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HomeMy WebLinkAboutCity Council - 5970 RESOLUTION NO. 5970 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH, CALIFORNIA, AUTHORIZING ISSUANCE OF BONDS, APPROVING BOND INDENTURE AND PRELIMINARY OFFICIAL STATEMENT FOR A SPECIAL ASSESSMENT DISTRICT WHEREAS, the CITY COUNCIL of the CITY OF HUNTINGTON BEACH, is conducting proceedings for the construction of certain public improvements in a special assessment district pursuant to the terms and provisions of the "Municipal Improvement Act of 1913", being Division 12 of the Streets and Highways Code of the State of California, said special assessment district known and designated as ASSESSMENT DISTRICT NO. 88-1 (RESERVOIR HILL) (hereinafter referred to as the "Assessment District" ) ; and This legislative body has previously declared in its Resolution of Intention to issue bonds to finance said improvements, said bonds to issue pursuant to the terms and provisions of the "Improvement Bond Act of 1915" being Division 10 of said Code; and, At this time this legislative body is desireous to set forth all formal terms and conditions relating to the authorization, issuance and administration of said bonds; and There has been presented, considered and ready for approval a bond indenture setting forth formal terms and conditions relating to the issuance and sale of bonds; and, There has also been presented a Preliminary Official Statement containing information including but not limited to the Assessment District and the type of bonds, including terms and conditions thereof. -1- 5970 NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: SECTION 1 . That the above recitals are true and correct. SECTION 2 . That this legislative body does authorize the issuance of bonds pursuant to the terms and provisions of the "Improvement Bond Act of 1915" , being Division 10 of the Streets and Highways Code of the State of California, and does expressly approve the BOND INDENTURE substantially in the form presented herein, subject to modifications as necessary and as approved by the City Attorney and the City Manager . A copy of said BOND INDENTURE shall be kept on file with the transcript of these proceedings and open for public inspection, with final approval conclusively evidenced by the City Manager ' s execution. Said bonds shall be issued and subject to the terms and conditions in said approved Bond Indenture . SECTION 3 . That the Preliminary Official Statement, as prepared and submitted, is hereby approved and adopted, and the execution and distribution is hereby authorized. A copy of said Preliminary Official Statement shall be kept on file with the transcript of these proceedings and remain open for public inspection. The City Manager is hereby authorized, subject to Bond counsel concurrence, to approve a final Official Statement in substantial compliance with the Preliminary Official Statement, and upon such approval, the execution and distribution of such final Official Statement is authorized. PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a regular meeting thereof held on the 19thday of December , 1988 . �a MAraA -2- 5970 BOND INDENTURE 'This Bond Indenture (the "Indenture") dated as of December 19, 1988, entered into and approved by the City of Huntington Beach (the "Issuer") , a municipal corporation, to establish the terms and conditions pertaining to the issuance of bonds in a special assessment district known and designated as ASSESSMENT DISTRICT NO. 88-1 (RESERVOIR HILL) (the "Assessment District") . SECTION 1. Issuance, Designation and Amount. Pursuant to the provisions of the "Improvement Bond Act of 1915", being Division 10 of the Streets and Highways Code of the State of California, as amended (the "Act") , the Issuer does hereby authorize the issuance of bonds to represent unpaid assessments within the Assessment District in principal amount not to exceed $1,837,000.00 and designated as the City of Huntington Beach, Assessment District No. 88-1 (Reservoir Hill) Limited Obligation Improvement Bonds (the "Bonds" ) . SECTION 2. Unpaid Assessments. The Issuer shall, immediately upon the completion of the 30-day cash collection period, determine the assessments which are unpaid and the aggregate amount thereof as authorized by Section 8621 of the Streets and Highways Code of the State of California. SECTION 3. Term of Bonds. Bonds to represent the unpaid assessments, and bear interest at a rate not to exceed the current legal maximum rate of 121 per annum, will be issued in the manner provided in the Act, the last installment of which Bonds shall mature a maximum of and not to exceed nineteen (19) years from the second day of September next succeeding twelve (12) months from their date. The provisions of Part 11.1 of the Act, providing an alternative procedure for the advance payment of assessments and the calling of Bonds shall apply. SECTION 4. Registered Bonds. Said Bonds shall be issuable only as fully regis- tered Bonds in the denomination of $5,000, or any integral multiple thereof, except for one bond maturing in the first year of maturity, which shall include the amount by which the total issue exceeds the maximum integral multiple of $5,000 contained therein. SECTION 5. Date of Bonds. All of said Bonds shall be dated the 17th day of January, 1989, and interest shall accrue from that date". SECTION 6. Maturity and Denomination. The Bonds shall be issued in serial form with annual maturities on September 2nd of every year succeeding twelve (12) months after their date, until the whole is paid. The amount maturing each year shall be such as to result in approximately equal annual debt service during the term of the issue as reflected by the interest rate and/or rates and principal amounts maturing in the respec- tive years of maturity as set forth in Exhibit "A" attached hereto and incorporated herein by this reference, and the Issuer shall, imme- diately upon completion of the cash collection period, prescribe the denominations of the Bonds, which shall be in convenient amounts, not necessarily equal, and shall further provide for their issuance and delivery. 1 5970 SECTION 7. Interest. Each Bond shall be of a single maturity and shall bear interest at the rate as set forth in Exhibit "A" hereto from the interest payment date next preceding the date on which it authenticated and registered, unless said Bond is authenticated and registered as of an interest payment date, in which case it shall bear interest from said interest payment date, or unless said Bond is authenticated and registered prior to the first interest payment date, in which case it shall bear interest from its date, until payment of its principal sum has been discharged. SECTION 8. Place of Payment . The principal on the Bonds shall be payable in lawful money of the United States of America upon surrender of the Bond at the office of , the designated registrar, transfer agent and paying agent of the Issuer ( "Paying Agent") , or such other registrar, transfer agent or paying agent as may be designated by subsequent Resolution of the Issuer. Interest on said Bonds shall be paid by check or draft to the regis- tered owner thereof at his address as it appears on the books of regis- tration, or at such address as may have been filed with the Paying Agent for that purpose, as of the 15th day of the month immediately preceding said interest payment date. SECTION 9. Redemption. This Bond, or a portion thereof if issued in a denomina- tion greater than $5,000, shall be subject to redemption and payment in advance of maturity in increments of $5,000 as provided in Section 8768 of the Streets and Highways Code, on the 2nd day of March or September in any year, by giving the notice provided in said law to the regis- tered owner thereof at his address as it appears on the books of regis- tration and by paying principal of and accrued interest on such redeemed amount, together with a premium equal to three percent (3%) of the redeemed principal amount . If less than the entire Bond is redeemed, the unredeemed portion shall be reissued to the registered owner thereof. SECTION 10. Transfer of Registered Bonds. Any fully registered Bond may, in accor- dance with its terms, be transferred upon the books of registration required to be kept pursuant to the provisions of Section 11 by the owner in whose name it is registered, or by his duly authorized attorney or legal representative, upon surrender of such fully regis- tered Bond for registration of such transfer, accompanied by delivery of a written instrument or transfer in a form approved by the Paying Agent and by the owner of• said Bonds, duly executed. SECTION 11. Exchange of Registered Bonds. Fully registered Bonds may be exchanged at the office of the Paying Agent for a like aggregate principal amount of Bonds of the same series, interest rate and maturity, subject to the terms and conditions provided in the system of registration for regis- tered debt obligations, including the payment of certain. charges, if any, upon surrender and cancellation of this Bond. Upon such transfer and exchange, a new registered Bond or Bonds of any authorized denomina- tion or denominations of the same maturity for the same aggregate principal amount will be issued to the transferee in exchange therefor. 2 5970 SECTION 12. Books of Registration. There shall be kept by the Paying Agent sufficient books for the registration and transfer of the Bonds and, upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may prescribe, register or transfer or ow cause to be registered or transferred, on said register, Bonds as hereinbefore provided. SECTION 13. Execution of Bonds. The Bonds shall be executed in facsimile by the Treasurer and by the City Clerk, and the corporate seal shall be imprinted in facsimile on the Bonds. The Bonds shall then be delivered to the Paying Agent for authentication and registration. In case an officer who shall have signed or attested to any of the Bonds by facsimile or otherwise shall cease to be such officer before the authen- tication, delivery and issuance of the Bonds, such Bonds nevertheless may be authenticated, delivered and issued, and upon such authentica- tion, delivery and issue, shall be as binding as though those who signed and attested the same had remained in office. SECTION 14. Authentication. Only such of the Bonds as shall bear thereon a certifi- cate of authentication substantially in the form below, manually executed by the Paying Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the transfer agent and registrar shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder, and are entitled to the benefits of this Indenture. FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION This bond has been authenticated and registered on as Transfer Agent, Registrar and Paying Agent By: SECTION 15. Negotiability, Registration and Transfer of Bonds. The transfer of any Bond may be registered only upon such books of registration upon surren- der thereof to the Paying Agent, together with an assignment duly executed by the owner or his attorney or legal representative, in satis- factory form. Upon any such registration of transfer, a new Bond or Bonds shall be authenticated and delivered in exchange for such Bond, in the name of the transferee, of any denomination or denominations authorized by this Indenture, and in an aggregate principal amount equal to the principal amount of such Bond or principal amount of such Bond or Bonds so surrendered. In all cases in which Bonds shall be exchanged or transferred, the Paying Agent shall authenticate at the earliest practical time, Bonds -in accordance with the provisions of this Indenture. All Bonds surrendered in such exchange or registration transfer shall forthwith be cancelled. The Paying Agent may make a charge for every such exchange or registration of transfer of Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of 3 5970 transfer. No transfer of fully registered Bonds shall be required to r be made between the fifteenth (15th) day of the month next preceding each interest payment date, nor during the fifteen (15) days preceding the selection of any Bonds for redemption prior to the maturity thereof, nor with respect to any Bond which has been selected for redemption prior to the maturity thereof. SECTION 16. Ownership of Bonds. The person in whose name any Bond shall be regis- tered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal and redemp- tion premium, if any, of any such Bond, and the interest on any such Bond, shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond, including the redemption premium, if any, and interest thereon, to the extent of the sum or sums so paid. SECTION 17. Mutilat ed, Destroyed, Stolen or Lost Bonds. In case any Bond secured hereby shall become mutilated or be destroyed, stolen or lost, the Issuer shall cause to be executed and authenticated a new Bond of like date and tenor in exchange and substitution for and upon the cancella- tion of such mutilated Bond or in lieu of and in substitution for such Bond mutilated, destroyed, stolen or lost, upon the owner's paying the reasonable expenses and charges in connection therewith, and, in the case of a Bond destroyed, stolen or lost, his filing with the Paying Agent and Issuer of evidence satisfactory to them that such Bond was destroyed, stolen or lost, and of his ownership thereof, and furnishing the Paying Agent and Issuer with indemnity satisfactory to them. i SECTION 18. Cancellation of Bonds. All Bonds paid or redeemed, either at or before maturity, shall be cancelled upon the payment or redemption of such Bonds, and shall be delivered to the Paying Agent when such payment or redemption is made. All Bonds cancelled under any of the provisions of this Indenture shall be destroyed by the Paying Agent, which shall execute a certificate in duplicate describing the Bonds so destroyed, and shall retain said executed certificate in its permanent files for the issue. SECTION 19. Creation of Funds. The Treasurer is hereby authorized and directed to establish the following Funds for purposes of making payment for the costs and expenses for the works of improvement and payment of principal and interest on the Bonds. The Funds to be created are designated as follows: IMPROVEMENT FUND: The proceeds from the sale of the Bonds, after deposit of required amounts in the Reserve Fund and Redemption Fund, shall be placed in the Fund hereby created, pursuant to Sections 10602 and 10424 of the California Streets and Highways Code, as amended, which shall be called the "Improvement Fund", and the monies in said Fund shall be used only for the purposes authorized in said assessment proceedings, and specifically to pay for the costs and expenses of the construction or acquisition of the authorized public capital improve- ments, together with all incidental expenses. Any surplus in the Improvement Fund after completion of the improvements shall remain in 4 5970 the Improvement Fund for a period of not less than two (2) years from the receipt of Bond proceeds as provided in Section 10427. 1 of the California Streets and Highways Code, and thereafter shall be utilized or distributed as determined by the Issuer. REDEMPTION FUND: The Treasurer is hereby authorized and directed to keep a Redemption Fund designated by the name of the proceedings, into which he shall place accrued interest, if any, on the Bonds from the date of the Bonds to the date of delivery to the initial purchaser thereof, all sums received for the collection of the assessments and the interest thereon, together with all penalties, if applicable. Principal of and interest on said Bonds shall be paid to the registered owner out of the Redemption Fund created pursuant to Section 8671 of the California Streets and Highways Code. Accrued interest paid by the purchaser of the Bonds, if any, shall be deposited in the Redemption Fund. In all respects not recited herein, said Bonds shall be governed by the provisions of the Act. Under no circumstances shall the Bonds or interest thereon be paid out of any other fund except as provided by law. RESERVE FUND: Pursuant to Part 16 of the Act, there shall be created a special reserve fund for the Bonds to be designated by the name of the Assessment District and specified as the special "Reserve Fund". An amount equal to six percent (6%) of the original Bond proceeds shall be deposited in the Reserve Fund out of said Bond proceeds. t Monies in the Reserve Fund shall be applied as follows: k A. Amounts in said Reserve Fund shall be transferred to the Redemption Fund for the Bonds if, as result of delinquencies in the payment of assessments, there are insufficient monies in said Redemption Fund to pay principal of and interest on the Bonds when due. Amounts so transferred shall be repaid to the Reserve Fund from proceeds from the redemption or foreclosure of property with respect to which an assessment is unpaid and from payments of the delinquent assessments; B. Interest earned on the permitted investment of monies on deposit in the Reserve Fund shall remain in the Reserve Fund so that the amount therein may accumulate to and subsequently be maintained at the "Reserve Requirement". The Reserve Requirement shall be an amount equal to the lesser of (i) the Maximum Annual Debt Service on the Bonds, (ii) 125% of the average annual debt service on the Bonds, or (iii) 10% of the original principal amount of the Bands. Annual Debt Service on the Bonds for each year ending September 2nd shall equal the sum of (a) the interest falling due on the outstand- ing Bonds in such 12 month period, assuming that the outstanding Bonds are retired as scheduled, and (b) the principal amount of outstanding Bonds falling due during such 12 month period. "Average Annual Debt Service" shall mean the average Annual Debt Service during the term of the Bonds. "Maximum Annual Debt Service" shall mean, as computed from time to time, the largest Annual Debt Service during the period from the date of such computa- tion through the final maturity of any outstanding Bonds. 5 5970 C. On July 15 of each fiscal year the amount on deposit in the Reserve Fund in excess of the Reserve Requirement shall be transferred from the Reserve Fund to the Redemption Fund and shall be credited to the unpaid assessment installments payable during such fiscal year. The Auditor ' s record, prepared pursuant to Section 8682 of the Streets and Highways Code, shall reflect the credits against each of the unpaid assessments in the manner provided in Streets and Highways Code Section 10427. 1 in amounts equal to each parcel's proportionate share of such transfer. Notwithstanding the above, interest earnings on monies on deposit in the Reserve Fund in excess of the "yield" on the Bonds, as that term is defined in the Internal Revenue Code of 1986 (the "Code") , shall be subject to transfer and rebate to the United States. D. Whenever monies in the Reserve Fund are sufficient to retire all of the Bonds outstanding, plus accrued interest thereon, such money shall be transferred to the Redemption Fund for the Bonds and collection of the remaining unpaid assessments shall cease. E. In the event assessments are paid in cash in advance of their final maturity date, the Issuer is required to credit the prepaid assess- ment with a proportionate share of the Reserve Fund and to transfer an amount equal to such credit to the Redemption Fund to be utilized for the advance retirement of Bonds. ECTION 20. No Issuer Liability. It is hereby further determined and declared that the Issuer will not obligate itself to advance any available funds from its Treasury to cure any deficiency or delinquency which may occur in the Bond Redemption Fund by failure of property owners to pay annual special assessments. This determination shall be clearly set forth and stated in the title of the Bonds to be issued pursuant to these proceed- ings as authorized and required by Section 8769 of the Streets and Highways Code of the State of California. SECTION 21. Covenant to Foreclose. The Issuer hereby covenants that upon default of any assessment payment due, it will cause Superior Court foreclosure proceedings to be brought within one hundred fifty (150) days of such default and thereafter diligently prosecute to completion such proceed- ings . Such foreclosure proceedings may be deferred if funds are advanced to the special Reserve Fund to keep said Fund continually at the level set forth in the Section entitled "Reserve Fund" set forth hereinabove. SECTION 22. Covenant to Maintain Tax-Exempt Status. The Issuer covenants that it will not make any use of the proceeds of the Bonds issued hereunder which would cause the Bonds to become "arbitrage bonds" subject to Federal income taxation pursuant to the provisions of Section 148(a) of the Code, or to become "Federally-guaranteed obligations" pursuant to the provisions of Section 149(b) of the Code, or to become "private activity bonds" pursuant to the provisions of Section 141(a) of the Code. To that end, the Issuer will comply with all applicable require- ments of the Code and all regulations of the United States Department of Treasury issued thereunder to the extent such requirements are, at 6 5970 the time, applicable and in effect. Additionally, the Issuer agrees to implement and follow each and every recommendation provided by Bond Counsel and deemed to be necessary to be undertaken by the Issuer to ensure compliance with all applicable provisions of the Code in order t to preserve the exemption of interest on the Bonds from Federal income taxation. SECTION 23. Covenant Regarding Arbitrage. The Issuer shall not take or permit nor suffer to be taken any action with respect to the gross proceeds of the Bonds as such term is defined under the Code which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds, would have caused the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and the regulations promulgated thereunder. SECTION 24. Order to Print and Authenticate Bonds. The Treasurer is hereby instructed to cause Bonds, as set forth above, to be printed, and to proceed to cause said Bonds to be authenticated and delivered to an authorized representative of the purchaser, upon payment of the purchase price as set forth in the accepted proposal for the sale of Bonds. SECTION 25. Arbitrage Certificate. On the basis of the facts, estimates and circum- stances now in existence and in existence on the date of issue of the Bonds, as determined by the Treasurer, said Treasurer is hereby autho- rized to certify that it is not expected that the proceeds of the issue will be used in a manner that would cause such obligations to be arbitrage Bonds. Such certification shall be delivered to the purchaser together with the Bonds. IN WITNESS WHEREOF, the Issuer has executed this Bond Indenture effective the date first written hereinabove. CITY MANAGER CITY OF HUNTINGTON BEACH STATE OF CALIFORNIA 5970 7 ATTEST: City Clerk REVIEWED AND APPROVED: APPROVED AS TO FORM: City Administrator City Attorney INITI ED AND APPROVED: i Chief miiistrativ Se vices STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss . CITY OF HUNTINGTON BEACH ) I , CONNIE BROCKWAY, the duly elected, qualified and acting City Clerk of the City of Huntington Beach, and ex-officio Clerk of the CityCouncil of said city, do hereby certify that the whole Y� Y Y number of members of the City Council of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of more than a majority of all the members of said City Council at a regular meeting thereof held on the 19th day of December , 1988 , by the following vote: AYES: COUNCILMEN: MacAllister, Green, Winchell , Bannister, Mays, Silva, Erskine —3 5970 NOES: COUNCILMEN: None ABSENT: COUNCILMEN: None City Clerk —4— 5970 EXHIBIT A $1,774,511 .39* City of Huntington Beach Assessment District No. 88-1 Limited Obligation Improvement Bonds (Reservoir Hill ) Principal* Maturity Date Amount Interest Rate 9/02/90 $ 4,511 .39 6.500 9/02/91 40,000.00 6.700 9/02/92 50,000.00 6.900 9/02/93 50,000.00 7.000 9/02/94 55,000.00 7.200 9/02/95 60,000.00 7.400 9/02/96 65,000.00 7.500 9/02/97 70,000.00 7.600 9/02/98 75,000.00 7.700 9/02/99 80,000.00 7.800 9/02/00 85,000.00 7.900 9/02/01 90,000.00 7.900 9/02/02 100,000.00 8.000 9/02/03 105,000.00 8.000 9/02/04 115,000.00 8.000 9/02/05 125,000.00 8. 100 9/02/06 135,000.00 8. 100 9/02/07 145,000.00 8. 100 9/02/08 155,000.00 8. 100 9/02/09 170,000.00 8. 100 Total $1,774,511 .39 The net interest cost, which includes a discount of 2.50%, is 8.15%. The average coupon rate is 7.97%. All Bonds are re-offered at par. * Subject to change upon close of cash collection period on January 5, 1989. 5970