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HomeMy WebLinkAboutReso. 1981 - 154 - Approving notice inviting bids for bond purchase - Hartnell Avenue Assessment District No. 1980-30 RESOLUTION NO. RESOLUTION APPROVING NOTICE INVITING BIDS FOR BOND PURCHASE HARTNELL AVENUE ASSESSMENT DISTRICT NO. 1980-3 The City Council of the City of Redding resolves: 1. A Notice Inviting Bids for Bond Purchase containing information concerning the proposed bond issue, the proposed improve- ment, and the assessment district has been prepared for the City. This Council approves the Notice Inviting Bids for Bond Purchase. 2. The City Council sets 11:00 a.m, on August 17, 1981, in the office of the City Clerk, as the time and place for receipt of bids for the purchase of improvement bonds in Hartnell Avenue Assessment District No. 1980-3. 3. This Council directs the City Clerk to publish the Notice once in a newspaper of general circulation within the City. 4. STURGIS, NESS, BRUNSELL & SPERRY a professional corpora- tion, Special Bond Counsel for the City, is authorized to distribute the Notice to secure competitive bidding. 5. The Notice is attached to this resolution and made a part of it. F7 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 3rd day of August, 1981, by the following vote, to wit: AYES • Councilmembers Demsher, Fulton, Gard, and Pugh NOES: Councilmembers None ABSENT: Councilmembers Kirkpatrick ETHEL A. RICHTER, City Clerk, City of Redding, Shasta County, California 0 R�O��la[� • NOTICE INVITING BIDS FOR BOND PURCHASE HARTNELL AVENUE ASSESSMENT DISTRICT NO. 1980-3, CITY OF REDDING, SHASTA COUNTY, CALIFORNIA Notice is hereby given that the City Clerk of the City of Redding, Shasta County, California, will receive sealed bids for the purchase of bonds to be issued by the City of Redding for Hartnell Avenue Assessment District No. 1980-3. Bids must be submitted not later than 11;00 a.m. on August 17, 1981, in the office of the City Clerk, City of Redding, 760 Parkview Avenue, Redding, California. The bids will be referred to the City Council for consideration at its meeting on the same day. MWV mmmnc 1. PURPOSE OF ISSUE. The bonds are being issued for the pur- pose of financing the acquisition of right of way, and the construction of public roadway improvements for an extension of Hartnell Avenue through the assessment district, together with water facilities and fire hydrants, sanitary sewer faci- lities, storm drainage facilities, and underground electric facilities, together with appurtenant work and facilities. 2. AUTHORITY FOR ISSUANCE. These bonds are authorized to be issued under the provisions of the Improvement Bond Act of 1915 of the State of California, after special assessment proceedings taken by the City Council under the provisions of the Municipal Improvement Act of 1913 of the State of California. The pro- ceedings were initiated by Resolution of Intention No. 80-271, as amended, adopted by the City Council on November 17, 1980. 3. AMOUNT OF ISSUE. The total amount of bonds to be issued for this assessment district is $1,746,241.12, which is the total amount of assessments levied. The final amount of bonds issued will be reduced to reflect cash payment, if any, received during the cash payment period, which expires on August 10, 1981. 4. DATE OF BONDS. The bonds will be dated September 2, 1981. 5. DENOMINATIONS AND MATURITY SCHEDULE. The bonds will mature over a period of fifteen years. The bonds will be in $5,000 denominations except that Bond No. 1 will be in the odd amount if necessary. For the purpose of computing the best bid, the maturity schedule will be as follows: Maturitv Schedule YEAR OF BOND MATURITY NUMBERS 1983 1 INATION AMOUNT 2- 12 1984 13- 24 1985 25- 37 1986 38- 52 1987 53- 68 1988 69- 86 1989 87- 105 1990 106- 126 1991 127- 150 1992 151- 176 1993 177- 205 1994 206- 236 1995 237- 270 1996 271- 308 1997 309- 350 DENOM - YEARLY INATION AMOUNT $1,241.12 $56,241.12 5000 5000 60,000.00 5000 65,000.00 5000 75,000.00 5000 80,000.00 5000 90,000.00 5000 95,000.00 5000 105,000.00 5000 120,000.00 5000 130,000.00 5000 145,000.00 5000 155,000.00 5000 170,000.00 5000 190,000.00 5000 210,000.00 TOTAL: $1,746,241.12 -2- COUPON RATE 10.000% 10.000% 10.000% 10.000% 10.0000 10.000% 10.0000 10.000% 10.000% 10.000% 10.000% 10.000% 10.000% 10.000% 10.000% 6. INTEREST. Each bond will bear interest from its date at a rate not to exceed ten percent (100) per annum. Each bond shall have coupons attached representing semiannual interest. The first coupon on each bond will represent interest from the date of the bond until January 2, 1983, and each subsequent coupon will represent interest to the next July 2 or January 2, as the case may be, until the maturity date of the bond. 7. PAYMENT. Both principal and interest on this issue are payable in lawful money of the United States at the Bank of America National Trust and Savings Association, Corporate Agency Division, Bank of America Center, P. 0. Box 37000, San Francisco, California 94137. 8. BEARER BONDS. The bonds will be issued as negotiable instruments payable to bearer. Unless thereafter registered, title to each bond may be passed by physical delivery. 9. ADVANCE OF MATURITY. The issuer at its option may advance the maturity of any bond to the next interest payment date following the publication of a sixty-day notice of call. Upon call, the bondholder shall receive interest to the date of call, the principal of the bond and a redemption premium in the amount of five percent of the principal. 10. LIMITED OBLIGATION. Bonds issued under the provisions of the Improvement Bond Act of 1915 of the State of California are limited obligation bonds. These bonds are not a general obligation of the issuer, and the full faith and credit of the issuer is not pledged to the payment of either principal or interest of the bonds. The obligation of the issuer is strictly limited by the specific provisions of the Improvement Bond Act of 1915. Furthermore, performance by the City of the limited obligation prescribed by said 1915 Act provisions has been affected by the adoption on June 6, 1978, of Proposition 13 (the Jarvis -Gann Initiative), which added Article XIIIA to the California Constitution, and by subsequent enactments of the California State Legislature to implement Article XIIIA. -3- 11. SECURITY. These bonds are secured by assessments levied against the several parcels of property in Hartnell Avenue Assessment District No. 1980-3, City of Redding, Shasta County, California. Principal and interest installments of the assess- ments are collected annually, as a separately stated item on the tax roll on which general taxes for real property are collected. These installments are deposited in a bond redemption fund, which constitutes a trust fund for payment of bond principal and interest. Each unpaid special assessment constitutes a lien on the specific parcel of property against which the assessment was levied. The lien is subordinate to all unpaid fixed special assessments previously levied, has priority over any fixed special assessments which may subsequently be levied, and has parity with the lien for property taxes. The annual installments are payable and become delinquent at the same time and in the same proportionate amounts, bear the same proportionate penalties and interest, and are subject to the same provisions for sale and redemption as general taxes. 12. ADDITIONAL SECURITY. If any property owner fails to pay the annual installment of a special assessment when due, the property is sold in the same manner as for delinquency on the payment of property taxes. Under the provisions of the 1915 Act, the City is obligated to purchase the property at the tax sale and, as an incident to such purchase, to transfer into the bond redemption fund the amount of the delinquent installments. The City's obliga- tion to make the transfer continues for each year until either the delinquencies are redeemed or the property is sold for cash to a third party. For the purpose of making the required transfers, the City has established a reserve fund equal to five percent (50) of the amount of the unpaid assessments. -4- The 1915 Act provides that in the event insufficient moneys are available to make the required transfers, the City is obligated to include in its next annual property tax levy an amount sufficient to make the transfers, but not to exceed 10� per $100 assessed valuation in any year. However, in the opinion of counsel, the legal authority for such special tax levy has been abrogated by the adoption of Article XIIIA of the California Constitution and the subsequent enactments of the California State Legislature to implement Article XIIIA, with the result that, under present Cali- fornia law, the City has no legal authority to levy such a special ad valorem property tax. 13. LEGAL OPINION. The legal opinion of Sturgis, Ness, Brunsell & Sperry a professional corporation, Suite 1150, Watergate Tower, 1900 Powell Street, Box 8808, Emeryville, California 94662, approving the validity of the bond issue will be furnished without charge to the successful bidder. This law firm has been retained by the issuer as bond counsel on a contingent fee payable solely from the proceeds of the bond issue. 14. TAX EXEMPTION. In the opinion of bond counsel, interest on the bonds is exempt from all federal income taxes and from State of California personal income taxes under existing statutes, regula- tions, rulings and court decisions. If the income received by private holders from bonds of the same type shall have been declared taxable under federal income tax authority or official (which ruling is followed by the Internal Revenue Service) or by decision of any federal court, the purchaser of the bonds shall have the option, before tender of the bonds, to cancel the purchase. 15. ARBITRAGE. The issuer will furnish to the purchaser, at the time of bond delivery, a certificate that the bonds are not arbi- trage bonds within the meaning of Section 103(c) of the Internal Revenue Code. -5- • 16. REGISTRATION. Any bond may be registered as to both principal and interest. Any registered bond may be transferred, deregistered, or reregistered at the expense of the bondholder. 17. RATING. The issuer has not sought to obtain a rating of this issue from any bond rating agency. 18. LITIGATION. There is no pending litigation contesting the validity of the assessments or the bonds of this issue. The thirty -day period prescribed by Section 10400 of the California Streets and Highways Code for the filing of any such litigation will expire on August 10, 1981. THE BIDDING 19. PRICE. Bidders must specify the price at which they propose to purchase the issue. Bidders are requested to specify the price as a percentage of the par value of the issue, but bids specifying a dollar price will be accepted. 20. MINIMUM PRICE. Bids must be for not less than eighty-five percent (850) of the par value of the issue. Any bid for less than 850 of the par value will be rejected. 21. SPECIFICATION OF RATES. Bidders must specify the interest rate which bonds of each maturity date shall bear. All bonds maturing on the same date must bear the same rate of interest, but different rates of interest may be bid for bonds maturing on different dates. The difference between the highest and lowest rates bid may not exceed two percent (2%). The interest payable on any bond on any interest payment date may be represented by only one coupon. Each interest rate must be specified as a multiple of 1/40 of one percent (.25%) per annum. 22. BOND CALCULATION. Each bid will be calculated on the basis of its net interest cost. Net interest cost is the amount deter- mined by adding the amount of bond discount to, or subtracting the amount of bond premium from, the total coupon interest payable on all bonds over the life of the issue, with adjustment for the factor of time of payment or accrual. In calculating interest, the calendar year will be treated as having 360 days and each calendar month, 30 days. Bidders are requested, but not required, to state in their bids the net interest cost or net interest rate, or both. This statement will be treated as informational only and will not affect the calculation of bids or award of the bonds. Award of the bonds, if made, will be made to the bidder offering to purchase the bonds at the lowest net interest cost to the issuer. 23. FORM OF BID. All bids must be unconditional and for not less than all of the bonds in this issue. Each bidder must agree to pay accrued interest from the date of the bonds to the date of delivery. Bids must be enclosed in a sealed envelope, addressed to the City Clerk of the City of Redding, and marked "Bid for Bonds, Hartnell Avenue Assessment District No. 1980-3." 24. BID CHECK. Each bid must be accompanied by a certified or cashier's check in the amount of $9,000.00 as a bid guarantee. All checks, except that of the successful bidder will be returned promptly after award. The check of the successful bidder will be negotiated and its amount will be deducted from the amount due upon the delivery of the bonds. No interest will be paid upon the deposit made by any bidder. 25. RIGHT OF REJECTION. The City Council of the City of Redding will award the bonds or reject all bids not later than forty- eight (48) hours after the bids are opened. 26. BOND PRINTING. The issuer will pay the cost of printing the bonds. 27. DELIVERY. Bonds shall be delivered on their date or as soon thereafter as they are ready for delivery. The purchaser shall have the right to cancel the purchase if the bonds are not tendered within sixty (60) days after the bid date. The bonds will be delivered at the office of the City Treasurer, City of Redding, 760 Parkview Avenue, Redding, California, or at any other place mutually agreed on between the City Treasurer and the purchaser. Payment for the bonds must be made in funds -7- • immediately available to the issuer. Any expense in connection with providing immediately available funds, whether by transfer of Federal Reserve funds or otherwise, shall be paid by the purchaser. DATED: August 3, 1981. ETHEL A. RICHTER, City Clerk, City of Redding, Shasta County, California IM