HomeMy WebLinkAboutReso 98-105 - Authorizing Issuance of Bonds (Teton Drive St Assessment Dist No. 1998-1) ' � ' � �
RESOLUTION NO. ��
RESOLUTION AUTHORIZING ISSUANCE OF BONDS
(Teton Drive Street Assessment District No. 1998-1)
The City Council of the City of Redding resolves as
follows :
On May 5, 1998, this City Council of the City of
Redding adopted its resolution of intention to order acquisition
of improvements in Teton Drive Street Assessment District No.
1998-1, City of Redding, Shasta County, California, under the
provisions of the Municipal Improvement Act of 1913 (the "Act" ) ,
as amended, and proceedings taken under the Act lead to the levy
of special assessments by this Council against parcels of land
within the assessment district in the total amount of $425, 000,
which assessments were recorded in the office of the County
Recorder of the County of Shasta, and thereupon became a lien on
each parcel assessed.
The period within which property owners may pay their
assessments in cash, at discount and without interest, was waived
in writing by the owners of 100% of the property assessed, and the
City Treasurer has certified and filed with the City Clerk a list
of assessments remaining unpaid.
This Council has, by separate resolution adopted this
same date, determined that the amount of unpaid assessments is as
certified by the City Treasurer.
SECTION l . ISSUANCE OF BONDS . The Council hereby
authorizes the issuance of limited obligation improvement bonds �
�
under the provisions of the Improvement Bond Act of 1915 to �
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represent unpaid assessments in an amount equal to the unpaid
assessments . Each bond shall be designated, "City of Redding,
Limited Obligation Improvement Bond, Teton Drive Street Assessment
District No. 1998-1 . " Bonds shall be dated their date of
delivery, presently expected to be on or about July 22 , 1998, and,
except for Bond No. l, which may be in an odd amount if necessary,
shall be issued in denominations of $1, 000 or integral multiples
thereof . Bonds shall mature in principal amounts, shall bear
interest at the rates set forth in the bond purchase contract and
may consist of serial bonds, term bonds, or any combination �
thereof .
SECTION 2 . APPOINTMENT OF PAYING AGENT, REGISTRAR AND
TRANSFER AGENT. The Council hereby appoints U. S . Bank Trust
National Association (the "Bank" ) as paying agent, registrar and
transfer agent for the bonds in accordance with a separate
agreement to be entered into between the City of Redding and the
Bank.
SECTION 3 . FORM AND EXECUTION. Bonds shall be issued
as fully registered bonds substantially in the form set forth as
Exhibit A to this resolution. The bonds shall be signed by the
City Treasurer and City Clerk of the City of Redding, and the seal
of the City shall be affixed. Both signatures and seal may be
reproduced on the bonds by facsimile, but upon its registration or
reregistration each bond shall be authenticated by the manual
signature of the authorized representative of the Bank.
The Bank shall assign to each bond authenticated and
registered by it a distinctive letter, or number, or letter and
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number, and shall maintain a record thereof which shall be
available to the City for inspection.
SECTION 4 . ESTABLISHMENT OF SPECIAL FUNDS . For
administering the proceeds of the sale of bonds, the payments from
property owners on account of assessments levied, and the payment
of interest and principal on the bonds, the Treasurer shall
establish and maintain five funds to be known as the Improvement
Fund, the Redemption Fund, the Special Reserve Fund, the
Investment Earnings Fund and the Arbitrage Rebate Fund,
respectively, for Teton Drive Street Assessment District No. 1998-
l .
SECTION 4 . 1 . IMPROVEMENT FUND. Except as provided in
Sections 4 . 2 and 4 . 3 , proceeds of sale of the bonds, together with
all amounts paid by property owners on the assessments before bond
issuance, if any, and the contributions from other public funds
shall be deposited in the Improvement Fund to be established and
maintained by the Treasurer. Disbursements from the Improvement
Fund shall be made by the Treasurer in accordance with the budget
of estimated costs and expenses set forth in the Amended
Engineer ' s Report, heretofore approved by this Council on June 16,
1998, which report and budget are subject to modification by this
Council from time to time as prescribed by the Act; provided that,
as determined by this Council at its June 16 regular meeting, the
amount of $15, 500 indicated in the Engineer' s Report for "Bond
Service" shall be added to the amount payable on account of
"Acquisition of Existing Improvements" , and the amount required
annually to pay the fees of the Paying Agent shall be included in
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the annual administrative cost assessment added to the
installments to be billed on account of unpaid assessments .
SECTION 4 .2 . REDEMPTION FUND. The Redemption Fund
shall be established and maintained by the Treasurer. There shall
be deposited into the Redemption Fund, from the proceeds of the
sale of bonds, the amount, if any, provided for funded interest,
which shall be the amount to pay interest on the bonds from their
dated date to first interest payment date. All payments of
principal and interest installments on the assessments, together
with penalties, if any, and all amounts received on account of
lien pay-offs shall be deposited in the Redemption Fund, which
shall be a trust fund for the benefit of the bondholders . Payment
of the bonds at maturity, or at redemption before maturity, and
all interest on the bonds shall be made from the Redemption Fund.
SECTION 4 . 3 . SPECIAL RESERVE FUND. The Special
Reserve Fund shall be established and maintained by the Treasurer.
There shall be deposited into the Special Reserve Fund the amount
equal to the "Initial Reserve Requirement" from the proceeds of
the sale of bonds . The Initial Reserve Requirement shall be an
amount equal to the lesser of (a) ten percent (10%) of the
proceeds of the issue, (b) maximum annual debt service on the
Bonds, or (c) one hundred twenty-five percent (125%) of average
annual debt service on the Bonds . That amount, less any amounts
transferred to the Redemption Fund pursuant to Section 8884 of the
Streets and Highways Code, shall constitute the "Reserve
Requirement" for the bonds from time to time .
A. During the term of the bonds, the amount in the
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Special Reserve Fund shall be available for transfer into the
Redemption Fund in accordance with Section 8883 and 8808 of the
Streets and Highways Code. The amount so advanced shall be
reimbursed to the Special Reserve Fund from the proceeds of
redemption or sale of the parcel for which payment of delinquent
assessment installments was made from the Special Reserve Fund.
B. If any assessment is prepaid before final maturity
of the bonds, the amount of principal which the assessee is
required to prepay shall be reduced by an amount which is in the
same ratio to the original amount of the Special Reserve Fund as
the original amount of the prepaid assessment bears to the total
amount of unpaid assessments originally securing the Bonds . This
reduction in the amount of principal prepaid shall be balanced by
a transfer from the Special Reserve Fund to the Redemption Fund in
the same amount .
C. The amount maintained in the Special Reserve Fund
shall never exceed the Reserve Requirement . Proceeds of
investment of the Special Reserve Fund shall be deposited in the
Investment Earnings Fund.
D. When the amount in the Special Reserve Fund equals
or exceeds the amount required to retire the remaining unmatured
bonds (whether by advance retirement or otherwise) , the amount of
the Special Reserve Fund shall be transferred to the Redemption
Fund, and the remaining installments of principal and interest not
yet due from assessed property owners shall be cancelled without
payment .
SECTION 4 .4 . INVESTMENT EARNINGS FUND. The Investment
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Earnings Fund shall be established and maintained by the
Treasurer. Proceeds of the investment of amounts in the
Improvement Fund and the Special Reserve Fund will be deposited in
the Investment Earnings Fund. As of June 30 of each year during
the term of the bonds, the Treasurer shall determine whether any
portion of investment earnings must be rebated to the United
States pursuant to Section 148 of the United States Internal
Revenue Code and regulations adopted thereunder. Any amounts
required to be rebated will be transferred to the Arbitrage Rebate
Fund, and the balance will be transferred as follows :
(a) To the extent that the balance in the Special
Reserve Fund is less than the Reserve Requirement, a transfer will
be made from the Investment Earnings Fund to the Special Reserve
Fund.
(b) The remaining balance in the Investment Earnings
Fund, if any, will be transferred to the Improvement Fund until
the improvement is completed and the Improvement Fund is closed;
thereafter the balance in the Investment Earnings Fund will be
transferred to the Redemption Fund to be used, in the discretion
of the Treasurer, as a credit upon the annual installments of
assessment or for the advance retirement of bonds .
The Treasurer is authorized to retain independent
attorneys, accountants and other consultants to assist in
complying with Federal arbitrage and rebate requirements and
restrictions .
SECTION 4 . 5 . ARBITRAGE REBATE FUND. The Arbitrage
Rebate Fund shall be established and maintained by the Treasurer.
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Amounts in the Arbitrage Rebate Fund shall be invested in the
same manner as amounts in the other funds and shall be held in
trust for rebate to the United States at the times required by
Section 148 of the United States Internal Revenue Code and
regulations adopted thereunder.
SECTION 4 . 6 . RETURN OF UNCLAIMED FUNDS . Other
provisions of this resolution to the contrary notwithstanding, the
Bank shall return to the City any funds held by it hereunder not
later than thirty (30) days before those funds would escheat to
the State of California under any law now or hereafter enacted.
SECTION 5 . PAYMENT ON BONDS . The principal and
interest on the bonds shall be payable at the office of the Bank
in San Francisco, California. Principal and interest shall be paid
by check mailed to the registered owner of each bond at the
owner' s address appearing on the register maintained by the Bank,
as registrar, on the 15th day of the month preceding the date of
payment .
Upon the payment and cancellation of any bond, the bond
shall be destroyed, and the Bank shall furnish the City a
certificate of destruction.
SECTION 6 . ADVANCE RETIREMENT OF BONDS . Any bond or
any portion thereof in the amount of $1, 000 or any integral
multiple thereof outstanding, 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
- or by personal service to the registered owner thereof at such
owner ' s address as it appears on the registration books of the
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Bank and by paying principal and accrued interest, together with a
redemption premium of three percent of the par value.
In addition to redemption in advance of maturity in
accordance with the foregoing, the term bonds, if any, shall be
made subject to partial mandatory advance redemption, by lot,
without premium, on each September 2 on and after the September 2
specified in the purchase commitment of such purchaser in
accordance with the schedule set forth therein.
SECTION 7 . REREGISTRATION. Any bond may be registered
to a new owner by completing the assignment certificate on the
reverse of the bond and delivering the bond to the registrar.
Upon reregistration, any bond may be replaced by one or more bonds
of the same maturity and aggregate amount in denominations of
$1, 000 or any integral multiple thereof .
SECTION 8 . COVENANTS . In the event of a default in
the payment of any bond or any installment of interest thereon,
bondholders shall have the remedies set forth in the Improvement
Bond Act of 1915 . In addition, the Council makes the following
covenants, which shall constitute a contract with the bondholders :
SECTION 8 . 1 . FORECLOSURE OF LIENS . No later than
October 1 in any year, the City shall file an action in the
Superior Court to foreclose the lien on each delinquent assessment
if the sum of uncured assessment delinquencies for the preceding
fiscal year exceeds five percent (5%) of the assessment
installments posted to the tax roll for that fiscal year, and if
the amount of the Special Reserve Fund is less than the Reserve
Requirement .
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SECTION 8 . 2 . ARBITRAGE. During the term of the bonds,
the City will make no use of bond proceeds which, if such use had
been reasonably expected at the date the bonds are issued, could
have caused the bonds to be "arbitrage bonds" within the meaning
of Section 148 of the United States Internal Revenue Code of 1986,
as amended, and regulations of the Internal Revenue Service
adopted thereunder, and further shall rebate to the United States
any amounts required to be rebated on account of arbitrage in
accordance with the provisions of that Code and those regulations .
SECTION 8 . 3 . MAINTENANCE OF TAX EXEMPTION. The City
will take all reasonable actions required to maintain the status
of interest on the bonds as excludable from gross income for
federal income tax purposes and as exempt from the State of
California personal income taxes .
SECTION 9 . BOOK-ENTRY BONDS . The Bonds when issued
shall be initially registered in the name of "Cede & Co. , " as
nominee of The Depository Trust Company, New York, New York, and
shall be initially issued as one Bond for each of the maturities
of the Bonds .
The Depository Trust Company is hereby appointed
depository for the Bonds and registered ownership of the Bonds, or
any portion thereof, may not thereafter be transferred except :
(i) To any successor of Cede & Co. , as nominee of The
Depository Trust Company, or its nominee, or to any
substitute depository designated pursuant to clause (ii) of
this section (a "substitute depository") ; provided, that any
successor of Cede & Co. , as nominee of The Depository Trust
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Company or substitute depository, shall be qualified under
any applicable laws to provide the services proposed to be
provided by it;
(ii) To any substitute depository not objected to by
the City, upon (1) the resignation of The Depository Trust
Company or its successor (or any substitute depository or its
successor) from its functions as depository, or (2) a
determination by the City to substitute another depository
for The Depository Trust Company (or its successor) because
The Depository Trust Company or its successor (or any
substitute depository or its successor) is no longer able to
carry out its functions as depository; provided, that any
such substitute depository shall be qualified under any
applicable laws to provide the services proposed to be
provided by it; or
(iii) To any person as provided below, upon (1) the
resignation of The Depository Trust Company or its successor
(or substitute depository or its successor) from its
functions as depository, or (2) a determination by the City
to remove The Depository Trust Company or its successor (or
any substitute depository or its successor) from its
functions as depository.
In the case of any transfer pursuant to clause (i) or
clause (ii) above, upon receipt of the outstanding Bonds by the
Paying Agent, together with a written Request of the City, a new
Bond for each maturity shall be executed and delivered in the
aggregate principal amount of the Bonds then outstanding,
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registered in the name of such successor or such substitute
depository, or their nominees, as the case may be, all as
specified in such written Request of the City. In the case of any
transfer pursuant to clause (iii) above, upon receipt of the
outstanding Bonds by the Paying Agent together with a written
Request of the City, new Bonds shall be executed and delivered in
such denominations numbered in the manner determined by the Paying
Agent and registered in the names of such persons as are requested
in such written Request of the City, subject to the limitations of
this Section 9 and the receipt of such a written Request of the
City, and thereafter, the Bonds shall be transferred pursuant to
the provisions set forth in this Resolution; provided, that the
Paying Agent shall not be required to deliver such new Bonds
within a period of less than sixty (60) days .
So long as the outstanding Bonds are registered in the
name of Cede & Co. or its registered assigns, the City and the
Paying Agent shall cooperate with Cede & Co. , as sole holder, or
its registered assigns in effecting payment of the principal of
and interest on the Bonds by arranging for payment in such manner
that funds for such payments are properly identified and are made
immediately available on the date they are due .
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I HEREBY CERTIFY that the foregoing resolution was duly
and regularly adopted by the City Council of the City of Redding,
Shasta County, California, at a regular meeting thereof, held on
the 7th day of July, 1998 .
AYES : Councilmembers Anderson, Cibula, Kight and McGeorge
NOES : Councilmembers Kehoe
ABSENT: Councilmembers None
CONNIE STROHMAYER, City Clerk,
City of Redding, Shasta County,
California
By
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EXHIBIT A
United States of America
State of California
County of Shasta
REGISTERED REGISTERED
Number $
CITY OF REDDING
LIMITED OBLIGATION IMPROVEMENT BOND
TETON DRIVE STREET ASSESSMENT DISTRICT NO. 1998-1
INTEREST RATE MATURITY DATE BOND DATE CUSIP NUMBER
, 1998
REGISTERED OWNER:
PRINCIPAL SUM: DOLLARS
Under and by virtue of the Improvement Bond Act of
1915, Division 10 (commencing with Section 8500) , of the Streets
and Highways Code, (the "Act" ) , the City of Redding, County of
Shasta, State of California, (the "City" ) , will, out of the
redemption fund for the payment of the bonds issued upon the
unpaid portion of assessments made for the acquisition, work and
improvements more fully described in proceedings taken pursuant to
Resolution of Intention No. 98- , adopted by the Council of the
City of Redding on the 5th day of May, 1998, pay to the registered
owner stated above or registered assigns, on the maturity date
stated above, the principal sum stated above, in lawful money of
the United States of America and in like manner will pay interest
from the interest payment date next preceding the date on which
this bond is authenticated, unless this bond is authenticated and
registered as of an interest payment date, in which event it shall
bear interest from such interest payment date, or unless this bond
is authenticated and registered prior to August 15, 1998, in which
event it shall bear interest from its date, until payment of such
principal sum shall have been discharged, at the rate per annum
stated above, payable semiannually on March 2 and September 2 in
each year commencing on March 2 , 1999 . Both the principal hereof
and redemption premium hereon are payable at the office of U. S .
Bank Trust National Association, as Paying Agent, Registrar and
Transfer Agent, in San Francisco, California (the "Bank" ) , and the
interest hereon is payable by check mailed on each interest
payment date to the owner hereof at the owner' s address as it
appears on the registration books of the Bank, or at such address
as may have been filed with the Bank for that purpose, as of the
fifteenth day of the month preceding each interest payment date .
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH IN THE REVERSE SIDE HEREOF WHICH SHALL FOR ALL
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PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH HEREIN.
This bond will continue to bear interest after maturity
at the rate above stated, provided, it is presented at maturity
and payment thereof is refused upon the sole ground that there are
not sufficient moneys in said redemption fund with which to pay
same. If it is not presented at maturity, interest thereon will
run until maturity.
This bond shall not be entitled to any benefit under
the Act or the Resolution Authorizing Issuance of Bonds (the
"Resolution of Issuance" ) , or become valid or obligatory for any
purpose, until the certificate of authentication and registration
hereon endorsed shall have been dated and signed by the Bank.
IN WITNESS WHEREOF, said City of Redding has caused
this bond to be signed in facsimile by the City Treasurer of said
City and by its Clerk, and has caused its corporate seal to be
reproduced in facsimile hereon all as of the day of July,
1998 .
City of Redding
City Clerk City Treasurer
(SEAL)
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is one of the Bonds described in the within mentioned
Resolution of Issuance, which has been authenticated and
registered on
U. S . BANK TRUST NATIONAL ASSOCIATION,
as paying agent, registrar and transfer agent
By
Authorized Signatory
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(REVERSE OF BOND)
CITY OF REDDING
LIMITED OBLIGATION IMPROVEMENT BOND
TETON DRIVE STREET ASSESSMENT DISTRICT NO. 1998-1
ADDITIONAL PROVISIONS OF THE BOND
Except for the term bonds, if any, each bond is one of
several annual series of bonds of like date, tenor and effect, but
differing in amounts, maturities and interest rates, issued by the
City of Redding under the Act and the Resolution of Issuance, for
the purpose of providing means for paying for the acquisition of
improvements described in said proceedings, and is secured by the
moneys in said redemption fund and by the unpaid portion of said
assessments made for the payment of said acquisition of
improvements, and, including principal and interest, is payable
exclusively out of said fund.
This bond is transferable by the registered owner
hereof, in person or by the owner' s attorney duly authorized in
writing, at said office of the Bank, subject to the terms and
conditions provided in the Resolution of Issuance, including the
payment of certain charges, if any, upon surrender and
cancellation of this bond. Upon such transfer, a new registered
bond or bonds, of any authorized denomination or denominations, of
the same maturity, for the same aggregate principal amount, will
be issued to the transferee in exchange therefor.
Bonds shall be registered only in the name of an
individual (including joint owners) , a corporation, a partnership
or a trust .
The Bank shall not be required to make such exchange or
registration of transfer of bonds during the period commencing
with the fifteenth (15th) day of the month preceding any interest
payment date and ending on said interest payment date.
The City will not obligate itself to advance available
funds from the City treasury to cure any deficiency which may
occur in the bond redemption fund. A determination not to
obligate itself shall not prevent the City from, in its sole
discretion, so advancing funds .
The City and the Bank may treat the registered owner
hereof as the absolute owner for all purposes, and the City and
the Bank shall not be affected by any notice to the contrary.
This bond or any portion of it in the amount of $1, 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 to the registered owner hereof at such owner' s
address as it appears on the registration books of the Bank and by
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paying the principal and accrued interest together with a premium
equal to three percentum of the principal .
[In addition to redemption in advance of maturity in
accordance with the foregoing, the term bonds maturing on
September 2 , 20 , are subject to partial mandatory advance
redemption, by lot, without premium, on each September 2 on and
after September 2 , , in accordance with the following schedule
and in the following amounts :
Year Amount to
(September 2) be Redeemed
20
20 (to be set forth
20 in the bond
20 purchase contract)
2006 (maturity) ]
I hereby certify that the following is a correct copy
of the signed legal opinion of ORRICK, HERRINGTON & SUTCLIFFE LLP,
San Francisco, California, on file in my office .
City Clerk
[Form of Legal Opinion]
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[Form of Assignment]
ASSIGNMENT
For value received the undersigned do (es) hereby sell,
assign and transfer unto
the within bond and
do (es) hereby irrevocably constitute and appoint
attorney to transfer the same
on the register of the Paying Agent, with full power of
substitution in the premises .
Date :
SIGNATURE GUARANTEED:
NOTE : The signature (s) to this Assignment must correspond with the
name (s) as written on the face of the within bond in
every particular, without alteration or enlargement or
any change whatsoever. The signature (s) must be
guaranteed by an eligible guarantor institution.
Social Security Number, Taxpayer ldentification Number
or other ldentifying Number of Assignee :
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