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HomeMy Public PortalAboutA1987-06-22CC_sp . � � � - ' � '' City of ��l'����� � ��- PAUI H. RICHARDS, II, Mayor �� � �, � ' EVELYN WELLS, AAayor Pro-Tem Q '�'� v 4 City �i�{eeting C{,aQFenges � v`�' � � Council Members . . 11330 BULLIS ROAD JOHN D. BYORK LYNWOOD, CALIFORNIA 90262 ROBERT HENNING � (213) 603-0220 � E. L. MORRIS 4 %� ��� ��� �� � . kj ��f� . .v .. uS I k� ��lF9�D I CITY OF LYPJ�VOOD SPECIAL MEETING Clrv C�ERt:s oF=1�E LYNWOOD CITY COUNCIL TO BE AELD ON JUNE 22, 1987 iii lg 1987 CITY COUNCIL CHAMBERS pp,� pp� 6:00 P.M. 7���9�l0illi12�1i2i3 5i6"'' �E�C , ' �I� C � .4 �. ,�� { ��� PAUL H. RICHARDS II ���/ MAYOR / / JOHN D. BYORK E. L. MORRIS COUNCILPERSON COUNCILPERSON ROBERT HENNING EVELYN WELLS COUNCILPERSON MAYOR PRO TEM CITY MANAGER CITY ATTORNEY I CHARLES G. GOMEZ KURT YEAGER CITY TREASURER CITY CLERK MARY L. WRIGHT ANDREI� L. HOOPER i � � i AGENDA � � 1. CALL TO ORDER i 2. ROLL CALL OF COUNCIL MEMBFRS i Jchn D. Byork Robert Henning ' E. L. Morris � Evelyn Wells Paul A. Richa�3s II PUBLIC ORAL COMMUNICATIONS i (Regarding Aqenda Items Only) ( i ' � � � � � _ - � � COUNCIL MEETING OF JUNE 22, 1987 � SCHEDULEil MATTERS . 3. BUDGET REVIEW Comments : The proposed Budget was delivered to Council on Wednesday, June 17 where normally it is qiven to Council in May for initiation of workshops to eventually adopt the final budget in late June. However, this year the overall design of the document was highly dependent on whether assessments and fees wou.ld be increased or not. Consequently, the final allocations for expenditures could not be calculated until after the May 19th meeting of the Council. Recommendation: That after staff makes its presentation, Council will discuss each section and continue the meeting to June 30 at 6:00 p.m. 4. REFUNDING OF 1977 AND 1986 BOND ISSUES .' Comments: - By essentially "refinancing" our old bond issues, the City � could realize additional monies to beef up,the General.Fund. Recommendation: That City Council discuss and give direction to staff. 5. TAX AND REVENUE APITICIPATION NOTE ISSUE • , Comments: - This is a request to issue $2,000,000 in tax and revenue anticipation notes for FY 87/88. Recommendation: 1)- Authorize .the staff to negotiate with public finance firms for the best price in issuing these bonds and authorize the Mayor to execute a contract with the lowest bidder. 2) The City Council adopt a re�olution authorizing the issuance and sale of 1987 Tax Anticipation Notes and providing for certain matters in connection therewith. PUBLIC ORALS _ ADJOURNMENT MOTION TO ADJOURN TO A SPECIAL MEETING FOR JUNE 30, 1987 AT 6:00 P.M.IN TAE COUNCIL CHAI+�ERS OF THE CITY HALL, 11330 BULLT_S ROAD, CZTY OF LYNWOOD, CALIFORNIA. �. . . . . . .. ' ' � ' .. � . . . . • i • • � • . • � � � . Date: June 22, 1987 � To: . The Honorable Mayor and Members.of the City Council From: CHARLES G. GOMEZ, City Manager ���`v v Subject: TAX AND REVENUE ANTICIPATION N07E ISSUE Objective• To have Council authorize the issuance of Tax and Revenue Anticipation Notes (TRAN) in an amount of $2,000,000. Background I , On June 16, 1987 staff presented to Council a Request to authorize the issuance of � � TRAN in the amount of $2,000,000 and ut'ilize the services of Seidler-Fitzgerald � to handle related finance services. Being tfie low bidder, Seidler-Fitzgerald ($15,200} was recommended over Miller & Schroeder ($20,000). ! , I . At the meeting, Council expressed some concern that only two finance firms were contacted and requested staff to research other agencies. In order to expedite the issuance of the notes, staff requests authorization from Councii to negotiate with available.public finance consultants to obtain the lowest cost ' for issuing the bonds (more information on this matter wili be presented by staff at the meeting). Recortunendation 1) Authorize staff to negotiate with public finance fihns for the best price in issuing these bonds and authorize the Mayor to execute a contract with the lowest bidder. I Z) Th� C9ty Council adopt a resoiution authorizing the issuance and sale of I 1987 Tax M ticipation `lotes and providing for certain matters in connection there4�ith. � 1 ac�.`ma ��; � _ � I � � , , � _....._..------ - -- _.___�:�-------; __ I ,. . . ' �. � . ����� RESOLUTION NO. • RESOLUTION OF THE CITY COUNCIL OF THE CZTY OF LYNWOOD AUTHORIZING THE ISSUANCE AND SALE OF , 1987 TAX ANTICIPATION NOTES AND PROVIDING FOR CERTAIN MATTERS IN CONNECTION THEREWITH WHEREAS, general law cities are authorized by Seations i 53850 et•seq. of the Government Code of the State of California �� to borrow money by the issuance of temporary notes; and � WHEREAS, this City Council (the "City CounciT") finds � and determines that the sum of not to exceed Two Million One � Hundred Thousand Dollars ($2.100,000) is needed to satisfy ; obligations payable from the General Fund of the City of ,� Lynwood (the "City"), and that it is necessary that up to Two , Million One Hundred Thousand Dollars ($2,100,000) be borrowed � for such purpose at this time by the issuancs of temporary i notes therefor in anticipation of ta�ces, income, revenue, cash � receipts and other moneys to be received by the City ;:or the ! General °ur.d of the City during or allocable to r^iscal Year I 1987-1988; and wHEREAS, the estimated amount of the uncollected ' taxes, income, revenue, cash receipts and other moneys to be ; received by the City for the General Fund of the City during or � _....__. . - --._.__ ._..._ ._. . _.----.__ .... .... .. ...._ ---- — - _ .. --- ---__---- � __. .. . � � - , _ . .: ,. � � allocable to Fiscal Year 1987-1988 and which will be available for the payment of said notes and the interest thereon amounts to more than $ ; and WHEREAS, it apgears, and the City Council hereby finds , and determines, that said sum of Two Million One Hundred Thousand Dollars ($2,100,000), when added to the interest payable thereon, does not exceed eighty-five percent (85�) of the estimated amount of the uncollected taxes, income, revenue, cash receipts and other moneys to be received by the City for the General Fund of the City during or allocable to Fiscal Year 1987-1988 and which wi11 be available for the payment of said notes and the interest thereon; and i WHEREAS, no money has he�eto£ore been borrowed by or I on behalf of the City through the issuance of tax anticipation ! � notes or temporary notes in anticipation of the receipt of, or i payable from or secured by ta:ies, income, revenue, cash ' receipts or other maneys to be received by the City for the General Fund of the City during or al2ocable to Fiscal Year I . '� 1987-1988; and � I WHEREAS, pursuant to Section 53856 0£ the Government � i Code of the State of California, certain unrestricted revenues I I which will be received by the City for the General Fund of the ,� ! Cit�� during or allocable to Fiscal Year 1987-1988 can be i pledged £or the payment of said notes and the interest thereon � (as hereinafter provided); i I ; � i 6020k/1269/132 - 2 ' , I _ `.. -- - _ __ __ _ -- ---- ----,..__----- ___ ___ _ ..._., � � � ; _ I : . . � � , NOW, THEREFORE, the City Council of the City of Lynwood hereby finds, determines, declares and resolves as folloras : Section 1. All of the recitals herein set £orth are true and carrect, and the City Council so finds and determines. Section 2. For the purpose of satisfying ' � obligations payable from the General Fund of the City, the City Council hereby determines to borrow the aggregate principal sum of nc+t to exceed Two Million One Hundred Thousand Dollars : ($2,1.00,000) by the issuance of temporary notes under Sections 53850 et se . of the Government Code of the State of California in anticipation of taxes, income, revenue; cash receipts and other moneys to be received by the City for the General Fund of the City during or allocable to Fiscal Year 1987-1988, which , temporary notes shall be designated "City of Lynwood 1987 Tax . Anticipation Notes" (the "Notes"). The exact amount of funds needed to satisfy obligations payable from the General Fund of the City shall be determined by the Superintendent of the City and be conveyed to the City Council of Supervisors prior to its adoption of *he resolution providing for the issuance of the Notes. The Notes shall be registered notes, be numbered from 1 . consecutively upward in order of issuance, and be in the � denomination o£ $5,000, �25,000, $50,000 or $100,000, or any com'c�ination thereof, as determined at the time of sale thereof. The Notes snall be dated as determined by the City 602tlk/1269/132 - 3 � _ � � ' Counr.il of Supervisors, but not earlier than July 3, 1487, sha11 mature (without option of prior redemption) on the date which is 364 days following their date and shall bear interest, payable at maturity and computed on a 30-day month/360-day year basis, at the rate or rates determined at the time of sale thereof, but not in excess of 12o per annum. Both the _ princ:ipal of and interest on the Notes shall be payable, only upon surrender thereof, in lawful money of the United States of America at the office of the Treasurer of the City of Lynwood in Lynwood, California. Section 3 .. The moneys so borrowed shall be deposited in the General Fund of the City and used and expended by t.he City for any lawful purpose authorized to be made from the General rund of the City. Section 4 . The principal amount of the Notes, together with the interest thereon, shall be payable from taxes, income, revenue, cash receipts and other moneys which are received by the City for the General Fund of the City during the Fiscal Year 1987-1988. As security for the payment of the principal of and interest on the Notes, the City hereby pledges any taxes, income, revenue, cash receipts and other moneys of the City lawfully available therefor (all as provided in Sections 53856 and 53857 of the Government Code of the State of California) which are received by the City for the General Fund o£ the City during or allocable to Fiscal `iear 1987-1988 , (as hereinafter orovided), and the principal of the Notes and 6020k/1269/132 - 4 � _ . __ __--- _--�---- ----- ,. � : � the interest thereon shall constitute a first lien and charge therean and shall be payable therefrom. In order to effect this pledge, the City agrees to cause to be created and established a special trust fund, designated the "City of Lynwood 1987 Tax Anticipation Note Repayment Fund" (the "Repa,tment Fund"). The Repayment Fund will be held by the City, acting as the responsible agent to maintain such fund until the payment of the Notes. The City will cause to be deposited directly to the Repayment Fund an amount equal to 55% of the principal amount of the Notes from the first unrestricte3 revenues received by the City in March, 1988 and an amount equal to 45% of the principal amount of the Notes (together with an amount sufficient to pay the interest to , � becacne due on the Notes) of the unrestricted revenues received by the City in April, 1988, and the principal of the Notes and interest thereon shall constitute a first lien and charge thereon and shall be payable therefrom, and to the extent not : ' so paid shall be paid from any other moneys of the City lawfully available therefor. All moneys on deposit in the Repayment Fund shall be used for the payment o£ the principal of and interest on the Notes and for no other ourpose unti', tn.e principal of and interest or. the Notes has been oaid in full or until provision has been made £or such payment, except that such moneys may be invested by the Treasurer of the City as directed by the City in any lawful investment of City funds as permitted by Section 53601 of the Government Code of the State 6020k/1269/132 - 5 - ----._. ._ _ _ . _. _ __._ _._...---_ --- -- - ,� : .. � � of California; provided, however, that such investments must mature prior to the maturity date of the Notes. The proceeds of any such investments shall be deposited as and when received in the Repayment Fund. Any moneys remaining in the Repayment Fvnd after the Notes and the interest thereon have been paid in full, or provision for such payment has been made, shall be transferred to the General Fund of the City. Section 5 . It is hereby covenanted and warranted by the City that all representations and recitals contained in this resolution are true and correct, and that the City, and its appropriate officials, have duly taken all proceedings necessary to be taken by them, and will take any additional proc�edings necessary to be taken by them, for the levy, collection and enforcement of the unrestricted revenues pledged _ , hereunder in accordance with law and for carrying out the . provisions of this resolution and the Notes, and that the City, and its appropriate officials, will not make provision £or impounding any unrestricted revenues which will be collected by Los Angeles County.er Lhe City for the General Fund of the City during or allocable to Fiscal Year 1987-1988 except after first having made provision for the deposits required by Section 4 hereof. Section 6 . For purposes of this Section, the folTowing terms shall have the meaning set forth below: (a) "Gross Proceeds" shall mean the sum of the following amounts: (i) original proceeds, being the amounts 6020k/1269/132 - 6 - __ --- -- ---- ._ .._ --��---. _.. -.._ ..- � , � � received by the City as proceeds of the original issuance of the Notes (after payment of all expenses of issuing the Notes); (ii) investment proceeds, being amounts received at any time by the County or the City, such as interest and dividends, resulting from the investment of proceeds of the Notes, includ'ang profits and less losses received on such investment; (iii) transferred proceeds (as defined in Section 1.103-14(e)(2)(ii) of the Regulations); (iv) amounts, other than original proceeds and investment proceeds, held in any fund or account and reasonably expected to be used to pay principal of or interest due with respect to the Notes; (v) securities or obligations pledged as security for the payment .of t�e Notes by an ultimate obligor {or a related person) or , the City;°(vi) amounts used to pay principal or interest with respect to the Notes; and (vii) amounts received as a result of investing the, amounts listed in clauses (i) through (vi). (b) "Investment Property" shall mean any security (as said term is�,de£ined in Section 165(g){2)(A) or (S) of the � , Code), obligation, annuity or investment-type property within the meaning of Section 148(b)(2) ofi the Code in which Gross Proceeds are invested, but excluding, however, obligations of the type described in Notice 87-22 published in Internal Revenue Bulletin 1987-10 on March 9, 1987 any any other property excluded under the Regulations. � , (c) "Net Note Proceeds" sha11 mean the par amount of the Notes plus accrued interest and premium, i:f any, less the 602�k�1269/132 ' 7 - ,..__. - - _ _ _ _ ----- -- -�-.,_. __ . . � _ � amount of any original issue discount, less the proceeds of the Notes applied to pay the costs of issuance of the Notes. (d) "Nonpurpose Obligation" shall mean any Investment Propet�ty in which Gross Proceeds are invested and which is not acquired to ca=ry out the governmental purpose of the Notes. (e) "Regulations" shall mean regulatior_s promulgated by the Department of the Treasury with respect to obligations the interest on which is excludable from gross income for federal income tax purposes. � In order to preserve the exclusion from gross income for federal income tax purposes of interest due on the Notes, and £or no other reason, the City covenants to comply with all applicable requirements of the Internal Revenue Code of 1986 (the "Code"), together with any amendments thereto or Regulations promulgated thereunder necessary to preserve such exclusion and specifically covenants, without limiting the generality of the foregoing, that: `�, (a) it will make no use of Gross Proceeds which at any tims uill cause the Notes to be "arbitrage bonds" within the meaning of Section 148 of the Code and applicable Regulations and will take any affirmative steps necessary to comply with ths rebate , provisions of Section 148(f).of the Code should such provisions be determined by Bond Courisel to be applicable to the Notes; � 602ak/1269/13 — $ . � - � (b) it will not use in excess of 5% of the proceeds of the Net Note Proceeds to make or finance loans to any person other than a governmental unit _ (other than loans which are used to acquire or carry Nonpurpose Obligations or are for the purpose of enabling the borrower to finance any governcnental tax or assessment of general application for a specific essential governmental function, all as set forth in , Section 141(c) of the Code); (c) it will neither use nor permit the use of more than 10� of the Net Note Proceeds for any private business use, or enter into an arrangement such�that more than 30% of the principal of the Notes or 10% of the interest due on the Notes during the term thereo£ is., directly or indirectly, secured by any interest in (i) property used or to be used for a private business use or (ii) payments in respect of such property or to be derived from payments in respect of property, or borrowed money, used or to be used for a private business use, all as set fcrth in Section 141(b) of the Code; and ± (d? it will not take any act3on that would cause the Notes to be "federally guaranteed" within the meaning of Section 149(b) of the Code and, in that regard, no portion of the proceeds of the Notes shall be (i) used in making loans guaranteed by the United � 6020k/1269/132 - 9 - . .� • , States (or any agency or instrumentality thereof); (ii) invested directly or indirectly in deposits or accounts insured by the Federal Deposit insurance Corporation, Eederal Savings and Loan Insurance Corporation, National Credit Union Administration or any other similar federally chartered corporation; or . (iii) otherwise invested directly or .indirectly in obligations guaranteed (in whole or in part) by the United States (or any agency or instrumentality . thereof); except (1) during the initial period following issuance of the Notes and ending on the final expenditure of the Note proceeds; and (2) for amounts held in a rese=ve fund satisfying Section 148(d) of the Code; (3) for amounts held in the � Repayment Fund or other bona fide debt service funds; (4) for investments in obligations issued by the United States Treasury; (5) £or investments in obligations guaranteed by the Federal National Mortgage Association, Gover_rsnent National Mortgage Association or Fede.ral H'ome Loan Mortgage Corporation, or (6) for investments permitted under Regulations issued pursuant to Section 149tb)(3)(B) o£ the Code. Notwithstanding any other provision of this resolution to the contrary, upon the City's failure to observe, or refusal to comply with, the above covenants, no person other than the owners of the Notes shall be entitled to exercise any right or 6020k/1269/132 - 10 - _--- - - - — _ __.. . __,-.-►-_--- � � � � ' remedy against the City on the basis of the City's failure to observe, or refusal ±o comply with, the above covenants. The City shall at all times do and perform aZ]. other acts and things necessary or desirable and within its power to assure that interest paid on the Notes shall for the purpose of federal income taxation be excludable from the gross income of the zecipients thereo£ and for the purpose of California , personal income taxation be exempt from such taxation. Section 7 . The City shall offer the notes under bidding provisions allowing for the issuance of notes substantially in accordance with the suggested official notice of sale attached hereto as Exhibit A and incorporated by reference herein. , Section 8. The Official Statement presented to this City Council is hereby approved for use in connectior. with the sale o£ the Notes in substantially the form presented, together with such changes, modifications and revisions as may be approved by tYie City Manager upon the advice of Bond Counsel � to the City and the City Manager is hereby authorized to execcite a final Official Statement on behalf of the City. Sectica 9. The Mayor, City Clerk, City Manager and officers of the City are hereby authorized and directed �ro take all actions, including without limitation execution of all certi£icates and documents necessary or aporopriate to the � consummation of the sale and delivery of the Notes. 6021�k/1269/132 - 11 - . � * remedy against the City on the basis of the City's failure to observe, or refusal to comply with, the above covenants. The City.shall at all times do and perform all other • acts and things necessary or desirable and within its power to assure that interest paid on the Notes shall for the purpose of federal income taxation be excludable from the gross income of the recipients thereof and for the purpose of California � personal income taxation be exempt £rom such taxation. - Se�tion 7 . The City shall offer the notes under bidding provisions allowing for the issuance of notes substantially in accordance with the suggested official notice of sale attached hereto as Exhibit A and incorporated by reference herein. :: _. -. • Section.8 The Official Statement presented to ' this City Council is hereby approved for use in connection with � the sale of the Notes in substantially the form pres�nted, �together with such changes, modifications and-revisions as may be approved by the City Manager upon the advice of Bond Counsel to the Citv and the City Manager is hereby authorized to execute a final 0£ficial Statement on behalf of ths City. Section 9. The Mayor, City Clerk, City Manager and officers of the City are hereby authorized and directed to take all actions, including without limitation execution of all certificates and documents necessary or appropriate to the consummation of the sale and delivery of the Notes. 6020k/1269/132 - 11 - : .. . � �. Section lo . This City Council hereby declares its reasonable e�ectation that it will not issue during calendar year 1987 in excess of $5.000,000 of °qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, or in excess of $5,000,000 of tax exempt bonds within the meaning of Section 148(f){4)(C) of the Code, and the Notes are hereby designated "qualified tax exempt obligations" within the meaning of Section . 265(b)(3)(B)(ii) of the Code. Section 11 . Stradling, Yocca, Carlson & Rauth is hereby appointed as bond counsel for the Notes on the terms set ' forth in the letter proposal on file with the City Manager. PASSED AND ADOPTED by the City Council the City of Lynwood, State of California, this day of June, 1987, by the following vote: AYES: Councilmembers � NOES: Councilmembers ABSENT: Councilmembers Mayor, City of Lynwood City Clerk, City of Lynwood 6020k/1269/132 ' 12 - _ -- --... _ _ _ . _. __ _- _ . . _. - -- - -- -- _ - - _.._ __ --- - -- --------- :�r ' " � �. , E}�-IIBIT A NOTICE INVITING BIDS ON $2,100,000 TAX ANTICIPATION NOTES OF THE CITY OF LYNWOOD NOTICE IS HEREBY GIVEN that sealed bids for the purchase of $2,100,000 par value tax and revenue anticipation notes of the City of Lynwood (the "City"), California, will be received by at the place and up to the times below specified: TIME: 10:00 a.m. PDST Monday, July 14, 1987 � pi,p,�; Office of the City Clerk City of Lynwood 11330 Bullis Road Lynwood, California 90262 IF NO LEGr1L OR ACCEPTABLE BID IS RECEIVED ON July 14,,1987, BIDS WILL BE ACCEPTED AT THE SAME PLACE AND TIME ON THE NEXT TWO (2) SUCCEEDING TL�SDAYS CObII�SENCING July 21, 1987. . Issue. $2,100,000 principal amount of notes dated .' 1987 designated "City of Lynwood 1987 Tax Anticipation Notes" (the "Notes"). The Notes shall be issued pursuant to Section 53850 et seg. o£ the California Government Code, and a resolution adopted by the City Council of the City of Lynwood. MaturitY. The Notes will mature on . 1 . , Interest. The Notes shall bear interest at a rate to be fixed upon the sale the=eof but not to esceed 12a, per annum, payable at maturity. '. Sianatures. The signature on the Notes of the Mayor and City Clerk of the City of Lynwood shall be affixed by facsimile and the sia_nature of the Treasurer o£ the City (the Treasurer ), or his designated de�uty, shall be manually affixed. Pavment. The Notes and the interest thereon are payable in lawful money of the United States of Amezica. The Notes are payable at the office of the Treasurer as oaying agent and registrar, in Lyr.wood, California. Principal and interest payable at maturity shall be oaid upon surrender of the Notes to each registe:ed owner thereof by check or draft mailed 6020k/1269/132 - 13 - � . • ' � � . � thereto, at his or her address as it appears on the registration books kept by the Treasurer. Transfer and Exchanae. The Notes shall be issued as fully registered Notes, without coupons. Transfer of ownership of the Notes shall be made by exchanging the same for new fully registered notes. All of such exchanges shall be made in such manner and upon such reasonable terms and conditions as may from time be determined and prescribed by the City Council of the City (the "City Council"). The first such exchange shall be free of any cost or charge to the person, form or • corporation requesting such exchange except for any tax or governmental charge that may be imposed in connection with such exchange. Each Note shall bear interest from its dated date. Reqistration. The successful bidder must deliver to the Treasurer, 1330 Bullis Road, Lynwood, California 90262, no later than 4:30 p.m. Pacific Daylight Savings Time on July 20, 1987, a notice stating the names of the registered owners and the address for the mailing of interest payments and the denominations in which the Notes are to be issued. If the successful bidder fails to submit to the Treasurer such names, addresses and denominations by the required time, one Note will be issued, in the full principal amount of the Notes, and the Notes will be registered in the names of the successful , bidder. , Callable The Notes shall not be subject to call or redemption prior to maturity. Purpose o£ Issue. The Notes were authorized for the purpose of paying certain expenditures of the City in advance , of the City's receipt of anticipated tax and other revenues for Fiscal Year 1987-88. Securitv. The Notes are payable as to both principal and interest from taxes, income, revenue, cash receipts and other moneys which are received by the City for the General Fund of the City during or allocable to Fiscal Year 1987-88. The City has agreed to have the Treasurer establish a special trust fund into which the City has pledged to deposit an amount equal to 55°s of the principal amount of the Notes from the installment o£ ad valorem oroperty taxes on the secured roll to be distributed by the Treasurer to the City in December, 1987 and an amount equal to 45°s of the principal amount of the Notes (together with an amount sufficient to pay the interest to become due on the Notes) from the installment of ad valorem property taxes on the secured roll to be distributed by the Treasurer to the City in April, 1988, and the principal of the Notes ar.d interest tnereon shall constitute a first lien and charge thereon and snall be payable therefrom. 6020k/1269/132 — 14 — ---- - --_ �__ - ---- --__-- ax �, � � By statute, the Notes are declared to be a general obligation of the City and to the extent not paid from said pledged moneys shall be paid, together with the interest thereon from any other moneys of the City lawfully available therefor. Under provisions of the California Constitution, the City is generally prohibited from incurring any indebtedness or liability exceeding in any year the income and revenue�provided for such year, without the assent o£ two-thirds of its qualified electors voting in an election called for such purpose. TERMS OF SALE Interest Rate The maximum rate bid may not exceed 12% per annum, payable at maturity. Bidders must specify the rate of interest which the Notes shall bear. Bids must be for the entire $2,100,00o principal amount of the Notes offered for sale. Bidders must specify one rate of interest for all Notes to the stated maturity date. Award. The Notes shall be sold for cash only. All bids , must be for not less than all of the Notes hereby offered for sale and each bid shall state that the bidder offers accrued interest to the date of delivery, the purchase price, which shall not be less than par, and the interest rate at which the bidder offers to buy the Notes. Each bidder shall state in its bid the total net interest cost in dollars and the average net interest rate determined thereby, which shall be considered informative only and not a part of the bid. Lowest Responsible Bid. The Notes will be awarded to the bidder submittipg the lcwest resPonsible bid considering t The ' interest rate s ecified and the remium offered, if any. lowest responsible bid will be determined by deducting the amount of the premium bid (if any) from tne total amount of interest which City would be required to pay from the dated date of the Notes to the maturity date thereof at the interest rate specified in the bid, and the award will be made on the basis of.the lowest net interest cost to City. The successful bidder must pay accrued interest .from the date of the Notes to the date of delivery, computed on a 360-day year basis. If there are two or more equal bids, the City Council of Supervisors will determine in its discretion which bid to accept. RiQht of Reiection. The City Council reserves the right, in its discretion, to reject any and all bids received and to the extent not prohibited by law to waive any irregularity or informality in any bid. 6020k/1269/132 - 15 - - _ ----_..__ ..__ �x . :� � • • Prompt Award. The City Council shall take action awarding the Notes or rejecting all bids not later than twenty-six (26) hours after the time prescribed for the receipt of the proposals; provided that the award may.be made after the expiration of the specified time if the successful bidder waives the time for award. Place of Deliverv; Funds for Payment. Delivery of the Notes will be made to the successful bidder at the offics of the Treasurer in the City of Lynwood, California, or at such other place as the Treasurer may select on or about July 30, 1,987. Payment for the Notes must be made by cashier's check. ` Oualified Tax Exempt Oblicfation. The Notes are "qualified tax exempt obligations" within the meaning of Section 265(b)(3)(B)(ii) of the Internal Revenue Code of 1986, as amended (the "Code") provided that the successful bidder is a "financial institution" to which the provisions of that section aPP Form of Bid Each bid, together with the bid check, must be submitted on, or in substantial accordance with, proposal forms provided by the Treasurer and be in a sealed envelope addressed to.the T=easurer, with the envelope clearly marked "Proposal for City of Lynwood i987 Tax Anticipation Notes". Bid Check A certified or cashier's check on a responsible bank or trust company in an amount equal to 1% of the principal amount of the Notes, payable to the"order of ±he Treasurer, must accompany each proposal as a guaranty that the bidder, if succESSful, will accept and pay for the Notes in accordance with the terms of its bid. The proceeds of the check accompanying any accepted proposal may be cashed and applied on the purchase price or, if such proposal is accepted but not performed, unless such failure of performance shall be caused by any act or omission of City, shall then be cashed and the proceeds retained by the issuer. The check accompanying each unaccepted proposal will be returned promptly. No interest , will be paid on the bid check. Chanqe in Tax Exempt Status. At any time before the Notes are tendered for delivery, the successful bidder may disaffirm and withdraw the proposal if the interest received by private owners of notes of the same type and character as the Notes shall be declared to be includable in gross income under p=esent federal income tax laws, either by a=uling of the Internal Revenue Service or by a decision of any federal court, or shall be declared taxable or be required to be taken into 6020k/1269/132 - 16 - - - - ---._.. _ -- - --- - ---- ------------ ---a..- -.. . � � any federalc�ncomentax laweenactednsubsequent to the date this notice. Closinq Papers• Bond Printinq. Each bid will be understood to be conditioned upon the City furnishing to the purchaser, without charge, concurrently with payment and delivery of the Notes, the following closing papers, each dated the date of delivery: , , (a) LeQal opinion - The opinion of Stradling, Yocca, Carlson fi Rauth, a Professional Corporation, Newport Beach, Cali£ornia, Bond Counsel, approving the validity of the Notes and stating that interest on the Notes is excluded from gross income for federal income tax purposes under present federal income tax laws and that such interest is also exempt from personal income taxes of the State of California under present state income tax laws. A copy of said opinion of Stradling, Yocca, Carlson & Rauth, certified by the City Clerk by facsimile signature, will be printed on the back of each Note. No charge will be made to the purchaser for such printing or certification. (b) A certi£icate of City certifying to the £ollowing: (1) that on the basis of the facts, estimates and circumstances in existence on the date o£ issue, it is not e�ected that the proceeds of the Notes will be used in a manner that would cause the Notes to be arbitrage bonds or pzivate activity bonds; and (2) that there.is no litigation threatened or pending affecting the validity of the Notes. (c) A certificate of the City signed by officers and representatives of the City certifying that said o£ficers and representatives have signed the.Notes, whether by respectively dulyaautho execute the (d) The re�2ipt of the Treasurer or his desi_c,nated deputy showing that the purchase price of the Notes, inciuding interest accrued to the date of delivery thereof, has been received by the Treasurez or his designated deputy; and (e) A certificate of City, signed by an officer of City, actinq in his of.ficial and not his perscnal capacity, to the effect that at the time of the sale of the Notes, and at all times subsequent thereto up to and including the time of delivery of the Notes, information regarding the City contained in the Official Statement relating to the Notes did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the circumstances therein, in light of circumstances under �ahich they were made, not misleading. 6020k/1269/13 - 17 - .__ . _ .._. ... ._.. ----- _------- _.. :: �. " � � The cost of printing the Notes will be borne by the City. CU5IP Numbers. It is antieipated that CUSIP numbers will be pzinted on the Notes, but neither the failure to print such numbers on any note nor error with respect thereto shall " constitute cause for a failure or refusal by the purchaser . thereof to accept delivery of and pay for the Notes in accordance with the terms o£ the purchase contract. All expenses of printing CUSIP numbers on the Notes and the CUSZP Service.Bureau fees shall be paid by City. Filinq Fees and Closinq Costs. The successful purchaser of the Notes will be responsible for payment of fees of the California Debt Advisory Commission, Municipal Secuzities �� Regulation City Council, Public Securities Association and Cali£ornia Public Securities Association. Information Available. Requests for information concerning the City or for copies of the Official Statement prepared by the City describing the Notes should be addressed to: City of Lynwood 11330 Bullis Road . Lynwood, Califo=nia 90262 Attention: Don Frazer � (.213) 603-0220 Consultant's Name will appear on the space. . ' �\ � � � 6020k/1269I13 — 18 _--- --- - ._ .------ - _._ ...__... - ----- —_-------- . _ . _ _ _ . ,;;y • . . � � . The City will provide the successful bidder 100 copies of the Official Statement to be used in connection with any resale of the Notes. Dated: June , 1987 Mary Wright, Treasurer, City of Lynwood 6020k/1269/132 - 19 - . � , � � . . PROPOSAL FOR THE PURCHASE OF CITY OF LYNWOOD COUNTY OF LOS ANGELES 1987 TAX ANTZCIPATION NOTES . -1987 Honorable City Council of the City of Lynwood c/o Treasurer of the City of Lynwood 11330 Bullis Road Lynwood, California 90262 Gentlemen: We offer to purchase City of Lynwood 1987 Tax Anticipation Notes in the principal amount, in such denomination, maturing and bearing interest as follows: Principal Interest Amount Maturitv Rate $ June ,. 198_ '% � and to pay therefor the principal amount there- of plus a premium of $ plus inter- est accrued on such Notes to the date of deliv- ery thereof. DENOMINATIONS at $ S,OOo at $ 25,o�0 ' at $50,000 at $100,000 This proposal is made subject to all th�.� terms and con3itions of the Notice inviting Bids for the Notes dated 3une , 1987, all of which te=ms and conditions are made a part hereof as £ully as though set forth in full in this proposal. This proposal is subject to acceptance, in whole or in . part, within twenty-six (26) hours after the expiration of the ticne for the receipt of proposals, as speci£ied in said Notice Inviting Bids. r 602Ok/1269/132 - 20 - -... .. _ _ _ _.. _ - - ----- . _--�- - , .. � � There is enclosed herewith a certified or cashier's check for $ (1% of the principal amount o£ Notes bid for hereunder) payable to the order of the Treasurer of the City of Lynwood. We hereby request that printed co.pies of the O£ficial Statement pertaining to the Notes be furnished us in accordance with the terms of said Notice Inviting Bids. The following is our computation made as provided in the Official Notice o£ Sale, but not constituting any part of the £oregoing, of the.net interest cost under the £oregoing proposal: Gross Interest Cost ...••••�•••••••••••°•�•°• � Less Premium ................................ $ Net Interest Cost ............................ $ Effective Rate .............................. ' % Authorized Signature(s): Firm(s)• , 6020k/1269/132 - 21 - - ----- ----_ - ---- _ - � � � EXEiIBIT B � NOTICE OF INTENTION TO SELL BONDS . $2,100,000 CITY OF LYNWOOD CJUNTY OF LOS ANGELES STATE OF CALIFORNIA 1987 TAX ANTICIPATION NOTES - The City Council of the City of Lynwocd, California, intends to receive sealed bids until 4:30 p.m., Pacific Daylight Savings Time, on Tuesday July 14, 1987 at the Office of the Treasurer of the City of Lynwood, California, 11330 Bullis Road, Lynwood, California 90262, for the above Notes dated July 1, 1987, maturing on June 30, 1988. Mailed bids should be sent to the Treasurer at the same address. IF NO LEGAL BID IS RECEZVID ON JULY 14, 1987, BIDS WILL BE ACCEPTED AT THE SAME PLACE AND TIME ON THE NEXT TWO SUCCEEDING TUESDAYS, COMMENCING ON JULY 21, 1987, UNTIL THE NOTES ARR AWARDED. Copies of the complete Notice Inviting Bids and copies o£ ' the Official Statement may be obtained from the City.'s fir�ancial advisor, Seidler-Fitzgerald Public Finance, 515 South Figueroa Street,'Los Angeles, Cali£ornia 90071, Attention: Mr. Joseph Nocella. Andrea Hooper, City Clerk Dated: June _, 1987 � 602tlk/1269/132 ' 22 - - -__..____ - ----- �_---- � . .� � ; ���i�"� [LANGUAGE ON COVER7 Zn the opinion of Stradling, Yocca, Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond. Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Bonds is exempt from present California personal income taxes, is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, subject to certain limitations as described herein under "T� Exemption". See "Tax Exemption" herei.n'for a description of certain provisions of the Internal Revenue Code of 1986 which may affect the tax treatment of interest on the Bonds by certain owners of the Bonds. [TpX EXEMPTIONJ In the opinion of Stradling, Yocca, Carlson & Rauth, a Professional Corporation, Bond Counsel, under existing laws, regi.ilations, rulings and judicial decisions, interest on the Bonds is exempt £rom personal income t�es imposed by the State of California, is excluded f=om gross income for federal income ta�c purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, Bond Counsel notes that, with respect to corporations (as defined for federal income taa purposes), interest on the Bonds will be included in determining corporate adjusted net book income (adjusted current earnings for taxable years ending after December 31, 1989), a portion of wfiich may increase the alternative minimum taxable income of such corporations. Bond Counsel's opinion as to the exclusion f=om gross income o£ interest on the Bonds is subject to the condition that the City comply with all requirements of the Inte=nal Revenue Code of 1986 (the "Code") that must be satis£ied subsequent to the issuance of the Bonds to assure that interest on the Bonds will not become includable in qross income for federal income tax purposes. Failure to comply with such requirements could cause interest on the Bonds to be included. in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with all such requirements. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring after the date of issuance of the Bonds may affect the tas status of interest on the Bonds. _ _ __,�_ - ____ - � �, � � Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes, the accrual or receipt of interest on the Bonds may otherwise affect the federal income tax liability of the recipient. The extent of these other tax consequences will. depend upon the recipient's particular tax status or other items of income or deductions. Bond Counsel expresses no . opinion regarding any such consequences. Accordingly, all poten.tial purchasers should consult their tax advisors before purchasing any of the Bonds. 6042k/1269/13 - Z - _ - - __--. . . _..�-_ - -- -- --- - ---- ..__ ,� . . � � , ����� BOND COUNSEL AGREIIKENT THIS AGREEMENT, made as of the first day of June, 1987, by and between the CITY OF LYNWOOD, a municipal corporation, duly organized and existing under the laws of the " State of California (herein the "City"), and STRADLING, YOCCA, � CARLSON & RAUTH, a professional corporation (herein "Bond Counsel"); R E C I T A L S: The City des'ires to issue tax and revenue anticipation . notes (the "Notes") for fiscal year 1987-88 and desires to retain Bond Counsel to do the necessary legal work hereinafter outlined in connection with the issuance of the Notes upon the terms and conditons set forth herein; NOW, THEREFORc�, in consideration of the mutual covenants, terms and Conditions contained in this Agreement, the parties hereto agree as follows: I. The City employs Bond Counsel to furnish the legal sezvices set forth below and Bond Counsel agrees to furnish those legal services. Bond Counsel agrees to consult with and advise City officials and the financial consultants or underwriters selected by the City as to the best legal method of accomplishing the issuance of the Notes. . ., . � � 2. Bond Counsel will perform the following services: upon request of City staff, attend the meetings of the City Counci2 rel.ating to the Notes, attend due diligence meetings and review the official statement prepared by the financial consultant to the City, prepare the notice inviting bids'and other sale documents, prepare all resolutions to be adopted by the City, coordinate the printing of the Notes, attend and supervise the closing, and issue a legal approving opinion to the purchaser of the Notes. 3. For the services to be rendered under this Agreement, the City agrees to pay Bond Counsel a fee of $3,000 and I e�rpenses of $500. The foregoing fee and expenses will be paid + following delivery of the Notes. Should the contemplated ' - , issuance of the Notes be abandoned or discontinued at any time, the City agrees to reimburse Bond Counsel for its expenses , incurred to date, not to exceed $500. \ Any legal services rendered to the City upon request following the delivery of the Notes shall be billed on a monthly basis, at the then hourly rate of the attorney '� pezforming the reauested service. i 5, Bond Counsel may, £rom time to time, have clients with interests adverse to the City. Bond Counsel reserves the right I to represent said clients except,on matters relating to the i � issuance and sale of the Notes. � � ( � � 6022k/1269/132 - 2 - � � � __ __ _,- --' _._ _ - --___ - - � - ------ i I .. ' I � . � '. � � ", IN WITNESS WHEREOF, as of the date set forth above, the City has caused this instrument to be executed by the Assistant Superintendent of Business Services; and Bond Counsel . has caused this instrument to be executed by one of its � authorized officers. CITY OF LYNWOOD � . , By. Mayor STRADLING, YOCCA, CARLSON & RAUTH, a Pro£essional Corporation By: E. Kurt Yeager • � � . I � I , , j ; I � i . � 1 , ' i I - 3 - i 6022k/1269/132 � _ __ I -------- .._ _ . __—..-- ,_. . - -.-�- -- � _-- - - ----- I