code upon the conditions as set
forth in appropriate proceedings therefor.
SECTION 3. REDEMPTION OF BONDS.
Section 3.1. Mandatory Redemntion. The Bonds shall be redeemed prior to
maturity, in whole or in part on any Interest Payment Date by lot within a maturity from surplus
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RESOLDTION NO. 06-114
monies on deposit and available for such purpose in the Redemption Fund from the sources, to
the extent of and in the manner set forth in the fourth paragraph of Section 4.4 hereof, at a
redemption price, expressed as a percentage of the principal amount of the Bonds to be
redeemed, of three percent for the f rst five years of the term of the Bonds together with accrued
interest to the date of redemption. The redemption price shall be zero after the first five years of
the term of the Bonds.
Section 3.2. Ontional Redemption. The Bonds may be redeemed prior to
maturity, in whole or in part on any Interest Payment Date by lot within a maturity from surplus
monies on deposit and available for such purpose in the Redemption Fund from sources other
than those refened to in Section 3.1, at the option of the City, at a redemption price, expressed as
a percentage of the principal amount of the Bonds to be redeemed, of three percent for the first
five years of the term of the Bonds together with accrued interest to the date of redemption. The
redemption price shall be zero after the first five years of the term of the Bonds.
Section 3.3. Selection of Bonds for Redemotion. If less than all of the
Outstanding Bonds are to be redeemed pursuant to Section 3.1 or Section 3.2, the City Treasurer
shall select the Bonds to be redeemed in such a way that the ratio of Outstanding Bonds to issued
Bonds shall be approximately the same within each maturity insofar as possible. Within each
maturity, the Bonds shall be selected for redemption by lot in any manner that the City Treasurer
deems fair.
Section 3.4. Notice of Redemntion. In the event that Bonds are to be redeemed
as provided in this Section 3, at least 30 days but not more than 60 days prior to any Redemption
Date, a notice of redemption (the "Redemption Notice") shall be sent by personal service, or
registered or certified mail by the City Treasurer to the Owners of any Bonds designated for
redemption and such securities depositories and securities information services as shall be
designated by the City Treasurer. Such Redemption Notice shall specify: (i) the Bonds or
designated portions thereof which are to be redeemed, (ii) the date of redemption, (iii) the
redemption price, (iv) the CUSIP numbers (if any) assigned to the Bonds to be redeemed, and
(v) if less than all Bonds are to be redeemed, the Bond numbers of the Bonds to be redeemed,
and shall require that such Bonds be surrendered at the office of the City Treasurer for
redemption at the redemption price. Such Redemption Notice shall further state that on the
specified date there shall become due and payable upon each Bond or portion thereof being
redeemed the redemption price, together with interest accrued to the redemption date, and that
from and after such redemption date interest thereon shall cease to accrue and be payable.
Neither failure to receive any Redemption Notice nor any defect in such
Redemption Notice so given shall affect the sufficiency of the proceedings for the redemption of
such Bonds. Each check or other transfer of funds issued by the City Treasurer for the purpose
of redeeming Bonds shall bear to the extent specified the CUSIP number identifying, by issue
and maturity, the Bonds being redeemed with the proceeds of such check or other transfer.
Section 3.5. Partial Redemption of Bonds. Upon sunender of any Bond to be
redeemed in part only, the City Treasurer shall authenticate and deliver to the Owner a new Bond
or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed
portion of the Bond surrendered, with the same interest rate and the same maturity. Such partial
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RESOLDTION N0. 06-114
redemption shall be valid upon payment of the amount required to be paid to such Owner, and
the City shall be released and discharged thereupon from all liability to the extent of such
payment.
Section 3.6. Effect of Notice and Availabilitv of Redemvtion Price. Notice of
redemption having been duly given, as provided in this Section 3, and the amount necessary for
the redemption having been made available for that purpose and being available therefor on the
date fixed for such redemption:
(1) The Bonds, or portions thereof, designated for redemption shall, on
the date fixed for redemption, become due and payable at the redemption price thereof as
provided in this Resolution, anything in this Resolution or in the Bonds to the contrary
notwithstanding;
(2) Upon presentation and surrender thereof at the ofiice of the City,
such Bonds shall be redeemed at the redemption price;
(3) From and after the redemption date, the Bonds or portions thereof
so designated for redemption shall be deemed to be no longer Outstanding and such Bonds or
portions thereof shall cease to accrue interest; and
(4) From and after the date fixed for redemption no Owner of any of
the Bonds or portions thereof so designated for redemption shall be entitled to any of the benefits
of this Resolution, or to any other rights, except with respect to payment of the redemption price
and interest accrued to the redemption date from the amounts so made available.
SECTION 4. FUNDS AND ACCOUNTS.
Section 4.1. Establishment of Special Funds and Accounts. For administering
and controlling the proceeds of the Bonds, the Assessment Installments and any related monies,
there are hereby created and established the following special funds and accounts to be
maintained by the City Treasurer:
(a) the Bonds Improvement Fund (the "Improvement Fund");
(b) the Bonds Redemption Fund {the "Redemption Fund"), within which there shall
be the:
(1) the Assessment Installment Account; and the
(2) the Assessment Prepayment Account;
Section 4.2. Disnosition of Bond Proceeds. The amount received from the City
from the sale of Bonds shall be deposited in the Improvement Fund.
Section 4.3. The Improvement Fund. All moneys in the Improvement Fund shall
be withdrawn and applied exclusively for the purpose for which the Bonds were authorized to be
issued. Prior to any such disbursement, the City Manager, or his designee, shall review all
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RESOLDTION NO. 06-114
requests for payment and invoices with respect to the Project and shall inspect all completed
work. If the work has been satisfactorily completed, the City Manager, or his designee, shall
prepare a receiving report, in the general form and content attached hereto as Exhibit B,
requesting payment by the City from the Improvement Fund. The City Treasurer shal] make the
requested payment upon receipt of a requisition therefor, in the general form and content
attached hereto as Exhibit B.
Upon the filing with the City Treasurer of a certificate by the City Manager, or his
designee, stating that the Project has been completed and that all costs of the Project have been
paid or are not required to be paid from the Improvement Fund, the City Treasurer shall transfer
the amount, if any, remaining in the Improvement Fund as directed by the City Council of the
City, which directions shall be pursuant to the Resolution of Intention and to the applicable
provisions of the 1913 Act, and the Improvement Fund shall be closed.
Section 4.4. Redemntion Fund. The City hereby agrees to establish and maintain
the Redemption Fund until all payments of principal of and premium (if any) and interest on the
Bonds have been made and all of the Bonds have been paid or redeemed. The City Treasurer
shall establish and maintain within the Redemption Fund an Assessment Installment Account
and an Assessment Prepayment Account.
All sums received by the City from the collection of Assessment Installments,
including any interest and penalties thereon and the proceeds of the exercise of any of the
remedies for delinquent payments available hereunder or under the Bond Act shall be deposited
and held in the Assessment Installment Account of the Redemption Fund except for prepayment
of the Assessments herein. On each Interest Payment Date and each Principal Payment Date, the
City Treasurer shall make payments of interest and principal, respectively, due and payable with
respect to the Bonds from monies in the Assessment Installment Account.
On each September 2, all monies in the Assessment Installment Account in excess
of the amount necessary to make the payments of principal of and interest on the Bonds then due
or overdue and payable on such date (assuming all Owners entitled to payment on or before such
date take or have taken any and all actions necessary on their part to receive amounts due them)
shall, to the extent permitted by law, be applied as follows:
(a) The moneys shall be retained in the Assessment Installment
Account of the Redemption Fund as a credit upon the Assessment; or
(b) The moneys shall be transferred to the Assessment Prepayment
Account of the Redemption Fund for application to the advance maturity and redemption of
Bonds pursuant to Section 3.
Amounts received from, or on behalf of, property owners in the Assessment
District as prepayments of the Assessment pursuant to Section 4.5 shall be deposited in the
Assessment Prepayment Account for application pursuant to Section 4.6. Amounts in the
Assessment Prepayment Account shall be used to pay the principal of and redemption premium
(if any) on Bonds the maturities of which shall have been advanced pursuant to Parts I 1 and 11.1
of the Bond Act. The City Treasurer shall advance the maturity of and call Bonds for
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RESOLDTION N0. 06-114
redemption pursuant to this Resolution and the Bond Act whenever and to the extent surplus
monies are on deposit in the Assessment Prepayment Account sufiicient to pay the principal
thereof plus the redemption premium (if any). On or after each Redemption Date, or prior
thereto, upon presentation and surrender thereof, the City Treasurer shall pay the principal of and
redemption premium on each Bond the maturity of which has been so advanced from monies in
the Assessment Prepayment Account. Interest accrued on each such Bond to the earlier of the
Principal Payment Date or Redemption Date shall be paid from monies in the Assessment
Installment Account.
Any amounts remaining in the Redemption Fund or the accounts thereof after
payment of all of the Bonds and the interest thereon shall be applied in accordance with
Section 4.8.
Section 4.5. Prenavment of Assessment. The owner of assessed land, except land
which has been ordered to judicial foreclosure, may prepay the Assessment and remove the lien
of the Assessment by paying to the City Treasurer the sum of the following amounts:
(a) The amount of any delinquent installments of principal and
interest, together with penalties accrued to the date of prepayment.
(b) The unpaid, nondelinquent principal of the Assessment, including
principal posted to the tax roll for the current Fiscal Year but not yet paid.
(c) An allowance for the applicable redemption premium. Unmatured
principal excludes principal due during the Fiscal Year of prepayment.
(d) A reasonable fee, fixed by the City Treasurer, for the cost of
administering the prepayment and the advance redemption of Bonds.
(e) Interest accrued to the next call date of the Bonds. The next call
date shall be the next Interest Payment Date which is not less than 90 days after the date of
prepayment. Credit shall be given, or refund provided, for installments of interest posted to the
current tax roll and actually paid.
(� Where the owner's land has been ordered to judicial foreclosure, the
owner must pay additional amounts in accordance with Part 14 of the Bond Act, or other
applicable provision of law, provided that attorneys' fees and costs of suit and post judgment
interest are not required to be paid into the Redemption Fund.
Section 4.6. Aonlication of Prepaid Assessments. Upon receiving a prepayment
of an assessment, the City Treasurer shall deposit it in the Assessment Prepayment Account of
the Redemption Fund. All prepayments may be commingled in a single account. From the
account the City Treasurer shall make disbursements in the following priority as follows:
City.
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(a) The administrative fee shall be deposited in the general fund of the
12
RESOLDTION N0. 06-114
(b) Delinquent principal, interest, and penalties shall be transferred to
the Redemption Fund.
(c) The installment of principal due in the Fiscal Year of prepayment
shall be transfened to the Redemption Fund.
(d) Interest accrued to the next call date shall be transferred to the
Redemption Fund.
(e) The balance in the Assessment Prepayment Account shall be used
to advance the maturity of Bonds to the next call date as provided in Part 11 and Part 11.1 of the
Bond Act, or other applicable provision of law. The amount of Bonds to be retired shall be the
maximum for which principal and redemption premium (if any) may be paid in full from the
Assessment Prepayment Account. Accrued interest on Bonds to be retired shall be paid from the
Redemption Fund.
Section 4.7. Certain Procedures Upon Redemption. If notice of redemption is
given, the Bonds so advanced shall mature and become payable on the date fixed for redemption
in the notice. The Owner of any such Bond may, prior to the date of redemption, with the
consent of the City Treasurer, surrender it and receive the principal and interest thereon to the
date of payment together with the redemption premium provided for the Bond. If the Bond has
not been sooner surrendered on the date fixed for redemption, the City Treasurer shall set aside
to the credit of the Owner of the Bond the amount of principal and accrued interest then due on
the Bond together with the redemption premium and the Bond shall then be deemed to have
matured and interest shall cease to accrue on the Bond. The amount so set aside shall upon
demand and upon the surrender and cancellation of the Bond be paid to the Owner of the Bond.
Section 4.8. Redemption Fund Surplus. If there is a surplus remaining in the
Redemption Fund after payment of all Bonds and the interest thereon, that surplus shal] be repaid
in accordance with the provisions of Section 8783 of the Bond Act to persons paying
supplemental assessments, if any, and the balance may be proportionately credited upon the final
installments due upon the Assessments securing the Bonds and repaid to those persons whose
Assessments have been previously paid or may be transfened to the general fund of the City.
Section 4.9. Investments. (a) All moneys in any of the funds or accounts
established pursuant to this Resolution shall be invested by the City Treasurer solely in
Authorized Investments. Obligations purchased as an investment of moneys in any fund or
account shall be deemed to be part of such fund or account.
All interest or gain derived from the investment of amounts in any of the funds or
accounts shall be deposited in the fund or account from which such investment was made. The
City Treasurer shall incur no liability for losses arising from any investments made pursuant to
this Section.
(b) For the purpose of determining the amount in any fund or account
established hereunder, the value of investments credited to such fund or account shall be
calculated at the cost thereof, excluding accrued interest and brokerage commissions, if any.
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RESOLIITION NO. 06-114
(c) Moneys in the Redemption Fund shall be invested only in obligations
which will by their terms mature on such dates as to ensure the timely payment of principal and
interest on the Bonds as the same become due.
Subject to the restrictions set forth in Section 5.3, the City Treasurer shall sell at
the best price obtainable or present for redemption any obligations so purchased whenever it may
be necessary to do so in order to provide moneys to meet any payment or transfer for such funds
and accounts or from such funds and accounts. For the purpose of determining at any given time
the balance in any fund or account, any such investments constituting a part of such fund and
account shall be valued at their amortized cost.
SECTION 5. COVENANTS.
So long as any of the Bonds issued hereunder are outstanding, the City makes the
following covenants with the Owners under the provisions of the Bond Act (to be performed by
the City or its proper officers, agents or employees) which covenants are necessary, convenient
and desirable to secure the Bonds and tend to make them more marketable; provided, however,
that said covenants do not require the City to expend any funds other than the Assessment
Installments.
Section 5.1 Punctual Pavment, The City will punctually pay or cause to be paid
the principal of, and interest and any premium on, the Bonds when and as due in strict
conformity with the terms of this Resolution and any Supplemental Resolution, and it will
faithfully observe and perform all of the conditions, covenants and requirements of this
Resolution and all Supplemental Resolutions and of the Bonds.
Section 5.2. Limited Obli�ation: No Reauired Advances From Available Surolus
Funds. The Bonds are limited obligation improvement bonds under Section 8769 of the Bond
Act and are payable solely from and secured solely by the Assessments and the amounts in the
Redemption Fund created hereunder. Notwithstanding any other provision of this Resolution,
the City is not obligated to, but may in its sole and absolute discretion, advance available surplus
funds from the City treasury to cure any deficiency in the Redemption Fund.
Section 5.3. Tax Covenants.
(a) The City covenants that, in order to maintain the exclusion from gross
income for Federal income tax purposes of the interest on the Bonds, and for no other purpose, it
will satisfy, or take such actions as may be necessary to cause to be satisfied, each provision of
the Code and Treasury regulations promulgated thereunder necessary to maintain such exclusion.
(b) The City covenants that no part of the proceeds of the Bonds shall be used,
directly or indirectly, to acquire any "investment property," as defined in Section 148 of the
Code, and it shall not take or permit to be taken any other action or actions, which would cause
any of the Bonds to be an "arbitrage bond" within the meaning of Section 148 of the Code, as in
effect from time to time, or under appl+cable Treasury regu�ations promulgated thereunder.
(c) The City covenants that it will not take any action or omit to take any
action, which action or omission, if reasonably expected on the date of initial execution and
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RESOLUTION NO. 06-114
delivery of the Bonds, would result in a loss of exclusion from gross income for purposes of
Federal income taxation, under Section 103 of the Code, of interest on the Bonds.
(d) The City covenants that it wili not use or permit the use of the proceeds of
the Bonds by any person (other than the City or other state or local governmental unit) in such
manner or to such extent as would result in a loss of exclusion of the interest on the Bonds from
gross income for Federal income tax purposes under Section 103 of the Code.
(e) The City covenants that it will execute and comply with a certificate
regarding compliance with the foregoing and with other applicable Federal tax provisions.
Section 5.4. General. The City shall do and perform or cause to be done and
performed all acts and things required to be done or performed by or on behalf of the City under
the provisions of this Resolution. The City warrants that upon the date of execution and delivery
of the Bonds, the conditions, acts and things required by law and this Resolution to exist, to have
happened and to have been performed precedent to and in the execution and delivery of such
Bonds do exist, have happened and have been performed and the execution and delivery of the
Bonds shall comply in all respects with the applicable laws of the State.
Section 5.5. Protection of Securitv and Riehts of Owners. The City will preserve
and protect the security of the Bonds and the rights of the Owners thereto, and will warrant and
defend their rights to such security against all claims and demands of all persons. From and after
the delivery of the Bonds by the City, the Bonds shall be incontestable by the City.
Section 5.6. Comnliance with the Law. Completion of Proiect. The City will
comply with all applicable provisions of the law in completing the construction of the Project;
provided that the City shall have no obligation to advance any funds to complete the Project in
excess of the amounts available therefor in the Improvement Fund.
Section 5.7. A�ainst Encumbrances. The City will not encumber, pledge or place
any charge or lien upon any of the unpaid Assessments or other amounts pledged to the Bonds
superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds,
except as permitted by this Resolution or the Bond Act.
Section 5.8. Collection of Assessments. The City shatl comply with all
requirements of the Bond Act so as to assure the timely collection of the unpaid Assessments.
Section 5.9. Accountins Records and Statements. The City will keep or cause to
be kept proper accounting records in which complete and correct entries shall be made of atl
transactions relating to the receipt, deposit and disbursement of the Assessment Installments, and
such accounting records shall be available for inspection upon five business days' written notice
by any Owner or such Owner's agent duly authorized in writing at reasonable hours and under
reasonable conditions.
SECTION 6. DEFEASANCE.
Section 6.1. Defeasance. If all Outstanding Bonds shall be paid and discharged
in any one or more of the following ways�
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RESOLDTION NO. 06-114
(a) by paying or causing to be paid the principal of and interest with respect to
all Bonds Outstanding, as and when the same become due and payable;
(b) by depositing with the City Treasurer, at or before maturity, an amount
which, together with the amounts then on deposit in the Redemption Fund, is fully sufficient to
pay the principal of and redemption premium (if any) and interest on all Bonds Outstanding as
and when the same shall become due and payable or, in the event of redemption thereof, before
their respective maturity dates; or
(c) by depositing with the City Treasurer Federal Securities in such amount as
the City shalI determine, as verified by a nationally recognized Independent Public Accountant
(unless the City is the sole owner of the Bonds, in which case no such verification is required),
will, together with the interest to accrue thereon and moneys then on deposit in the Redemption
Fund together with the interest to accrue thereon, be fully sufficient to pay and discharge the
principal of, and premium (if any) and interest on all Bonds Outstanding as and when the same
shall become due and payable;
then, at the election of the City, and notwithstanding that any Bonds shall not
have been surrendered for payment, all obligations of the City under this Resolution with respect
to all Outstanding Bonds shall cease and terminate, except for {i) the obligation of the City
Treasurer to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid, all
sums due thereon, and (ii) the City's obligations under Sections 5.3 and 5.5. Any funds held by
the City Treasurer, at the time of receipt of such notice from the City, which are not required for
the purpose above mentioned, shall be applied in accordance with Section 8784 of the Act.
SECTION 7. SUPPLEMENTAL RESOLUTIONS.
Section 7.1. Sunnlemental Resolutions Without Owner Consent. The City, may
from time to time, and at any time, without notice to or consent of any of the Owners, adopt
resolutions supplemental hereto as shall not be inconsistent with the terms and provisions hereof
for any of the following purposes:
(a) to cure any ambiguity, to conect or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any other provision with
respect to matters or questions arising under this Resolution or in any supplemental resolution,
provided that such action shall not adversely affect the interests of the Owners;
(b) to add to the covenants and agreements of and the limitations and the
restrictions upon the City contained in this Resolution other covenants, agreements, limitations
and restrictions to be observed by the City which are not contrary to or inconsistent with this
Resolution as theretofore in effect; and
(c) to modify, alter, amend or supplement this Resolution in any other respect
which is not materially adverse to the interests of the Owners.
Section 7.2. Suvnlemental Resolutions with Owner Consent. Except as provided
in Section 7.1, the Owners of a majority in aggregate principal amount of the Bonds then
Outstanding shall have the right to consent to and approve the execution of such supplemental
16
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RESOLDTION NO. 06-114
resolutions as shall be deemed necessary or desirable for the purpose of waiving, modifying,
altering, amending, adding to or rescinding, in any particular, any of the terms or provisions
contained in this Resolution or in any supplemental resolution or agreement; provided, however,
that nothing herein shall permit, or be construed as permitting, (a) an extension of the maturity
date of the principal of, or the payment date of interest on, any Bond, (b) a reduction in the
principal amount of, or redemption price of, any Bond or the rate of interest thereon, (c) a
preference or priority of any Bond or Bonds over any other Bond or Bonds, or (d) a reduction in
the percentage of Bonds the Owners of which are required to consent to such supplementat
resolution, without the consent of the Owners of all Bonds then Outstanding. In no event,
however, may a modification or amendment provide for the issuance of additional bonds, notes
or other evidences of indebtedness payable out of the Assessment Installments.
Section 7.3. Notice of Suoolemental Resolution to Owners. If at any time the
parties hereto shall desire to enter into a resolution supplemental hereto, which pursuant to the
terms of Section 7.2 shall require the consent of the Owners, the City shall cause notice of the
proposed resolution to be mailed, postage prepaid, to all Owners at their addresses as they appear
in the Registration Books. Such notice shall briefly set forth the nature of the proposed
resolution and shall state that a copy thereof is on file at the of�ice of the City for inspection by
all Owners. The failure of any Owner to receive such notice shall not affect the validity of such
resolution when consented to and approved as in Section 7.2 provided. Whenever at any time
within one year after the date of the first mailing of such notice, the City shall receive an
instrument or instruments purporting to be executed by the Owners of not less than a majority in
aggregate principal amount of the Bonds then Outstanding, which instrument or instruments
shall refer to the proposed resolution described in such notice, and shall specifically consent to
and approve it substantially in the form of the copy thereof referred to in such notice as on file
with the City, such proposed resolution, when duly adopted by the City, shall thereafter become
a part of the proceedings for the issuance of the Bonds. In determining whether the Owners of
the requisite aggregate principal amount of the Bonds have consented to the adoption of any
supplemental resolution, Bonds which are owned by the City or by any person directly or
indirectly controlling or controlled by or under direct or indirect common control with the City,
shall be disregarded and shall be treated as though they were not Outstanding for the purpose of
any such determination.
Upon the adoption of any resolution supplemental hereto and the receipt of
consent to any such resolution from the Owners of the appropriate aggregate principal amount of
Bonds in instances where such consent is required, this Resolution shall be, and shall be deemed
to be, modified and amended in accordance therewith, and the respective rights, duties and
obligations under this Resolution of the City and all Owners of Bonds then Outstanding shall
thereafter be determined, exercised and enforced hereunder, subject in all respects to such
modifications and amendments.
Section 7.4. Citv as Sole Owner of the Bonds. So long as the City is the sole
owner of the Bonds, the City may adopt resolutions supplemental hereto for any purpose without
regard to the provisions of this Section 7.
SECTION 8. DEFAULT.
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RESOLDTION N0. 06-114
Section 8.1. Events of Default. If any of the following events occur, it is hereby
declared to constitute an "Event of Default":
(a) Default in the due and punctual payment of interest on any Bond, whether
at the stated Interest Payment Date thereof, or upon proceedings for redemption thereof;
(b) Default in the due and punctual payment of the principal of or premium, if
any, on any Bond, whether at the stated Principal Payment Date thereof, or upon proceedings for
redemption thereof; or
(c) Failure by the City to observe and perform any material covenant,
condition or agreement required by this Resolution to be performed by it (other than a default
described in clause (a) or (b) above) for a period of 60 days following written notice to the City
from any Owner of such failure; provided, however, if the City is in good faith attempting to
remedy said failure and is unable to do so within the 60 day time period, an additiona160 days
shall be allowed.
Section 8.2. Remedies Not Exclusive: Non-waiver. No remedy conferred hereby
upon any Owner is intended to be exclusive of any other remedy, but each such remedy is
cumulative and in addition to every other remedy and may be exercised without exhausting and
without regard to any other remedy conferred by the Bond Act or any other law of the State. No
waiver of any default or breach of duty or contract by any Owner shall affect any subsequent
default or breach of duty or contract or shall impair any rights or remedies on said subsequent
default or breach. No delay or omission of any Owner to exercise any right or power accruing
upon any default shall impair any such right or power or shall be construed as a waiver of any
such default or acquiescence therein. Every substantive right and every remedy conferred upon
the Owners may be enforced and exercised as often as may be deemed expedient. In case any
suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken
and the Owner shall prevail, said Owner shall be entitled to receive reimbursement for
reasonable costs, expenses, outlays and attorney's fees and should said suit, action or proceeding
be abandoned, or be determined adversely to the Owners then, and in every such case, the City
and the Owners shall be restored to their former positions, rights and remedies as if such suit,
action or proceeding had not been brought or taken.
Section 8.3. Limited Liabilitv of the Citv to the Owners. Except for the
collection of the Assessment Installments and the observance and performance of the other
conditions, covenants and terms contained herein or in the Bond Act required to be observed or
performed by it, the City shall not have any obligation or liability to the Owners with respect to
this Resolution or the preparation, authentication, delivery, transfer, exchange or cancellation of
the Bonds. Pursuant to the Resolution of Intention relating to these proceedings, the City has
determined that no funds of the City will be available to pay principal of, premium, if any, or
interest on the Bonds. In such Resolution of Tntention the City has determined that pursuant to
Section 8769 of the Bond Act, the City will not obligate itself to advance available funds from
the City's treasury to cure any deficiency which may occur in the Redemption Fund.
Section 8.4. Action bv Owners Unon Default. In the event the City fails to take
any action to eliminate an Event of Default under Section 8.1 hereof, the Owners of a majority in
�s
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RESOLDTION NO. 06-114
aggregate principal amount of Outstanding Bonds may institute any suit, action, mandamus or
other proceeding in equity or at law for the protection or enforcement of any right under this
Resolution, but only if such Owners have first made written request of the City, after the right to
exercise such powers or right of action shall have occurred, and shall have af%rded the City a
reasonable opportunity either to proceed to exercise the powers granted herein or granted under
law or to institute such action, suit or proceeding in its name and unless also, the City shall have
been offered reasonable security and indemnity against the costs, expenses and liabilities to be
incurred therein or thereby, and the City shall have refused or neglected to comply with such
request within a reasonable time. Any moneys recovered in such suit, action, mandamus or other
proceedings shall be applied first to the payment of the reasonable costs and expenses of the
Owners in bringing such suit, action, mandamus or other proceeding, including reasonable
compensation to their agents and attorney.
SECTION 9. MISCELLANEOUS.
Section 9.1. Partial Invaliditv. If any section, paragraph, subdivision, sentence,
clause or phrase of this Resolution shall for any reason be adjudged by any court of competent
jurisdiction 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 oth�r section, paragraph, subdivision,
sentence, clause and phrase hereof and would have authorized the issuance of the Bonds
pursuant hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions,
sentences, clauses or phrases of this Resolution or the application thereof to any person or
circumstance, may be held to be unconditional, unenforceable or invalid.
Section 9.2. General Authorization. The officers of the City are hereby
authorized and directed, jointly and severally, 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, to execute such agreements, certificates, receipts, opinions and other documents, and
to deliver at the closing and delivery of the Bonds any and all of the foregoing as may be
appropriate in the circumstances. All such acts and things heretofore done are hereby approved,
ratified and confirmed.
Section 9.3. Personal Liabilitv. The City or any offcer, agent or employee
thereof, shall not be individually or personally liable for the payment of the principal of or
interest on the Bonds; but nothing herein contained shall relieve any such entity, o�icer, agent or
employee from the performance of any official duty provided by law.
Section 9.4. Pavment of Business Day. In any case where the date of the
maturity of interest or of principal (and premium, if any) of the Bonds or the date fixed for
redemption of any Bonds or the date any action is to be taken pursuant to this Resolution is other
than a Business Day, the payment of interest or principal (and premium, if any) or the action
need not be made on such date but may be made on the next succeeding day which is a Business
Day with the same force and effect as if made on the date required and no interest shall accrue
for the period after such date.
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RESOLDTION NO. 06-114
Section 9.5. Emplovment of A�ents bv the Citv. In order to perform its duties
and obligations hereunder, the City may employ such persons or entities as it deems necessary or
advisable. The City shall not be liable for any of the acts or omissions of such persons or entities
employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected
in doing so, upon the opinions, calculations, determinations and directions of such persons or
entities.
Section 9.6. Disaualified Bonds. In the event of a later transfer of the Bonds in
accordance with Section 9.8 hereof, in determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent
or waiver under this Resolution, Bonds which are owned or held by or for the account of the City
shall be disregarded and deemed not to be Outstanding for the purpose of any such
determination, provided, however, that for the purpose of determining whether the City
Treasurer shall be protected in relying on any such demand, request, direction, consent or waiver,
only Bonds which the City Treasurer knows to be so owned or held shall be disregarded.
Section 9.7. Sale of Bonds to Purchaser; Authorization of Investment in Bonds.
(a) The Bonds shall be initially sold to the Purchaser. The City Council hereby authorizes and
directs the City Treasurer to invest in and purchase the Bonds pursuant to the proposal of the
City Treasurer to purchase the Bonds, which is on file in the o�ice of the City Clerk.
(b) The investment and purchase of the Bonds authorized by paragraph (a) of
this Section 9.7 is specifically authorized by the City Council pursuant to Section 53601 of the
California Government Code, notwithstanding the fact that certain of the Bonds will have a
maturity exceeding five years. The City Council may, pursuant to its authority under Section
53601 of the California Government Code, take action at a future date ordering the sale of Bonds
in such manner as ordered by the City Council.
Section 9.8. Transfer of Bonds: Restrictions. (a) The City Treasurer will
purchase the Bonds and hold the Bonds for the account of the City as the initial owner of the
Bonds, for an indefinite period of time, and does not intend at this time to distribute, sell or
otherwise dispose of the Bonds, or any portion thereof, to any third party. The City Treasurer
and other City officers have made the decision to invest in the Bonds and evaluated the security
for the Bonds based solely on their own investigation. At the time of adoption of this
Resolution, the City has not prepared, and does not intend to prepare, any offering document (in
the form of an of�icial statement or otherwise) with respect to the Bonds. The City has not made,
and at this time does not intend to make, any continuing disclosure filings with state or national
information repositories with respect to the Bonds.
(b) The transfer of the Bonds shall be restricted as set forth herein. No Bond
(or any portion thereo� may be transferred and no such transfer shall be effective or recognized
in the Registration Books, unless the City Treasurer shall have received a letter from the
proposed transferee in the form satisfactory to the City Treasurer, which shall contain statements
substantially to the following effect:
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RESOLDTION NO. 06-114
(i) The transferee has received and reviewed copies of this Resolution. The
transferee understands that (A) the Bonds are limited obligations of the
City secured by and payable solely from Assessment Installments as
provided in this Resolution, (B) no other fund or property of the City is
liable for the payment of the Bonds, (C) none of the payment obligations
with respect to the Bonds are secured by a pledge of any money received
or to be received from taxation by the City or any political subdivision
thereof, and (D) there is no reserve fund for the Bonds.
(ii) The transferee has suf�icient knowledge and experience in financial and
business matters, including in the purchase and ownership of municipal
obligations of a nature similar to the Bonds, to be able to evaluate the risks
and merits of investing in the Bonds.
(iii) The transferee acknowledges that City has not prepared any offering
document with respect to the Bonds. The transferee, as a sophisticated
investor, has made its own credit inquiry and analyses with respect to the
Bonds. The transferee has assumed the responsibility for obtaining and
making such review as the transferee has deemed necessary or desirable in
connection with the transferee's decision to invest in the Bonds. The
transferee's decision to invest in the Bonds did not rely on any information
provided by the City (or any representatives or agents of the City) that is
not in written form.
(iv) The transferee has duly determined that (A) the transferee is legally
authorized to purchase the Bonds, and (B) the Bonds are a lawful
investment for the transferee under all applicable laws.
(v) The transferee understands that (A) the Bonds have not been registered
with any federal or state securities agency or commission or otherwise
qualified for sale under the "Blue Sky" laws or regulations of any state,
(B) will not be listed on any securities exchange, (C) will not carry a
rating from any rating service, and (D) may not be readily marketable.
(vi) The transferee is investing in the Bonds for its own account, and at the
time of its purchase of the Bonds, and does not intend to distribute, resell
or otherwise dispose of the Bonds.
(vii) The transferee agrees that, in the event that the transferee decides to sell or
otherwise transfer the Bonds, it shall require the new transferee to deliver
to the City Treasurer the letter required by this Section 9.8 as a condition
precedent to the consummation of such transfer.
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RESOLDTION NO. 06-114
(c) Upon satisfaction of subsection (b) above, any Bond may in accordance
with its terms be transfened upon the Registration Books by the person in whose name it is
registered, in person or by such person's duly authorized attorney, upon surrender of such Bond
for cancellation, accompanied by delivery of a written instrument of transfer, duly executed, in a
form approved by the Treasurer. Whenever any Bond shall be surrendered for such transfer, the
City shall execute and the City Treasurer shall thereupon authenticate and deliver to the
transferee a new Bond or Bonds of like tenor, maturity or maturities and aggregate principal
amount. The City Treasurer shall not be required to transfer, pursuant to this Section 9.8, either
(i) any Bond during the period established by the City Treasurer for the selection of Bonds for
redemption, or (ii) any Bond selected for redemption pursuant to Section 3.
Section 9.9. Repeal of Resolution No. 06-87. Resolution No. 06-87 of the City
Council is hereby repealed.
Section 9.10. Waivers. So long as the City is the sole owner of the Bonds, the
City Treasurer may waive certain provisions of this Resolution with respect to the redemption of
Bonds prior to maturity, including the provisions related to the redemption of Bonds only on a
call date as specified in Section 4.5(e), the payment of a redemption premium, and providing
notice of redemption.
Section 9.11. Effective Date. This Resolution shall take effect immediately upon
adoption.
PASSED, APPROVED AND ADOPTED this day of
, 2006 , at a regular meeting of the Plalm Desert City Cotmcil
by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
JIM FERGIISON, MAYOR
AZTEST:
RACHELLE D. KLASSEN, CITY CLERK
CITY OF PALM DESERT, CALIFORNIA
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RESOLDTION N0. 06-114
Exhibit A
Transfer of this Bond is subject to the restrictions set forth in the Resolution referred to herein.
A transfer of Bonds is limited to certain parties that qualify under the requirements of the
Resolution, which include the requirement that ihe transferee can bear ihe economic risk oJ
investment in the Bonds and has such knowledge and experience in business and financial
malters, including the purchase and ownership of municipal obligations of a nature similar to
the Bonds, to be able to evaluate the risks and merits of the investment in the Bonds. The Bonds
have not been registered with any federal or state securities agency or commission.
[FORM OF BOND]
United States of America
State of California
County of Riverside
REGISTERED
NUMBER 1
REGISTERED
$
CITY OF PALM DESERT
HIGHLANDS UTILITY UNDERGROUNDING ASSESSMENT DISTRICT NO. 04-01
LIMITED OBLIGATION DviPROVEMENT BOND
SERIES 2006
REGISTERED OWNER: City of Palm Desert
Under and by virtue of the Improvement Bond Act of 1915, Division 10
(commencing with Section 8500) of the California Streets and Highways Code (the "Act"), the
City of Palm Desert (the "City"), County of Riverside, State of California, will, out of the
Redemption Fund for the payment of the Bonds issued upon the unpaid assessments made for the
work and improvements more fully described in proceedings taken pursuant to Resolution of
Intention No. 06-49, adopted by the City Council of the City on April 13, 2006, pay to the
registered owner hereof, or registered assigns, the principal sum of $ in the amounts
and on the dates as follows:
Maturity Date Principal
(September 2) Amount
2207 $
2008 $
2009 $
2010 $
2011 $
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RESOLDTION NO. 06-114
Maturity Date Principal
(September 2) Amount
2012 $
2013 $
2014 • $
2015 $
2016 $
2017 $
2018 $
2019 $
2020 $
2021 $
2022 $
2023 $
2024 $
2025 $
2026 $
2027 $
2028 $
2029 $
2030 $
2031 $
2032 $
in lawful money of the United States of America and in like manner will pay interest on the
unpaid balance hereof at the rate of percent per annum, payable semiannually on March 2
and September 2(each an "Interest Payment Date") in each year commencing on March 2, 2007.
This Bond bears interest from the Interest Payment Date next preceding its date of authentication
and registration, unless this Bond is authenticated and registered (i) on an Interest Payment Date,
in which event interest shall be payable from such date of authentication and registration,
(ii) prior to an Interest Payment Date and after the close of business on the I Sth day of the month
immediately preceding such Interest Payment Date, in which event it shall bear interest from
such Interest Payment Date, or (iii) prior to the close of business on February 15, 2007, in which
event it shall bear interest from the Bond Date stated above, until payment of such principal sum
shall have been discharged; provided, however, that if at the time of authentication of such Bond,
interest is in default, interest on that Bond shall be payable from the last Interest Payment Date to
24
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RESOLIITION NO. 06-114
which the interest has been paid or made available for payment. Principal of and interest on the
Bond shall be paid by check of the City mailed by the City Treasurer on or before the Interest
Payment Date by first class mail, postage prepaid, to the person whose name appears in the
Registrations Books as the Owner of such Bond as of the 1�th day of the calendar month
immediately preceding each Interest Payment Date, to the address of that person on the
Registration Books, provided that the payment of principal of the Bond on the final maturity date
and the payment of the principal of the Bond and any premium due upon the redemption thereof
shall be payable upon presentation and surrender thereof at maturity or earlier redemption at the
o�ice of the City Treasurer in Palm Desert, California.
This Bond will continue to bear interest after maturity at the rate above stated,
provided that it is presented at maturity and payment thereof is refused upon the sole ground that
there are not sufficient moneys in the Redemption Fund with which to pay same. If it is not
presented at maturity interest hereon will run only until maturity.
This Bond is issued by the City of Palm Desert under the Act and Resolution
No. of the City Council of the City (the "Resolution of Issuance"} in the aggregate
principal amount of $ for the purpose of providing means for paying for the
improvements described in the proceedings, and is secured by the moneys in the Redemption
Fund and by the unpaid assessments made for the payment of those improvements, and,
including principal and interest, is payable exclusively out of the Redemption Fund and certain
other funds and accounts as provided in the Resolution. The City will not obligate itself to
advance available funds from the City treasury to cure any deficiency which may occur in
the Redemption Fund.
This Bond is transferable by the registered owner hereof, in person or by the
owner's attorney duly authorized in writing, at the of�ice of the City Treasurer, 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 transfer, a new registered
Bond or Bonds, of any authorized denomination or denominations, of the same maturity, and 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 individual (including joint
owners), a corporation, a partnership or a trust.
The City shall not be required to exchange or to register the transfer of Bonds
during the fifteen days immediately preceding any interest payment date or of any Bonds
selected for redemption in advance of maturity.
The City may treat the owner hereof as the absolute owner for all purposes, and
the City shall not be affected by any notice to the contrary.
This Bond or any portion of it in the amount of $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 30 days' notice by registered or certified mail, postage
prepaid, or by personal service to the registered owner hereof at the registered owner's address as
it appears on the registration books of the City and by paying principal and accrued interest
25
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RESOLDTION NO. 06-114
together with a premium equal to three percent of the principal. Interest shall cease to accrue
from and after the date of redemption. �
This Bond is subject to refunding pursuant to the procedure of Division 11
(commencing with Section 9000) or Division 11.5 (commencing with Section 9500) of the
Streets and Highways Code of the State of California prior to maturity.
This Bond shall not be entitled to any benefit under the Act or 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 City Treasurer of the
City.
IN WITNESS WHEREOF, the City of Palm Desert, California has caused this
Bond to be signed by the City Treasurer and by the City Clerk, and has caused its corporate seal
to be impressed hereon all as of , 2006.
CITY OF PALM DESERT, CALIFORIVIA
City Clerk
City Treasurer
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is one of the Bonds described in the within mentioned Resolution which has
been authenticated and registered on .
City Treasurer
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RESOLDTION NO. 06-114
ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
the within-mentioned Bond and hereby irrevocably constitute(s} and appoint(s) attorney, to
transfer the same on the books kept for registration hereof with full power of substitution in the
premises.
Dated:
t`OTICE: The s�gnature to this assignment miut correspond with Ihe name as it appears
upon the within Bond in every paR�cular, without alteration or enlazgement or any chenge
whatsoever.
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RESOLIITION N0. 06-114
� . .
.
[FORM OF REQUISITION]
REQUISITION NO.
with reference to
$
City of Palm Desert
Highlands Utility Undergrounding Assessment District No. 04-01
Limited Obligation Improvement Bonds
Series 2006
1. The City of Palm Desert (the "City") hereby requests the City Treasurer to pay
from the moneys in the Improvement Fund established pursuant to Section 4.1 of the Resolution,
the amounts shown on Schedule I attached hereto to the parties indicated in Schedule I.
2. The payees, the purposes for which the costs have been incurred, and the amount
of the disbursements requested are itemized on Schedule I hereto.
3. Each obligation mentioned in Schedule I hereto has been properly incurred and is
a proper charge against the Improvement Fund. None of the items for which payment is
requested has been reimbursed previously from the Improvement Fund.
Dated:
CITY OF PALM DESERT
:
Schedule I
Pavee Purpose Amount
P64 O 1-0001 \90115 3 v2. doc
RESOLDTION NO. 06-114
LIST OF UNPAID ASSESSMENTS
CITY OF PALM DESERT
HIGHLANDS UTILITY UNDERGROUNDING ASSESSMENT DISTRICT NO. 04-01
LIMITED OBLIGATION IMPROVEMENT BONDS
SE�IES 2006
WHEREAS, an assessment and diagram were recorded in the offices of the City of
Palm Desert, California (the "City") on June 9, 2006 for the installation and construction of the
improvements described in the proceedings taken pursuant to Resolution No. 06-49 of the City
Council of the City; and
WHEREAS, notice of recordation of the assessment and of the place where and the time
within which the individual assessments could be paid, in whole or in part, has been duly given
in the time and form provided by law, and the time so provided for such payments has expired;
NOW, THEREFORE, the undersigned City Treasurer of the City, being the person
designated to receive payments of assessments, does hereby certify that Exhibit 1, attached
hereto, and by this reference made a part hereof, is a true, correct and complete list of all
assessments remaining unpaid upon such assessment and that this List of Unpaid Assessments is
on file in the office of the City Treasurer.
The total amount of unpaid assessments is $
Dated:
City Treasurer
P6401.1034 902521.1
RESOLDTION N0. 06-114
Exhibit 1
Assessor's Parcel No. Assessment
P6401.1034 902521.1
RESOLDTION NO. 06-114
PROPOSAL
FOR THE PURCHASE OF NOT TO EXCEED $3,530,000
CITY OF PALM DESERT
HIGHLANDS UTILITY LTNDERGROUNDING ASSESSMENT DISTRICT NO. 04-01
LIMITED OBLIGATION IMPROVEMENT BONDS
SERIES 2006
July � 2006
Mayor and Members of the City Council
City of Palm Desert, California
As City Treasurer of the City of Palm Desert, I offer to purchase on behalf of the
City of Palm Desert not to exceed $3,530,000 principal amount of City of Palm Desert
Highlands Utility Undergrounding Assessment District No. 04-01 Limited Obligation
Improvement Bonds, Series 2006, particularly described in the resolution of the City Council of
the City of Palm Desert entitled "A Resolution of the City Council of the City of Palm Desert
Providing for the Issuance of Limited Obligation Improvement Bonds, Authorizing the City
Treasurer to Purchase the Bonds, and Repealing Resolution No. 06-87," (the "Resolution") at an
interest rate which shall not exceed 6.5 percent per annum and to pay par value for the bonds.
This proposal is subject to all of the terms and conditions of the Resolution, all of
which terms and conditions are made a part hereof as though fully set forth in this Proposal.
Respectfully Submitted
Paul Gibson
City Treasurer of the City of Palm Desert
P6401.000 l 902522.1