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HomeMy WebLinkAboutCity Council - 5942 RESOLUTION NO. 5942 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH AUTHORIZING THE BORROWING OF FUNDS FOR FISCAL YEAR 1988/89, THE ISSUANCE AND SALE OF TAX AND REVENUE ANTICIPATION NOTES THEREFORE, APPROVING PRELIMINARY OFFICIAL STATEMENT AND APPOINTING BOND COUNSEL RESOLVED, by the City Council of the City of Huntington Beach, California, as follows: WHEREAS, pursuant to Sections 53850 et. seq. of the Government Code of the State of California, this City Council (the "Counsel") has found and determined that borrowing is needed for the requirements of the City of Huntington Beach (the "City"), a municipal corporation duly organized and existing under the laws of the State of California, to satisfy obligations payable from the General Fund of the City, and that it is appropriate that said borrowing be undertaken at this time by the issuance of temporary notes therefore in anticipation of the receipt of taxes, revenue and other monies to be received by the City for the General Fund of the City during or allocable to fiscal year 1988/89 ("Fiscal Year 1988/8911); NOW, THEREFORE, the City Council of the City of Huntington Beach hereby finds, determines, declares and resolves as follows: Section I. Limitation on Maximum Amount. The principal amount of notes issued pursuant hereto, when added to the interest payable thereon, shall not exceed eighty-five percent (85%) of the estimated amount of the uncollected taxes, revenue and other monies of the City for the General Fund of the City attributable to fiscal year 1988/89, and available for the payment of said notes and the interest thereon (as hereinafter provided). Section 2. Issuance and Terms of Notes. Solely for the purpose of anticipating taxes, revenue and other monies to be received by the City for the General Fund of the City during or allocable to fiscal year 1988/89, and not pursuant to any common plan of not to exceed $10,000,000. Such borrowing shall be by the issuance of temporary notes under Sections 53850 et. seq. of the Government Code of the State of California, designated "City of Huntington Beach 1989 Tax and Revenue Anticipation Notes" (the "Notes"), to be numbered from I consecutively upward in order of issuance, to be in the denominations of $25,000 or any integral multiples thereof as designated by the initial purchaser thereof, to be dated the date of delivery thereof, to mature (without option of prior redemption) on a date selected by the City Treasurer which is approximately (but not later than) twelve (12) months following the date of issuance of the Notes, and to bear interest, payable at maturity and computed on a 30-day month/360-day year basis, at the rate set forth in the Purchase Contract authorized pursuant to Section 14 hereof. Both 5942 the principal of and interest on the Notes shall be payable, only upon surrender thereof, in lawful money of the United States of America, at the principal office of Security Pacific National Bank in Los Angeles, California Section 3. Form of Notes. The Notes shall be issued in bearer form, without coupons, and shall be substantially in the form and substance set forth in Exhibit A attached hereto and by reference incorporated herein, the blanks in said form to be filled in with appropriate words and figures. Section 4. Use of Proceeds. The monies so borrowed shall be deposited in the General Fund of the City and used and expended by the City for any purpose for which it is authorized to expend funds from the General Fund of the City. Section 5. Security. The principal amount of the Notes, together with the interest thereon, shall be payable from taxes, income, revenue, cash receipts and other monies which are received by the City for the General Fund of the City for the fiscal year 1988/89. As security for the payment of the principal of and interest on the Notes, the City hereby pledges (a) an amount equal to one-half (1/2) of the principal amount of the Notes (plus one-half of the interest to become due on the Notes at maturity), of "unrestricted monies", as hereinafter defined, to be received by the City in December, 1988, (b) one-quarter (1/4) of the principal amount of the Notes (plus one-fourth of the interest to become due on the Notes at maturity), of unrestricted monies to be received by the City in March, 1989, and (c) one-quarter (1/4) of the principal amount of the Notes (plus one-fourth of the interest to become due on the Notes at maturity), of unrestricted monies to be received by the City in June, 1989 (all such pledged amounts described in clauses (a) through (c) above being hereinafter called the "Pledged Revenues"). The principal of the Notes and the interest thereon shall constitute a first lien and charge thereon and shall be paid from the Pledged Revenues. To the extent not so paid from the Pledged Revenues, the Notes shall be paid from any other monies of the City lawfully available therefore. In the event that there are insufficient unrestricted monies received by the City to permit the deposit in the Repayment Fund, as hereinafter defined, of the full amount of the Pledged Revenues to be deposited in any month on the last business day of such month, then the amount of any deficiency shall be satisfied and made up from any other monies of the City lawfully available for the repayment of the Notes and interest thereon. The term "unrestricted monies" shall mean taxes, income, revenue and other monies intended as receipts for the General Fund of the City for fiscal year 1988/89 and which are generally available for the payment of current expenses and other obligations of the City. Section 6. Paying Agent. Security Pacific National Bank is hereby appointed to act as the Paying Agent of the City for the purpose of paying to the Note holders upon presentation thereof, at its principal office in Los Angeles, California, both the principal -2- 0638J 5942 of and interest on the Notes on maturity and to perform such other duties and powers of the Paying Agent as are prescribed in this Resolution. Section 7. Repayment Fund. There is hereby created a special fund to be held by the City designated the "1988 Tax and Revenue Anticipation Note Repayment Fund" (the "Repayment Fund").and applied as directed in this Resolution. Any money placed in the Repayment Fund shall be for the benefit of the holders of the Notes, and until the Notes and all interest thereon are paid or until provision has been made for the payment of the Notes at maturity with interest to maturity, the monies in the Repayment Fund shall be applied solely for the purposes for which the Repayment Fund is created; provided, however, that, any interest earned on amounts deposited in the Repayment Fund may periodically be transferred to the City's General Fund. From the date this Resolution takes effect, all Pledged Revenues shall, during the months in which received, be deposited in the Repayment Fund. One business day prior to maturity date of the Notes, the monies in the Repayment Fund shall be transferred to the Paying Agent, and used, to the extent necessary, to pay the principal of and interest on the Notes. Any monies remaining in the Repayment Fund after the Notes and the interest thereon have been paid, or provision for such payment has been made, shall be transferred to the City's General Fund. Section 8. Deposit and Investment of Repayment Fund. All monies held by the City in the Repayment Fund, if not invested, shall be held in time or demand deposits as public funds and shall be secured at all times by bonds or other obligations which are authorized by law as security for public deposits, of a market value at least equal to the amount required by law. Monies in the Repayment Fund shall, to the greatest extent possible, be invested by the City directly in investments as permitted by the laws of the State of California as now in effect and as hereafter amended, and the proceeds of any such investments shall be deposited in the Repayment Fund and shall be part of the P I edged Revenues. Section 9. Execution of Notes. The City Treasurer of the City is hereby authorized to execute the Notes by manual or facsimile signature, and the City Clerk of the City is hereby authorized to countersign the same by manual signature and to affix the seal of the City thereto either manually or by facsimile impression thereof, and said officers are hereby authorized to cause the blank spaces thereof to be filled in as may be appropriate. Section 10. Covenants and Warranties. It is hereby covenanted and warranted by the City that all representations and recitals contained in this Resolution are true and correct, and that the City and its appropriate officials have duly taken all proceedings necessary to be taken by them, and will take any additional proceedings necessary to be taken by them, for the prompt collection and enforcement of the taxes, revenues and -3- 0638J 5942 other monies pledged hereunder in accordance with law and for carrying out the provisions of this Resolution. Section 11. Arbitrage Provisions and Other Covenants. a. Certain Definitions. The following terms shall, for all purposes of this Section 11, have the following meanings unless the context shall clearly require some other meaning: (i) "Code" means the Internal Revenue Code of 1986, as amended. (ii) "Excess Investment Earnings" has the meaning ascribed to it in subsection (c) of this Section 11. 0i1) "Gross Proceeds" means the sum of the following amounts: A. original proceeds, namely, net amounts (after payment of all expenses of issuing the Notes) received by or for the City as a result of the sale of the Notes, excluding original proceeds which become transferred proceeds (determined in accordance with applicable Regulations) of obligations issued to refund in whole or in part the Notes; B. investment proceeds, namely, amounts received at any time by or for the City, such as interest and dividends, resulting from the investment of any original proceeds (as referenced in clause (A) above) or investment proceeds (as referenced in this clause (B)) in Nonpurpose Obligations, increased by any profits and decreased (if necessary, below zero) by any losses on such investments; C. sinking fund proceeds, namely, amounts, other than original proceeds and investment proceeds, which are held in Repayment Fund and any other fund to the extent that the City reasonably expects to use such other funds to pay debt service on the Notes; D. Investment Property pledged as security for payment of Debt Service on the Notes by the City; E. amounts, other than as specified in this definition, used to pay debt service on the Notes; and F. amounts received as a result of investing amounts described in this definition. (iv) "Investment Property" means any security (as said term is defined in Section 165(g)(2)(A) or (B) of the Code), obligation, annuity or investment-type property, excluding, however, obligations the interest on which is excluded from gross income under Section 103 of the Code. (v) "Nonpurpose Obligation" means any Investment Property which is acquired with the Gross Proceeds of the Notes and is not acquired with the Gross Proceeds of the Notes and is not acquired in order to carry out the governmental purpose of the Notes. -4- 0638J 5942 (vi) "Purchase Price" for the purpose of computation of the Yield of the Notes, has the same meaning as the term "issue price" in Sections 1273(b) and 1274 of the Code, and, in general, means the initial offering price to the public (not including bond houses and brokers, or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the Notes are sold or, if the Notes are privately placed, the price paid by the first buyer of the Notes or the acquisition cost of the first buyer. The term "Purchase Price", for the purpose of computation of the Yield of Nonpurpose Obligations, means the fair market value of the Nonpurpose Obligations on the date of use of Gross Proceeds of the Notes for acquisition thereof, or if later, on the date that Investment Property constituting a Nonpurpose Obligation becomes a Nonpurpose Obligation of the Notes. (vii) "Regulations" means temporary and permanent regulations promulgated under Section 148 of the Code. (viii) "Safe Harbor Rules" means the rules for determining when the proceeds of the Notes are expended, as set forth in Section 148(f)(b)(ii i) of the Code. (ix) "Yield" means that yield which, when used in computing the present worth of all payments of principal and interest (or other payments in the case of Nonpurpose Obligations which require payments in a form not characterized as principal and interest) on a Nonpurpose Obligation or on the Notes produces an amount equal to the Purchase Price of such Nonpurpose Obligation or the Notes, all computed as prescribed in applicable Regulations. b. Nonarbitrage Covenant. The City shall not take, nor permit nor suffer to be taken by the Paying Agent or otherwise, any action with respect to the Gross Proceeds of the Notes which if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of the issuance of the Notes would have caused the Notes to be "arbitrage bonds" within the meaning of Section 148(a) of the Code and Regulations promulgated thereunder. In addition, the City shall not take, nor permit nor suffer to be taken by the Paying Agent or otherwise, any action which would cause the interest on the Notes to be subject to Federal income taxation under the Code. c. Rebate of Excess Investment Earnings to United States, Inapplicability of Rebate Under Certain Circumstances. If the City fails to comply with the Safe Harbor Rules on or before June 1, 1989, the City shall, not later than June 30, 1989, establish a separate fund to be known as the Rebate Fund and deposit into such fund the full amount of the Excess Investment Earnings for purposes of ultimate rebate to the United States, all as more particularly described in this Section. The term "Excess Investment Earnings" means n amount a a ou t equal to the sum of: (A) the excess of (1) the aggregate amount earned from the date of delivery of the Notes -5- 0638J 5942 on all Nonpurpose Obligations in which Gross Proceeds of the Notes are invested (other than amounts attributable to an excess described in this paragraph (A)), over (2) the amount that would have been earned if the Yield on such Nonpurpose Obligations (other than amounts attributable to an excess described in this paragraph (A)) had been equal to the Yield on the Notes, plus (B) any income attributable to the excess described in paragraph (A). The City shall pay from the Rebate Fund an amount equal to Excess Investment Earnings to the United States within sixty (60) days of the maturity date of the Notes. The City shall remit payments to the United States at the address prescribed by the Regulations as the same may be in time to time in effect with such reports and statements as may be prescribed by such Regulations. The City shall, unless the City shall have determined that it is not obligated to rebate Excess Investment Earnings pursuant to this subsection (c), keep and retain for a period of six (6) years following the retirement of the Notes, records of the determinations made pursuant to this subsection (c). Anything herein to the contrary notwithstanding, the City shall not be obligated to rebate Excess Investment Earnings to the United States if the City shall comply with the Safe Harbor Rules. Section 12. Federal Guarantee Prohibition. The City shall take no action nor permit nor suffer any action to be taken if the result of the same would be to cause the Notes to be "federally guaranteed" within the meaning of Section 149(b) of the Code. Section 13. Approval of Preliminary Official Statement. (a) The facts contained in the Official Statement are true and correct in all material respects and the Official Statement omits no statement of a material fact necessary to make the Official Statement not misleading in light of the circumstances under which it was made, provided, however, that the Official Statement does not contain a final interest rate with respect to the Notes. (b) The Official Statement is hereby approved for distribution in the offering and sale of the Notes. (c) The Mayor, City Clerk, City Treasurer or other qualified officers of the City are authorized to approve corrections and additions to the Official Statement, acting with the advice of Prudential-Bache Capital Funding, Inc. and Bond Counsel, by supplement or amendment thereto, or otherwise as may be appropriate, provided either that any such corrections or additions shall be necessary to cause the information contained in the Official Statement to conform with facts material to the Notes or to requirements of proceedings of this City, or that such corrections or additions are of form rather than of substance. (d) Prudential-Bache Capital Funding, Inc., is authorized and directed to cause -6- 0638J 5942 the Official Statement to be distributed to the initial purchaser of the Notes and to such municipal bond broker-dealers, to such banking institutions and to such other persons as may be interested in purchasing Notes described and offered for sale therein. Section 14. Authorization of Sale of Notes. The Notes are hereby authorized to be sold to Prudential-Bache Securities, Inc., (the "Underwriter"), in accordance with the certain Purchase Contract by and between the City and the Underwriter in substantially the form on file with the City Clerk, so long as the net interest cost on the Notes does not exceed seven percent (7%), and so long as the discount on the Notes does not exceed one and one (I %). Subject to the foregoing limitations, the City Treasurer is hereby authorized to execute the Purchase Contract in substantially the form on file with the City Clerk. Section 15. Appointment of Bond Counsel. Jones Hall Hill and White, a Professional Law Corporation, is hereby appointed Bond Counsel for the issuance of the Notes, and that certain Agreement for Legal Services, on file with the City Clerk, is hereby approved, and the Mayor is hereby authorized to execute said Agreement. Section 16. Execution of Closing Documents. The Mayor, the City Clerk, the City Administrator, the Finance Director, the City Treasurer and other officers of the City are authorized and directed to execute such certificates, agreements and other closing documents as are necessary to consummate the transaction contemplated by this Resolution. -7- 0638J 5942 PASSED AND ADOPTED by the City Council of the City of Huntington Beach.- California, this 24th day of October 1988, by the following vote: AYES: Kelly, Finley, Erskine, Mays, Winchell , Bannister NOES: None ABSENT: (Green out of room) CITY OF HUNTINGTON BEACH J n Erskine, Mayor REVIEWED: APPROVED: Robert J. Franz, Deputy City Admi strator Paul E. Cook, City Administrator INITIATED AND APPROVED: Donald L. Watson, City Treasurer ATTEST: APPROVED AS TO FORM: 4W4� Z2) )f )I I �' "'� Connie Brockway, City erk i utton, ity At ney -8- 0638J 5942 Res. No. 5942 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, CONNIE BROCKWAY, the duly appointed, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of at least a majority of all the members of said City Council at a regular meeting thereof held on the 24th day of October 19 88 by the following vote: AYES: Councilmembers: Kelly, Finley, Erskine, Mays, Winchell , Bannister NOES: Councilmembers: None ABSENT: Councilmembers: Green out of room City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California 5942