HomeMy WebLinkAboutAgenda Packet 06/04/2001 (21) CITY OF PETALUMA, CALIFORNIA
AGENDA SILL JUN ° 4 2061 t
1 Agenda Title: y ! Meeting Date:
�esolutiontof and Authorizing ity Cnilthe . ialuma of Intention to Levy June 4, 2001
P
Issuance and Sale of Limited
Obligation Refunding Improvement Bonds Relating to Assessment
District #23 (Redwood Business Park 3) and Approving Related
Documents and Authorizing Official Actions
• Department: Director: Contact Person: .Phone Number:
Finance William J. Thomas William J. Thomas 778-4352
Cost of Proposal: $76,500 (to be paid from proceeds of bonds) Account Number: N/A
Amount Budgeted: N/A Name of Fund: N/A
Attachments to Agenda Packet Item:
Attachment I: Preliminary Numerical Analysis
Attachment II: Resolution of Intention to Levy Reassessments and Issue Limited Obligation Refunding
Improvement Bonds
Attachment III: Resolution Adopting Reassessment Report, Confirming and Ordering Reassessments
Pursuant to Summary Proceedings and Directing Actions with Reports Thereto.
Attachment IV: Resolution Authorizing Issuance of Limited Obligation Refunding Improvement Bonds
Attachment V: Draft Reassessment Report for Assessment District#23 (Redwood Business Park 3)
• Attachment VI: Draft of Preliminary Official Statement
Attachment VII: Draft of Bond Purchase Agreement
Summary Statement: In November 1995, Assessment District #23; Redwood Business Park 3 —Phases
1 and 2 was formed by the City to finance the construction and acquisition of public improvements to
benefit the District including the extension and improvements of North McDowell Blvd., a construction
of a bridge on North McDowell Blvd over Willow Brook Creek, construction of a road and bridge
improvement on Old Redwood Highway, utility improvements and widening of a portion of Willow
Brook Creek. In December 1995, the City issued $3.6 million in Special Assessment District No. 23
Bonds to finance these improvements. The coupon interest rates on the outstanding 1995 Bonds range
from 5.75% to 7.0% with a final maturity on September 2, 2020.
Due to declining interest rates in the bond market, the•City's financial advisor, Kelling, Northcross and
Nobriga ("KNN") is recommending that the 1995. Bonds be refinanced. It is estimated that the
refinancing will result in an approximated all-in interest rate of 5.77% (All-In True Interest Cost (TIC)).
'The proposed refinancing will not extend the term of the bonded debt. The Preliminary Numerical
Analysis is included in Attachment Ito this report.
Based on the estimated interest rate, the annual cash flow savings.will be in excess of $20,000. The
estimated net present value savings are $182,000, assuming a bond term of 19 years. The Numerical
Analysis and projected savings include the cost of issuing Limited Obligation Reassessment Bond, which
is estimated at $76,5000. Issuance costs are paid from the proceeds of bonds so that no appropriation is
,required.
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This agenda item includes all Council actions necessary to authorize the levy of reassessments and the
issuance of Limited Obligation Refunding Improvement Bonds in the amount of$3.194 million.
Council Priority: THIS AGENDA ITEM IS CONSIDERED TO BE PART OF, OR NECESSARY TO, ONE OR
MORE OF THE 1999-2000 PRIORITIES ESTABLISHED BY THE CITY COUNCIL ON JANUARY 30, 1999 -•
AND MARCH 18, 2000
/,
AsJ
Priority(s): Increase revenues and/or decrease current expenditures
Recommended City Council Action/Suggested Motion:
Itis recommended that the Petaluma City Council adopt the attached resolutions to:
1. Approve Reassessment Report;
2. Authorize the levy of reassessments and the_issuance and sale of limited obligation refunding
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improvement bonds in the.aggregate principal amount not to exceed$1194 million;
3. Approve the preparation and distribution of the Official Statement;
4. Authorize and approve all actions taken by the officers and agents of the Council with respect to
the issuance of the bonds; and
5. Authorize the execution of a purchase contract for the bonds.
eviewed b Finance Director: RevieweL a_ ,,;, e : Approved by City Manager:
a4yate: .0glir Date:
Today's Dale. Revision # anl l ate Revised: le Cod •
May 14, 2001 # S:/agenda/AD23 efunding Report
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1111
CITY OF PETALUMA, CALIFORNIA
June 4,2001
AGENDA REPORT
FOR
RESOLUTION OF THE PETALUMA CITY COUNCIL OF INTENTION TO LEVY
REASSESSMENTS:AND AUTHORIZING THE ISSUANCE •
AND SALE OF LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS
RELATING TO THE REFUNDING OF BONDS ISSUED
• FOR ASSESSMENT DISTRICT NO. 23—REDWOOD BUSINESS PARK 3 AND
APPROVING RELATED DOCUMENTS AND
AUTHORIZING OFFICIAL ACTIONS -
1. EXECUTIVE.SUMMARY:
In November 1995, Assessment District #23, Redwood Business Park 3 — Phases 1 and 2 was •
formed by the City to finance the construction and acquisition of public improvements to benefit
the District including the extension and improvements of North McDowell Blvd., a construction
of a bridge on North McDowell Blvd over Willow Brook. Creek, construction of a road and
bridge improvement on Old Redwood Highway, utility improvements and widening of a portion
of Willow Brook Creek. In December 1995, the City issued $3.6 million in Special Assessment
District No. 23 Bonds to finance these improvements. The coupon interest rates on the
outstanding 1995 Bonds range from 5:75% to 7.0% with a final maturity on September 2, 2020.
• The City's financial advisor, KNN, is recommending that the 1995 Bonds be refinanced at an
approximate all-in interest rate of 5.77% (TIC). Annual cash.flow savings will be in excess of
$20,000. The estimated net present value savings is $182,000. This is after $76,500 associated
with the cost of issuance has been paid. These expenses will be paid from the proceeds of the
bonds so that no appropriation is required.
This agenda item includes all Council actions necessary to authorize the levy of reassessments
and the issuance of Limited Obligation Refunding Improvement bonds in the amount of$3.194
million. -
2. BACKGROUND:
The City of Petaluma undertakes assessment district financing for several reasons. In some
cases, an assessment district provides a convenient way for property owners to pay their share of
a larger improvement project. In other cases, the City lends its public financing authority to
private development•interests in order to allow for construction of necessary public
improvements. N the second case,the City is essentially functioning as a lender, in order to
support types of development it finds desirable.
Assessment District#23 was formed to assist in the development of Redwood Business Park
(the"Park"). When the Limited Obligation ImprovementBonds'were sold, the property.within
the District was undeveloped land. At this time, the District is largely built-out and this portion
• of the Park is currently home to a substantial portion of the City's employment base. Advanced
Fiber Communications, AT&T, Gluon Networks, Cisco'Systems and Learning Universe Child
Development Center currently occupy properties within the Assessment District.
As a result of the recent decline in interest rates, combined with the fact that developed property
provides better security for Assessment Bonds, 'CNN has examined the feasibility of refinancing
the 1995 Bonds. An analysis revealed that refinancing the 1995 Bonds could result in interest
rate reductions of 100 to 150 basis points, which provide an annual average cash flow:savings in
•
excess of$20,000 or a net present value savings of$182,000. Table 1, below illustrates the
current debt service payment made by each property in the District and compares this to the
projected debt-service payment under the proposed refinancing.
TABLE 1
SUMMARY OF PROPOSED SAVINGS
Current Projected
Assessors Savings
Annual Annual Savings in
Parcel Owner Debt Debt Dollars in
Number Service Service Percent
047-55=04 Savoy Corporation $ 27;898 $ 26,093 $ 1,805 6.47%
047-55=05 Savoy Corporation 23070.29 21577.68 1492.61 6.47%
047-55-07 G&W Copley Redwood Business Park 26,988 25,242 1,746 6.47%
047-55-15 G&W Copley Redwood Business Park 40,498 37,878 2,620 6.47%
047-55-17 G&W Copley Redwood Business Park 55,231 51,657 3,573 6.47%
047-55-22 99 AF Petaluma LLC 100,713 94,197 6,516 6:47%
047-55-23 G&W Copley Redwood Business Park 30,907 28,907 2,000 6:47%
047-55-24 G&W Copley Redwood Business Park 8,150 7,623 527 6.47% •
$ 313,455 293 175.' .20280 6.47%
3. ALTERNATIVES:
No Refinancing: Under this alternative, the City would retain the 1995 Bonds at the above
market coupon interest rates of 5.75% to 7.00%, foregoing a net present value savings of
approximately$182,000. Because the debtservice is the obligation of the property owners, this
alternative would not allow the owners to experience savings as a result of a,more:favorable bond
market. Under this alternative,the City is not providing the most fiscally responsible service to
the property owners in the Assessment District.
4. FINANCIAL.IMPACTS:
The proposed refinancing of the 1995 Bonds would result in savings to the property owners sand
taxpayers in the City as follows:
➢ A net present value savings of approximately $182,000 or 5.6%, which exceeds the
industry standard:of 3,0%.
• ➢ Annual average cash flow savings in excess of$20,000, which is a savings of '
approximately 7.0%.
➢ No extension of the debt repayment term.
➢ A slight reduction in the amount of the outstanding lien.
Expenses associated with the transaction,will be paid from the proceeds of bonds. Therefore, no •
appropriation is required. The savings-noted above are net of all expenses associated with the
cost of issuing refunding bonds. Costs for issuance are estimated as follows:
Bond Counsel (Jones-Hall) ' $ 21,000
Underwriter's Counsel (Jones-Hall) 7;500
•
Trustee/Escrow Agent (BNY Western Trust Company) 1,000
Verification Report (Causey Detngen) 1,500
Financial Advisor(KNN) 20,000
Reassessment Engineer(Harris and Associates) 6,750
Printing/Contingency/Miscellaneous Expenses 18,750
Total Cost of Issuance _ $ 76,500
5. CONCLUSION:
Itis cost-effective to refinance the 1995 Bonds. A.net present value savings of$182,000 will
occur from the proposed,action. These savings will be experience by property owners in the
District at no cost to the City.
6. OUTCOMES OR PERFORMANCE MEASUREMENTS THAT WILL
INDENTIFY SUCCESSOR COMPLETION:
7. RECOMMENDATION:
It is recommended that the Petaluma City Council adopt the attached resolutions to:
> Approve Reassessment Report;
➢ Authorize the levy of reassessments and the issuance and sale of limited obligation
refunding improvement bonds in the aggregate principal:amount not to exceed $3.194
million;
> Approve the preparation and distribution of the Official Statement;
> Authorize and approve all actions taken by the officers and agents of the Council with
respect to the issuance of the bonds; and
> Authorize the execution of..a.purchase contract for the bonds.
s:/agenda/AD23 Refunding Report
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• ATTACHMENTI
PRELIMINARY NUMERICAL ANALYSIS
•
if.
• City Of Petaluma, California
Refunding Assessment District, 2001
Refunding Of'Outstanding Assessment;District NO. 23
Sources And Uses Of Funds
Maximum Issue Size 3,195,000.00
Sources Of Funds:
Par AmounbOf'Bonds 3,194,000.00
Outstanding Reserve Fund 249,528.00
December 2000 Collection Remaining 45,000.00
April 2001 Collection 156,815.00
Accrued Interest 0.00
Total Sources 3,645;343.00
Uses Of Funds:
Cost Of Escrow Securites (SLGs) 3,408,548.00
Beginning Escrow;Cash Balance 0.00
Reserve Fund (1) 111,790.00
Underwriter's Discount(2) 47,910.00
40, Costs Of Issuance (3) 76,500:00
Accrued Interest 0.00
Adjustment 595.00
Total Uses 3,645,343.00
Assumptions
(1)'3.50% Of The Par Amount Of Bonds
(2) 1.50% Of The Par Amount Of Bonds
(3) See Table Below
Proposed Costs Of Issuance Dollar Amount
Bond Counsel (Jones Hall) 21,000.00
Disclosure/Underwriter's;Counsel (Jones Hall) 7,500.00
Trustee/Escrow Agent(BNY Western Trust Co.) 1,000.00
Verification Repor£(Causey Demgen) 1,500.00
Financial Advisor(Keiling, Northcross & Nobriga) 20,000.00
Reassessment Engineer (Harris &Associates) 6,750.00
Printing/Contingency/Misc.:.Expenses 18,750.00
Total Costs Of Issuance 76,500.00
•
Run lime 7:28 PM
Run.Date 5/3/2001
•
RESERVE FUND CALCULATION DOLLAR AMOUNT
MAXIMUM ANNUAL DEBT SERVICE 293,175.08
•
3.50%a, 111,790.00
1:25 *AVERAGE ANNUAL 345;559.71
DATED'DATE 06/05/2001
DELIVERY DATE 06/05/2001
YIELD CALCULATIONS
PAR AMOUNT OF BONDS 3,194,000.00
PLUS ACCRUED;INTEREST 0.00
LESS INSURANCE PREMIUM 0:00
LESS SURETY'BOND PREMIUM 0.00
LESS UNDERWRITER'S DISCOUNT 0.00
LESS COSTS OF ISSUANCE 0.00
LESS DISCOUNT/PLUS'PREMIUM . 0.00
TARGET AMOUNT 3,194,000.00
ARBITRAGE'YIELD 5.5826783
TOTAL INTEREST 2,058,507.58
PLUS UNDERWRITER'S DISCOUNT 47,910.00
PLUS DISCOUNT/LESS PREMIUM 0.00
TARGET AMOUNT 2,106,417.58.
NET INTEREST COST (NIC) 5.7590341
BOND YEARS _ 36,575.88
AVERAGE LIFE 11.4514350
AVERAGE COUPON 5.6280461
DENOMINATION 5,000
COMPOUNDING SEM
DAY BASIS 30/360
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ti GROSS DEBT SERVICE SCHEDULE
' 411 PERIOD ANNUAL
DATE PRINCIPAL RATE INTEREST TOTAL TOTAL
02-Sep-01
02-Mar-02 127,930.08 127,930.08
02-Sep-02 79,000 4.250 86,245.00 165,245.00 293,175.08
02-Mar-03 84,566.25 84,566.25
02-Sep-03 115;000 4.450 84,566.25 199,566.25 284,132.50
02-Mar-04 82,007.50 82,007.50
02-Sep-04 120;000 4.600 82,007.50 202,007.50 284,015.00
02-Mar-05 79,247.50 79,247.50
02-Sep-05 130,000 4/00 79,247.50 209,247.50 288,495.00
02-Mar-06 76,192.50 76,192.50
02-Sep-06 135,000 4.800 76,192.50 211,192.50 287,385.00
02-Mar-07 72,952.50 72,952.50
02-Sep-07 145,000 4.900 72,952.50 21.7,952.50 290,905.00
02-Mar-08 69,400.00 69,400.00
02-Sep-08 145,000 5:000 . 69,400.00 214,400.00 283,800.00
02-Mar-09 65,775.00 65,775.00
02-Sep-09 155,000 5A00 65,775:00 220,775.00 286,550.00
02-Mar-10 61,822.50 61,822.50
02-Sep-10 160,000 5.200 61,822.50 221,822.50 283,645.00
02-Mar-11 57,662.50 57,662.50
02-Sep-11 170,000 5:300 57,662.50 227,662.50 285,325.00
•I` 02-Mar-12 53,157.50 53,157.50
02-Sep-12 175,000 5.400'. • 53,157.50 228,157.50 281,315.00
02-Mar-13 48,432.50 48,432.50
02-Sep-13 190,000 5.500 48,432.50 238,432.50 286,865.00
02-Mar-14 43,207.50 43,207.50
02-Sep-14 195,000 5:600 43,207.50 238,207.50 281,415.00
02-Mar-15 37,747.50 37,747.50
02-Sep-15 210,000 5.700 37,747.50 247,747.50 285,495.00
02-Mar-16 31,762.50 31,762.50
02-Sep-16 220,000 5:800 31,762.50 251,762.50 283,525.00
02-Mar-17 25,382.50 25,382.50
02-Sep-17 235,000 5.900 25,382.50 260,382.50 285,765.00
02-Mar-18 ' 18,450.00 18,450.00
02-Sep-18 245,000 6.000 18,450.00 263,450.00 281,900.00
02-Mar-19 11,100.00 11,100.00
02-Sep-19 260,000 6.000 11,,100.00' 271,100.00 282,200.00
02-Mar-20 3,300.00 3,300.00
02-Sep-20 110,000 6.000 3,300.00 113,300.00 116,600.00
3,194,000 • 2,058,507.58 ' 5252,507.58 5,252,507.58
0.00 0.00 0.00
2,058,507.58 5,252,507.58 5,252,507.58 '
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City of Petaluma,California •
AD No.23
SLGs.Purchase and Escrow Cash Flow Schedule
Delivery Date 6/5/2001
Escrow Total Periodic Cash
Type Date Requitement Principal Rate Interest Receipts Difference Balance
Cert 9/212001 3;452,727.50 3,408,548.00 4.98 44,180.39 3,452,728.39 0.89 0.89
Totals 3,452,727.50 3,408,548.00 44,180.39 3,452,728.39 0.89
(tI
1�
•
•
•
•; ATTACHMENT II
RESOLUTION OF INTENTION TO LEVY REASSESSMENTS AND ISSUE
LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS
1 Resolution No. N.C.S.
2 'of the City of Petaluma, California
1,3
tJ
aRESOLUTION OF'INTENTION TO LEVY REASSESSMENTS AND TO ISSUE
LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS UPON THE
6 SECURITY THEREOF
7
8
9 Assessment District No.23,Redwood Business Park 3
10 (Reassessment and Refunding of 2001)
11
12 WHEREAS, under Resolution of IntentionNo.95-220 N.C.S.,adopted August 21, 1995,the Council has
13 conducted the special assessment and reassessment proceedings for its Assessment District No 23,Redwood Business
14 Park 3(the"Assessment District")and in such proceedings,.by its Resolution No. 95-286 N.C.S.issued the
15 improvement bonds designated Limited Obligation Improvement Bonds, City of Petaluma,Assessment District No. 23,
16 Redwood Business Park 3, Series 1995-A, dated December 20, 1995, in the principal:amount of$3,600,000(the"Prior
17 Bonds")';
18
19 WHEREAS, the public interest requires the refunding of the Prior Bonds and this Council intends to
20 accomplish such refunding through the.levy of reassessments in and for the Assessment District and issuance of
21 refunding improvement bonds.upon the security of the unpaid reassessments therein,a portion of the proceeds of which
22 refunding bonds shall be used to refund"the.PriorrBonds.
23
24 NOW,THEREFORE BE IT RESOLVED as follows:
25
26 1. Authority. The proceedings for the levy collection of reassessments as security for the issuance and
payment of refunding bonds shall be conducted pursuant to the Refunding Act of 1984 for 1915
Improvement Act Bonds,-Division 11:5 (commencing with Section 9500)of the Streets and Highways
t Code of California(the `Act").
30 2. Boundary Map. The contemplated reassessments and refunding,in the,opinion of this Council, are of
31 special benefit; and'the costs and expenses thereof are made chargeable upon,the Assessment District,the
32 exterior boundaries of which are shown on a map thereof to on file in the office of the City Clerk;to which
33 map reference is hereby made for further particulars. The map indicates by boundary lines the extent of
34 the territory included in the Assessment District and shall govem'for;all details as to the extent thereof.
35 3. Public Property Omitted. This Council declares that all public streets,highways, lanes and alleys within
36 the District in use in the performance of a public function shall be omitted from the reassessment hereafter
37 to be made to cover the costs and expenses of the reassessment and refunding, except to the extent that
38 such properties shall be found to specially benefit from such reassessment.
39 4. Reassessment and Report. The reassessment and refunding are hereby;referred to Harris&Associates,
40 Petaluma,.California, a qualified firm employed by this City for the purpose hereof(the"Reassessment
41 Consultant"), and the,Reassessment Consultant is hereby directed to make and file with said Clerk a
42 reassessment report in writing,presenting the following:
43
44 (a) A..schedule setting forth the unpaid principal and interest on the Prior Bonds to be
45 refunded and the total amounts thereof;
46
47 (b) The total estimated principal amount of.the.reassessment and of the refunding bonds
48 to be secured by the unpaid reassessments and the maximum interest thereon, together with an
49 estimate of cost of the reassessment and of issuing the Bonds, including all costs of issuing the
50 refunding bonds,as defined by subdivision(a)of Section 9600 of the Act;
51
52 (c) The auditor's record kept.under Section 8682 of the Streets and Highways Code of
0i California showing the schedule of principal installments and interest on all unpaid original
assessments for the'Prior'Bonds and the total amounts thereof;
55
56 (d) The estimated amount of each reassessment, identified by reassessment number
57 corresponding to the reassessment number of the reassessment diagram, together with a proposed
58 . auditor's record for the reassessment prepared in the manner described in said Section 8682;and
59
1 (e) A,reassessment diagram,showing the Assessment District and the boundaries and
2 dimensions of the subdivisions of land within.the Reassessment District. Each subdivision,including •
3 each separate condominium interest as defined in Section 783 of the Civil Code, shall be given a ,1
4 separate number upon the diagram.
5
6 When any portion or percentage of the costs and expenses of the reassessment,and,refunding is to be paid from sources •
7 other than the reassessments; the amount of such portion or percentage shall first be deducted from the total:estimated
8 cost and expenses of the reassessment and refunding, and the reassessments shall include only the remainder of the
9 estimated cost and expenses. If any excess shall be realized from the reassessment it shall be used, in such amounts as
10 this Council may determine, in accordance with the provisions of law, in a manner or manners to be provided in these
11 proceedings.
12
13 5. Refunding Bonds:Notice is hereby given that the limited obligation refunding improvement bonds(the
14 "Bonds"),to represent the unpaid reassessments, andan the form(s)of serial/or term bonds, series and bearing
15 interest at the rate or rates of interest to be determined by this Council at the time of sale thereof,but not to
16 exceed the maximum rate authorized by applicable law at time of such sale, will be issued in°°these proceedings
17 in the manner provided by the Act and the Improvement-Bond Act of 1915,being Division 10 of the Streets
18 and Highways.Code of California(the"Bond Law"), the last installment of which Bonds(ori"series thereof)
19 shall mature on date that is not later the final maturity of each of the Prior Bonds being refunded. Under the
20 Bond Law,the City will not obligate itself to advance available funds from the treasury of:the City to cure any
21 deficiency in the redemption fund to be created with respect to the Bonds;provided,however, that a
22 determination not to obligate itself shall not prevent the City from,in its sole discretion, so advancing the funds.
23
24 6. Bond Call Procedures.The provisions of Part 11.1 of Division 10 of the Streets and Highways Code of
25 California,providing for an alternative procedure for the advance payment of reassessments an d the calling of
26 bonds,shall apply to the Bonds issued under:these proceedings.
27
28 7. Consultants.For the purposes of the reassessment and refunding proceedings,the law:firm of Jones Hall,A
29 Professional Law Corporation, San Francisco, California; is hereby appointed as bond counsel("Bond
30 Counsel"),IBIS Securities,Walnut Creek, California,is hereby appointed as underwriter(the"Underwriter") •
31 and Kelling,Northcross&Nobriga,Oakland, California is appointed financial advisor(the"Financial
32 Advisor"). The compensation of Bond Counsel and the Underwriter shall be fixed in the proceedings and shall
33 be paid only upon the successful completion ofthe proposed reassessment and refunding:
34 8. Effective Date.This resolution shall take effect upon the date of its adoption.
35
36 Under the power andauthority conferred upon this Council by the Charter of said City.
37 REFERENCE: I hereby certify the'fo regoing Resolution was,introduced and adopted by the
38 Council of the City of Petaluma:at.a Regular meeting on 2001 Approved as to
39 by the following vote: form:
40
41 •
42 City Attorney
43 AYES:
44 NOES:
45 ABSENT:
46
47 ATTEST:
48 City Clerk . Mayor
49
50 Resolution No. NCS
ATTACHMENT III
• RESOLUTION ADOPTING REASSESSMENT REPORT, CONFIRMING
AND ORDERING REASSESSMENTS PURSUANT TO SUMMARY
PROCEEDINGS AND DIRECTING ACTIONS WITH REPORTS
THERETO
•
Resolution No. N-.C.S.
of the Cityyof'Petaluma, California
•
A RESOLUTION ADOPTING'REASSESSEMEN.T REPORT, CONFIRMING
AND ORDERING THE REASSESSMENTPURSUANT TO SUMMARY
PROCEEDINGS AND DIRECTING ACTIONS WITH RESPECT THERETO
Assessment District No'.?23, Redwood Business Park 3
(Reassessment and Refunding of 2001)
WHEREAS, on June 4, 2001, this Council adopted the,Resolution of Intention to Levy
Reassessments and to Issue Limited Obligation Refunding Improvement Bonds Upon the
Security Thereof(the "Resolution of Intention"),in and for the City's.Assessment District No.
23,.Redwood Business.Park.3.(Reassessment and Refunding of 2001) (the "Assessment
District"), and therein directed-the+making and filing of a reassessment report (the "Report") in
writing in accordance with andpursuanttattle Refunding,Act.of 1984 for 1915 Improvement
Act Bonds, Division 11.5 of the Streets and Highways Code of California,(the "Act")which
Report includes reassessments for each of the individual assessment districts described in Exhibit
A to the Resolution of Intention; and
WHEREAS, the Report was duly`made and filed, and duly considered by this Council
• and found to be sufficient in every particular, and the Report shall stand for all subsequent
proceedings under andpursuant to the aforesaid Resolution of°Intention.-
NOW, THEREFORE BE IT RESOLVED,' AS FOLLOWS:
1. Conditions Satisfied. Under Section 9525 of the Act,land based upon the Report this
Council finds that albofthe;following conditions are satisfied that:
a. Each of the estimated annual installments of principal'and'interest on the
reassessment as set foith•in the Report is less than the corresponding annual
installment of principal and interest on the original assessment as also set forth in
the Report, bythe=same percentage for all subdivisions of land with the
Assessment District.
b.. The number ofyears to maturity of all proposed refunding bonds or separate
series thereof proposed to be issued under the Resolutionof,Intention is not more
than-the.nurrlberof years to the last maturity of the bonds proposed to be refunded
(the `Prior,Bonds"); and
c. Except as'expressly permitted by the Act, the principal amount of the
reassessment on.each subdivision of land withimthe,Assessment District is less
than the,unpaid principal amount of the original assessment by the-same
percentage for each subdivision of land in the Assessment District.
2. Public Interest. The public interest, convenience and necessity require that the
• reassessment be made,
3. Boundaries Approved. The Assessment District benefited by•the reassessment and to
be reassessed to pay the costs•and expenses thereof, and the exterior boundaries
thereofareas shown by the boundary map and reassessment diagram thereof on file
in the office'ofthe-City Clerk, which map and diagram•aremade a part hereof by this
reference thereto. The provisions of-the above-referenced'Resolution of Intention are
• hereby incorporated'herein by this reference and hereby made apart.thereof.
4. Report Approved. Pursuant to the findings hereinabove expressed with respect to
Section 9525 of the Act, the conditions,;and all of them are-deemed satisfied and,that •
the following elements of the Report are hereby finally approved and confirmed •
without further proceedings, including the conduct of a public heating under:.the Act,
to wit:
a: A-schedule setting forth the.unpaid principal and interest on the Prior Bonds
,proposed to be refunded anfthe total;amounts thereof;
b. An estimate of the total principal amount of the reassessmentand of the refunding
bonds and the,maximum interest thereon,together withtan estimate of cost of the
reassessment and'of issuing the refunding bonds, including expenses incidental
thereto;
c. The auditor's-record kept pursuant to Section 8682 of the Streets and Highways
Code of California showing the schedule of principal installments and interest-on
all unpaid original assessments and the-total amounts thereof;.
d. The estimated amount of each reassessment, identified-byreassessment number
correspondingto the reassessment number of the reassessment diagram, together
with a proposed auditor's record for the reassessmentprepared in the manner
described in Section 8682;and
e. A reassessment diagram showing the Assessment District;and the boundaries and
dimensions of the subdivisions of land and zones therein.
Final adoption''and approval of the Report as awhole, estimate,of the costs and
expenses; the reassessment diagram and the reassessment, as contained in-the Report,
as hereinabove,determined and ordered,vis intended to and shall and apply to the •
Report, or;any portion thereof as amended, modified, revised-or corrected by, or
pursuant to and in accordance with, any resolution or order, if any, heretofore duly
adoptedtor,made by this.Council
5. Findings and Determinations. Based on the oral and documentary evidence,
including.the Report, offered;and-received by Council, this Council-expressly
fines'and,determines:
a. Thatteach of said several subdivisions of land within the Assessment District will
be.specially benefited by said reassessment at least in the amount; if not more than
the amount, of the reassessment apportioned against the subdivisions of land
respectively;
b. There is substantial evidence-to support, and the weight of the evidence
preponderates in favor of, the above finding and determination as to special
benefits; and
c. The reassessment,approved and confirmed under Section 9525 of the Act shall not
be deemed an assessment and, therefore, is ordered without compliance with the
procedural requirements;of Article XIIID of the:California.Constitution.
6. Reassessment-Levy. Thereassessment including-all costs and expenses thereof, is
hereby levied. [the original assessments, as,shown on the Report, are hereby
supersededand supplanted by the reassessment herein levied] Under the Act,
reference:.is hereby made to the,Resolution-of Intention for further particulars.
7. Recordings Directed. The City Clerk shall forthwith cause:
a. The reassessment to bedelivered to the official of the City who is the •
Superintendent of Streets o€the City, together with the reassessment,diagram, as
approved and confirmed,by`this Council, with a certificate-of such confirmation
and,ofthe date thereof, executed by`the-Clerk, attached thereto. The
Superintendent of Streets shalhrecord:the reassessment and reassessmentdiagram
in a:suitable book to be kept for that purpose, and append thereto,a certificate of
the date of such recording, and such recordation"shall be and constitute the
:• reassessment roll herein;
b. A copy of the boundary map and the reassessment diagram and a notice of
reassessment,substantially in the form specified-in Section 3114 of the Streets
and Highways Code of th"e.California and executed by the Clerk, to be filed and
recorded, respectively, in the•office of the County Recorder of the County of
Sonoma; and
c. A copy of this resolution to be provided to the Auditor of the County of Sonoma
upon delivery of the debt:service records for the reassessments.
From the date of recording of the notice of reassessment, all persons shall be deemed
to have notice of the contents of such reassessment, and each of such reassessments
shall thereupon be a.lien:upon the property against which it is made, and unless
sooner discharged such liens shall so continue for the period of (10) years from
the date of said recordation, or in the event bonds are issued to represent the
reassessments, then such liens shall continue until the expiration of four(4) years
after the due date of the last:installment upon such bonds or of the last installment of
principal of such bonds.
The appropriate officer or officers of the City are hereby authorized to pay any and all
fees required by law in connection with the above.
• Under the power and authority conferred upon this Council,by the Charter of said City.
' REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the
Council of the City of Petaluma at a Regular meeting on, 2000, Approved as to
by the following vote: form:
City Attorney
AYES:
NOES:
ABSENT:
ATTEST:
City Clerk Mayor
Resolution No. NCS
•l
• ATTACHMENT IV
RESOLUTION AUTHORIZING':ISSUANCE OF
LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS
•;
26091-05 JH:SRC:sgs 3/15/01
RESOLUTION NO. N.C.S.
of the City of Petaluma
A RESOLUTION'OF THE CITY COUNCIL.OF THE CITY OF PETALUMA
AUTHORIZING ISSUANCE OF LIMITED OBLIGATION REFUNDING
IMPROVEMENT BONDS
Assessment District No. 23, Redwood Business Park 3
(Reassessment and Refunding of 2001)
•1
Adopted , 2001
•
•
•
•• TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS;GENERAL
Section 1.01. DEFINITIONS 2
Section 1.02. UNPAID REASSESSMENTS 8
Section 1.03. EQUAL SECURITY 8
ARTICLE II
THE BONDS
Section 2.01. BONDS AUTHORIZED 9
Section 2.02. TERMS OF BONDS 9
Section 2.03. REDEMPTION
•
10
Section 2.04. FORM OF BONDS 11
Section 2.05. EXECUTION AND AUTHENTICATION OF BONDS 11
Section 2:06. TRANSFER OR EXCHANGE OF BONDS 11
Section 2.07. BOND REGISTER 12 .,
Section 2.08. TEMPORARY BONDS -- 12
Section 2:09. BONDS MUTILATED, LOST; DESTROYED OR STOLEN 12
Section 2.10. BOOK-ENTRY ONLY SYSTEM 12
ARTICLE III
ISSUANCE OF BONDS'
• Section 3.01. ISSUANCE AND SALE OF BONDS 15
Section 3.02. VALIDITY OF BONDS 15
Section 3.03. PLEDGE OF REASSESSMENTS AND FUNDS 15
Section 3.04. LIMITED OBLIGATIONS 15
Section 3.05. NO ACCELERATION 15
Section 3.06. REFUNDING OF BONDS 15
Section 3.07. AUTHORITIES 16
Section 3.08. OFFICIAL STATEMENT 16
Section 3.09. CONTINUING DISCLOSURE DOCUMENT(S 16
Section 3.10. BOND SALE AND DELIVERY 16
Section 3.11. ACTIONS APPROVED 16
ARTICLE IV
FUNDS AND ACCOUNTS
Section 4.01. APPLICATION OF PROCEEDS OF SALE,OF BONDS 18
Section 4.02. COSTS OF ISSUANCE"FUND 18
Section 4.03. REDEMPTION,FUND 18
Section 4.04. RESERVE FUND 19
Section 4.05. ESCROW FUND 20
ARTICLE V
•
COVENANTS •
Section 5.01. COLLECTION OF REASSESSMENTS 21
Section 5.02. FORECLOSURE 21
Section 5.03. PUNCTUAL PAYMENT; COMPLIANCE WITH DOCUMENTS 22
•. Section 5.04. NO PRIORITY FOR ADDITIONAL OBLIGATIONS 22
Section 5.05. FURTHER ASSURANCES 22
Section 5.06. PRIVATE ACTIVITY BOND LIMITATION 22
i �
•
Section 5.07. FEDERAL GUARANTEE PROHIBITION 22
Section 5.08. NO ARBITRAGE • 22
Section 5.09. REBATE,REQUIREMENT 23
Section 5.10. YIELD OF THE BONDS 23
Section 5.11. AMENDMENT 23
Section 5.12. MAINTENANCE OF TAX-EXEMPTION 23
Section 5.13. CONTINUING DISCLOSURE 23
ARTICLE VI
INVESTMENT OF FUNDS
Section 6.01. DEPOSIT AND INVESTMENT OF MONEYS IN FUNDS 24
Section 6.02. ACQUISITION, DISPOSITION AND VALUATION OF INVESTMENTS 24
Section 6.03. LIABILITY OF CITY 25
Section 6.04. EMPLOYMENT OF AGENTS BY CITY 25
ARTICLE VII
MODIFICATION OR AMENDMENT
Section 7.01. AMENDMENTS PERMITTED 27
Section 7.02. OWNERS' MEETINGS - 27
Section 7.03. PROCEDURE FOR AMENDMENT WITH WRITTEN CONSENT OF
OWNERS 27
Section 7.04. DISQUALIFIED BONDS 28
Section 7.05. EFFECT OF SUPPLEMENTAL RESOLUTION 28
Section 7.06. ENDORSEMENT OR REPLACEMENT OF BONDS ISSUED AFTER
AMENDMENT. 28 •
Section 7.07. AMEN, DATORY ENDORSEMENT OF BONDS 29
•
•
ARTICLE VIII
MISCELLANEOUS
Section 8.01. BENEFITS OF AGREEMENT LIMITED TO PARITIES 30
Section 8.02. SUCCESSOR AND PREDECESSOR' 30
Section 8.03. 'DISCHARGE OF RESOLUTION 30
Section 8.04. EXECUTION OF DOCUMENTS AND PROOF OF OWNERSHIP 31
Section 8.05. WAIVER OF PERSONAL LIABILITY. 31
Section 8.06. NOTICES AND'DEMANDS . 31
Section 8.07. PARTIAL INVALIDITY - - 31
Section 8.08. UNCLAIMED.MONEYS 31
Section 8.09. APPLICABLE`LAW. 31
Section 8.10. CONFLICT WITH ACT 32
Section 8.11. CONCLUSIVE EVIDENCE OF REGULARITY; VALIDITY 32
Section 8.12. PAYMENT ON BUSINESS DAY 32
Section 8.13. REPEAL OF INCONSISTENT RESOLUTIONS 32
Section 8:14. AUTHORITY OF FINANCE DIRECTOR 32
Section 8.15. CERTIFIED;COPIES 32
Section 8.16. EFFECTIVE DATE OF THE RESOLUTION 32
•
* * * * * ** * * * *-
EXHIBIT A TERMS AND,CONDITIONS •
EXHIBIT B FORM OF BOND
•
ii
• RESOLVED;by the City Council (the"Council") of the City of Petaluma (the "City"),
County of Sonoma, (the "County") Califomia:
WHEREAS,under Resolution of Intention No. 95-220 N.C.S. adopted August 21, 1995,
this Council has conducted the special assessment and reassessment proceedings for its
Assessment District No. 23, Redwood Business.Park'3 (the "Assessment District") and in such
proceedings, by its Resolution No. 95-286: N:C.S. adopted November 6, 1995, as amended.by
Resolution No. 95-314 N.C.S. adopted December 18; 1995, issued the improvement bonds
designated ,"Limited Obligation'.Improvement Bonds, City of Petaluma, Assessment District
No. 23. Redwood Business Park 3,. Series 1995-A" dated December 20, 1995, in the principal
amount of $3,600,000 (the "Prior Bonds");
WHEREAS, on ., 2001, the Council adopted, its Resolution of Intention to
Levy Reassessments and to Issue Limited,Obligation Refunding Improvement Bonds Upon the
Security Thereof, (the "Resolution of Intention") relating to the levy of reassessments and
issuance of.refunding bonds pursuant to the Refunding Act of 1984 for 1915 Improvement
Bonds, Division 11.5 (commencing with Section 9500) of the Streets and Highways Code of
California (the "Act") in and for the Assessment District and by the'Resolution of Intention, the
City Council of the City provided that refunding improvement bonds as more particularly
described herein (the "Bonds") 'would be issued thereunder and reference to the Resolution of
Intention is hereby expressly made for further particulars;
WHEREAS, this Council has completed its proceedings under the Resolution of
Intention for the levy of reassessments,has caused all recordings and filings to be completed in
accordance with the requirements in and for the Prior Bonds and by the adoption of this
• Resolution intends to provide for the:issuance of the Bonds; .
•
WHEREAS, as provided in the proceedings under the Resolution of Intention, the
proceeds of the Bonds shall be used to retire, in advance of their'scheduled maturities, certain
prescribed and previously unrefunded and outstanding portions Of the.Prior Bonds and to pay
the costs of issuance of the Bonds; and
WHEREAS, this Council now intends"to provide for the issuance of the Bonds upon the
security of a the unpaid reassessments,all as hereinafter provided.
NOW, THEREFORE' BE IT RESOLVED by the Council of-the City of Petaluma as
follows:
•
•
•
•
•
ARTICLE I •
DEFINITIONS; GENERAL
Section 1.01. DEFINITIONS. Unless the context otherwise requires, the terms defined
in.this Section shall, for all purposes of.this Resolution and of any Supplemental Resolution and
of the Bondsand of any certificate, opinion„request or other document herein mentioned, have
- the meanings herein specified: All references in this Resolution to "Articles,” "Sections, and
other subdivisions areto the corresponding Articles,Sections or subdivisions of this Resolution;
and the words "herein," hereof," "hereunder" and other words of similar import refer to this
Resolution as a whole and not to any particular Article,Section or subdivision hereof. Words of
the masculine gender shall be deemed and construed to include correlative words of the
feminine and neuter genders. Unless the context shall otherwise indicate, words importing the
singular number shall include the plural number and vice versa, and words importing persons
shall include:corporations and associations;including public bodies,as well as natural persons.
"Act"means the Refunding Act of 1984 for 1915 Improvement Act Bonds, Division.11.5
of the Streets and Highways Code of California..
"Agent" means Bank of New York; Western Trust, designated in Section 2:01 hereof to
perform.the duties,of,authentication, registration, transfer and payment of the-Bonds and the
Agent'sassigns Or any corporation or association which may at any be substituted in the
Agent's plate.
"Auditor" means the auditor/controller or tax collector of the County, or such other
official of the County who is responsible,for preparing real property tax bills.
"Authorized Officer" means the Mayor, City Manager, Finance Director, Director of .
Public Works, City Engineer, Treasurer, City Clerk, City Attorney or any other officer or
employee authorized by the..City Council of the City or by an Authorized Officer to undertake
the action referenced in-this Resolution,as required to be undertaken by an Authorized Officer.
"Available Surplus Funds" means any surplus-moneys held by the City at the end of
each Fiscal Year in excess of the amounts'required to pay lawful municipal obligations incurred
in that Fiscal Year.
"Bond"or "Bonds "means "Limited Obligation Refunding Improvement Bonds; City of
Petaluma, Assessment District.No 23, Redwood Business_Park 3 (Reassessment and.Refunding
of 2001) Series°2001-A" issued under this Resolution and the Act, and at any time Outstanding
in substantially the form in Exhibit B,attached.
"Bond Date" means the dated date of the Bonds specified in Exhibit A attached hereto
and made a part hereof.
• "Bond Denomination" means the amount of $5,000 or any integral multiple thereof,
which is the minimum amount in Which the Bonds may be issued, except that one Bond may
contain any odd amount.
"Bond Law" means the.Improvement Bond Act of 1915, Division 10 of the California
Streets and Highways Code.
"Bond Purchase Agreement" means the agreement between the City and the Original •
Purchaser:for the sale and purchase of the Bonds.
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•
•• "Bond-Register''means the books•maintainedby the Agent pursuant to Section 2.07 for
the registration and transfer ofownershiplof'the Bonds.
"Bond Year"means the twelve-month.period beginning on September 2 in each year and
ending on the day prior to September2 in the following year except that (i) the first.Bond Year
shall begin on the Closing Date and end on the day prior to the next September 2, and (u) the
last Bond Year may end on a prior redemption date. •
"Business Day"means any day other than (i) a Saturday or a Sunday or (ii) a day on
which banking institutions in thestate in which the Agent has.its Principal Office are authorized
or obligated by law or executive order to be closed.
"City" means the City of Petaluma a municipal corporation and chartered city of the
State of California duly organized and validly existing under and by virtue of the Constitution
and the laws of the State of California.
"City Attorney" me
y y ans the duly appointed or retained attorney or firm of attorneys to
the City for purposes of rendering advice in the conduct of its general municipal affairs.
"City Manager" means the City Manager or the Assistant City Manager of the City.
"Clerk" means the City Clerk of the City or Deputy City Clerk or designee thereof.
"Closing Date" means the date.upon.which there is an exchange of any of the Bonds for
•i the proceeds representing the purchase:price of such Bonds by the Original Purchaser thereof.
"Continuing Disclosure'Certificate" means any such certificate provided under Section
5.13 hereof.
"Costs of Issuance" means-all expenses incurred in=connection with the authorization,
issuance, sale and delivery of the Bonds, including but not limited to compensation, fees and
expenses of'the City and the Agent and their respective counsel„compensation to any financial
consultants and underwriters (other than those taken as discount on the Closing Date), legal
fees and expenses, filing and recording costs, costs of preparation. and reproduction of
- documents, costs of compliance with the Tax Code relating to any rebate,to the United States
and continuing disclosures and the costs of printing, mailing and publication of notices with
respect to the City.
"Costs of Issuance -Fund means• the fund designated "City of Petaluma, Limited
Obligation,Refunding Improvement,Bonds, Assessment District"No.•23, Redwood Business Park
3 (Reassessment and Refunding of 2001), Series 2001-A, Costs of Issuance Fund'established
under Section 402 hereof.
•
"Council” means-the City Council as the legislative body of the City.
•
"County" means the County of Sonoma, State of California.
"Debt Service" means, for each Bond Year,: the sum of (i) the interest due on the
Outstanding Bonds in such Bond Year, assuming that the•Outstanding Bonds are retired as
scheduled, and (ii) theprineipal amount of the Outstanding Bonds due in such Bond Year.
"Depository or Securities Depositories" means The Depository Trust Company, 711
Stewart Avenue, Garden City, New York 11530, Fax - (516) 227-4171 or 4190; Philadelphia
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Depository Trust Company, Reorganization Division, 1900 Market Street Philadelphia, •
Pennsylvania:19103, Attention: Bond Department, Fax - (215) 496-5058; and, in accordance
with then currentguideliries•of the Securities and Exchange Commission,-such other addresses
and/or such other securities depositories as the City may designate in an Officer's Certificate
delivered to the Agent
"DTC" means the Trust Company, New York, New York and,its successors
and assigns. -
"Escrow Agreement"means the Escrow.Agreement dated as of the Closing Date,by and
between the City and the Escrow Holder, by which the Escrow Fund, is established and
administered.
"Escrow Fund" means the fund, "Limited Obligation Refunding.Improvement
Bonds, City•of Petaluma,.Assessment'District:No. 23, Redwood Business Park,3 (Reassessment
and Refunding of 2001),Series 2001-A, Prior Bonds Escrow Fund establishedwand..administered .
under Section 4.05 hereof.
"Escrow. Holder" means the Agent acting as Escrow Holder under the Escrow
Agreement.
"Fair Market Value" means the price at which a willing buyer would purchase the
investment from a willing seller.in a bona fide, arm's length transaction'(determined-as' of the
date the contract to purchase or sell the investment becomes binding)' the investment is traded
on an established securities market (within the meaning of section 1273 of the Tax Code) and,
otherwise, the term,"Fair Market Value" means the acquisition price in a bona fide arm's length •
transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired
in accordance with applicable regulations under the Tax Code, (ii) the investment is an
agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically
negotiated interest rate (for example, a guaranteed investment contract, a forward supply
contract or other investment agreement) that is acquired in accordance with applicable.
regulations under,,the Tax Code, (iii) the;investment is a United States Treasury,Security--State.
and Local Government Series that is acquired in accordance with.applicable regulations of the
United States Bureau of Public Debt, or(iv)any commingled investment fund in which the City
and related parties do not own more than a ten percent (10%)) beneficial interest if the return
paid by such fund is without regard to the source of the investment. -
"Federal Securities"means any of the following which at the time of investment are legal
investments under the laws of the State for the moneys proposed to be invested therein:
(a) direct general obligations of the United, States of America (including
obligations issued or held in book entry form on the books of the Department of the
Treasury of the'United States of America); and
(b) obligations of any department,: agency or instrumentality of the, United
States of .America the timely payment of principal of and interest on which are
unconditionally:and fully guaranteed by the.United States of America.
"Finance Director" means the chief financial officer of the City or designee thereof,
including any deputy',thereof or assistant•thereto., ,
"Fiscal Year means the period commencing on July 1 of each year and ending on the •
next succeeding June 30.
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•• "Information.Services" means Financial.Information, Inc.'s "Daily Called Bond Service,"
30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny
Information Services' Called Bond Service, 55 Broad Street, 28th Floor, New York, New York
10004; Moody's Investors Service Municipal and Government;' 99 Church Street, New York,
New York 10007, Attention: Municipal News Reports; Standard & Poor's Corporation "Called
Bond Record, 25 Broadway, 3rd Floor, New-York, New York 10004; and, in accordance with
then current guidelines of the Securities and .Exchange Commission, such other addresses
and/or such services providing information with respect to called bonds as the City may
designate in an Officer's Certificate delivered to the Agent.
"Interest Payment Date" means.each date upon which interest on the Bonds is payable
semiannually on each March 2 and September 2 until maturity and beginning on the date
specified in Exhibit A.
"Officer's Certificate",means a written certificate or similar document executed by an
Authorized Officer on behalf of the City.
"Original Purchaser"'means the Authority as the first purchaser of the Bonds from the
City under the ReassessrnentBond Purchase Agreement.
"Outstanding,"when used as of,any particular time with reference to Bonds, means all
Bonds theretofore executed, issued and delivered by the City and authenticated by the Agent
under this Resolution except:
(a) Bonds theretofore canceled by the Agentorsurrendered to the Agent for
cancellation;
(b) Bonds paid or deemed to have been paid within the meaning of Section
2.03; and
(c) Bonds in lieu of or in substitution for which other Bonds shall have been
executed, issued and delivered by the City pursuant to this Resolution or any
Supplemental Resolution.
"Owner" or "Registered Owner," when used with respect to any Outstanding Bond,
means the person in whose name the ownership of such Bond shall be registered oh the Bond
Register.
"Participating Underwriter" means an underwriter or purchaser'of the Bonds under the
Continuing Disclosure Certificate.
'Permitted Investments" means the following, but only to the extent that the same are
acquired at Fair Market Value:
•
(a) Federal Securities;
•
(b) securities (other than those identified in paragraphs (a) and (d) of Section
53601 of the Government Code of the State) in which the City may legally invest funds
subject to its control,pursuant to Article 1, commencing with Section 53600, of Chapter
4 of Part 1 of Division 2 of Title 5 of the Government Code of the State, as now or
hereafter amended;
• (c) shares in'a California common law trust established pursuant to Title 1,
Division 7, Chapter 5 of the California Government Code which invests exclusively in
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investments permitted by Section 53635 of Title 5, Division 2, Chapter 4 of the •,
California Government Code, as it may be amended, including but not limited to the
California Asset Management Program(CAMP);
(d) the Local Agency Investment Fund of the State of California, created
pursuant to Section 16429:1 of the California Government Code, to the extent the
Finance Directoris authorized to register such investment in the City's name;
(e) investment agreements or guaranteed investment contracts with or
guaranteed by a financial entity whose long-term unsecured obligations are rated "AA"
or betterby Moody's Investors Service ("Moody's) and Standard and. Poor's;Ratings
Group ("S&P") and whose short term debt is rated no lower than the corresponding
level of rating category for such debt'and such agreement or contract shall provide that
the financial entity shall deposit collateral with a third party in accordance with criteria
established-by Moody's and S&P in the event that the rating of short:+or long-term debt
of the entity is downgraded below then-current requirements of Moody's and 'S&P for
such agreements or contracts;
(f) money market funds which are rated Am or better byS&P;
(g) any of the following direct or indirect obligations;of the^followingagencies
of the United States of America: (i) direct obligations of the Export-Import Bank; (ii)
certificates of beneficial ownership issued by the Farmers Home Administration; (iii)
participation certificates issued by the General Services Administration; (iv) mortgage-
backed bonds or pass-through obligations issued and guaranteed by the Government •
National Mortgage Association, the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation or the Federal Housing Administration;' (v) project
notes issued by the United States Department of Housing and Urban Development; and
(vi) public housing notes and bonds guaranteed by the United States of America;
(h) interest-bearing demand or time deposits (including, certificates of
deposit)',in federal or,statechartered'savings and loan associations or in federal or State
of California banks (including the Agent), provided that (i) the unsecured short-term
obligations of such commercial bank or savings and loan association shall be rated Al or
better by S&P, or (ii)such demand or time deposits shall be,fully'insured by the;Federal
Deposit Insurance Corporation;
(i) commercial paper rated in the highest short-term rating category by S&P,
issued by corporations which are organized and operating within the United States of
America, and which matures not more than 180 days following the date of investment
therein;
(j) bankers acceptances, consisting of bills of exchange or time drafts drawn
on and accepted by a commercial bank whose short-term obligations are rated in the
highest short-term rating category by S&P, which mature not more than 270 days
following the date of investment therein; -
(k) obligations the interest on which is excludable from gross income
pursuant to Section 103 of the Tax Code and which are rated A or better by'S&P.
"Prepayment Account"means the account of that name within the Redemption Fund. •
"Principal Amount" means the aggregate principal amount of the Bonds as set forth in
Exhibit A.
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•
I• "Principal Office" means the office othhe Agent in- • , California, or such
other office as shall be designated by the,Agent in writing to the City, or such other office of the
Agent designated by the Agent for payment,transfer or exchange of the Bonds.
"Prior Bonds" means the bonds of the City designated "Limited Obligation
Improvement Bonds,City of Petaluma,Assessment District No: 23: Redwood Business Park 3,
Series 1995-A" in the original, principal amount of $3,600,000.
•
"Prior Bonds Resolution" means, collectively, Resolution No. 95-286 N.C.S. adopted by
the Council of the City on November 6, 1995, as amended by Resolution No 95-314 N.C.S.
adopted December 18, 1995, by which the•Prior Bonds were authorized and issued.
"Project" means, collectively, the acquisitions and improvements funded with all or a
portion of the proceeds of the;Prior'Bonds.
"Reassessment or Reassessments" means the unpaid amounts of the special
. reassessments levied against all taxable real property- within the boundaries of the
Reassessment District pursuant to the Act and the proceedings of the Council under the
Resolution of Intention, for the purpose of paying Debt Service on the Bonds under the Bond
Law.
•
"Record. Date" means, with respect to the Bonds; the fifteenth (15th) day of the
calendar month immediately preceding an Interest Payment"Date, whether or not a Business
Day.
• "Redemption Fund" means the fund designated "City of Petaluma, Limited Obligation
Refunding Improvement Bonds, Assessment District No. '23; Redwood Business Park 3
(Reassessment and Refunding of 2001), Series 2001-A, Redemption Fund" established under
Section 4.03 hereof.
"Redemption Premium" means the percentage of the principal amount of the Bonds
payable upon redemption of the Bonds, as set forth in Exhibit A hereto.
"Reserve Fund" means the fund designated "City of Petaluma, Limited Obligation
Refunding Improvement Bond, Assessment District No. 23, Redwood Business Park 3
(Reassessment and Refunding of 2001), Series 2001-A, Reserve Fund" established under Section
4.04 hereof.
"Reserve Requirement" means an amount of not to exceed _% of the Principal
Amount.
"Resolution" or "Resolution of Issuance" means this Resolution, as originally adopted
or as it may from time to time be supplemented, modified or amended by any Supplemental
Resolution pursuant to the provisions hereof.
"Resolution,of Intention" means the resolution entitled"Resolution of Intention to Levy
Reassessments and to ,Issue Limited Obligation Refunding Improvement Bonds Upon the
Security Thereof," adopted by the Council on , 2001. •
"State" means the State of California.
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•
"Supplemental Resolution" means any resolution, agreement, resolution .or other •
instrument hereafter duly adopted or executed by the City in accordance with the provisions of
this Resolution. -
"Tax Code" means the Internal Revenue Code of 1986 as in effect on the date of
issuance of the:Bonds or(except as otherwise referenced herein) as it may be amended to apply
to obligations issued:on the date of issuance of"the Bonds, together with applicable proposed,
- temporary and final regulations promulgated, and applicable official public guidance published,
under the Tax Code.
"Treasurer" means the official who is the elected City treasurer, or the deputy or
designee;thereof, or which official may be the Finance Director.
Section 1.02. UNPAID REASSESSMENTS. The Reassessments are as shown on the
list of unpaid reassessments on file with the Finance Director which list is hereby approved and
which is,incorporated herein by this reference and made a part hereof. For a particular
description of the lots or parcels of land bearing the,respective assessment numbers.set+forth in
the list, reference is hereby made to the,reassessment and to the diagram, and any amendments
thereto, recorded in the office of the Officer of the City who is the Superintendent of Streets of
the City after confirmation thereof by the Council.
Section 1.03. EQUAL. SECURITY. In consideration of the acceptance of the Bonds by
the Owners thereof, this Resolution shall be deemed to be and shall constitute a contract
between the City and the Owners from time to time of the Bonds; and the covenants and
agreements herein set forth to be performed on behalf of the City shall be for the equal and •
proportionate benefit, security and protection of all Owners of the Bonds without preference,
priority or.distinction as to security or otherwise,of any of the Bonds over any of the others by
reason of the number or date thereof or the time of sale, execution or delivery thereof, or
otherwise for any cause whatsoever,except as expressly provided therein or herein.
•
•
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• .. ARTICLE II
THE'.BONDS
Section 2.01. BONDS AUTHORIZED. All ads, conditions and things required by law
to exist, happen and be performed precedentto and in the issuance of the Bonds have existed,
happened and been performed in due time, form and manner as required by law, and the
Council is now authorized pursuant to-each and every requirement of law to issue the Bonds in
the manner and form as provided in this Resolution. The Bonds in the Principal Amount are
hereby authorized and will be issued as serial and/or term bonds as set forth in the
Reassessment Bond Purchase Agreement and Exhibit A hereto. The Agent, at the Principal
Office, is hereby designated as the.Agent to perform the actions and duties required under this
Resolution for the authentication, transfer,registration, and payment of the Bonds.
Section 2.02. TERMS OF BONDS.
(A) Denominations. The Bonds shall be issued as fully registered Bonds without
coupons in the Bond Denomination or any integral multiple thereof, except that the first
maturity may contain any odd amount. Bonds shall be lettered and numbered in a customary
manner as determined by the Agent.
(B) Date of Bonds. The Bonds shall be dated the Bond Date.
(C) CUSIP. "CUSIP" identification numbers shall be imprinted on the Bonds, but
•
such numbers shall not constitute a part of the.contract evidenced by the Bonds and any error
or omission with respect thereto shall not;constitute cause for refusal of any purchaser to accept
delivery of and pay for the Bonds: Failure of the City or the Agent to use such CUSIP numbers•
in any notice to Owners shall not constitute an event of default or any violation of the City's
contract with such Owners and shall not impair the effectivenessof'any such notice.
(D) Series and Maturities The Bonds .shall consist of the series and mature and
become payable on September 2 of each year and shall bear interest at the rates per annum all
as set forth in Exhibit B hereto and,hereby made a part hereof.
(E) Interest. The Bonds shall bear interest at-the rates set forth above payable on the
Interest Payment Dates in each year. Interest shall be calculated on the basis of a 360-day year
composed of twelve 30-day months. Each Bond shall bear interest from the Interest Payment
Date next preceding the date of authentication and registration thereof unless it is authenticated
and registered (i) prior to an Interest Payment Date and after the close of business of the Record
Date, in which event it shall bear interest from such Interest Payment Date, or (ii) prior to the
close of business on the Record Date preceding the first Interest Payment Date,in which event it
shall bear interest from the Dated Date.
(F) Method,.of'Payment. Both the principal of and interest and premium (if any) on
the Bonds shall be payable,in lawful money of the United States of .America. Interest on the
Bonds (including the final interest payment upon maturity or earlier redemption) is payable by
check of the Agent mailed by first class mail to the registered Owner thereof at such registered
Owner's address asit appears on the registration books maintained by,the Agent at the close of
business on the Record Date,preceding the Interest Payment Date, or by wire transfer made on
such Interest Payment Date upon written instructions of any Owner of $1,000,000 or more in
• aggregate principal amount of Bonds delivered to the Agent prior to the applicable Record
Date. The principal of the Bonds and any premium on the Bonds are payable in lawful money
of the United States of America upon surrender of the Bonds at the Principal Office of the
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Agent. All Bonds paid by the Agent pursuant this Section shall be canceled by the Agent. The •
Agent shall destroy the. canceled Bonds and, upon request of the City, issue a certificate of
destruction of such Bonds to the City.
Section 2.03. REDEMPTION.
(A) Optional Redemption. Whenever, as of an Interest Payment Date, there are
sufficient funds in the Prepayment Account of the Redemption Fund from the proceeds of
prepayments of Reassessments or from the application of any surplus funds by the Council,
Bonds shall be.called for redemption. Each Bond,or any portion of the principal thereof in the
principal amount of the Bond Denomination or any integral multiple thereof,:"may be redeemed
and paid in advance of maturity on any Interest Payment Date in any year by giving notice as
hereafter provided and by paying the principal amount thereof, plus interest to the date of
redemption,unless sooner surrendered, in which event said interest will be paid to the date of
• payment,together with the Redemption Premium.
The provisions of Part 11.1 of.the 'Bond Law are applicable to the advance payment of
Reassessments and to°the calling of the Bonds. The Agent shall select Bonds for redemption in
such a way that the ratio of Outstanding Bonds to issued Bonds shall be approximately the
same in each annual series insofar as possible (i.e. on a pro-rata basis among maturities of the
Bonds). Within each annual maturity, the Agent shall select Bonds for retirement by lot.
(B) Notice to Agent: In the event it is transmitting moneys for deposit in the
Prepayment Account of the Redemption Fund, the City shall give the Agent written notice of the
aggregate'amount of Bonds expected to be redeemed pursuant to subsection (A) not less than •
sixty (60) days prior to the applicable redemption date:
(C) Redemption Procedure by Agent: The Agent shall select Bonds for retirement in
such a way that the ratio of Outstanding Bonds to issued Bonds shall be approximately the
same in each annual series insofar as possible. Within each annual series the Agent shall select
Bonds for retirement by lot. The Agent,shall cause written notice of any redemption to be.given
by registered or certified mail or by personal service to the respective'registered Owners of any
Bonds designated for redemption, at their addresses appearing on the Bond Register in the
Principal Office of.the.Agent at least 30 days before the applicable Interest Payment Date, The
Agent shall also cause notice of redemption to be,sent-to the Securities Depositories and to one
or more of the Information Services at least one day earlier than the giving of notice to the
Owners as aforesaid; provided, however, such mailing to the .Securities' Depositories and
Information Services shall not be a condition precedent to such redemption. .Failure to so mail
any notice of redemption, or of any person or entity to receive any such notice, or any defect in
any notice of redemption, shall not affect the validity of the proceeding for the redemption of
such Bonds.
Such notice shall state the redemption date and the redemption price and, if less than all
of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP
numbers (if:applicable),and Bond numbers of the Bonds to'be redeemed by giving the individual
CUSIP number and Bond:number'of each Bond to be redeemed or shall state that all Bonds
between two stated Bond numbers, both inclusive, are to be'redeemed or that all of the Bonds
of one or more maturities have been called for redemption, shall state as to any Bond called in
part the principal amount thereof to be redeemed, and shall require that such Bonds be then
surrendered at. the Principal Office of the Agent for redemption at the said redemption price,
and shall state that further interest on,such Bonds, or the portion thereof to be redeemed, will; •
not accrue from and after the redemption date.
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•
!• Upon the payment of the redemption price of Bonds being redeemed, each check or
other transfer of funds issued fortsuch:purpose shall, to the extent practicable, bear the CUSIP
niirnber identifying,byis`sue and.maturity; the Bonds being.redeemed with the proceeds of such
check or other transfer.
Upon surrender of Bonds redeemed in'part only, the City shall execute and the Agent
shall authenticate-and deliver to the registered Owner, at the expense of the City, a new Bond
or Bonds, of the same series and maturity,,of authorized denominations in aggregate principal
amount equal to the unredeemed potfion,.of the Bond or Bonds:
(D) Effect of Redemption. From and after the date fixed for redemption, if funds
available for the payment of the principal of,and interest-and any premium on, the Bonds so
called for redemption shall have been deposited in the,Redemption Fund on the date fixed for
redemption, such Bonds so called Shall cease be entitled to any benefit under this Resolution
other than the right to receive payment of the redemption price, and no interest shall accrue
thereon on or after the redemptidn'idate specified in such notices All Bonds redeemed by the
Agent pursuant to this Section 2.03,shall be,canceled by the Agent. The Agent shall destroy the
canceled Bonds and, upon request of the Authority, issue a certificate of destruction of such
Bonds to the City.
Section' 2.04. FORM OF BONDS: The Bonds; the form of Agent's certificate of
authentication, and the form of ;assignment to appear thereon, shall be substantially in the
respective form set forth in Exhibit=B attached hereto and by this reference incorporated herein,
with necessary or appropriate variations,as permitted or required.
• Section 2.05. EXECUTION AND AUTHENTICATION OF BONDS. The Bonds shall
be executed in the name,and:on behalf ofthe City with themanualor facsimile signatures of the
Treasurer and attested by themanualor facsimile signature,of the Clerk. The Bonds shall then
g In,case,any officer who shall have signed any of the
be delivered to the Agent for,
Bonds shall cease to be,suchofficer before the Bonds so signed,shallhave been authenticated or
delivered by the Agent:orissiied by the City, such Bonds may nevertheless be authenticated,
delivered and issued and, 'upon such authentication, delivery and issue, shall be as binding
upon the City as though,the individual who signed the same had continued to be,such officer of
the City. Also, any Bond may be signed on behalf of the City by:any individual who on the
actual date of the execution of such Bond shall be the proper officer although on the nominal
date of such Bond such individual shall not have been such officer.
Only such of the Bond's as shall bear thereon a certificate of authentication in
substantially the,form set forth in Exhibit C, manually executed by the Agent,shall be valid or
obligatory for any purpose or entitled to the benefits of this Resolution, and such certificate of
the Agent shall be conclusive evidence that the Bonds "so authenticated have been duly
authenticated and delivered hereunder and are!entitled to the benefits of this Resolution. The
Agents certificate,of authentication on any Bonds shall be deemed to be executed by it if signed
by the Agent or by an authorized officer or signatory of the Agent, but it shall not be necessary
that the same officer orsignatory`sign the certificate'of authentication on all of the Bonds issued
hereunder: • .
Section 2.06. TRANSFER OR EXCHANGE OF BONDS. Any Bond may, in accordance
with its terms, be transferred upon the Bond Register by the registered Owner, in person or by
such Owner's duly authorized attorney, upon surrender of such Bond for cancellation,
•
accompanied by delivery,of a written instrument of transfer in a form approved by the Agent,
duly executed. Whenever any Bond shall be surrendered for transfer, the Agent shall thereupon
authenticate and deliver:to the transferee 'a new Bond or Bonds of like tenor, maturity and
aggregate principal amount. Bonds may be exchanged at the.Principal Office of. the Agent, for
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•
Bonds of the same tenor and maturity and of other authorized denominations. No Bonds the •
notice of redemption of which has been given under Section-2.03 shall be subject to transfer or
exchange pursuant to this Section. Neither the City nor the Agent shall be required to, make
such exchange or registration or transfer of Bonds on or after the Record Date or after. a Bond
has been selected for redemption. For any transfer or exchange under this Section, the City and
the Agent may require the payment of a".reasonable fee to cover the costs and expenses of the
City and the Agent.
Section .2.07. BOND REGISTER. The Agent will keep or cause 'to be kept. at its
Principal Office a sufficient Bond Register for the registration and transfer of the Bonds, which
shall at all times during regular business hours be open to inspection by the City; and, upon
presentation for such purpose, the Agent shall, under*such reasonable regulations as it May
prescribe, register or transfer or cause to be registered or transferred, on the Bond Register,
Bonds as'hereinbefore;provided.
Section 2.08. TEMPORARY'BONDS. The Bonds may be issued.,initially lit-temporary
form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be
printed,lithographed or typewritten, shall be of such denominations'as may Lbe determined by
the Council and may contain such reference to any of the provisions of this Resolution as may
be,appropriate. Every temporary Bond shall be executed by the officers'designated and in the
manner:provided•in:Section 2.05 hereof and be registered and authenticated bytthe Agent:upon
the same conditions and in:substantially the same manner as the definitive Bonds. If the City
issues temporary Bonds, it will execute and furnish definitive Bonds without delay, and
thereupon the temporary Bonds may be surrendered, for cancellation, in exchange therefor at
the Principal Office of the Agent; and the Agent shall authenticate and deliver in exchange for •
such temporary Bonds an equal--aggregateprncipal amount of definitive Bonds of authorized
denominations. Until so exchanged, the temporary Bonds:shall be entitled to the same benefits.
under this Resolution as definitive Bonds authenticated and delivered hereunder.
Section..2.09::BONDS MUTILATED, LOST, DESTROYED OR STOLENIf any Bond
shall become mutilated, the Agent shall thereupon authenticate and deliver, a new (Bond of like
maturity and principal.amount in exchange and substitution for the Bond so mutilated, but only
uponsurrenderto the Agent of the Bond so mutilated. Every mutilated Bond so surrendered to
the.Agent shall be canceled by it and delivered to,or upon the order of, the City. If any Bond
issued hereunder shall be lost, 'destroyed or stolen, evidence of such loss, destruction,or theft
may be submitted to the City and the Agent and, if such evidence be satisfactory to them and
indemnity satisfactory to them shall be given, the Agent shall thereupon authenticate and
deliver, a new Bond of like maturity and principal amount in lieu of and in substitution for the
Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been
called for redemption, instead of issuing:'a substitute Bond the Agent may pay the sarnewithout
surrender thereof upon receipt of indemnity satisfactory to the.Agent). The City and the Agent
may requirepayment of a reasonable fee for each new Bond issued under this Section and of the
expenses which may be incurred by the City and the Agent. Any Bond issued under the
provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall
constitute an original contractual obligation on the part of the City whether or not rthe Bond
alleged to be lost,destroyed or stolen be at anytime enforceable by anyone, and shall be equally '
and proportionately entitled to the benefits of this Resolution with all other Bonds secured by•this Resolution and any Suppleinental Resolution..
Section 2.10. BOOK-ENTRY ONLY SYSTEM. DTC.shall act as the initial Depository
for the Bonds. One Bond for each maturity of the Bonds shall be initially executed, •
authenticated, and delivered as set forth..herein"with a .separate fully registered certificate (in
print or typewritten form). Upon initial execution, authentication, and delivery, the.ownership.
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•• of the Bonds shall be registered`in the Bond Register kept by the Agent for the Bonds in the
name of Cede &Co.,.as:nominee of DTC.or such nominee as DTC shall appoint in writing.
The Authorized Officers of the City and the Agent are hereby authorized to take any
and all actions as may necessary and not inconsistent With this Resolution to qualify the
Bonds for the Depository's 'book-entry system, including the. execution of the Depository's
required representation letter:
With respect to Bonds registered in the Bond Register in the name of Cede & Co., as
nominee of DTC, neither the C ity nor the Agent shall have any responsibility or obligation to
any broker-dealer, bank, or other financial institution for which DTC holds Bonds as
Depository from time to time (the "DTC Participants") or to any person for which a DTC
Participant acquires an interest in the Bonds (the "Beneficial Owners"). Without limiting the
immediately preceding sentence,neither the City nor the Agent shall have any responsibility or
obligation with respect to (i) the accuracy of the records of. DTC, Cede & Co., or any DTC
Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC
Participant, any Beneficial Owner, or any other person, other than DTC, of any notice with
respect to the Bonds, including any Bonds to be redeemed in the?event the City elect to redeem
the Bonds, in part, (iii) the selection by the Depository of the beneficial interests in the Bonds to
be redeemed in the event the City elects to redeem the Bonds in part, (iv) the payments to any
DTC Participant, any Beneficial Owner, or any person, other than DTC, of any amount with
respect to the principal of'or interest on the Bonds, or (v) any consent given or other action
taken by the Depository as Owner of the Bonds.
Except as set forth above,the City and the Agent iriay treat as and deem DTC to be the
absolute Owner of each Bond, for which DTC is acting as Depository for the purpose of
payment of the principal or and interest on such Bonds, for the purpose of giving notices of
prepayment and other matters With respect to such Bonds, for the purpose of registering.
transfers with respect to such.Bonds, and for all purposes whatsoever. The Agent On behalf of
the City shall pay all principal of and interest on the Bonds only to or upon the order of the
Owners as shown on.the Bond Register, and all such payments shall be valid and effective to
fully satisfy and discharge all obligations with respect to the principal of and interest on the
Bonds to the extent of the sums or sums so paid.
No person other than an Owner, as shown on the Bond Register, shall receive a physical
Bond. Upon delivery by DTCto the City.and the Agent of written notice"to the effect the DTC
has determined to substitute a newnominee in place of Cede & Co.,,and subject to the transfer
provisions in Section 2.06 hereof, references to "Cede& Co." in this Section 2.15 shall refer to
such new nominee of DTC.
DTC may determine.to discontinue providing its services with respect to the Bonds at
any time by giving written notice to the City and to the Agent during any time that the Bonds
are Outstanding;and discharging its responsibilities with respect thereto under applicable law.
The City mayterminate the services of DTC with respect to the Bonds if it.determines that DTC
is unable-to discharge its responsibilities with respect to the Bonds or that continuation of the
system of book-entry transfer'through DTC is not in the best interest of the Beneficial.Oivners,
and the City shall mail notice of such termination to the Agent.
Upon termination of the services of DTC as provided in the previous paragraph, and if
no substitute.Depository willing to undertake the functions hereunder can be found which is
willing and above to undertake such functions upon reasonable or customary terms, or if the
lir City determines thatit is iii the best:interest if the Beneficial Owners of the Bonds that they be
able to obtain certified'Bonds, the Bonds shall no longer be restricted to being registered in the
Bond Register of the Agent in the name of Cede & Co., as nominee of DTC, but may be
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registered in whatever name or names the Owners shall designate at that time, in accordance •
with Section 2.06.
To the extent that the Bond Owners as designated as the transferee by the Owners, in
accordance with Section 2.10, the Bonds will be delivered to such Beneficial Owners.
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•• Section 3.07. AUTHORITIES. The Authorized Officers are hereby authorized and
directed to cause the various documents herein mentioned to be completed and executed-with
such changes, modifications, deletions or additions as rimy be approval by the Authorized
Officer in consultation with the City's staff and consultants with respect to these-reassessment
proceedings, such approval to be conclusively evidenced by the execution of the such
documents by the Authorized. Officer. The foregoing authorization is expressly conditioned
upon the satisfaction of the following: (i) the total principal amount of the Bonds shall not
_ exceed $3,195,000; (ii) thedtrue interest cost of the Bonds shall not exceed 7% per annum and
the discount shall not exceed 1.75% of the principal amount of the Bonds. The Clerk is
, authorized to complete,and to-approve changes in any provisions of this Resolution and Exhibit
A hereto in order to accomplish the.delivery of any of the Bonds-on schedule; such changes may
be accomplished by attachment'of a certificate, executed by,the Clerk, to this Resolution on file
in the office of the Clerk.
Section 3.08. OFFICIAL STATEMENT. The Council hereby approves the Official
Statement describing the financing for the Bonds, in substantially-the form on file with the City
Clerk together with any changes therein or additions thereto deemed advisable by the
Authorized Officer. The Council approves and authorizes the distribution by the Original
Purchaser'(as Underwriter) of the Official Statement to prospective ,'purchasers of the Bonds,
and authorizes and directs the Authorized Officer on behalf of the City to deem "final,"
pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"), the Official
Statement prior to its distribution.'to prospective, purchasers of the Bonds (the Official
Statement, as so deemed final, being referred to as the "Preliminary Official Statement"). The
execution of the,final Official Statement,which shall include such changes and additions to the
Preliminary Official Statement as may be permitted by the Rule and deemed advisable by the
•; Authorized'Officer and such information permitted to be excluded from the Preliminary Official
Statement pursuant to the Rule.,(the:"Official Statement"), shall,be conclusive evidence of the
approval of the Official.Statement by the-City.
Section 3.09. CONTINUING DISCLOSURE .DOCUMENT(S). The Council hereby
approves the forms of the City's'Continuing Disclosure'Certificate, and the Owner's Continuing
Disclosure Certificate with respect to the Bonds in substantially the forms thereof attached to
the Preliminary Official Statement. The Authorized Officer is hereby authorized and directed
to complete and execute the Certificate on behalf of the City with such changes, additions,
deletions as may be approved'B the Authorized Officer iri:consultation with the City's bond
counsel.
Section 3.10. BOND SALE AND DELIVERY. The Bond Purchase Agreement in
substantially the form on file with.the city is hereby approved and the Authorized Officer is
hereby authorized and directed to complete and execute the Bond Purchase Agreement' on
behalf of the City With such changes,,additions, deletions and..revisions as may be approved by
the Authorized Officerin consultation with the City's.financial'advisor, underwriter and bond
counsel. Upon execution of the Bond Purchase Agreement by the City, the Bonds shall be
prepared, authenticated and delivered, all in accordance with the applicable terms of the Bond
Resolution and Bond Purchase Agreement. The Authorized'Officer and other responsible City
officials are'hereby authorized and directed to take such actions as are required under the Bond
Purchase Agreement to complete all actions required to evidence the delivery of the Bonds and
the receipt-ofthe purchase price thereof from the purchaser of the Bonds.
Section;3:11. ACTIONS APPROVED. All actions heretofore taken by the officers and
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agents of the City with'respect to the establishment of the reassessment district and the sale
and issuance of the Bonds are hereby approved, confirmed and ratified, and the Authorized
Officers of the City are herebyauthorized:and directed to do any and all things and take any
and all actions and execute any and all certificates, agreements, 'contracts, and other
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(B) Disbursements. On or before.each interest Payment Date, the Finance;Director •
shall withdraw from the accounts in the Redemption Fund and forward to the, Agent for
payment to the Owners of the Bonds, amounts sufficient to pay the principal,of, and interest
and any premium, then due and payable on the Bonds.. Five (5) Business Days prior to each
Interest Payment Date, the Finance Director shall determine:if the amounts then on deposit in
the Redemption Fund are sufficient to pay the Debt'Service due on the Bonds on such.Interest
Payment Date. Im the event that amounts in the Redemption Fund are insufficient for such.
purpose,-the Finance.Director shall cause appropriate withdrawals to be Made from the-Reserve
Fund, to the extent of any funds therein, the amount of such insufficiency,and shall transfer
any amounts so withdrawn to,the Redemption Fund: Amounts so withdrawn:from the Reserve.
fund and deposited in-the Redemption.Fund shall be applied to the payment of the Bonds. If,
the foregoing transfers, there are,insufficient,funds in the Redemption.Fund to make the
payments provided for in the first sentence of this Section 4.03(B), the Finance'Director shall
apply the available funds first to the payment of interest on the Bonds, then to the payment of.
principal due on the Bonds, and then to payment of principal due on the Bonds by reason of
Bonds called for redemption pursuant to Section 2.03.hereof.
(C) Investment. Moneys in. the. Redemption Fund and the Prepayment Account,
therein shall be invested and deposited:in accordance with.Section,6.01. Interest earnings,and
profits resulting from such investment and deposit shall be retained in the Redemption:Fund
and the account therein.
(D) Closing of:Fund. The Redemption Fund (and,the Prepayment Account therein)
shall be closed when all of the principal-of'and interest on the Bonds has been paid.
Section 4.04. RESERVE FUND.. •
(A) Establishment of Reserve Fund. The Reserve Fund is hereby established as a
separate fund to be held by the Finance Director to the credit of whicha deposit shall be made
as required by Section;4.01, and deposits shall be made as providecLin the Bond:Law. Moneys
in the Reserve Fund_shall be held by the Finance Director for the benefit of the City and the
Bond Owners as a reserve for the payment of principal of, and interest and any premium on,
the Bonds. The City shall cause the Reserve Fund to be administered in accordance with Part
16 of the Bond Law;;provided.hatproceeds from'.:redemption or sale of properties with respect
to which payment of delinquent Reassessments and interest thereon was made from the Reserve
Fund, shall be credited to the Reserve.Fund.
(B) Use of Fund. Except as otherwise provided in this Section 4.04 all amounts
deposited in the Reserve Fund shall be used and withdrawn by the Finance Director solely for
the purpose of making transfers to the Redemption Fund in the event of any deficiency at any
time in the Redemption,Fund of the amount then:required`,for payment of the principal of, and
interest and any'premium on, the Bonds or, in accordance with the provisions of this Section
4.04,for the purpose of redeeming Bonds•from the Redemption•Fund.
(C) Transfer Due to Deficiency in Redemption Fund. Transfers shall be made
from the Reserve Fund to the Redemption Fund in the event of a deficiency in the Redemption .
Fund, in accordance with Section 4.04(B)hereof.-
(D) Payment of Reassessments. Whenever, after the issuance of the Bonds, a
Reassessment is pre-paid, in whole or in part, as provided, in the Bond Law, the Finance
Director shall transfer from the Reserve Fund to the Redemption Fund an amount specified in
such direction equal to the product of the ratio of the original amount of the Assessment
securing any Bonds so paid to the original amount of all Reassessments securing any Bonds,
times'the initial Reserve Requirement.
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• (E) Transfer- of Excess of Reserve Requirement. Whenever, on any Interest
Payment Date, or on any other date as determined by the Finance Director, the amount in the
Reserve Fund exceeds the then applicable Reserve Requirement, the Finance Director shall,
exceptas otherwise provided in-,Section509 hereof for purposes of rebate and as evidenced by
an appropriate Officer's Certificate, transfer on or before such Interest Payment Date an
amount equal to the excess from the Reserve Fund to the Redemption Fund to be used in
accordance with Part 16 of the Bond Law. -
(F) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in
the Reserve Fund is sufficient: to retire all the Outstanding Bonds, whether by advance
retirement or otherwise, collection of the principal and interest on the Reassessments shall be
discontinued and the Reserve Fund liquidated by the Finance Director in retirement of the
Outstanding Bonds, as•directed.hy an Officer's Certificate. In the event that the balance in the
Reserve Fund at the time of liquidation exceeds the amount required to retire all of the
Outstanding Bonds, the excess shalt be transferred to the City to be used in accordance with the
Act and the Bond Law.
(G) Investment. Moneys in the Reserve Fund shall be invested and deposited in
accordance with Section 6.01. Interest earnings and profits resulting from said investment shall
be retained in the Reserve Fund;subject to the provisions of Section 4.04(E) hereof.
Section 4.05. ESCROW FUND. On the Closing Date, the Escrow Fund shall be
established by the Finance Director with the Escrow Holder under the Escrow Agreement with
deposit(s) provided under Section 4.01. The purpose of the establishment of the Escrow Fund
it shall be to assure the timely advance retirement of the Prior Bonds, using a portion of the
proceeds of the Bonds and other funds held by the City with respect to the Prior Bonds and
investment earnings thereon,all as to be specified by appropriate Certificates of the City.
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ARTICLE V •
COVENANTS
Section 5.01.;COLLECTION OF REASSESSMENTS.
The City shall comply with .all requirements of the Act, the Bond Law and..this
Resolution to assure the timely collection of the Reassessments, including, without limitation,
the enforcement of delinquent Reassessments. To that end, the following-shall apply:
(A) Tax Roll Collection. The Reassessments as set forth on the list thereof on file
with the Finance Director together with the interest thereto, shall be payable in annual series
corresporiding.inntiniberand proportionate amount to the number of installments and principal
amounts of the Bonds maturing or becoming subject to mandatory prior redemption. under
Section 2.03 hereof. An annual proportion of each Reassessment shall be payable in each Fiscal
Year preceding;the date of maturity or mandatory prior redemption date of each of the Bonds
issued sufficient to pay the Bonds when due and such proportion of each Reassessment coming
due inany 'ear, together with:the annual interest'thereon,'shall be payable in-the same inanner
and at the same time and in the same installments as the general taxes on real property are
payable, and become delinquent at the same times and in the same proportionate amounts and
bear the same proportionate penalties and interests after delinquency as do the}general taxes on
real•property..All sums.received.from the collection of the. Reassessments and of the interest
and penalties'thereon shall be placed in the Redemption Fund.
(B) Auditor Record. The Finance Director shall; before the final ,date on which the
•
Auditor will accept the transmission of the Reassessments for the parcels within the
Assessment District for inclusion on the next tax roll, prepare or cause to be prepared, and
shall transmit to the Auditor, such data as the Auditor requires to include the installments of
the Reassessments on the next secured tax. roll. The Finance Director is hereby authorized to
\. employ consultants to assist in computing'the installments of the Reassessments hereunder and
in reconciling Reassessments billed to amounts received as provided in the subsection(C) of this
Section 5.01.
(C) Administrative Costs. In addition to any amounts authorized pursuant to
section 8682 of the Bond Law to be included with the annual amounts of installments as
aforesaid, the City, pursuant to'section<8682.1 of the Bond Law may cause to be entered on the
assessment roll on which taxes will next become due, opposite each.lot or parcel of land within
the Reassessment,District in.themanner set forth in said section.8682, each lot's pro rata share
of the estimated annual expenses of the •City in connection with the administrative duties
thereof for the Bonds, including, but-not: limited to, the costs of registration, authentication,
transfer and compliance with the provisions of Article V hereof. Delinquent Reassessments
shall be subject to foreclosure pursuant to Section 5.02 hereof.
Section 5.02.. FORECLOSURE. The City hereby covenants with and for the benefit of
• the Owners of the Bonds that it will order, and cause to be commenced; and thereafter
diligently prosecute an action in-the superior courttto foreclose the lien of any Reassessment or
installment thereof which has been billed,but has not been paid, pursuant to and as provided
in sections 8830 and 8835, inclusive of the Bond Law and the conditions specified in this
. Section 5.02 The Finance Director shall,notify the City Attorney of any such delinquency of
which the Finance Director is aware, and the City Attorney shall commence, or cause to be
commenced, such foreclosure proceedings, including collection actions preparatory to the filing
of any complaint. The City Attorney is hereby authorized to employ counsel to conduct any
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such foreclosure proceedings: The following conditions shall apply to the foreclosure
W proceedings which shall be commenced within 60 days of.any of the following determinations
which shall be made by the Finance Director-not later than Octoberl bleach Fiscal Year:
(A) If the Finance Director determines that there:is a delinquency of a Reassessment
of $ or more for a prior Fiscal Year or Years for any single parcel of land in the
Reassessment District.
(B) If the F inane Director determines that the total amount of delinquent
Reassessments for the prior Fiscal Year for the entire Reassessment District, less the total
delinquencies under subsection (A) above, exceeds three percent (3%) of the total
Reassessments due and;payable in,the prior Fiscal Year,foreclosure shall be commenced against
each parcel of land in the Reassessment District with a delinquency of $ or more for the
prior Fiscal Year or Years.
(C) If the Finance Director determines that the total amount of delinquent
Reassessment for the prior Fiscal Year for the entire Reassessment District, less the total
delinquencies under subsections (A) and (B) above, exceeds five percent (5%) of the total
Reassessments due and payable for the prior Fiscal Year, foreclosure shall be commenced
against each parcel of land within the'Reassessment District with any amount of delinquency
for the prior Fiscal Year or Years.
Section 5.03. PUNCTUAL PAYMENT; COMPLIANCE WITH DOCUMENTS. The
City shall punctually pay or cause to be paid the interest: and principal to become due with
respect to all of the. Bonds in strict conformity with the terms of the Bonds and of this
•' Resolution, and will faithfully observe and perform all of the conditions, covenants and
requirements of this Resolution and all Supplemental Resolutions:
Section 5.04. NO PRIORITY FOR ADDITIONAL OBLIGATIONS. The City covenants
that no additional bonds or other=obligations shall be issued or incurred having any priority
over the Bonds in payment of principal or interest out of the Reassessments. Nothing in this
Resolution shall prohibit the City from issuing bonds or other obligations on a parity with or
subordinate to the Bonds and secured by and payable from the Reassessments upon such terms
as the City may determine.
Section 5.05. FURTHER ASSURANCES. The City will adopt, make, execute and
deliver any and all such further-resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Resolution,
and for the better assuring and confirming unto the Owners of the Bonds.the rights and benefits
provided in this Resolution.
Section 5.06. PRIVATE ACTIVITY BOND LIMITATION. The City shall assure that
the proceeds of the Bonds are not so used as to cause=the Bonds to satisfy the private business
tests of section 141(b) of the Tax Code or the private loan financing test of section 141(c) of the
Tax Code.
Section"5:07. FEDERAL GUARANTEE PROHIBITION. The City shall not take any
action or permit or suffer any action to be taken if the result of the same would be to cause any
of the Bonds to be "federally guaranteed" within the"meaning of section 149(b) of the Tax
Code.
Section 5.08'. NO ARBITRAGE. The City shall not take, or permit or suffer to be taken
by the Finance Director or otherwise, any action with respect to the proceeds of the Bonds
which, if such action had been reasonably expected to have been taken, or had been deliberately
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and intentionally taken, on:thedate of issuance of the Bonds would have caused.ithe Bonds to
be "arbitrage bonds" within,the meaning'of section 148 of the Tax Code. •
Section 5.09. REBATE REQUIREMENT. 'The City shall take any and all actions
necessary to assure compliance with section 148(f) of the Tax Code, relating to the rebate of
excess investment earnings, if any, to the federal gove"mmerit, to the extent that such section is
applicable to the Bonds Earnings on any reserve fund established under this Resolution shall
be used for rebate purposes before any application thereof as credits to the Redemption Fund
under Section 4.03(E).
Section 5.10. YIELD OF THE BONDS. In determining the yield of the Bonds to comply
premium, if any) imadvance of maturity based on the reasonable redemption (including
with Sections 5.08 and 5.09 hereof, the City will take into
p y) � ty le expectations of•the City, as of
the Closing Date, regarding prepayments of Reassessments and use of prepayments for
redemption of the Bonds,without regard to whether or not prepayments are received or Bonds
redeemed.
Section 5.11. AMENDMENT. Without the consent of the Owners of the Bonds, the
City may:amend this Resolution to add,modify or delete provisions if necessary or desirable to
assure compliance with Section 148(f) of the-Tax Code, or as otherwise required, to assure the
exemption from federal income taxation of interest on the Bonds.
Section J.12. MAINTENANCE`.OF TAX-EXEMPTION. The City shall take all actions '
necessary to,assure the exclusion of interest on the Bonds from the gross income of the Owners
of the Bonds torthe same extent as such interest is permitted to be excluded from gross'income
under the Tax Code as in effect on the date of issuance of the Bonds.
•
Section 5.13. CONTINUING DISCLOSURE. The City hereby covenants and agrees
that it will comply with and carry out all of the provisions of any continuing disclosure relating
to the Bonds. Notwithstanding any other provision of this Resolution, failure of the City to
comply with any continuing disclosure shall not be considered an event of default.
•
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ip
• ,ARTICLE VI
INVESTMENT OF FUNDS
Section 6.01. DEPOSIT AND INVESTMENT OF MONEYS IN FUNDS. Subject in all
respects to the provisions of Section 6.02,moneys in any fund,or account created or established
by this Resolution and held.by the•FinairceDirector shall be invested by the Finance Director in
Permitted Investments, as directed pursuant to an Officer's Certificate filed with the Finance
Director at least two (2) Business Days in advance of the making of such investments. The -
following shall apply to such investments:
(A) In the absence of any,such Officer's Certificate, the Finance Director shall invest
any such moneys in Permitted Investments,described as Federal Securities which by their terms
mature prior to the date on Which such •:moneys are required to be paid out hereunder.
Obligations purchased as an investment of moneys in any fund shall be deemed to be part of
such fund or account, subject, however, to the requirements of this Resolution for transfer of
interest earnings and profits;resulting'from investment of amountsin'funds and accounts;
(B) The Finance Director may act as principal of agent 'in the acquisition or .
disposition of any investment. The'Finance Director shall incur,no liability for losses arising
from any investments made pursuant to this Section;
(C) Subject in all respects;to the provisions of Section 5.09, investments in any and
all funds and accounts may at the discretion of the Finance Director be commingled in a
• separate fund or funds for purposes of making, holding and disposing of investments,
notwithstanding provisions herein for transfer to or holding in or to the credit of particular
funds or accounts of amounts received or held by the Finance:Director'hereunder, provided that
the Finance Director shall at alLtimes account for such investments-strictly in accordance with
the funds and accounts to which-they are credited and otherwise as provided in this Resolution;
(D) The Finance: Director shall sell at, the highest price; reasonably obtainable, or
present for redemption, any investment security whenever'it shall be necessary to provide
moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or
account to which such investment security is credited and the Finance Director shall not be
liable or responsible for any loss lossresulting from the acquisition or disposition of such investment
security in accordance herewith;,"and
(E) For any funds held by the Finance Director, the foregoing provisions of this
Section 6.01 shall also apply, except that an Officer s Certificate shall not be required. For such
funds the Finance Director shall keep records or accounts of.all expenditures or disbursements
therefrom which records shall be available for inspection during„business hours on any Business
Day upon prior written request.
Section 6.02. ACQUISITION, DISPOSITION AND VALUATION OF
INVESTMENTS.
(A) Except as otherwise provided in subsection. (B) of this Section, the City
covenants that all investments of amounts deposited ,in any fund or account under this
Resolution, or otherwise,containing gross proceeds of the Bonds (under section 148 of the Tax
Code) shall be acquired disposed of and valued (as of the date that valuation is required by
• this Resolution or the Tax Code) at Fair Market Value.
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(B) Investments in funds or accounts (or portions thereof) that are subject to a yield •
restriction under applicable provisions of the Tax Code, and (unless valuation is undertaken a t
least annually) investments in any reserve fund,shall be valued at their present'value (within
the meaning of section 148 of the Tax Code).
Section 6.03.••LIABILITY OF CITY.The City shall not incur any responsibility in respect
of the Bonds;or this Resolution other than in connection with the duties or obligations explicitly
.provided herein or in the Bonds. The City shall not be liable to any Owner in connection with -
the performance of its duties hereunder, except for its own negligence or willful default. The
City shall not be bound to ascertain or inquire as to the performance or observance of any of the
terms, conditions, covenants or agreements of the Agent herein or of any of the documents
executed by the Agent in connection with the Bonds, or as to the existence of a default
thereunder. Under this;Resolution, the following shall apply to the City:
(A) In the absence of bad faith, the City, including the Finance Director, may
conclusively rely, as to the truth of the statements and the correctness of the opinions expressed
therein,upon.;certificates or opinions furnished to the City and conforming to the requirements
of this Resolution. The City, including the<Finance;Director, shall not be liable for any error of
judgment madein good faith unless it shall be proved that it was negligent in ascertaining the
pertinent fade;
(B) No provision of this Resolution shall require the City to expend or risk its own.
g eneral funds or otherwise incur any financial liability (other than with respect to the foreclosure
proceedings;for.delinquent Reassessments and the payment of fees and costs of the Agent) in
the performance of any of its obligations hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such funds or •
adequate indemnity against such risk or Iiability is not reasonably assured to it
(C) The City,may rely and shall be protected in acting or refraining from acting upon
any notice, resolution, request, consent,order, certificate, report, warrant,.bond or other paper
or document believed by it to be genuine,.and to have been signed or presented by the proper
party or proper parties. The City may consult with counsel, who may be the City Attorney,
with regard to legal questions, and the opinion of such counsel shall be full. and complete
authorization and protection in respect of any action taken or suffered by it hereunder in good
faith and in accordance therewith;
(D) The City shall not be bound to recognize any person as the Owner of a Bond
unless duly registered and until such Bond is submitted for inspection, if required, and his title
thereto satisfactorily established,if disputed;.and
(E) Whenever in the administration,of its duties under this Resolution the City shall
deem it necessary or desirable that a matter be proved or established prior to taking or suffering
any action hereunder, such matter other evidence in respect thereof be herein specifically
prescribed).may,in the‘absence of willful misconduct on the part of the City,be deemed to be
conclusively proved and established by a certificate of the Agent or other expert retained by the
City for:the purposes hereof, and such certificate shall be full warrant to the City for any action
taken or suffered under the provisions of this Resolution or any Supplemental Resolution upon
the faith thereof,but in its discretion the City may,in lieu/thereof,accept other evidence of such
matter or may require'such additional evidence as to it may deem reasonable.
Section 6.04. EMPLOYMENT OF AGENTS BY CITY. In order to perform its duties •
and obligations hereunder,the City may employ such persons or entities as it deems necessary
or advisable. The City"shall not be liable for,any of the acts or omissions of such persons or
entitiesemployed by with reasonable•care and in good faith hereunder, and shall be entitled
-25-.
�• to rely, and shall be fully protected in doing so, upon the"opinions; calculations, determinations
and directions of such persons,orentities. -
•
•
•
•
•
•.
-26-
ARTICLE VII • •±
MODIFICATION OR AMENDMENT
Section 7.01. AMENDMENTS PERMITTED. This Resolution and the rights and
obligations of the City and of the Owners of the Bonds may be modified or amended at any _
•
time by a Supplemental Resolution pursuant to the affirmative vote at a meeting of Owners, or
with the written consent without.a meeting, of the Owners of at least sixty percent (60%) in
aggregate principal amount of the Bonds then-Outstanding, exclusive of Bonds disqualified as
provided in Section 7.04. No,such modification or, amendment shall (i) extend the maturity of
any Bond or'reduce the;interest rate thereon,•or otherwise alter or impair the obligation;of the
City to pay the principal of, and the interest and any premium on, any Bond, without the
express consent of the Owner of such Bond, or.(ii)permit t.the creation by the City of any pledge
or lien upon the Reassessments superior to or on a parity with the pledge and lien created for
the benefit of the Bonds (except as otherwise permitted by the Act, this Resolution, the laws of
the State of California), or reduce the percentage of Bonds required for the amendment`hereof,
or to amend this Section 7.01. Any such amendment may not modify any of the rights, or
obligations of the Agent without its written. consent. This Resolution and the rights and
obligations of the City and of the Owners may also be modified or amended at anytime by a
Supplemental Resolution, without the consent of any Owners, only to the extent permitted by
law and only for anyone or more of thefollowingpurposes:
(A) to add to the covenants;and agreements of the City in this Resolution contained,
other covenants and agreements thereafter to be observed, or to limit or surrender,any right or
power herein reserved to or conferred upon.the'City; -
(B) to make modifications not adversely affecting any outstanding 'series of Bonds of
the City in any material respect; . -
(C) to make such provisions for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective provision contained in this Resolution, or in regard to
questions arising under this Resolution, as the City may deem necessary or desirable,and not
inconsistent with this'Resolution, and which shall not adversely affect the rights of the Owners
of theBonds;or
(D) to make such additions, deletions or modifications as may be necessary or
desirable to assure exemption from federal-income taxation of interest on the Bonds .
Section 7.02: OWNERS' MEETINGS. The City-may at any time call a meeting of the
Owners. In such event the City is authorized to fix the time and place of said meeting and to
provide for the giving,of-notice thereof and to fix adopt rules and regulations for the
conduct of said meeting.
Section 7:03. PROCEDURE FOR AMENDMENT WITH WRITTEN CONSENT OF
OWNERS. The City may at any time adopt a Supplemental Resolution amending the
provisions of the Bonds or of this Resolution or any Supplemental Resolution,to the extent that
such amendment is permitted by Section 7.01 hereof, to take effect when and as provided in
this Section 7.03. With respect to such Supplemental Resolution under this Section 7.03, the
following shall apply:
(A) A copy of such Supplemental Resolution, together with a request to-Owners for •
their consent thereto, shall be mailed by first class mail, by the Finance Director to each Owner
-27-
'�• of Bonds Outstanding, but failure to mail copies of such Supplemental Resolution and request
shall not affectthe validity'of the Supplemental Resolution:when assented to as in this Section
provided;
(B) Such Supplemental Resolution shall not become effective unless there shall be
filed with the Agent the written consents of the Owners of at least sixty percent (60%) in
aggregate principal amount of the Bonds then.Outstanding (exclusive of Bonds disqualified as
. provided in Section 7.04) and a notice shall have been mailed as hereinafter in this Section
provided. Each such consent shall be effective only if accompanied by proof of ownership of
the Bonds for which such consent is given,which proof shall be*such as is permitted by Section
8.04. Any such consent shall be binding upon the Owner of the Bonds giving such consent:and
on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless
such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by
filing such revocation with the.Agent prior to the date when the notice hereinafter in this Section
provided for has been mailed; and
(C) After the. Owners of the required percentage of Bonds shall have filed their
consents to the•Supplemental.Resolution, the City shall mail a notice to the Owners in the
manner.hereinbefore provided in this Section for the mailing of the Supplemental Resolution,
stating in substance that the Supplemental Resolution has been'.consented to by the Owners of
the required percentage of Bonds and will be effective as provided in this Section but failure to
mail copies of said notice shall not affect the validity of the Supplemental Resolution or
consents thereto)' Proof of the mailing'of such notice shall be filed with the Agent. A record,
consisting of,the papers required by this Section 7.03' to be filed with the Agent, shall be proof
of the matters therein stated until the contrary is proved. The Supplemental Resolution shall
•
become effective upon the filing with the Agent of the proof of.matters therein of such notice,
and the Supplemental Resolution shall be deemed conclusively binding (except as otherwise
hereinabove.specifically provided in this Article) upon the City-and the Owners of all Bonds a t
the expiration ti of sixty (60) days a after such filing,
ns except.in the event of a final decree of a court
of j ct ( setting i gent in a legal action or equitable proceeding for
such purpose commenced within such sixty-day period.
Section 7.04. DISQUALIFIED BONDS. Bonds owned or held for the account of the
City, excepting any pension or retirement fund, shall not be deemed Outstanding for the
purpose of any vote, consent or other'action or any calculation.of Outstanding Bonds provided
for in this Article VII, and shall not be entitled to vote upon, consent to,or take any other action
provided for in this Article VII.
Section 7:05. EFFECT OF SUPPLEMENTAL RESOLUTION. From and after the time
any Supplemental Resolution becomes effective pursuant to this Article VII, this Resolution shall
be deemed to be modified and amended in accordance therewith, the respective rights, duties
and obligations under'this Resolution of the City and all Owners of Bonds Outstanding shall
thereafter be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such Supplemental
Resolution shall be"deemed to be part of the terms and conditions,of this Resolution for any and
all purpose's;
Section 7.06. ENDORSEMENT OR REPLACEMENT OF BONDS ISSUED AFTER
AMENDMENT. The City may determine that Bonds issued and delivered after the effective
date of any action taken as provided in this Article VII shall bear a notation, by endorsement or
• otherwise, in form approved by the City, as to such action. In that, case, upon request of the
Owner of any Bond Outstanding at such effective date and presentation of his Bond for that
purpose at the Principal Office of the Agent or at such other office as the City may select and
designate for that purpose, a suitable notation shall be made on such Bond. The City may
•
28
i
determine that new Bonds, so modified as in the opinion of the City is necessary,to conformto •�
' such Owners' action, shall be prepared, executed and delivered. In that case, •upon.request of
the Owner of any Bonds then Outstanding,such new Bonds shall be exchanged at the Principal,
Office of the Agent without'cost to any Owner, for Bonds then Outstanding, upon surrender of
such Bonds.
Section 7.07. AMENDATORY ENDORSEMENT OF BONDS'. The provisions of this
Article VII shall not prevent any Owner from accepting any amendment as to the particular
Bonds held by such Owner,:provided that due notation thereof is made on such Bonds. .
. •
•
•
-29-
.i
•
0 ARTICLE VIII
•
MISCELLANEOUS -
Section 8:01. BENEFITS OF AGREEMENT LIMITED TO PARITIES. Nothing in this
Resolution, expressed or implied, is intended to give to any person other than the City, the
Agent and the Owners, any right, remedy or claim under or by reason of this Resolution. Any
covenants, stipulations, promises:or agreements in this Resolution contained by and on behalf
of the City shall be for the soleand exclusive benefit of.th Owners and the Agent.
Section 8.02. SUCCESSOR.AND PREDECESSOR. Whenever in this Resolution or any •
Supplemental Resolution either the City or the Agent is named or referred to, such reference
shall be deemed to include the successors or assigns thereof, and all the covenants and
agreements in this Resolution contained by or on behalf of the City shall bind and inure to the
benefit of the respective successors,and assigns thereof whether so expressed or not.
Section 8.03. DISCHARGE OF RESOLUTION. Subject to the provisions of Section
2.03 hereof, if the City shall pay and discharge the entire indebtedness on all Bonds
Outstanding in any one or more of the following ways:
(A) by paying or causing to be paid the principal of (including any Sinking Fund
Payments) and interest and any premium on all Bonds Outstanding, as and when the same
become due and payable; ,
(B) by depositing with the Agent, in trust, at or before maturity, money which,
together with the amounts then on deposit in the Redemption;.Fund is fully sufficient to pay all
Bonds Outstanding, including-all principal, interest and any applicable redemption premiums,
or;
(C) by irrevocably depositing with the Agent, in trust, cash and Federal Securities in
such amount as the City shall determine, as "confirmed by an independent certified public
accountant,which will, together with',the:interest to accrue thereon and moneys then on deposit
in the Redemption Fund be fully,sufficient.topay and discharge'the indebtedness on all Bonds,
including all principal, interest,and any applicable redemption premiums, at or before their
respective maturity dates;
(D) if such Bonds are to be redeemed prior to the maturity thereof notice of such
redemption shall have been given as in this Resolution;provided.or provision satisfactory to the
Agent shall have been-made for the giving of such notice, then, at the election of the City, and
notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the
Reassessments and other funds provided for in this Resolution.and:all other obligations of the
City under this Resolution withrespect to all Bonds Outstanding shall, cease and terminate,
except only the obligation of the City to pay or cause to be paid to the Owners of the Bonds not
so surrendered and paid:allssums due,thereon, the obligation of the City,to'assure that no action
is taken or failed'to be taken,if such action or failure adversely affects the.,exclusion of interest
on the Bonds from gross income for federal income tax purposes, and all amounts owing to the
Agent pursuant to Section 7.05 hereof; and thereafter Reassessments shall not be payable to the
Agent Notice of such election shall be filed with the Agent. Any funds,thereafter held by the
Agent upon payments of all fees and expenses of the Agent, which are not required for said
® purpose, shall lie"paid over to the City to be used by the City as provided in the Act and the
Bond Law.
-30-
Section 8.04. EXECUTION OF DOCUMENTS AND PROOF OF OWNERSHIP.• Any
request; declaration or;other instrument which this Resolution may require or perrriit to be
executed by Owners may be in one or more instruments of similar tenor, and shall be executed
by Owners in person or by their attorney's appointed in writing. Except as otherwise herein
expressly provided, the fact and date of the execution by any Owner or his attorney of such
request, declaration onother instrument, or of such writing appointing such attorney, may be
proved by the certificate of any notary public or other officer authorized to take
acknowledgments,of deeds to be recorded:in th'e state in-which he purports to act, that the
person signing such request,declaration-or other instrument or writing acknowledged to him the
execution,thereof, or by-an affidavit of a witness of such execution, duly sworn:to before such
notary public or other officer. The ownership of registered bonds and the amount, maturity;
number and 'date of holding the same shall be proved by the registry books. Any consent,
request, declaration or other instrument or writing of the then registered Owner of any Bond
shall bind all future Owners of such Bond in respect of anything done or suffered to be done by
the City or the Agent in,good faith and in accordance therewith.
Section 8.05. WAIVER OF PERSONAL LIABILITY. No member, officer, agent or
employee of the City shall be individually or personally liable for the payment.of the principal
of,or interest or any premium on, the Bonds;but nothiirg-herein contained shall:relieve any such
member, officer, agent Or employee from the performance of any official duty provided bylaw.
Section 8.06. NOTICES AND DEMANDS. Any notice or demand which by any
provision of this Resolution is required or permitted to be given or served by the Agent to or on
the City maybe given or served by being deposited postage prepaid in a post office letter box
addressed (until another address is filed'by the City with the Agent) as follows:
- - Attention: Finance Director •
CITY-OF PETALUMA
P.O. BOX 61
Petaluma, CA 94953
Section 8.07. PARTIAL INVALIDITY: If any Section, paragraph, sentence, clause or
phrase of this Resolution shall for any reason be held illegal or unenforceable„such holding shall
not affect the validity of the remaining portions of this, Resolution. The City hereby declares
that it would have adopted this Resolution and each and every other Section, paragraph,.
sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto -
irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases
of this Resolution maybe held illegal, invalid or unenforceable.
Section 8:08. UNCLAIMED MONEYS.. Anything contained herein to the contrary
notwithstanding, any moneys held by the Finance Director in trust for the payment and
discharge of the principal of, and the interest and any premium on, the Bonds which remains
unclaimed for two (2) years after the date when payments of principal, interest and any
premium have become payable, shall be repaid by the Finance Director to the City as its
absolute property free from any trust, and the Finance Director'shall thereupon be released and.
discharged with respect thereto and, the Bond Owners shall look only to the City for the
payment of the principal of, and interest,and any premium on,such Bonds.
Section 8.09. APPLICABLE LAW': This Resolution shall be governed by and enforced in
accordance with the laws of. the. State of California applicable to contracts made and
performed in the State.of California. • •
-31.-
411/ Section 8.10. CONFLICT WITH ACT. In the event ofta conflict between any provision
of this Resolution with any provision of the Act, the provision of the Act shall prevail over the
conflicting provision oftthis Resolution:
Section 8.11. CONCLUSIVE EVIDENCE OF REGULARITY; VALIDITY. Bonds
issued pursuant to this Resolution shall constitute conclusive evidence of the regularity of all
proceedings under the Act relative to their issuance and the levy of the Reassessments. The
validity of the authorization and ;issuance of the Bonds shall not be dependent upon the
completion and/or acquisition of the Project or any part thereof or the performance by any
person or such person's obligation(s) with'respect to the Project.
Section 8.12. PAYMENT ON BUSINESS DAY. In any case where the date of the
maturity of interest or of principal, (and premium,-if any)of the Bonds or the date fixed for
redemption of.any Bonds or the date any action is to be taken pursuant to this Resolution is
other than a Business Day, the payment of interest or principal, including Sinking Fund
Payments, (and any redemption premium)or the action need not,be made on such date but may
be made on the next succeeding,day which is a Business Day with the same force and effect as
if made on the date required and no additional interest shall accrue from such Interest Payment
Date until such Business Day.
Section 8.13. REPEAL OF INCONSISTENT RESOLUTIONS. Any resolution of the
Council, and any part of such resolution,inconsistent with this Resolution, is hereby repealed to
the extent of such inconsistency:
Section 8.14. AUTHORITY.OF FINANCE DIRECTOR. All actions mandated by this
•, Resolution to be performed by the Finance Director may be performed by the designee thereof or
such other official of the City or independent contractor, consultant or trustee duly authorized
by the City to perform such action or actions in furtherance'of'all or a specific portion of the
requirements hereof.
Section 8.15. CERTIFIED COPIES. The Clerk shall cause to be furnished a certified
copy of this resolution to the Finance Director, to the Agent, and to the Auditor of the County.
Section 8:16. EFFECTIVE DATE OF THE ,RESOLUTION. This Resolution shall
become effective upon the date of its adoption.
-32-
�• EXHIBIT A
CITY OF PETALUMA -
Assessment District No. 23, Redwood Business Park
(Reassessment and Refunding of 2001)
•
TERMS AND CONDITIONS
The following terms and conditions shall be part of the within Resolution Authorizing
the Issuance of Refunding Bonds (the:"Resolution of Issuance") as if set forth in the text thereof:
Principal Amount: Under Section 2:01, the actual aggregate principal amount of the
Bonds is $ and the Bond Date is , 2001.
The first Interest Payment Date is 2, 2001.
Principal Maturities and :Interest: Under Section .2.02 the maturities and rates of
interest of the Bonds are as follows:
Maturity Date Principal Interest . Maturity Date Principal Interest
(September 2) Amount($) Rate (%) (September 2) Amount(S) Rate (%)
•
Bond Redemption: Under Section 2.03, the Redemption provisions are as follows: Three
percentum (3%) of the principal amount'being redeemed.
Funds:
Deposit to Funds: Under Section 4.01 and on the Closing Date, only the
following amount will be deposited:
$ from Bond Proceeds to the Costs of Issuance Fund;
$ from Bond Proceeds to the Escrow Fund;
$ from the Prior Bonds' reservefund to the Escrow Fund; and
$ from the Prior Bonds' redemption fund to the Escrow Fund.
After the receipt by the City of the April 10, 2001, tax roll collections for the Prior
•, Bonds from the County, the Finance Director shall deposit from such collections to the
Reserve Fund$ and any balance to.the Redemption Fund.
EXHIBIT A
Page 1
• EXHIBIT B
FORM OF BOND
United States of America
State of California
County of Sonoma
County of Registered • - Registered
Number A---- ***$***
LIMITED OBLIGATION
REFUNDING IMPROVEMENT BOND
CITY OF PETALUMA
Assessment District No 23, Redwood Business Park 3
(Reassessment and.Refunding:of,2001)
Series 2001-A
INTEREST.RATE MATURITY'DATE DATED DATE CUSIP
REGISTERED OWNER:
PRINCIPAL AMOUNT: *** DOLLARS***
Under and by virtue of the Refunding Act of 1984 for 1915:;Improvement Act Bonds of,
Division 11.5 (commencing with Section 9500) of the Streets and Highways Code (the "Act"),
the City of Petaluma (the City) County of Sonoma, State of California, will, out of the
t. redemption fund for the payment; of the bonds issued upon the unpaid portion of
reassessments made for the acquisition, work and improvements more fully described in
proceedings taken pursuant to Resolution of Intention No 99-157 adopted by the City Council
of the City on , •2001, pay to the registered owner named above or registered
assigns, on the maturity date stated above, the principal amount stated above, in lawful money
of the United States of America and in like manner will pay interest at the rate per annum
stated above, payable semiannually on March 2 and September 2 (each an "Interest Payment
Date") in each year commencing:on 2, 2001.
This Bond bears interest from the interest payment date next preceding its date of
authentication and registration unless it;is authenticated and registered (i) prior to an Interest
Payment Date and after the close of business of the fifteen day preceding such Interest Payment
Date, in which event it shall bear interest. such Interest Payment Date, or (ii) prior to the
close,of business on the fifteenth day of the calendar Month preceding September.2, 2000, in
which event it,shall:bear interest from its date, until payment of such principal sum shall have
been discharged.;For'the period during which Depository Trust,Company of New York, New
York, ("DTC") or any successor depository, is the registered owner of this bond, principal,
redemption premiums,if any,and interest shall be paid by the City to DTC, or such successor
depository,by wire transfer;provided:that principal and redemption premiums, if any, shall be
paid upon surrender to the City, at the corporate trust office of Bank of New York, Western
Trust Company, as Authentication Agent, Registrar, Transfer and Paying Agent (the "Agent"),
in San Francisco, California, of matured bonds or bonds, called for redemption prior to
maturity As to any registered owner hereof other than DTC or. successor depository, the
principal and redemption premiums, if any, shall be payable at the office of the Agent specified.
above and interest shall be paid by check, draft or warrant mailed' to DTC, or any successor
depository, or in the event of termination of the book-entry system, to the registered owner
hereof at the-registered owner's address as it appears on the records of the Agent, or at such
address as may havebeen filed with the Agent, for that purpose, as of the fifteenth day of the
EXHIBIT B
Page 1
q writing each Interest Payment Date; provided however, upon •
request writin immediately iaOOerrof$1 00,000 or more in aggregate principal amount;of Bo_nds,
such request having been made before fifteen days preceding an Interest Payment Date, such
interest shall be paid on such Interest Payment Date by wire transfer in:immediately available
funds to an account in the continental United States designated by such Owner to the Agent.
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 sirfficientrnoneys 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 and the Resolution.
Authorizing of Issuance oLRefunding 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 Agent.
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 under;the Act and the
Resolution of Issuance 'for the purpose of providing means for paying for the reassessment
bonds described in the proceedings, and is secured by the moneys in the redemption fund and
by the unpaid portion of assessments ;made,for the payment of those improvements, and,
including principal and-interest,is payable exclusively out of the redemption fund.
This bond is transferable by the registered owner hereof, in person or by the,owner's
attorney dulyy authorized in writing, at the office of the Agent, 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 transfer, a new registered bond or
bonds,.of any authorized denomination or denominations, of the same maturity, and for the
same aggregate principalamount,will be issuedto the transferee in exchange therefor.
Bond's 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 Agent shall be required to exchange or to register the transfer of
bonds during the 15 days immediately preceding any Interest.Payinent Date.
The City and the Agent may treat-the registered.owner hereof as the absolute'owner for
all purposes, and the City and the Agent shall not;be-affected by any notice to the,contrary.
This Bond or any portion of it in the amount of five thousand dollars ($5,000), or any
integral multiple thereof, may be redeemed and paid, in advance of maturity upon the any
Interest Payment Date in any year by giving at least 30 days' notice by registered or certified
mail or personal service,to the registered owner hereof at the registered owners address as it
appears on the registration books of the Agent and by paying principal and accrued interest
together with a premium of three.pereentury (3%) of the principal redeemed.
This Bond is a Limited Obligation Refunding Improvement Bond because, under The
Resolution,of Issuance,the City is not obligated to advance funds from the City treasury to
cover any deficiency which may occur in the redemption fund for the bonds; however, the City
is not prevented,-in its sole discretion, from so advancing funds..
Unless.this Bond is presented by an authorized representative of The Depository Trust •
Company, a New York corporation ("DTC"), to the Agent for,_registration of transfer, exchange,
or payment, and any-Bond issued is registered_in the name of Cede& Co. or in such other name
EXHIBIT'S
Page 2
• as is requested by an authorized representative of DTC (and;any'payment is made to Cede &
Co. or to such-other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, ORvOTHER USE HEREOF FOR VALUE ORLOTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
•
•
•
•
EXHIBIT B
Page 3
IN WITNESS WHEREOF, the City of Petaluma has caused this bond to be signed in •
facsimile by the Finance Director of the City and by its City Clerk,and has cause its corporate
seal to be reproduced in facsimile hereon all as of day of
2001.
CITY OF PETALUMA
Finance Director * City Clerk
[SEAL]
•
•
•
•
EXHIBIT B.
Page 4
CERTIFICATEOF AUTHENTICATION AND REGISTRATION
This is one of the bonds described'in the within mentioned'Resolution of Issuance.
Dated: , 2001
BANK OF NEW YORK, WESTERN TRUST
COMPANY;
as Agent
By:
Authorized Officer
•
EXHIBIT B
Page 5
ABBREVIATIONS •
The following abbreviations,when used in the inscription on the face of this bond, shall
be construed as though they were written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in common
UNIF GIFT MIN ACT- Custodian
(Cust) (Minor)
under Uniform Gifts to Minors Act
(State)
Additional abbreviations may also be used though not in the above list
ASSIGNMENT
For value received, the undersigned does) hereby sell, assign and transfer unto' •
•
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within mentioned Bond and hereby irrevocably constitute(s) and appoint(s),
, attorney, to transfer the same on the registration books of the Agent, with full
power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: The isignature(s) on this
assignment must correspond with the
name(s) as written on the face of the
registered Bond in every particular without
alteration or enlargement or any change
•
whatsoever.
EXHIBIT B
Page 6
• ATTACHMENT V
DRAFT REASSESSMENT REPORT FOR ASSESSMENT DISTRICT NO. 23
(REDWOOD BUSINESS PARK
•
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•
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Ipk�r o p;�1t c1c Harris & Associates
'it-; r , ( . i May 7 , 2001
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REASSESSMENT REPORT •
Division 11.5, California Streets & Highways Code
CITY OF PETALUMA
Assessment;District No.23, Redwood Business Park 3
(Reassessment:and Refunding of 2001)
ITEM PAGE
1. Reassessment 1
2. Engineer's Cost Estimate 4,
3. Reassessment Roll 5
4. Names and Addresses of Property Owners `. - . - 6
5. Auditor's Record for Prior Bonds 7' •
6. Proposed Auditor's Record for Refunding Bonds 8
7. Method of Reassessment 9
8. Annual Administrative Assessment 12,
9. Certifications 13
10. Reassessment Diagram - - Attch'd
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City of Petaluma 05/07/01
Assessment District No. 23, Redwood Business Park 3 Page 1
• (Reassessment and Refunding of 2001) Reassessment Report
REASSESSMENT
WHEREAS, on , 2001, the City Council of the City of Petaluma (the "City"), County of
Sonoma (the "County"), State of California,;pursuant to the provisions of the Refunding Act of 1984 for
1915 Improvement Act Bonds (the "Act"), adopted its Resolution-ofIntention No. for the
reassessment of the real property within the boundaries of the City's Assessment District No. 23,
Redwood Business Park 3 (Reassessmentrand Refunding of 2001) and for the refunding of the
outstanding balance of the City's;previously issued $3,600,000 Limited.Obligation Improvement
Bonds, Assessment District No. 23; Redwood Business Park, Series 1995-A, dated December 20, 1995
(the "Prior Bonds"), and to pay,the-costs of such reassessment and refunding;
WHEREAS, the Resolution of Intention directed the undersigned to make and file a report
presenting:
(i) a schedule setting forth the unpaid principal and interest'of the Prior Bonds to be refunded and
the total amounts thereof;
(ii) the total estimated principal amount of the reassessment and`of the refunding bonds and the
maximum interest thereon-.together with an estimate of the cost of the reassessment and of
issuing the refunding bonds;
(iii) the auditor's record showing the schedule of principal installments and interest on Prior Bonds
and the total amounts thereof
(iv) the estimated amount of each reassessment, identified by reassessment number:corresponding
to the reassessment number of the reassessment diagram, together with,a proposed auditor's
record for the reassessment; and
(v) a,reassessment diagram showing the assessment district and the boundaries and dimensions of
the subdivisions of land within the district. Each subdivision;rincluding each separate
condominium interest as defined in Section 783 of the Civil Code, shall be given a separate
number upon the diagram to which Resolution reference is hereby made for further particulars;
•
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City of Petaluma • 05/07/01
Assessment District No. 23, Redwood Business Park 3 Page 2'
(Reassessment and Refunding of 2001) Reassessment Report •
NOW THEREFORE, the undersigned,by virtue of the power vested in me under the Act and the
order of the Council of the City, hereby make the following reassessment to cover the refunding of the
Prior Bonds and expenses incidental thereto.
The amountto be paid'for the refunding,together with the.expenses.incidental thereto, and the
reassessment balance are as follows:
SUMMARYCOST ESTIMATE
As Confirmed As Modified
Preliminarily And After
Approved Adopted Recordation
COSTS $3,644,748
CREDITS $' 452,343 •
BALANCE TO
REASSESSMENT $3,192,405
I do hereby reassess and apportion the portion of the total amount of the cost and expenses of the
reassessment and refunding upon the several lots,pieces or parcels or portions of lots or subdivisions of
land liable therefor and benefited thereby, and hereinafter numbered to correspond with the numbers .
upon theattacheddiagram, upon each, severally and respectively, in accordance with the benefits to be
received by-such subdivisions; respectively, from the acquisitions and improvements, and more
particularly set-forth in the list hereto attached and by reference made a part hereof.
As required by the Act, a diagram is hereto attached showing the reassessment district and also the
boundaries and dimension of the.respective subdivisions of within said reassessment district as the
same existed at the time of the passage of the Resolution of Intention,;each of which subdivisions
having been given a separate number upon said diagram.
C:\petaluma AD'23\Reassess-Report l.doc
City of Petaluma 05/07/01
Assessment District No. 23, Redwood Business Park 3 Page 3
•, (Reassessment and Refunding of 2001).Reassessment Report
The reassessment is made upon the several.subdivisions of land within the assessment district in
proportion to the unpaid principal amount of the original assessment recorded as a lien against each of
such subdivisions land. The diagram and reassessment numbers appearing herein correspond to the
numbers appearing on such diagram, to which reference is hereby made for a more particular
description of the property.
Each subdivision of land reassessed is described in the reassessment list by reference to its parcel
number as shown on the Assessor's Maps of the County for the fiscal year 2001-2002 and includes all of
such parcel. For a more particular description of said property, reference is hereby made to the deeds
and maps on file and of record;in'the office of the County Recorder;ofthe County.
Notice is hereby given that serial and/or term refunding bonds (the "Refunding Bonds") to represent
unpaid reassessments and bear interest,at the rate Of not to exceed twelve percent (12%) per annum, or
•, such higher rate of interest as"may be authorized by applicable law at the time of sale of such bonds,
will be issued hereunder in the.manner provided'bythe Act, and the last:installment of such refunding
bonds shall mature not to exceed eighteen.(18) years from the second day of September next succeeding
twelve(12) months from their.date.
Dated As of
By:
•
HARRIS &ASSOCIATES
Mary Grace Pawson
Engineer of Work
RCE 004573
•
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City of Petaluma 05/07/01
•
Assessment District No. 23, Redwood Business Park 3 Page 4 ••
(Reassessment and.Refunding of 2001) Reassessment Report
ENGINEER'S COST ESTIMATE
•
•
Prior Bonds Redemption Date: September 2,2001
Refunding Bonds Dated Date: , 2001
Refunding Bonds Closing Date: , 2001
For Prior Bonds
Cost of Escrow Securities $.3,4.08,548
For Refunding Bonds
Underwriting Discount ( 1 .5 % ) $47,910
Reserve Fund ( 3.55 ) • $111 ,790
Financial Advisor $22,500
Bond Counsel $30,000 •
Fiscal Agent $4;000
Enginegrin.g Fees $6 ,750
CPA Verification Fee $2,000
Other Costs (City Admin/Legal) $ 11 ,250
Contingency $ 1 ,595
TOTAL REFUNDING EXPENSES $3,646,343
REFUNDING CREDITS
Prior Bonds Reserve Fund $249 ,52.8
Prior Bonds Redemption Fund $202 ,815
Prior Bonds Improvement Fund $0
Interest Earnings on Escrow • $0
Other Credits
• TOTAL REFUNDING CREDITS $4.52,343
BALANCE TO REASSESSMENT $3,1!94,000
•
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City of Petaluma 05/07/01
Assessment District No. 23,.Redwoo3 Business Park 3 Page 5
• (Reassessment and Refunding of 2001) Reassessment Report
REASSESSMENT ROLL
The Reassessment rolhincludes a Reassessment Number and the Assessor's Parcel Number as found on
the secured Assessment Roll of the County of Sonoma, for Fiscal Year 2000/01. The Roll also shows
the reassessment levied on each parcel. The Roll is found below.
(1) (2) (3)
As As As
Reassessment Assessor's Percent of Preliminarily, Confirmed and Changed and
No. Parcel No. Acreage Reassessment Approved Recorded Modified
1 047-550-004 3.07 8.90% $284,266.00
2 047-550-005 2.88 7:36% $235,078.40
3 047-550-007 2.66 9i23% $294,806.20
4 047-550-015 3.88 12.60% $402,444.00
5 047-550-017 5.35 17:31% $552,881.40
• 6 047-550-022 9.44 30:63% $978,322.20
7 047-550-023 3.02 9:81% $313,331.40
8 047.550-024 1.28 4.16% $132,870.40
•
•
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City of Petaluma 05/07/01
Assessment District No. 23, Redwood Business Park 3 Page 6
(Reassessment and Refunding of 2001) Reassessment Report
NAMES AND ADDRESSES OF PROPERTY OWNERS
The names and addresses of property owners at the time of this reassessment are shown 1n. table
below.
Reassessment Assessor's Owner's Name. Owner's.Address
No. Parcel
Number
1 047-055-004 Savoy Corporation 2720 Taylor Street Suite 450
San Francisco, CA 94133
2 047-055-005 Savoy Corporation 2720 Taylor Street Suite 450
San Francisco, CA 94133
3 047-055-007 G&W Copley.Redwood Business 1318 Redwood Way Suite 140
Park •Petaluma,.CAj94952 •
4 047-055-015 G&W Cop.
op.ley'Redwood Business 1318 Redwood Way-;Suite 140
Park Petaluma,CA94952
5 047-055-017 G&W Copley Redwood Business 1318 Redwood Way-Suite 140
Park Petaluma, CA 94952
6 047-055-022 99 AF Petaluma LLC 15601 Dallas Parkway Suite 525
Dallas,TX 75001
7 047-055-023 G&W Copley Redwood.Business 1318 Redwood Way Suite 140
Park Petaluma, CA 94952
8 047-055-024 G&W Copley Redwood Business 1318 Redwood Way Suite 140
Park Petaluma, CA 94952
•
•
•
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City of Petaluma 05/07/01
s. Assessment District�No. 23, Redwood Business Park,3 ' Page 7
(Reassessment and Refunding,of2001) Reassessment.Report
AUDITOR'S RECORDS FOR PRIOR BONDS'
DATE __ PRINCIPAL RATE __ _ _ INTEREST _ ANNUAL TOTAL,
2-Sep-01 90,000 5.75 111 ,815.00 201 ,815.00
2-Mar-02 . 109,227.50
2-Sep-02 95,000 6.00 109,227.50 313,455.00
2-Mar-03 106,37750
2-Sep-03 100,000 6.15 106,377.50 312,755.00
2-Mar-04 1 03,302.50
2-Sep-04 105,000 6.30 103,302'.50 311 ,605.00
2-Mar-05 99,995,00
. 2-Sep-05 115,000 6.40 99,995.00 314,990.00
2-Mar-06 96,315.00
2-Sep-06 120,000 6.50 96,315.00 312,630.00
2-Mar-07 92,415.00
2-Sep-07 130,000 6.60 92,415.00 314;830.00
2-Mar-08 88,125.00
• 2-Sep-08 135,000 6.70 88,125600 311 ,250.00
2-Mar-09 83,602.50
2-Sep-09 145,000 6.80 83,602.50 312,205.00
2-Mar-10 78,672.50
2-Sep-10 155,000 6.90 78,672.50 312,345.00
2-Mar-11 73,325.00
2-Sep-11 165,000 7.00 73,325.00 311,650.00
2-Mar-12 67,550.00
2-Sep-12 175,000 7.00 67,550.00 - 310,100.00
2-Mar-13 61,425.00
2-Sep-13 190,000 7.00 61 ,425.00 312,850.00
2-Mar-14 54,775:00
2-Sep-14 200,000 7.00 54,775.00 309,550.00
2-Mar-15 47,775:00
2-Sep-IS 215,000 7.00 47,775.00 310,550.00
2-Mar-16 40,250.00
2-Sep-16 230,000 7.00 40,250.00 310,500.00
2-Mar-17 32,200.00
2-Sep-17 245,000 7.00 ' 32,200.00 309,400.00
2-Mar-18 23,625.00
2-Sep-18 260,000 7.00 23,625.00 307,250.00
2-Mar-19 14,525.00
2-Sep-19 280,000 7.00 14,525.00 .309,050.00
.' 2-Mar-20 4,725.00
2_Se_a.-20 __ 135,000 __,__ 7,00 _ _ 4_,725_00___ 144,450_00_
3,285,000 2,668,230.00 5,953,230.00
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City of Petaluma 05/07/01
Assessment District No. 23, Redwood Business Park 3 Page 8 ••
(Reassessment and Refunding of 2001) Reassessment•Report
PROPOSED AUDITOR'S RECORD FOR REFUNDING BONDS
•
DATE __ PRINCIPAL___ RATE_____ INTEREST___ ANNUAL TOTAL
2-Sep-01 0.00
2-Mar-02 127,930,08
2-Sep-02 79,000 4.25 86,245.00 293,175.08
2-Mar-03 84,566.25
2-Sep-03 115,000 4.45 84,566.25 284,132:50
2-Mar-04 82,007.50
2-Sep-04 120,000 4.60 82,007.50 284,015.00
2-Mar-05 79,247.50
2-Sep-05 130,000 4.70 79,247.50 288,495.00
2-Mar-06 76,192.50
2-Sep-06 135,000 4.80 76,192.50 287,385.00
2-Mar-07 72,952.50
2-Sep-07 145,000 4.90 72,952.50 290,905.00
2-Mar-08 69,400.00
2-Sep-08 . 145,000 5.00' 69,400.00 283,800.00 •
2-Mar-09 65,775.00
2-Sep-09 155,000 . 5.10 65,775.00 286,550:00 '
2-Mar-10 61,822.50
2-Sep-10 160,000 5.20 • 61,822.50 283,6.45.00
2-Mar-11 57,662.50
2-Sep-11 170,000 5.30 57,662.50 285,325.00
2-Mar-12 53,1.57.50
2-Sep-12 175,000 5.40 53,157.50 _ 281,315:00
2-Mar-13 48,432.50
2-Sep-13 190,000 5.50 48,432.50 286,865.00
2-Mar-14 43,207.50
2-Sep-1.4 195,000 5.60 43,207.50 281,415.00
2-Mar-15 37,747.50
2-Sep-15 210,000 5.70 37,747.50 285,495.00
2-Mar-16 31,762.50
2-Sep-16 220,000 5.80 31,762.50 283,525.00
2-Mar-17 25,382.50 .
2-Sep-17 235,000. 5.90 '25,382.50 . 285,765.00
2-Mar-18 18,450.00
2-Sep-18. 245,000 6.00 18,450.00 281,900.00
2-Mar-19 11,100.00
2-Sep-19 260,000 6.00 11,100.00 282,200.00
• 2-Mar-20 3,300.00 • •
2-Sep_20 _____ 110 _6000 _____ .00 ____3300.00 ___ 116600.00
3,194,000 2,058,507.58 5,252,507:58
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City'of'Petaluma 05/07/01
Assessment District No. 23, Redwood Business Park 3 Page 9
;• ;(Reassessment and Refunding,cif 2001)Reassessment,Report
METHOD OF REASSESSMENT
PROJECT OVERVIEW
Assessment District No. 23, Redwood Business Park 3 —Phases 1.and was formed by the City
Council of the City of Petaluma-in•November 1995. The District was formed to finance the construction
and acquisition of public improvements that can generally be described as:
s Extension and improvements of North McDowell Blvd.to serve as access to the property within the
•
District
• Construction of a bridge on North-McDowell Blvd. over Willow Brook Creek, again to provide
•
access to the property within the District
s Construction of a portion of the road and bridge improvements on Old Redwood Highway adjacent
• to the District, including the replacement of the Old Redwood Highway Bridge over Willow Brook
Creek
• Construction of utility improvements including storm drainage, water and gas, underground
telephone, electrical and cable TV to serve the property within the District
• Widen of Willow Brook Creek between Old Redwood Highway and'U.S. Route 101 to provide
adequate drainage and flood protection for the property within the District
• Payment for permits, licenses and"the construction of all auxiliary work necessary to complete the
improvements.
The City issued $3,600,000 of improvement bonds under the Improvement Bond Act of 1915 to finance
the construction and acquisition. This refunding provides for better interest rates and terms on the
outstanding debt.
•
APPORTIONMENT FORMULA
Method for Allocating Costs to the.Assessment District
• All costs associated with these reassessment proceedings are allocated to the.Assessment District. This
includes original planning, design, construction and financing costs and the costs associated with this
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City of Petaluma 05/07/01
Assessment District No. 23, Redwood Business Park 3• Pagel()
•
(Reassessment and Refunding of 2001)•Reassessment Report -
•
refunding. The constructed"facilities provide special benefit to the property in the District in the.form'of
access, utility and drainage service and satisfaction of development conditions. These benefits are not
experienced in by property outside of the District. The refunding provides special benefit to the
property in the District by reducing the overall debt service cost associated with,the assessment bonds.
This benefit is not experienced by property'ohtside of the District.
Method for rAllocatir g Costs within the Assessment-District
The amount of the reassessment'shall be apportioned-to the parcels in the District-in the,same manner as
the assessment was originally levied by the City Council of the City of Petaluma in its,proceedings for
the Prior Bond._This method, as described in the Amended Engineer's Report Assessment District No. '
23 Redwood Business Parka, (the Amended Engineer's Report) dated November6'1995 is as follows:
METHOD OF SPREAD
REDWOOD BUSINESS PARK 3—PHASE 1 AND 2 •
CITY OF PETAL UMA, SONOMA COUNTY, CALIFORNIA
Assessment District No. 23 has a total assessment of$3,600,000. This amount has been split between
the parcels on a modified square footage basis as follows:
Parcel No. Acreage % of Total Area % of Total Assessment,
PARCEL (1) 5.35 1695% 17..-31%
PARCEL (2) 3.88 12.30% 12.60%'
PARCEL (3) .3.07 9.72% 8.90%
PARCEL (4) 2.88 9.13% 136%
PARCEL (5) 3.61 11.44% 11.73%
PARCEL(6) ,6.41 20.29% 20.82%
PARCEL (7) 3.71 11.76% • 12.05%
PARCEL (8) 2.66 8.41% 9.23%
TOTAL 31.57 100% 100%
•
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City of Petaluma 05/07/01
Assessment District,No 23, Redwood;Business Park 3 Page 11
•. (Reassessment and Refunding,of 2001) Reassessment Report
Since the formation of the original Assessment District, the parcels have been renumbered and
reconfigured several times. The:Table below outlines the Reassessment Number, current Assessor's
Parcel Number and reassessment percentage and equates these to the Parcel Number, Acreage and
percent of assessment as described in the•Amended Engineer's Report. Neither the percentagebr total
dollar value of assessment:for any parcel is increased as a result of these refunding proceedings.
Current Sonoma County Assessor's Data
Reassessment Assessor's % of Total Original Assessment
No. Parcel No. Acreage Reassessment No.
1 047-550-004 3.07 8.90% 3
2 047-550-005 .2.88 7.36% 4
3 047-550-007 2.66 9.23% 8
4 047-550-015 3.88 12.60% 2..
•j 5 047-550-017 5.35 17.31% 1
6 047-550-022 9.44 30.63% 5,7(por.)
7 047-550-023 3.02 9.81% 5,6,7 (por.)
8 047-550-024 1.28 4.16% 6(por.)
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City of Petaluma 05/07/01
Assessment District No. 23, Redwood Business Park 3 Page 12
_(Reassessment and Refunding of 2001) Reassessment Report
IP
ANNUAL ADMINISTRATIVE ASSESSMENT
An annual administrative assessment shall be levied on each parcel of land or'subdivision of land within
the Assessment District. The administrative assessment will pay for necessary costs and expenses
incurred by the City of Petaluma, and not otherwise reimbursed, resulting from the administration and
collection of assessments and/or from the, administration or registration of any bonds and reserve or
"other related funds. This maximum assessment hereinafter set forth is authorized pursuant to the
provisions of Section 10204(0 of the ,Streets and Highways Code and the said maximum annual
assessment shall not exceed$8,800 levied on each assessed parcel prorata to its'reassessnient amount.
•
•
•
•
C:\petaluma AD 23\Reassess Report 1.doc
•
City of Petaluma 05/07/01
Assessment District No. 23,'Redwood Business Park 3 Page 13
•,
(Reassessment and Refunding of 2001) Reassessment Report
CERTIFICATIONS
. 1. I, the City Clerk of the City of Petaluma, hereby certify that-the foregoing Reassessment with the
diagram thereto attached, was filed with me on , 2001.
Beverly Kline, City Clerk
City ofPetaluma, California
2. I, the City Clerk of the City of Petaluma, California, hereby certify that.,this Reassessments, with
Diagram attached, were confirmed and adopted by the City Council of said City on
, 2001.
Beverly-Kline, City Clerk
City of Petaluma, California
3. I, the Director of Public Facilities and Services/Superintendent-of Streets of the City of Petaluma,
County of Sonoma, California, hereby certify that this Reassessment, together with the diagram thereto
attached, was recorded in my office on , 2001.
Rick Skladzien, Director of Public Facilities &
Services/Superintendent of Streets
City of Petaluma, California
4. A Notice of Reassessment was recorded and the.Reassessment Diagram was filed in the office of the
County Recorder of the County of Sonoma, California, on , 2001
Beverly Kline, City Clerk
City of Petaluma, California
C:\petaluma AD 23\Reassess Report 1.doc
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• ATTACHMENT VI
DRAFT OF PRELIMINARY OFFICIAL STATEMENT
•
. 26091-05 fl-EDIT 05/_1/8/01 I•
/• PRELIMINARY'OFFICIAL STATEMENT DATED ,2001
NEW ISSUE—BOOK-ENTRYONLY NO RATING
In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to
certain qualifications described herein, under existing law, the interest on.the Bonds is excluded from gross income for federal income tax
purposes and such interest is not an item of tax preference for purposes of theifederal alternative minimum tax imposed on individuals '
and corporations, although for the purpose of computing the alternative minimum tax imposed on certain corporations, such interest is
taken.into account in determining certain income and,earnings. In the further opinion of Bond Counsel, such interest is exempt from
California personal income taxes. See "TAX MATTERS"herein.
$ 'f
LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS
CITY OF-PETALUMA •
Assessment District No. 23,Redwood Business Park 3
(Reassessment and Refunding roff2001), Series 2001-A
Dated: Dateiof_Delivery Due: September 2,as shown below
Authority The Limited Obligation Improvement Bonds, City of Petaluma, Assessment District No.,:23,
Redwood Business Park 3 (Reassessment and Refunding of 2001), Series 2001-A are being
issued by the' City Petaluma pursuant to the,provisions of the ursuant to the Refunding Ad
of 1984 for 1915 Improvement.Bonds, Division,11.5 of. the California Streets and Highways
Code,to redeem and defease the outstanding'liimted obligation improvement bonds of the City
issued for its,Assessment District 23, Redwood Business Park 3. All of the proceedings of the
City undertaken to forni:the District and to levy the.assessments were undertaken pursuant to
the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways
Code).
Denominations Initial purchases of beneficial interests in.the Bonds will be made in book-entry form and the
. Bonds will be:•registered in the name of Cede & Co., as nominee for The Depository Trust
Company ('"DTC") Initial Bond denominations are $5,000 and any integral multiple thereof
. except that one. and may contain an odd amount. Purchasers of beneficial interests it the
Bonds wilt not receive certificates representing their interests in the Bonds and will not be paid
directly by the Bond tnistee. See"THE BONDS-Book-Entry System"herein.
Redemption The Bonds are subject to redemption on any March 2 or.September 2 on or after
prior to Maturity as described.herein. See"THE BONDS"herein.
Reassessments The Bonds are payable from reassessments levied against certain property within the
Assessment'District 23,.Redwood Business Park 3. Under the provisions of the Bond Law,
reassessment:installments of principal and interest sufficient to meet annual Bond debt service
are included'on theregular county tax bills sent to owners of property against which there are
unpaid .assessments. These annual reassessment ,installments are To be paid into the
Redemption Fund, to be held by the City and used to pay debt-service'on the Bonds as it _
becomes due. See'SECURITY FOR THE BONDS AND SOURCES OF PAYMENT THEREFOR."
Security The Bonds are not.general obligations"of the City of Petaluma and the Bonds are payable only from
assessrnerits and other'specific sources of money available to the City. Unpaid reassessments
constitute:fixed liens on the lots and parcels reassessed.within the District and do not
constitute a personal indebtedness of the. respective owners of such..lots and parcels.
Accordingly, in the event of delinquency, proceedings may be conducted only against the
particular parcel of real property securing the delinqquentareassessment. Thus, the value of
. fhe"real'property within fre District which has been allocated,a portion of the reassessment is
a critical-factor in.determining the investment t,quality of the Bonds. See"OWNERSHIP AND
VALUE OF PROPERTY WITHIN THE:DISTRIC T:"
Use of Proceeds The proceeds of the Bonds will primarily be'used to refinance bonds originally issued to
finaneetfinance the acquisition and pconstruction-by:theCity of public improvements, primkrily
infrastructure improvements necessary_for development of a'portion of the Redwood.Business
Parkin-the-City. See THE IMPROVEENTS."
This cover page contairis=certain information for general reference only. It'is not a summary of this issue.
Investors are advised to read' the entire Official Statement to obtain information essential to the making of an
informed investment decision.
• Preliminary,subject to change.
•
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COUNTY OF
SONOMA,THE STATE OF CALIFORNIA OR ANY`POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE
PAYMENT OF THE BONDS. THE INFORMATION SET FORTH IN THIS OFFICIAL STATEMENT, INCLUDING
INFORMATION UNDER THE HEADING"BONDOWNERS'RISKS",SHOULD BE READ IN ITS ENTIRETY.
MATURITY SCHEDULE
Maturity. Principal Interest Maturity Principal Interest
(September 21 Amount Rate Price (September 21 Amount Rate Price
$ _%Term Bonds due September 2,20_,Price: 100%
The Bonds will be offered when as and'iif issued.and received by the Underwriter, subject to the approval as:to their
legality by Jones Hall,A Professional Law Corporation,:San Francisco, California, as Bond Counsel.Jones Hall,is also serving as
Disclosure Counsel:to the City. In addition, certain legal matters will be passed upon for the City by..the-City Attorney. This
anticipated that the Bonds in book-entry form will be available for delivery to Cede & Co., as nominee of DTC, on orabbut
2001 in New York, New York.
IBIS,?SECURITIES; LLC
Dated: 2001.
*Preliminary,subject to change.
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CI-TY OF PETALUMA
CITY COUNCIL
E. Clark Thompson,Mayor
Janice Cader-Thompson, Vice-Mayor
Mike Healy, Councilmember
•
Matt Maguire, Councilmember
Bryant Moynihan, Councilmember
Mike'O'Brian, Councilmember
Pamela Torliatt, Councilmember
CITY STAFF
Frederick C. Stouder, City Manager
Gene RP. Beatty,Assistant City Manager
Richard R. Rudnansky, City Attorney
WilliainJ. Thomas, Finance Director
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BOND COUNSEL and DISCLOSURE COUNSEL
Jones Hall„A Professional.Law Corporation
San Francisco, California
REASSESSMENT ENGINEER
Harris 8&Associates
Petaluma, California
PAYING AGENT and ESCROW AGENT
Bank of NeW York, Western Trust Company
San Francisco, California
FINANCIAL ADVISOR
Kelling, Northcross &Nobriga
Oakland, California
UNDERWRITER
Ibis Securities, LLG
Walnut Creek, California
• •
• • TABLE OF CONTENTS
INTRODUCTION 11 SPECIAL RISK FACTORS 1916
THE BONDS 22 General 19161-7
General Provisions 22 Owners Not Obligated to Pay Bonds or
Authority for Issuance - 33 Reassessments 2017
Purpose of Issue and the Refunding.Plan 44 Bankruptcy.and Foreclosure 201748
Estimated Sources and Uses of Funds 44 Availability of Funds to Pay Delinquent
Investment of Bond Proceeds 54 Assessment Installments 2118
Estimated Debt Service Schedule 54 Limited Obligation upon.Delinquency...211819
Redemption 5s Collection of the Assessment 211819
Payment;Registration,Transfer and Exchange Proposition 218 224-920
of Bonds 66 Hazardous,Substances 232021
Book-Entry System - - - 76 Future Overlapping Indebtedness 232024
Discontinuance of Book-Entry System 98 No Acceleration Provision 2424
SECURITY FOR THE BONDS 98 CONSTITUTIONAL LIMITATIONS ON
Reassessments 98 TAXATION AND APPROPRIATIONS. 242124
Methods of Assessment and Reassessment Property Tax Rate Limitations-Article
Spread 109 XIIIA 242122
Covenant to Commence Foreclosure Legislation Implementing Article XIIIA252122
Proceedings 109 Appropriation Limitation-Article XIIIB...252'
Priority of Lien _ 11109 Property.Tax Collection Procedures 262223
•; Reserve Fund 1110 LEGAL MATTERS.. 272324
• THE DISTRICT • 121110 Tax Matters 272324
Description - - . 124440 - Absence of Litigation 2724
Property Owners 131244 Legal Opinion 272425
Assessment.Installment Delinquencies 1413 MISCELLANEOUS 282425
Value to Lien Ratios - -151313 Continuing.Disclosure 282425
Direct and Overlapping Governmental No Rating 2825
Obligations 1745 Verification of,Mathematical Accuracy 2825
Collection of the Assessment - 1745 Underwriting 2825
THE REDWOOD BUSINESS PARK 181516 Additional Information 292526
APPENDIX A-Reassessment Diagram A-1
APPENDIX B-Form of.Bond Counsel Opinion C-1
APPENDIX C. Form of Continuing Disclosure Certificate - D-1
APPENDIX D- City of Petaluma General Information E-1
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`• GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement. This Official Statement is submitted in'connection with the sale of the
Bonds referred to herein and may not be reproduced or used, in whole or in part, for any-other purpose.
This Official Statement shall not be construed as a contract with the purchasers of the Bonds.
• Unauthorized Representations. No dealer, broker, salesperson or other person has been
authorized by the City to give any information'or to make any representations with respect to the Bonds
other than those contained inl this(Official Statement and, if,given,oi made, such other information or
representations must not be relied upon as having been authorized by.any of the foregoing: This Official
Statement does..not constitute:an offer to sell or the solicitation of any`offer to buy nor shall there be any
sale of the.Bonds by any person.in<anyjurisdiction in which it is unlawful for such person to make such
an offer,solicitation or sale.
Estimates and Projections. When used in this Official Statement and in any continuing
disclosure by the City, in any press release and in any oral statement made with the approval of an
authorized officer of the City,the words or phrases"will likely result;" "are;expected to," "will continue,"
is anticipated;" "estimate,' "projects'' "forecast," "expect," "intend" and similar expressions identify
"forward looking statements""within the meaning of the Private'Securities Litigation Reform Act of 1995.
Such statements are subject to-risks and uncertainties that could cause actual results to differ materially
from those contemplated in such forward-looking statements. Any forecast is subject to such
uncertainties. Inevitably, some 'assumptions used to develop the forecasts will not be realized and
unanticipated events and circumstances may occur. Therefore, there are likely to be differences between
forecasts and actual results, and those differences may be material. The information and expressions of
opinion herein are subject to change without notice,and neither the delivery of this Official Statement nor
• any sale made hereunder shall, under any circumstances,give use to any implication that there has been
no change in the affairs of the City since the'date hereof.
Involvement of Underwriter. The Underwriter has reviewed the information in this Official
Statement in accordance with and'as'_a part of,its responsibilities to investors under the Federal Securities
Laws as applied to the facts and circumstances of this transaction; but the Underwriter does not
guarantee the accuracy or completeness of such information. The information and expressions of
opinions herein are subject to change without notice and neither delivery of'this Official Statement nor
any sale made hereunder shall, under any circumstances, create any implication that there has been no
change in the affairs of the City since the date hereof. All summaries of provisions of the Resolution or
other documents referred to in this Official Statement, are made subject to the provisions of such
documents,respectively,and do-not purpoft to be complete statements of any or all of such provisions.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR-MAINTAIN THE MARKET PRICE OF THE BONDS
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL.IN THE OPEN MARKET. SUCH
STABILIZING,IF COMMENCED,MAY BE DISCONTINUED AT ANY TIME.
THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, IN RELIANCE UPON AN EXCEPTION FROM'THE REGISTRATION REQUIREMENTS •
CONTAINED IN-SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES,LAWS OF'ANYSTATE.
•
• OFFICIAL<STATEMENT-
c
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LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS
CITY OF PETALUMA
Assessment District No. 23,Redwood Business Park 3
(Reassessment and.Refunding of 2001), Series 2001-A
INTRODUCTION
This Introduction is nota.sun}mary of this Official Statement. It is only a brief description of
and guide to, and is qualified by, more complete and detailed informationcontained in the entire Official
Statement, including the cover page and appendices hereto, and the.documents summarized or described
herein. A full review should be made of the entire Official Statement. The offering of the Bonds to
potential investors is made only by means of the entire Official Statement.
Purpose of Official Statement. The purpose of this Official"Statement, which includes
the cover page and Appendices hereto (the "Official Statement") is to provide certain
•' information concerning the sale and issuance of the Limited Obligation Refunding
Improvement Bonds, City of Petaluma, Assessment District No 23, Redwood Business Park 3
(Reassessment and Refunding of 2001) Series 2001-A (the 'Bonds').
The City. The City of Petaluma (the "City") is located in Sonoma County,
approximately 40 miles north of San Francisco. Incorporated in 1858,.the'City's first charter was
granted by the state in 1947, and Petaluma continues to-operate as a 'charter city. The
population of the City is estimated to be 53,000.
•
The Assessment District. The City of,Petaluma, Assessment District No. 23, Redwood
Business Park 3 (the "District")was created by the City pursuant to Resolution of Intention No
95-220 N.C.S. adopted by the City Council of the City-(the "City"Council") on August 21, 1995.
The District is comprised of [eight] parcels, all of which are reassessed. See "THE"DISTRICT"
herein for a description of the parcels,property ow ners and assessed value of the Iand in the
District. Based on the2000-01,Sonoma County (the "County") assessed valuation of.property in
the District and the.$ reassessment amount, the overall value-to-lien ratio for the District
is approximately to 1.
Purpose of the Bonds. The net proceeds of the Bonds, along with other available funds,
will be used (i) to redeem and defease the outstanding limited obligation improvement bonds
of the City issiied;forthe District issued in 1995 (the "1995 Bonds") by making a deposit into
Preliminary,subject to change.
-1-
the Escrow Fund created pursuant to the reassessment proceedings for such purpose, (ii) to •'
make a deposit into a debt service reserve fund and (iii) to pay certain costs of issuing the
Bonds. See "THE BONDS Purpose of Issue and the Refunding Plan" herein.
Sources of Payment for the Bonds. The Bonds are issued pursuant to the Refunding Act
of 1984 for 1915 Improvement Bonds, Division 11.5 of the California Streets and•Highways
Code (the "Refunding Law") and a resolution of the City Council of the City, adopted on
, 2001 (the "Resolution"). The Bonds are issued upon and are secured by certain
unpaid reassessments (the'Reassessments") against the Reassessment Parcels'together with
interest thereon. The unpaid Reassessments together with interest thereon constitute a trust
fund for the redemption and payment of the principal of the Bonds and the interest thereon.
The Bonds are also secured by the monies in the Redemption Fund and the Reserve Fund
created pursuant to the reassessment proceedings.
Description of the Bonds. Payments. Interest is payable on March 2, 2002, and
semiannually thereafter on March 2 and September 2 each year Principal of,and premium, if
any, on the Bonds shall be payable by Bank of New York, Western Trust Company, 'San
Francisco, California, acting,.as registrar, transfer agent and paying agent (the "Paying Agent")
for the Bonds. See THE BONDS - General Provisions," " - Payment, Registration, Transfer
and Exchange of Bonds"herein.
Denominations and Registration. The Bonds will be issued in denominations of$5,000
each or integral multiples thereof, except for one Bond 'which is-may be in an;odd amount. The •
Bonds will.be issued as fully registered bonds registered in the name of Cede &Co.,as nominee
for The Depository Trust Company. Initial,purchases of beneficial interests in the Bonds will be
made in book-entry form. See"THE BONDS—Book-Entry.System."
Redemption. The Bonds are subject,to redemption on any March 2 or September 2, at a
redemption price equal to the principal,amount to be redeemed plus a premium thereon, plus
accrued interest toathe redemption date: The Bonds maturing on September 2,'20 are subject
to mandatory sinking fund redemption. See—THE.BONDS- Redemption" herein.
Summaries Not'Definitive. The.summaries and references to the Act, the"Bond.Law,the
Resolution, the Bonds, certain resolutions and to other statutes and documents referred to
herein do not purport to be comprehensive or definitive, and are qualified in,their entireties by
reference to each such statutes and documents: All capitalized terms used herein, unless noted
otherwise,.;shall have the meanings prescribed in the Resolution, as hereinafter defined. The
information set forth herein has been furnished by the City and by sources which are believed
to be accurate and reliable but is not guaranteed as to accuracy or completeness. Statements
contained in this Official Statement which involve estimates, forecasts, or other matters of
opinion, whether or not expressly so described herein, are intended solely as such and are not •
to be construed,as representations of fact. •
THE BONDS
General Provisions
-2-
The Bonds will be dated their date of delivery, and will be issued in the aggregate
•, principal amount set forth on the cover'hereof. The Bonds shall initially bessued in the form of
fully registered bonds in a denomination of$5;000 or any integral multiple thereof, except for
one Bond which may be in. an odd amount. The Bonds will be issued only as one fully
registered Bond for each maturity, in the name of Cede & Co., as nominee for The Depository
Trust Company, New York, New'York ("DTC"), as registered owner of all Bonds, and will be
available to Beneficial Owners' under the book-entry system maintained by DTC in
denominations of$5,000 or any integral multiple thereof except-that one Bond may be in an
odd amount. Beneficial Owners of the Bonds will not receive physical certificates representing
their interest in the Bonds. So long as the Bonds are registered in the name of Cede & Co., as
nominee of DTC, references herein to the owners shall mean;Cede & Co., and shall not mean
the Beneficial Owners of the Bonds: See "Book-Entry System" below.
The Bonds will bear'interest.from their dated date at the rates per annum set forth on
• the cover page hereof, payableesemiannually on each March 2 and September 2, commencing
March 2, 2002 (each, an "Interest Payment Date"), and will mature'in the amounts and on the
dates setforth on the cover page hereof.
The principal and interest:on the Bonds at maturity shall be payable in lawful money of
the United States of America upon presentation at the office of the Paying Agent.
Interest on the Bonds-shall be paid by check, draft or'warrant mailed to DTC, or any
successor depository, or in the event of termination of the.book-entry system, to the registered
•; owner hereof at the registered; owner's address as it appears on the records of the Paying
Agent, or at such address as may have been'filed with the Agent for that purpose, as of the
fifteenth day of the calendar Month immediately preceding each Interest Payment Date.
As long as Cede & Co. is the owner of the Bonds, payments of the principal
of, premium, if any, and interest on the'Bonds will be made'directly to DTC, or its nominee,
Cede &Co. Disbursements of such payments to DTC's,Participants is the responsibility of DTC
and disbursements of such payments to the Beneficial Owners is the responsibility of DTC's
Participants and Indirect Participants, as.more fully described below in the section captioned
"Book-Entry System. Payments of the principal of,premium,if any, and interest on the Bonds
will be made directly to DTC, or its nominee, Cede & Co.,by the Fiscal Agent, so long_as DTC
or Cede & Co.is the registered owner of the Bonds. Disbursements of such payments to DTC's
Participants is the responsibility of DTC and disbursements of such'paymentsito the Beneficial
Owners is the responsibility of DTC's Participants and Indirect Participants, as more fully
described herein. See".Book-Entry System." below.
Authority for Issuance
The Bonds are issued pursuant to the Refunding Law and a Resolution of Issuance
adopted by the City Council on , 2001. The Bonds are issued upon and primarily
secured by certain unpaid Reassessments which are a lien against certain parcels of land (the
"Reassessment Parcels") within the District,together with interest thereon. The City stated its
intention to refund the 1995 Bonds pursuant to a Resolution of Intention adopted by the City
Council of the City on 2001.
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The Bonds are issued pursuant to particular provisions of the Refunding Law which
permit their authorization,'issuance and sale without public hearing if three conditions are
satisfied. The three conditions are summarized as-follows:
(a) Each estimated annual installment of principal and interest on. the
Reassessment is less than the corresponding annual installment.of principal and interest
on the portion of the original assessment being superseded and supplanted by the same
percentage for all Reassessment Parcels.
(b) The number of years to maturity of all the Bonds is not more than the
number of years to the last maturity of the 1995 Bonds (as defined below).
(c) The principal amount of the Reassessment on each.Reassessment Parcel
is less+than the,unpaid principal amount of the portion of'the original assessment;being
superseded and supplanted by the same percentage for each Reassessment Parcel.
The.City Council, as part of the.refundingproceedings taken pursuant to the Refunding
Law,has made a finding that the three conditions are satisfied.
Purpose of Issue and the.Refunding Plan
The purpose of the Bonds is to provide funds which will be deposited into an escrow
fund (the "Escrow Fund") held by. ,San Francisco; California, as escrow agent
("Escrow Agent") pursuant to an Escrow Agreement, and used to pay principal and interest •
due on and redeem on. „20_the following outstanding series of bonds,referred
to herein as the 1995 Bonds:
Certainmmoneys in the existing funds and accounts relating to the 1995 Bonds will also
be applied to the redemption. See "Estimated Sources and Uses of Funds."
Estimated Sources and Uses of Funds
The proceeds to be received from the sale of the Bonds, together with other applicable
sources, are estimated to applied as follows:
SOURCES:
Par Amount of the Bonds
Less:Underwriter's Discount
Plus: Funds from the 1995 Bonds
Total Sources
USES: .
Deposit Escrow Fund
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Deposit to Reserve Fund(1)
Deposit to Costsof Issuance Fund(2)
Total Uses
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•
Investment of Bond Proceeds • .
• Monies held in the Redemption Fund and the Reserve Fund shall be invested as
permitted under the Refunding Law, and shall be held by the City. Investments in any and all
funds and accounts shall be at the discretion of the Finance Director and may be commingled in
a separate fund or funds for purposes of making, holding and disposing of investments,
notwithstanding provisions in the Resolution,for transfer to or holding in or to the credit of
particular funds or accounts of amounts received or held by the Finance Director, provided that
the Finance Director at all times accounts for such investments strictly in accordance with the
funds and accounts to which they are credited and otherwise as provided in the Resolution.
Estimated Debt Service Schedule
The following table presents the debt service schedule for the Bonds, assuming no
redemptions are made:
Year Ending Principal Interest Annual Total
•'
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Redemption ,
Optional Redemption. Whenever, as of an 'Interest Payment Date, there are sufficient
funds in the Prepayment Account of the Redemption Fund from the proceeds of prepayments
of Reassessments,or from the application of any surplus funds,by the City Council, Bonds shall
be called for redemption. Each Bond, or any portion of the principal thereof in the principal
amount of $5,000 or any integral multiple thereof, may be redeemed and paid in advance of
maturity on any Interest Payment Date in any year by giving notice as provided in the
Resolution and by paying the_principal amount thereof,plus interest to the date of redemption,
unless sooner surrendered, in which event said interest will be paid to the date of payment,
together with a Redemption Premium of 3% of the principal amount to be redeemed.
The provisions of Part 11.1 of the Bond Law are applicable to the advance payment of
• Reassessments and to the 'calling of the Bonds. The Paying Agent shall select Bonds for
redemption in such a way that the ratio of Outstanding Bonds to issued Bonds shall be
-5-
approximately the same in each annual series insofar as possible (i.e. on a pro-rata basis among •
maturities of the Bonds). Within each annual,maturity, the Agent shall- select Bonds for
retirement by lot.
Mandatory Sinking Fund Redemption., The Bonds maturing on September 2, 20_ (the
"Term'Bonds") shall be called before maturity and redeemed,from the Sinking Fund Payments
that have been deposited into the Redemption.Account, on September 2, 20_, and on each
September 2 thereafter prior to maturity, in accordance with the schedule of Sinking Fund
Payments set,forth below, The Bonds so called for redemption shall be selected by the Fiscal
Agent by lot and shall be redeemed at a;redemption price for each redeemed Bond equal to the
principal amount thereof, plus accrued interest to the redemption date, without premium, as
follows:
Sinking Fund •
Redemption Date Sinking Payments
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Effect of Redemption. From and after the date fixed for redemption,if funds available for
•
the payment of the principal of, and interest and any premium on, the Bonds' so called for
redemption shall have been deposited in the Redemption Fund on the date fixed for
redemption, such Bonds so called will cease to be entitled to any benefit under the.Resolution
other than the right to receive payment of the redemption price, and no interest shall accrue
thereon on or after the redemption date specified in such notice.
Any prepayment of all or part of any Reassessment would, iand the issuance of
refunding bonds would, and the accumulation of investment income in the Redemption Fund
may, result in optional redemption of all or a portion of the Bonds prior to their "stated
maturities. Pursuant to the Refunding Law, the City may issue refunding bonds for the
purpose of redeeming the Bonds. See "SECURITY FOR THE BONDS - Reserve Fund" for a
discussion on the transfer of investment income from the Reserve Fund to the Redemption
Fund.
Transfer and Exchange of Bonds
Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred upon the - "
Bond Register by the registered Owner, in person or by such Owner`s duly authorized attorney,
upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument
of transfer in a form,approved by the Paying Agent, duly executed. Whenever any Bond shall
be surrendered for transfer, the Paying Agent shall thereupon authenticate and deliver to the
transferee anew Bond or Bonds of like tenor, maturity and aggregate principal amount. Bonds
may be exchanged at the Principal Office of the Paying Agent, for Bonds of the same tenor and •
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maturity and of other authorized denominations. Neither.the City nor the Paying Agent shall
• be-required to make such exchange or registration or transfer of'Bonds on or after the Record
Date or after a Bond has been selected for redemption. For any transfer or exchange under this
Section, the City and the Paying Agent may'require the payment of a reasonable fee to cover
the costs and expenses of the City and the Paying Agent.
Exchange of Bonds. Fully registered' Bonds may be exchanged at the office of the Paying
Agent, or designated transfer agent/registrar, for a like aggregate principal amount of Bonds of
the same series, interest rate and maturity, subject to the terms:and conditions provided in the
system of registration for registered;debt obligations, including the payment of certain charges,
if any, upon surrender and cancellation of said Bonds. Upon such transfer and exchange, 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.
Bond Register. The Paying Agent is required to keep sufficient books for the registration
and transfer of the Bonds and, upon presentation for such purpose, the Paying Agent shall,
under such reasonable regulations as it may prescribe, register or transfer or cause to be
registered or transferred, onsaid register, the Bonds as provided in the Resolution. The register
shall show the series, number, date; amount, rate of interestand last known holder of each
Bond, and the number and amount of:each interest coupon paid.
• Book-Entry System
DTC will act as securities depository for the Bonds. The Bonds will be issued as fully
registered bonds registered in the name of Cede &Co. (DTC's partnership nominee). One fully
5 registered Bond will be issued for each maturity of the Bonds, each in the aggregate principal
amount of such maturity, and will be deposited with DTC.
• DTC.is a limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within-the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a ':clearing:agency" registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934. DTC holds securities that its participants (the
"Participants") deposit with DTC, DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges; in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations; acid certain other organizations. DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the
• American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and dealers, banks, and -
trust companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
• Purchases of, the Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Bonds on DTC's records. The ownership
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interest of each actual purchaser of each Bond ("Beneficial-Owner") is in turn to be recorded :`
on the Direct and Indirect Participants. records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but.Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as periodic statements of their
holdings, from the:Direct or Indirect Participant through which the Beneficial Owner entered
into the transaction. Transfers of ownership interests>inthe Bonds are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial Owners. .Beneficial
Owners will not receive certificates representing their ownership interests in the Bonds, except
in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers; all. Bonds deposited by Participants with DTC are
registered in the name of DTC's partnership nominee, Cede & Co. The deposit of,Bonds with
DTC and their registration in the name.of Cede &Co. effect no change in beneficial ownership.
DTC has no knowledge of The actual Beneficial Owners of the Bonds; DTC's records reflect only
the identity of the Direct Participants to whose accounts such securities are credited,which may
or may not be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct t;Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants
to Beneficial Owners will be governed by arrangements among them, subjectato any statutory
or regulatory requirements as may be-in effect from time to time.
0.
Redemption notices shall be sent to Cede&.Co. If less than all of the bonds within an .
issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of
each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its
usual procedures,DTC mails an Omnibus Proxy to an issuer as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants toywhose accounts the Bonds are credited on the record date (identified in a listing
attached to the Omnibus Proxy). -
Principal, mandatory redemption.and interest payments on the Bonds will be made to
DTC: DTC's practice is to credit Direct Participants' accounts on payment dates in accordance
with,their respective holdings shownon DTC's records unless DTC has reason to believe that it
will not receive payment on the date payable. Payments by Participants to Beneficial Owners
will,be governed by standing instructions and customary practices, as is the case with securities
held for the accounts of customers m bearer form or registered in "street name,"and will be the
responsibility of such Participant and not of DTC, the Fiscal Agent, or the City, subject to any
statutory or regulatory requirements as may be in.-effect from-time to time. Payment of
principal and interest to DTC is the:responsibility of the City or the Fiscal Agent, disbursement
of such payments to Direct Participants shall be the-responsibility of DTC, and disbursement of
such payments to the Beneficial Owners shall be responsibility of Direct and Indirect
Participants.
The City cannot and does not give any assurances that DTC, DTC Participants or •'.
others will-distribute payments of-principal, interest or premium with respect to the;Bonds
-8-
Paid to DTC or its nominee as the' registered owner, or will distribute any redemption
•, notices or other notices,to the Beneficial''Owners, or that they will do so on a timely basis or .
will serve and act in the manner. described in this Official Statement. The City is not
responsible or liable'for the failure'of DTC or any DTC Participant to make any payment or
give any notice toa'.Beneficial Owner with respect to the Bonds.or an error or delay relating
thereto.
. The foregoing description of. the procedures and record-keeping with respect to
beneficial ownership interests in the Bonds, payment of principal, interest and other payments
on the Bonds to DTC Participants or.Beneficial Owners, confirmation and transfer of beneficial
ownership interests in such Bonds and other related transactions by and between DTC, the
DTC Participants and the Beneficial Owners is based solely on information provided by DTC.
Accordingly,no representations can be made concerning these matters and neither the DTC
Participants nor the Beneficial Owners should rely on the foregoinginformation with respect to
such matters, but should instead confirm the same with DTC or the DTC Participants, as the
case may be.
Discontinuance of Book-Entry System
DTC may discontinue providing its services with respect to the Bonds at any time by
giving notice to the Fiscal Agent and discharging its responsibilities with respect thereto under
applicable law or the City may terminate participation in the system of book-entry transfers
through DTC or any other securities^depository at any time. In the event that the book-entry
0 system is discontinued, the City will execute, and the Fiscal Agent will authenticate and make'
available for delivery, replacement Bonds in the form of,registered bonds.
•
SECURITY FOR THE BONDS
Reassessments
The Bonds are issued upon and are secured: by a first pledge of all the unpaid
Reassessments levied upon the Reassessment Parcels, together with interest thereon. The
unpaid Reassessments together with interest:thereon:constitute a trust fund for the redemption
and payment of the principal!?of the,Bonds and the interest thereon. All the Bonds are secured
by the monies in the Redemption Fund and the Reserve Fund created pursuant to the
reassessment proceedings. Principal of and interest on the Bonds are payable exclusively out of
the Redemption'Fund..
Although the unpaid Reassessments constitute fixed liens on the Reassessment
Parcels, they do not constitute personal indebtedness of the owners of the Reassessment ..
• Parcels. Furthermore, there can be no assurance as to the ability of the owners to pay the
unpaid Reassessments.
The unpaid Reassessments levied on the Reassessment Parcels will be billed by the
County on the regular property tax bills sent to owners of such properties. All sums received
• from the collection of the Reassessments and of the interest and penalties thereon shall be
placed in the Redemption Fund. The annual Reassessment installments together with interest
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are to be paid into the.Redemption.Fund which will be used to pay the principal of and interest
on the Bonds as they become due. -
The Bonds are.not.secured by the general taxing power of the City or the.State or any
political ,subdivision of the State, :and neither the City nor the State nor any 'political
subdivision of the State has pledgedits full faith and credit for the payment thereof.
Methods of Assessment and Reassessment Spread
As described in the Reassessment Consultant's Reassessment Report prepared with
respect to.the District, the assessments,levied in the Prior District were spread on,the basis of
special and direct benefits received by the assessed parcels from the improvements to be
constructed, as recommended by the assessment engineer(s) and as finally approved by the
City Council: The Reassessments are spread in amounts proportional to the respective
outstanding assessments securing the 1995 Bonds.
Covenant to Commence Foreclosure Proceedings
The Refunding Act provides that in the event any Reassessment or installment thereof
or any-interest thereon is not paid when due, the City may order the institution of a court action
to foreclose the lien of the unpaid.Reassessinent. In such.an-action, the real property subject to
the unpaid Reassessment, but not any parcel for which the Reassessment'rnstallment in not
delinquent, may be sold at judicial foreclosure sale. This foreclosure sale procedure is not
mandatory. The City has covenanted that it will order; and cause to be commenced; and
•
thereafter diligently prosecute an action m the superior court to foreclose the lien of a
Reassessment or installment thereof which has been billed, but has not been paid in the
following instances,_which action shall be commenced within 60 days'of'any of the following
determinations which.shall be made by the Finance Director not later than October 1 of each
Fiscal Year:
(A) If the City determines that there is a delinquency of a Reassessment of$
or more for a prior Fiscal Year or Years for any single parcel of land in the District.
(B) If the;City determines that the total amount of delinquent Reassessments for the
prior Fiscal Year for the entire District, less the total delinquencies.under_subsection (A) above„
exceeds threepercent(3%) of the total Reassessments dueand payable imthe prior Fiscal'.Year,
foreclosure,shall be commenced'against each:parcel.of land in the District with a delinquency of
$ or more for the prior:Fiscal Year or Years.
(C) If the City 'determines that the total'?amount of]delinquent Reassessment-'for the
prior Fiscal Year for the entire District, less the total delinquencies under:.subsections (A) and
fB) above, ezceeds'five percent (5%) of the total Reassessments due and payable for the prior
Fiscal Year, foreclosure shall,be commenced against each parcel of land within the District with
any amount of delinquency for the prior Fiscal Year"or Years.
However, the City has covenanted in the Resolution that upon any Reassessment
- --linquent, it will cause foreclosure proceedings to be brought within-one
hundred fifty :(150) days of such delinquency on all then delinquent parcels and thereaafter •
diligently prosecute su - - _ - - _ Z-- :
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•
• In the event ,court foreclosure proceedings are necessary, there may be a delay in
payments to Bondowners pending prosecution of the;foreclosure proceedings and receipt by
the City of the proceeds'of the foreclosure sale. 'It is also possible that no bid for the purchase of
the applicable property would be received at the foreclosure sale. See also the section herein
entitled"SPECIAL RISK FACTORS."
Priority of Lien .
The Reassessments (and any further assessment or reassessment) and each installment
thereof, and any interest and penalties thereon, constitute'..a lien against the lots and parcels of
land on which they were imposed until the same is paid. Such lien has priority over all fixed
special assessment liens which may thereafter be created against the property and also has .
priority over all private liens including the lien of any mortgage or deed of trust whenever
created. Such lien is co-equal to and independent of the lien, for general taxes and any
community facilities district special taxes. There are special taxes;and assessments other than
the Reassessments affecting a portion of the land in the District. See"THE DISTRICT - Direct
and Overlapping Governmental'`'Obligations" below.
Reserve Fund
On the date of issuance and delivery of the Bonds, the City will make a deposit from
0 Bond proceeds into the Reserve Fund in the amount;of$ . Moneys in the Reserve Fund
shall be held by the Finance Director for the benefit of the City and the Bond Owners as a
reserve for the payment of principal of, and interest and any premium on, the Bonds. The City
shall cause the Reserve Fund to be administered in accordance with Part 16 of the Bond Law;
provided that proceeds from redemption or sale of-propertieswith respect to which payment of
delinquent Reassessments and interest thereon was made from the Reserve Fund, shall be
credited to the Reserve Fund.
Amounts deposited into the Reserve Fund will be used and withdrawn by the Paying
Agent solely for the purpose of making transfers to the Redemption Fund in the event of any
deficiency at any time in.the Redemption Fund of the amount then required for payment of the
principal of (including Sinking!Fund Payments,if any), and interest and any premium on the
Bonds or for the purpose ofredeeiriing Bonds from the Redemption Fund.
Whenever, after-the issuance of the Bonds, a Reassessment is prepaid, in whole or in
part, as provided,in'the Refunding Law, the Finance Director=shall transfer from the Reserve
Fund to the Redemption Fund an amount specified in such direction equal to the product of the
ratio of the original amount of the Reassessment so paid to the original amount of all
Reassessments, times theinitial Reserve Requirement. . • .
Whenever, on any Interest Payment Date, or on any other date when requested by an
Authorized Officer, the amount in the Reserve Fund exceeds the then applicable Reserve
Requirement, the Paying Agent will, except as otherwise in the Resolution for purposes of
• rebate, transfer on or before such Interest Payment Date or such other date an amount equal to
such excess from the Reserve Fund to the Redemption Fund to be used in accordance with the
Refunding Law:
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Whenever the balance in the Reserve Fund is sufficient to retire all the Outstanding •
Bonds, whether by advance retirement or otherwise, collection of the principal and interest on
the Reassessments will be discontinued and the Reserve Fund liquidated by the Paying Agent
in retirement of the Outstanding Bonds. In the,event that the balance in the Reserve Fund at
the time of liquidation exceeds the amount required to retire all of the Outstanding Bonds, the
excess will, after payment of all amounts due to the Paying.Agent, be transferred to the City to
• be used in accordance with the Act and the Refunding Law.
THE DISTRICT
Description
Direct access to the District is provided by U.S. Highway 101, which has an interchange.
less than one-quarter mile from the District to Stony Point Road, Petaluma Boulevard North,
North McDowell Boulevard and Old Redwood Highway. The Redwood Business Park
currently includes over 20 buildings, of which: 7 are located in the District See "THE
REDWOOD BUSINESS PARK" above for a brief description of the development in the
Redwood Business Park.
The.District is comprised of eight parcels;,seven of which are developed.. All of the
parcels in the District are part of a Planned Community District, and the planning process Ask
required by the City has been completed. The parcels are zoned for office, R&D, industrial,
warehouse and commercial uses. To date, in the District approximately square feet of
development has been approved, and approximately .. square feet`has.been constructed, I
Proceeds of the Prior Bonds were used to acquire and construct various road and bridge
construction and-improvements as well as utility improvements, all of benefit to the.District.
■-- 9' - - ' There are
three landowners in.the District. For the 2000-01 fiscal,year, the District included nine parcels;
however o. One of the nine, Assessor's Parcel No 047-550-021, was a common area eomon-
arca,for Assessor's Parcel Nos. 047-550-018, 019 and 020, and not subject to anrassessment for
area and enlarging each of the three developable parcels. The common area land and the-three
parcels it served were recently reconfigured into three parcels with no common area; the three
resulting'developable parcels,are will be designated Assessor's Parcel Nos. 047-550-022, -023
and-024,beginning in the 2001-02,fiscal year.
The following table_shows the property owners within the District, as well as the
assessed value, of their parcels. as reported by the 'County.Assessor, based on the parcel
designations for fiscal year 2000-01.
CITY OF PETALUMA
ASSESSMENT DISTRICT'NO. 23, REDWOOD BUSINESS PARK 3 •
Property:Owners and 2000-01 Assessed Values
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•
•' Assessor's
Parcel 2000-01! 2000-01. Total
Number Property Owner Acres AN.Land A.V.Impmts Value
047-550-004 .Savoy Corporation 3.07 $675,266. $4,051,593 $4,726,859
047-550-005 Savoy Corporation 2.88 727;209 2,597,175 3,324,384
047-550-007 G&W Copley_Redwd.Bus.Park 2.66 311,661 0 $311,661
.047-550-015 G&W Copley Redwd Bus.Park 3.88 1,765;548 4,260,602(1) 6,026,150
047-550-017 G&W Copley Redwd.Bus..Park 5.35 1,246,644 5,041,401 6;288;045
047-550-018 99 AF Petaluma LLC 2.10 3,00Q000 18;000,000 21,000;000
047-550-019 G&W Copley Redwd`Bus.Park 0.65 304,621. 4;739,126(1) 5,043,747
047-550-020 G&W Copley Redwd:Bus.Park 0.17 80,107 622,4190) 702,526
047-550-021 Common Area('-) 10.81 . na . .n/a n a
Total 31.57 $3O 8,,,o 0r'-avx,"41
7,423,372
0)Value.ofimprovements based on City building permits for improvements not yet assessed by County.
(2)Common Area parcel has been eliminated beginning in fiscal year 2001-02'and land area consolidated into
other parcels.
Source: Sonoma County Assessor's Office 2000-01 Secured Roll and City building permit records.
Property Owners
Reassessment Parcel Nos. _ (APN 047-550-007, -015, -017, --023 and -025024),
representing_% of the outstanding lien,is owned by G&W Copley Redwood Business Park,
•
the original developer of Redwood Business Park.
•
Reassessment Parcel No. (APN 047-550-015)7 representing _% of the outstanding
lien,-has been developed within the last year with an approximate 67,340 square foot three-
story building. Currently, the building is fully leased to Cisco Systems, a publicly traded
company,under a lease'that expires in
Reassessment Parcel No.,_ (APN 047-550-017)7 °. - _ - _
14en—has been developed;within the last year with an approximate _square foot one-story
building. Currently, the building ds also fully leased,to Gluon,Networks, under a lease that
expires 9n
Reassessment Parcel No _ (APN 047.550-023, formerly 047-550-019),representing
_% of the outstanding'lien, has been developed within the last year with an approximate
58,440 square foot two-story building. Currently, the building is fully leased to Gluon
Networks, under a lease that expires in .
Reassessment Parcel No. (APN 047-550-024, formerly 047-550-020), representing.
° : - _ - •, has been developed within the last year with an approximate
7,423 square foot one-story building. Currently, the building is fully leased to Learning
Universe Child Development Center, a subsidiary of Knowledge Learning Corporation, a
publicly traded company; under a,lease that expires in
• Reassessment Parcel No._ (APN 047-550-007) is currently unrevedundeveloped.
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Reassessment Parcel No._ (APN 047-550-02248), representing_%-of the outstanding ••
lien; is owned by 99 AF Petaluma, LLC. This parcel is developed with a 140,448 square foot
split-level office'building: Currently the building is fully leased out to Advanced Fibre
Communications, Inc. This company designs, develops, manufactures, markets and supports
the Universal Modular Carrier 1000 multi-feature digital loop carrier system.. Their product
enables service providers to connect subscribers to the central office switch for voice and data
communications. They'are publicly traded on NASDAQ under the symbol AFCI. Advanced
Fibre Communications has_a fifteen-year triple-net lease that expires September:,30,2014.
99 AF Petaluma is a real-estate,investment partnership based in Dallas, Texas. They
purchased the property in September of 1999 from G&W Copley Redwood Business Park, LP.
The partnership is made up Of two companies, of which 90% is a pension-fund advisory group
and 10% is a real estate company. The objective of the partnership was to purchase the
property as an investment and hold it for two to three years. Currently; they are actively
marketing the property.
Reassessment Parcel Nos. 1 and 2 (047-550-004 and 047-550-005, respectively)—)
representing % of;the District, are owned by the Savoy Corporation. Reassessment Parcel •
No 1 is developed with a,42,451 square-foot one-story building. Currently, the building is
completely leased to Cisco Systems. Reassessment Parcel No 2 is developed with a 34,339
square-foot one-story building. Currently, the building,is completely leased to three tenants:
Cisco Systems under a lease expiring May 31, 2005, AT&T under a lease expiring,October 31,
2001 with three 5-year options, and Sequoia Analytical, a company that performs soil testing
and has an on-site laboratory facility, under a lease expiring August'31, 2006 with one 5-year
option.
These two parcels were purchased by the Savoy Corporation in March of,2000. This
company is,a;third generation family-owned real estate investment and management company
founded,in 1917. Savoy Corporation owns'and manages nine properties in the Bay area and
one property in Los Angeles.:
Assessment Installment Delinquencies
- . . . • - . :'ary political subdivisions operate under the
provisions of Sections.1701 through 4717, inclusive; of the Revenue and Taxation Code of the
State of California, commonly referred to as the "Teeter Plan," with respect to property tax
apportioning secured taxes whereby agencies levying; taxes through the County roll may
receive from the County 100% of their taxes at the time they`are levied. The County treasurys
cash position (froth taxes) is insured by a special tax loss'reserve fund accumulated from
delinquent penalties.
Once adopted, a county's'Teeter Plan will remain in effect in perpetuity unless the
board of supervisors orders its'discontinuance or unles,prior'to the commencement of a fiscal
y ar, a petition for discontinuance is received and joined.th by resolutions'of the governing
bodies of not less than two thirds.of the participating districts in the county. An electing county
,_
county if theboard of supervisors, by action taken-not later than.July 15 of a fiscal y ar,elects to
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discontinue the procedure with respect to such levying agency and the rate of secured tax
• delinquencies in that agency in any year exceeds 3% of"the total of all taxes and ascessments
levied on the secured roll by that
There have'been`no delinquencies in theA history of-a°scssment levies;'collections and
delinquency rates-for the D a - - --- - -- - - '.-: - -- '- of the
assessments for the District since its creation in 1995, as shown below.
•
CITY OF PETALUMA
ASSESSMENT DISTRICT NO. 23,REDWOOD.BUSINESS PARIC3
Assessment:Levies and Collections
Fiscal Dollars Dollars Percent
Year Levied Delinquent Delinquent
1995-96 $242,733.64 $0 0%
1996-97 '319;667,60 0 0
1997-98 316,105.06 0 0
1998-99 317,375.02 0 0
1999-00 322,233.02 0 0
2000-01 322,558.08 0 0
Source: Sonoma County Treasurer—Tax Collector.
Value to Lien Ratios
The aggregate fiscal year 2000-2001 assessed valuation of the real property within the
District has been reported by the County Assessor to be $ and according to
building permits issued by the.City for improvements which are complete but have not yet
been added to assessed value, an additional $ of improvements has been
completed, for a total estimated valuation of ,property in the District of
$47,423,372 . The principal amount Of'the.lien of the-Reassessment with respect
to the Bonds is $ . $3,192;405: The aggregate assessed value of the real property
and improvements within the District and the additional improvement value of the three
parcels based on City Building Permits is approximately 14.86 times the total of the
Reassessment lien with respect to the Bonds against the property within the District.
In comparing the aggregate appraised assessed value of the real property within the
District and.the-principal amount'of the Bonds, it should be noted that only real property upon
which there is, a delinquent assessment can be foreclosed, and the real property within the
District cannot be,foreclosed upon as a whole to pay delinquent assessments of the owners of .
such parcels unless all of the real property within the District is subject to a delinquent
assessment In any event, individual parcels may be foreclosed upon to pay delinquent
installments-of the assessments levied against such parcels. The principal amount of the Bonds
• is not allocated pro-rata among the parcels within the District; rather,the total assessment for
the District'has been allocated among the parcels within the District according to the benefit
spread shown in the Reassessment Report. The value to lien ratio does not include the lien of
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special taxes and other assessments affecting property in the District. See. "Direct and •
Overlapping Governmental Obligations" below and "SECURITY FOR THE BONDS - Priority
of Lien" above.
The following value-to-lien ratios are comparisons between Reassessments on parcels as
they are configured for the current and future tax years. However, the assessed values to
which they are being compared are based on the parcels as they were configured in the
previous (2000-01) tax year plus information from the City regarding recent improvements to
the property (see table on page _}. In the previous year, Assessor's Parcel No 047-550-021
was a common area for Assessor's Parcel Nos: 047-550-018, 019 and 020,and no assessment lien
was applied'to the common area Currently, the four parcels were divided into three,removing
the common,area and enlarging each of the three developable parcels. All three parcels have
been improved within the last year. The value of the improvement based on City Building
Permits has been added.
•
•
•
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•
`. CITY OF PETALUMA
ASSESSMENT DISTRICT-NO. 23, REDWOOD BUSINESS PARK 3
"Reassessments and Value to Lien Ratios
Based'on'Fiscal Year 2001-02'Assessor's Parcel'Designations (1)
Assessor's Reassessment Percentage Value to
Parcel Number Acres Property Owner .Lien of.Total Lien Lien Ratio
047-550-004 Savoy Corporation $284,266.00 8.90
047-550-005 Savoy Corporation . ' 235;078.40 7.36
047-550-007 G&W Copley Redwood Business Park 294;806:20 9.23
047-550-015 G&W Copley RedwoodtBusiness Park 402,444.00 12.61
047-550-017 G&W Copley Redwood Business Park 552,881.40 17.32
047 550-022 99 AF Petaluma LLC 978,322.20 30.65
047-550-023 G&W Copley RedwoodBusiness Park 313,331.40 9.81
047-550-024 G&W Copley Redwood Business Park 132;870.40 4.16
(1) Fiscal Year 2000-01 Assessor Parcel'No.s 047-550=018,-019,-020 and -021 became 047-550-022, -023 and -024
for 2001-02.
Source: Reassessment Report
Direct and Overlapping Governmental Obligations
Overlapping local agencies provide public services within the District, and such
agencies have issued general obligation bonds and other types of indebtedness. See
• "SECURITY FOR THE BONDS - Priority of Lien." Direct and overlapping governmental
obligations as of 1, 2001 are shown in the following table:
CITY OF PETALUMA
ASSESSMENT'DISTRICT NO.23, REDWOOD BUSINESS PARK 3
Direct and Overlapping Debt
JIBIS to orderl
Source: California Municipal Statistics,Inc.
Collection of the Assessment
Delinquency History. There are currently no delinquencies in the payment of property
taxes or assessments on property in the District. The City reports that no ascersment has been
delinquent since the formation of the District.
•
Teeter Plan. The County of Sono- .. - .
under the provisions of Sections 4701 through '1717, inclusive, of the Revenue and Taxation
• method of apportioning secured taxes whereby agencies levying taxes through the County roll
-17-
may receive from the County 100% of their taxes at the time they arc levied. The County .•
tr usury's cash position (from taxes)is'insured by a special tax loci reserve hind accumulated
frerx-delinq�ter3 - - - - _
the board of supervisors, by action taken not later than July 15 of a fiscal y dr, elects to
discontinue the procedure with respect, to such levying agency and the rate of secured tax
delinquencies in that agency in any year exceeds 3% of the total of all taxes_and a",essmcnts.
levied on the secured'roll by that agency.
THE REDWOOD BUSINESS PARK
The following Information is included to provide.general background information on the
Redwood Business Park; which contains the District. One:,of the property owners in the District also
owns property in the Business Park that is not part of the District, however the 'Reassessments that
secure the Bonds are attached only on the parcels that conprise the District.
General. The Redwood Business Park is comprised of 101 acres and has been •
designated a Planned Community District by the City, and all necessary approvals for full
build-out have been obtained. At the time of approval, the Redwood Business Park was
expected to contain be developed with 29 buildings of approximately 1,227,117 leasable square I •
feet of flex and office space. Parking facilities-are planned to include four spaces for each 1,000
square feet of leasable space. Approximately 26% of the area in the Redwood Business Park is
designated to be landscaped?Currently, more than 20 buildings have been completed.
History. The Redwood Business Park consists of three phases- Phase I,,Phase II and
Phase III. Construction of Phase I began in 1983. This initial development consisted of
approximately 26 net acres, with 12 buildings (326,117 square feet of leasable space), consisting
of three two-story office buildings and eight single-story flex buildings. The public
improvements required by Phase I were purchased by the City with proceeds of the sale of
,$1,250,000 Redwood Business Park Assessment District No. 16NS Bonds issued in September
1985 (the "No: 16NS Bonds'). These bonds have been hilly defeased, and none of the parcels in
the District are part of Assessment District.No. 16NS.
Most of Phase II was constructed in 1988 and 1989, with approximately 33 acres with six
buildings (113;000 ,square feet) with 366,000 square feet of,leasable area. ,Improvements for
Phase II were funded with the issuance of 3,530,000 Assessment District. No. 20 Redwood
Business Park No. 2 Bonds (the "No. 2 Bonds"). Proceeds of the No. 2 Bonds were also used to
refund the remaining No. 16NS Bonds. None of the assessments for the No. 2 Bonds overlap I
the Reassessments that secure the Bonds.
Construction of Phase III of the Redwood Business Park commenced in late 1994. All of
the planned improvements have been completed. The Phase,III area includes property in the •
District.
_18
`. Occupancy Rates. Average occupancy rates in 'the Redwood Business Park have
exceeded 90% during the past five years..Currentoccupancyis 100%.
-
SPECIAL RISK FACTORS
The following inforniat'ion, should be considered by prospective investors in evaluating the
Bonds. However, the following does not purport to be an exhaustive listing of risks and other
considerations which may'be^,relevant to investing in the Bonds. In addition, the order in which the
following information is presented is not intended to reflect the relative importance of any such risks.
General
Under the provisions of the Bond Law, Reassessment installments, from which funds
for the payment of annual installments of principal of and interest on the Bonds are derived,
will be billed to properties against which there are unpaid Reassessments on the regular
property tax bills sent to owners of such properties. Such Reassessment installments are due
and payable, and bear the same penalties and-interest for non-payment, as do regular property
tax installments. Reassessment installments billed will be in aggregate amounts equal to debt
service on the Bonds. See "SECURITY'FOR THE BONDS AND'SOURCES OF PAYMENT
THEREFOR- Reassessments" herein. Payments of. Reassessment installments made by the
owners of parcels will be,applied on a pro-rata basis to all Bonds for which the Reassessment
• installments are due and could result in a lesser amount being applied to the Bonds if the
1 amount paid by the property owners is less than the total Reassessment installment. It should
also be noted that the univillin'gness or inability of a property owner to pay regular property tax
bills as evidenced by property tax delinquencies may also indicate an unwillingness'or inability
to make regular property tax payments and Reassessment installment payments in the future.
Unpaid Reassessments;do not,constitute a personal indebtedness of the owners of the
parcels within the District and the owners,have made no commitment to pay the principal of
or interest on the Bonds onto support payment of the Bonds in any manner. Accordingly, in
the event of delinquency, proceedings may- be conducted only against the real property
securing the delinquent Reassessment. Thus, the value of the real-property within the
District is a critical factor in determining the investment quality of.the Bonds. The unpaid
Reassessments are not required to bepaid upon sale of property within the District. There
is no assurance the owners shall be able to pay the Reassessment installments or that they
shall pay such installments even though financially able to do so. See "Owners Not
Obligated to Pay Bonds',or Reassessments" below.
In order to pay debt service on the Bonds, it is necessary that unpaid installments of
Reassessments on land within the District are paid in a timely manner. Should the installments
not be paid on time, the City has established a Reserve Fund from the proceeds.of the Bonds to
cover delinquencies. The Reassessments are secured by a lien on the parcels within the District
and the City has covenanted in certain circumstances to institute foreclosure proceedings to sell
parcels with delinquent installments to cover such delinquent installments in order to obtain
funds to pay debt service on the Bonds.
i
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Failure by owners of the parcels to pay installments of Reassessments when due, •'
depletion of the Reserve Fund, delay, in foreclosure proceedings, or the inability Of the City to
sell parcels which have been subject to foreclosure proceedings for amount 'sufficient:to.cover
the delinquent installments of Reassessments levied against such parcels, may result in the
inability of the City to make full or punctual payments of debt service, on the Bonds and
Owners of the Bonds would therefore be.adversely affected.
Unpaid Reassessments do not,constitute'a'personal indebtedness of the owners of the
parcels within the District There is no assurance the owners shall be able to pay the
Reassessment installments or that they shall pay such installments even though_financially able
to do so.
Owners Not Obligated to Pay Bonds`or Reassessments
Unpaid`Reassessments.do not constitute a personal indebtedness of the owners of the
parcels within the District and the owners have made,no commitment to pay the principal of
or interest on the,Bonds or to support payment of the Bonds in any manner. There is no
assurance that the owners have,the ability topay the;Reassessment installments or that„even
if they have the ability,,they will choose to pay such installments. An owner may elect to not
pay the, Reassessments when due and cannot be legally compelled to do so. If an,owner
decides that'for any other reason it does not want to:retain title to the property, such'owner
may chose not to pay Reassessments and to allow the property to be foreclosed. Such a
choice may be made due to a decrease in the market value of the property, or for other
reasons. A foreclosure of the property will result in such owner's interest in the property •
being transferred to another party. Neither the City nor any Owner of the Bonds will have
the ability at any time to seek payment,from.-the owners of property within the District of
any.Reassessinent-or'any principal or interest due On the'Borids, or the ability to control who
becomes a subsequent owner of any property within the District.
Bankruptcyand Foreclosure
The payment of Reassessments and the ability of the City to foreclose the lien of a
delinquenhunpaid.Reassessment,.as discussed in."SECURITY'FOR THE BONDS Covenant to
Commence Superior Court,Foreclosure," may be:limited by bankruptcy, insolvency, or other
laws generally affecting creditors' rights or by State law relating to judicial foreclosure. In
addition, the prosecution of a foreclosure could be delayed due to lengthy local court calendars
or procedural,delays.
The various legal opinions to be delivered concurrently with the delivery of the Bonds
(including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of
the various legal instruments by bankruptcy, reorganization,'insolvency or other similar laws,
affecting the rights of creditors generally.
•
Although bankruptcy proceedings would, not cause the Reassessments to become
extinguished, bankruptcy of a property,owner,.or anyone else who claims an interest in the
property, could result in a delay in prosecuting superior court foreclosure proceedings and
could result in delinquent Reassessment installments not being paid in full. Such a delay
•
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'• would,increase the likelihood of-a.delay or default in payment of the principal Of and interest
on the Bonds. .
Availability'of Funds to Pay Delinquent Reassessment Installments
The City will establishya,Reserve Fund to be held by the-Paying Agent and deposit and
maintain therein a portion of Bond proceeds in the amount required under the Resolution.
There is no assurance that the balance,iri the Reserve Fund will,be adequate to pay the debt
service on the Bonds in the event:of delinquent Reassessment installments. If, during the
period of delinquency, there are insufficient funds in the Reserve Fund to pay delinquent
installments,a delay may occur in paymentsto the owners of the Bonds.
Limited Obligation upon Delinquency
As discussed in the. section -herein entitled "SECURITY FOR THE BONDS," if a
delinquency occurs in the payment of any Reassessment, the City has the duty to transfer the
amount of such delinquent Reassessment-from the Reserve Fund into the Redemption Fund. If
there are additional delinquencies after depletion of the Reserve Fund, the City has no direct or •
contingent liability for payrfnent of the Bonds in the event of default in the payment of an
Reassessment installment,but does have:the duty to cause to be undertaken judicial foreclosure
as covenanted in the Resolution. See "Collection of Reassessments" above.
The City's obligation to advance monies to pay Bond debt service in the event of
• delinquent Reassessment installments will not exceed the balance in the Reserve Fund. During
the period.of delinquency if there are msufficient funds in the Reserve Fund, a delay may occur
in payments to Owners of the Bonds. Notwithstanding, the City may, at its sole option and at
its sole discretion, elect to advance availablesurplus funds,of.'the City to pay for any delinquent
installments pending sale, reinstatement or redemption of any delinquent property.
Collection of the Reassessment
In order to pay debt service on the Bonds it is necessary that the Reassessment be paid
in a timely mariner: Should the installments of Reassessments not be paid on time, funds in the
Reserve Fund and Redemption Fund maybe utilized to pay debt service on the Bonds to the
extent other funds are not available therefor.
The Reassessment is to be collected in the same manner as ordinary ad valorem real
property taxes, are collected and, except as provided in the special covenant for foreclosure
described herein and in the Act, is to be subject to the same penalties and the same procedure,
sale and lien priority in case of delinquency as is provided for ad valorem real property taxes.
Pursuant to these procedures, if taxes are unpaid for a period of five years or more, the
property may sold to recover amounts due. - -
Pursuant to the Bond Law, in the event of any delinquency in the payment of the
Reassessment occurs,-the 'City may commence an action in superior court to foreclose the lien
• therefor within specified time limits. In such an action, the real property subject to the unpaid.
amount may be sold at judicial foreclosure sale. Such judicial foreclosure action is not
mandatory. Amendments to the Bond Law enacted in 1988 and effective January 1, 1989
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provide that under certain circumstances property may be sold upon foreclosure at a lesser •
Minimum Price or without a Minimum Price. "Minimum Price" as used in the Bond Law is
the amount equal to the delinquent installments of principal,or interest of the Reassessment or,
together with all interest penalties,costs,fees,charges and-other amounts more fully detailed in
the Bond Law. The court may authorize a sale at less than the Minimum Price if the court
determines that sale atless than the Minimum Price will not result in an ultimate loss to the
Owners of the Bonds, or, under certain circumstances, if holders of 75% or more of the
• outstanding Bonds'consent to such sale. However, there can be no assurance that foreclosure
proceedings will occur in a'timely manner so as to avoid-a=delay in payments of debt service on
the Bonds. The!City has covenanted for the benefit of the owners of the Bonds that under
certain circumstances, the City will commence an action in the superior court-to foreclose the
lien of the delinquent!installments of. the Reassessment against each parcel of land in the
District for which such installment has been billed but has not been paid,,and will diligently
prosecute and pursue such foreclosure proceedings to judgment and sale.. In the event that
sales or.forecloSures of property are necessary, there could be a delay in payrnents.to holders of
the,Bonds pending such-sales or the prosecution of foreclosure proceedings.and receipt by the .
City of the proceeds of sale if the other sources of payment for the Bonds, as set forth-in the
Resolution, are depleted. See "SECURITY FOR THE BONDS - Covenant to Commence
Superior Court Foreclosure" and "BONDOWNERS' RISKS- Bankruptcy and Foreclosure"
herein.
Proposition 218
Under the California Constitution, the power of initiative is reserved to the voters',for •
the purpose of enacting;statutes and constitutional amendments. Over past years; the voters
have exercised this power through the adoption of Proposition 13 and similar measures,
including the approval of Proposition 218 in•the.general election held on November 5,1996.,
Proposition 218 added Articles XIIIC andXIIID to the California Constitution,.imposing
certain vote requirements;and other limitations on the imposition of new or increased taxes,
assessments and property-related fees and charges. Proposition 218 states that all taxes
imposed by local, governments shall be deemed to be either general taxes or special taxes:
Special purpose districts, including:school districts,-have no power to levy general taxes. No
local government may impose, extend or increase:any general tax unless and until such tax is
submitted to the electorate and approved by a majority vote. No local ,government: may
impose, extend or increase any special tax unless and until such tax is submitted to the
electorate and approved by a two-thirds vote.
Proposition 218 also provides that no tax, assessment, fee^or charge`shall be assessed by
any agency upon ,any parcel of property or upon any person as an incident of property
ownership except .(i) the ad valorem property tax imposed pursuant to Article XIII and Article
XIIIA of the California Constitution, (ii) any special tax'receiving a two-third vote pursuant to
the California Constitution;,and (iii) assessments, fees and charges for property related services
as provided in Proposition 218: Proposition 218 then,goes,on to add voter requirements for
assessments-and fees and charges imposed as an incident of property ownership, other=than
fees and charges for sewer, water, and refuse collection services. The assessments securing the, •
Prior Bonds were approved by a majority of the voters in the District, to the extent required,
under Proposition 218.
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• Proposition.218'also removed any constitutional or other limitation-on the exercise of
the initiative power to reduce or repeal any local taxes, assessments, fees and charges. This
provision with respect to the initiative power is not limited to taxes imposed on or after
November 6, 1996, the effective date of Proposition 218, and could result in retroactive repeal or
reduction in any existing taxes, assessments, fees and charges, subject to overriding federal
constitutional principles relating to the impairments of contracts.
The foregoing discussion;of Proposition 218 should.not be considered an exhaustive or
authoritative treatment;of the issues. The City does not expect to be in a position to control the
consideration or disposition.of these issues and cannot predict the timing or outcome of any
judicial or legislative activity:in this regard. Interim rulings; final decisions, legislative
proposals and legislative enactments may all affect the impact of.-Proposition 218 on the Bonds
as well as the market for the Bonds. Legislative and court calendar delays and other factors
may prolong any uncertainty regarding the effects of'Proposition,218.
The interpretation and application of Proposition 218 may ultimately be determined by
the courts with respect to;a number of,the matters discussed above; and it is.not possible at this
time to predict with certainly the outcome of such determination.
Hazardous Substances
While governmental taxes, assessments and charges are a common claim against the
•
value of a taxed parcel, other less common claims may be relevant. One of the most serious in
terms of the potential'reduction in the value that May be realized to pay-the Reassessment is a
claim with regard to a hazardous substance. In general, the owners and operators of a'parcel
within the District may be required by law to remedy conditions of the parcel relating to
releases or threatened releases of hazardous substances. The federal Comprehensive
Environmental Response; Compensation and Liability Act of 1980, sometimes referred to as
"CERCLA" or "Superfund Act," is the most well known and widely applicable of these laws,
but California laws with regard to hazardous substances are Also stringentand similar. Under
many of these laws, the owner. (or operator) is obligated to remedy a hazardous substance
condition of property whether or not the owner (or operator).`has_anything to do with creating
or handling the hazardous substance. The effect therefore, should any of the parcels within the
District be affected by a hazardous substance, is to reduce the marketability and value of the
parcel by the costs of remedying the condition, because the owner is obligated to remedy the
condition. Further,.such may arise not simply from the existence of a hazardous
substance but from the method of handling it. All of these possibilities could significantly
affect the value of a property that is realizable upon a delinquency and foreclosure. The City is
not aware that the owner (or operator) of any of the land within the District has such a current
liability with respect to such land, however, the City has not undertaken any independent
investigation into the existence of any such.liabilities and it is possible that such liabilities do
currently existand that the City is not aware of them.
Future Overlapping Indebtedness
• The ability of an owner of land within the District to pay the Reassessments could be
affected by the existence of other taxes and assessments imposed upon the property subsequent
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•
to the date of issuance of the Bonds. In addition, other public agencies whose boundaries
overlap those of the District,could, without the consent of the City, and in certain cases without
the consent of the owner's of the land within the District,impose additional taxes oeassessment
liens on the property within the District to finance public improvements to be located inside of
or outside of the District.
The.Reassessment and each installment thereof and any interest and penaltiesthereon
constitute a.lienagainst the parcels on which they were imposed until the"same:are paid. Such
lien is subordinate to all fixed special assessment liens previously imposed upon the same
property,but•has priority over all private liens and,over all fixed special assessment liens which
may thereafter be created against the;property. Such lien is co-equal to and-independent of the
lien for general taxes,and any lien imposed under the Mello-Roos Community Facilities Actof
1982, as amended.
No Acceleration Provision
The Resolution does not contain a provision allowing for the acceleration of the
principal of the Bonds in the event of a payment default or other default under the terms of the •
Bonds or the Resolution.
CONSTITUTIONAL LIMITATIONS ON TAXATION AND APPROPRIATIONS
Property Tax Rate Limitations- Article XIIIA •
On June 6, 1978,the California voters.added Article-XIIIA to the California Constitution
which limits the amount of any ad valorem taxes on real-p'toperty'to.one percent(1%) of-its,full
cash value, except that additional ad valorem property taxes may be levied to pay debt,service,
on indebtedness approved prior to 'July 1, 1978 and (as a result of an amendment to
Article XIIIA approved by California_voters on June 3, 1986) on bonded indebtedness for the
acquisition or-improvement:of real property which has been approved on or after July'l, 1978,
by two-thirds of the,voters voting;on such indebtedness. Article XIIIA defines full cash value to
mean "the county assessor's valuation of real property as shown on the 1975-76 tax bill under
full cash value, or thereafter, the appraised value of real property when purchased, newly'
constructed or a change in ownership has occurred after the 1975 assessment period:" This
cash value may be increased at a rate not to exceed two percent (2%) per year to account for
inflation. The United States Supreme'Court has upheld the validity of Article XIIIA in a case
decided in June 1992.
Article XIIIA as originally-implemented has been amended to permit reduction of the
. "full cash value' base in the.event of declining property values caused by damage, destruction
or other,factors, to provide-that there would be no increase in the "full cash value" base in the
event of reconstruction of property damaged or destroyed in a disaster and in various other
minor or technical ways.
Legislation Implementing Article XIIIA •
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.• _ Legislation has.been enacte4 and amended a number'oFtimes since 1978 to implement
Article XIIIA. Under current law,'local agencies are no longer permitted.to levy directly any ad
valorem property tax. The 1% property tax is automatically levied annually by'the county and
distributed according to a formula among taxing agencies: The formula apportions the tax
roughly in proportion to the relative shares of taxes levied prior to 1978. Any special tax to pay
voter-approved indebtedness is levied in addition to the basic 1%.property tax.
Increases of assessed valuation resulting from reappraisals of property due to new
construction, change in ownership or from the 2% annual adjustment are allocated among the
various jurisdictions in the "taxing area" based upon their respective "sites" Any such
allocation made to a local-agency continues as part of its allocation in future years.
Beginning in the 1981-82 fiscal year, assessors in California-no longer record property
values on tax rolls at the assessed valueof 25% of market value which was expressed,as $4.00
per $100 of assessed value. Alt taxable property is now shown at full market value'on the tax
rolls. Consequently, the basic taz-rate is expressed as $1 per.$100 of taxable value.
Appropriation Limitation -Article XIIIB
On November 6, 1979, the voters of the State approved Proposition 4, known as the
Gann Initiative, which added Article XIIIB. On June 5, 1990, the voters approved
• Proposition 111, which amended Article XIIIB in certain respects. Under Article XIIIB, as
amended, state and local government entities have an annual"appropriations limit" which
limits the ability to spend certain moneys which are called "appropriations subject to
limitation" (consisting of most -revenues and certain state subventions; together called
"proceeds of taxes" and certain other funds) in an amount higher than the "appropriations
limit." Article XIIIB does notaffect>the appropriationof moneys which are excluded from the
definition of "appropriations limit" including debt service on indebtedness existing or
authorized as of January 1, 1979, or bonded indebtedness subsequently approved by two-thirds
of the voters.
In general terms, the "appropriations limit" is to be based on the adjusted fiscal year
1986-87 appropriations limit, which is traced back through an annual adjustment process to the
1978-79 fiscal year Annual adjustments reflect changes in California per capita personal
income (or, at the city s option, changes in assessed value caused by'local nonresidential new
construction), population and services provided by these entities. Among other provisions of
Article XIIIB, if the revenues of such entities in any fiscal year and the following fiscal year
exceed thearnoinits permitted to be spent in such years, the excess would have to be.returned
by revising tax rates or.fee-schedules over the subsequent two years. .
•
•
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Property Tax Collection Procedures •_
In California, property which is subject to ad valorem taxes is classified as "secured" or
"unsecured:" The "secured roll" is that part of the assessment roll containing state-assessed
public utilities' property and property the taxes on whichare a lien on real property sufficient,
in the opinion of the county assessor, to,secure payment of the taxes. A tax levied on unsecured
property does not become..a lien against such unsecured property, but may become a lien on_
• certain other property owned by the taxpayer. Every tax which becomes a lien on secured
property has priority over all other liens arising pursuant to State law on such secured
property, ;regardless of the time of the creation of the other,liens. Secured and unsecured.
property are entered separately on the assessment roll maintained by the county.assessor. The
method of collecting delinquent taxes is substantially different for the two classifications of
property.
Property taxes on the secured roll are due in two installments,, on November 1 and
February 1 of,each fiscal year If unpaid,'such taxes.become delinquent.on December 10'and
Apri110, respectively, and a 10% penalty attaches to any, delinquent payment. In addition
property on the .secured roll with respect to which taxes are due is delinquent on or about.
June 30 of the fiscal year. Such property may thereafter be redeemed by payment of the
delinquent taxes and a delinquency penalty,plus a redemption penalty of 1% per month,to the
time of redemption. If taxes are unpaid for a period of five years or more,,the property is
deeded to theState and then is subject to sale by the county tax collector.
Historically, property taxes are levied for each fiscal year on taxable real and personal
•
property situated in the_taxing jurisdiction as of the preceding January 1. A bill enacted in 1983,.
SB 813 (Statutes of 1983,Chapter 498), however, provided for the supplemental assessmentand
taxation of property as of the occurrence of a change of ownership or completion of new
construction. Thus, this legislation eliminated delays in the realization of-increased property
taxes from new assessments. As amended, SB 813,provided increased revenue to taxing.
jurisdictions to the extent that supplemental assessments of new construction or changes of
ownership occur;subsequent to the January 1 lien date.
Property taxes on the unsecured.roll are due on the January 1 lien date and become
delinquent, if unpaid on the following August31. A ten percent (10%) penalty is also;attached.
to delinquent taxes in respect of property on the unsecured roll, and further, an,additional
penalty•of 1-1/2% per month accrues with respect to such-taxes.beginning the first day of the
third month following the delinquency date. The taxing.;authority has four ways of collecting
unsecured,personal property taxes: (1) a civil action against the taxpayer, (2) filrng.a:certificate
in the office of the county,clerk specifying certain facts in order to obtain a judgment,lien on
certain property of the taxpayer, (3) filing a certificate of delinquency for record in the county
recorder's office, in order to obtain.a lien on certain property of the taxpayer; and (4) seizure
and sale of personal property, improvements'or possessory interests belonging or assessed to
the assessee. The exclusive means of enforcing the payment of delinquent-taxes in respect of
property on the secured roll is the sale of the property securing the taxes to the State for the
amount of taxes which are delinquent.
•
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-LEGAL MATTERS
• Tax Matters
In the opinion of Jones Hall, A Professional Law Corporation, San Francisco,California,
Bond Counsel, subject, however to the qualifications set forth below, under existing law, the
interest on the Bonds is excluded from gross income for federal-income tax purposes and such
interest is not an item of tax preference for purposes of the federal alternative minimum tax
imposed on individuals and corporations, provided, however, that, for the purpose of
computing the alternative minimum tax imposed on corporations (as defined for federal
income tax purposes), such interest is taken into account,in-determining certain income and
earnings.
The opinions.set forth in the preceding paragraph are'subject to the condition that the
City comply with all requirements of the Internal Revenue Code of 1986(the "Code") that must
be satisfied.subsequent'to the issuance of the Bonds in order that such interest be,or continue to
be, excluded from gross income for federal income tax purposes. The City has covenanted to
comply with each such requirement. Failure to comply with certain of such requirements may
cause the inclusion of such interest in gross income for federal income tax purposes to be
retroactive to the date of issuance of the Bonds.
In the further opinion of Counsel, interest on the Bonds is exempt from California
personal income taxes.
•
Owners of the Bonds should also be aware that the'ownership-or disposition of, or the
accrual or receipt of interest on, the Bonds may have federalor state tax consequences other
than as described above. Bond Counsel expresses no opinion regarding any federal or state tax
consequences arising with respect!to'the Bonds other than as expressly described above.
Absence of Litigation
No litigation is pending or threatened concerning the validity of the Bonds. There is no
action, suit or proceeding known,by the City to be pending at the present time restraining or
enjoining the delivery of the Bonds; or-in any way contesting,or affecting the validity of the
Bonds or any proceedings of the City taken with respect to the execution thereof. A no
litigation certificate executed by the City will be delivered to the Underwriter simultaneously
with the delivery of the Bonds.
Legal Opinion
All proceedingsin connection with the issuance of the Bonds are subject to the approval
as to their legality of Jones Hall, A Professional Law Corporation, San Francisco, California,
Bond Counsel for the City in connection with the Bonds. Bond Counsel's employment is
limited to a review of legal procedures required for the approval of the Bonds and to rendering
an opinion as to the validity'of the Bonds and the exemption of interest on the Bonds from
• income taxation. Jones Hall'is also Disclosure Counsel to the City. Payment of the fees of Jones
Hall as Bond Counsel and as Disclosure Counsel is contingent upon issuance of the Bonds.
•
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MISCELLANEOUS •
Continuing Disclosure
The City has covenanted for the benefit of and beneficial owners of the Bonds to
provide,certain financial information and operating data (the "Annual Report") relating to the
City by-not.later than nine months followingthe,end of the City's fiscal year„commencing with
the report for the 2000-01 Fiscal Year and to provide notices of the occurrence of certain
enumerated events, if material. The Annual Report will be filed by the City with, each
Nationally Recognized Municipal Securities Information Repository, and with the appropriate
State,information repository, if any (collectively, the "Repositories"). The specific nature of the
information to be contained in the Annual Report or the notices of material events is
summarized below under the caption in "APPENDIX C.- Form of Continuing. Disclosure
Certificate." The City has never failed toy comply in all material respects with any previous
undertakings with respect to the Rule 15c2-12(b)(5) to provide annual financial,information;or
notices of material events:
No Rating
The City has not-made, and does not contemplate making, an application-to any rating
agency for the assignment of a rating of the Bonds. •
Verification of Mathematical Accuracy
, independent accountants, upon issuance of
the Bonds, will deliver a report on the 'mathematical accuracy of certain computations,
contained in schedules provided to them which were prepared by the City; relating to the
sufficiency of amounts on deposit in the Escrow Fund to pay, when due, the principal,interest.
and prepayment premium requirements of the 1995 Bonds.
The report of will include the statement that the scope of its
engagement is limited to verifying the mathematical accuracy of the computations contained in
such schedules provided to it, and that it has no obligation to update its report because of
events occurring, or data or information coming to its attention, subsequent to the date of its
report.
Underwriting •
The Bonds are being purchased by Ibis Securities, LLC (the "Underwriter") at a -
purchase price of.$ . (representing the par amount of the Bonds ($ ) and
less underwriter's discount of $ The Purchase Contract relating to the Bonds
provides that all Bonds will be purchased if any are purchased, and that the obligation to make
such purchase is subject to certain terms and conditions set forth in said Purchase Contract,
including, but not limited to, the approval of certain legal matters by counsel.
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Additional Information
References are made herein to certain documents and reports which are brief summaries
thereof which do not purport to be complete or definitive, and reference is made to such
documents and reports for full and.complete statements of the contents thereof.
Any statements in this Official Statement involving matters of opinion, whether or not
expressly so stated, are intended as such and not as representations of fact. This Official
Statement is not to be construed as a contract or agreement between the City and the
purchasers or Owners of any of the Bonds.
The execution and delivery of this Official Statement has been duly authorized by the
City.
CITY OF PETALUMA
By:
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•
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APPENDIX A
REASSESSMENT DIAGRAM.
•
•
A-1
APPENDIX B
•
FORM OF BOND COUNSEL OPINION
•
•
B-1
APPENDIX C
FORM OF
CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (this "Disclosure Certificate") is executed and
delivered by the City of Petaluma (the"City") in connection with the issuance of its $
aggregate principal amount of Limited Obligation Refunding:Improvement Bonds, City of
Petaluma, Assessment District No. 23, Redwood Business Park 3 (Reassessment and Refunding
of 2001) Series 2001-A (the "Bonds"). The Bonds are being issued pursuant to a Resolution
adopted by the City Council of the City of Petaluma on _ , 2001 (the "Resolution").
• The City covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being
executed and delivered by the City for the benefit of the holders and beneficial owners of the
Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-
12(b)(5).
Section 2. Definitions. The following capitalized terms shall have the following
meanings:
"Annual Report" shall mean any Annual Report provided by the City pursuant to, and as
• described in,Sections 3 and 4'of this Disclosure Certificate.
"Dissemination Agent" shall mean the City, or any successor Dissemination Agent
designated in writing by the City and which has filed with the City a written acceptance of
such designation.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure
Certificate.
"National Repositonf shall .mean any Nationally Recognized Municipal Securities
Information Repository for purposes of the Rule.
"Participating Underwriter" shall mean any of the original underwriters of the Bonds
required to comply with the Rule in connection with offering of the Bonds.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the'Securities Exchange Act-of 1934, as the same may be amended from
time to time.
"State Repositonf shall mean any public or private repository or entity designated by the
State of California as a state repository for the purpose of the Rule and recognized by the
• Securities and Exchange'Commission. As of the date of thereof, there is no State Repository.
C-1
Section 3. Provision of Annual Reports.
• (a) The City shall,or shall cause the Dissemination Agent,to,,not later than March 31 of
every year commencing March 31, 2002;;'with`the report for the 2000-2001 Fiscal Year, provide
to each Repository an Annual Report which is consistent with the requirements of Section 4 of
this Disclosure Certificate. Not later than fifteen (15) Business Days prior to said date, the City
shall provide the Annual Report to the Dissemination Agent (if other than the City). The
Annual Report may be submitted as a single document or as separate documents comprising a
package, and may cross-reference other information as provided,in Section 4 of this Disclosure
Certificate; provided that the audited financial statements of the City may be submitted
separately from the balance of the,Annual Report, and later than the date required above for
the filing of.the,Annual Report if not available by that date. .
(b) If the City is unable to provide to the Repositories,an Annual Report by the date
required in subsection (a), theCity shall send a notice to the Municipal Securities Rulemaking
Board in substantially the form-attached as Exhibit A.
(c) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual
Report the name and address of each National Repository and each State
Repository, if any; and
• (ii) if the Dissemination Agent is other than the City; file a report with
the City certifying that the Annual Report has been provided pursuant to this
Disclosure Certificate, `stating the date it was provided- and listing all the
Repositories to which it was provided.
Section 4. Content. of Annual Reports. The City's Annual Report shall contain or
incorporate by reference the following information regarding-the.City of Petaluma, Assessment
District No. 23, Redwood Business Park 3 (the"District").
(a) The following additional items with respect to the Bonds and property in
the District:
1. Principal amount of Bonds outstanding.
2. Balance in the Bonds debt service reserve fund and a statement of the
reserve requirement.
3. Total assessed value of all parcels subject to-the annual reassessment
- levy and the current year's assessed value for the District.
4. The delinquency rate in the payment of assessments for the most
recent fiscal year.
•, 5. Concerning delinquent parcels:
C-7
• number:of parcels delinquent in payment of assessments,
• amount of total delinquency and, ak
• whether the City:has fulfilled its covenants to pursue foreclosure
proceedings upon delinquent properties.
6. Identity of any delinquent tax payer obligated for more than 10% of
the annual assessment levy and:
• assessed value of applicable properties; and •
• summary of results of foreclosure sales, if available.
7. For each parcel in the District securing more than five percent(5%) of
the annual;assessment levy for the year to which the report relates'(or
for any individual owner owning in the 'aggregate-parcels securing
more than five percent (5%) of the assessment levy for the fiscal year
to which the report relates) the following from 'the most recently
available. County assessor's roll: name of owner, apn number or
numbers, assessed value (broken out by land, improvements and
total) and the share of the percentage,the assessment levy for the year.
to which the report relates.
(b) Audited Financial Statements of the City prepared in.accordance with
generally accepted accounting principles as promulgated to apply ;to governmental
entities from time to time by the Governmental Accounting Standards Board. If the •
City's audited financial statements are not available by the time the Annual Report is
required to be filed pursuant to Section 3(a), the.Annual Report shall contain unaudited
financial statements in a-format similar to the financial statements.contained in the final
Official Statement, and the audited financial statements shall be filed in the same
manner as the Annual Report when they become available.
THE CITY.'S ANNUAL FINANCIAL STATEMENT IS PROVIDED SOLELY TO
COMPLY WITH THE SECURITIES EXCHANGE COMMISSION STAFF'S
INTERPRETATION OF RULE 15C2-12. NO FUNDS OR ASSETS OF THE .CITY OF
PALO ALTO (OTHER THAN THE PROCEEDS OF THE REASSESSMENTS LEVIED
FOR THE DISTRICT AND,SECURING THE BONDS) ARE REQUIRED TORE USED TO
PAY' DEBT SERVICE ON THE BONDS AND THE CITY IS NOT OBLIGATED TO
ADVANCE AVAILABLE FUNDS FROM THE CITY TREASURY TO COVER ANY
DELINQUENCIES. INVESTORS' SHOULD NOT RELY ON THE FINANCIAL
CONDITION OF THE CITY IN EVALUATING WHETHER TO BUY, HOLD OR SELL
THE BONDS.
Any or all of the items listed above may be included by specific reference to other
documents, including official,statements of debt issues of the City or related public entities,
which have been submitted to each of the Repositories or the Securities and Exchange
Commission. If the document included by reference, is a final official statement, it must be
available from the Municipal Securities Rulemaking Board. The City shall clearly identify each
such other document so;included by reference.
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Any or all of the items :listed above may be included by specific reference to other
documents, including official statements of 'debt issues of the City or related public entities,
which have been submitted, to each of the Repositories or the Securities and Exchange
Commission. If the document included by reference is a final official statement, it must be
• available from the Municipal Securities,Rulemaking Board. The City shall clearly identify each
such other document so included by reference.
Section 5. Reporting.of Significant Events. • -
(a) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given,
notice of the occurrence of any of the following events with respect to the Bonds, if material:
(1) Principal and interest payment delinquencies.
• (2) Non=payment related defaults.
(3) Unscheduled draws on debt service reserves reflecting
financial.difficulties.
(4) Unscheduled draws on credit enhancements reflecting
financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure
to perform.
(6) Adverse tax opinions or events affecting the tax-exempt
status of the security.
(7) Modifications to rights of security holders.
(8) Bond°calls.
(9) Defeasaiices.
(10) Release, substitution, or sale of property securing repayment
of the securities.
(11) Rating changes.
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City
shall as soon as possible'determine if such event would be-material under applicable federal
securities law.
(c) If the City determines that knowledge of the occurrence of a Listed Event would be
material under applicable federal securities law, the City shall promptly file a notice of such
occurrence with the Municipal Securities Rulemaking Board and each State Repository.
Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and (9)
need not be given under this subsection any earlier than the notice (if any) of the underlying
event is given-to'.holders.of,affected Bonds pursuant to the Resolution.
Section 6 Termination of Reporting Obligation. The City's obligations under this
Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment
in full of all of the Bonds.
Section 7. Dissemination Agent. The City may, from time to time, appointor engage a
Dissemination Agent,to assist it carrying out its obligations under this Disclosure Certificate,
and may discharge any such Agent, with or without appointing a successor Dissemination
Agent: The initial Dissemination Agent shall be the City.
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Section 8. Amendment; Waiver. Notwithstanding any other provision of this
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Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this
Disclosure Certificate may be waived,provided that the following conditions are satisfied:
(a) the amendment,or waiver, if it relates to annual or event information to be provided,
is made in connection with a change in circumstances that arises from a change in legal
requirements, change in law, or change-in the identity, nature, or status of the City; or type of
business conducted;
(b) the undertakings herein, as proposed to be: amended or waived, would, in the
opinion of nationally recognized bond counsel, have "complied with the "requirements of the
Rule at the time'of the primary offering of the Bonds, after taking into account'any amendments
or interpretations of The Rule, as well as any change in circumstances;and
(c) the proposed amendment or waiver (i) is approved by holders of the Bonds in the
manner provided in the Resolution for amendments to the Resolution with the consent of
holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially
impair the interests of holders.
Section 9. Additional Information. Nothing in this Disclosure Certificate shall be
deemed to prevent the City from disseminating any other information, using the means of
dissemination set forth in this Disclosure Certificate or any other means,of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event,
in addition to that which is, required by this Disclosure"Certificate. If the City chooses to
include any information"in any Annual Report or notice of occurrence of a Listed Event in
addition to that which is specifically required by this Disclosure Certificate,the City shall have.
no obligation under this Agreement to update such information or include it in any future
Annual'.Report or notice of occurrence of a Listed Event.
Section 10: Default. In the event of a failure of,the City to comply withsanyprovision of
this Disclosure Certificate, any holder or beneficial owner of the Bonds may take-such actions as
may be necessary and appropriate,including seeking mandate or specific performance by court
order, to cause the City to comply with its obligations under this Disclosure Certificate. A
default under;this Disclosure Certificate shall not-be deemed an Event of Default under the
Resolution, and the sole remedy under this Disclosure Certificate in the event of any failure of
the City'to comply with this Disclosure Certificate shall bean action to compelperformance.
Section 11. Duties, .Immunities, and. Liabilities of Dissemination. Agent. The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers,
directors,employees:and agents,harmless against any loss, expense and liabilities which ittnay
incur arising out of or in the exercise or performance Of its powers and duties hereunder,
including the costs.and expenses (including attorneys fees) of defending against any claim of
liability, but excluding liabilities due to the Dissemination Agent's negligence or willful
misconduct: The obligations of the City under this'Section shall survive resignation or removal
of the Dissemination Agent and payment of-the Bonds.
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•. Section 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the City, the Dissemination Agent, the Participating Underwriters and holders and beneficial
owners,from time to time, of the Bonds, and shall create no rights in any other person or entity.
Date: , 2001
CITY OF PETALUMA
By
Assistant City Manager
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EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: City of Petaluma
Name of Bond Issue: $ _aggregate principal amount of Limited Obligation Refunding
Improvement Bonds, City of Petaluma, Assessment District No. 23,
Redwood Business Park 3 (Reassessment and Refunding of 2001) Series
2001-A
Date of Issuance: _ ,2001
NOTICE IS HEREBY GIVEN that the City has not provided an Annual Report with
respect to the above-named Bonds as required by the Resolution, adopted , 2001,
by and between the City of Petaluma and Bank of New York, Western Trust Company, San
Francisco, California, as paying agent. The City anticipates that the Annual Report will,be filed
by
Dated:
CITY OF PETALUMA
...
By
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APPENDIX D
•T
CITY OF PETALUMA GENERAL INFORMATION
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ATTACHMENT VII •.
DRAFT OF BOND PURCHASE AGREEMENT
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26091-05 JH:DTF 5/8/01
CITY OF PETALUMA, CALIFORNIA ®'
LIMITED OBLIGATION REFUNDING IMPROVEMENT BONDS
Assessment District.No. 23;Redwood Business Park 3
(Reassessment and Refunding of 2001), Series 2001-A
PURCHASE CONTRACT
, 2001
City Council
City.of Petaluma
11 English St.
Petaluma, CA 94952
Dear Members of the City Council:
IBIS Securities, LLC (the "Underwriter"), acting not as fiduciary or agent for you, but on •
behalf of itself, offers to enter into this Purchase^Contract with the City of Petaluma, California
(the "City"), which upon acceptance will be binding upon the City and upon the Underwriter.
This offer is made subject,to the City's acceptance by the execution of this Purchase Contract and
its delivery to,the Underwriter,at or before 11:59`p:m., local time, on , 2001, and, if
not, so accepted will be subject to withdrawal by the Underwriter upon notice delivered to the
City at any time prior to the acceptance hereof by the City.
1. Purchase, Sale and-Delivery of the Bonds.
(a) Subject to the terms and conditions and in reliance upon the representations,
warranties-and agreements herein set forth, the Underwriter hereby agrees to purchase from the
City, and the City hereby agrees to sell to the Underwriter, all (but not less than all) of
of the City's Limited Obligation Refunding Improvement Bonds, City of
Petaluma, Assessment District No 23, Redwood Business Park'3 (Reassessment-and Refunding
of 2001) Series 2001-A,(the "Bonds"), dated , 2001, bearing interest from said date
(payable on March 2;and,September 2 in each year conimencirig on March 2, 2001) at such rates
per annum and maturing on such dates and in such,amounts as set forth in Exhibit A.hereto. The
Bonds shall be substantially in the form described in, shall be issued upon satisfaction of the
contingencies set forth in, shall be secured under the provisions of, and shall be payable and
subject to redemption as provided in A Resolution,.of the City Council of the City of Petaluma
Authorizing Issuance of Limited Obligation Refunding Improvement Bonds, " adopted •
, 2001 (the "Resolution"),the Official Statement dated , 2001, relating to
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26091-05 JH:DTF 5/8/01
'• the Bonds (the "Official Statement") and the Refunding Act of-1984 for 1915 Act Improvement
Bonds, constituting,Division 1.1.5 of the Streets and Highways Code.of the State of California
(the "Act").
(b) By its acceptance of this proposal,:the City approves the Official Statement and the
Preliminary Official Statement dated , 2001. (the "Preliminary Official
Statement"). 'The.City deems the Preliminary Official Statement to be "final" as of its date for
purposes of Rule 15c2-12 promulgated pursuant to theaSecurities Exchange Ad Of 4934 ("Rule
15c2-12"). 'The Underwriter agrees to file, if required, a copy of the Official Statement with a
nationally recognized municipal securities information repository and to advise the City as to the
location and time of such filing. The City hereby authorizes the Underwriter to use and
distribute, in connection with the offer and sale of the Bonds„ the Official Statement, the
Resolution, this Purchase Contract and all information contained herein,•and all other documents,
certificates and statements furnished by the City to. the Underwriter in connection with the
transactions contemplated by this Purchase Contract.
(c) On the basis of the representations and warranties and: subject to the terms and
conditions set forth herein, the City agrees to sell, and the Underwriter agrees to purchase at the
Closing Time and at the Closing Date (as hereafter defined), all (but not less than all) of the
$ aggregate principal amount of Bonds. at a purchase price of
$ (consisting of the principal.amount of the Bonds,;less an Underwriter's discount
of$ ), plus accrued interest from the date of the Bonds-to thedate of Closing. Payment
• for the Bonds shall be made in same day funds by a wire transfer of those funds at.the.offices of
the City, or some other mutually agreeable place at ten o'clock am. prevailing time on
, 2001, or at such other date, time and place;:agreed upon by appropriate officers of
the City and the.Underwriter against delivery of the,Bonds to the Underwriter. The date of such
payment and delivery is herein:called the "Closing-Date" and the hour and date of such delivery
and payment is herein called.the."Closing Time". The Bonds will be delivered in fully registered
form, bearing CUSIP numbers (provided neither the printing of a wrong number nor the failure
to print a number Shall constitute cause to refuse delivery of any Bond.
2. Representations;,Warranties and Agreements of the.City. The City represents and
warrants to and agrees'with'the'Underwriter that:
(a), The City' is duly organized and validly existing as a charter city under the
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Constitution and laws of the State of California and has, and at the Closing Date will have, full
legal right, power and.authority (i) to enter into this Purchase Contract, (ii) to issue, sell and
deliver the Bonds to.the Underwriter as provided herein, and.(iii)'to carry out, give effect to and
consummate .the transactions contemplated by this Purchase Contract, the Resolution, the
Official Statement and-any City resolutions or agreements referred to therein. _
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(b) The City has complied and will at the Closing Date be in compliance, in,all material
respects, with the Resolution, the Act, and all other applicable laws and the agreements referred
to in subsection (a) hereof.
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26091-05 JH:DTF 518101
(c) The City has, or prior to the Closing Date, will have, duly and validly: (i) adopted the •'
Resolution and approved and,authorized the execution and delivery of the Bonds, this Purchase
Contract, the Official Statement and any other applicable agreements; and (ii) authorized and
approved the performance by the City of its obligations contained in, and the taking of any and
all action as may necessary to carry out, give: effect to and consummate the transactions
contemplated by, each of said documents; and at the Closing Date (assuming,due authorization,
execution and delivery by the respective other parties thereto, where necessary) the Bonds, the
Resolution, this Purchase Contract, and any other applicable agreements will constitute.the valid,
legal and binding obligations of the City, enforceable in,accordance with their respective terms,
subject to bankruptcy; insolvency and other laws affecting;the enforcement of Creditors' rightsin
general and to the application of equitable principles if equitable remedies are sought.
(d) The City is not, and at the Closing will not be, in any respect material to the
transactions referred to herein of contemplated-hereby, in breach of or default under'vany law or
administrative rule or regulation of the State of.California,the United States of America, or:of
any department„division, agency or instrumentality of either thereof, or any applicable court or
administrative decree or order, or any loan agreement, note, resolution, indenture, contract, -
agreement or'other instrument to which the City is a party or is otherwise subject or bound; and
the adoption of the Resolution, and the execution and delivery of the Bonds, this Purchase
Contract, any other applicable agreements and the other instruments contemplated by any of such.
to which the City is a party, and compliance with:the provisions of each thereof, will
not, in any respect material.to`the transactions referred to herein or contemplated hereby, conflict •
with or constitute a breach of or default under any applicable law or administrative' rule or
'regulation of the State of California, the United States of America, or of any department,
division, agency or instrumentality of either thereof, or any applicable court or administrative
decree or order or any loan:agreement, note, resolution, indenture, contract, agreement or other
instrument to which the City is a partyor is otherwise subject or bound.
(e) All approvals, consents, authorizations, elections and orders of' or filings or
registrations with any governmental authority, board, agency or commission'having jurisdiction
which would constitute a condition precedent to, or the absence of which would materially
adversely affect, the performance by the City of its obligations hereunder and under the
Resolution, the Bonds and any other applicable agreements have been obtained,and are in full
force and effect:
(f) The Bonds, the Resolution, and other applicable agreements conform as to form and
• tenor to the descriptions thereof contained in the Official Statement; and the Bonds, when
delivered to and paid for by the Underwriter on the Closing Date as provided herein, will be
validly issued and outstanding and entitled to all the;benefits and security of the Resolution.
(g) Thee-special reassessments (referred to herein as the "assessments") referred to in:the
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Official Statement have been duly and lawfully levied under and pursuant to the Municipal
Improvement Act of 1913, as amended (the "1913 Act"), and such assessments constitute valid
and legally binding liens on the properties on which they have been levied, all as described in the
Official Statement.
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26091-05 JH:DTF 5/8/01
(h) Except as disclosed in the Official Statement, there are no outstanding assessment
••' liens against any of the properties within the City of Petaluma, Assessment District No. 23,
Redwood Business.Park--3 (the "Assessment District") which are senior to the assessment liens
referred to in paragraph (g) above.
(i) The Official Statement is, and as of the Closing Date will be, true, correct and
complete in all material respects; and,the Official.Statement does not, and as of the Closing Date
will not, contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made; not misleading.
(j) During the period commencing on the date hereof and ending on the date 90 days
following the Closing Date, if any event shall occur of which the City has knowledge and as a
result of which it may necessary'to supplement the'Official Statement in order to make the
statements therein, in-light.ofthe circumstances existing at such time, not misleading, the City
shall forthwith notify the. Underwriter thereof and, if in the reasonable opinion of the
Underwriter such event requires an amendment or supplement to the Official Statement,the City
will at no expense to the.Underwriter amend or supplement theOfficial Statement in a form and
manner jointly approved by the City and the Underwriter. The City's obligation pursuant to this
section (j) shall terminate on the earlier of (i) ninety days from the end of the "underwriting
period", as defined in Rule 15c2-12, or (ii) the time when the Official Statement is available to
• any person from a nationally recognized municipal securities information repository, but in no
case less than twenty five days following the end of the underwriting period.
(k) The Resolution creates a.valid pledge of, lien upon aiidsecurity interest in.the unpaid
assessments in'the Assessment.District,and the interestthereon,and the moneys in all funds and
accounts established pursuant to the;Resolution, including the investments thereof, subject in all
cases to the provisions of the Resolution permitting the application thereof for the purposes and
on the terms and conditions set forth therein.
(1) To the best knowledge of the City after diligent inquiry, no action, suit, proceeding,
inquiry or,investigation, at law For in equity, before or by any court, regulatory agency, or public
board or body (except for actions filed,by or on behalf of the City) is pending or threatened, in
any way affecting the existence of the City or'the titles of its officers to their respective offices,
or seeking to restrain or to,enjoin:the issuance, sale or delivery of the Bonds, the application of
the proceeds thereof in accordance with the Resolution, the collection or application of
assessments pledged or to be pledged to pay the principal of and interest on the Bonds, or the
pledge thereof, or in any way contesting or affecting the validity or enforceability of the
assessments,the•Bonds, the Resolution, any other applicable agreements, this Purchase Contract,
or any action of the City-contemplated by any of said documents, or in any way contesting the •
completeness or accuracy of the Official Statement or the powers of the.City or its authority with
respect to the Bonds; the Resolution, any other applicable agreements, this.Purchase Contract or
any action of the City contemplated by any of said documents, or in any way seeking to enjoin or
• restrain the City from, acquiring fee title to the land within the Assessment District, or which
would adversely affect the exclusion from gross income for purposes of-federal income taxes of
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26091-05 1H:DTF 5/8/01
interest paid on the Bonds or the exemption of interest on the Bonds from California personal •
-income taxation; nor to the best knowledge of the City, is there any basis therefore.
(m) The City will furnish such:=information,execute such instruments.and take,such other
action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify
the.Bonds for offer-and sale under the"Blue Sky" or other securities laws and regulations'of such
states andiother jurisdictions of the.United States as the Underwriter may designate; provided,
however,that the City shall not be required to consent to service of process outside,of California.
(n) Any certificate signed by any official of the City authorized to do so shall.be-deemed
a representation,and warranty by the City to the.Underwriter as to the statements made therein.
(o) The City.will{apply the proceeds of the Bonds to the defeasance:of'the Prior Bonds
(as defined in,the Official-Statement), in accordance with the Resolution and all other applicable
documents and as described in the Official Statement.
(p) The City will not invest or otherwise use.proceeds of the Bonds in<any manner which.
would cause the Bonds to'be considered arbitrage bonds within the meaning of Section 148 of
the Internal Revenue.Code of 1986, as amended.
(q) The City will give reasonable notice to the Underwriter prior- to its approval of any
reapportionment of any assessment so as to provide the Underwriter with an opportunity.'to •
advise the City whether and to what extent such reapportionment would result in a reduction in
the security for the Bonds provided by the unpaid assessment.
(r) The City will, at the Underwriter's request, take any action reasonably necessary to
assure or maintain the exclusion from gross income for purposes of federal income taxation of
interest on the Bonds and will not take any,action, or permit,any action to-be taken with respect
to which it may exercise control, which would result in the loss of that exclusion.
(s) The City shall provide to the Underwriter; no later than seven,(7) business days after
the date of this Purchase. Contract, but in any event in sufficient time to accompany any
confirmation sent by the Underwriter to a purchaser of the Bonds, sufficient copies of the
Official Statement to satisfy the Underwriter's obligation under Rule 15c2-12 with respect to the.
distribution of the Official Statement, provided that the City shall not be required to provide
more than 400'copies of the Official-Statement.
(t) Unless otherwise notified in writing by the Underwriter on or prior to the Closing
.. Date, the Underwriter can assume that the "end of the underwriting period" for the Bonds for all •
purposes of Rule 15c2-12 is thei Closing Date. In the event-such notice is given in writing,by the
Underwriter„the Underwriter agrees to notify the City in writing following the'occurrence of the
"end of the underwriting-period" as defined in Rule 15c2-12 for the Bonds.
3. Conditions to the Obligations of the Underwriter. The obligations of the •
Underwriter to accept delivery, of'and pay for the Bonds on the Closing Date shall be subject, at
the option of the Underwriter, to the accuracy in all material respects of the representations and
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26091-05 JH:DTF 5/8/01
'• warranties on the part of the City contained herein as of the date hereof and as of the Closing
Date; to the accuracy in all material respects of the statements of the officers and other officials
of the City, as well as of the other individuals referred to herein, made imany certificates or other
documents furnished pursuant to the provisions hereof; to the performance by the City of its •
'obligations to be performed hereunder at or prior to the Closing Date; and to the following
additional conditions:
(a) At the Closing Date, the.Resolution, and any other applicable agreements, shall be in
full force and effect, andshall not have been amended,modified or supplemented, except as may
have been taken in connection therewith, with the issuance of the Bonds and with the
transactions contemplated thereby and by this Purchase Contract, all such actions as, in the
opinion of Bond Counsel, shall be necessary and appropriate;
(b) At the Closing Date, the Official Statement shall be in a form and substance
satisfactory to the Underwriter;
(c) At the Closing Date, assessments shall not be delinquent on properties within the
Assessment District except as specifically approved in writing by the Underwriter, or as shown
in the Official Statement;
(d) Between the date hereof and the Closing Date, the=market price or marketability of
the Bonds (at the yields set forth in Exhibit A) shall not have been materially adversely affected,
in the judgment of the Underwriter (evidenced by a written notice to the City terminating the
obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of
the following:
(i) legislation introduced-in.or enacted by the Congress or recommended to the
Congress by the President of the United States, the.Depaitl„ent of the Treasury, the
Internal Revenue Service, or any member of Congress, or favorably reported for passage
to either House of Congress by any committee of such House to which such legislation
has been referred for consideration, or a decision rendered by a court established under
Article III of the Constitution of the United States of America or by the Tax Court of the
United States of America, or an order, ruling, regulation (final, temporary or proposed),
press release or other form of notice issued or made by or on behalf of the Treasury
Department of the United States of America or the Internal Revenue Service, with the
purpose or effect directly or indirectly, of imposing federal income taxation upon such
interest as would be received by any owner of a Bond;
(ii) legislation introduced in or enacted (or resolution passed) by the.Congress or
an order, decree or injunction issued by any court of competent`jurisdiction, or an order, .
ruling, regulation' (final, temporary or proposed), press release or other form of notice
issued or made by or on behalf of the Securities and Exchange Commission, or any other
governmental agency having jurisdiction' of the subject matter, to the effect that
obligations of the general character of the Bonds, including any or all underlying
• arrangements, are not exempt from registration under or other requirements of the
Securities Act of 1933, as amended, or that the Resolution is not exempt from
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26091-05 JH:DTF 5/8/01
qualification under or other requirements of the Trust Indenture Act;of1939, as amended, •`
or that the issuance, offering or sale of obligations of the general character of the Bonds,
including any or all underlying arrangements, as contemplated hereby or by the Official
Statement or otherwise is or would be in violation of the federal securities laws as
amended and then in effect;
(iii) a general suspension of trading in securities on the. New York Stock
Exchange or the American Stock Exchange, the establishment of minimum prices on
either such exchange, the establishment of material restrictions (not_in force as of the date
hereof) upon trading in securities generally by any governmental authority or any
national securities exchange, a general banking moratorium declared by federal, State of
New York or State of California officials authorized to do so, or a war or other national.
calamity;
(iv) the withdrawal or downgrading of any rating of any securities of the City by a
national rating agency;
(v) any amendment to the federal or California Constitution or action by any
federal or California court, legislative body,regulatory body or other authority materially
adversely affecting the tax status of the City, its property, income,.securities (or interest
thereon),.the validity or enforceability of the assessment;
(vi) the New York Stock Exchange or other national securities exchange or any •
• governmental authority, shall impose, as to the Bonds or obligations of the general
character of the Bonds, any material restrictions not now in force, or increase materially
those now in force, with respect to the,extension of credit by, or the charge to the net
capital requirements of, underwriters;
(vii) any event occurring, on information becoming known which, in the judgment.
of the;Underwriter, makes untrue in any material respect any statement or information
contained in the Official Statement, or has the effect that the Official Statement contains
any untrue statement of material factor omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances
under which they were made,-not misleading; or
(viii) general political, economic and market conditions, in the sole judgment of
the Underwriter, shall not be satisfactory to permit the sale of the Bonds.
(e) At or prior to the Closing Date, the Underwriter shall have received the following
documents, in each case satisfactory in form and substance: .to the Underwriter, provided,
however, that the delivery of any such closing document may be waived by the Underwriter;
provided, however, that the execution of the Receipt for Bonds by the Underwriter operates as a
waiver of all;deficiencies in the delivery of the closing documents set forth in this sub-paragraph
(e)of this Purchase Contract:
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26091-05 JH:DTF 5/8/01
(i) the Official 'Statement, executed on behalf of the City by an authorized
• member of its City Council, or such other official as May be approved by the
Underwriter;
(ii) the Resolution, together with certificates of an Authorized Officer of the City
(as such term is defined in the resolution), dated-as:of the Closing Date, to the effect that
they are true, correct and complete:copies of the ones duly adopted by the City and that
• they have°not been amended, modified or rescinded (except as?may have been agreed to
by the Underwriter) and are in full force and effect as of the Closing Date;
(iii) an unqualified opinion of Jones Hall, A Professional Law Corporation, Bond
Counsel, dated the Closing Date, to the effect that'(A) the Bonds are the valid, legal,
binding obligations of the City, (B) the interest on the Bonds is excluded from gross
income for purposes of federal income taxes, is not a specific preference item for
purposes of federal individual and corporate- alternative minimum taxes, and (C) the
interest on the Bonds is exempt from personal income taxes of the State of California, all
as provided in the Official Statement, together with an unqualified opinion of Bond
Counsel, dated the Closing;Date and addressed to the Underwriter, to the effect that such
opinion may relied upon,by the Underwriter to the same extent as if such opinion was
addressed to it;
(iv) an opinion,dated the Closing Date and addressed to the Underwriter, of Bond
• Counsel to.the effecfthat (1) this Purchase Contract has-been duly authorized, executed
and delivered by the City, and assuming due authorization, execution and delivery by the
• Underwriter; constitutes a legal, valid and binding agreement of the City, enforceable in
accordance with,its terms, subject to bankruptcy, insolvency`and other laws affecting the
enforcement of creditors' rights 'in general and except as such enforceability may be
limited by the application of equitable principles if equitable-remedies are sought; ( 2 )
the Bonds are not subject to the registration requirements of the:Securities Act of 1933, as
amended, and the Resolution is exemptfrom qualification under the Trust Indenture Act
of 1939, as amended; (3) the Bonds and the Resolution conform as to form and tenor to
the descriptions thereof contained in the Official Statement, and the statements contained
in the Official Statement on the cover:and under the captions "INTRODUCTION", "THE
BONDS"; "SECURITY FOR THE BONDS", "SPECIAL RISK FACTORS", "LEGAL
MATTERS':, insofar as such statements purport to summarize certain provisions of the
Act, the Bonds, the Resolution, and.other applicable laws and agreements, present a fair
and accurate 'summary of such provisions; (4) the Resolution and the Bonds constitute
legal,, valid and binding agreements of the City enforceable in 'accordance with their
terms except as;such enforceability may be limited by bankruptcy, insolvency and other
laws affecting the enforcement of creditors' rights in general and the application of
equitable principles if equitable remedies are sought; (5) the Resolution creates a valid
pledge of, lien upon and security interest in the proceeds of the Bonds, the unpaid
assessments in the Assessment District and the interest thereon, and the moneys in all
funds and accounts established pursuant to the'Resolution, including the investments
• thereof, subject in all-cases to the provisions of the Resolution permitting the application
thereof for the purposes and on the terms and conditions set forth therein; (6) the
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assessments in the Assessment District have been duly and lawfully levied under and •'
pursuant to the 1913 Act and constitute valid and legally binding liens on the respective
properties on which they were levied; and based upon the information provided to such
counsel in the course of their participation in the preparation of the Official Statement
and (except as provided above) without,having undertaken to determine independently
the accuracy or completeness of the statements contained in the Official Statement, such
counsel.have no reason to believei:thatthe Official,Statement (except for the financial and
statistical data.included therein and.assumptions with respect thereto, as to which no view
need be expressed)as of the date,of the Official'Statement omitted, or as of the Closing.
Date omits, to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not
misleading;
(v) an opinion, dated the Closing Date'and:addressed to the Underwriter,of Jones
Hall, A Professional Law Corporation, disclosure counsel to the City, to the effect that
based upon the information made available to them in the course of their participation in
the preparation of the Official Statement as disclosure counsel to the City and without
having undertaken to determine independently or assuming any responsibility for the
accuracy, completeness or fairness of the statements contained in the Official Statement,
such counsel does not believe-that the Official Statement, as, of its,date and as of the
•
Closing Date, contains.any untrue,statement of a material fact or omits to state,a material
fact required to be stated therein or necessary to make the statements`therein, in the light •
of the circumstances under which;they were made,not misleading (except-that no opinion
or belief need be expressed as,to any appendices and any other financial and statistical
data contained in the.Official Statement); and such memoranda of said firms, or of other
counsel specified by the Underwriter; as to "Blue Sky" matters as the Underwriter may
reasonably require;
(vi) a certificate, dated the;Closing?Date and signed by an authorized officer of the
City to the effect that (1) the City has duly authorized, executed and delivered this
Purchase Contract and the Official Statement; (2) the statements contained in the Official
Statement (excluding the Appendices thereto as to which no opinion is expressed), to the
best of the knowledge of the City.Counsel and without undertaking to verify the same
with independent investigation, do not contain any_untrue statement'of a material fact or
omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not
misleading; (3)to the best knowledge of said officer, no event has occurred since the date
of the Official Statement which should.be disclosed in the Official Statement in order to
•
make the statements and information therein not misleading in any material respect;,and
(4) the representations and warranties of.theCity contained herein are true,and correct in
all material respects on and as of the Closing Datewith the same effect as if made onthe
Closing Date;
(vii) an opinion, dated the Closing Date and addressed to the Underwriter, of the •
Counsel to the City, to the effect that (1) to such counsel's best knowledge, no action,
suit; proceeding, inquiryy or investigation, at law or in equity, before or by any court,
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regulatory agency; public board or body, is pending or threatened affecting the existence
• of the City or-the titles.of its officers to their respective offices, or seeking to restrain or
• to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds
thereof in accordance with the Resolution, the collection or application of the assessment
and the interest thereon to pay the principal of and interest on the Bonds, or contesting or
affecting the validity or enforceability of the Bonds, the Resolution, this Purchase
Contract, or action of the City contemplated by any of said documents, or contesting the
completeness 'or accuracy of the Official Statement or'the powers of the City or its
authority with respect to:the Bonds, the Resolution,.this,Purchase Contract, or any action
on the part of the City'contemplated:by any of said.decuments, or seeking to enjoin or
restrain the City from approving the acquisition of fee title to the land within the
Assessment District, or which'challenges the exclusion.of interest aid on the Bonds from
gross income for purposes''of federal income taxation or the exemption of such interest on
the Bonds from California personal income taxation, nor to such counsel's knowledge is
there any basis therefore, •(2) the City is duly organized and validly existing under the
Constitution and laws of the State of California with full legal right, power and authority
to issue the Bonds andto perform all of its obligations:under this Purchase Contract, and
the Bonds; and (3) the City has duly and validly adopted the Resolution, and it is in full
force and effect;
(viii) consent and comfort letters from such consultants to the financing as is
• reasonably requested by the Underwriter;
(ix) a transcript of all proceedings relating to the authorization, issuance, sale and
delivery of the Bonds; and
•
(x) such additional legal opinions, certificates (including a non-arbitrage
certificate), instruments and:other documents-as the Underwriter may reasonably request
to evidence the truth and accuracy; as of the date hereof and as of the Closing Date; of the
City's representations and warranties contained herein and of the statements and
information contained in the Official Statement and the due performance or satisfaction
by the City at or prior to the Closing of all agreements then to be performed and all
conditions then to be satisfied by the City in connection with the transactions
contemplated hereby,and by the Resolution and the Official Statement.
All..the opinions, certificates, instruments and other documents mentioned in this section
or elsewhere in this Purchase Contract shall be deemed to be compliance with the terms hereof
if and only if, theyareinform and substance satisfactory to.the Underwriter,
If any of the conditions:to the obligations of the'Underwriter,contained in this section or
elsewhere in this,Purchase:Contract shall not have been satisfied when and as required herein, all
obligations of the Underwriter'hereunder may be terminated by the Underwriter at, or at any time
prior to, the Closing Date'by written notice to the City.
• 4. Expenses.
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4
(a) Whether or not the Underwriter accepts delivery of and pays for the Bonds as, set •�`
forth herein, it shall be under no obligation to pay,'andthe City-shall pay or cause to be paid out
of the proceeds of the Bonds or any other legally available funds of the City, all expenses
incident to the performance of the City's obligations hereunder, including but not limited to the
cost of printing, engraving and delivering the Bonds to the Underwriter;;the cost of printing,
distribution and delivery of the Preliminary Official Statement and the Official Statement in
reasonable quantities as requested by the Underwriter; the fees and disbursements of Bond
Counsel, accountants, engineers, appraisers, and any other experts- or consultants retained in
connection with the Bonds;-and any other expenses not specifically enumerated in paragraph (b)
of this section incurred in connection.with,the issuance of the Bonds.
•
(b) Whether or not the Bonds are delivered to the Underwriter as set forth herein,, the
City shall be under no obligation to pay, and the Underwriter shall pay, all expenses paid or
incurred to qualify the Bonds for sale under.any "Blue Sky" laws; and all other expenses paid,or
incurred by the Underwriter in connection with its offering and distribution of the Bonds not
specifically enumerated in paragraph (a) of this section, including the fees and disbursements of
its counsel:
5. Notices: Any notice or other communication to be given to the City under this
Purchase Contract may given bydelivering:the'Same in writing,as follows:
City of Petaluma
11 English St.
Petaluma; CA 94952
•
Attention: Finance Director
and any notice or other communication to be given to the Underwriter under this Purchase
Contract may be given by delivering the same in writing as follows:
IBIS Securities, LLC
2950 Buskirk Avenue, Suite 165
Walnut Creek, CA 94596 .
Attention:'Nicki Tallman
6. Parties in Interest._ This Purchase Contract is made solely for the benefit of the
City and the Underwriter (including successors, or assignees of the Underwriter) and no other
person, including but'not limited to •any owner of`land within the Assessment District, shall
acquire or have any right hereunder or by virtue hereof.
•
7. Survival of Representations,and'Warranties. The representations and warranties of
•
the City, set forth in or made pursuant to this Purchase Contract, shall not be deemed to have
been discharged„satisfied or otherwise rendered void:.by reason of the Closing or:teianination of
this Purchase-Contract„regardless of any investigations made by or on behalf of the Underwriter •
(or statements as to the results of such investigations) concerning such representations and
statements of the City and regardless of delivery of and payment for the Bonds.
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.1
•' 8. Offering by Underwriter. It is understood that the,Underwriter proposes to offer
the Bonds for said to the public(which may include selected dealers) as set forth in the Official
Statement. Concessions from the public offering price•may be allowed to selected dealers. It is
understood that the initial public offering price and concessions set forth in the Official
Statement inay vary after the initial public offering. It is further understood that the Bonds may
be offered to the public at prices other than the par value thereof. The net premium on the sale of
the Bonds, if any, shall accrue to the benefit of the Underwriter. The City hereby confirms the
authority and use by the Underwriter of the Official Statement.
9. Time. Time shall be of the essence of this Purchase Contract.
10. Counterparts. This Purchase Contract may be executed in any number of
counterparts.
11. Effective. This.Purchase Contract shall become effective and binding upon the
respective parties hereto upon the execution of the acceptance:hereof by the City and shall be
valid and enforceable as of the time of such acceptance.
Very truly yours,
IBIS SECURITIES,,LLC
•
By:
Accepted:
CITY OF PETALUMA
By:
Finance Director
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EXHIBIT A TO PURCHASE CONTRACT •
CITY OF•PETALUMA,,CALIFORNIA
LIMITED OBLIGATION"REFUNDING IMPROVEMENT BONDS
•
Assessment District No. 23, Redwood Business Park 3
(Reassessment,and Refunding of 2001), Series 2001-A
Year
(September 2) Principal Amount Interest Rate
•
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