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Home My WebLink AboutRES NO 95-82RESOLUTION NO. .95-82 RESOLUTION OF THE CITY COUNCIL APPROVING BOND PURCHASE AGREEMENT FOR SALE OF BONDS, AND PROVIDING FOR THE ESTABLISHMENT OF A REDEMPTION FUND FOR THE PAYMENT OF SAID BONDS. WHEREAS, the CITY COUNCIL of the CITY OF BAKERSFIELD, CALIFORNIA, has hereto- fore instituted and conducted proceedings under the terms and provisions of the "Municipal Improvement Act of 191Y', being Division 12 of the Streets and Highways Code of the State of California, for the construction of certain public works of improvement, together'with appurtenances and appurtenant work, in a special assessment district known and designated as ASSESSMENT DISTRICT NO. 81-1 (hereinafter referred to as the "Assessment District"); and, WHEREAS,-in the Resolution of Intention it was determined and declared that bonds should issue under the provisions of the "Improvement Bond Act of 1915", being Division 10 of the Streets and Highways Code of the State of California; and, WHEREAS, there has now been received, in proper form, a Bond Purchase Agreement for. the purchase of said bonds to issue under said proceedings, and said proposal received is considered to be an Agreement that would best serve the interests of owners of land included within the Assessment District and should be accepted and approved; and, WHEREAS, there has now been received, in proper form, a preliminary Official Statement, to be used in conjunction with the sale of bonds contemplated here- under for these proceedings. NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: SECTION 1. That the above recitals are all true and correct. SECTION 2. That the Bond Purc6ase Agreement received from MILLER & SCHROEDER MUNICIPALS, INC. for the purchase of improvement bonds representing unpaid assess- ments in said Assessment District is hereby accepted and approved, and execution is hereby authorized by the Mayor and City Clerk. SECTION 3. That said sale is subject to all the terms and conditions as set forth in the Bond Purchase Agreement. SECTION 4. That the Treasurer be, and hereby is, directed to have the bonds printed immediately upon the expiration of the cash collection period, and said Treasurer shall then have said bonds signed and delivered to said bidder upon receipt of the amount of monies due pursuant to said bid and upon the performance of all the conditions as set forth in the written offer. CONTRACT NO. 82-148 $949,0O0 CI'TY OF BAKERSFIELD, CALIFORNIA IMPROVEMENT BONDS ASSESSMENT DISTRICT NO. 81-1 ~'6RCHASE CONTRACT AugUSt 19, 1982 Honorable City Council City of Bakersfield Bakersfield, California Dear Council~embers: Miller & Schroeder Municipals, Inc. (the "Manager"), acting not as a fiduciary or agent for you, but on behalf of itself and on behalf of certain other underwriters (the Manager and such other underwriters being herein collectively called the "Underwriters~'), offers to enter into this-Purchase Contract with 'the City of Bakersfield, California (the "City"), which upon acceptance will be binding upon the City and upon the Underwriters. This offer is made subject to the City's acceptance by the execution of this Purchase Contract and its delivery to .the Manager at or before 12:00 p.m., local time, on August 19, 1982, ~nd, if not so accepted, will be subject to withdrawal by the Manager upon notice delivered to the City at any time prior to the acceptance hereof' by the City. 1. Purchase, Sale and Delivery of the Bonds. (a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements herein set forth, the Underwriters, jointly and severally, hereby agree to purchase from the City, and the City hereby agrees to sell to the Underwriters, all (but not less than all) of the City of Bakersfield, California, improvement Bonds, Assessment District No. 81-1 (the "Bonds''~ in an aggregate ,# principal amount not to'exceed $949,000, dated as of October 2, 1982, bearing interest (payable on January 2 and July 2 in each year commencing on January 2, 1984) at the rates per annum and maturing on the dates and in the amounts set forth in Exhibit A hereto. The purchase price for the Bonds shall be percent (. .%) of the principal amount thereof plus' accrued interest thereon, if any, calculated on a 360-day year basis, from October 2, 1982, to the Closing Date (hereinafter defined). The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions Honorable City Council City of Bakersfield August 19, 1982 Page 2 of, and shall be'payable and subject to redemption as provided in, Resolution No. adopted by the City on , 1982 (the "ResolutiQn") and the Improvement Bond Act of 1915, constituting Division 10 of the Streets and Highways Code of the State of California (the "Act")° (b) Attached hereto as Exhibit B is a copy of the Preliminary Official Statement of the City, dated , 1982, relating to the Bonds, which, together with the cover page and all appendices thereto, and together with such other changes as may be made thereto, with the approval of the Manager, from time to time prior to the Closing Date (including any supplements thereto), is herein called the "Official Statement." The City hereby authorizes the Underwriters to use and distribute, in connection with the offer and sale of the Bonds, the Preliminary Official Statement, the Official Statement, the Resolution and other documents or contracts to which the City is a party, this Purchase Contract and all information contained therein, and all other documents, certificates' and statements furnished by the City to the Underwriters in connection with the transactions contemplated by this Purchase Contract. (c) At 10:00 aom., local time, on October 5, 1982, or at such other time or date as shall be agreed upon by the Manager and the City (such time and date being herein referred to as the "Closing Date"), the City will deliver to the Manager', at Jeffries Banknote Company, or at such other location or locations as may be designated by the Manager, in Los Angeles, California, the Bonds in definitive form (all bonds being printed or lithographed on steel engraved borders and having had CUSIP numbers assigned to them), duly executed by the City in the manner provided for in the Resolution and the Act, and the documents herein mentioned; and the Manager will accept such delivery and pay the purchase price of the Bonds as set forth in paragraph (a) of this section by certified or official bank check payable in Los Angeles Clearing House funds (such delivery and payment being herein referred to as the "Closing"). The Bonds shall be made available to the Manager not later than 24 hours before the Closing Date for purposes of inspection and packaging. The Bonds shall be in coupon form or in fully registered form, or in a combination of both such forms, as may be directed by the Manager. If the Underwriters fail (other than for a reason permitted hereunder) to accept and pay for the Bonds upon tender thereof by the City as herein provided, the Underwriters shall pay the City one-half of one percent (1/2 of 1%) of the 279SP/2254/01 Honorable City CoUncil City of Bakersfield August 19, 1982 Page'3 aggregate principal amount of the Bonds ($ ) as and for full liquidated damages for such failure and for any and all defaults hereunder on the part of the Underwriters, and such remedy shall be the sole remedy of the City and shall constitute a full release and discharge of all claims and damages for such failure and for any and all such defaults. 2. Representations, Warranties and Agreements of the City. The City represents, warrants to and agrees with the Underwriters that: (a) The City is duly organized and validly existing as a municipal corporation under the Constitution and laws of the State of California and has, and at the Closing Date will have, full legal right, power and authority (i) to enter into this Purchase Contract, (ii) to issue, sell and deliver the Bonds to the Underwriters pursuant to the Resolution as provided herein, and (iii) to carry out, give effect to and · consummate the transactions contemplated by this Purchase Contract, the Resolution, the Official Statement and any other applicable agreem-.nts; (b) The City has complied, and will at the Closing Date be in compliance, in all respects with the Resolution, the Act, and any other applicable laws and agreements; (c) The City has duly and validly: (i) authorized and approved the execution and delivery of the Bonds, this Purchase Contract, the Official Statement and any other applicable agreements, and (ii) authorized and approved the performance by the City of its obligations contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions contemplated by, each of said documents (assuming due authorization, execution and delivery by the other parties thereto, where necessary), and at the Closing Date the Bonds, the Resolution, this Purchase Contract, and any other applicable agreements will constitute the valid, legal and binding obligations of the City and of the other parties thereto in accordance with their respective terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors' rights in general and to the application of equitable principles if equitable remedies are sought; (d) The City is not, and at the Closing Date will not be, in breach of or default under any law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either thereof, or any applicable court or 2798P/2254/01 Honorable City Council City of Bakersfield August 19, 1982 Page 4 administrative. decree or order or any loan agreement, note, resolution, indenture~ contract, agreement or other-instrument to which the City is a party or is otherwise.subject or bound; the adoption of'the Resolution~ and the execution and delivery of the Bonds, this Purchase Contract, the contract or contracts for the construction of the public improvements which will be financed with the proceeds from the sale of the Bonds,, any other applicable agreements and the other instruments contemplated by any of such documents to whj. ch the City is a party, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States of America, or of any department, division, agency or instrumentality of either therof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound; (e). All approvals, consents, authorizations, elections and orders of or filings or registrations with any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the City of its obligations hereunder and under the Resolution, the Bonds and any other applicable agreements have been obtained and are in full force'and effect; (f) The Bonds, the Resolution and other applicable agreements conform as to form and tenor to the descriptions thereof contained in the Official Statement and the Resolution, and the Bonds, when delivered to and paid for by the Underwriters on the Closing Date as provided herein, will be validky issued and outstanding and entitled to all the benefits and security of the Resolution; (g) The special assessments constituting the security for the Bonds have been duly and lawfully levied under and pursuant to the Municipal Improvement, Act of 1913, constituting Division 12 of the Streets and Highways Code of the State of California, and such assessments constitute valid and legally binding liens on the properties on which they have been levied; (h) There are no outstanding assessment liens against any of the properties within Assessment District No. 81-1 which are senior to the assessment liens referred to in paragraph (g) hereof,' and the City has no present intention of conducting further proceedings leading to the levying of additional assessments against any of the properties within Assessment District No. 81-1. 2798P/2254/01 ' Honorable City Council City of Bakersfield August 19, 1982 Page 5 (i) The Official Statement is and will be, as of the Closing Date, true, correct and complete in all material respects and will not, as of the ClOsing Date, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (j) During the period commencing on the date hereof and ending on the date 90 days following the Closing Date, if any event shall occur as a result of which it may be necessary to supplement the Official Statement in order to make the statements therein~ in light of the circumstances existing at such time, not misleading, the City shall forthwith notify the Manager of any such event of which it has knowledge and, if in the opinion of the Manager such event requires an amendment or supplement to the Official Statement, the City will at its expense amend or supplement the Official Statement in a form and manner jointly approved by the City and the Manager; (k) The Resolution creates a valid pledge of, lien upon and security interest in the unpaid assessments in Assessment District No. 81-1 and the interest thereon and the moneys in all funds and accounts established pursuant to the Resolution, including the investments thereof, subject in all cases to the provisions of the Resolution permitting the application thereof for the purposes ~and on the terms and conditions set forth therein; (1) No action, suit, proceeding, inquiry or investigation, at law or in equity, before or by. any court, regulatory agency, or public board or body is pending, or to the knowledge of the City, threatened, in any way affecting the existence of the City or the titles of its officers to their respective offices or seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds, the-application of the proceeds thereof in accordance with the Resolution, or~ ~le collection or application of assessments pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge therof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Resolution, any other applicable agreements, this Purchase ContraCt, or any action of the City contemplated by any of said documents, or in any way contesting the completeness or accuracy of the Official Statement or the powers of the City or its authority with respect to the Bonds, the Resolution, any other applicable agreements, this Purchase Contract or any action of the City contemplated by any of said documents, or which would adversely affect the exemption of interest paid on the Bonds from Federal income taxation or California personal income taxation, nor to the knowledge of the City, is there any basis therefor; 2798P/2254/01 ' Honorable City Council City of Bakersfield August 19, 1982 Page 6 (m) The City will furnish such information, execute such instruments and take such other action in cooperation with the Manager as the Manager may reasonably request to qualify the Bonds for offer and sale under the "blue sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Manager may designate; (n) Any certificate signed by any official of the City authorized to do so shall be deemed a representation and warranty by the City to the Underwriters as to the statements made therein; and (o) The City will apply the proceeds of the Bonds in accordance with the Resolution and all other applicable documents, and as described in the Official Statement. 3. Conditions to the Obligations of the Underwriters. The obligations of the-Underwriters to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at'the option of the Manager, to the accuracy in all material respects of the representations and warranties on the part of the City contained herein as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the City made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the City of its obligations to be performed hereunder 'at or prior to the Closing Date and 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 to in writing by the Manager, 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 Brown & Nazarek, Bond Counsel for the City, shall be necessary and appropriate; (b) At the Closing Date, the Official Statement shall be in form and substance satisfactory to the Manager; (c) At the Closing Date, no taxes on any of the properties within Assessment District No. 81-1 shall be delinquent, except as specifically approved by the Manager; (d) Between 'the date hereof and the-Closing Date, the market price or marketability, at the initial offering prices set forth in Exhibit A, of the Bonds shall not have been 2798P/2254/01 Honorable City Council City of B~kersfield AuguSt 19, !9S2 Page 7 materially adversely affected, in the judgement of the Manager (evidenced by a written notice to the City terminating the obligation of the Underwriters to accept delivery of and pay for the Bonds), by reason of any of the following: (1) legislation introduced in or enacted by the Congress or recommended to the Congress by the President of the United States, the Department of the Treasury, the internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation has been referred for consideration, 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 of the United States of America or the Internal Revenue Service, with the purpose or effect, directly or indirectly, of imposing Federal income taxation upon such assessments and the interest thereon as would be received by the City under the Resolution or upon such interest as would be received by any holders of the Bonds; (2) legislation introduced in or enacted (or resolution passed) by the Congress 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 arrange- ments, 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 underlying arrangements, as contemplated hereby or by the Official Statement or otherwise is or would be in violation of the Federal securities laws as amended and then in effect; (3) a general suspension of trading in securities on the New York Stock Exchange, or a general banking moratorium declared by Federal, State of New York or State of California officials authorized to do so, or a war or other national calamity; 2798P/2254/01 Honorable City' Council City of Bakersfield August 19, 1982 Page 8 (4) the withdrawal or downgrading of any rating of any securities of the City by a national rating agency; (5) aHy amendment to the Federal or California Constitution or action by any Federal or California court, legislative body~ reguiatory body or other authority materially adversely affecting the tax status of the City, its property, income, securities (or interest thereon), 'the validity or enforceability of the assessments or the ability of the City to acquire and improve the Project as contemplated by the Resolution and the Official Statement; or (6) any event occurring, or information becoming known which, in the judgment of the Manager, makes untrue in any material respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (e) At or prior to the Closing Date, the Manager shall have received 4 counterpart originals or certified copies of the following documents, in each case satisfactory in form and substance to the Manager: (1) The Official Statement, executed on behalf of the City by its Mayor; (2) The Resolution together with a certificate of the City Clerk dated as of the Closing Date, to the effect that it is a true, correct and complete copy of the one duly adopted by the City and that it has not been amended, modified or rescinded (except as may have been agreed to by the Manager) and is in full force and effect as of the Closing Date; (3) An unqualified approving opinion, dated 'the Closing Date and addressed to the City, of Brown & Nazarek, Bond Counsel for the City, in substantially the form set forth in Appendix I to the Official Statement, and an unqualified opinion of such counsel, dated the Closing Date and addressed to the Manager on behalf of the Underwriters, to the effect that such opinion addressed to the City may be relied upon by the Underwriters to the same extent as if such opinion was addressed to them; (4) An opinion, dated the Closing'Date and addressed to the Manager on behalf of the Underwriters, of Brown & Nazarek, Bond Counsel for the City, to the effect that (i) this 2798~/2254/01 Honorable City Council City of Bakersfield August 19, 1982 Page 9 Purchase ContraCt has been duly authorized, executed and delivered by the City, and, assuming due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid 'and binding agreement of the City, enforceable in accordance with its terms, except as such enforceability may be limited by the application of equitable principles if equitable remedies are sought; (ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Resolution is exempt from qualification under the Trust Ihdenture Act of 1939, as amended; (iii) the Bonds and the Resolution conform as to form and tenor to the descriptions thereof contained in the Official Statement, and the statements contained in the Official Statement on the cover and under the captions "Introductory Statement", "The Bonds" "Security For The Bonds", "The Project" and "The Assessment District", insofar as such statements purport to summarize certain provisions of the Municipal Improvement Act of 1913, the Improvement Bond Act of 1915, the Bonds, the Resolution, and other applicable laws and agreements, present a fair and accurate summary of such provisions; and such summaries do not contain any untrue statements of a material fact required tobe stated in 'the OffiCial Stat'ement or~necessary to make the statements made therein, in the light of the circumstances under which they are made, not misleading in any material respect; (iv) the Resolution, and the Bonds constitute legal, valid and binding agreements of the City enforceable in accordance with their terms except as such enforceability may be limited by bankruptcy, insolvency and other 'laws affecting the enforcement of creditors' rights in general and the application of equitable principles if equitable remedies are sought; and (v) the Resolution creates a valid pledge of, lien upon and security interest in the proceeds of the Bonds, the unpaid assessments in Assessment District No. 81-1 and the interest thereon and the moneys in all funds and accounts established pursuant to the Resolution, including the investments thereof, subject in all cases to the provisions of the Resolution permitting the application thereof for the purposes and on the terms and conditions set forth therein; (5) An opinion, dated the ~losing Date and addressed to the Manager on behalf of the Underwriters, of Stradling, Yocca, Carlson & Rauth, a Professional Corporation, Counsel to the Underwriters, to the effect that (i) the Bonds are exempt from the registration requirements of the Securities Act of 1933, as amended, and the Resolution is exempt from qualification under the Trust Indenture Act of 1939, as amended; and (ii) based upon the information made available to them in the course of their participation in the participation in the preparation of the Official Statement as Counsel to the 2798~/2254/01 Honorable City Council City of Bakersfield August 19, 1982 Page'10 Underwriters and without having undertaken to determine · independently or assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement, such Counsel do not believe ~at the Official Statement, as of its date and as of the Closing Date, contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (except t.hat no opinion or belief need be expressed as to Appendices I through III and any other financial and statistical data contained in the Official Statement); (6) A certificate, dated the Closing Date and signed by the Mayor or such other officer of the City as the Manager may select, to the effect that (i) the representations and warranties of the City contained herein are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; (ii) to the best knowledge of said officer, no event has occurred since the date of the Official Statement which should be disclosed in the Official' Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; and (iii) the City has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under this Purchase Contract, the Resolution and the Official Statement at and prior to the Closing Date; (7) An opinion, dated the Closing Date and addressed to the Manager on behalf of the Underwriters, of the City Attorney, to the effect that (i) no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, is pending or, to his knowledge, threatened in any way affecting the existence of the City or the titles of its officers to their respective offices, or seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Resolution, or the collection or application of the assessments and the interest thereon to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Resolution, this Purchase Contract, or any other applicable agreements or any action of the City contemplated by any of said documents, or in any way contesting the completeness or accuracy of the Official. Statement or the powers of the City or its authority with respect to the Bonds, the Resolution, this Purchase Contract, or any other applicable Honorable City Council City of Bakersfield AuguSt 19, 1982 Page 1i agreement, or any action on the part of the City contemplated 'by any' of said documents, or which would adversely '.affect the exemption of interest paid on the Bonds from federal income taxation or California personal income taxation, nor to his knowledge is there any basis therefor; (ii) the City is duly organized and validly existing as a municipal corporation under the Constitution and laws of the State of California, with full legal right, power and authority to issue the Bonds and to perform all of its obligations under this Purchase Contract, the Bonds and all other applicable agreements; (iii) the City has duly and validly adopted the Resolution, and it is now in full force and effect, and the City has duly authorized, executed and delivered this Purchase Contract and the Official Statement; (iv) the construction contract or contracts to be entered into by the City with contractors for construction of the project to be financed with proceeds of the Bonds have been duly authorized by the City and, upon execution and delivery by the City (assuming due authorization, execution and delivery by the other parties thereto, where necessary), will constitute legal, valid and binding agreements of the City enforceable in .... aCCordance with.=~..~eir termS, SubjeCt to bankrupt.cy, insolvency and other laws affecting the enforcement 'of creditors' rights in general and to the application of equitable principles if equitable remedies are sought; (v) the statements contained in the Official Statement under the captions "Security For The Bonds'!, "The Project" and "Supplemental Information - The City Of Bakersfield", to the best of his knowledge, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (8) One counterpart original or copy certified by the City Clerk of a transcript of all proceedings relating to the authorization, iussuance, sale and delivery of the Bonds; (9) The final appraisal report of M.A.I., setting forth appraised values identical to those included in Appendix II to the Official Statement and a certificate of such appraiser, dated the Closing Date, confirming his consent to the reproduction of the appraisal report in the Official Statement and to the effect that, as of the date hereof and as of the Closing Date, the appraisal report set forth in Appendix II to the Official Statement and the statements in the Official Statement under the caption "Appraisal Report" did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading; 2798~/22S~/O1 Honorable City' Council City of Bakersfield AuguSt 19, 1982 Page i2 (10) Letters, addressed to the Manager and dated the 'Closing Date, from to the 'effect that ~i) any and all fnformation submitted by them to the Manager or the City in 'connection with the preparation of the Preliminary Official Statement and the Official Statement was, to the best of their knowledge, true and correct, and (ii) the statements relating to them, their proposed developments, their property ownership, and their contractual arrangements, if any, contained in the Official Statement under the captions "The Project", "The Assessment District" and "Property Owners", to the best of their knowledge, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading; (11) An opinion, dated the Closing Date and addressed to 'the Manager on behalf of the Underwriters, of counsel to to the effect that: .(i) ~ ., is a 'V~lidly' organizea California and has filed' 'a ~tatem~n~" of in t'he office of the County Recorder of Kern and (ii) that, based upon his or her review of the Official Statement and after diligent inquiry of · nothing has come to his or her attention which cause him or her to believe that any of the statements contained in the Official Statement under the captions "Property Owners" contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make such statements, in the light of the circumstances in which they were made· not misleading; and, (12) Such additional legal opinions, certificates (including a non-arbitrage certificate), instruments and other documents as the Manager may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the City's representations and warranties contained herein and of the statements and informantion contained in the Official Statement and the due performance or satisfaction by the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the City in connection with the transactions contemplated hereby and by the Resolution and the Official Statement. All the opinions, letters, certificates, instruments and other documents mentioned in this section or elsewhere in this Purchase~Contract shall be deemed to be in compliance with 2798P/2254/01 Honorable 'City Council City of Bakersfield August 19, 1982 Pa~e 13 the terms hereof' if~ and only if, substance satisfactory to the Manager- they are in form and If any 'of the conditions to the obligations of the Underwriters contained in this section or elsewhere in this Purchase Contract shall not have been satisfied when and as required heroin, all obligations of the Underwriters hereunder may be terminated by the Manager at, or at any time prior to, the Closing Date by written notice to the City. 4. Expenses. (a) Whether or not the Underwriters accept delivery of and pay for the Bonds as set forth heroin, they shall be under no obligation to pay, and the City shall pay or cause to be paid (out of the proceeds of the Bonds or any other legally available funds of the City) all expenses incident to the performance of the City's obligations hereunder, including but not limited to the cost of printing, engraving and delivering the Bonds to the Underwriters; the cost of preparaticn~ printing {and/.or word processing and reproduction), distribution ann delivery' Of all=the'agreements'and documents contemplated hereby (including but not limited to the Preliminary Official Statement, the Official Statement, and the "blue sky" and legal investment memoranda) and drafts of any thereof in reasonable quantities as requested by the Manager; the fees and disbursements of Security Pacific National Bank (as trustee, paying agent and registrar), Bond Counsel, accountants, engineers, appraisers, economic consultants and any other experts or consultants retained in connection with the Bonds; and any other expenses not specifically enumerated in paragraph (b) of this section incurred in connection with the issuance of the Bonds. (b) Whether or not the Bonds are delivered to the Underwriters as set forth herein, the City shall be under no obligation to pay, and the Underwriters shall pay, expenses to qualify the Bonds for sale under any "blue sky" laws; and all other expenses incurred by the Unde~riters in connection with their public offering and distribution of the Bonds not specifically enumerated in paragraph (a) of this section including the fees and disbursements of their counsel- 5. Notices- Any notice or other communication to be given to the City under this Purchase Contract may. be given by delivering the same in writing at the City's address set forth above, 'Attention: , City Manager; and any notice or other communication to be given to the Underwriters under this Purchase Contract may be given by 2798~/2254/01 Honorab].e City Council City of Bakersfield AuguSt 19, 1982 Page 14 delivering the same in writing to Miller & Schroeder °Municipals, Inc., 505 Lomas Santa Fe Drive, Suite 200, Solana Beach, California 92075, Attention: Andrew L. Bard. 6. Parties in Interest. This Purchase Contract is made solely for the benefit of the City and the Underwriters (including successors or assignees of any Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. 7. Survival of Representations and Warranties. The representations and warranties of the City, set forth in or made pursuant to this Purchase Contract, shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Contract and regardless of any investigations made by or on behalf of the Underwriters (or statements as to the results of such investigations) concerning such representations and statements of the City and regardless of delivery of and payment for the Bonds. 8i Effecti~el 'This' Purchase contract shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance. Very truly yours, The Underwriters By MILLER & SCHROEDER MUNICIPALS, INC. By Accepted: CITY OF BAKERSFIELD By Mayor 2798P/2254/01 Honorable City Council City of Bakersfield August 19, 1982 Page 15 EXHIBIT A TO PURCHASE CONTRACT City of Bakersfield, California Improvement Bonds Assessment District No. 81-1 Not To Exceed $949,000 Due 1983 1984 1985 1986 1987 1988 1989 -1990 1991 1992 1993 1994 1995 1996 1997 Principal Amount $ $ $ $ $ $ $, $ $ $ $ $ Coupon Rate 12.00% 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 12.00 2798P/2254/O1 ~ Honorable City Council City of Bakersfield August 19, 1982 Page 16 Exhibit B to Purchase Contract [Here attach copy of the Preliminary'Official Statement.] 2798~/2254/01 NEW ISSUE iDRAFT In the opinion of Bond Counsel, interest on the Bonds is exempt from federal income taxes and from State of California personal income taxes under existing income tax laws, regulations, rulings and judicial decisions. Interest may, however, become taxable by the United States of America on any Bond held by a substantial user (or related person) of the facilities financed with the proceeds of the Bonds. KERN COUNTY STATE OF CALIFORNIA CITY OF BAKERSFIELD IMPROVEMENT BONDS ASSESSMENT DISTRICT NO, gl-I (Fairview Assessment District) Dated: October 12, 1932 Due: Duly 2, as shown below The Bonds are issued upon and secured by unpaid assessments levied in the improvement proceedings for City of Bakersfield, Assessment District, and will be issued pursuant to the Improvement Bond Act of 1915. The s-will-be issued as coupon bonds in the denomination of $5,000 each, on January 2 d July 2 of each year, beginning January 2, 1984. Both the principal · · t~e s ' ' a unts as shown in the following maturity schedule. MATURITY SCHEDULE Due Coupon ' . · .' Due' Coupon Amount July 2 Rate Yield ' '. AmOunt . July' 2 Rate Yield $ 30,000 1984 % % $ '60~000 1990 · - % % -3-51000- 1985 65,000 1991 39 '533 1986 75 000 1992 1987 85',000 1993 t~5,000 1988 95,000 199t~ 55,000 1989 105,000 1995 115,000 1996 (Plus accrued interest) Any Bond may be redeemed on any January 2 or July 2 prior to its fixed matuH date, at the option of the City Treasurer, upon giving 60 days' prior notice and upon ayment of the principal amount thereof and interest accrued thereon' to the date o redemption, plus a redemption premium of five percent (5%) of the ~am~unt thereof. The Bonds are not secured by the general taxing power of the City of Bakersfield, the County of Kern, or the State of California or any of its political subdivisions. The interest on and principal of the Bonds are payable solely from moneys in the Redemption Fund and are secured by unpaid assessments as more fully described heroin. See the section oI this Official Statement entitled "SPECIAL RISK FACTORS" for a discussion of special factors which should be considered, in addition to the other matters set forth heroin, in considering the investment quality of the Bonds. ..... Th4 Bonds hre offered,' when, 'as and-if-issuedrsu~ec~L~o-the approval ol Brown & Nazarek, Irvine and San Bernardino, California, Bond Counsel. It is anticipated that the Bonds will be available for delivery in Los Angeles, California on or about October 12, 1982 or as soon as possible thereafter. The date of this Preliminary Official Statement is August 10, 1982 ~Preliminiary, subject to change. TABLE OF CONTENTS Page INTRODUCTORY STATEMENT ............... . ......... THE BONDS ................................ Description of the Bonds .......................... Authority for Issuance .......................... Summary .of Assessment Procedure ..................... Purpose of the Bonds ............................ Source and Application of Funds ....................... Redemption Provisions .......... · ............... Debt Service Schedule ........................... SECURITY FOR THE BONDS ......................... Reserve Fund ............................... Covenant for Superior Court Foreclosure .................. THE PRO3ECT . .I ............................ Project Description ............................ Disposition of Surplus Funds ........................ Environmental Review ............. ~ ............. THE ASSESSMENT DISTRICT ......................... Method of Assessment .......................... PROPERTY OWNERS ........... , .............. SPECIAL RISK FACTORS .......................... Prior Assessment Liens .......................... Default Under Prior Assessment Liens .................... Proposed Additional Assessment Districts .................. Availability of City Funds ......................... Land Development ........................... Land Development Costs ............... ........... Property Ownership ............................ Article XIII A of the California Constitution (The 3arvis/Gann Amendment) .... Article XIII B of the California Constitution (The Gann Initiative) ........ Tax Delinquencies .............................. Bankruptcy ' MISCELLANEOUS ............................. No Litigation ............................... Approval of Legality ........ ' .................... Tax Exemption .............................. No Rating ............................. Financial Consultant ............................ Underwriter ........ : ............... : ....... Additional Information ........................... SUPPLEMENTAL INFORMATION - THE CITY OF BAKERSFIELD ......... 10 10 11 I1 11 12 12 12 13 13 15 15 15 15 15 iii No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations, other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the City. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds, by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the City of Bakersfield, Kern County and other sources which are believed to be reliable but is not guaranteed as to accuracy or completeness, and is not to be construed as a representation of such by the City. The information and expressions of opinion stated herein are subject to change without notice. The delivery of this Official Statement shall not, under any circumstances, create any implication that there has been no change in the affairs of the City, the Project, the Assessment District or major property owners since the date hereof. CITY OF BAKERSFIELD Kern County, California MAYOR AND CITY COUNCIL Mary K. Shell Mayor Vernon D. Strong Thomas D. Payne 3ames 3. Barton Council/Members 3. M. Christensen Arthur Rockoff 3ohn M. Means Donald K. Ratty CITY STAFF City Manager Philip Kelmar Superintendent of Streets J. Dale Hawley DESIGN ENGINEER BOND COUNSEL Brown & Nazarek Irvine and San Bernardino, California ASSESSMENT ENGINEER California INTRODUCTORY STATEMENT f~ & J This Official Statement is provided to furnish info ation relating to the City of Bonds (the "Bonds" or "Bond"). The Bond~ bein'g'i~'a~d pursuant to the Improvement Bond Act of 1915 (Division I0 of the State Streets and Highways Code). The assessment proceedings are being conducted pursuant to the Municipal Improvement Act of 1913 (Division 12 of the State Streets and Highways Code). The proceeds of the Bonds will be used by the City to fund the acquisition and construction of storm drains, sanitary sewers, water lines~ acquisition of easements and rights-of-way,'together with appurtenances and appurtenant work (the "Project")~ the funding of a Special Reserve Fund ("Reserve Fund")~ underwriter's discount and costs related to the issuance of the Bonds. The Bonds are payable from the annual assessment installments collected on the regular property tax bills sent to owners of property having unpaid assessments levied against land benefited by the Project. (See the section of this Official Statement entitled "SECURITY FOR THE BONDS".) In the event of a delinquency in the payment of any installment of an assessment, the City, in the absence of any other bidder, is obligated, from and to the extent it has available funds, to purchase the property securing such delinquent assessment at delinquent assessment sale and to pay future delinquent installments on the assessment and interest thereon until such property is resold.-by_~the City or redeemed. The Reserve Fund will be established in the amou~$~3~r approximately ten'percent (10%) of the principal amount of Bonds issued)! from the proceeds of the Bonds to provide funds for the purchase by the City of property at delinquent assessment sales and to pay future delinquent installments of the assessments . for such properties and interest thereon. Except to the extent that funds may be available in the Reserve Fund for transfer to the fund from which payments' of principal and interest will be made (the "Redemption Fund") for the purchase of pi'operty at delinquent assessment sale and for the payment of future installments of the assessments for such properties, the City can give no assurance as to the availability of funds to 'purchase such property or for the payment of such future installments. The Bonds are not general obligations of the City~ the County or the State or any other political subdivision of the State~ and neither the City, the County, nor.'. the State has pledged its full faith and credit for the payment thereof. See the section of this Official Statement entitled "SPECIAL RISK FACTORS" for a discussion of special factors which should be considered~ in addition to the other matters set forth herein, in considering the investment quality of the Bonds. The City has caused the preparation of this Official Statement containing descrip- tions of the Bonds~ security of the Bonds~ the Project~ the Assessmen.t District~ the major property owners and the City. "Such discussion and information do not purport to be comprehensive or definitive. All references to the Bonds and the Project are qualified in their entirety by reference to the Engineer's Report and to the City's resolutions setting forth the terms and descriptions thereof. THE BONDS Description of the Bonds *Preliminary, subject to change. The Bonds will be dat~j~'~uly 2, 198~d will bear interest ~rom that dhte at the rates and mature in the amounts an~ on the dates as set iorth on the cover p~ge o~ this Official Statement. The Bonds will be issued as coupon bonds i ~ o~ination o~ 5~,0~0 each, except Bond Number 1 in the denomination o ~$~,0~nd will be registrable as to both principal and interest only. Interest on t~nd~l' Be payable semFannually on ~anuary 2 and 2uly 2 of each year commencing 2anuary 2, 198~. Both principal and interest are payable at the offices o~ the paying agent. Authority for Issuance The improvement proceedings for the Assessment District were initiated by adoption of the Resolution of Intention by the Bakersfield City Council (the "City Council") on . The proceedings are being conducted pursuant to Division 12 of the State Streets and Highways Code, the Municipal Improvement Act of 1913 (the "1913 Act"). The Bonds represent unpaid assessments levied against private property in the Assessment District in accordance with the provisions of the 1913 Act, and will be issued pursuant to Division 10 of the State Streets and Highways Code, the Improvement Bond Act of 1915 (the "1915 Act"). Summary of Assessment Procedure Pursuant to the proceedings being used by the City for the Assessment District all costs are either estimated or ascertained prior to doing the work or making the acquisition of the improvements or property involved. Under such proceedings, the assessments are then levied, collections made and bonds sold to represent unpaid assessments. The money obtained from cash collections and bond proceeds is used by the City in payment for the work to be done, for the property to be acquired and for incidental expenses. ~ Proceedings can be initiated b ~ther a petition or by the City Council without a petition. The Assessment D~jstr. t wa~:~initiated by a petition signed by owners neer's Report") which contains, among other thing% the estimate o~ project costs and the assessmen~ lot each parcel. The total amount o~ the proposed assessment was based upon the engineer's estimated cost o~ the Project. The individual assessments were spread among the various parcels o~ land within the Assessment District on the basis o~ the special benefit to be derived by each parcel ~rom the Project. (See the "Method o~ Assessment" herein.) .The Engineer's Report was filed and preliminarily approved by the City Council on Thereafter, notice was published in a local newspaper designated by the City Council for that purpose. Notice was also posted along all of the open streets within the Assessment District. In addition, notice of the proposed assessment was mailed to each of the owners whose property was proposed to be assessed. The notices advised the property owners of the filing of the Engineer's Report, the date, time and place for a hearing on the Project, the proposed .assessments and the right to protest. The mailed notice also advised the property owners of the precise amount proposed to be assessed against their properties, as shown in the Engineer's Report. *Preliminary, subject to change. 2 Property owners had the right to protest in writing prior to or at the commencement of the hearing and to be heard at the hearing. Owners of approximately percent ( °/6) of the assessed land area in the Assessment District filed written protests. (See the subsection entitled "Protesting Property Owners".) At the conclusion of the hearing on , the City Council adopted its resolution confirming the assessments, overruling protests and ordering the work and acquisitions. After confirmation, the assessments became liens ~igainst the various assessed parcels. The property owners were given published and mailed notice the opportunity to pay all or a portion of the assessment in cash within 30 days of the recording of the assessment. The notice further advised the property owners that if a cash payment was not made, bonds'would be sold to represent unpaid assessments. The cash payment period ended , 1982. Any property owner who prepaid an assessment during the cash collection period will be entitled to a reduction of the assessment. Such reduction represents that portion of the assessment that would otherwise be used for underwriter's discount and for the funding of the Reserve Fund, or percent (. .96) of the amount of the assessment confirmed at the hearing. County assessment roll. A notice o~ hearing on the Debt to all owners o~ property in the Assessment District before the the hearin the conclusion o~ the hearing~ which was held on ~ the City Co il approved the report which ~ound that the ~ 3 the 1931 Act would be excee in that the" estimated amounts proposec; assessed upon the parcels o~ land within the ssm~nt District exceed '.the true values o~ such parcels~ and that the total esti d cost hs~ Pro not exceed one-hal~ o~ the total "tru Purpose of the Bonds The Bonds are authorized for the purpose of providing funds for water~:sewer and drainage facilities as tnore fully described in the section of this Official 'Statement entitled "THE PRO3ECT". Source and Application of Funds The Bond proceeds and funds collected in payment of assessments will be applied as follows: : Sources of Funds Principal Amount of Bonds Less Bond Discount Net Bond Proceeds Application of Funds Construction Cost Contingency Estimated Construction Cost Incidental Costs Reserve Fund Total 85 ' c%Z ) (1) Based on construction bid Redemption Provisions The Bonds may be called and redeemed in vance of maturity, at the option of the n r together with a premium equal to five percent (5%)of the amount thereof, and interest to the date of advanced maturity, or, if a Bond shall be sooner surrendered, then interest to the date of payment of a Bond. In selecting a Bond for retirement, the lowest numbered Bond of annual series midway to the end of the Bond term will be chosen. Successive Bonds will be chosen from the lowest number of each annual series, before and after the series from which the first Bond is selected, so that Bonds called will be a pro rata portion of each annual series. It is intended that the relationship of unpaid assessments to Bonds outstanding be disturbed as little as possible by the call of Bonds. It is likely that the development of property in the Assessment District (see the section of this Official Statement entitled "PROPERTY OWNERS") will result in the subdivision of the majority of the property within the Assessment District. Subdivision of parcels would result in the apportionment of the assessments to the resulting smaller parcels and could result in extinguishment (prepayment) of assessment liens. Such prepayment of assessment liens could, at the option of the City Treasurer, result in redemption of the Bonds prior to their stated maturities. Debt Service Schedule Set forth below is a schedule for debt service of the Bonds. ESTIMATED DEBT SERVICE SCHEDULE Maturity Date Principal Interest (July 2) Maturing Due Total Debt Service 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Total $ 9:77:4:3,'9:6 $ 13274'3.96~ :1.33.0'76.96 2;2900.0.. 0.0 ].3360.0. 0.0 :]:32.000, O.O ].29'~00.. O0 1.-.3-2000. O0 .1:33D0.0.. ~0 132800, O0 't21~800. O0 --_~. ....... - $1~84654. ( 1 ) Interest for months. SECURITY FOR THE BONDS The Bonds are secured by unpaid assessments levied in the assessment proceedings~ and such unpaid assessments, together with interest thereon, constitute a trust fund for the redemption and payment of the principal of and interest on the Bonds. The Bonds are secured by the moneys in the Redemption Fund and by the unpaid assessments levied against private property within the Assessment District~ and principal of and interest on the Bonds are payable exclusively out of the Redemption Fund. The Reserve Fund is also a trust fund for the benefit of the holders of the Bonds. (See the subsection entitled "Reserve Fund".) Under provisions of the Improvement Bond Act of 1915, installments sufficient to meet annual payments of principal of and interest on the Bonds are to be collected on the regular property tax bills sent to owners of property against which there are unpaid assessments. These annual installments are to be paid into the Redemption Fund which will be held by the City Treasurer and used to pay the principal of' and interest on the Bonds as they become due. TFie installment billed against each property each year represents a pro rata share of the total principal and interest coming due that year, based on the percentage which the unpaid assessment against the property bears to the total oi unpaid assessments. The failure of a property owner to pay an annual assessment installment would not result in an increase in assessment installments against other parcels of property. Although the unpaid assessments constitute liens on assessed parcels, they do not constitute a personal indebtedness of the respective property owners. There is no assurance that the property owners will be financially able to pay the annual assessments or that they will pay such assessments even if financially able to do so. 'In the event of a delinquency in payment of any unpaid assessment installment, the City is obligated, in the absence of any other bidder, to advance to the Redemption Fund surplus funds of the City, to the extent it has funds, to purchase land at delinquent assessment sales and to pay future delinquent installments of assessments and interest thereon until such land is resold by the City or redeemed. Except to the extent that funds may be available in the Reserve Fund for transfer to the Redemption Fund for the purchase of property at delinquent assessment sales and the payment of future delinquent installments of the assessments for such properties and interest thereon, the City can give no assurance as to the availability of funds to purchase such property or for the payment of such future delinquent installments and interest. The Bonds are not secured by the general taxing power of the City, the County, or the State or' any political subdivision of the State, and neither the City, the County nor the State has pledged its full faith and credit for the payment thereof. Reserve Fund A Reserve Fund in the amoun:~r'~' ' will'~e established from the proceeds of the Bonds to provide for the t~r~4~ase_b.y._the--C'/ty of properties at delinquent assessment sales and for the payment of future delinquent installments of assessments and interest thereon and real property taxes for properties so purchased by the City. The · Reserve Fund shall constitute a trust fund for the benefit of the holders of the Bonds, and shall be maintained, used, transferred, reimbursed and liquidated as follows: (a) Whenever there are insufficient funds in the Redemption Fund to pay the next maturing installment of the principal of or interest on the Bonds, an amount necessary to pay such deficiency will be advanced from the Reserve Fund to the Redemption Fund. The amounts so advanced will be reimbursed from the proceeds of redemption or sale of the parcels for which payment of delinquent installments of assessments and interest thereon or property taxes has been made from the Reserve Fund. (b) In the event unpaid assessments are paid in adva~~:~ part- t assessments thus paid shall be reduced by an amount ]~' · equa ~o the ~a~e of the t ~ ~Z-~ u~al amount initially provided for the Reserve Fund to the total amount ori~iWglly assessed in the proceedings for the issuance of the Bonds, and the amount thus determined shall be transferred from the Reserve Fund to the Redemption Fund. (c) If at any time the amount of any income realized from the investment of the money in the Reserve Fund plus the remaining principal amount thereof exceeds an amount equal to 13 percent of the aggregate principal amount of the Bonds issued, less any discount thereon, such excess shall be transferred to ,the Redemption Fund and expended for the advance retirement of the Bonds within 13 months of the date of the occurrence of such excess. (d) Whenever the balance in the Reserve Fund is sufficient to retire all remaining outstanding Bonds, whether by advance retirement or otherwise~ collection of the assessment installments shall be discontinued and the Reserve Fund shall be liquidated in retirement of the Bonds. The need to make advances from the Reserve Fund may result in its total depletion prior to reimbursement from resales of property or delinquency redemptions. In that event, there could be a delay in payments to holders of the Bonds pending reimbursement of the Reserve Fund. Covenant for Superior Court Foreclosure In the event of delinquency in the payment of any installment of an unpaid assessment, the City Council is authorized by the 1915 Act to order institution of an action in the Superior Court of the State to foreclose the lien of such unpaid assessment, In such action the real property subject to the unpaid assessment may be sold at judicial foreclosure sale. Upon such a sale, the right of redemption is limited to one year from the date of sale, as distinguished from the five-year redemption period in the event of a sale for delinquent property taxes. Such judicial foreclosure sale is not mandatory. However~ pursuant to the Resolution of Issuance, the City has covertanted with the holders of the Bonds, that in the event of delinquency in the payment of any installment of an assessment then due and payable, the City Council will cause court foreclosure proceedings to be commenced within 120 days of such delinquency, and will cause such foreclosure action to be diligently prosecuted to judgement and sale. In the event such Superior Court foreclosure or foreclosures are necessary, there could be a delay in payments to holders of the Bonds pending prosecution of the foreclosure proceedings and receipt by the City of the proceeds of the foreclosure sale. It is possible that no bid other than that of the City would be received at the foreclosure sale, and in such event there could be additional delay in payment of the principal of and interest on Bonds pending resale of the property by the City or redemption of the property by the property owner. The Assessment District consists of 13 parcels, collectively r, epresenting approxi- mately 137.16 acres. Of these parcels~ two were not assessed, as they were owned by the City or other governmental agencies. The remaining 11 parcels were assessed. The table shows the following for each parcel: each assessed parcel's assessment number; the Assessor's parcel number; the assessed valuations for land and improvements; the amount of the unpaid assessment; and the amount of delinquent taxes. Assessment District Project In response to the petition filed by percent of the property owners in the Assessment DistriCt, the City has undertaken to conduct assessment district improvement proceedings to provide for the acquisition and construction of Certain public improve- ments for the benefit of land within the Assessment District. The public improvements to be financed through these assessment district proceedings and the issuance of the Bonds consist of construction of sewer and water lines and storm drains and improvement to a storm pump; acquisition of easements and rights of way; together wLth appurtenances and appurtenant work; and incidental costs and expenses related to the acquisitions and construction, collectively referred to as the "Project". The City does not anticipate that changes in zoning or General Plan Land use designations will be required for the development of the property within the Assessment District. Disposition of Surplus Funds If any surplus funds remain in the Improvement Fund after completion of the Project, the City Council may use such surplus for one or more of the following purposes: for the maintenance of the Project; as a credit upon the assessment or any supplemental assessment; or an amount up to $1,000 may be transferred to the City's General Fund. Environmental Review A Draft discusses the acquisition of prepared by suitant for the Environmental Impact Report (EIR) dated which environmental impacts which would result from the construction and the facilities proposed for the Assessment District and the Project was , the City's environmental con- Project. The EIR was prepared in accordance with requirements of the California Environ- mental Quality Act of 1970 (CF-QA), as amended, and follows guidelines established by the State and adopted by the City. The Final EIR was certified by the City Council on adequate for the facilities proposed to be financed by Assessment Dis,.trict . Determination was filed with the County Clerk on . for the filing.. _o~( suits to challenge the City's compliance with CEQA has expired. Method of AssessmentOr Sewers as being A Notice of The time For the purpose of establishing the benefit to the various'properties, the sewer portion of the project is divided into three categories, i.e., lines providing direct service to abutting properties, off-site lines needed to reach the benefitted properties which provide no other direct besnefit to the assessment district, and oversizing. In those cases where the sewers traverse the assessmesnt parcel in the streets, future streets or easements, such sewer lidnes will be utilized to serve the immediately adjacent property, the lines constitute collection lines which would be required for the development of a property. The parcel, in such cases, is assessed for the cost of an 8" sewer for the distance the line traverses the _parcel To this amount is added the cost of any Ys or laterals installed for the speckf~c besnefit o the parcel. The remaining costs, i.e., that of oversizing and off-site work ha~J 'b-e-e-nS~uted to all properties on the basis of the area of such parcel which may eventually be developed. For those several properties already in a developed state and not furnished sewers on their side of Fairview Road, such parcels are assessed for off-site and oversizing only. Water The water work within this,project consists of installing a 12" AC main in Fairview Road from South H Street to the Esterly side of the proposed future intersection of Osborne Street. The line will be on the Northerly side of l~airview Road and will be tunnelled or jacked under Kern Island Channel. Preliminary estimates prepared by the California Water Service Company indicate a total cost for this work of $65,175; however, inasmuch as the water company will pay that portion of the costs in excess of an 8" main, the total estimated cost to the assessment district is $40,333. It is customary for the water company to charge for main installation on a front footage basis and to grant reimbursement if other propertieS' utilze ~he main. In this instance, there are six properties which will c. urrently-eF--ev. eq.tually bsenefit from the installation of this 12" main. Referring to these as assessresent pa'~cel numbers, these are numbers 3,/4, 1, I0, S and I1. Assessment l~F~'l"3"is'th~":~'f~enfield Union School property and cannot be assessed under current regulations. The cost of placing this line under the Kern Island Channel and Carrying it in Fairview across the frontage of the school site is estimated at $15,000. This amount is assessed on a frontage basis to all the benefitted parcels including that portion of Parcel 1 Easterly of where this line terminates. The extension of this line in Fairview Road in front of Parcel I will be accomplished by the developer of that property at a later date; however the entire frontage besnefits from the access provided by the channel crossing work. The balance of the costs is assessed on an area basis to the benefitted parcels where the line is installed bescause of the relative size of the parcels on the North and South sides of Fairview Road benefit is more related to area than to front footage. Since the line is installed on the Northerly side of the street, those properties on the Southerly side are credited in the amount of $500 each, which is the estimated cost to bring service from this line across the paved street to the Southerly side properties. Drainage The drainage work consists of improving the sump (Parcel 13) and extending the storm drain line Northerly across Fairview Road through Parcel l to the common property line of Parcels I and 2. It is assumed that the drainage work to be performed by this assessment district fulfills any development obligations which the assessresent parcels drainage charges will be imposed upon r i t system proposed. The basis method of assessing this ~tr~iFiii~ is on an area or acreage basis, since the area, when developed, will be proportional to the drainage run-off. This method of assessmesnt is further backed up by City regulations which collect drainage fees on an acreage basis as a condition of development. There are several modifications to a straight area assessment necessitated by either law or special circumstances. Parcel I had previously constructed a portion of this proposed drainage system. In order to provide equity in that circumstance, Parcel I is credited against its assessment the estimated cost of that portion of the system which it has previously constructed. Parcels 8, 10 and 11 were not assessed for the proposed drainage system. These parcels are in a developed state The theory of the drainage fee and, in this case, the drainage assessment, is to fulfill the obligation which the property otherwise would have in providing drainage facilities as the result of its development. PROPERTY O~I/NERS Information regarding ownership of assessed parcels in the Assessment District has been provided by the respective owners of such parcels. This information has been included because it is considered relevant to an informed evaluation of the Proiect. As most of the development has not 'commenced, no assurance can be given that it will occur, or that it will occur in a timely manner. Furthermore, development is subiect to further discretionary approvals by' the City and other public agencies. The following information should not be construed to suggest that the Bonds or the assessments securing the Bonds are a personal obligation of the property owners or the developers. See" the sections herein entitled SPECIAL RISK FACTORS -"Land Development" and "Proposed Additional Assessment Districts". 9 These property owners own properties within the Assessment District represent a majority of the assessments (by dollar amount) securing the Bonds; approximately percent of the assessments); (with approximately_ percent); and (with approximately percent of the assessments). Name of Name of Owner Barratt Northern California, Inc. which (with Barratt Northern California, Inc., a Delaware Corporation ("Barratt") owns Parcel No. I with an unpaid assessment of $179,413.13 representing approximately 19% of the total amount of unpaid assessments levied in the Assessment District. Barratt is a wholly owned subsidiary of Barratt Developments Limited of Newcastle, England specializing in residential real estate development in California. Barratt currently plans to develop 135 single family detached houses and 102 condominium homes. Models for the single family detached housing are currently under construction for the first phase of this project which includes a total of 35 single family detached houses. The '102 condominium units are not presently under construction. Bartart reports it is in the process of subdividing approximately twenty-five percent of its property. The development of Barratt's property will depend on the success of sales from the models. MTL Development MTL Development ("MTL") is a general partnership whose partners are the following corporations, Wildflower, Inc.; Fichner, Inc.; and, Solann Beach Mortgage Co. These corporations act as investment holding companies and construction firms whose stock- holders are individuals residing in the City of Bakersfield. MTL Development owns interest in two parcels;' Parcel No. 4, in which holds a partnership interest and Parcel No. 7 of which it is the sole owner. MTL has filed a tentative trust map to subdivide Parcels t~ and 7 but is not committed to subdivide and has not received final approval from the City for such subdivision. MTL presently intends to develop its property as single family residential detached housing, but reports no commitments in a schedule to develop. Assessment Roll --City .oJ .Bakersfield *-, Availability of City Funds As discussed in the "SECURITY FOR THE BONDS" section herein, in the event of a delinquency in payment of any unpaid assessment installment, the City is obligated, in the absence of any other bidder, to advance to the Redemption Fund surplus funds of the City, to the extent it has funds, to purchase land at delinquent assessment sales and to pay 10 future delinquent installments of assessments and interest thereon until such land is resold by the City or redeemed. The City's operations are currently fi~anced by County property tax revenues, State funds and other revenues and subventions. There can be no representation or assurance, in fact a certain degree of doubt exists, that State funds will be received by the City in an amount comparable to that received in prior years. A loss or reduction in the amount of such funds could necessitate the financing of current City operations from City fund balances. Such utilization of the City's fund balances would limit the availability of surplus funds for advancement to the Redemption Fund in the event of delinquency in the payment of assessment installments. Moreover, the availability of future fund balances is subject to, among other things, economic and other conditions which are unpredictable and beyond the City's control. Construction-related activities and grant programs represent major sources of City revenue. These revenue sources may particularly be affected by changes in the economy. The City's financial reports are available at the office of the City Treasurer. Land Development As discussed under the caption "PROPERTY OWNERS" herein, several development companies anticipate developing land within the Assessment District. Development may be affected by changes in general economic conditions, fluctuations in the real estate market and other similar factors. In addition, land development operations are subject to comprehensive federal, State and local regulations. Approval is required from various agencies in connection with layout and design of developments, the nature and extent of improvements,. construction activity, land use, zoning, health requirements and numerous other matters. Failure to obtain any such approval would adversely affect land development operations. There can be no assurance that land development operations within the Assessment District will not be adversely affected by future governmental policies relating to the national economy. Land Development Costs Development of land within the Assessment District is contingent upon construction or acquisition of major public improvements such as arterial streets, water distribution facilities, sewage collection and transmission facilities, drainage and flood protection facilities, gas, telephone and electrical facilities, parks and street lighting, as well as local in-tract improvements. There can be no assurance that these improvements will be constructed. The cost of these public and private in-tract and off-site improvements would increase the public and private debt for which the land within the Assessment District is security. This increased debt could reduce the ability or desire of the property owners to pay the annual assessment installm~ents levied against their property..' Property Ownership The ownership of the property in the Assessment District is not greatly diversified in that percent ( %) of the unpaid assessment is levied against land owned by one property owner and more than percent ( %) of the unpaid assessment is levied against land owned by different property owners. Failure of t,hese principal property owners to pay installments of assessments when due 11 could result in the rapid total depletion of the Reserve Fund prior to reimbursement from the resales of property or delinquency redemptions. In that event, there could be a delay in payments of the principal of and interest on the Bonds. ' Article XHI A of the California Constitution (the 3arvis/Gann Amendment) On 3une 6, '1978, California voters approved an amendment to the California Constitution commonly known as Proposition 13, the 3arvis/Gann Amendment, which added Article XIII A to the California Constitution. The effect of Article XIII A is to limit ad valorera taxes on real property. On November 7, 1978, the California voters approved Proposition g, which made certain clarifications to Article XIII A. Article XIII A, as amended, limits ad valorem property taxes on real property to one percent (1%) of the full cash value of the property; defines "full cash value" as the appraised value as of March 1, 1975, plus adjustments not to exceed two percent (2%) per year for changes in the Consumer Price Index; requires adjustment of full cash value upon change of ownership or new construction; requires reassessments downward if property values decrease; exempts from the one percent (1%) ad valorem property tax limit taxes levied to pay indebtedness approved by the voters prior to 3uly 1, 1978; requires counties to collect the one percent (1%) ad valorera property tax and to apportion it according to law to the local agencies within the counties; prohibits new sales taxes and/or transaction taxes on the sale of real property after 3uly 1, 1978; allows special taxes to be levied by local agencies only upon approval of two-thirds (2/3) of the "qualified" electors; and requires a two-thirds (2/3) vote of all members of the Legislature to change any State taxes resulting in increased revenues. Enactment of Article XIII A of the California Constitution has reduced the amount of general property tax revenues received by the City. Such reduction in tax revenues makes it less likely that the City will have surplus funds, other than monies in the Reserve Fund, to advance to the Redemption Fund to pay delinquent assessment installments. In addition, the enactment of Article XIII A and subsequent legislation effectively repealed the otherwise mandatory duty of cities issuin~q bonds pursuant to the Improvement Bond Act of 1915, to levy and collect a special tax, in an amount necessary to pay such delinquent assessment installments, but not to exceed 10¢ on each $100 of assessable property within the city in any one year, if surplus funds were not available to cover delinquencies. Article XIII B of the California Constitution (The Gann Initiative) At the November 6, 1979 general election, Proposition ~ (the Gann Initiative) was approved by the voters of California. That proposition added Article XIII B to the California Constitution. Article XIII B limits the annual appropriations of the City, as well as of the State and other local governments, to the amount of appropriations for the prior year adjusted for changes in the cost of living and population. The City's appropriations limit may also be changed in the event that the financial responsibility of providing services is transferred from another entity of government t6 the City or from the City to another such entity. It is not yet possible to determine the full extent of the application of Article XIII B or its possible effect on the availability of governmental services or the financing public improvements. However, it is expected that Article XIII B will not have any effect upon the validity of or security for the Bonds, except to the extent that its application may result in a reduction in revenues available to the City for transfer to the Redemption Fund for payment of delinquent installments of assessments and interest thereon. 12 The appropriations limitations of Article XIII B affect only the appropriations of "proceeds of taxes". "Proceeds of taxes" are tax revenues, subventions received from the State and proceeds from the investment of tax revenues. Revenues from regulatory license fees, user charges and user fees are not proceeds of taxes unless they exceed the cost reasonably borne in providing the regulation, product or service. Article XIII B does not expressly provide that special assessments such as those levied pursuant to the Municipal Improvement Act of 1913 are "proceeds of taxes". The question of whether such assessments are "proceeds of taxes" was the subject of a petition for alternative and peremptory writs of mandate in County of Placer v. F. Earl Corin, Treasurer of the County of Placer, No. S F 24160. The court in this mandate proceeding determined, among other matters, that Article XIII B does not encompass special assessments. Therefore, the proceeds of special assessments are not "proceeds of taxes" under Article XIII B and are not subject to the City's appropriations limit. Tax Delinquendes A number of parcels with unpaid assessments have outstanding delinquent property taxes. Under provisions ol the Improvement Bond Act of 1915, assessment installments, from which funds necessary for the payment of annual installments of principal of and interest on the Bonds are derived, will be billed to properties against which there are unpaid assessments on the regular property 'tax bills sent to owners of such properties. Such assessment installments are due and payable, and bear the same penalties and interest for non-payment, as do regular property tax installments; and assessment installment payments cannot be made separately from property tax payments. Therefore, the unwillingness or inability of a property owner to pay regular property tax bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability to make regular property tax payments and assessment installment payments in the future. See the sections of this Official Statement entitled "SECURITY FOR THE BONDS", "Reserve Fund" and "Covenant for Superior Court Foreclosure", for provisions which apply, and procedures which the City is obligated to follow, in the event of delinquency in the payment of assessment installments. Bankruptcy The payment of property owners' assessment installments and the ability of the City to foreclose the lien of a delinquent unpaid assessment, as discussed in the section herein entitled "SECURITY FOR THE BONDS", may be limited by bankruptcy, insolvency, or other laws generally affecting creditors' rights or by the laws of the State relating to judicial foreclosure. Although bankruptcy proceedings would not in themselves cause the assessment liens to become extinguished, bankruptcy of a property owner could result in a delay in the City prosecuting Superior Court foreclosure proceedings. Such delay would increase the likelihood of a delay or default in payment of the principal of and in'terest on the Bonds, and the possibility of delinquent assessment installments not being paid in full. MISCELLANEOUS No Litigation Ther~ is no controversy or litigation of any nature now pending to restrain or enjoin the issuance, sale, execution or delivery ol the Bonds or in any way contesting or 13 affecting the validity of the Bonds, the proceedings of the City taken with respect to the issuance or sale thereof, the existence or powers of the City or the title of any officers of the City to their respective positions (see section of this Official Statement entitled~ "PROPERTY OWNERS - Protesting Property Owners"). Approval of Legality All legal matters related to the authorization, issuance, sale and delivery of the Bonds are subject to the approval of Brown & Nazarek~ Irvine and San Bernardino~ California~ Bond Counsel. The unqualified opinion of Bond Counsel approving the validity of the Bonds will be supplied free of charge to the original purchaser of the Bonds and will be printed on each Bond. Fees payable to Bond Counsel are contingent upon the sale and delivery of the Bonds. Tax Exemption In the opinion of Brown & Nazarek~ Irvine and San Bernardino, California~ Bond Counsel~ under existing laws, regulations, rulings and judicial decisions, interest on the Bonds is exempt from present Federal income taxes. Under existing laws, interest on the Bonds is also exempt from State of California personal income taxes, except inheritance~ gift and franchise taxes. Interest may, however, become taxable by the United States of America on any Bond held by a substantial user (or related person) of the facilities financed with the proceeds of the Bonds. No Rating No rating has been sought or obtained for the Bonds. Underwriting The Bonds have been sold at a net interest cost of %. The purchase price to be paid to the City for all the Bonds is $ plus accrued interest. The underwriter(s) intend(s) to offer the Bonds to the public initially at the prices and/or yields set forth on the cover page of this Official Statement plus accrued interest from ~ 1982 which prices or yields may subsequently change without any require- ment of prior notice. The underwriters reserve the right to join with dealers and other underwriters in offering the Bonds to the public. The underwriters may offer and sell Bonds to certain dealers (including depositing Bonds into investment trusts) at prices lower than the public offering prices, and such dealer may reallow any such discounts on sales to other dealers. In reoffering Bonds to the publiq the underwriters may over-allot or effect transactions which stabilize or maintain the market prices for Bonds at levels above those which might otherwise prevail. Such stabilization, if commenced, may be discontinued at any time. : .' Additional Information Any statements made in this Olficial Statment involving matters of opinion or of estimates~ whether or not so expressly stated~ are set forth as such and not as representations of fact~ and no representation is made that any of the estimates will be realized.. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers~ holders or owners of any of the Bonds. Copies in reasonable quantity of this Official Statement and other documents referred to herein may be obtained from the offices of the City. The execution and delivery of this Official Statement by its Mayor have been duly authorized by the City. Concurrently with the delivery of the Bonds, the City will furnish a certificate executed on behalf of the City by its Director of Public Works to the effect that this Official Statement, as of the date of this Official Statement and as of the date of delivery of the Bonds, does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements herein, in light of the circumstances under which they were made, not misleading. CITY OF BAKERSFIELD~ CALIFORNIA By Mayor