HomeMy WebLinkAboutRES NO 148-87RESOLUTION NO. 14R-~7
A RESOLUTION OF THE COUNCIL OF THE CITY
OF BAKERSFIELD DETERMINING UNPAID ASSESSMENTS
AND PROVIDING FOR ISSUANCE OF BONDS IN
THE MATTER OF CITY OF BAKERSFIELD ASSESSMENT
DISTRICT NO. 87-2
RESOLVED, by the Council of the City of Bakersfield,
California (the "City"), that
WHEREAS, on May 6, 1987, this Council passed and
adopted Resolution of Intention No. 1026 (the "Resolution of In-
tention"), as amended, relating to the construction of public
improvements under and pursuant to the provisions of the Munici-
pal Improvement Act of 1913, the Charter, and the Municipal Code
of the City. By s~id Resolution of Intention, this Council pro-
vided that serial bonds would be issued thereunder pursuant to
the p~ovisions of the Improvement Bond Act of 1915, Division 10
of the S~reets and Highways Code of California ~nd reference to
said R,'s~lution of Intention is hereby expressly made for further
partic.~[ars;
WHEREAS, notice of the recordation of the assessment
and of the time within which assessments were to be paid in cash
was duly published and mailed in the manner provided by law and
the time so provided for receiving payment of assessments in cash
expired, and a list of the assessments remaining unpaid has been
filed by the Finance Director of the City as the Collection Offi-
cer with the City; and
WHEREAS, this Council duly considered said list and
determined that the same was an accurate statement thereof;
follows: NOW, ERLFORE, IT IS }{EREBY DETERMINED AND ORDERED, as
SECTION 1. Definitions. Unless the context Qtherwise
requires, the terms defined in this Section 1 shall, for all pur-
poses of this Resolution, have the meanings herein specified and
shall be equally applicable to both the singular and plural forms
of any of the terms herein defined.
"Act" means the Improvement Bond Act of 1915, Division
10 of the Streets and H~gbways Code of the State of California.
"~A~qent" means Bank of America National Trust and Sav-
ings Association, the Transfer Agent, Registrar and Paying Agent
designated in Section 6 hereof.
"Bond" or "Bonds" means the Improvement Bonds, City of
Bakersfield Assessment District No. 87-2, issued pursuant to the
Act and this Resolution.
"Bond Date" means the dated date of the Bonds, which is
August 17, 1987.
"Bond Denomination.. means
which is the~-~in-~um~ ~ .... the amount of $5,000.00,
LL ~ 'H WhiCh the Bonds may be issued,
except ~mat one Bond may contain the amount of $1,000.00.
"Bond Year" means the twelve month period beginning on
August 17 of ea~-h~ear and ending on August 16 of the following
year, commencing with the period beginning on August 17, 1987,
and ending on August 16, 1988.
"Closiq~ Date" means the date upon which there is an
exchange of the Bonds for the proceeds representing the purchase
of the Bonds by the Original Purchaser.
"Code" means the Internal Revenue Code of 1986, as
amended. ~
"Debt Service', means the scheduled amount of interest
and amortization of principal payable on the Bonds during the
period of computation, excluding amounts Scheduled during such
period which relate to principal which has been retired before
the beginning of such period.
"Excess Investment Earning- has the meaning set forth
in Section ~4(-~of.
by that
Section
amounts:
"Excess Investment Ear~ Account" means the account
name created by, and held by the Treasurer pursuant to,
24(a) hereof..
"Gross Proceeds" means the sum of the following
(J) original proceeds, namely, net amounts (after
payment of all expenses of issuing the Bonds) received
by or for the Issuer as a result of the sale of the
Bonds, excluding original proceeds which become trans-
ferred proceeds (determined in accordance with appli-
cable Regulations) of obligations issued to refund in
whole or in part the Bonds;
(ii) investment proceeds, namely, amounts received
at any time by or for the ISSuer, such as interest and
dividends, resulting from the Investment of any origi-
nal proceeds (as referenced in clause (i) above) or
investment proceeds (as referenced in this clause (ii))
in Nonpurpose Obligations, increased by any profits and
decreased (if necessary, below zero) by any losses on
such investments, excluding investment proceeds which
become transferred proceeds (determined in accordance
2
with applicable Regulations) of obligations issued to
refund in whole or in part the Bonds;
(iiJ) sinking fund proceeds, namely, amounts,
other than original pt~oceeds or investment proceeds (as
referenced in clauses (i) and (ii) above) of the Bonds,
which are held in the Redemption Fund and any other
fund to the extent that the Issuer reasonably expects
to use such other fund to pay Debt Service on the
Bonds;
(iv) amounts in the Reserve Fund or in any fund
established as a reasonably required reserve
replace-
ment fund, or
Treasurer
the sale
Section
(v) Investment Property pledged as security for
payment of Debt Service on the Bonds by an ultimate
obligor or a related person or by the Issuer;
(vi) amounts, other than as specified in this
definition, used to pay Debt Service on the Bonds; and
(vii) amounts received as a result of investing
amounts described in this definition.
"I~rovement Fund" means the fund established by
into w~{ ~ha~ be placed the proceeds received the
from
of the Bonds, including any premium, all pursuant to
10 hereof.
~n~e~r_est Payment Date" means the dates upon which
interest on the Bon~ is payable, commencing on March 2, 1988,
and semiannually thereafter on September 2 and March 2 of each
year to maturity.
"Investment .Earn_~_~ Account means the account by that
name created by, and held by t~-~ T~surer pursuant to, Section
24(a) hereof.
"Investment. Prop~_rty" means any security (as said term
is defined in section 165(g)(2)(A) or (B) of the Code), obliga-
tion, annuity or investment-type property, excluding, however,
obligations the interest on which is exempt from income tax under
section 103 of the Code.
"Issuance Costs" means all costs and expenses of issu-
ance of the Bonds, including, but not limited to:
(i) underwriters, fees other than those taken in
the form of a discount on the Closing Date;
(ii) counsel fees, inclu~ing bond Counsel, under-
writers, counsel, Issuer's counsel and special tax coun-
sel fees,
incurred in Connection with the borrowing;
(iiJ) financial advisor fees incurred
tion with the issuance of the Bonds;
(iv) rating agency fees;
(v) trustee fees and trustee Counsel fees;
(vi) paying agent and certifying and authenticat-
ing agent fees related to issuance of the Bonds;
(vii} accountant fees related to iSSuance of the
Bonds;
as well as any other specialized counsel fees
in Connec-
(vii:[) printing costs of the Bonds and of the pre-
liminary and final official statement;
(ix) publication costs associated with the financ-
ing proceedings; and
(x) costs of engineering and feasibility studies
necessary to the issuance of the Bonds.
ssuer means the issuer of the Bonds, which is the
City of Bake-~-~fi~ld, County of Kern, State of California.
.Ne~ ~
L~L Proceeds of the Bonds" means proceeds of the Bonds
received by or for the Issuer on the Closing Date, less amounts
used to pay Issuance Costs and less amounts deposited on the Clos-
ing Date in the Reserve Fund.
"N-~°npur_~2_q~ Obligation" means any Investm
which is acquired with the Gros~ pro~ ...... ~nt Property
acquired in order te ~ ..... - ..... o u~ ~ne ~on~s and is not
Bonds. ~ uut the governmental purpose of the
"Original Purchaser- means the purchaser of the Bonds
from the Issuer on the Closing Date.
"Private Business Use" means use directly in a trade or
business carried on by a natural person or in any activity
carried on by a person other than a natural person, excluding,
however, use by a governmental unit and use as a member of the
general public.
cribed in
"Pr_~ect" means the acquisitions and improvements des-
the ResOlution of Intention.
"Purchase Price" for the
Yield of the Bonds, as provided in
means the initial offering price
bond houses and brokers, or similar
purpose of computation of the
the Code, the term in general,
to the public (not including
persons or organizations act-
ing in the capacity of underwriters or wholesalers) at which
price a substantial amount of the Bonds are sold or, if the Bonds
are privately placed, the price paid by the first buyer of the
Bonds or the acquisition cost of the first buyer. The term "Pur-
chase Price", for the purpose of computation of the Yield of Non-
purpose Obligations, means the fair market value of the Nonpur-
pose Obligations on the date of use of Gross Proceeds of the
Bonds for acquisition thereof, or if later, on the date that
Investment Property constituting a Nonpurpose Obligation becomes
a Nonpurpose Obligation of the Bonds.
- "Redemption Fund" means ~- * -
L~ fund established by the
Treasurer into whic~-~ai~be placed any accrued interest for the
period from the Bond Date to the closing date and all sums re-
ceived from the collection of unpaid assessments and of the inter-
est and penalties thereon, all as provided in Section 11 hereof.
"~edemption Premium" means 3% of the principal amount
of the Bonds.
"Regulations', means temporary and permanent regulations
promulgated-~der section 148 of the Code.
"Reserve Fund" means the fund established by the Trea-
surer from the proceeds of the sale of the Bonds in the amount of
$175,770, all as provided in Section 18 hereof.
"Treasurer" means the Finance Director or designee, of
the City of Bakersfield. ,
~Yiel~'
the -resen ~ means that yzeld which, when used in co
~ worth oi all ~a~me ........ mputing
- - ~ ~ ~ u~ principal and interest (or
other payments in the case of Nonpurpose Obligations which re-
quire payments in a form not characterized as principal and inter-
est) on a Nonpurpose Obligation or on the Bonds produces an
amount equal to the Purchase Price of such Nonpurpose Obligation
or the Bonds, all computed as prescribed in the Code and, in the
case of variable rate obligations, as further prescribed in Sec-
tion 23 hereof.
SECTION 2. List of Unpaid Assessments. The assess-
ments now remaining unpaid are as shown on said list and on
Exhibit "A" attached hereto and by this reference made a part
hereof; the aggregate amount thereof is $2,511,000; and for a
particular description of the lots or parcels of land bearing the
respective assessment. numbers set forth in said list, reference
is hereby made to the assessment and to the diagram recorded in
the office of the Superintendent of Streets of the Issuer after
confirmation thereof by this Council.
SECTION 3. Issuance of Bonds. The Bonds, in the aggre-
gate principal amount of $2,511,000, shall be issued as herein-
after provided upon the security of said unpaid assessments in
accordance with, under and pursuant to the provisions of said
5
Resolution of Intention and the proceedings thereunder duly had
and taken. The Bonds shall be issued only in fully registered
form in the amount of the Bond Denomination or any integral multi-
ple thereof, and shall mature in the amounts and on the dates and
at the rates of interest set forth in Exhibit "B" attached hereto
and by this reference made a part hereof. The Bonds shall be
numbered or otherwise identified as determined by the Agent speci-
fied in Section 6 hereof.
SECTION 4. Form of Bonds. The Bonds shall be substan-
tially in the form set forth in Exhibit "C" hereto and hereby
made a part hereof.
SECTION 5. Payment of Bonds. The Bonds shall bear
interest at the rate or rates determined by this Council at the
time of sale of the Bonds (not to exceed twelve percent (12%) per
annum, or such higher rate of interest as may be authorized by
applicable law at the time of sale of such Bonds), payable on
each interest Payment Date.
Each Bond shall bear interest from the interest payment
date next preceding the date on which it is authenticated and
registered, unless authenticated and registered (1) prior to an
interest payment and after the close of business of the fifteenth
day preceding such interest payment date, in which event it shall
bear interest from such interest payment date, or (ii) prior to
the close of business on the fifteenth day of the month preceding
the first Interest Payment Date, in which event it shall bear
interest from the Bond Date; provided, however, that if at the
time of authentication interest is in default, each Bond shall
bear interest from the date to which interest has been paid.
Each Bond will continue to bear interest after maturity at the
rate stated therein, provided it is presented at maturity and
payment thereof is refused on the sole ground that there is not
sufficient money in the redemption fund with which to pay same;
if it is not presented at maturity, interest thereon will run
only until maturity.
SECTION 6. Designation of Agent. Bank of America
National Trust and Savings Association is hereby designated as
the Transfer Agent, Registrar and Paying Agent (hereinafter the
"Agent"). The principal and redemption premium of the Bonds
shall be payable in lawful money of the United States of America
at the office(s) of the Agent in San Francisco, California, upon
the presentation and surrender of the Bonds as the same become
du~. and payable. ~
~ ~ ~rb~k terest on the Bonds shall be paid to the
~ e ~ ~d d~aft mailed to the address entered
i i
P or herein as of the fifteenth (lq)
day immediately preceding each Interest Payment Date. The Tl'ea-
surer is hereby authorized and directed to enter into agreements
with the Agent in furtherance of the purposes of this Section.
SECTION 7. Execution. The Bonds shall be executed on
behalf of the Issuer and under its official seal by its Treasurer
and by its City Clerk, whose signatures shall be reproduced on
the Bonds by engraved, printed or lithographed facsimile thereof,
and the official seal may be placed on the Bonds in like manner;
such signing and sealing shall constitute and be a sufficient and
binding execution of each and every one of the Bonds. The Bonds
shall then be delivered to the Agent for authentication by it.
If any officer whose signature appears on the Bonds
ceases to be such officer before the authentication and delivery
of the Bonds to the purchaser thereof, such signature shall be as
valid as if such officer had remained in office until the authen-
tication and delivery of the Bonds.
SECTION 8. Authentication. Only such of the Bonds as
shall bear thereon a certificate of authentication substantially
in the form below, manually executed by the Agent, shall be valid
or obligatory for any purpose or entitled to the benefits of this
Resolution, and such certificate of the Agent shall be conclusive
evidence that the Bonds so authenticated have been duly executed,
authenticated and delivered hereunder and are entitled to the
benefits of this resolution. The Agent's certificate of authenti-
cation on any Bond shall be deemed to be executed by it if signed
by an authorized officer or signatory of the Agent, but it shall
not be necessary that the same officer or signatory sign the
tificate of authentication on all the Bonds issued hereunder.cer-
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Bonds described in the Resolution
Determining Unpaid Assessments and Providing for Issuance of
Bonds, which has been registered on
By
Authorized Officer
SECTION 9. Preparation and Delivery of Bonds. The
Treasurer is hereby directed to cause the Bonds to be prepared in
accordance with this resolution and to deliver same upon their
completion and execution to the Agent who shall authenticate and
deliver the Bonds to the purchaser thereof, upon receipt of the
purchase price therefor, and upon the performance of the condi-
tions contained in the accepted offer for the purchase of the
Bonds.
7
SECTION 10. Improvement Fund. The Treasurer shall
establish the Improvement Fund designated by the name and/or num-
ber of the improvements or assessment district into which shall
be placed the proceeds received from the sale of the Bonds, in-
cluding any premium (except that any interest accrued from the
date of the Bonds to the date of delivery thereof shall be placed
is the Redemption Fund provided for herein). All moneys in the
Improvement Fund shall be withdrawn only upon checks or warrants
of the Issuer and shall be applied exclusively to the payment of
the cost of the acquisitions and/or construction of the improve-
ments described in the proceedings under and pursuant to said
Resolution of Intention, as now or hereafter changed or modified
by appropriate legal proceedings, and all expenses incidental
thereto. Any surplus remaining after payment of all costs and
all legal charges, claims and expenses shall be used as set forth
in said proceedings.
SECTION ll. Redemption Fund. Said Treasurer shall
establish the Redemption Fund designated by the name of the
Bonds, into which shall be placed any accrued interest for the
period from the date of the Bonds to the date of delivery thereof
and all sums received from the collection of unpaid assessments
provided for in Section 12 hereof, and of the interest and penal-
ties thereon. From the Redemption Fund disbursements shall be
made to pay the principal or advance redemption price of the
Bonds and the interest due thereon.
SECTION ]2. Collection of Unpaid Assessments. The
unpaid assessments shown on said list, together with the interest
thereon, shall be payable in annual series corresponding in num-
ber to the number of serial maturities of the Bonds issued. An
annual proportion of each unpaid assessment shall be payable Jn
each year preceding the date of maturity of each of the several
series of Bonds issued, sufficient to pay the Bonds when due, and
such proportion of each unpaid assessment coming due in any year,
together with the annual interest thereon, shall be payable in
the same manner and at the same time and in the same installments
as the general taxes on real property are payable, and become
delinquent at the same times and in the same proportionate
amounts and bear the same proportionate penalties and interest
after delinquency as do the general taxes on real property. All
sums received from the collection of said unpaid assessments and
of the interest and penalties thereon shall be placed in the
Redemption Fund provided for herein.
SECTION 13. Redemption Prior to Maturity. Each Bond,
or any portion thereof in the amount of the Bond Denomination or
any integral multiple thereof, outstanding may be redeemed and
paid in advance of maturity upon any Interest Payment Date in any
year by giving at least 60 days notice and by paying the princi-
pal amount thereof together with the Redemption Premium plus in-
terest to the date of advanced maturity, unless sooner surren-
8
dered, in which event said interest will be paid to the date of
payment, all in the manner and as provided in the Act.
The Treasurer shall cause to be called for redemption
and retire Bonds upon prepayment of assessments in amounts suffi-
cient therefor, or whenever sufficient surplus funds are avail-
able therefor in the Redemption Fund. In selecting Bonds for
retirement, the lowest numbered Bonds of the various annual matur-
ities shall be chosen pro rata in a manner intended to disturb as
little as possible the relationship of unpaid assessments to
Bonds outstanding.
The provisions of Part 11.1 of the Act
to the advance payment of assessments and to the
Bonds.
are applicable
calling of the
SECTION JL4. Exchange of Bonds. Any Bond, upon surren-
der thereof at the office of the Agent, together with an assign-
ment duly executed by the registered owner thereof or his attor-
ney or legal representative in such form as shall be satisfactory
to the Agent, may, at the option of such owner, be exchanged for
an aggregate principal amount of Bonds equal to the principal
amount of the Bond so surrendered, and of any authorized denomina-
tion or denominations. The Issuer shall make provision for the
exchange of Bonds at the office of the Agent.
SECTION 15. Negotiability, Registration and Transfer
of Bonds. The Agent shall keep books for the registration, and
for the registration of transfers, of the Bonds as provided in
this resolution which shall at all times be open to inspection by
the Issuer. The transfer of any Bond may be registered only upon
such books upon surrender thereof to the Agent together with an
assignment duly executed by the owner or his attorney or legal
representative in such form as shall be satisfactory to the Agent.
Upon any such registration of transfer, the Issuer shall execute
and the Agent shall authenticate and deliver in exchange for such
Bond a new Bond or Bonds registered in the name of the trans-
feree, of any denomination or denominations authorized by this
resolution, and in an aggregate principal amount equal to the
principal amount of such Bond or Bonds so surrendered.
In all cases in which Bonds shall be exchanged, the
Issuer shall execute and the Agent shall authenticate and deliver
at the earliest practicable time Bonds in accordance with the
provisions of this resolution. All Bonds surrendered in any such
exchange or registration of transfer shall forthwith be cancelled
by the Agent. The Issuer or the Agent may make a charge for
every such exchange or registration of transfer of Bonds suffi-
cient to reimburse it for any tax or other governmental charge
required to be paid with respect to such exchange or registration
of transfer, but no other charge shall be made to any owner for
the privilege of exchanging or registering the transfer of Bonds
under the provisions of this resolution. Neither the Issuer nor
the Agent shall be required to make such exchange or registration
of transfer of Bonds during the fifteen (15) days immediately
preceding any Interest Payment Date.
SECTION 16. Ownership of Bonds. The person in whose
name any Bond shall be registered shall be deemed and regarded as
the absolute owner thereof for all purposes and payment of or on
account of the principal, and redemption premium, if any, of any
such Bond, and the interest on any such Bond, shall be made only
to or upon the order of the registered owner thereof or such
owner's 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. Advances from Available Surplus Funds.
The Issuer shall be the purchaser of property upon which payment
of an annual installment of principal and interest due upon any
of said unpaid assessments is delinquent, in like manner in which
it becomes or may become the purchaser of property sold for the
nonpayment of general taxes, and shall transfer from available
surplus funds into the Redemption Fund for the Bonds, as an ad-
vance recoverable upon sale or redemption of the property, the
amount of the delinquent unpaid assessment installment upon which
said sale is made. The Issuer shall also pay and transfer from
available surplus funds into the Redemption Fund, as an advance
recoverable upon sale or redemption of the property, the amount
of any future delinquent unpaid assessment installments on such
property pending redemption.
SECTION 18. Reserve Fund. Upon receipt of the pro-
ceeds from the sale of the Bonds, the Treasurer shall forthwith
establish the Reserve Fund, which shall be designated by the name
and/or number of the assessment district proceedings. The moneys
in the Reserve Fund shall constitute a trust fund for the benefit
of owners of the Bonds and shall be administered by the Issuer in
accordance with and pursuant to the provisions of Part 16 of the
Act; provided, that proceeds from redemption or sale of the prop-
erties with respect to which payment of delinquent assessments
and interest thereon was paid from the Reserve Fund, shall be
credited to the Reserve Fund; and provided, further, tha~ for the
purposes of providing for reduction of the amount of money in the
Reserve Fund during the term of the Bonds pursuant to Section
8887 of the Act, aJl proceeds from investment of moneys in the
Reserve Fund shall be credited upon the assessments. In the
event that the crediting of any portion of such proceeds upon
assessments not theretofore paid in full in cash would result in
moneys in the Redemption Fund remaining therein for a period of
more than twelve (12) months, then any portion of such proceeds
which would otherwise remain in the Redemption Fund for a period
of more than twelve (12) months shall be used to call Bonds prior
to their maturity date on the earliest call date next succeeding
the deposit thereof in the Redemption Fund.
1 0
SECTION 19. Covenant to Foreclose. The Issuer hereby
covenants with and for the benefit of the owners of the Bonds
that it will order, and cause to be commenced within 150 days
following the date of delinquency, and thereafter diligently pros-
ecuted, an action in th,~, s~Jperior court to foreclose the lien of
any assessment or installm~,nt thereof not paid when due, pursuant
to and as provided in S~'c~ ions 8830 through 8835, inclusive, of
the Act.
SECTION 20. Investment of Funds. Moneys in the Im-
provement Fund, }~edemption Fund, and the Reserve Fund shakl, when-
ever practicable, be invested in legal investments for the Issuer
under applicable law for the moneys held pursuant to this resolu-
tion at the time wh~n any of such moneys are to be i~]vested there-
in. Any ~ncome th~refrom or interest thereon shall ac~-~rue to and
be deposited in the fund from which said moneys were invested,
except as otherwise provided in Section 24 hereof.
SECTION 21. No Arbitrage. The Issuer shall not take,
nor permit nor suffer to be taken by the T~easurer or otherwise,
any action with respect to the Gross Proceeds of the bonds 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 Bonds would have caused the Bonds to be "arbi-
trage bonds" within the meaning of Section 148 of the Code and
Regulations promulgated thereunder.
SECTION 22. Certificate as to Non-Arbitrage. On the
basis of the facts, estimates and c~rcumstances now in existence
and in existence on the date of issue of the Bonds, as determined
by the Treasurer, the Treasure~ ~s authorized and directed to
certify that it is not expected that the proceeds of said issue
will be used in ~ manner ~hal w,~uld cause such obligations to be
arbitrage bonds. Such c~, t~cation shall be delivered to the
purchaser of the Bonds at the time of delivery of and payment for
the Bonds.
SECTION 23. Yield Computations for Variable Rate Obli-
gations. For the purpose of Section 24 hereof, the yield on a
Nonpurpose Obligation that consists of variable rate Investment
Property shall be determined as of the date the Nonpurpos~ Obliga-
tion is acquired and as of the first day of each Bond Year by
assuming that the rate of interest will be weighted average rate
of interest for such Investment Property during the preceding
one-year period (or portion thereof in which the Nonpurpose Obli-
gat}on was outstanding). With respect to a Nonpurpose Obligation
purchased on its date of issue, the Yield for the first Bond Year
shall be determined by assuming that the rate of interest will be
the initial rate of interest for such Nonpurpose Obligation as
determined under the prescribed formula on such date of issue
(w~thout regard to any fixed rate initially applicable to such
Nonpurpose Obligation).
1 1
SECTION 24. Rebate of Excess Investment Earnings to
United States.
(a) Creation of Accounts. There is hereby
created, to be held by the Treasurer as separate
accounts distinct from all other funds and accounts
held by the Treasurer under this Resolution, the Invest-
meDt Earnings Account and the Excess Investment Earn-
ings Account. All interest earnings and profits on
amounts in all funds and accounts established under
this Resolution, other than interest earnings on the
Redemption Fund and any other funds referenced in sub-
section (c)(5) of this Section 24 if such earnings in
any Bond Year are less than $100,000, shall, upon re-
ceipt by the Treasurer, be deposited in the Investment
Earnings Account. In addition, all interest earnings
and profits on Gross Proceeds in funds held by the
Issuer shall, upon receipt, be paid to the Treasurer
for deposit in the Investment Earnings Account. Annual-
ly, on the last day of each Bond Year or on the preced-
ing business day in the event that such last day is not
a business day, the Treasurer shall transfer from the
Investment Earnings Account to the Excess Investment
Earnings Account for purposes of ultimate rebate to the
United States an amount equal to Excess Investment Earn-
ings, alJL as more particularly described in this Sec-
tion 24. Following the transfer referenced in the pre-
ced~ir~g sentence, the Treasurer shall transfer all
amour~ts remaining in the Investment Earnings Account to
the Redemption Fund to be used for the payment of Debt
Service on the Bonds on the next interest payment date
and for such purpose. Debt Service due from the Issuer
on such date sha~l be credited by an amount equal to
the amount so transferred.
(b) Definition of Excess Investment Earnings.
The Issuer shall calculate Excess Investment Earnings
in accordance with this subsection (b) and shall assure
payment of an amount equal to Excess Investment Earn-
ings to the United States in accordance with subsection
(c). The term "Excess Investment Earnings" means an
amount equal to the sum of:
(i) the excess of
(A) the aggregate amount earned from
the .date of delivery of the Bonds on all Nonpur-
pose Obligations in which Gross Proceeds of the
Bonds are invested (other than amounts attribu-
table to an excess described in this paragraph
(i))~. over
(B) the amount that would have been
earned if the yield on such Nonpurpose Obligations
1 2
(other than amounts attributable to an excess des-
cribed in this paragraph (i)) had been equal to
the yield on the Bonds.
plus (ii) any income attributable to the excess
described in paragraph (i).
(c) Calculation of Excess Investment Earnings.
Prior to the last day of the first Bond Year, the
Issuer shall cause to be calculated, and shall provide
written notice to the Treasurer of, the Excess Invest-
meDt Earnings referenced in paragraph (i) of subsection
(a). Thereafter, prior to the last day of each Bond
Year and on the date of the retirement of the Bonds,
the Issuer shall calculate, and shall provide written
notice to the Treasurer of, the amount of Excess Invest-
ment Earnings referenced in paragraphs (i) and (ii) of
subsection (a). Said calculations shall be made or
cause to be made by the Issuer in accordance with the
following:
(1) Except as provided in (2), in determin-
ing the amount described in paragraph (i)(A) of
subsection (a), the aggregate amount earned on
Nonpurpose Obligations shall include (i) all in-
come realized under federal income tax accounting
principles (whether or not the person earning such
income is subject to federal income tax) with
respect to such Nonpurpose Obligations and with
respect to the reinvestment of investment receipts
from such Nonpurpose Obligations (without regard
to the transaction costs incurred in acquiring,
carrying, selling or redeeming such Nonpurpose
Obligations), including, but not limited to, gain
or loss realized on the disposition of such Nonpur-
pose Obligations (without regard to when such
gains are taken into account under Section 453 of
the Code relating to taxable year of inclusion of
gross income), and income under Section 1272 of
the Code (relating to original issue discount) and
(ii) any unrealized gain or loss as of the date of
retirement of the Bonds in the event that any Non-
purpose Obligation is retained after such date.
(2) In determining the amount described in
paragraph (i) of subsection (a), Investment Proper-
ty shall be treated as acquired for its fair mar-
ket value at the time it becomes a Nonpurpose Obli-
gation, so that gain or loss on the disposition of
such Investment Property shall be computed with
reference to such fair market value as its ad-
justed basis.
1 3
(3) In determining the amount described in
paragraph (i)(B) of subsection (b), the yield on
the Bonds shall be determined based on the actual
yield of the Bonds during the period between the
date of the Bonds and the date the computation is
made (with adjustments for discount or premium).
(4) In determining the amount described in
paragraph (ii) of subsection (b), all ir~come attri-
butable to the excess described in paragraph (i)
of subsection (b) must be taken into account,
whether or not that income exceeds the yield on
the Bonds, a;~d no amount may be treated as "nega-
tive arbitrage".
(5) In determining the amount described in
subsection (b), there shall be excluded any amount
earned on any fund or account which is used primar-
ily to achieve a proper matching of revenues and
debt service within each Bond Year and which is
depleted at least once a year except for a reason-
able carryover amount not in excess of the greater
of one year's earnings on such fund or account or
one-twelfth of annual Debt Service as well as
amounts earned on said earnings if the gross earn-
ings on all such funds and accounts for the Borld
year is less than $100,000.
(d) Payments to United States. The Issuer shaJl
direct the Treasurer to pay from the Excess Investment
Earnings Account an amount equal to Excess Investment
Earnings to the United States in installments with the
first payment to be made not later than thirty (30)
days after the end of the fifth Bond Year and with sub-
sequent payments to be made not later than five (5)
years after the preceding payment was due. The Issuer
shall assure that each installment is in an amount
equal to at least 90 percent of tl~e Excess Investment
Earnings with respect to the Bonds as of the close of
the computation period. Not later than thi. rty (30)
days after the retirement of the Bonds, the Issuer
shall pay 100 percent of the theretofore unpaid Excess
Investment Earnings of the Bonds. In the event that
there are any amounts remaining in the Excess Invest-
ment Earnings Account following the payment required by
the preceding sentence, the said amounts may be used
for any lawful purpose of the Issuer. The Issuer shall
remit payments to the United States at the address pre-
scribed by the Regulations as the same may be from time
to time in effect with such reports and statements as
may be prescribed by such regulations. In the event
that, for any reason, amounts in the Excess Investment
Earnings Account are insufficient to make the payments
to the United States which are required by this subsec-
1 4
tion (di~, the Issuer shall assure that such payments
are made to the United States, on a timely basis, from
any funds lawfully available therefor.
(e) Further Obligations of Issuer. The Issuer
shall assure that Excess Investment Earnings are not
paid or disbursed except as required in this Section 24.
To that end the Issuer shall assure that investment
transactions are on an arm's length basis. In the
event that Nonpurpose Obligations consist of certifi-
cates of deposit or investment contracts, investment in
such Nonpurpose Obligations shall be made in accordance
with the procedures described in applicable Regulations
as from 'lime to time in effect.
(f) Maintenance of Records. The Issuer shall
keep, and retain for a period of six (6) years follow-
ing the retirement of the Bonds, records of the determi-
nations made pursuant to this Section 24.
(g) Independent Consultants. In order to provide
for the administration of Section 23 hereof and this
Section 24, the Issuer and the Treasurer may provide
for the employment of independent attorneys, accoun-
tants and consultants compensated on such reasonable
basis as the Issuer or the Treasurer may deem appropri-
ate.
SECTION 25. No Federal Guarantee. The Issuer shall
take no action nor permit nor suffer any action to be taken if
the result of the same would cause the Bonds to be a federally
guaranteed obligation within the meaning of Section 149(b) of the
Code. Any section reference in this Resolution to the Code shall
be deemed to be and shall refer to any section of similar import
enacted in lieu or in amendment of such section or contained in
any internal revenue code enacted in lieu of the Internal Revenue
Code of 1954.
SECTION 26. Amendment. Without the consent of the
Bondowners, the Issuer hereafter may amend this Reso],ution to
add, modify or delete provisions if the same is necessary or
desirable, in the opinion of Bond Counsel, to assure the exemp-
tion of interest on the Bonds from Federal income taxation, pro-
vided that the security interest of the bondholders is not
affected thereby.
SECTION 27. Authority of Treasurer. All actions man-
dated by this Resolution to be performed by the Treasurer may be
performed by the designee of thereof or such other official of
the Issuer or independent contractor, contractor or trustee duly
authorized by the City Council of the Issuer to perform such
action or actions in furtherance of all or a specific portion of
the requirements hereof.
i 5
SECTION 28. Certified Copies. The City Clerk shall
furnish a certified copy of this Resolution to the Treasurer, to
the Agent and to the Auditor of the County of Kern.
tions.
SECTION 29. Private Activity and Private Loan Prohibi-
(a) Priva__te Activity Prohibition. The Issuer
shall assure that (i) not in excess of ten percent
(10%) of the Net Proceeds of the Bonds are used for a
Private Business Use if, in addition, the payment of
more than ten percent (10%} of the principal or ten
percent (10%) of the interest due on the Bonds during
the term thereof is, under the terms of the Bonds or
any underlying arrangement, directly or indirectly,
secured by any interest in property used or to be used
for a Private Business Use or in payments in respect of
property used or to be used for a Private Business Use
or is to be derived from payments, whether or not to
the Issuer, in respect of property or borrowed money
used or to be used for a Private Business Use; and (ii)
and that, in the event that both (A) in excess of five
percent ~'5%) of the Net Proceeds of the Bonds are used
for a Private Business Use, and (B) an amount in excess
of five ]Dercent (5%) of the principal or five percent
(5%) of the interest due on the Bonds during the term
thereof is, under the terms of the bonds or any underly-
ing arrangement, directly or indirectly, secured by any
interest in property used or to be used for said Pri-
vate Business Use or in payments in respect of property
used or to be used for said Private Business Use or is
to be derived from payments, whether or not to the
/ssuer, in respect of property or borrowed money used
or to be used for said Private Business Use, then sa~d
excess over said five percent (5%) of Net Proceeds of
the Bonds used for a Private Business Use shall be used
for a Private Business Use related to the governmental
use of the Project.
(b) Private Loan Prohibition. The ]issuer shall
assure that not in excess of the lesser of five percent
(5%) of the Net Proceeds of the Bonds are used, direct-
ly or indirectly, to make or finance loans (other than
loans constituting Nonpurpose Investments or assess-
ments) to persons other than governmental units.
(c) Disbursement Statement. Upon each disburse-
ment of Net Proceeds of the ~-onds deposited in the
Improvement Fund, the Treasurer shall prepare and exe-
cute a statement setting forth the portion, if any, of
the Net Proceeds of the Bonds to be used for a Private
Business Use or to make or finance a private loan
(other than a loan constituting a Nonpurpose Investment
or an assessment) and certifying that there has been
1 6
compliance with subsections (a) and (b) above, Such
statements shall be maintained as a part of the perma-
nent business records of the Issuer pertaining to the
Bonds.
I HEREBY CERTIFY that the foregoing Resolution was
passed and adopted by the Council of the City of Bakersfield at a
regular meeting thereof held on Auqust ~ 1987 , by the
following roll call vote:
¥~ COUNC~I~y' i~i~ C~LDS C~Rt '
NOE~ CO; ;',;~':LI,~E~,~! ~ F,,3
Clerk of the Council of the
City of Bakersfield
APPROVED __ A~gus% 12, ~9'87
MAYOR of the City of Ba'~ersfield
TORNEY of the City of
Bakersfield
1 7
EXHIBIT "A"
CITY OF BAKERSFIELD
ASSESSMENT DISTRICT NO. 87-2
Maturity
Due 9/2
Principal
Amount
Interest
Rate
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
$ 101,000
110,000
115,000
125,000
130,000
140,000
150,000
155,000
170,000
180,000
195,000
210,000
225,000
245,000
260,000
5 00%
5 50%
5 75%
6 00%
6 25%
6 50%
6 75%
7 00%
7 25%
7 50%
7 70%
7 80%
7 90%
7 90%
7 90%
EXHIBIT "A"
MODIFIED
ENG INEEIt' S REPORT
EXHIBIT 'a'
CITY OF BAKERSFIELD ASSESSNENT DISTRICT NO. 87-2 - ACQUISITION OF GATEWAY INDUSTRIAL PARK
PUBLIC IHPROVE~ENTS (TENTATIVE PARCEL HAP MO. 7744)
Assessment HumbeF
Assessor*s
· Psrcel'Humbe~
ssessment Number 1
?N 167-010-08-00-3
ASSESSNENT'ROLL
Confirmed
Ovuer Preliminary to
Na~e/Address Assessment Assessment
Tenneco Realty Development Corp.
c/o Gerald R. Jones, Tax Dept.
P.O. Box 9380
Bakersfield CA 93389
$2,823,000.00
$2,511,000.00
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
CITY OF BAKERSFIELD
ASSESSMENT DISTRICT NO. 87-2
INTEREST RATE MATURITY DATE
ORIGINAL ISSUE DATE CUSIP
REGISTERED OWNER:
PRINCIPAL SUM:
DOLLARS
Under and by virtue of the Improvement Bond Act of
1915, Division 10 of the Streets and Highways Code (the "Act"),
the CITY OF BAKERSFIELD (the "City"), State of California, will
on the maturity date specified above out of the redemption fund
for the payment of the bonds issued upon the assessments made for
the acquisitions, work and improvements more fully described in
Resolution of Intention No. 1026, passed by the City Council of
the City of Bakersfield on the 6th day of May, 1987, pay to the
registered owner hereof, or registered assigns, on the maturity
date stated above, the principal sum shown hereon in lawful money
of the United States of America and in like manner pay interest
from the interest ]payment date next preceding the date on which
this Bond is authenticated, unless this Bond is authentigated and
registered as of an interest payment date, in which event it
shall bear interest from such interest payment date, or unless
this Bond is authenticated and registered prior to March 2, 1988.
In which event it shall bear interest from its date until payment
of such principal sum shall have been discharged, at the rate per
annum above. Interest is payable commencing on March 2, 1988,
and semiannually thereafter on March 2 and September 2 of each
year to maturity. Both the principal hereof and redemption pre-
mium hereon are payable at the office of the Finance Director, or
its successor, as Transfer Agent, Registrar and Paying Agent (the
"Agent") in Bakersfield, California, and the interest hereon is
payable by check .or draft mailed to the owner hereof at the
owner's address as it appears on the registration books of the
Agent, or at such address as may have been filed with the Agent
Exhibit "C"
C 1
for that purpose, as of the fifteenth day immediately preceding
each interest payment date.
This Bond is one issued by the City under the Resolu-
tion of Issuance in the aggregate principal amount of TWO MILLION
FIVE HUNDRED ELEVEN THOUSAND DOLLARS ($2,511,000) for the purpose
of providing means for paying for the improvements and acquisi-
tions described in said proceedings, and is secured by the moneys
in said redemption fund and by the unpaid portion of said assess-
ments made for the payment of said improvements and acquisitions,
and, including principal and interest, is payable exclusively out
of said fund.
This Bond is transferable by the registered owner here-
of, in person or by the owner's attorney duly authorized in writ-
ing at said office of the Agent, subject to the terms and condi-
tions provided in the Resolution of Issuance, including the pay-
ment of certain charges, if any, upon surrender and cancel]ation
of this Bond. Upon such transfer, a new registered Bond or
Bol]ds, of any authorized denomi~.ation or denominations, of the
s~me matu~ |ty, I~or the same aggregate principal amount, will be
issued to the transferee in exchange therefor.
Bonds shall be registered only in the
vidual (including joint owners), a corporation,
a trust.
name of an indi-
a partnership or
Neither the City nor the Agent shall be required to
make such exchange or registration of t~ansfer of Bonds during
the fifteen (15) days immediately preceding any March 2 or Septem-
ber 2.
The City and the Agent may treat the owner hereof as
the absolute owner for all purposes, and the City and the Agent
shall not be affected by any notice to the contrary.
This Bond or any portion of it in the amount of $5,000
or any integral multiple thereof, may be redeemed and paid in
advance of maturity upon the 2nd day of March or September in any
year by giving at ]east 60 days' notice by registered mail to the
registered owner hereof at such owner's address as ~t appears on
the registration books of the Agent and by paying the principal
and accrued interest together with a premium equal to 3 percentum
of the principal.
This Bond will continue to bear interest after maturity
at the rate shown above provided ~t is presented at maturity and
payment thereof is refused upon the sole ground that there are
not sufficient moneys in said redemption fund with which to pay
same. If it is not presented at maturity, interest thereon will
run until maturity.
This Bond shall not be entitled to any benefit under
the Act or the Resolution Determining Unpaid Assessments and Pro-
Exhibit "C"
C - 2
riding for the Issuance of Bonds (the "Resolution of Issuance"),
or become valid or obligatory for any purpose until the certifi-
cate of authentication and registration hereon endorsed shall
have been dated and signed by the Agent.
IN WITNESS WHEREOF, the CITY OF BAKERSFIELD has caused
this Bond to be signed in facsimile by the Finance Director of
said City and by its City Clerk and has caused its corporate seal
to be affixed hereon all as of
CITY OF BAKERSFIELD, CALIFORNIA
CITY CLERK
FINANCE DIRECTOR
(SEAL)
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is a Bond representative of the Bonds described in
the within-mentioned Resolution of Issuance, which has been regis-
tered on
Finance Director of the City of
Bakersfield, Agent
By
Authorized Officer
LEGAL OPINION
I hereby certify that the following is a correct copy
of the signed legal opinion of Richard H. Hatgrove, Attorney at
Law, Bakersfield, California, addressed to the City Council of
Exhibit "C"
C - 3
the City of Bakersfield, and on file in my office, dated the date
of delivery and payment for the Bonds therein described.
City Clerk
RICHARD H. HARGROVE
Attorney at Law
Suite 411
2220 Tulare Street
Fresno, California 93721
City Council
City of Bakersfield
1501 Truxtun Avenue
Bakersfield, CA 93301
City of Bakersfield Improvement Bonds
Assessment District No. 87-2
Members of the City Council:
We have acted as Bond Counsel in connection with the
issuance by the City of Bakersfield, (the "City") of $2,511,000
aggregate principal amount of Improvement Bonds City of Bakers-
field, Assessment District No. 87-2, (the "Bonds"), dated August
17, 1987, pursuant to the Municipal Improvement Act of 1913 and
the Improvement Bond Act of 1915 relative to certain improvements
in that certain assessment district in the City, which proceed-
ings were initiated under Resolution of Intention No. 1026 duly
adopted by the City Council on May 6, 1987, and relative to the
issuance of the Bonds in said proceedings, which Bonds were
issued pursuant to the Charter, the Municipal Code, and the Reso-
lution of Issuance duly adopted by the City Council of the City
on August 12, 1987, (the "Resolution").
In such connection, we have examined the Resolutions
and certificates of the City and others as to certain factual
matters, and such other documents and matters deemed necessary by
us to render the opinions set forth herein, although in doing so
we have not undertaken to verify independently the accuracy of
the factual matters represented, warranted or certified therein,
and we have assumed the genuineness of all signatures thereto.
The opinions expressed herein are based on an analysis
of existing laws, regulations, rulings and court decisions and
cover certain matters not directly addressed by such authorities.
Such opinions may be affected by actions taken or events occurr-
ing after the date hereof, and we have neither undertaken to
determine whether any such actions or events are taken or occur
nor to inform any person thereof. Furthermore, we have assumed
compliance with all covenants contained in the Resolution of Issu-
Exhibit "C"
C - 4
ance, including (without ].imitation) covenants compliance with
which is necessary to assure that future actions or events will
not cause interest on the Bonds to be included in gross income
for Federal income tax purposes. In addition, we call attention
to the fact that the rights and obligations under the Bonds and
the Resolution of Issuance are subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting credi-
tors' rights, to the application of equitable principles and to
the exercise of judicial discretion in appropriate cases.
Based on and subject to the foregoing, and in reliance
thereon, as of the date hereof, we are of the following opinions:
1. The City has lawful authority for the issuance of
the Bonds, and the Bonds constitute legal, valid and binding obli-
gations of the City payable solely from the revenues to the ex-
tent specified in the Resolution; provided, that we express no
opinion upon the plans, specifications, maps, profiles, drawings
and other engineering features of the proceedings and our opinion
upon the regularity of the proceedings otherwise is based upon
the assumption that all engineering details are correct.
2. The Resolution has been duly and legally adopted
and constitutes the valid, legal and binding obligation of the
City.
3. The Bonds are secured by the moneys in the redemp-
tion fund created pursuant to the Resolution and by the revenues
of the enterprise, and the City is not obligated to pay the prin-
cipal of or interest on the Bonds except from the moneys in said
redemption fund, and neither the City nor any officer thereof Js
otherwise liable for such payment.
4. Interest on the Bonds is excluded from gross income
for Federal income tax purposes under Section 103 of the Internal
Revenue Code of 1986, as amended, and is exempt from California
personal income taxes. Interest on the Bonds is not a specific
preference item for purposes of the Federal individual or corpo-
rate alternative minimum taxes, although we observe that interest
on the Bonds is included in adjusted net book income and.adjusted
current earnings in calculating corporate alternative minimum
taxable income. We express no opinion regarding other Federal
income tax consequences related to the accrual or receipt of in-
terest on the Bonds.
Respectfully submitted,
Richard H. Hatgrove
Exhibit "C"
C - 5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto
the within Bond and all rights thereunder, and hereby irrevocably
constitutes and appoints
attorney
to transfer the within Bond on the books kept for registration
hereof with full power of substitution in the premises.
Dated:
NOTICE: The signature to this
assignment must correspond with
the name as it appears on the face
of the within Bond in every partic-
ular, without alteration or en-
largement or any change whatso-
ever.
Exhibit "C"
C - 6
STONE &YOUNGBERG
MEMBERS: PACIFIC STOCK EXCHANGE
August 12, 1987
The Honorable Members of the City Council
of the City of BaKersfield
650 Merchant Street
Bakersfield, CA 95688
Re:
Offer to Purchase Bonds in the Sum of $2,511,000 par value
City of Bakersfield - Assessment District No. 87-2
(Kern County, California)
Honorable Members of the Council:
Stone & Youngberg ("the Underwriter") hereby offers to purchase all of
the referenced bonds subject to the following conditions:
1. The bonds shall be issued pursuant to the Municipal Improvement
Act of 1913 and the Improvement Bond Act of 1915
The par value of the bonds shall be in the amount of $2,511,000,
and the bonds shall mature serially over a period of 15 years.
3. The bonds shall be issued in denominations of $5,000, or in
integral multiples thereof as may be requested by the Underwriter.
All bonds shall be issued in registered form in accordance with
instructions to be determined by the Underwriter prior to
closing. The City shall retain Bank of America N.T. & S.A., Los
Angeles, California, as Paying Agent, Registrar and Transfer Agent.
The bonds shall be dated August 17, 1987 and be delivered within
30 days thereafter.
The bonds shall mature in each of the years and in the amounts and
at the rates of interest set forth on the attached maturity
schedule marked Exhibit A.
The City shall establish from the proceeds of the bonds a reserve
fund equal to seven percent <7%) of the principal amount of the
bonds. The reserve fund shall be administered pursuant to the
Resolution of Issuance for the bonds, as well as pursuant to
applicable federal laws and regulations. The reserve fund balance
shall be shown as a separately stated item in the City's annual
financial report.
ONE CALIFORNIA STREET ' SAN FRANCISCO, CAL[FORNIA 94111 · (415) 981-1314
The Honorable Members of the City Council August 12, 1987
of the Clty of BaKersfield Page 2
9.
10.
11.
12.
The City shall covenant to commence judicial foreclosure of
delinquent assessments within 150 days after any delinquency.
The City shall award the sale of the bonds to us at the City Council
meeting on August 12, 1987.
The purchase price shall be 98.3 percent of par, plus accrued
interest, if applicable, and shall be paid in full upon delivery to
us of the Bonds.
The City will deliver to the Underwriter at closing in forms suitable
to the Underwriter:
(a)
The unqualified approving legal opinion of Richard H. Hargrove,
Attorney At Law, Fresno, California, Bond Counsel. The legal
opinion shall be printed on the bonds at no charge to us.
(b) A no-litigation certificate of the City.
The obligations of the Underwriter to accept delivery of and pay for
the bonds on tile Closing Date shall be subject, at the option of the
Underwriter to the following additional conditions:
(a)
At the Closing Date, the Resolution and any other applicable
agreements shall be in full force and effect, and shall not have
been amended, modified or supplemented except as may have been
agreed in writing by the Underwriter, and there shall have been
taken in connection therewith, with the issuance of the bonds
and with the transactions contemplated thereby and by this
Purchase Contract, all such actions as, in the opinion of Bond
Counsel, shall be necessary and appropriate~
(b)
Between t,qe date hereof and the Closing Date, the market price
or marketability of the bonds at the initial offering prices set
forth in the Offering Memorandum shall not have been materially
adversely affected, in the judgment of the Underwriter
(evidenced by a written notice to the City terminating the
obligation of the Underwriter to accept delivery of and pay for
the Bonds) by reason of any of the following:
(1)
Legislation enacted (or resolution passed) by the Congress
of tqe United States of America or a decision rendered by a
court established under Article III of the Constitution of
the United States of America or by the Tax Court of the
United States of America, or an order, ruling, regulation
(final, temporary or proposed), press release or other form
of notice issued or made by or on behalf of the Treasury
Department or the Internal Revenue Service of the United
States of America, with the purpose or effect, directly or
indirectly, of imposing federal income taxation upon the
interest as would be received by the owners of the bonds;
The Honorable Members of' the City Council August 12, 1987
of the City of Bakersfield Page 3
KS:crq
(2726A)
(2)
Legislation enacted (or resolution passed) by the Congress
of the United States of America, or an order, decree or
injunction issued by any court of competent jurisdiction,
or an order, ruling, regulation (final, temporary or
proposed), press release or other form of notice issued or
made by or on behalf of the Securities and Exchange
Commission, or any other governmental agency having
jurisdiction of the subject matter, to the effect that
obligations of the general character of the bonds, or the
bonds, including any or all underlying arrangements, are
not exempt from registration under or other requirements of
the Securities Act of 1933, as amended, or that the
Resolution is not exempt from qualification under or other
requirements of the Trust Indenture Act of 1939, as
amended, or that the issuance, offering or sale of
obligations of the general character of the bonds, or of
the bonds, including any or all underwriting arrangements,
as contemplated hereby or by the Offering Memorandum or
other'wise is or would be in violation of the federal
securities laws as amended and then in effect;
(3)
The withdrawal or downgrading of any rating of any
securities of the City by a national municipal bond rating
agency;
(4)
Any amendment to the Federal or California Constitution or
action by any Federal or California court, legislative
body, regulatory body or other authority materially
adversely affecting the tax status of the City, its
property, income, securities (or interest thereon),
validity or enforceability ,gf the assessments or the
ability of the City to construct or acquire the
improvements as contemplated by the Resolution and the
Offering Memorandum~ or
(5)
Any event occurring, or information becoming known which,
in the judgment of the Underwriter makes untrue or
misleading in any material respect any statement or
information contained in the Offering Memorandum concerning
the City, the Improvement Project, the major landowner or
the property assessed.
(c) Parcel Map 7744 shall have been approved by the City Council.
Respectfully submitted,
STONE & YOUNGBERG
Kimberly St.~nsbury
The Honorable Members of the City Council August 12, 1987
of the City of Bakersfield Page 4
EXHIBIT A
$2,511,000
CITY OF BAKERSFIELD IMPROVEMENT BONDS
ASSESSMENT DISTRICT NO. 87-2
(KERN COUNTY, CALIFORNIA)
Maturity Date
(September 2)
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Principal
Amount
$101 000.00
110 000.00
115 000.00
125 000.00
130 000.00
140 000.00
150 000.00
155000.00
170 000.00
180 000.00
195 000.00
210 000.00
225 000.00
245 000.00
260 000.00
Interest
Rate
5.00%
5.50%
5.75%
6.00%
6.25%
6.50%
6.75%
7.00%
7.25%
7.50%
7.70%
7.80%
7.90%
7.90%
7.90%
The net interest cost of the bonds based on the above maturity schedule and a
discount of 1.7% is 7.673%. The average interest rate is 7.490%.
(2726A)