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HomeMy WebLinkAboutReso. 1988-338 - Resolution authorizing issuance of bonds lebrun lane/polk street street assessment district no. 1987-4 S 4111 RESOLUTION RESOLUTION AUTHORIZING ISSUANCE OF BONDS LEBRUN LANE/POLK STREET STREET ASSESSMENT DISTRICT NO. 1987-4 The City Council of the City of Redding resolves: Section 1. RECITALS. On June 21, 1988, the Council of the City of Redding adopted its resolution of intention to order improvements in Lebrun Lane/Polk Street Street Assessment District No. 1987-4, City of Redding, Shasta County, California, under the provisions of the Municipal Improvement Act of 1913 (the "Act") , as amended. Proceedings taken under the Act led to the levy of a special assessment by the Council against parcels of land within the assessment district in the total amount of $298 ,289. 95. These 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 parcel owners paid their assessments in cash without interest expired on September 8, 1988 . Section 2 . ISSUANCE OF BONDS. The Council hereby authorizes the issuance of improvement bonds under the provisions of the Improvement Bond Act of 1915 to represent unpaid assessments in the amount of $289, 930. 64 . The bonds shall be designated, "Limited Obligation Bond, City of Redding, Lebrun Lane/Polk Street Street Assessment District No. 1987-4, Series No. 1987-4 . " Bonds shall be issued in denominations of $1000, or integral multiples thereof, except for Bond No. 1, which may be an odd amount, and shall be dated October 3 , 1988 . Bonds shall mature and shall bear interest at the rates set forth in the table attached as Exhibit A. k ®RMNAL • 411 • Section 3 . APPOINTMENT OF PAYING AGENT, REGISTRAR AND TRANSFER AGENT. The Council hereby appoints the Bank of America National Trust and Savings Association as paying agent, registrar and transfer agent for the bonds in accordance with an agreement between the City of Redding and Bank of America. Section 4. FORM AND EXECUTION. Bonds shall be issued as fully registered bonds substantially in the form set forth as Exhibit B to this resolution. The bonds shall be signed by the City Treasurer and the City Clerk 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 registrar. The paying agent shall assign to each bond authenticated and registered by it a distinctive letter, or number, or letter and number, and shall maintain a record thereof which shall be available to the City for inspection. Section 5. ESTABLISHMENT OF SPECIAL FUNDS. For administering the proceeds of the sale of bonds and payment of interest and principal on the bonds, there are hereby established 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 Lebrun Lane/Polk Street Street Assessment District No. 1987-4 . Section 5. 1. IMPROVEMENT FUND. Except as provided in Section 5. 3, proceeds of sale of the bonds, together with all amounts paid on the assessments prior to bond issuance, shall be 2 • • deposited in the improvement fund to be maintained by the City Treasurer. Disbursements from the improvement fund shall be made by the City Treasurer in accordance with the budget of estimated costs and expenses set forth in the amended engineer' s report heretofore approved by the Council, which report and budget are subject to modification by the Council from time to time as prescribed by the Act. Section 5. 2 . REDEMPTION FUND. The redemption fund shall be maintained by the City Treasurer. All payments of principal and interest installments on the assessments, together with penalties, if any, 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 prior to maturity, and all interest on the bonds shall be made from the redemption fund. Section 5. 3 . SPECIAL RESERVE FUND. The special reserve fund shall be maintained by the City Treasurer. There shall be deposited into the special reserve fund the amount of $14 , 496. 53 from the proceeds of the sale of bonds. A. During the term of the bonds, the amount in the special reserve fund shall be available for transfer into the redemption fund in accordance with Section 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. 3 410 410 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 assessments originally levied in Lebrun Lane/Polk Street Street Assessment District No. 1987-4 . 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 amounts deposited in the reserve fund will never exceed 100 of the proceeds of the bond issue. 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 5.4 . INVESTMENT EARNINGS FUND. Proceeds of the investment of amounts in the improvement fund and the special reserve fund (and the redemption fund if its earnings exceed $100, 000 in any bond year) will be deposited in the investment earnings fund. On July 1 of each year during the term of the bonds (or at other times as may be required or permitted by regulations of the United States Internal Revenue Service) , the Treasurer shall 4 . 410 . 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 to the improvement � fund (or, upon completion of the improvement, to the redemption fund to be applied as credit to the next installment of pp principal and interest collected from owners of assessed land) . The City Treasurer is authorized to retain independent attorneys, accountants and other consultants to assist in complying with Federal requirements. Section 5. 5. ARBITRAGE REBATE FUND. 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 6. PAYMENT ON BONDS. The principal and interest on the bonds shall be payable at the office of the Bank of America Corporate Agency Service Center, P.O. Box 37109, San Francisco, California 94137. Principal and interest shall be paid by check, draft or warrant mailed to the registered owner of each bond at the owner's address appearing on the register maintained by the registrar on the 15th day preceding the date of interest payment or maturity of each bond. Section 7. REREGISTRATION. Any bond may be registered to a new owner by completing the assignment certificate on the reverse of 5 411 • 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 $5000 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. If any installment of principal or interest of any assessment levied in Lebrun Lane/Polk Street Street Assessment District No. 1987-4 becomes delinquent, the Council shall cause an action to be filed in the Superior Court of the County of Shasta to foreclose the lien of the delinquent assessment under the authority of Section 8830 and following of the Streets and Highways Code of the State of California. This action shall be filed not later than one hundred fifty (150) days after the date of delinquency. 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, and regulations of the Internal Revenue Service adopted thereunder, and further shall rebate to the United States any amounts actually earned as arbitrage in accordance with the provisions of that Code 6 • • 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 8.4 . REFUNDING. The bonds of this bond issue shall be subject to refunding pursuant to the provisions of Division 11. 5 of the California Streets and Highways Code. 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 twentieth day of September, 1988 . AYES: Councilmembers Buffum, Carter, Dahl , Fulton & Johannessen NOES: Councilmembers None ABSENT: Councilmembers None ETHEL A. NICHOLS, City Clerk, City of Redding, Shasta County, California 7 . • MATURITY SCHEDULE CITY OF REDDING, LEBRUN LANE/POLK STREET A.D. 1987-4 SEPT 2 MATURITY PRINCIPAL INTEREST DATE AMOUNT RATE 1990 $ .00 1991 14,930.64 6. 50 1992 15 ,000.00 6.75 1993 15 ,000.00 7.00 1994 15 , 000. 00 7.25 1995 15 , 000. 00 7. 50 1996 15,000.00 7.75 1997 20,000.00 8. 00 1998 20,000. 00 8. 10 1999 20, 000.00 8. 20 2000 25 , 000. 00 8. 25 2001 25 , 000. 00 8. 25 2002 30, 000. 00 8. 30 2003 30, 000. 00 8. 30 2004 30, 000. 00 8. 35 TOTAL: $289,930.64 EXHIBIT A United States of America State of California County of Shasta REGISTERED REGISTERED Number LIMITED OBLIGATION IMPROVEMENT BOND CITY OF REDDING LEBRUN LANE/POLK STREET STREET ASSESSMENT DISTRICT NO. 1987-4 SERIES NO. 1987-4 INTEREST RATE MATURITY DATE BOND DATE CUSIP NUMBER 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. 88-231, adopted by the City Council of the City of Redding on the 21st day of June, 1988, as later amended, 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 March 2 , 1990, 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 , 1990. Both the principal hereof and redemption premium hereon are payable at the principal corporate trust office of the Bank of America National Trust and Savings Association, or its successor, as Transfer Agent, Registrar and Paying Agent, in San Francisco, California, and the interest hereon is payable by check or draft mailed 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 immediately 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 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 EXHIBIT B .N. • • 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 3rd day of October, 1988 . CITY OF REDDING Clerk Treasurer (SEAL) CERTIFICATE OF AUTHENTICATION AND REGISTRATION This is one of the Bonds described in the within mentioned Resolution of Issuance, which has been authenticated and registered on BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION as paying agent, transfer agent and registrar By Authorized Officer 2 . . . • • (REVERSE OF BOND) CITY OF REDDING LEBRUN LANE/POLK STREET STREET ASSESSMENT DISTRICT NO. 1987-4 ADDITIONAL PROVISIONS OF THE BOND This Bond is one of several annual series of bonds of like date, tenor and effect, but differing in amounts, maturities and interest rates, issued by the City of Redding under the Act and the Resolution of Issuance, for the purpose of providing means for paying for the 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 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. Neither the City nor the Bank shall be required to make such exchange or registration of transfer of bonds during the fifteen (15) days immediately preceding any 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 mail to the registered owner hereof at such owner's address as it appears on the registration books of the Bank and by paying principal and accrued interest together with a premium equal to three percentum of the principal. I hereby certify that the following is a correct copy of the signed legal opinion of STURGIS, NESS, BRUNSELL & SPERRY a professional corporation, Emeryville, California, on file in my office. City Clerk 2 • OPINION OF BOND COUNSEL CITY OF REDDING LEBRUN LANE/POLK STREET STREET ASSESSMENT DISTRICT NO. 1987-4 We have acted as bond counsel for the City of Redding for the issuance of improvement bonds representing unpaid special assessments in Lebrun Lane/Polk Street Street Assessment District No. 1987-4 . We have examined the law and such certified proceedings and other documents as we deem necessary to render this opinion. We have not independently verified questions of fact but have relied on the certifications of public officials. Nor have we reviewed the accuracy or sufficiency of the offering material related to the sale of the bonds. Based on our examination, we are of the following opinion: 1. The unpaid assessments in Lebrun Lane/Polk Street Street Assessment District No. 1987-4 were validly levied and now constitute a lien on the parcels of land assessed, as provided in the Municipal Improvement Act of 1913 of the State of California. Bonds representing the unpaid assessments were validly issued under the provisions of the Improvement Bond Act of 1915 of the State of California. 2 . The bonds are valid special obligations of the City of Redding, payable solely from the redemption fund, into which are placed all sums received from the collection of installments of principal and interest on the unpaid assessments. The bonds are enforceable in accordance with the Improvement Bond Act of 1915. 3 . Interest on the bonds is not includable in the gross income of the bondholder for purposes of Federal income taxes under existing statutes, regulations and Court decisions, but such interest affects the corporate bondholder' s liability for alternative minimum taxes. Interest on the bonds is exempt from State of California personal income taxes, and the bonds are exempt from all California taxes except estate and franchise taxes. The federal tax-exempt status of bond interest depends upon continuing compliance by the issuer with the arbitrage rebate covenant contained in the Resolution Authorizing Issuance of the Bonds. O • Opinion of Bond Counsel Page Two 4 . The rights of the bondholders and the enforceability of the bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, heretofore or hereafter enacted. Enforcement of the bonds may be subject to the exercise of judicial discretion in accordance with general principles of equity. STURGIS, NESS, BRUNSELL & SPERRY a professional corporation By: Samuel A. Sperry Dated as of October 3 , 1988 Opinion to: M. L. Stern & Company, Inc. 8350 Wilshire Boulevard, Suite 210 Beverly Hills, California 90211