HomeMy WebLinkAboutCity Council - 1844 1 f
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CITY OF HUNTMTON BEACH
RESOLUTION NO. AfAk.....
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH,
CALIFORNIA, AUTHORIZING THE ISSUANCE OF $3,750,000 WATER
REVENUE BONDS OF SAID CITY AND PROVIDING THE TERMS
AND CONDITIONS FOR THE ISSUANCE OF SAID BONDS.
WHEREAS, pursuant to Resolution No. 1730, a special municipal election was held in the City
of Huntington Beach on April 30, 1963, for the purpose of submitting to the qualified voters of said
city and the proposition of issuing water revenue bonds of said city in the amount of $5,700,000 pursuant
to the Revenue Bond Law of 1941 (Chapter 6, Part 1, Division 2, Title 5 of the Government Code of
the State of California) for the following purposes, to wit:
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The acquisition, construction and financing of additions to the waterworks system of the City
of Huntington Beach including works and facilities for the production, storage, transmission and
distribution of water, including capacity rights in works and facilities to be used jointly with
other public corporations including capacity rights in the San Joaquin Reservoir to be constructed
by the Irvine Ranch Water District, the West Orange County Feeder No. 2 and the Irvine
Reservoir Transmission Line and additional capacity rights in the East Orange County Feeder
No. 2, water storage reservoirs and tanks, water transmission and distribution mains, treatment
plants, and water wells, and including the acquisition of all water rights, lands, easements, buildings,
pipe, pumps, valves, fittings, meters, machinery, equipment, materials, apparatus and other
property necessary or convenient therefor, and incidental expenses included in connection therewith.
and
WHEREAS, said proposition was approved by the votes of more than a majority of all the
voters voting on said proposition at said special election, and this City is now authorized to issue said
bonds as provided in said Revenue Bond Law of 1941; and
WHEREAS, this City Council deems it necessary to issue and sell at this time $3,750,000 of said
bonds as "Series A";
NOW, THEREFORE, the City Council of the City of Huntington Beach, California, DOES
HEREBY RESOLVE, DETERMINE AND ORDER as follows:
Section 1. Definitions. As used in this resolution the following terms shall have the following
meanings:
(a) "City" means the City of Huntington Beach, California.
(b) "City Council" or "Council" means the City Council of said City.
(c) "Treasurer" means the City Treasurer of the City of Huntington Beach, California.
(d) "Revenue Bond Law" means the Revenue Bond Law of 1941 as cited in the recitals
hereof.
(e) "The bonds", "said bonds" or "this series" means the bonds authorized by this resolution.
(f) "Enterprise" means the enterprise defined in said Resolution No. 1730 calling said
election, as follows:
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"That the enterprise referred to herein is defined to be the entire waterworks system of
the City of Huntington Beach as such system now exists together with all additions to be
acquired, constructed and financed with funds derived from the sale of the revenue bonds
herein proposed to be issued,together with all improvements and extensions to said system later
constructed or acquired."
(g) "Gross revenues of the enterprise" means all revenues (as defined in Section 54315 of
the Government Code, which include all charges received for, and all other income and receipts
derived by the city from the operation of the enterprise or arising from the enterprise) received
by the city from the services, facilities and water sales of the enterprise and excepting therefrom
revenues derived from connection charges and other deposits to secure service.
(h) "Necessary and reasonable maintenance and operation costs of the enterprise" means the
reasonable expenses of management, repair and other expenses necessary to maintain and preserve
the enterprise in good repair and working order, excluding depreciation and obsolescence.
(i) "Net revenues of the enterprise" means the amount of the gross revenues of the enterprise
remaining after payment therefrom of the necessary and reasonable maintenance and operation costs
of the enterprise.
(j) "Maximum annual debt service" shall be the maximum sum obtained for any fiscal year
thereafter by totaling the following:
(a) The principal amount of all outstanding bonds payable in such fiscal year; and
(b) The amount of minimum term bond payments for bonds required to be made in
such fiscal year together with the premium thereon, if any be payable; and
(c) The interest which would be due during such fiscal year on the aggregate principal
amount of bonds which would be outstanding in such fiscal year if the bonds are retired as
scheduled, but deducting and excluding from such aggregate amount the amount of bonds
already retired in advance of sa1d schedule.
Security 1st National Bank
(k) "Fiscal Agent" means the ..of..LaR..Ang2.l.sa..................... or its successor, appointed
pursuant to Section 10 of this resolution.
(1) "Parity Bonds" means revenue bonds (including further series of bonds of the issue of
which this series is a part) revenue notes or any other evidences of indebtedness which may be
authorized and/or issued for the acquisition, construction and financing of extensions of, additions
to, and improvements of the enterprise, payable out of the revenues derived from the enterprise and
which, as provided in this resolution, rank on a parity with the bonds of this series.
(m) "Subsequent resolution" means any resolution of issuance for any parity bonds.
(n) "Fiscal year"means the year period beginning on July 1st and ending on the next following
June 30th.
(o) "Authorized Investments" means any negotiable direct obligations of the United States,
or any negotiable obligations for which the full faith and credit of the United States are pledged for
the payment of principal and interest, or any obligations issued by federal land banks or federal
intermediate credit banks established under the Federal Farm Loan Act, as amended, bonds or
debentures of the Federal Home Loan Bank Board or of any federal home loan bank established
under the Federal Home Loan Bank Act, obligations of the Federal National Mortgage Association
established under the National Housing Act, as amended, and debentures and consolidated deben-
tures issued by the Central Bank for Cooperatives and banks for cooperatives established under the
Farm Credit Act of 1933, as amended.
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Section 2. Equality of Bonds, Pledge of Revenues. Pursuant to the Revenue Bond Law of 1941
and this resolution, said bonds shall be equally secured by a pledge, charge and lien upon the gross
revenues of the enterprise without priority for number, date of bonds, date of sale, date of execution, or
date of delivery, and the payment of the interest on and principal of said bonds and any premiums upon
the redemption of any thereof shall be and are secured by an exclusive pledge, charge and lien upon the
gross revenues of the enterprise, and all of the gross revenues of the enterprise (including revenues of
improvements and extensions later constructed or acquired and revenues of existing systems, plants,
works or undertakings to be acquired, improved or extended or for the acquisition, improvement or
extension of which said bonds are to be issued) are hereby pledged, charged and assigned for the security
of said bonds, and such gross revenues and any interest earned on the gross revenues shall constitute a
trust fund for the security and payment of the interest on and principal of said bonds and so long as any
of said bonds or interest thereon are unpaid said gross revenues and interest thereon shall not be used
for any other purpose, except as permitted by this resolution and any subsequent resolution, and shall
be held in trust for the benefit of the bondholders and shall be applied pursuant to this resolution, or to
this resolution as modified pursuant to provisions herein, and any subsequent resolution.
Nothing in this resolution or in any subsequent resolution shall preclude: (a) the redemption prior
to maturity of any bonds subject to call and redemption and payment of said bonds from proceeds of
refunding bonds issued under said Revenue Bond Law of 1941 as the same now exists or as hereafter
amended, or under the charter of said city or any other law of the State of California; (b) the issuance,
subject to the limitations in Covenant 11 in Section 13 hereof, of additional indebtedness evidenced
by revenue bonds, revenue notes or any other evidences of indebtedness payable out of the revenues of
the enterprise and ranking on a parity with said bonds.
Section 3. Amount, Issuance, Purpose and Nature of Bonds. That under and pursuant to said
Revenue Bond Law revenue bonds of the city in the amount of $3,750,000 shall be issued for the
purpose stated in the recitals hereof. Said revenue bonds shall be and are special obligations of the
city and shall be and are secured by a pledge of and lien upon, and shall be and are a charge upon,
and shall be and are payable as to the principal thereof and interest thereon and any premiums upon
the redemption of any thereof, solely from the gross revenues of the enterprise, such gross revenues
being hereby pledged, charged and assigned for the security of the bonds.
Section 4. No General City Liability. The general fund of the city is not liable for the pay-
ment of the bonds or their interest, nor is the credit or taxing power of the city pledged for the
payment of the bonds or their interest. The holder of the bonds or coupons shall not compel the exercise
of the taxing power by the city or the forfeiture of any of its property. The principal of and interest
on the bonds and any premiums upon the redemption of any thereof are not a debt of the city nor a
legal or equitable pledge, charge, lien, or encumbrance, upon any of its property, or upon any of its
income, receipts, or revenues, except the gross revenues of the enterprise which are, under the terms
of this resolution and said Revenue Bond Law, pledged to the payment of said bonds and interest.
Section 5. Description of Bonds. Said bonds shall be in the principal sum of $3,750,000, shall be
3,750 in number, numbered Al to A3,750, inclusive, and shall be of the denomination of $1,000 each.
Said bonds shall be designated 1963 WATER REVENUE BONDS, SERIES A, shall be dated November
1, 1963, and shall be payable in consecutive numerical order on November 1 in each year of maturity
in the amounts for each of the several years as follows:
Bonds Bonds Bonds
Year Maturing Year Maturing Year Maturing
1965............ $ 10,000 1970-1971............ $ 90,000 1981 ------------ $ 140,000
1966............ 20,000 1972-1973............ 100,000 1982-1983------------ 150,000
1967............ 40,000 1974-1976------------ 110,000 1993 ............ 1,890,000
1968............ 60,000 1977-1978._.......... 120,000
1969............ 80,000 1979-1980------------ 130,000
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The bonds maturing in the years 1965 to 1983, inclusive, are herein sometimes referred to as "serial
bonds." The bonds maturing in the year 1993 are herein sometimes referred to as "term bonds."
Section 6. Interest. Said bonds shall bear interest at a rate or rates to be hereafter fixed by
resolution or resolutions, but not to exceed six per cent (6%) per annum, payable annually for the
first year and semiannually thereafter, on the 1st days of May and November of each year. Each bond
shall bear interest until the principal sum thereof has been paid, provided, however, that if at the
maturity date of any bond, or if the same is redeemable and has been duly called for redemption, funds
are available for the payment or redemption thereof in full accordance with the terms of this resolution,
said bonds shall then cease to bear interest. Said bonds and the interest thereon shall be payable in
lawful money of the United States of America at the _Shur_ity__lst__Nati anal-_B.&Ni os Angeles,
California, Fiscal Agent for the city, or, at the option of the holder, at any paying agent of the city in
Chicago, Illinois, or in New York, New York.
Section 7. Execution of Bonds. The Mayor of the city and the Treasurer of the city are hereby
authorized and directed to sign all of said bonds by their printed, lithographed or engraved facsimile
signatures, and the City Clerk of the city is hereby authorized and directed to countersign said bonds
and to affix thereto the corporate seal of the city, and the Treasurer of the city is hereby authorized and
directed to sign the interest coupons of said bonds by his printed, lithographed or engraved facsimile
signature.
Section 8. Registration. Said bonds may be registered either as to principal only or as to both
principal and interest, and the form of registration of any registered bond may be discharged from
registration in the manner and with the effect set forth in the provisions for registration contained in
the form of bond set forth herein.
Section 9. Redemption of Bonds. The bonds maturing on or prior to November 1, 1983 are not
subject to call or redemption prior to maturity. The bonds maturing on November 1, 1993 are subject to
call and redemption, at the option of the city,on November 1, 1973 or on any interest payment date there-
after prior to maturity, at a redemption price equal to the principal amount thereof plus the following
premiums (percentage of par value) if redeemed at the following times:
REDEMPTION DATES AND PREMIUMS
On or After And Prior to On or After And Prior to
November 1 November 1 Premium November 1 November 1 Premium
1973 1974 4 % 1982 1983 13/4%
1974 1975 33/4 1983 1984 11/2
1975 1976 31/2 1984 1985 I1/4
1976 1977 31/4 1985 1986 1
1977 1978 3 1986 1987 3/4
1978 1979 23/ 1987 1988 1/2
1979 1980 21/2 1988 1989 1/4
1980 1981 21/4 1989 Maturity —0-
1981 1982 2
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All or any of the bonds subject to call may be called for redemption at any one time. If less than all of
the bonds are redeemed at any one time, such bonds shall be redeemed by lot. The interest payment
date on which bonds are to be presented for redemption is hereinafter sometimes called the "redemption
date."
(a) Notice of Redemption. Notice of the intended redemption shall be published by one insertion
in a newspaper of general circulation in the County of Orange, California, and in a financial news-
paper or journal of national circulation published in the City of New York, New York, said publica-
tions to be at least 30 days but not more than 60 days prior to the redemption date. The notice of
redemption shall (a) state the redemption date; (b) state the redemption price; (c) state the numbers
and date of maturity of the bonds to be redeemed, provided, however, that whenever any call includes
all of the outstanding bonds subject to call the numbers of the bonds need not be stated; (d) require
that such bonds be surrendered with all interest coupons maturing subsequent to the redemption date
(except that no coupons need be surrendered on bonds registered as to both principal and interest)
at the S.ezmriay_.1at._Na.Uo4aa-1-Baq#Los Angeles, California, Fiscal Agent for the city, or, at the
option of the holder, at any paying agent of the city in Chicago, Illinois, or in New York, New York;
(e) require that bonds which at the time of call are registered so as to be payable otherwise than to
bearer shall be accompanied by appropriate instruments of assignment duly executed in blank; and
(f) give notice that further interest on such bonds will not accrue after the designated redemption date.
The Fiscal Agent shall, on or before the date of publication of said notice of redemption, mail a
similar notice, postage prepaid to any person, firm or corporation that originally purchased bonds from
the city.
If any of the bonds designated for redemption shall be registered so as to be payable otherwise than
to bearer, the Fiscal Agent shall, on or before the date of publication of said notice of redemption,
mail a similar notice, postage prepaid, to the respective registered owners thereof at the addresses
appearing on the bond registry books.
The actual receipt by the holder of any bond (hereinafter referred to as "bondholder") of notice
of such redemption shall not be a condition precedent to redemption, and failure to receive such notice
shall not affect the validity of the proceedings for the redemption of such bonds or the cessation of
interest on the date fixed for redemption. The notice or notices required by this section shall be given
by the Fiscal Agent. A certificate by the Fiscal Agent that notice of call and redemption has been given
to original purchasers and to holders of registered bonds as herein provided shall be conclusive as
against all parties, and no bondholder whose bond or registered bond is called for redemption may object
thereto or object to the cessation of interest on the redemption date fixed by any claim or showing that
he failed to actually receive such notice of call and redemption.
(b) Redemption. Prior to the redemption date there must be set aside in the Retirement Fund
moneys for the purpose and sufficient to redeem, at the premiums payable as in this resolution pro-
vided, the bonds designated in such notice for redemption. Said moneys must be set aside in said fund
solely for that purpose and shall be applied on or after the redemption date to the payment (principal
and premium) of the bonds to be redeemed upon presentation and surrender of such bonds and (except
as to bonds registered as to both principal and interest) all interest coupons maturing after the redemption
date. Any interest coupon due on or prior to the redemption date shall be paid from the Interest
Fund upon presentation and surrender thereof. Any interest due on or prior to the redemption date upon
bonds registered as to both principal and interest shall be paid from said Interest Fund. Each bond
presented (if unregistered or registered as to principal only) must have attached thereto or presented
therewith all interest coupons maturing after the redemption date.
(c) Effect of the Notice of Redemption. When notice of redemption has been given, and when
the amount necessary for the redemption of the bonds called for redemption (principal and premium)
is set aside for that purpose in the Retirement Fund, the bonds designated for redemption shall become
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due and payable on the date fixed for redemption thereof, and upon presentation and surrender of said
bonds and (except as to bonds registered as to both principal and interest) all interest coupons maturing
after the redemption date, at the place specified in the notice of redemption, and, if any of said bonds be
registered, upon the appropriate assignment thereof in blank, such bonds shall be redeemed and paid at
said redemption price out of the Retirement Fund, and no interest will accrue on such bonds called for
redemption or on any interest coupon thereof after the redemption date specified in such notice, and the
holders of said bonds so called for redemption after such redemption date shall look for the payment of
such bonds and the premium thereon only to said Retirement Fund. All bonds redeemed and all interest
coupons thereof shall be cancelled forthwith by the Fiscal Agent and shall not be reissued.
All interest coupons pertaining to any redeemed bonds, which coupons have matured on or prior
to the time fixed for redemption, shall continue to be payable to the respective holders thereof but
without interest thereon. All unpaid interest payable at or prior to the date fixed for redemption upon
bonds registered in such manner that the interest is payable only to the registered owners shall continue
to be payable to the respective registered owners of such bonds, or their order,but without interest thereon.
Bank
Section 10. Fiscal Agent. The city hereby appoints the Security lat National in the
City of Los Angeles, State of California, as the Water Revenue Bond Fiscal Agent for the purpose of
paying the principal of and interest on any of the bonds presented for payment in the City of Los Angeles,
State of California, and for the purpose of performing all other duties assigned to or imposed upon the
Fiscal Agent as in this resolution provided. The Fiscal Agent initially appointed and any successor thereof
may be removed by the city and a successor or successors appointed; provided that each such successor
shall be a bank or trust company doing business in and having an office in the City of Los Angeles,
State of California. Any such Fiscal Agent designated by the city shall continue to be the Fiscal Agent
of the city for all of said purposes until the designation of a successor as such Fiscal Agent, and the city
agrees that it will maintain a Fiscal Agent in said City of Los Angeles so long as any of said bonds or
any parity bonds are outstanding and unpaid. The Fiscal Agent is hereby authorized and directed
to withdraw from the funds and in the manner provided herein all sums required for the payment of the
principal of and interest on the bonds presented for payment at the places herein provided at maturity,
or on call and redemption or on purchase by the Fiscal Agent prior to maturity. The Fiscal Agent is
hereby authorized to redeem the bonds and the interest coupons appertaining thereto when duly presented
to it for payment at maturity, or on call and redemption or on purchase by the Fiscal Agent prior to
maturity, and to cancel all bonds and coupons upon payment thereof and to return the same so cancelled
to the Treasurer. The Fiscal Agent shall keep accurate records of all funds administered by it and of all
bonds and coupons paid and discharged by it. The City Council is hereby authorized to compensate
the Fiscal Agent for the services rendered pursuant to the provisions of this resolution.
The Fiscal Agent shall have no duty or obligation whatsoever to enforce the collection of or to
exercise diligence in the enforcement of the collection of funds assigned to it hereunder, or as to the
correctness of any amounts received, but its liability shall be limited to the proper accounting for such
funds as it shall actually receive.
The recitals of fact and all promises, covenants and agreements herein and in the bonds of said
authorized issue contained shall be taken as statements, promises, covenants and agreements of the city,
and the Fiscal Agent assumes no responsibility for the correctness of the same, and makes no representa-
tions as to the validity or sufficiency of this resolution or of the bonds or coupons, and shall incur no
responsibility in respect thereof, other than in connection with the duties or obligations herein or in
the bonds assigned to or imposed upon the Fiscal Agent. The Fiscal Agent shall be under no responsi-
bility or duty with respect to the issuance of the bonds for value. The Fiscal Agent shall not be liable
in connection with the performance of its duties hereunder, except for its own negligence or default.
Any Fiscal Agent appointed hereunder may resign at any time. Upon the merger, consolidation or
other reorganization of any Fiscal Agent into another entity so that the identity of the Fiscal Agent is
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lost, the City Council shall appoint a new Fiscal Agent, which may be the corporation resulting from
such reorganization.
Section 11. Revenues and Funds. Under and pursuant to said Revenue Bond Law there are hereby
created the following funds which shall be applied pursuant to this resolution and under and pursuant
to said Revenue Bond Law:
1. Water Revenue Bond Acquisition and Construction Fund (herein sometimes referred Ao
as "Construction Fund," held by the City);
2. Water Revenue Fund (herein sometimes referred to as "Revenue Fund," held by the
Fiscal Agent);
3. Water Revenue Bond Interest Fund (herein sometimes referred to as "Interest Fund," held
by the Fiscal Agent);
4. Water Revenue Bond Retirement Fund (herein sometimes referred to as "Retirement
Fund," held by the Fiscal Agent);
5. Water Revenue Bond Reserve Fund (herein sometimes referred to as "Reserve Fund,"
held by the Fiscal Agent);
6. Maintenance and Operation Fund (herein sometimes referred to as "M & O Fund," held
by the City);
7. Water Revenue Surplus Fund (herein sometimes referred to as "Surplus Fund," held by
the City).
(a) Disposition of Bond Proceeds. The proceeds of the sale of the bonds shall be placed by the
Treasurer as follows:
(1) The accrued interest, if any, shall be deposited with the Fiscal Agent to be placed in
the Interest Fund.
(2) The amount of $175,000 shall be placed in the Reserve Fund.
(3) The balance shall be placed in the Construction Fund.
The City may deposit money received from any source in the Construction Fund. The money set
aside and placed in the Construction Fund shall remain therein until from time to time expended for the
purposes for which the bonds were issued.
Moneyin the Construction Fund may be invested in any authorized investments, provided that the
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maturity or maturities thereof shall not be later than the date or dates on which money must be available
1 f s to meet scheduled Construction Fund expenditures. I any um remains in said Construction Fund
after the full accomplishment of the purposes for which the bonds were issued, it shall be transferred to
and placed in the Reserve Fund to the extent necessary at that time to bring the Reserve Fund up to an
amount equal to the maximum annual debt service and, as to any remaining balance to the Water Fund.
(b) Revenue Fund. The Treasurer shall,on or before the fifth business day of each calendar month
next succeeding the calendar month in which the gross revenues of the enterprise have been collected,
commencing in the month of November, 1963,deposit the gross revenues with the Fiscal Agent. Said gross
revenues shall be deposited by the Fiscal Agent in the Revenue Fund and shall be held in trust by the
Fiscal Agent. The Fiscal Agent shall transfer moneys from the Revenue Fund to the following funds
in the following order of priority.
(c) Interest Fund. On or before the tenth business day of each calendar month so long as any of
the bonds are outstanding the Fiscal Agent shall set aside out of the Revenue Fund into the Interest
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Fund one-sixth (1/6th) of the interest which will become due and payable on the outstanding bonds
within the next ensuing six (6) months, except that for the first year after the date of the bonds,
commencing in the month of November 1963,the monthly sum transferred for interest shall be one-twelfth
(1/12th) of the interest which will become due and payable at the end of the first year less the amount
of any accrued interest placed in said fund.
Such sums shall be so transferred that the full amount required to pay the interest on said
bonds shall be set aside in the Interest Fund at least fifteen (15) days prior to the date the installment
of interest becomes due.
Any amount required to be set aside, transferred to and placed in the Interest Fund may be
prepaid at the direction of the City in whole or in part by being earlier set aside, transferred to and
placed in the Interest Fund, and in that event the monthly transfer which has been so prepaid need not
be made at the time appointed therefor. In any event at least fifteen (15) days prior to the due date of
any installment of interest on such bonds all sums required for the payment thereof must be in the
Interest Fund.
Money in the Interest Fund may be temporarily invested in any Authorized Investments provided
that the maturity or maturities thereof shall not be later than the date or dates on which money must be
available in the Interest Fund.
The interest coupons shall recite that they are payable from the Revenue Fund, but said coupons
notwithstanding such recital shall be paid from the Interest Fund which is derived from the Revenue
Fund.
If after all of the bonds and any parity bonds have been redeemed and cancelled or paid and
cancelled there are moneys remaining in the Interest Fund said money shall be transferred to the
Revenue Fund; provided, however, that if said moneys are part of the proceeds of refunding bonds said
moneys shall be transferred to the fund or account created for the payment of the principal of and
interest on such refunding bonds.
(d) Retirement Fund. For the payment of the principal amount of the bonds on or before the tenth
business day of each calendar month so long as any of such bonds are outstanding the Fiscal Agent shall
set aside out of the Revenue Fund into the Retirement Fund, one-twelfth (1/12th) of the principal
amount of such bonds which will mature and be payable within the next ensuing twelve (12) months
except that said payments of one-twelfth (1/12th) of the principal amount shall not commence until
the month of November, 1964.
Such sums shall be so transferred that the full amount required to pay as it becomes due any
maturity or installment of principal on said bonds shall be set aside in the Retirement Fund at least
fifteen (15) days prior to the date the installment of principal becomes due.
Any amount required to be set aside, transferred to and placed in the Retirement Fund may be
prepaid at the direction of the City in whole or in part by being earlier set aside, transferred to and
placed in the Retirement Fund, and in that event the monthly transfer which has been so prepaid need
not be made at the time appointed therefor. In any event at least fifteen (15) days prior to the due date
of any installment of principal on such bonds all sums required for the payment thereof must be in the
Retirement Fund.
Money in the Retirement Fund may be temporarily invested in any Authorized Investments,
provided that the maturity or maturities thereof shall not be later than the date or dates on which money
must be available in the Retirement Fund for call or retirement of bonds.
The bonds shall recite that they are payable from the Revenue Fund, but said bonds notwith-
standing such recital shall be paid from the Retirement Fund which is derived from the Revenue Fund.
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For the payment of the term bonds on or before the tenth business day of each calendar month,
commencing in the month of November, 1983, there shall be transferred from the Revenue Fund and set
aside in the Retirement Fund an amount not less than the minimum amount hereinafter specified. Such
transfer shall in no event be less than the amounts (herein sometimes referred to as "minimum term
bond payments") which will be sufficient to call and redeem said term bonds (including premiums
thereon) in the following respective minimum principal amounts on November 1 in each of the following
years, to wit:
Minimum Amount Minimum Amount
Year Each Year Year Each Year
1984---_------------------------ --------- $160,000 1989---------------------------------------- $190,000
1985------ --------------------------------- $160,000 1990........................................ $200,000
1986------------------------ --------- $170,000 1991-------- ---------- -------_----------- $210,000
1987---------------------------------------- $180,000 1992........................................ $220,000
1988----------- ---------------- ------- $180,000 1993---------------------------------------- $220,000
The minimum term bond payment to be made on the tenth business day of each calendar month as
aforesaid shall be one-twelfth (1/12th) of the amount needed in each year to call and redeem the
minimum amount of term bonds according to the above table, it being the intent of this provision that
the respective minimum amounts necessary to call and redeem term bonds according to the above table
(or to purchase all or any part of such bonds in lieu of call and redemption prior to maturity) shall be
transferred to the Retirement Fund prior to the redemption date. In the event that the transfer made for
any month is less than the minimum term bond payment for that month because of lack of funds or for'
any other reason the deficiency shall be added to and become a part of the minimum term bond payment
required for the following month.
Except as hereinafter provided, moneys in the Retirement Fund set aside for the minimum term
bond payments shall be used solely for the purpose of purchasing and/or calling and redeeming said
term bonds prior to maturity. Money in said fund in excess of that which has been set aside for the
purpose of redeeming bonds which have been called prior to maturity may be used to purchase from
time to time on the open market any of the outstanding bonds subject to such call and redemption
(irrespective of the number of such bonds), either at public or private sale or otherwise, but the purchase
price (including brokerage or other charges, but excluding accrued interest) shall not exceed the redemp-
tion price thereof on the next interest payment date.
If on September 15, 1984 or on any September 15th of any year thereafter,the fiscal agent determines
that there will be in the Retirement Fund on the next succeeding November 1 an amount at least sufficient,
including premiums, to call $5,000 principal amount of term bonds or more, the fiscal agent shall then
call and redeem term bonds from minimum term bond payments deposited in the Retirement Fund,
together with the amount to be so deposited prior to the next available November 1 redemption date, in
the largest amount which can be redeemed with the money to be available at said redemption date.
If after all of the bonds and any parity bonds have been redeemed and cancelled or paid and
cancelled there are moneys remaining in the Retirement Fund said money shall be transferred to the
Revenue Fund; provided, however, that if said moneys are part of the proceeds of refunding bonds said
moneys shall be transferred to the fund or account created for the payment of the principal of and
interest on such refunding bonds.
(e) Reserve Fund. From the proceeds of the sale of the bonds the amount of $175,000 shall be
immediately placed in the Reserve Fund, held in trust by the Fiscal Agent, and shall be invested in any
Authorized Investments, provided that the maturity of said investments shall not be later than twelve
years from the date thereof. The interest earned on such investments shall be credited to said fund
until there shall be in said fund an amount equal to the maximum annual debt service and thereafter
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there shall be maintained at all times in the Reserve Fund an amount equal to said maximum annual
debt service.
From the proceeds of the sale of additional bonds or of any parity bonds there shall be immediately
placed by the City in the Reserve Fund an amount which, when added to the amount, if any, transferred
from Surplus to the Reserve Fund on the same day, will make the Reserve Fund equal to the maximum
annual debt service and thereafter there shall be maintained in said Reserve Fund an amount at least
equal to said maximum annual debt service.
Moneys in the Reserve Fund shall be used solely for the purpose of paying the principal of and
interest on the bonds or any parity bonds in the event that the moneys in the Interest Fund or the
Retirement Fund are insufficient therefor and for that purpose the Fiscal Agent shall withdraw and
transfer moneys from the Reserve Fund to the appropriate fund as the case may be. Whenever moneys
are withdrawn from the Reserve Fund for the purposes provided in this section an equal amount of money
shall be placed in the Reserve Fund by transfers from the Surplus Fund as provided herein or from the
first available moneys in the Revenue Fund. Money in the Reserve Fund may be used to pay the principal
and/or interest on the last outstanding maturity of the bonds or any parity bonds.
(f) M&O Fund. All moneys remaining in the Revenue Fund or on or before the tenth business day
of each month, after setting aside and transferring all the sums required to be set aside and transferred
by the preceding paragraphs of this section, shall be transferred by the Fiscal Agent to the Treasurer and
the Treasurer shall deposit in the M & O Fund an amount necessary to pay from said M & O Fund the
necessary and reasonable maintenance and operation costs of the enterprise, to set aside and maintain in
said M&O Fund at least $25,000 as a reserve for replacements and repairs and to set aside and maintain
in said M & O Fund at least $10,000 as unencumbered working capital.
Money in the M & O Fund set aside as a reserve for replacements and repairs or as unencumbered
working capital may be invested in any authorized investments.
(g) Surplus Fund. Any money received by the Treasurer from the Fiscal Agent in excess of the
amount needed to fill the above stated requirements shall be placed in the Surplus Fund. Moneys in the
Surplus Fund shall be used for the restoration, if necessary, of the Reserve Fund to an amount equal to
the maximum annual debt service.
After the above transfers and uses have been made and all other covenants of the city contained
herein have been duly performed moneys in the Surplus Fund may be (i) used for extensions and
betterments of the water system; (ii) invested in any securities in which the city may invest funds subject
to its control; (iii) transferred to the Retirement Fund to be used for the redemption of any of said bonds
which are subject to call and redemption prior to maturity or to the purchase from time to time in the
open market of any outstanding bonds whether or not subject to call and redemption (irrespective of the
maturity or number of such bonds) at prices and in such manner, either at public or private sale, or
otherwise, as the city in its discretion may determine, but such purchase price (including brokerage and
other charges, but excluding accrued interest) shall not exceed 104% of the principal amount or the
redemption price of the callable bonds on the next interest payment date, or (iv) used for any lawful
purpose of the city.
(h) Withdrawals. The Fiscal Agent shall not permit any withdrawal to be made by the city of
any moneys held by the Fiscal Agent if and when to the knowledge of the Fiscal Agent, the city is in
default hereunder. The Treasurer shall not permit the withdrawal of any moneys in the M & O Fund
or in the Surplus Fund (except restoration of the Reserve Fund) if and when the city is in default
hereunder.
(i) Security for Deposits. All moneys whether held by the Treasurer or the Fiscal Agent shall be
held in time or demand deposits, and shall be secured at all times by such obligations and to the extent
required by law except to the extent that such moneys are invested as hereinbefore provided.
10
(j) Investments. Obligations purchased as an investment of money in any funds which are herein
authorized to be invested shall be deemed at all times to be a part of such funds and any profit realized
from investments shall be credited to such funds and any losses resulting from such investment shall be
charged to such funds, and the interest accruing thereunder shall be credited to the Revenue Fund except
where expressly provided otherwise. The Treasurer or Fiscal Agent, as the case may be, shall sell at the
best price obtainable or present for redemption any obligations so purchased whenever it may be necessary
to do so in order to provide moneys to meet any payment or transfer from such funds. For the purpose
of determining at any given time the balance in any such funds any such investments constituting a part
of such funds shall be valued at the then estimated or appraised market value of such investments.
Section 12. Warranty. The city shall preserve and protect the security of the bonds and the
rights of the bondholders and warrant and defend their rights against all claims and demands of all
persons.
Section 13. Covenants. So long as any of the bonds issued hereunder are outstanding and unpaid,
or so long as provision for the full payment and discharge thereof at maturity or upon redemption thereof
prior to maturity through the setting apart in the Retirement Fund to insure the payment or redemption
thereof of money sufficient for that purpose has not been made, the city makes the following covenants
with the bondholders under the provisions of the Revenue Bond Law of 1941 (to be performed by the
city or its proper officers, agents or employees) which covenants are necessary, convenient and desirable
to secure the bonds and tend to make them more marketable; provided however, that said covenants
do not require the city to expend any funds other than the revenues received or receivable from the
enterprise.
Covenant 1. Punctual Payment. The city covenants that it will duly and punctually pay or
cause to be paid the principal of and interest on every bond issued hereunder, together with the premium
thereon, if any be payable, on the date, at the place and in the manner mentioned in the bonds and
coupons and in accordance with this resolution, and that the payments into the Interest Fund, the Retire-
ment Fund, and the Reserve Fund will be made, all in strict conformity with the terms of said bonds and
of this resolution, and that it will faithfully observe and perform all of the conditions, covenants and
requirements of this resolution and all resolutions supplemental thereto and of the bonds issued here-
under, and that time of such payment and performance is of the essence of the city's contract with the
bondholders.
Covenant 2. Discharge Claims. The city covenants that in order to fully preserve and protect
the priority and security of the bonds the city shall pay from the Revenue Fund and discharge all lawful
claims for labor, materials and supplies furnished for or in connection with the enterprise which, if
unpaid, may become a lien or charge upon the revenues prior or superior to the lien of the bonds and
impair the security of the bonds. The city shall also pay from the Revenue Fund all taxes and assess-
ments or other governmental charges lawfully levied or assessed upon or in respect of the enterprise or
upon any part thereof or upon any of the revenues therefrom.
Covenant 3. Commence Acquisition and Construction. As soon as funds are available therefor,
the city will commence the accomplishment of the purposes for which the bonds are issued and will
continue the same to completion with all practical dispatch and in an economical manner.
Covenant 4. Operate Enterprise in Efficient and Economical Manner. The city covenants and
agrees to operate the enterprise in an efficient and economical manner and to operate, maintain and
preserve the enterprise in good repair and working order.
Covenant 5. Against Sale, Eminent Domain. The city covenants that the enterprise shall not
be mortgaged or otherwise encumbered, sold, leased, pledged, any charge placed thereon, or disposed
of as a whole or substantially as a whole unless such sale or other disposition be so arranged as to
provide for a continuance of payments into the Revenue Fund sufficient in amount to permit payment
11
therefrom of the principal of and interest on and premiums, if any, due upon the call and redemption
thereof, of the bonds, payment of which is required to be made out of the revenues of the enterprise,
and also to provide for such payments into the funds as are required under the terms of this resolution.
The revenues from the enterprise or any other funds pledged or otherwise made available to secure
payment of the principal of and interest on the bonds shall not be mortgaged, encumbered, sold, leased,
pledged, any charge placed thereon, or disposed of or used except as authorized by the terms of this reso-
lution. The city further covenants that it will not enter any agreement which impairs the operation
of the enterprise or any part of it necessary to secure adequate revenues to pay the principal and interest
of the bonds or which otherwise would impair the rights of the bondholders with respect to the revenues
or the operation of the enterprise. If any substantial part of the enterprise is sold the payment therefor
shall either be used for the acquisition and/or construction of improvements and extensions of the
enterprise or shall be placed in the appropriate funds and shall be used to pay or call and redeem said
bonds and any parity bonds in the manner provided in this resolution and any subsequent resolution.
The city covenants that any amounts received as awards as a result of the taking of all or any
part of the enterprise by the lawful exercise of eminent domain, if and to the extent that such right can be
exercised against such property of the city, shall either be used for the acquisition and/or construction
of improvements and extension of the enterprise or shall be placed in the appropriate funds and shall be
used to pay or call and redeem said bonds and any parity bonds in the manner provided in this resolution
and any subsequent resolution.
Covenant 6. Insurance. The city covenants that it shall at all times maintain with responsible
insurers all such insurance on the enterprise as is customarily maintained with respect to works and
properties of like character against accident to, loss of or damage to such works or properties. If any
useful part of the enterprise shall be damaged or destroyed, such part shall be restored to use. The money
collected from insurance against accident to or destruction of the physical enterprise shall be used for
repairing or rebuilding the damaged or destroyed enterprise, and to the extent not so applied, shall be
applied to the retirement of said outstanding and unredeemed bonds and any parity bonds issued for
the enterprise and for such purpose paid into the appropriate funds.
The city shall also maintain with responsible insurers workmen's compensation insurance and
insurance against public liability and property damage to the extent reasonably necessary to protect the
city and the bondholders.
Covenant 7. Records and Accounts. The city covenants that it shall keep proper books of record
and accounts of the enterprise, separate from all other records and accounts, in which complete and
correct entries shall be made of all transactions relating to the enterprise. Said books shall at all times
be subject to the inspection of the holders of not less than 10% of the outstanding bonds or their repre-
sentatives authorized in writing.
The city covenants that it will cause the books and accounts of the enterprise to be audited
annually by an independent certified public accountant or firm of certified public accountants and will
make available for inspection by the bondholders at the office of the Treasurer of said city and at the
office of the Fiscal Agent, a copy of the report of such accountant or accountants.
The city covenants that it will cause to be published annually, not more than 120 days after the
close of each fiscal year a summary statement showing the amount of gross revenues and the amount
of all other funds collected which are required to be pledged or otherwise made available as security
for payment of principal of and interest on the bonds, the disbursements from such revenues and other
funds in reasonable detail, and a general statement of the financial and physical condition of the enter-
prise. The city shall furnish a copy of the statement to any bondholder upon request.
Covenant 8. No Free Service. The city covenants that, except to the extent that the city is
required under agreements and/or contracts existing on the effective date of this resolution, no water
or other service from the enterprise may be furnished or rendered to the United States of America, the
12
State of California, the city, any municipal or public corporation or district or public agency or any
private corporation or person free, and that, except to the extent that the city is required under agree-
ments and/or contracts existing on the effective date of this resolution, no such service shall be rendered
to the United States of America, the State of California, the city, any other municipal or public corpo-
ration or district or any private corporation or person at rates lower than those charged other persons
for similar service, except that charges to the city for water used for street or sewer flushing and for fire
hydrants may be made at rates lower than those charged private persons, and all rates for service
rendered to the city shall be a reasonable charge for the service rendered. No building or other real
property of the enterprise shall be furnished free to the city, but the city shall pay into the Revenue
Fund the reasonable rental value of any property so used, and reasonable and proper charges for service
rendered or quarters furnished to the enterprise shall be paid to the city from the Revenue Fund. The
city covenants that it shall at all times during the period any of the bonds are outstanding maintain
and enforce valid regulations for the payment of bills for water service and that such regulations shall at
all times during such period provide that the city shall discontinue water service to any user whose
water bill has not been paid within the time fixed by said regulations, which shall not be more than two
months from the date the water bill became delinquent.
Covenant 9. Rates and Charges. The city shall and hereby covenants that it shall prescribe,
revise and collect such charges for the services, facilities and water of the enterprise which, after making
allowances for contingencies and error in the estimates, shall be at least sufficient to pay the following
amounts in the order set forth:
(a) The interest on and principal payments or minimum term bond payments of the bonds
as they become due and payable;
(b) All payments required for compliance with this resolution including payments required
to be made into the Reserve Fund;
(c) All payments required to meet any other obligations of the city which are charges,
liens, encumbrances upon or payable from the revenues of the enterprise;
(d) All current expenses for the necessary and reasonable maintenance and operation costs
of the enterprise;
and the charges shall be so fixed that the net revenues shall be at least 1.25 times the amounts payable
under (a).
Covenant 10. No Priority for Additional Bonds. The city covenants that no additional bonds
shall be issued pursuant to said Revenue Bond Law or any other law of the State of California having any
priority in payment of principal or interest out of the revenues of the enterprise over the bonds hereby
authorized to be issued and payable out of said revenues.
Covenant 11. Limits on Additional Debt. The city covenants that, except for bonds issued to
refund said bonds, no additional indebtedness evidenced by revenue bonds, revenue notes or any other
evidences of indebtedness payable out of the Revenue Fund and ranking on a parity with these bonds
shall be created or incurred unless:
First: That the city is not then in default and that the principal of and interest on the bonds
have been paid; and that all required payments into the Retirement Fund and the Reserve Fund
have been made, and
Second: That the last maturity date of any parity bonds shall not be earlier than the last
maturity date of any bonds then outstanding and that any parity bonds of this same issue shall
mature on November 1, and
Third: The net revenues of the enterprise, calculated on sound accounting principles, as
shown by the books of the city for the latest fiscal year or the last completed 12 month period
13
ended 60 days prior to the adoption of the resolution of issuance for such additional indebtedness
as shown by an audit certificate or opinion of an independent certified public accountant or firm of
certified public accountants employed by the city, plus, at the option of the city, any or all of the
items hereinafter in this Covenant 11 designated (a) and (b), shall have amounted to at
least 1.25 times the maximum annual debt service in any fiscal year thereafter on all indebtedness
to be outstanding immediately subsequent to the incurring of such additional indebtedness.
For the purposes of this Covenant 11, and net revenues of the enterprise shall not include any
sum transferred from the Construction Fund under the provisions of Section 11(a) hereof. The items
any or all of which may be added to such net revenues for the purpose of applying the restriction
contained in this Covenant 11 are the following:
(a) An allowance for net revenues from any additions to or improvements or extensions of the
enterprise to be made with the proceeds of such additional indebtedness, and also for net revenues from
and such additions, improvements or extensions which have been made from moneys from any source
but which, during all or any part of such fiscal year or last completed 12 month period, were not in
service, all in an amount equal to 75% of the estimated additional average annual net revenues to be
derived from such additions, improvements and extensions for the first 36 month period in which each
addition, improvement or extension is respectively to be in operation, all as shown by the certificate or
opinion of a qualified independent engineer employed by the city.
(b) An allowance for earnings arising from any increase in the charges made for service from
the enterprise which has become effective prior to the incurring of such additional indebtedness but
which, during all or any part of such fiscal year or last completed 12 month period, was not in effect, in
an amount equal to 75% of the amount by which the net revenues would have been increased if such
increase in charges had been in effect during the whole of such fiscal year or last completed 12 month,
period, as shown by the certificate or opinion of a qualified independent engineer employed by the city.
Section 14. Lost, Stolen, Destroyed or Mutilated Bonds. In the event that any bond or any interest
coupon pertaining thereto is lost, stolen, destroyed or mutilated, the city will cause to be issued a new
bond or coupon similar to the original to replace the same in such manner and upon such reasonable
terms and conditions, including the payment of costs and the posting of a surety bond if the city
deems such surety bond necessary, as may from time to time be determined and prescribed by resolution.
The city may authorize such new bond or coupon or coupons to be signed and authenticated in such
manner as it determines in said resolution.
Section 15. Cancellation of Bonds. All bonds and coupons surrendered to the Fiscal Agent or any
paying agent of the city for payment upon maturity or for redemption shall upon payment therefor be
cancelled immediately. Any bonds purchased by the city as authorized herein together with all unpaid
coupons pertaining thereto shall be cancelled forthwith and shall not be reissued. All of the cancelled
bonds and interest coupons shall be transferred to and shall remain in the custody of the Fiscal Agent
until returned to the Treasurer.
Section 16. Consent of Bondholders. The consents of bondholders provided for in this section
shall relate solely to the amendment, waiver or modification of the covenants specified in Section 13
hereof and shall not be effective to waive or modify any other provisions of this resolution or any other
proceeding for the issuance of said bonds. Any act relating to the amendment, waiver or modification
of any of the said covenants consented to by bondholders holding sixty-six (66%) in aggregate
principal amount of the outstanding bonds, exclusive of bonds, if any owned by the city, shall be binding
upon the holders of all of the bonds and interest coupons, whether such coupons be attached to bonds or
detached therefrom, and shall not be deemed an infringement of any of the provisions of this resolution,
whatever the character of such act may be, and may be done and performed as fully and freely as if
expressly permitted by the terms of this resolution, and after such consent relating to such specified
14
matters has been given, no bondholder or holder of an interest coupon, whether attached to a bond
� Y p ,
or detached therefrom, shall have any right or interest to object to such action or in any manner to
question the propriety thereof or to enjoin or restrain the city or any officer thereof from taking any action
pursuant thereto.
Bondholders may consent by affirmative vote at a bondholders' meeting or may consent in writing
without a meeting, all as hereinafter provided.
No such amendment, waiver or modification shall be made which will permit (a) a change in the
maturity or term of redemption of the principal of any bond or any installment of interest thereon; (b)
a reduction in the principal amount of or redemption price or redemption premium or rate of interest
upon any bond without the consent of the holder of such bond; or (c) a reduction of the percentage of
the principal amount of bonds the vote or consent of which is required to effect any such amendment.
(a) Calling Bondholders' Meeting. If the city shall desire to obtain any such consent it may
call a meeting of bondholders, by resolution, for the purpose of considering the action, the consent
to which is desired.
(b) Notice of Meeting. Notice specifying the purpose, place, date and hour of such meeting
shall be published once in a financial newspaper or journal of national circulation published in the
City of New York, New York, not less than sixty (60) days and not more than ninety (90) days
prior to the date fixed for the meeting. Such notice shall set forth the nature of the proposed action,
consent to which is desired. If any of the bonds shall be so registered as to be payable otherwise
than to bearer, the City Clerk shall, on or before the first publication of such notice, mail a similar
notice, postage prepaid, to the respective registered owners thereof at their addresses appearing on
the bond registry books. The place, date and hour of holding such meeting and the date or dates
of publishing and mailing such notice shall be determined by the city, in its discretion.
The actual receipt by any bondholder of notice of any such meeting shall not be a condition
precedent to the holding of such meeting, and failure to receive such notice shall not affect the
validity of the proceedings thereat. A certificate by the City Clerk, approved by resolution of the
City Council that the meeting has been called and that notice thereof has been given as herein
provided shall be conclusive as against all parties and it shall not be open to any bondholder to
show that he failed to receive notice of such meeting.
(c) Voting Qualifications. Any bondholder may, prior to any such meeting, deliver his bond
or bonds to any agency designated by the City for the purpose, and shall thereupon be entitled to
receive an appropriate receipt for the bond or bonds so deposited, calling for the redelivery of
such bond or bonds at any time after the meeting. The Treasurer shall prepare and deliver to the
chairman of the meeting a list of the names and addresses of the registered owners of bonds, with
a statement of the maturities and serial numbers of the bonds held and deposited by each of such
bondholders, and no bondholder shall be entitled to vote at such meeting unless his name appears
upon such list or unless he shall present his bond or bonds at the meeting or a certificate of deposit
thereof, satisfactory to the city, executed by a bank or trust company. No bondholders shall be
permitted to vote with respect to a larger aggregate principal amount of bonds than is set against
his name on such list, unless he shall produce the bonds upon which he desires to vote, or a certifi-
cate of deposit thereof as above provided.
(d) Issuer-owned Bonds. The city covenants that it will present at the meeting a certificate,
signed and verified by one member of the City Council and by the Treasurer stating the maturities
and serial numbers of all bonds owned by, or held for account of, the city, directly or indirectly.
No person shall be permitted at the meeting to vote or consent with respect to any bond appearing
upon such certificate, or any bond which it shall be established at or prior to the meeting is owned
by the city, directly or indirectly, and no such bond (in this resolution referred to as "issuer-owned
bond") shall be counted in determining whether a quorum is present at the meeting.
15
(e) Quorum and Procedure. A representation of at least sixty-six per cent (66%) in aggre-
gate principal amount of the bonds then outstanding (exclusive of issuer-owned bonds) shall be
necessary to constitute a quorum at any meeting of bondholders, but less than a quorum may
adjourn the meeting from time to time, and the meeting may be held as so adjourned without further
notice, whether such adjournment shall have been had by a quorum or by less than a quorum. The
city shall, by an instrument in writing, appoint a temporary chairman of the meeting, and the meet-
ing shall be organized by the election of a permanent chairman and a secretary. At any meeting each
bondholder shall be entitled to one vote for every $1,000 principal amount of bonds with respect
to which he shall be entitled to vote as aforesaid, and such vote may be given in person or by proxy
duly appointed by an instrument in writing presented at the meeting. The city, by its duly author-
ized representative, may attend any meeting of the bondholders, but shall not be required to do so.
(f) Vote Required. At any such meeting held as aforesaid there shall be submitted for the
consideration and action of the bondholders a statement of proposed action, consent to which is
desired, and if such action shall be consented to and approved by bondholders holding at least
sixty-six per cent (66%) in aggregate amount of the bonds then outstanding (exclusive of issuer-
owned bonds) the chairman and secretary of the meeting shall so certify in writing to the city,
and such certificate shall constitute complete evidence of consent of bondholders under the provisions
of this resolution. A certificate signed and verified by the chairman and the secretary of any such
meeting shall be conclusive evidence and the only competent evidence of matters stated in such
certificate relating to proceedings taken at such meeting.
(g) Written Consent of Bondholders. If the city shall desire to obtain any such consent in
writing, without a meeting of bondholders, the City Council thereof may, by resolution, propose the
action,to which consent is desired. A copy of such resolution, together with a request to bondholders
for their consent to the action proposed therein, shall be published once in a financial newspaper
or journal of national circulation published in the City of New York, New York. If any of the bonds
shall be so registered as to be payable otherwise than to bearer, the City Clerk shall, on or before
the publication of such resolution and request, mail a copy thereof to each registered owner at the
address appearing on the bond registry books.
The actual receipt by any bondholder of such resolution and request shall not affect the validity
of the proceedings for the obtaining of such consent. A certificate by the City Clerk, approved by
resolution of the City Council of said city, that said resolution and request has been published and
mailed as herein provided shall be conclusive as against all parties, and it shall-not be open to any
bondholder to show that he failed to receive such resolution and consent.
Each written consent shall be accompanied by proof of ownership of the bonds for which such
consent is given. Proof of ownership shall be made in such manner as shall be prescribed by the
resolution proposing the action. Any such written consent shall be binding upon the holder of the
bonds giving such consent and on any subsequent holder (whether or not such subsequent holder
has notice thereof) unless such consent is revoked in writing by the holder giving such consent or
by the subsequent holder. To be effective, any revocation of consent must be filed before the
adoption of the resolution accepting consents as hereinafter provided.
After the holders of at least sixty-six per cent (66%) in aggregate principal amount of the
bonds then outstanding (exclusive of issuer-owned bonds) shall have consented in writing, the City
Council shall adopt a resolution accepting such consents and such resolution shall constitute
complete evidence of the consent of bondholders under this resolution.
(h) Publication of Consent. Notice specifying the amendment, waiver or modification that
has received the consent of bondholders as required by this section shall be published once in
a financial newspaper or journal of national circulation published in the City of New York, New
York, not less than sixty (60) days following the final action in the proceedings for the obtaining
16
of such consent. Said notice is only for the information of bondholders and failure to publish such
notice or any defect therein shall affect the validity of the proceedings theretofore taken in the
obtaining of such consent.
Section 17. Bond and Coupon Farms. Said bonds shall be payable to bearer, shall be issued in
negotiable form, and shall be negotiable, and the form of said bonds and interest coupons thereof shall
be substantially as follows:
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF ORANGE
CITY OF HUNTINGTON BEACH
1963 WATER REVENUE BOND, SERIES A
No. ---QQQ--------- $1,000
THE CITY OF HUNTINGTON BEACH, a public corporation situated in the County of Orange,
State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from the Revenue Fund,'
as hereinafter provided,to the bearer, on November 1,--------,upon presentation and surrender of this bond,
the sum of ONE THOUSAND DOLLARS,with interest thereon at the rate of_______% per annum,payable
annually for the first year and semiannually thereafter on the first days of May and November of each
and every year from the date hereof until this bond is paid, upon presentation and surrender of the
respective interest coupons hereto attached; provided, however, that if at the maturity date of this bond
or, if the same is redeemable and shall be duly called for redemption,then at the date fixed for redemption,
funds are available for the payment or redemption thereof, as provided in the resolution hereinafter
mentioned, this bond shall then cease to bear interest. .) othlpritncai�and merest are payable in lawful
ecurl y a a long
money of the United States of America at the_____________Bkftk---------------------- in Los Angeles, California,
Fiscal Agent for the city, or, at the option of the holder, at any paying agent of the city in Chicago,
Illinois, or in New York,New York.
This is one of a duly authorized issue of bonds of the city designated "1963 Water Revenue Bonds
Series A," hereinafter called "the bonds", all of which have been issued pursuant to the Charter of said
city and the Revenue Bond Law of 1941 (being Chapter 6, Part 1,Division 2, Title 5 of the Government
Code of the State of California) for the purpose of the acquisition, construction and financing of a water
system for said city and the creation of said issue and the terms and conditions of the bonds are provided
for by the resolution of the CityCouncil of said city authorizing the bonds adopted ? .___3_, 19�t3__,
designated Resolution No.__144___, and this reference incorporates said resolution, said Charter and
said Chapter 6 herein, and by acceptance hereof the holder of this bond and the coupons hereto attached
assents to said terms and conditions. Said resolution is adopted under, and this bond and the interest
coupons hereto attached are issued under and are to be construed in accordance with the Charter of said
city and the laws of the State of California.
This bond and the interest hereon and any premium upon the redemption hereof are not a debt
of the city of Huntington Beach, nor a legal or equitable pledge, charge, lien or encumbrance upon any of
its property or upon any of its income, receipts, or revenues except the gross revenues of the enterprise
(as defined in said resolution) pledged to its payment, and the principal of and the interest on this bond
and any premium upon the redemption hereof are payable solely from the gross revenues of the enterprise
pledged to its payment and said city is not obligated to pay such principal, interest and premium except
from said gross revenues. The Revenue Fund is established under and pursuant to the Revenue Bond Law
of 1941, and under the provisions of said resolution authorizing the issuance of this bond the gross
revenues received from the enterprise are required to be deposited to the credit of said Revenue Fund and
used only for the purposes authorized by said resolution, including the payment of principal and interest
of the issue of bonds of which this is one.
17
By the terms of said Revenue Bond Law and by covenant expressed in said resolution, the city
is obligated to prescribe, revise and collect charges for the services, facilities and water of the water
system of the city such as to provide revenues sufficient to pay the interest on and principal of the
bonds as they become due and payable in addition to all other payments required for compliance with
said resolution and the necessary and reasonable maintenance and operation costs of the water system,
is prohibited from issuing bonds having any priority with respect to payment from the gross revenues of
the enterprise, and is subject to conditions with respect to any sale of said water system. In the manner
provided in the resolution, any or all of the obligations referred to in this paragraph and certain other
obligations mentioned in said resolution may be waived with the consent of the holders of 66% in
aggregate principal amount of the outstanding bonds, exclusive of issuer-owned bonds.
This bond is callable and redeemable prior to maturity in accordance with the provisions for
redemption endorsed hereon.
This bond and the coupons hereto attached are negotiable instruments and shall be negotiable by
delivery. This bond may be registered as to principal only or as to both principal and interest, in accord-
ance with the provisions for registration endorsed hereon.
It is hereby certified and recited that any and all acts, conditions and things required to exist, to
happen and to be performed precedent to and in the incurring of the indebtedness evidenced by this
bond and in the issuance of this bond exist, have happened, and have been performed in due time, form
and manner as required by the Constitution and laws of the State of California and the charter of said
city, and that this bond, together with all other indebtedness of the city pertaining to the aforesaid water
system, is within every debt and other limit prescribed by the Constitution and laws of the State of
California.
IN WITNESS WHEREOF, said City of Huntington Beach has caused this bond to be signed by the
Mayor and the Treasurer of said city by their facsimile signatures, countersigned by the City Clerk of said
city, and sealed with the corporate seal of said city, and the interest coupons hereto attached to be signed
by the Treasurer by his facsimile signature, and has caused this bond to be dated the first day of
November, 1963.
COUNTERSIGNED:
Robert M. Lambert
Mayor of the City of
Huntington Beach, California
Paul C. Jones B. Diekoff
City Clerk of the City of Treasurer of the City of
Huntington Beach, California Huntington Beach, California
(SEAL)
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(COUPON FORM)
On the first day of ............ 19......
the CITY OF HU�ITINGT�JN ly PEtCH, County of Orange, California will pay to
the bearer, at the.p,T.-t1.WnW1....Bank...... in Los Angeles, California, Fiscal Agent Coupon No.
for the city, or, at the option of the holder, at any paying agent of the city ........
in Chicago, Illinois, or in New York, New York, out of the Revenue Fund
of said city and not out of any other fund or moneys of the city, the sum of $..................
in lawful money of the United States of America, being the interest then due on
1963 WATER REVENUE BOND, SERIES A, No. ....................
Dated November 1, 1963, subject to the
provisions on the reverse hereof.
B. Diekoff
Treasurer of the City of
Huntington Beach, California
On the reverse side of the coupon there shall be printed substantially the following:
(REVERSE OF COUPON)
If the bond to which this coupon is attached is redeemable and is duly called for redemption
on a date prior to the maturity date of this coupon, this coupon will be void.
PROVISIONS FOR REDEMPTION
Unless this bond matures on or prior to November 1, 1983, it is redeemable in the manner and
subject to the terms and provisions, and with the effect, set forth in the resolution referred to on the face
of this bond, at the option of the city, on November 1, 1973, or on any interest payment date thereafter
prior to maturity,upon at least 30 days'prior notice published in a newspaper circulated in the County of
Orange, California, and in a financial newspaper or journal of national circulation published in the
City of New York, New York, at a redemption price equal to the principal amount thereof plus the
following premiums (percentage of par value) if redeemed at the following times:
REDEMPTION DATES AND PREMIUMS
On or After And Prior to On or After And Prior to
November 1 November 1 Premium November 1 November 1 Premium
1973 1974 4% 1982 1983 13/4%
1974 1975 33/4 1983 1984 11/2
1975 1976 31/2 1984 1985 11/4
1976 1977 31/4 1985 1986 1
1977 1978 3 1986 1987 3/4
1978 1979 23/4 1987 1988 1/2
1979 1980 21/2 1988 1989 1/4
1980 1981 21/4 1989 Maturity —0-
1981 1982 2
PROVISIONS FOR REGISTRATION
This bond may be registered in the name of any person as the registered owner hereof, either as
to principal only or as to both principal and interest, and, if registered in either of said forms may be
changed to registration in the other of said forms or discharged from registration.
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Each registration, transfer after registration, change of form of registration, or discharge from regis-
tration of this bond shall be entered by the Fiscal Agent in books kept by it for the purpose and
noted by it in the registration blank below. Registration as to principal only shall not affect the
negotiability by delivery of the coupons pertaining hereto. Upon registration as to both principal and
interest, all unmatured coupons pertaining hereto shall be surrendered to the Fiscal Agent and shall be
preserved.
So long as this bond is registered no transfer hereof shall be valid for any purpose unless made
by the registered owner and entered and noted as herein provided, and the principal hereof and any
redemption premium shall be payable only to the registered owner, or to his order. Interest on this
bond, if registered as to both principal and interest, shall be payable to the person whose name appears
upon the registry books as the registered owner hereof at the close of business on the tenth day preceding
the interest payment date, or to his order. If this bond is registered as to both principal and interest
and its registration is changed to registration as to principal only, or if it is discharged from registration,
there shall be attached hereto coupons representing interest hereon to become due thereafter to the date
of maturity hereof. In lieu thereof, and upon surrender and cancellation thereof, the Fiscal Agent at
the direction of the Treasurer of the city may issue in exchange therefor a new bond, with such coupons
attached, identical with this bond, except for the previous notations on the registration blank hereon, and
except that the signatures on the new bond shall be those of the persons holding the offices at the time
of affixing such signatures. The issuance of any such new bond or new coupons shall be at the expense
of the registered owner.
Each discharge hereof from registration shall be effected by an entry on the registry books, and a
notation in the blank below, that this bond is payable to bearer, whereupon this bond shall become an
unregistered bearer instrument, negotiable by delivery as if it had never been registered. Each request
for registration, transfer, change or discharge must be in form satisfactory to the Treasurer and must
be made in writing, signed by the registered owner, or by his agent duly authorized in writing, or by the
bearer, as the case may be.
Date of In Whose Name Manner of Signature of
Registration Registered Registration Fiscal Agent
............... ------------------- ........ ------------......... ................. ......------. ---------------------..............
-------------- ------- ------ ................................ .................................... ------------------•----------------
-------•--------------------------- --------------------------------• ..................................... ...................................
Section 18. Proceedings Constitute Contract. The provisions of this resolution and of the resolu-
tions providing for the sale of the bonds and awarding the bonds and fixing the interest rate or rates
thereon shall constitute a contract between the city and the bondholders and the provisions thereof
shall be enforceable by any bondholder for the equal benefit and protection of all bondholders similarly
situated by mandamus, accounting, mandatory injunction or any other suit, action or proceeding at law
or in equity that is now or may hereafter be authorized under the laws of the State of California in any
court of competent jurisdiction. Said contract is made under and is to be construed in accordance with the
laws of the State of California.
No remedy conferred hereby upon any bondholder is intended to be exclusive of any other remedy,
but each such remedy is cumulative and in addition to every other remedy and may be exercised without
exhausting and without regard to any other remedy conferred by the Revenue Bond Law of 1941 or any
other law of the State of California. No waiver of any default or breach of duty or contract by any bond-
20
r
holder shall affect any subsequent default or breach of duty or contract or shall impair any rights or
remedies on said subsequent default or breach. No delay or omission of any bondholder to exercise
any right or power accruing upon any default shall impair any such right or power or shall be construed
as a waiver of any such default or acquiescence therein. Every substantive right and every remedy
conferred upon the bondholders may be enforced and exercised as often as may be deemed expedient.
In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or
taken and the bondholder shall prevail, said bondholder shall be entitled to receive from the Revenue Fund
reimbursement for reasonable costs, expenses, outlays and attorney's fees and should said suit, action
or proceeding be abandoned, or be determined adversely to the bondholders then, and in every such case,
the city and the bondholders shall be restored to their former positions, rights and remedies as if such
suit, action or proceeding had not been brought or taken.
After the issuance and delivery of the bonds this resolution shall be irrepealable, but shall be subject
to modification to the extent and in the manner provided in Section 16 of this resolution, but to no
greater extent and in no other manner.
Section 19. Future Contracts. Nothing herein contained shall be deemed to restrict or prohibit the
city from making contracts or creating bonded or other indebtedness payable from the general fund of the
city or from taxes or any source other than the revenues of the enterprise as defined herein, and from
and after the sale of the bonds the general fund of the city shall not include the revenues of the enterprise
and no contract or other obligation payable from the general fund of the city shall be payable from the
revenues of the enterprise, except as provided in Section 11(g) hereof.
Section 20. Severability. If any covenant, agreement or provision, or any portion thereof,contained
in this resolution, or the application thereof to any person or circumstance, is held to be unconstitutional,
invalid or unenforceable, the remainder of this resolution and the application of any such covenant,
agreement or provision, or portion thereof, to other persons or circumstances, shall be deemed severable
and shall not be affected thereby, and this resolution and the bonds issued pursuant hereto shall remain
valid and the bondholders shall retain all valid rights and benefits accorded to them under this resolution
and the Constitution and laws of the State of California and the Charter of said city. If the provisions
relating to the appointment and duties of a Fiscal Agent are held to be unconstitutional, invalid or un-
enforceable said duties shall be performed by the officer of the city performing the functions of a treasurer.
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M
Section 21. Effective Date. This resolution shall take effect upon adoption.
ADOPTED, SIGNED AND APPROVED this __3___ day of 19
Mayor' of the City of
Huntington Beach, California
ATTEST:
(::;D
City Clerk,, the City of
Huntington Beach, California
(SEAL)
STATE OF CALIFORNIA 1
COUNTY OF ORANGE ss.
CITY OF HUNTINGTON BEACH j
I, PAUL C. JONES, City Clerk of the City of Huntington Beach, California, DO HEREBY
CERTIFY that the foregoing resolution was duly adopted by the City Council of said city and was
approved by the Mayor of said city at a____ ________________________ regular meeting of said City Council held on
the _.3-------- day of _S.eptamb_ex________- 1963, and that it was so adopted as follows:
AYES: Councilmen Wells,L Gisler, Stewart
Welch, Lambert
NOES: Councilmen None
ABSENT: Councilmen None
City Clerk of the City of
Huntington Beach, California
(SEAL)
STATE OF CALIFORNIA l
COUNTY OF ORANGE ss.
CITY OF HUNTINGTON BEACH j
I, PAUL C. JONES, City Clerk of the City of Huntington Beach, California, DO HEREBY
CERTIFY that the above and foregoing is a full, true and correct copy of Resolution No. __184k..____
and that the same has not been amended or repealed.
DATED: September 5 1963.
(2/-,
City Clerk the City of
Huntington Beach, California
(SEAL)
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