HomeMy WebLinkAboutRES NO 100-76RESOLUTION NO. 100-76
RESOLUTION OF THE COUNCIL OF THE CITY
OF BAKERSFIELD, CALIFORNIA, MAKING A
COVENANT FOR THE BENEFIT OF THE PUR-
CHASERS OF $15,500,000 CITY OF BAKERS-
FIELD 1976 WATER BONDS REGARDING THE
PROVISIONS OF SECTION 103(d) OF THE
INTERNAL REVENUE CODE OF 1954, AS
AMENDED, AND APPROVING A DECLARATION
OF TRUST IN RELATION THERETO
WHEREAS, the Council of the City of Bakersfield (herein
"Council") has taken the following actions in relation to the
issuance and sale of $15,500,000 City of Bakersfield 1976 Water
Bonds (herein the "Bonds"), to-wit:
1. Adopted ResOlution No. 89-76 on November 15,
1976 providing for the issuance and sale of the Bonds;
2. Adopted Resolution No. 94-76 on December 7,
1976 awarding the Bonds to Security Pacific National
Bank;
and
WHEREAS, Section 103(d) of the Internal Revenue Code of
1954, as amended, provides that any arbitrage bond shall be
treated as an obligation not defined in Section 103(a)(1) of
said Code; and
WHEREAS, this Council desires to make a covenant with the
purchasers of the Bonds that the Bonds will not be arbitrage
bonds as defined in Section 103(d) of the Internal Revenue Code
of 1954, as amended; and
WHEREAS, a further assurance that the Bonds will not be
determined to be arbitrage bonds by the Treasury Department of
the united states of America, this Council desires to enter into
a trust agreement with United California Bank relating to the
proceeds directly derived from the sale of the Bonds and indirect
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proceeds which may be received by the City from the sale of the
Kern Island Water Company, a portion of the assets to be acquired
from bond proceeds;
NOW, THEREFORE, the Council of the City of Bakersfield DOES
HEREBY RESOLVE, DETERMINE AND ORDER as follows:
SECTION 1. The City covenants with the holders of all Bonds
at any time outstanding that it will make no use of the proceeds
of any of the Bonds which will cause any.of the Bonds to be
"arbitrage bonds" subject to federal income taxation by reason
of Section 103(d) of the Internal Revenue Code of 1954, as
amended. To that end, so long as any of the Bonds are outstanding,
the City and the Trustee hereinafter referred to, with respect to
the proceeds of the Bonds, will comply with all requirements of
said Section 103(d) and all regulations of the United States
Department of the Treasury issued thereunder, to the extent that
such requirements are, at theltime, applicable and in effect.
SECTION 2. The Director of Finance is hereby authorized
to furnish to Security Pacific National Bank, at~the~time of the
delivery of the bonds, an arbitrage certificate certifying it
is not expected that the proceeds of the Bonds will be used in a
manner that will cause the Bonds to be arbitrage bonds.
SECTION 3. The Council hereby authorizes the Director of
Finance to enter into a trust agreement with United Calfiornia
Bank (herein the "Trustee") whereby the proceeds of the sale of
the Bonds, together with the receipt of funds from the sale of
Kern Island Water Company and any other "indirect proceeds" (as
such term is defined in the regulations of the Treasury promulgated
to carry out the purposes of said Section 103), will be deposited
Wi~h"~h~ ~r~stee 'in a fund't6 ~be~creat~a and held by' the' Trustee-" -
known as the "City of Bakersfield 1976 Water Bonds, Acquisition
Fund", created by this Council in its .Resolution No. 89-76, to
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be disbursed by the Trustee on order of the Director of Finance to
carry out the purposes set forth in the bond proposition approved
by the voters for the issuance of the Bonds. Upon completion of
said purposes, the balance of the money in said Acquisition Fund
shall .be transferred to the City of Bakersfield 1976 Water Bonds,
Interest and Redemption Fund.
ADOPTED, SIGNED AND APPROVED this 13th day of December, 1976.
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City Bakersfield -
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STATE OF CALIFORNIA )
) ss.
COUNTY OF KERN )
I, H. E. BERGEN, City Clerk of the City of Bakersfield,
California, do hereby certify that the foregoing resolution was
duly adopted by the City Council of said City at a regular meeting
of said City Council held on the 13th day of December,_1976, and
that it was so adopted by the following vote:
AYES: COUNCILMEN: Barton, Bleecker, Christensen, Medders,
Rogers, Sceales, Strong
NOES: COUNCILMEN: None
ABSENT: COUNCILMEN: None
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STATE OF CALIFORNIA )
)
COUNTY OF KERN )
ss.
I, H. E. BERGEN, City Clerk of the City of Bakersfield,
California, do hereby certify that the above and foregoing is
a full, true and correct copy of RESOLUTION NO. 100-76 , Of
said City Council, and that the same has not been amended or
repealed.
DATED: December 16 , 1976.
Ci~ler~k~~ersfield