HomeMy WebLinkAboutReso 82-139 Ordering Sale of Bonds North Point Assessment District No. 1982-3 RESOLUTION NO. /
RESOLUTION ORDERING SALE OF BONDS
NORTH POINT ASSESSMENT DISTRICT NO . 1982-3
The City Council of the City of Redding resolves :
The City Council accepts the offer of
Chuck Graves, Esther Hansen, Dorothy Hamblin, Robert Mason, Brent Owen ,
William Pincin, Gary Standifer
to purchase all of the improvement bonds to be issued in North
Point Assessment District No. 1962-3 , 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 , attached hereto as Exhibit A and by
reference made a part hereof .
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 August, 1982 .
AYES : Councilmembers Demsher, Fulton, Kirkpatrick, and Gard
NOES : Councilmembers None
ABSENT : Councilmembers None
ABSTAIN: Councilmembers Pugh
ETHEL A. NICHOLS , City Clerk , City of
Redding , Shasta County , California
•
By CrP ��/c' �✓
• LAW OFFICES OF •
STURGIS, NESS, BRUN SE LL & SPERRY
A PROFESSI0 f..:CORPORXI101:
EUCENE K.STURGIS 0892-1976) SUITE II50,wATERCcTE TOWER
EDu'I\ N.NESS EMERlvILLE.CALIFORNIA 94608 >L°1LING ADDRESS:
ROBERT BRUNSELL TELEPHONE (415) 652-7588 BOX 5808
SAMUEL A.SPERRY E'MERY\-ILLE, CA 94662
August 16 , 1982
Mr . Brent Owen
P. O. Box 2483
Redding , CA 96001
Re : North Point Assessment District No. 1982-3 , City of
Redding, Shasta County , California
Dear Mr. Owen :
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 North Point Assessment
District No . 1982-3 .
' 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 September 2 , 1982 .
3 . The bonds will bear interest coupons payable at the rate
of 12% 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 shall be in number and shall follow the maturity
schedule set forth as an attachment to this letter , and by
reference 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 bondholder
on July 2 of the year of maturity .
5 . The bonds , and each of them, are subject to call in accord-
ance 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 bondholder 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 Reeding . Bondholders must under
stand that neither the principal nor the interest constitute
PYHIRIT A
Mr . Brent Owen
Page 2
August 16 , 1982
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 $15 , 698 . 00 . The amount 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
purchase the subject bonds on the express understanding and
expectation 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
Mr . Brent Owen
Page 3
August 16 , 1982
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.
12 . Each prospective purchaser shall be obligated to inform him-
self or herself to the extent that he or she deems prudent
about the merits of your development and the related market-
ability 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 pre-
pare 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
circumstance 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 improve-
ment 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 .
2 . The bonds shall be sold at par, with the result that the pur-
chase price is equal to the principal amount of the bonds ,
namely $313 , 800 . 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 Policy 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 acknowledgement that
they have read and fully understand the terms and condi-
tions of the bond issue and bond sale .
Mr. Brent Owen
Page 4
August 16 , 1982
(d) An allocation of the bond issue, by bond number ,
among the bond purchase group.
4 . Upon confirmation that the title company has each of the
foregoing 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
questions , please do not hesitate to call on me .
Very truly yours ,
STURGIS , NESS , BRUNSELL & SPERRY
2/5
rofession- 1 corporation
Samuel A Soerr
SAS :mr
Attachment
PAATURITY SCHEDULE
NORTH POINT ASSESSMENT DISTRICT NO. 1982-3
DATE OF BOND DENOM- ANNUAL INTEREST
MATURITY NUMBERS INATION AMOUNT RATE-%
1984 1 $1 , 800 . 00 $ 18 , 800 . 00 12 . 000
2-18 1 , 000 . 00
1985 19-38 1 , 000 . 00 20 , 000 . 00 12 . 000
1986 39-60 1 , 000 . 00 22 , 000 . 00 12 . 000
1987 61-85 1 , 000 . 00 25 , 000 . 00 ' 12 . 000
1988 86-113 1 , 000 . 00 28 , 000 . 00 12 . 000
1989 114-144 1 , 000 . 00 31 , 000 . 00 12 . 000
1990 145-179 1 , 000 . 00 35 , 000 . 00 12 . 000
1991 180-219 1 , 000 . 00 40 , 000 . 00 12 . 000
1992 220-263 1 , 000 . 00 44 , 000 . 00 12 . 000
1993 264-313 1 , 000 . 00 50 , 000 . 00 12 . 000
TOTAL : $ 313 , 800 . 00