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
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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"''
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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
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AGENDA �
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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) (
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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.
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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). !
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. 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
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1987 Tax M ticipation `lotes and providing for certain matters in connection
there4�ith.
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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
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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 �
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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
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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
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WHEREAS, no money has he�eto£ore been borrowed by or I
on behalf of the City through the issuance of tax anticipation !
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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
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1987-1988; and � I
WHEREAS, pursuant to Section 53856 0£ the Government �
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Code of the State of California, certain unrestricted revenues I
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which will be received by the City for the General Fund of the ,�
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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
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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
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' 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
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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
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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
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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
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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
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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
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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;
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(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
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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
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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
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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.
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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.
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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
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NOES: Councilmembers
ABSENT: Councilmembers
Mayor, City of Lynwood
City Clerk, City of Lynwood
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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 .
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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
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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.
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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.
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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
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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.
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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. . '
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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
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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
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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)•
,
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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 �
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[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.
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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.
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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.
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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. �
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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 �
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By.
Mayor
STRADLING, YOCCA, CARLSON & RAUTH,
a Pro£essional Corporation
By:
E. Kurt Yeager •
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