HomeMy WebLinkAbout077-93 RESOLUTION NO. 77-93
A RESOLUTION PROVIDING FOR
THE ISSUANCE OF REFUNDING BONDS
TASSAJARA RANCH REASSESSMENT DISTRICT NO. 93-1
TABLE OF CONTENTS
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Exhibit
1. Definitions .................................. 2
2. Amount of the Reassessments .................. 7
3. Issuance of Bonds ............................ 7
4. Form of Bonds ................................ 7
5. Payment of Bonds ............................. 7
6. Designation of Agent ......................... 8
7. Execution .................................... 8
8. Authentication 9
· · · · · lee e·ll.eeee·ee,
9. Preparation and Delivery'of Bonds 9
10. Exchange of Bonds ............................ 9
11. Negotiability, Registration and
Transfer of Bonds ......................... 9
12. Ownership of Bonds ........................... 10
13. Collection of Reassessments .................. 10
14. Covenant to Foreclosure ...................... 11
15. NO Duty to Advance from Available
Surplus Funds ............................. 11
16. Redemption Prior to Maturity ................. 11
17. Refunding of Bonds ........................... 12
18. Escrow Fund .................................. 12
19. Cost of Issuance Fund ........................ 13
20. Redemption Fund .............................. 14
21. Reserve Fund ................................. 14
22. Investment of Funds .......................... 16
23. No Arbitrage ................................. 16
24. Certificate as to Non-Arbitrage .............. 16
25. Federal Guarantee Prohibition ................ 16
26. Private Activity and Private Loan Limitations. 17
27. Rebate Account ............................... 17
28. Investment Earnings Fund ..................... 18
29. Amendment .................................... 19
30. Authority of Town Officials .................. 19
31. Certified Copies ............................. 19
A·
Bond Form .................................... A-1
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RESOLUTION NO. 77-93
A RESOLUTION PROVIDING FOR
THE ISSUANCE OF REFUNDING BONDS
TASSAJARA RANCH REASSESSMENT DISTRICT NO. 93-1
RESOLVED, by the Town Council (the "Council") of the Town
of Danville (the "Town"), Contra Costa County, California, that:
WHEREAS, by its Resolution No. 74-88 (the "1988
Resolution"), adopted June 20, 1988, this Council authorized
and issued its "Town of Danville Limited Obligation Improvement
Bonds, Assessment District No. 88-1, Series 88-A" dated
July 13, 1988 (the "Prior Bonds"), in the aggregate principal
amount of $15,620,000 to finance the acquisition and
construction of public improvements more particularly described
in special assessment proceedings referenced in said resolution;
WHEREAS, on June 29, 1993, this Council passed and adopted
its Resolution No. 75-93, "A Resolution of Intention to Conduct
Reassessment Proceedings in Assessment District No. 88-1",
under the provisions of the Refunding Act of 1984 for 1915
Improvement Act Bonds, being Division 11.5 of the California
Streets and Highways Code (the "Act"), and therein provided
that serial bonds would be issued thereunder (the "Bonds")
pursuant to the provisions of the Act, reference to said
Resolution of Intention hereby being expressly made for further
particulars;
WHEREAS, in said Resolution of Intention this Council
determined and declared that the Town will not obligate itself
to advance available funds from the Town Treasury to cure any
deficiency which may occur in the Redemption Fund;
WHEREAS, proceedings taken under the Act and said
Resolution of Intention led to the levy of reassessments by the
Council against parcels of land within the reassessment
district in the total amount of $13,919,868. When the
reassessment and reassessment diagram approved as part of said
proceedings are recorded in the Office of the Superintendent of
Streets of the Town, and upon compliance with the provisions of
Division 4.5 of the California Streets and Highways Code, the
reassessment will become a lien upon the various parcels of
land reassessed; and
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WHEREAS, the Council has determined that the public
interest or necessity require that the Town defease the Prior
Bonds in full by providing for reassessments and the issuance
of the Bonds to refund, on September 2, 1993, the Prior Bonds
outstanding after September 2, 1993 pursuant to the Act and
proceedings taken under the Act and said Resolution of
Intention;
NOW, THEREFORE, THE COUNCIL HEREBY DETERMINES AND ORDERS,
AS FOLLOWS:
Section 1. Definitions. Unless the context otherwise
requires, the terms defined in this Section 1 shall, for all
purposes of this Resolution, have the meanings herein specified
and shall be equally applicable to both the singular and plural
forms of any of the terms herein defined.
"Act" means the Refunding Act of 1984 for 1915 Improvement
Act Bonds, being Division 11.5 of the Streets and Highways Code
of the State of California.
"Arbitrage Certificate" means the Certificate as to
Arbitrage executed by the Town on the Closing Date, including
all Exhibits thereto.
"Agent" means the Transfer Agent, Registrar and Paying
Agent designated in Section 6 hereof.
"Bond" or "Bonds" means the Bonds issued pursuant to the
Act and this Resolution.
"Bond Date" means July 1, 1993.
"Bond Denomination" means the amount of $5,000.
"Bond Year" means each one-year (or shorter) period
beginning on the Closing Date and ending on the day immediately
preceding the next anniversary date of the Closing Date, and
each one-year period thereafter until there are no outstanding
Bonds.
"Closing Date" means the date of delivery of the Bonds and
payment therefor.
"Contract of Purchase" means the contract for the sale of
the Bonds by the Town to the Original Purchaser.
"Code" means the Internal Revenue Code of 1986, as amended,
regulations thereunder and rulings and judicial decisions
interpreting or construing it.
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"Cost of Issuance Fund" means the fund established by the
Treasurer under Section 19 hereof.
"Debt Service" means the scheduled amount of interest and
amortization of principal payable on the Bonds during the
period of computation, excluding amounts scheduled during such
period which relate to principal which has been retired before
the beginning of such period.
"Escrow Agent" means the escrow agent designated as such
pursuant to the Escrow Agreement.
"Escrow Agreement" means the escrow agreement dated as of
the Closing Date by and between the Town and the Escrow Agent
relating to the refunding and defeasance of the Prior Bonds.
"Escrow Fund" means the fund established by the Treasurer
under Section 18 hereof.
"Guidelines" means the Guidelines for Compliance with
Section 148(f) of the Internal Revenue Code of 1986, as
amended, delivered on the Closing Date,as amended from time to
time.
"Interest Payment Date" means the dates upon which interest
on the Bonds is payable, being March 2 and September 2 of each
year to maturity, commencing March 2, 1994.
"Investment Earnings Fund" means the fund established by
the Treasurer under Section 28 hereof.
"Issuance Costs" means:
(1) all expenses incident to the calling, retiring, or
paying of the Prior Bonds and to the issuance of the Bonds,
including, but not limited to any bond counsel, financial
consultants, underwriters (other than as taken in the form
of a discount on the Closing Date), certified public
accountants, engineering, paying agent and rating agency
fees, bond insurance premium, printing and advertising
costs, Town administrative expenses, and the charges of any
escrow agent or trustee in connection with the issuance of
the Bonds or in connection with the redemption or
retirement of the Prior Bonds;
(2) any accrued and unpaid interest on the Prior Bonds;
(3) any premium necessary in the calling or retiring
of the Prior Bonds; and
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(4) any amount that the Town pays or transfers, or has
previously paid or transferred, either from a special
reserve fund or from surplus funds, into the redemption
fund securing the Prior Bonds and the penalties and
interest thereon, if the amounts and the penalties and
interest thereon are included in and limited to the
particular reassessments levied upon those subdivisions of
land securing the original assessment installments which
are delinquent and for which the payments or transfers are
made.
"Oriqinal Purchaser" means the original purchaser of the
Bonds from the Town.
"Owner" means the person in whose name any Bond is
registered by the Agent.
"Prior Bonds" means Town of Danville, Limited Obligation
Improvement Bonds, Assessment District No. 88-1, Series No.
88-A," dated July 13, 1988, which, after September 2, 1993,
will be outstanding in the aggregate principal amount of
$14,120,000. The Prior Bonds are being refunded in the
proceedings had pursuant to said Resolution of Intention.
"Project" means the acquisitions and improvements more
particularly described in the special assessment proceedings
referenced in said Resolution No. 74-88.
"Rebate Account" means the account established by the
Treasurer pursuant to Section 27 hereof.
"Record Date" means the fifteenth (15th) day of the month
immediately preceding each Interest Payment Date.
"Redemption Fund" means the fund established by the
Treasurer into which shall be placed any accrued interest paid
by the Original Purchaser for the period from the Bond Date to
the Closing Date and all sums received from the collection of
unpaid reassessments and of the interest and penalties thereon,
all as provided in Section 20 hereof.
"Redemption Premium" means from March 2, 1994 through
September 2, 2003, 3% of the principal amount of the Bonds;
from March 2, 2004 through September 2, 2004, 2% of the
principal amount of the Bonds; from March 2, 2005 through
September 2, 2005, 1% of the principal amount of the Bonds; and
thereafter 0%.
"Regulations" means temporary and permanent regulations
promulgated under the Code.
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"Reserve Fund" means the fund of that name held by the
Treasurer as provided in Section 21 hereof.
Reserve Requirement.
the least of:
The term "Reserve Requirement" means
(i) The maximum annual debt service payable on the
Bonds for the current and any succeeding Bond Year;
(ii) One and one-quarter (1.25) times the average
annual debt service payable on the Bonds for the current and
any succeeding Bond Year; or
(iii) Ten percent (10%) of the proceeds of all Bonds
issued, within the meaning of Section 148(d) of the Code.
"Resolution" means this Resolution as adopted or hereafter
amended.
"Treasurer" means the Treasurer of the Town.
Section 2. Amount of the Reassessments. The aggregate
amount of the reassessment confirmed by the Council is
$13,919,868; reference is hereby made to the reassessment and
to the reassessment diagram recorded in the office of the
Superintendent of Streets of the Town for the amount of the
reassessment confirmed on each of the parcels of land within
the reassessment district.
In the event that the Bonds are issued in a principal
amount less than the amount of the confirmed reassessment, the
Council intends to order a reduction of the reassessment to an
amount equal to the principal amount of the Bonds.
Section 3. Issuance of Bonds. The Bonds, in the aggregate
principal amount of not to exceed $13,919,868, and with an
interest rate of not to exceed 7.3% per annum, shall be issued
as hereinafter provided upon the security of said reassessments
in accordance with, under and pursuant to the provisions of
said Resolution of Intention, and the proceedings thereunder
duly had and taken. The Bonds shall be issued only in fully
registered form in the amount of the Bond Denomination or any
integral multiple thereof, and shall mature in the amounts and
on September 2 in each of the years and at the rates of
interest set forth in Exhibit A to the Contract of Purchase,
provided that the first maturity date shall be September 2,
1994. The Bonds shall be numbered or otherwise identified as
determined by the Agent specified in Section 6 hereof.
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Section 4. Form of Bonds. The Bonds shall be
substantially in the form set forth in Exhibit A hereto and
hereby made a part hereof. Temporary Bonds in typewritten form
may be delivered pending preparation of definitive Bonds.
Section 5. Payment of Bonds. Interest on the Bonds, at
the rate or rates set forth in the Contract of Purchase, shall
be payable on each Interest Payment Date.
A Bond shall bear interest from the Interest Payment Date
next preceding the date on which it is authenticated and
registered, unless authenticated and registered (i) after the
Record Date with respect to an Interest Payment Date, in which
event it shall bear interest from such Interest Payment Date,
or (ii) first Interest Payment Date, in which event it shall
bear interest from the Bond Date; provided, however, that if at
the time of authentication and registration interest is in
default, the Bond shall bear interest from the date to which
interest has been paid or made available for payment. Each
Bond will continue to bear interest after maturity at the rate
stated therein, provided it is presented at maturity and
payment thereof is refused on the sole ground that there is not
sufficient money in the Redemption Fund with which to pay same;
if it is not presented at maturity, interest thereon will run
only until maturity.
Section 6. Designation of Agent. Bank of America National
Trust and Savings Association, at its corporate trust office in
Los Angeles, California, is hereby designated as the Transfer
Agent, Registrar and Paying Agent (hereinafter the "Agent").
The principal and redemption premium of the Bonds shall be
payable in lawful money of the United States of America at the
Corporate Trust Office of the Agent in Los Angeles, California,
upon the presentation and surrender of the Bonds as the same
become due and payable. Interest on the Bonds shall be paid to
the Owner by check or draft mailed to the address entered in
the registry book provided for herein as of the Record Date, or
upon the request in writing of an Owner of $1,000,000 or more
in aggregate principal amount of the Bonds, such request having
been made before the Record Date 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
within the continental United States designated by such Owner
to the Agent. The Treasurer is hereby authorized and directed
to enter into an agreement with the Agent in furtherance of the
actions of the Agent pursuant to this Resolution.
The Treasurer shall transfer moneys to the Agent as
requested by the Agent to pay the principal of, interest and
redemption premium, if any, on the Bonds as required by this
Resolution.
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Section 7. Execution. The Bonds shall be executed on
behalf of the Town and under its official seal by its Treasurer
and by its Clerk, whose signatures shall be reproduced on the
Bonds by engraved, printed or lithographed facsimile thereof,
and the official seal may be placed on the Bonds in like
manner; such signing and sealing shall constitute and be a
sufficient and binding execution of each and every one of the
Bonds. The Bonds shall then be delivered to the Agent for
authentication by it.
If any officer whose signature appears on the Bonds ceases
to be such officer before the authentication and delivery of
the Bonds to the purchaser thereof, such signature shall be as
valid as if such officer had remained in office until the
authentication and delivery of the Bonds.
Section 8. Authentication. Only such of the Bonds as
shall bear thereon the certificate of authentication 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 executed,
authenticated and delivered hereunder and are entitled to the
benefits of this Resolution. The Agent's certificate of
authentication on any Bond shall be deemed to be executed by it
if signed by an authorized officer or signatory of the Agent,
but it shall not be necessary that the same officer or
signatory sign the certificate of authentication on all of the
Bonds issued hereunder.
Section 9. Preparation and Delivery of Bonds. The
Treasurer is hereby directed to cause the Bonds to be prepared
in accordance with this Resolution and to deliver same upon
their completion and execution to the Agent who shall
authenticate and deliver the Bonds to the purchaser thereof,
upon receipt of the purchase price therefor, and upon the
performance of the conditions contained in the Contract of
Purchase.
Section 10. Exchange of Bonds. Any Bond, upon surrender
thereof at the office of the Agent, together with an assignment
duly executed by the Owner thereof or such Owner's attorney or
legal representative in such form as shall be satisfactory to
the Agent, may, at the option of such Owner, be exchanged for
an aggregate principal amount of Bonds equal to the principal
amount of the Bond so surrendered, and of any authorized
denomination or denominations. The Town shall make provision
for the exchange of Bonds at the office of the Agent.
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Section 11. Negotiability, Registration and Transfer of
Bonds. The Agent shall keep records for the registration, and
for the registration of transfers, of the Bonds as provided in
this Resolution which shall at all time be open to inspection
by the Town. The transfer of any Bond may be registered only
upon such records upon surrender thereof to the Agent together
with an assignment duly executed by the Owner or such Owner's
attorney or legal representative in such form as shall be
satisfactory to the Agent. Upon any such registration of
transfer, the Town shall execute and the Agent shall
authenticate and deliver in exchange for such Bond a new Bond
or Bonds registered in the name of the transferee, of any
denomination or denominations authorized by this Resolution,
and in an aggregate principal amount equal to the principal
amount of such Bond or Bonds so surrendered.
In all cases in which Bonds shall be exchanged, the Town
shall execute and the Agent shall authenticate and deliver at
the earliest practicable time Bonds in accordance with the
provisions of this Resolution. All Bonds surrendered in any
such exchange or registration of transfer shall forthwith be
canceled by the Agent. The Town or the Agent may make a charge
for every such exchange or registration of transfer of Bonds
sufficient to reimburse it for any tax or other governmental
charge required to be paid with respect to such exchange or
registration of transfer, but no other charge shall be made to
any Owner for the privilege of exchanging or registering the
transfer of Bonds under the provisions of this Resolution.
Neither the Town nor the Agent shall be required to make such
exchange or registration of transfer of Bonds between a Record
Date and the subsequent Interest Payment Date and such Interest
Payment Date, nor, in the case of any proposed redemption of
Bonds, after the day next preceding the date of the mailing of
notice of redemption.
Section 12. Ownership of Bonds. The Owner shall be deemed
and regarded as the absolute owner thereof for all purposes and
payment of or on account of the principal and redemption
premium, if any, of any such Bond, and the interest on any such
Bond shall be made only to or upon the order of the Owner
thereof or such Owner's attorney or legal representative. All
such payments shall be valid and effectual to satisfy and
discharge the liability upon such Bond, including the
Redemption Premium, if any, and interest thereon to the extent
of the sum or sums so paid.
Section 13. Collection of Reassessments. The
reassessments, together with the interest thereon, shall be
payable in annual series corresponding in number to the number
of serial maturities of the Bonds issued. An annual proportion
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of each unpaid reassessment shall be payable in each year
preceding the date of maturity of each of the several series of
Bonds issued, sufficient to pay the Bonds when due, and such
proportion of each unpaid reassessment coming due in any year,
together with the annual interest thereon, shall be payable in
the same manner 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 interest 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.
Section 14. Covenant to Foreclose. The Town hereby
covenants with and for the benefit of the Owners that it will
(i) determine or cause to be determined, not later than August
31st of each year, whether or not any owners of property are
delinquent in the payment of reassessment installments for the
fiscal year ending on the preceding June 30th, and, if such
delinquencies exist, the Town will order and cause to be
commenced, no later than November 1st, and thereafter
diligently prosecute an action in the superior court to
foreclose the lien, provided, however, that the Town shall not
be required to order the commencement of foreclosure
proceedings for that fiscal year if (1) the total reassessment
installment delinquency is less than five percent (5%) of the
total installments due in such fiscal year, and (ii) the
Reserve Fund remains at or above the initial deposit made into
the Reserve Fund pursuant to Section 21. Notwithstanding the
foregoing, if the Town determines that any single property
owner is delinquent in excess of ten thousand dollars ($10,000)
in the payment of the reassessment installments, then it will
diligently institute, prosecute and pursue foreclosure
proceedings against such property owner. The Treasurer shall
notify the Council of any delinquency requiring the
commencement of a foreclosure action pursuant hereto and the
Council shall commence, or cause to be commenced, such
proceedings.
Section 15. No Duty to Advance from Available Surplus
Fun~. As provided in the Resolution of Intention, the Town
has not obligated itself to advance available funds from the
Town Treasury to cure any deficiency which may occur in the
Redemption Fund.
Section 16. Redemption Prior to Maturity. Each Bond, or
any portion thereof in the amount of $5,000 or any integral
multiple thereof, outstanding, may be redeemed and paid in
advance of maturity upon any Interest Payment Date in any year,
by giving at least 30 days' notice to the Owner by registered
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or certified mail or by personal service, and by paying the
principal amount thereof together with the Redemption Premium
plus interest to the date of advanced maturity, unless sooner
surrendered, in which event the interest will be paid to the
date of payment, all in the manner and as herein provided.
The Treasurer shall cause to be called for redemption and
retire Bonds upon prepayment of reassessments in amounts
sufficient therefor, or whenever sufficient surplus funds are
available therefor in the Redemption Fund. The Treasurer 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. Within each
annual series, Bonds shall be selected for redemption by lot.
The decision of the Treasurer in selecting Bonds or portions
thereof for redemption shall be conclusive in the absence of
fraud.
The provisions of Part 11.1 of the aforementioned
Improvement Bond Act of 1915 (incorporated into the Act) are
applicable to the advance payment of reassessments and to the
calling of the Bonds. The Treasurer is hereby expressly
authorized to make provisions for the calling of the Bonds with
the Agent in the agreement executed under Section 6 hereof.
Section 17. Refunding of Bonds. The Bonds may be refunded
by the Town pursuant to Divisions 11 or 11.5 of the California
Streets and Highways Code upon the conditions as set forth in
appropriate proceedings therefor.
Section 18. Escrow Fund. The Treasurer shall establish
with the Escrow Agent a special fund to be designated as the
Prior Bonds (Assessment District No. 88-1) Refunding Escrow
Fund (the "Escrow Fund") to be held in trust by the Escrow
Agent for the benefit of the owners of the Prior Bonds. The
Escrow Fund shall be subject to, administered by, and contain
those investments set forth in an escrow certificate to be
executed by the Treasurer at or prior to the delivery of the
Bonds. Any sums remaining in the Escrow Fund after completion
of the refunding shall be transferred to the Town for deposit
to the Redemption Fund.
Investments of monies in the Escrow Fund shall be limited
to the following investments, if and to the extent such
investments are permitted under the Act and do not result in
the Prior Bonds to be "federally guaranteed" within the meaning
of Section 103(h) of the Internal Revenue Code of 1954, as
amended and applicable Regulations:
u.s. Treasury Certificates, Notes and Bonds (including
State and Local Government Series -- "SLGS"), direct
obligations of the Treasury which have been stripped by the
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Treasury itself, "CATS" and "TIGRS" and obligations issued
by the following agencies which are backed by the full
faith and credit of the U.S.:
i ,
U.S. Export-Import Bank
Direct obligations or fully guaranteed
certificates of beneficial ownership
,
Farmers Home Administration
Certificates of beneficial ownership
3. Federal Financing Bank
4. Federal Housing Administration Debentures
·
General Services Administration
Participation certificates
,
U.S. Maritime Administration
Guaranteed Title XI financing
,
New Communities Debentures
U.S. government guaranteed debentures
·
U.S. Public Housing Notes and Bonds
U.S. government guaranteed public housing notes
and bonds
·
U.S. Department of Housing and Urban Development
Project Notes
Local Authority Bonds
No substitution of securities in the Escrow Fund shall be
made unless there has first been delivered to the Escrow Agent,
(1) a verification by a Certified Public Accountant that the
escrow investments, as substituted, are sufficient to pay debt
service, as it becomes due, on the Prior Bonds and (2) an
opinion of nationally recognized bond counsel to the effect
that the substitution is permitted under the documents and the
substitution has no adverse effect on the tax-exempt nature of
the Bonds.
The Escrow Agent is hereby authorized and directed on
behalf of the Town to provide notice of redemption (advance
maturity) pursuant to the Improvement Bond Act of 1915 (being
Division 10 of the California Streets and Highways Code) in
order that all of the Prior Bonds maturing after September 2,
1993 be duly redeemed on September 2, 1993, and to pay from the
Escrow Fund the principal of and interest and redemption
premiums, if any, on the Prior Bonds so called for advance
maturity in accordance with said Act of 1915.
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Section 19. Cost of Issuance Fund. The Treasurer shall
establish a special cost of issuance fund to be designated by
the name of the Bonds (the "Cost of Issuance Fund"), into which
shall be placed from the proceeds of the Bonds representing the
total of the sums identified in the report heretofore approved
and adopted by the Town as the costs incurred in the issuance
of the Bonds. All moneys in said Fund shall be withdrawn only
upon checks or warrants of the Town and shall be applied
exclusively to the payment of the costs of conducting said
reassessment proceedings and the issuance of the Bonds, except
as provided in Section 28 hereof. Any sums remaining in the
Cost of Issuance Fund after payment of all costs and legal
charges shall be transferred to the Redemption Fund provided
for herein.
Section 20. Redemption Fund. The Treasurer shall
establish the Redemption Fund designated by the name of the
Bonds, into which shall be placed any accrued interest paid by
the Original Purchaser for the period from the Bond Date to the
Closing Date and all sums received from the collection of
reassessments provided for in Section 13 hereof, and of the
interest and penalties thereon, except as provided in Section
28 hereof. From the Redemption Fund disbursements shall be
made to pay the principal or advance redemption price of the
Bonds and the interest due thereon.
The amount of any surplus remaining in any funds
established for the payment of the Prior Bonds after completion
of the refunding shall be transferred to the Redemption Fund.
All revenues collected by the Town relating to the
operation of the Project, net of the expense of the operation
of such facilities ("net operating revenues") shall be
deposited by the Town into the Redemption Fund. The net
operating revenues (which are, by definition, exclusive of the
monies derived from the reassessments collected by the Town
from within the reassessment district) shall first be credited
towards the next succeeding interest payment and then the next
succeeding principal payment on the Bonds until such net
operating revenues are depleted. These credits will reduce in
like amount the amount of future unpaid reassessments to be
collected by the Town.
Section 21. Reserve Fund. Upon receipt of the proceeds
from the sale of the Bonds, the Treasurer shall establish the
Reserve Fund, which shall be designated by the name of the
Bonds, and shall place therein an amount from proceeds derived
from the sale of the Bonds or other funds equal to not less
than five percent (5%) of the principal amount of the Bonds
issued. Moneys in the Reserve Fund shall constitute a trust
fund for the benefit of the Owners.
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Any income realized from the investment of moneys in the
Reserve Fund shall, except as provided in Section 28 hereof, be
credited to the Reserve Fund to the extent the amount therein
is less than the Reserve Requirement, and, thereafter,
transferred to the Redemption Fund to be used first, to the
extent needed to meet any deficiency therein, and then, and in
the amounts and at the times as the Council may determine, for
either or both of the following pursuant to Section 10427.1 of
the California Streets and Highways Code:
(a) as a credit upon the reassessment in the manner
provided in said Section 10427.1;
(b) for advance retirement of the Bonds in the manner
provided in Section 16 hereof.
Moneys in the Reserve Fund shall be paid and transferred in
the following amounts and at the following times and under any
of the following circumstances:
(a) Whenever there are insufficient funds in the
Redemption Fund to meet the next maturing installment of
principal of or interest on the Bonds due to delinquent
installments of reassessments, an amount necessary to pay
such deficiency shall be transferred as an advance from the
Reserve Fund to the Redemption Fund. The amount so
advanced shall be reimbursed and deposited in the Reserve
Fund from the proceeds of redemption or sale of the parcel
for which payment of delinquent installments was made from
the Reserve Fund.
(b) Whenever a reassessment is paid in cash prior to
its final maturity date pursuant to the provisions of
Section 16 hereof, the amount on deposit in the Reserve
Fund shall be proportionately reduced by an amount equal to
the ratio of the total amount initially provided for the
Reserve Fund to the total amount originally reassessed in
the proceedings for the Bonds, and an amount equal to the
reduction in said reassessment shall be transferred from
the Reserve Fund to the Redemption Fund.
(c) Whenever the balance in the Reserve Fund is
sufficient to retire all the remaining outstanding Bonds,
including accrued interest, if any, and Redemption Premium,
collection of the principal and interest on the unpaid
reassessments shall be discontinued and the Reserve Fund
shall be liquidated in retirement of the Bonds, except as
provided in Section 28 hereof. The same shall be credited
aqainst the remaining unpaid reassessments in the manner
32130005/25
13
set forth in said Section 10427.1, and the amount
apportioned to each such unpaid reassessment shall be
credited against the last unpaid reassessment installment,
and, if the amount apportioned to each such parcel exceeds
the amount of said last installment, then such excess shall
be credited against the next preceding unpaid reassessment
installment or installments until exhausted. In the event
that the balance in the Reserve Fund at the time of
liquidation exceeds the amount required to retire all
outstanding Bonds, the excess shall be apportioned to each
parcel upon which the individual reassessment remained
unpaid at the time the balance in the Reserve Fund was
sufficient to retire all outstanding Bonds. The payments
shall be made in cash to the respective owners of the
parcels except that, if the excess is not greater than one
thousand dollars ($1,000), the excess may be transferred to
the general fund of the Town.
(d) All sums received from the collection of
assessments, heretofore levied as security for the Prior
Bonds, that are delinquent, if any, and all interest and
penalties thereon, shall be placed in the Redemption Fund.
Section 22. Investment of Funds. Moneys in the Escrow
Fund, Redemption Fund, and the Reserve Fund shall, whenever
practicable, be invested in legal investments for the Town
under applicable law for the moneys held pursuant to this
Resolution at the time when any of such moneys are to be
invested therein. Reference is also made to Section 18 with
respect to the investment of moneys in the Escrow Fund and
Section 28 with respect to the Rebate Requirement (as defined
in the Guidelines).
Section 23. No Arbitrage. The Town hereby covenants with
the Owners of the Bonds that, notwithstanding any other
provisions of this Resolution, it will make no use of the
proceeds of the Bonds that would cause the Bonds to be
"arbitrage bonds" within the meaning of Section 148 of the
Code, and that it will, at the time of delivery of the Bonds,
execute an Arbitrage Certificate in furtherance thereof.
The Town covenants and agrees that it will comply with the
Guidelines, as they may be amended from time to time, and the
Treasurer covenants and agrees that it will comply with the
directions of the Town given to it pursuant to the Guidelines.
Pursuant to such covenant, the Town obligates itself to comply
throughout the term of the issue of the Bonds with the
requirements of Section 148 of the Code. The foregoing
covenant shall extend throughout the term of the Bonds, to all
funds and accounts created under this Resolution and all moneys
32] 30005/25
14
on deposit to the credit of any such fund or account, and to
any other amounts which are Bond proceeds for purposes of
Section 148 of the Code.
In furtherance of the foregoing tax covenants of this
Section 23, the Town covenants that it will comply with the
instructions and requirements of the Arbitrage Certificate.
These covenants shall survive payment in full or defeasance of
the Bonds.
Section 24. Certificate as to Non-Arbitrage. On the basis
of the facts, estimates and circumstances now in existence and
in existence on the Closing Date of the Bonds, as determined by
the Treasurer, the Treasurer is authorized and directed to
certify that it is not expected that the proceeds of the Bonds
will be used in a manner that would cause the Bonds to be
arbitrage bonds.
Section 25. Federal Guarantee Prohibition. The Town shall
take no action nor permit nor suffer any action to be taken if
the result of the same would cause the Bonds to be "federally
guaranteed" within the meaning of section 149(b) of the Code
and the Regulations.
Section 26. Private Activity and Private Loan Limitations.
The Town shall assure that no action is taken (or omitted from
being taken) such that the Bonds would constitute private
activity bonds, within the meaning of Section 141 of the Code,
or, to the extent the requirements of Section 1313 of the Tax
Reform Act of 1986 are satisfied such that Section 141 of the
Code is inapplicable with respect to the Bonds, that the Bonds
would constitute either "industrial development bonds" within
the meaning of Section 103(b), or private loan bonds within the
meaning of Section 103(o), of the Internal Revenue Code of
1954, as amended.
Section 27. Rebate Account.
(a) There is hereby created a special fund, herein called
"Rebate Account," to be designated and maintained by the
Treasurer as a separate account, distinct from all other
accounts of the Town. All amounts at any time on deposit in
the Rebate Account shall be held by the Treasurer in trust, to
the extent required to satisfy the requirement to make rebate
payments to the United States (the "Rebate Requirement" as
defined in the Guidelines) pursuant to Section 148 of the Code
and the TreasuryRegulations promulgated thereunder. Such
amounts shall be free and clear of any lien under the
Resolution and shall be governed by this Section 27 and
Section 23 and by the Guidelines. The Treasurer shall be
deemed conclusively to have
32130005/25
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complied with the Rebate Requirement if it follows the written
directions of the Town, and shall have no independent
responsibility to, or liability resulting from its failure to,
enforce compliance by the Town with the Rebate Requirement.
(b) Within 45 days of the end of each Bond Year, (1) the
Town shall calculate or cause to be calculated with respect to
the Bonds the amount that would be considered "rebatable
arbitrage" within the meaning of Section 1.148-2(a) of the
Treasury Regulations, using as the "computation date" for this
purpose the end of such Bond Year, and (2) upon the Town's
written direction, the Treasurer shall deposit to the Rebate
Account from deposits from the Investment Earnings Fund, if and
to the extent required, amounts sufficient to cause the balance
in the Rebate Account to equal the amount of "rebatable
arbitrage" so calculated. The Town shall provide written
direction to the Treasurer that the Treasurer shall not be
required to deposit any amount to the Rebate Account in
accordance with the preceding sentence if the amount on deposit
in the Rebate Account prior to the deposit required to be made
under this subsection (b) exceeds the amount of "febarable arbi-
trage" calculated in accordance with the preceding sentence.
Such excess may be withdrawn from the Rebate Account to the
extent permitted under subsection (g) of this Section. The
Town shall not be required to calculate the amount of "rebata-
ble arbitrage" within the meaning of Section 1.148-2(a) of the
Rebate Regulations with respect to all or a portion of the
proceeds of the Bonds (1) to the extent such proceeds satisfy
the expenditure requirements of Section 148(f)(4)(B) or Section
148(f)(4)(C) of the Code, whichever is applicable, and
otherwise qualify for the exception to the Rebate Requirement
pursuant to whichever of said sections is applicable, or (2) to
the extent such proceeds are subject to an election by the Town
under Section 148(f)(4)(C)(vii) of the Code to pay a 1-1/2%
penalty in lieu of arbitrage rebate in the event any of the
percentage expenditure requirements of Section 148(f)(4)(C) are
not satisfied, or (3) to the extent such proceeds qualify or
the exception to arbitrage rebate under Section
148(f)(4)(A)(ii) of the Code for amounts in a "bona fide debt
service fund"; in such event, and with respect to such
proceeds, the Town shall provide written direction to the
Treasurer that the Treasurer shall not be required to deposit
any amount to the Rebate Account in accordance with this subsec-
tion (b). The Town shall also not be required to calculate the
amount of "rebatable arbitrage" within the meaning of Section
1.148-2(A) of the Treasury Regulations with respect to all
proceeds of the Bonds and other amounts treated as proceeds of
the Bonds in the event it is determined that the Bonds and the
Town satisfy the requirements of Section 148(f)(4)(D) of the
Code (relating to "exempt small issuers"); in such event the
32] 30005/25
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Town shall provide written direction to the Treasurer that the
Treasurer shall not be required to deposit any amount to the
Rebate Account in accordance with this subsection (b).
(c) Any funds remaining in the Rebate Account after
redemption of all the Bonds and any amounts described in
paragraph (2) of subsection (d), or provision made therefor
satisfactory to the Treasurer, including payment of any accrued
interest and payment of any applicable fees to the Treasurer,
shall be withdrawn by the Treasurer and remitted to the Town.
(d) Upon the Town°s written direction, which direction
shall be subject to the exceptions contained in subsection (b)
of this Section to the requirement to calculate "rebatable
arbitrage" and make deposits to the Rebate Account, the
Treasurer shall pay to the United States Treasury, out of
amounts in the Rebate Account,
(1) not later than 60 days after the end of (i) the
fifth Bond Year, and (ii) each fifth Bond Year thereafter,
an amount that, together with all previous rebate payments,
is equal to at least 90% of the sum of (A) the "rebatable
arbitrage" calculated as of the end of such Bond Year in
accordance with Section 1.148-2 of the Treasury
Regulations, and (B) all previous payments of "rebatable
arbitrage" calculated in accordance with Section 1.148-2 of
the Treasury Regulations; and
(2) not later than 60 days after the payment of all
Bonds, an amount equal to 100% of the "rebatable arbitrage"
calculated as of the end of such Bond Year (and any income
attributable to the "rebatable arbitrage" determined to be
due and payable) in accordance with Section 1.148-2 of the
Treasury Regulations.
(e) In the event that, prior to the time of any payment
required to be made from the Rebate Account, the amount in the
Rebate Account is not sufficient to make such payment when such
payment is due, the Town shall calculate the amount of such
deficiency and direct the Treasurer to deposit from legally
available funds an amount received from the Town equal to such
deficiency into the Rebate Account prior to the time such
payment is due.
(f) Each payment required to be made pursuant to
subsection (d) of this Section shall be made to the Internal
Revenue Service Center, Philadelphia, Pennsylvania 19255 on or
before the date on which such payment is due, and shall be
accompanied by Internal Revenue Service Form 8038-T.
32130005/25
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(g) In the event that immediately following the
calculations required by subsection (b) of this Section, but
prior to any deposit made under such subsection, the amount on
deposit in the Rebate Account exceeds the amount of "rebatable
arbitrage" within the meaning of Section 1.148-2(a) of the
Treasury Regulations, upon written instructions from the Town,
the Treasurer shall withdraw such excess from the Rebate
Account and credit such excess to the Redemption Fund.
(h) The Town shall retain records of all determinations
made hereunder until six years after the retirement of the last
obligation of the Bonds.
Section 28. Investment Earnings Fund. There is hereby
created, to be held by the Treasurer as a separate fund
distinct from all other funds and accounts held by the
Treasurer, an Investment Earnings Fund. Notwithstanding any
other Section herein, interest earnings on investments having a
yield no greater than the yield on the Bonds (as determined in
the Guidelines) shall be retained in the fund or account on
which they were earned, except as provided in Section 21.
Notwithstanding any other Section herein, interest earnings
representing yield received above the yield of the Bonds on
investments having a yield greater than the yield on the Bonds
(as determined in the Guidelines) shall be paid into the
Investment Earnings Fund. The Treasurer shall be responsible
for determining whether an investment has a yield greater than
the yield on the Bonds, including seeking necessary advice to
fulfill such duties and responsibilities.
Section 29. Amendment. Without the consent of the
Bondowners, the Town hereafter may amend this Resolution to
add, modify or delete provisions if the same is necessary or
desirable, in the opinion of Bond Counsel, to assure that
interest on the Bonds will be excluded from gross income for
Federal income tax purposes and exempt from State of California
personal income taxation.
Section 30. Authority of Town Officials. The Manager,
Treasurer, Clerk and Administrative Services Manager are hereby
charged with the responsibility for the issuance and delivery
of the Bonds. Said officers and other members of the Town
staff are hereby authorized jointly and severally to execute
any and all documents and do any and all things deemed
necessary or advisable in order to consummate the delivery of
the Bonds pursuant to the Contract of Purchase therefor and
32130005/Z5
18
4
otherwise to effectuate the purposes of this Resolution. All
actions mandated by this Resolution to be performed by the
Treasurer may be performed by the designee thereof or such
other official of the Town or independent contractor,
contractor or trustee duly authorized by the Town to perform
such action or actions.
Section 31. ~ertified Copies. The Clerk shall furnish a
certified copy of this Resolution to the Treasurer, to the
Agent, and to the Auditor and the Tax Collector of the County
of Contra Costa.
32130005/25
19
I hereby certify that the foregoing is a full, true and
correct copy of a resolution duly passed and adopted by the
Town Council of the Town of Danville, California at a meeting
thereof held on the 29th day of June, 1993 by the following
vote:
AYES, and in favor thereof,
Noes, Councilmembers: NONE
ABSENT, Councilmembers: NONE
ABSTAIN, Councilmember: NONE
SHIMANSKY, RITCHEY, DOYLE, GREENBERG, LANE
ayor
ATTEST:
City Clerk
APPROVED AS TO FORM:
32130005/25
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t
EXHIBIT A
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF CONTRA COSTA
REGISTERED REGISTERED
NUMBER R- $
TOWN OF DANVILLE
LIMITED OBLIGATION IMPROVEMENT BOND
TASSAJARA RANCH REASSESSMENT DISTRICT
No. 93-1
INTEREST MATURITY BOND CUSIP
RATE DATE DATE NUMBER
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
Under and by virtue of the Refunding Act of 1984 for 1915
Improvement Act Bonds, being Division 11.5 of the California
Streets and Highways Code (the "Act"), the Town of Danville,
(the "Town"), Contra Costa County, California, will, out of the
redemption fund for the payment of the bonds issued upon the
unpaid portion of reassessments made for the refunding bonds
more fully described in proceedings taken pursuant to
Resolution of Intention No. adopted by the Town Council
of the Town on , 1993, 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 from the interest payment date next preceding the date
on which this bond is authenticated and registered, unless this
bond unless is authenticated and registered (i) after the
Record Date with respect to an interest payment date, in which
event it shall bear interest from such interest payment date,
or (ii) on or before the first interest payment date, in which
event it shall bear interest from its date, until payment of
such principal sum shall have been discharged, at the rate per
32130005/25
A-1
annum stated above, payable semiannually on March 2 and
September 2 in each year, commencing on 2, 199_;
provided, however, that if, at the time of authentication and
registration, interest is in default, this bond shall bear
interest from the last interest payment date to which interest
has been paid or made available for payment.
Both the principal hereof and redemption premium hereon are
payable upon presentation and surrender hereof at the Corporate
Trust Office of Bank of America National Trust and Savings
Association, as Transfer Agent, Registrar and Paying Agent (the
"Agent"), in Los Angeles, California, or its successor, and the
interest hereon is payable by check or draft mailed to the
registered owner hereof at such registered owner's address as
it appears on the registration books of the Agent as of the
Record Date, being the fifteenth (15th) day of the month
immediately preceding the interest payment date, or upon the
request in writing of an owner of $1,000,000 or more in
aggregate principal amount of the bonds, such request having
been made before the Record Date 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
within the continental United States designated by such owner
to the Agent.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE SIDE HEREOF WHICH SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH HEREIN.
This bond will continue to bear interest after maturity at
the interest rate above stated provided that it is presented at
maturity and payment hereof is refused upon the sole ground
that there are not sufficient moneys in said redemption fund
with which to pay same. If it is not presented at maturity,
interest hereon will run only until maturity.
This bond shall not be entitled to any benefit under the
Act or the Resolution, or become valid or obligatory for any
purpose, until the certificate of authentication and
registration hereon shall have been dated and signed by the
Agent.
32] 30005/25
A-2
IN WITNESS WHEREOF, the Town of Danville has caused this
bond to be signed in facsimile by its Treasurer and by its
Clerk, and has caused its corporate seal to be reproduced in
facsimile hereon, as of , 1993.
TOWN OF DANVILLE
Clerk Treasurer
[ SEAL ]
32130005/25
A-3
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is one of the bonds described in the within-mentioned
Resolution, which has been authenticated and registered on
Bank of America National
Trust and Savings Association,
as Agent
By
Authorized Officer
32] 30005/25
A-4
(REVERSE OF BOND)
TOWN OF DANVILLE
LIMITED OBLIGATION IMPROVEMENT BOND
Tassajara Ranch Reassessment District 93-1
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 said Town under the Act and a
Resolution entitled "A Resolution Providing for the Issuance of
Refunding Bonds", adopted by the Town Council on
1993 (the "Resolution"), in the aggregate principal amount of
($ ) for
the purpose of refunding outstanding assessment bonds and
financing the issuance costs related to the refunding, as more
particularly described in the proceedings, and is secured by
the moneys in the redemption fund and by the unpaid portion of
the reassessments made for the bonds and, including principal
and interest, is payable exclusively out of the redemption fund.
In the Resolution of Intention the Town has determined and
declared, pursuant to Section 9519.5 of the Act, that the Town
will not obligate itself to advance available funds from the
Town treasury to cure any deficiency which may occur in the
redemption fund.
This bond is transferable by the registered owner hereof,
in person or by the registered owner's attorney duly authorized
in writing, at said office of the Agent, subject to the terms
and conditions provided in the Resolution, including the
payment of certain charges, if any, upon surrender and
cancellation of this bond. Upon such transfer, a new
registered bond or bonds, of any authorized denomination or
denominations, of the same maturity, and for the same aggregate
principal amount, will be issued to the transferee in exchange
herefor.
Bonds shall be registered only in the name of an individual
(including joint owners), a corporation, a partnership or a
trust.
Neither the Town nor the Agent shall be required to make
such exchange or registration or transfer of bonds between a
Record Date and the subsequent interest payment date, nor, in
the case of any proposed redemption of bonds, after the day
next preceding the date of the mailing of notice of such
redemption.
32130005/25
A-5
%
The Town and the Agent may treat the registered owner
hereof as the absolute owner for all purposes, and 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 2nd day of
March or September in any year, by giving at least 30 days'
notice by registered or certified mail or by personal service
to the registered owner hereof at the registered owner's
address as it appears on the registration books of the Agent,
and by paying the principal amount to be redeemed, together
with the following redemption premium, plus interest to the
date of advanced maturity, unless sooner surrendered, in which
event interest will be paid to the date of payment:
Date of Advanced Maturity
March 2, 1994 through September 2,
March 2, and September 2,
March 2, and September 2,
March 2, and thereafter
Redemption Premium
3%
2%
1%
0%
I hereby certify that the following is a correct copy of
the signed legal opinion of Brown & Wood.
City Clerk
[LEGAL OPINION OF BROWN & WOOD]
32130005/25
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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.
32130005/25
A-7
ASSIGNMENT
For value received the undersigned do(es) hereby sell,
assign and transfer unto
(Print or typewrite name, address and social security or other
tax identification number of assignee)
the within bond and all rights thereunder, and hereby
irrevocably constitute(s) and appoint(s)
, attorney, to transfer the same on
the bond register maintained by the Agent with full power of
substitution in the premises.
Dated:
Signature Guaranty
NOTE: Signature(s) must
correspond exactly to name(s) on
face thereof. When assignment is
made by a guardian, trustee,
executor or administrator, an
officer of a corporation, or
anyone in a representative
capacity, proof of such person's
authority to act must accompany
this assignment.
NOTE: The signature(s) to
the Assignment must be
guaranteed by a member firm
of a registered national
securities exchange or a
commercial bank or trust
company.
32130005/25
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