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HomeMy WebLinkAboutReso. 1983 - 088 - Resolution ordering sale of bonds calexico drive street assessment district no. 1983-4 RESOLUTION NO. 83 -8g RESOLUTION ORDERING SALE OF BONDS Calexico Drive Street Assessment District No. 1983-4 The City Council of the City of Redding resolves: The City Council accepts the offer of -E. W. COOK, (attached to this resolution and by reference incorporated in it) , to purchase all of the improvement bonds to be issued in Calexico Drive Street Assessment District No. 1983-4 , City of Redding , Shasta County, California. The City Council directs the sale and delivery of the bonds to the offeror in accordance with the terms and conditions stated in the offer. 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 16th day of May, 19834.,, AYES : Councilmembers Demsher, Kirkpatrick, 'Pugh, and Gard NOES: Councilmembers None ABSENT: Councilmembers Fulton ETHEL A. NICHOLS , City Clerk , City of Redding, Shasta County, California BY (---7e-77.--Z? C • • •Law Offices of STURGIS, NESS, BRUNSELL & SPERRY (415) 652 7588 EUGENE K. STURGIS a professional corporation (1892-1976) 1900 Powell Street, Suite 1150 MAIL ADDRESS: EDWIN N. NESS Emeryville, California 94608 ROBERT BRUNSELL POST OFFICE Box 8808 SAMUEL A. SPERRY May 12 , 1983 EMERYVILLE, CA 94662 Mr. E. W. Cook 3435 Riverview Drive Redding, CA 96001 Re: Calexico Drive Street Assessment District No. 1983-4 , City of Redding Dear Mr. Cook: • The purpose of this letter is to set forth the terms and conditions of sale to you by the City of Redding of the improvement bonds for Calexico Drive Street Assessment District No. 1983-4 . The terms of issuance and sale are as follows: 1 . The principal amount of bonds is $24 , 497 . 01. The bonds will mature in accordance with the maturity schedule set .forth on Exhibit A attached to this letter. 2 . The bonds will be issued pursuant to the provisions of the Improvement Bond Act of 1915 . 3 . The bonds will be dated June 2 , 1983 and delivery will be made to you upon payment of the purchase price at the office of the City Treasurer of the City of Redding on or about June 2 , 1983 . The bonds will bear interest coupons payable at the rate of 10% per annum, with interest payable semi-annually on January 2 and July 2 , with the first interest coupon being dated January 2, 1984 . • 4 . The bonds will be in even denominations of $500 , except Bond No. 1, which shall be in the denomination of $497 . 01. It is understood that the entire principal amount of each bond will mature on July 2 in the year indicated in the maturity schedule and shall be payable to you on that date. 5. The bonds, and each of them, are subject to. prior redemption in accordance with the provisions of the Improvement Bond Act of 1915 . In summary, these provisions state that any bond is callable at the discretion of the City of Redding on any interest payment. date by. payment to the bond holder of the principal • amount of the bond, a 5% prepayment premium, and accrued interest to the date of call. 6 . Principal and interest of the bonds are payable from a special fund to be administered by the. Bank of America, serving as • • Mr. E. W. Cook Page Two May 12 , 1983 paying agent for the City of Redding. Bond holders must understand that neither the principal nor the interest consti- tute obligations of the City of Redding other than in the strictly limited sense provided by the Improvement Bond Act of 1915 , and neither principal nor interest is payable from any fund of the City other than the special bond redemption fund to be established for this bond issue. 7 . Moneys flow to said special fund from the installment payments of the respective property owners of the parcels. Attached as Exhibit B to this letter is a copy of the Unpaid List showing by parcel the amount of unpaid assessment against each of the respective parcels . The annual installment payments from property owners are collected on the tax roll of the County of Shasta as a separately stated item on the tax bill for each of the subject parcels. The installments are payable on the same dates as property taxes and are calculated to provide suf- ficient funds to pay principal and interest on the bonds , pro- vided that all property owners pay their installments on time. 8 . In the event of delinquency by any property owner in the payment . of any installment or part thereof, the Bank of America may have insufficient funds in the special fund from which to pay bond principal and interest on the due date. 9 . To protect against this possibility, we have provided in the assessment proceedings for establishment of a special reserve fund in the amount of $1,977 .60 . The amounts contained in this special reserve fund will be available, when needed, to supple- ment the installment collections from property owners so as to assure timely payment of bond principal and interest. It must be expressly understood, however, that any sustained period of . default by one or more property owner could exhaust said reserve fund, resulting in an insufficiency of funds to pay both princi- pa1 and interest on time. 10. The Improvement Bond Act of 1915 further provides that, in the event there are insufficient funds from installment collections and from the special reserve fund to pay both principal and interest on time, the City of Redding is obligated to advance "any available funds not immediately needed" to the special fund for payment of such bond principal and interest. This phrase set forth in quotes in the foregoing sentence is 'generally construed to mean surplus funds or unappropriated reserves ot- some similar fund of the City. It must be expressly under- stood that the C'.ty of Redding makes no representation to you whatsoever that it has any such funds available at this time or that it will have any such funds atany future date. To • Mr. E . W. Cook Page Three May 12 , 1983 the contrary, as the City adjusts its budgeting and appropria- tions procedures to meet the limitations imposed by Proposition 13 and Proposition 4 (Article:.. XIIIA and XIIIB of the California Constitution) , it will become increasingly likely that the City will not have any such funds . Prudence suggests that you not purchase these bonds unless you are willing to take the risk of some delay in payment to you, and that in any event you should not rely upon the City to make any advances to the bond redemption fund. 11. In the event that all sources legally available to pay bond principal and interest are insufficient at anyy time to pay bond principal and interest when due , there will be a default in payment to bond holders of both principal and interest. While this appears to be unlikely, it is a clear possibility. This condition of default would continue until the delinquent property owners cure their installment delinquency or until the City can obtain funds from which to make an advance to the bond redemption fund, or until such time as the City can foreclose its lien against the delinquent property and realize cash proceeds from such sale to a third party. 12. In purchasing the bonds , it is your obligation to infoLm your- self to the extent that you deem prudent about the merits of this bond issue and the sufficiency of the lien security against the respective parcels. Neither the City nor any officer or agent thereof, including our firm as bond counsel , intends to prepare any disclosure document describing the financial con- dition of the City, the improvement bonds , or the property being assessed. Instead, it shall be your obligation to satisfy your- self as to the nature of the investment risk involved in purchas- ing these bonds . 13. Summarizing the foregoing, it must be expressly understood that this type of improvement bond would most likely not be a suit- able investment for any person who would experience financial hardship if there were to be a default in payment of bond principal or interest for a period of time extending to ap- proximately four or five years . Absent unusual circumstances, thi's period of default would, in my experience, be the extreme case and would most likely result only from the circumstance of bankruptcy proceedings pertaining to the owner of one or more of the subject parcels. The purchase price of the bonds shall be the par value thereof , namely $24 ,497 . 01, together with any accrued interest on the bonds from the date of June 2 to the date of delivery. As indicated , we presently expect to have the bonds available for delivery to you on June 2 , so that there would be no accrued interest if we can accomplish that. 411 • • Mr. W. E. Cook Page Four May 12 , 1983 The bond printer is presently working against a significant backlog of orders , and it is therefore possible that we will be delayed by a week or two in getting the bonds available. In that case, the accrued interest will be added to the purchase price. The bonds , when delivered to you, will be accompanied by the customary closing documents , including our approving legal opinion respecting the bonds . You will be required to execute a receipt for the bonds and submit that to the City Treasurer, together with a certified check or cashier' s check payable to the City of Redding. We will be providing you a copy of our bond delivery instructions, which we will prepare and send to Beverly Cassaday, the City Treasurer, in advance of the bond delivery. To indicate your agreement to the terms of purchase and sale of this bond issue to you, please execute the two enclosed copies of this letter and bring them with you to the City Council meeting this coming Monday evening, May 16th, at 7: 00 P.M. I would like for you to be present at the time the Council authorizes the sale to you. Yours very truly, STURGIS, NESS, BRUNSELL & SPERRY a professional corporation ` ! / V Samuel A. Sperry SAS:mc Enclosures cc: Robert Courtney, City Manager Linda Downing, Director of Finance Robert D. Hastings, Public Works Dept. Beverly J. Cassaday, City Treasurer E. W. CORK •DITOR'S RECORD • CALEXICO DRIVE STREET ASSESSMENT DISTRICT NO. 1983-4 , CITY OF REDDING, SHASTA COUNTY, CALIFORNIA DATE OF BONDS : 6/2/83 YEAR RATE PRINCIPAL INTEREST TOTAL 1983-84 10 . 000 $497 . 01 $2 ,653 . 84 $3 , 150. 85 1984-85 10. 000 1,000 . 00 2, 400 . 00 3,400 . 00 1985-86 10. 000 1, 000 . 00 2,300 . 00 3,300. 00 1986-87 10. 000 1,000 . 00 2, 200 . 00 3 , 200. 00 1987-88 10. 000 1,000 . 00 2,100 . 00 3,100. 00 1988-89 10. 000 1, 000 . 00 2,000 . 00 3 , 000 .00 1989-90 10. 000 1,500 . 00 1,900 .00 3, 400 . 00 1990-91 10. 000 1,500 . 00 1,750 .00 3 , 250.00 1991-92 10. 000 1,500 . 00 1,600 . 00 3, 100 . 00 1992-93 10. 000 2, 000 . 00 1,450 . 00 3,450. 00 1993-94 10. 000 2,000 . 00 1,250 . 00 3 , 250 . 00 1994-95 10.000 2, 000 .00 1,050 .00 3, 050. 00 1995-96 10. 000 2, 500. 00 850 . 00 3,350 . 00 1996-97 10. 000 3 , 000 . 00 600 . 00 3 ,600 .00 1997-98 10. 000 3 ,000 . 00 300 . 00 3 ,300 . 00 $24 ,497. 01 $24 ,403 . 84 $48,900. 85 } • EXHIBIT A • 411 . 411 . PAID AND UNPAID LIST OF ASSESSMENTS IN Calexico Drive Street Assessment District No. 1983-4 I HEREBY CERTIFY that the attached list of Paid and Unpaid Assessments correctly reflects (1) all amounts received by me on account of assessments in Calexico Drive Street Assessment District No. 1983-4, City of Redding, Shasta County, California, within thirty (30) days after the assessments became due and payable and (2) all amounts remaining unpaid on each of the assessments in said Calexico Drive Street Assessment Assessment District No. 1983-4 . Executed at Redding, California, on , 1983 . BEVERLY J. CASSADAY, City Treasurer, City of Redding, Shasta County, California By • EXHIBIT B PAID AND UNPAID LIST CALEXICO DRIVE STREP ASSESSMENT DISTRICT NO. 83-4 , CITY OF REDDING, SHASTA COUNTY, CALIFORNIA ASSESS AMOUNT OF AMOUNT CREDIT TO AMOUNT NUMBER ASSESSMENT . PAID ASSESSMENT UNPAID 1 $4 , 241. 87 $ . 00 $ . 00 $4 , 241. 87 2 6 , 395 . 48 . 00 . 00 6 , 395 . 48 3 3, 285 . 83 . 00 . 00 3 , 285 . 83 4 3 , 359 . 91 2, 855.92 3, 359 .91 .00 5 5,805 . 51 3 , 500 . 00 4 ,117. 65 1,687 .86 6 2, 976 . 39 2,529.93 2, 976. 39 . 00 7 2 , 976 . 39 . 00 . 00 2, 976 . 39 8 2 ,976 . 39 . 00 . 00 2,976 . 39 9 2 ,933. 19 . 00 . 00 • 2,933. 19 10 4 , 601. 04 3 , 910. 88 4 , 601. 04 . 00 OTALS: $39 ,552. 00 $12 ,796 . 73 $15,054 . 99 $24,497 .01 DISCOUNT FOR CASH PAYMENT:15. 000% i