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HomeMy WebLinkAboutReso. 1980 - 122 - Ordering sale of bonds - Lake Blvd Subdivision Unit 4 Assessment District no. 1980-4 -, • • RESOLUTION NO. i/0- /;/ 2,-- , RESOLUTION ORDERING SALE OF BONDS Lake Boulevard Subdivision Unit 4 Assessment District No. 1980-4 The City Council of the City of Redding resolves: The City Council accepts the offer of OLETA WOODS, CHUCK GRAVES, GARY OLSON and THE T. R. WOODS TRUST to purchase all of the improvement bonds to be issued in Lake Boulevard Subdivision Unit 4 Assessment District No. 1980-4 , City of Redding, Shasta County, California. The City Council directs the sale and delivery of the bonds to the offerors in accordance with the terms and conditions stated in the offer, copy of which is attached hereto as Exhibit A and by this reference incorporated herein. * * * 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 2nd day of June, 1980. AYES: Councilmembers Demsher, Fulton, Kirkpatrick, and Pugh NOES : Councilmembers None ABSENT: Councilmembers Gard MILDRED L. BRAYTON, City Clerk, City of Redding, Shasta County, C,/ ' fornia — i V y • LAW OFFICES OF STURGIS, NESS, BRUNSELL 6 SPERRY A PROFESSIONAL CORPORATION EUGENE K.STURGIS(1892-1976) SUITE 1150,WATERGATE TOWER EDWIN N.NESS EMERYVILLE,CALIFORNIA 94608 ROBERT BRUNSELL TELEPHONE (415) 652-7588 SAMUEL A.SPERRY May 23 , 1980 , Mr. Brent Owen Post Office Box 2483 Redding, Ca. 96001 Dear Mr. Owen: RE: Lake Boulevard Subdivision Unit 4 Assessment District No. 1980-4 , City of Redding The purpose of this letter is to outline to you the terms and conditions of sale to your bond purchase group and purchase by them of the improvement bonds for the Lake Boulevard Subdivision Unit 4 Assessment District No. 1980-4 . The terms of the bond issue are as follows : 1. The bonds will be issued pursuant to the provisions of the Improvement Bond Act of 1915. 2. The bonds will be dated June 10, 1980 . 3. 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 , 1981. 4 . The bonds shall be in number and shall follow the maturity schedule set forth as an attachment to this letter and by refer- ence incorporated herein. It is understood that the entire principal amount of each bond will mature in the year indicated and shall be due and payable to the bond holder on July 2 of the year of maturity. 5. The bonds,and each of them, are subject to call in accordance with the provisions of the Improvement Bond Act of 1915 . The principal call provision is 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 paying agent for the City of Redding. Bond holders must understand that neither the principal nor the interest constitute � T3 yrr' 11,, 1 •. ' A Mr. Brent Owen -2- May 23, 1980. 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 said special fund. 7 . Moneys flow to said special fund from the installment payments of the respective property owners of the 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 property tax bill for each of the subject parcels. 8 . In the event of delinquency by any property owner in payment of said annual installment or any part thereof, the Bank of America may have insufficient funds in the special fund from which to pay bond principal or interest when due. 9. To protect against this contingency, we have provided in the special assessment proceedings for establishment of a special reserve fund in the amount of $12 , 050. 00. The amounts contained in said special reserve fund shall be available, if needed, to supplement the installment collections from property owners to assure timely payment of bond principal and interest. It should be expressly understood, however, that any sustained period of default by one or more property owners could exhaust said reserve fund, resulting in an insufficiency of funds to pay bond principal and/or interest when due. 10. The Improvement Bond Act of 1915 further provides that, in the event there are insufficient funds from installment collections and the special reserve fund to pay bond principal and interest when due, 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 . It must be expressly understood by each of the bond purchasers that the City makes no representation whatsoever as to whether it will have any such funds not immediately needed for such purpose. 11. Accordingly, each of the prospective bond purchasers should pur- chase the subject bonds on the express understanding and expecta- tion that, in the event that installment collections from property owners, combined with funds available in the special reserve fund, are insufficient at any time to pay bond principal and interest when due, there will be a default in payment of such bond principal and interest. This condition of default would then continue until the delinquent property owners cure such delinquency, or until such time as the City may obtain funds not immediately needed from which to make such advance, or until such time as the City can foreclose on the delinquent property and realize cash proceeds from such sale from a third party. Mr. Brent Owen -3- , May 23 , 1980 12 . Each prospective purchaser shall be obligated to inform himself or herself to the extent that he or she deems prudent about the merits of your development and the related marketability of each of the subject parcels prior to purchasing any of the subject bonds . Neither the City nor any officer or agent thereof, including the undersigned, intends to prepare any bond circular, official statement, or other disclosure document pertaining to the financial condition of the City, the subject improvement bonds, or the subject subdivision property. 13 . Based on the foregoing, it must be expressly understood that the subject improvement bonds would most likely not be a suit- able investment for any person who would experience any degree of financial hardship if there were to be a default in payment of bond principal or interest for a period of time extending to approximately four or five years . Absent unusual circum- stances, this period of default would, in my experience, be the extreme case and would most likely result only from the circum- stance of a bankruptcy proceeding pertaining to the then owner of any one or more of the subject parcels . The terms of the sale by the City of Redding of the subject improvement bonds to the bond purchase group are as follows : 1. Bonds are to be delivered through an escrow with Superior Title Company on or about their date; provided that delivery date may be delayed in the event that the improvements being ac- quired are not certified as completed prior to the June 2 , 1980 City Council meeting. 2 . The bonds shall be sold at par, with the result that the purchase price is equal to the principal amount of the bonds , namely $240, 990. 00 . 3 . The title company will deliver to the authorized representative of the City of Redding the following items prior to delivery of the bonds : a. The full purchase price, by certified check or cashier ' s check, payable to the City Treasurer of the City of Redding . b. Title Report with a lien-free endorsement respecting each and all of the parcels . c. Counterpart copies of this letter executed by each of the bond purchasers, as an acknowledgment that they have read and fully understand the terms and conditions of the bond issue and bond sale. d. An allocation of the bond issue, by bond number, among the bond purchase group. 410 Mr.• Brent Owen -4- May 23 , 1980 4 . Upon confirmation that the title company has each of the fore- going available, the closing will be conducted in the usual manner, with the exchange of the usual bond closing documents . As provided in subparagraph 3 (d) above, each of the prospective bond purchasers should execute a counterpart of this letter for deposit into escrow. In the event that either. you or any of them have any ques- tions, please do not hesitate to call on me. Yours very truly, STURGIS, NESS, BRUNSELL & SPERRY a professional corporation ///544UAAN42 / /if Samuel A. Sperry SAS:mc Att: • • MATURITY SCHEDULE OF BONDS , LAKE BOULEVARD SUBDIVISION UNIT 4 ASSESSMENT DISTRICT NO. 1980-4 , CITY OF REDDING, SHASTA COUNTY, CALIFORNIA Bond Numbers Maturity Date Total Amount (incl. ) of Bonds Maturing 1 to 8 July 2 , 1981 $ 7, 990. 00 9 to 16 July 2 , 1982 8 , 000. 00 17 to 25 July 2 , 1983 9 , 000 . 00 26 to 35 July 2 , 1984 10 , 000. 00 36 to 46 July 2 , 1985 11, 000. 00 47 to 58 July 2 , 1986 12 , 000 . 00 59 to 71 July 2 , 1987 13 , 000. 00 72 to 86 July 2 , 1988 15 , 000 . 00 87 to 102 July 2 , 1989 16 , 000 . 00 103 to 120 July 2 , 1990 18 , 000. 00 121 to 140 July 2 , 1991 20 , 000. 00 141 to 162 July 2 , 1992 22 , 000 . 00 163 to 186 July 2 , 1993 24 , 000. 00 187 to 212 July 2 , 1994 26 , 000. 00 213 to 241 July 2 , 1995 29 , 000. 00 TOTAL - $240 , 990. 00 NOTE : All bonds are in $1 , 000. 00 denominations except Bond No. 1 which is in the amount of $990 . 00 .