HomeMy WebLinkAbout1970-09-01; City Council; 209; Water Revenue Bond Sale'10
THE CITY O F CARLSBAD,CALIFORNIA
Agenda Bill No.209 Date: September 1, 1970
'Referred To :
Subject:f\
Water Revenue Bond Sale
Submitted By:
City Manager
Statement of the Matter
Mr. Fritz Stradling, Attorney for the sale of the Water Revenue Bonds,
has prepared the necessary documents to proceed with the sale of
the bonds. Mr. Matteson from Bartle Wells Associates will be present
Tuesday evening for the Council meeting to present the Official
Statement.
Exhibit
1. Resolution #1779, authorizing issuance of Water Revenue Bonds
2. Resolution #1780, authorizing the taking of bids.
3. Resolution #1781, approving the official statement.
Staff Recommendations
AJ3 No .209 ' Date: September 1, 1970
City Manager's Recommendation • •
It is recommended that the City proceed with the sale of the water bonds
by the adoption of the attached resolutions, if they mee't with your
approval or as amended.
Counci1'Action
9-1-70 Resolution 1779, 1780, and 1781 adopted, authorizing issuance
of Water Revenue Bonds, taking of bids and approving official statement
-2-
CITY OF CARLSBAD
RESOLUTION NO. 1779
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA,
AUTHORIZING THE ISSUANCE OF $1,225,000 WATERWORKS REVENUE
BONDS OF SAID CITY AND PROVIDING THE TERMS AND
CONDITIONS FOR THE ISSUANCE OF SAID BONDS.
Page
Recitals 1
Section 1. Definitions 2
Section 2. Amount, Issuance, Purpose
and Nature of Bonds 3
Section 3. Equality of Bonds, Pledge of
Revenues 3
Section 4. No General City Liability... 3
Section 5. Description of Bonds 4
Section 6. Interest 4
Section 7. Execution of Bonds 4
Section 8. Registration 4
Section 9. Call and Redemption of
Bonds Prior to Maturity.. 4
Section 10. Notice of Redemption 5
Section 11. Redemption Fund 6
Section 12. Effect of the Notice of
Redemption 6
Section 13. Funds 7
Section 14. Construction Fund 7
Section 15. Water Fund 7
Section 16. Bond Service Fund 7
Section 17. Reserve Fund 8
Section 18. Maintenance and Operation
Fund 8
Section 19. Additional Fund Uses 9
Section 20. Warranty 9
Section 21. Covenants 9
Covenant 1. Punctual Payment ... 9
Covenant 2. Discharge Claims .... 9
Page
Covenant 3. Commence Acquisition 10
Covenant 4. Operate Enterprise in
Efficient and Econom-
ical Manner 10
Covenant 5. Against Sale 10
Covenant 6. Insurance 10
Covenant 7. Records and Accounts 11
Covenant 8. No Free Service 11
Covenant 9. Rates and Charges ... 11
Covenant 10. No Priority for
Additional Bonds .... 12
Covenant 11. Limits on Additional
Debt 12
Section 22. Investment of Funds 12
Section 23. Lost, Destroyed or Mutilated
Bonds 13
Section 24. Cancellation of Bonds 13
Section 25. Consent of Bondholders .... 13
Section 26. Calling Bondholders'
Meeting 13
Section 27. Notice of Meeting 13
Section 28. Voting Qualifications 14
Section 29. Issuer-owned Bonds 14
Section 30. Quorum and Procedure 14
Section 31. Vote Required 14
Section 32. Bond and Coupon Forms ... 15
Section 33. Proceedings Constitute
Contract 18
Section 34. Future Contracts 19
Section 35. Severability 19
Section 36. Effective Date 19
CITY OF CARLSBAD
RESOLUTION NO. 1779
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA,
AUTHORIZING THE ISSUANCE OF $1,225,000 WATERWORKS REVENUE
BONDS OF SAID CITY AND PROVIDING THE TERMS AND
CONDITIONS FOR THE ISSUANCE OF SAID BONDS.
WHEREAS, pursuant to Article 8, Chapter 3, Division 2, Title 5 (commencing at Section
53540) of the Government Code of the State of California, this City Council, without a vote of
the electors, may issue revenue bonds of the City if:
(a) The principal amount of such bonds does not exceed the then unissued balance of
the principal amount of bonds of the same type authorized at an election heretofore held in
the City;
(b) The bonds are issued for the same purpose as that for which said unissued bonds
were authorized; and
(c) The bonds are issued in accordance with the laws governing the issuance of bonds
of the City, except for the requirement of a bond election;
and
WHEREAS, pursuant to Resolution No. 1545 of the City Council of the City of Carlsbad, a
special municipal election was held in said City on November 5, 1968, for the purpose of sub-
mitting to the qualified voters of said city the following proposition of issuing water revenue
bonds pursuant to the Revenue Bond Law of 1941 (Chapter 6, Part 1, Division 2, Title 5 of the
Government Code of the State of California), to wit:
PROPOSITION N —BOND PROPOSITION: Shall the City of Carlsbad issue water
revenue bonds in the principal sum of $1,800,000 for the acquisition, construction and financing of
extensions, enlargements and improvements of the water system of said city, including works and
facilities for the storage, transmission and distribution of water, the reconstruction of parts of
said system, and the acquisition of land, easements, rights of way and other property necessary
therefor, and including all engineering, inspection and legal fees, costs of the issuance of said
revenue bonds, bond reserve funds, and other costs and expenses incidental to or connected with
such acquisition, construction and financing?
and
WHEREAS, said proposition was approved by the votes of more than a majority of all the
voters voting on said proposition at said special election;
and
WHEREAS, the bonds authorized at said election have not been issued and it is deemed
necessary that $1,225,000 of said unissued bonds be canceled and that pursuant to said Article 8
revenue bonds in the principal amount of $1,225,000 of the same type and for the same purpose
be issued;
and
WHEREAS, $767,000 Waterworks Revenue Bonds, 1958 and $300,000 Waterworks Revenue
Bonds, 1960, payable out of revenues derived from the operation of the enterprise, as hereinafter
defined, have been issued pursuant to Resolution No. 397 and Resolution No. 711, respectively,
of the City Council of the City of Carlsbad;
and
WHEREAS, the conditions set forth in Sections 21, Covenants 11 of said Resolution
Nos. 397 and 711 having been satisfied, said $1,225,000 bonds when issued and outstanding shall
be on a parity with said $767,000 Waterworks Revenue Bonds, 1958 and $300,000 Waterworks
Revenue Bonds, 1960, and the provisions set forth in this resolution are supplementary to the
provision in said Resolution Nos. 397 and 711;
NOW, THEREFORE, the City Council of the City of Carlsbad, California, DOES HEREBY
RESOLVE, DETERMINE AND ORDER as follows:
Section 1. Definitions. As used in this resolution the following terms shall have the follow-
ing meanings unless the context requires otherwise:
(a) "City" means the City of Carlsbad, California.
(b) "City Council" or "Council" means the City Council of said City.
(c) "Revenue Bond Law" means The Revenue Bond Law of 1941 as cited in the recitals
hereof.
(d) "The bonds", "said bonds" or "1970, Series A bonds" means the bonds authorized
by this resolution.
(e) "Enterprise" means the enterprise defined in said Resolution No. 1545, calling said
election, as follows:
"The entire water system of the City of Carlsbad including all improvements and
extensions later constructed or acquired."
(f) "Gross revenues of the enterprise" means all revenues (as defined in Section 54315
of the Government Code, which include all charges received for, and all other income and
receipts derived by the City of Carlsbad from the operation of the enterprise or arising from
the enterprise) received by the City of Carlsbad from the services, facilities and water of the
enterprise, provided that any inclusion fee or fees which the City is required to charge under
paragraph 5 of the Agreement for Purchase, made August 30, 1957, between the City and the
Carlsbad Mutual Water Company, shall not be included therein.
(g) "Necessary and reasonable maintenance and operation costs of the enterprise"
includes the reasonable expenses of management, repair and other expenses necessary to
maintain and preserve the enterprise in good repair and working order.
(h) "Net revenues of the enterprise" means the amount of the gross revenues of the
enterprise remaining after payment therefrom of the necessary and reasonable maintenance
and operation costs of the enterprise.
(i) "Maximum amount of annual debt service" means the maximum amount required to
be paid in any fiscal year on account of interest and principal coming due on said bonds.
(j) "Fiscal year" means the year period beginning on July 1st and ending on the next
following June 30th.
(k) "1958 bonds" means the $767,000 Waterworks Revenue Bonds, 1958.
(1) "1960 bonds" means the $300,000 Waterworks Revenue Bonds, 1968.
(m) "Parity bonds" means the outstanding 1958 bonds and the 1960 bonds.
(n) "Reserve Funds" means the Reserve Funds created by Resolution Nos, 397, 711 and
the Reserve Fund created by this resolution.
Section 2. Amount, Issuance, Purpose and Nature of Bonds. That under and pursuant to
Article 8, Chapter 3, Division 2, Title 5 of the Government Code of the State of California and
said Revenue Bond Law, revenue bonds of the City of Carlsbad in the amount of $1,225,000 shall be
issued for the purposes stated in the recitals hereof. Said revenue bonds shall be and are special
obligations of the City of Carlsbad and shall be and are secured by a pledge of and lien upon, and
shall be and are a charge upon, and shall be and are payable as to the principal thereof and interest
thereon and any premiums upon the redemption of any thereof, solely from the gross revenues
of the enterprise, such gross revenues being hereby pledged, charged and assigned for the security
of the bonds.
Section 3. Equality of Bonds, Pledge of Revenues. Pursuant to the Revenue Bond Law of
1941 and this resolution, bonds of this issue shall be equally secured by a pledge, charge and lien
upon the gross revenues of the enterprise without priority for number, date of bonds, date of sale,
date of execution, or date of delivery, and the payment of the interest on and principal of said
bonds and the parity bonds and any premiums upon the redemption of any thereof shall be and
are secured by an exclusive pledge, charge and lien upon all of the gross revenues of the enterprise,
and all of the gross revenues of the enterprise (including revenues of improvements and extensions
later constructed or acquired and revenues of existing systems, plants, works or undertakings to
be acquired, improved or extended or for the acquisition, improvement or extension of which said
bonds are to be issued) are hereby pledged, charged and assigned for the security of said bonds,
and such gross revenues and any interest earned on the revenues shall constitute a trust fund for
the security and payment of the interest on and principal of said bonds, and so long as any of the
bonds or interest thereon are unpaid said gross revenues and interest thereon shall not be used
for any other purpose, except as permitted by Resolution Nos. 397, 711 and this resolution, and
shall be held in trust for the benefit of the bondholders and shall be applied pursuant to Resolution
Nos. 397, 711 and this resolution, or to Resolution Nos. 397, 711 and this resolution as modified
pursuant to their provisions. The bonds authorized hereby when issued and outstanding shall be
on a parity with the 1958 bonds and 1960 bonds.
Nothing in this resolution shall preclude: (a) the redemption prior to maturity, at the times
and in the manner stated in this resolution, and payment of bonds of this issue, including premiums
thereon if any be payable, from proceeds of refunding bonds issued under said Revenue Bond
Law of 1941 as the same now exists or as hereafter amended, or under the charter of said City
(in the event that the City should adopt a charter), or under any other law of the State of
California; (b) the issuance, subject to the limitations in the covenants in Section 21 hereof, of
additional indebtedness evidenced by revenue bonds, revenue notes or other similar evidences of
indebtedness payable out of the revenues derived from the enterprise and ranking on a parity with
the bonds of this issue.
Section 4. No General City Liability. The general fund of the City of Carlsbad is not liable
for the payment of the bonds or their interest, nor is the credit or taxing power of the City of
Carlsbad pledged for the payment of the bonds or their interest. The holder of the bonds or
coupons shall not compel the exercise of the taxing power by the City of Carlsbad or the forfeiture
of any of its property. The principal of and interest on the bonds and any premiums upon the
redemption of any thereof are not a debt of the City of Carlsbad nor a legal or equitable pledge,
charge, lien, or encumbrance, upon any of its property, or upon any of its income, receipts, or
revenues, except the gross revenues of the enterprise which are, under the terms of this resolution
and said Revenue Bond Law, pledged to the payment of said bonds and interest.
Section 5. Description of Bonds. Said bonds shall be in the principal sum of $1,225,000, shall
be 245 in number, numbered 1 to 245, inclusive, and shall be of the denomination of $5,000 each.
Said bonds shall be designated WATERWORKS REVENUE BONDS, 1970, Series A, shall be
dated July 1, 1970, and shall be payable in consecutive numerical order on July 1, in each year of
maturity in the amounts for each of the several years as follows:
Year of Year ofMaturity Principal Amount Maturity Principal Amount
1972 $ 35,000 1982 $ 60,000
1973 40,000 1983 65,000
1974 40,000 1984 75,000
1975 40,000 1985 80,000
1976 45,000 1986 85,000
1977 50,000 1987 90,000
1978 55,000 1988 95,000
1979 55,000 1989 100,000
1980 55,000 1990 100,000
1981 60,000
Section 6. Interest. Said bonds shall bear interest at a rate or rates to be hereafter fixed by
resolution or resolutions, but not to exceed seven per cent (7%) per annum, payable semi-
annually on the 1st days of January and July of each year. Each bond shall bear interest until
the principal sum thereof has been paid, provided, however, that if at the maturity date of any
bond, or if the same is redeemable prior to maturity and has been duly called for redemption,
funds are available for the payment or redemption thereof in full accordance with the terms of
this resolution, said bond shall then cease to bear interest. Said bonds and the interest thereon
shall be payable in lawful money of the United States of America at the main office of Security
Pacific National Bank in the City of Los Angeles, California, or, at the option of the holder, at any
fiscal agency of the City of Carlsbad in Chicago, Illinois, or in New York, New York.
Section 7. Execution of Bonds. The Mayor and the City Treasurer of said City are hereby
authorized and directed to sign all of said bonds by their printed, lithographed or engraved
facsimile signatures, and the City Clerk of said City is hereby authorized and directed to counter-
sign said bonds and to affix thereto the corporate seal of said City, and the City Treasurer of said
City is hereby authorized and directed to sign the interest coupons of said bonds by his printed,
lithographed or engraved facsimile signature.
Section 8. Registration. Said bonds may be registered either as to principal only or as to
both principal and interest, and the form of registration of any registered bond may be changed, or
any registered bond may be discharged from registration in the manner and with the effect set
forth in the provisions for registration contained in the form of bond set forth in Section 32 hereof.
Section 9. Call and Redemption of Bonds Prior to Maturity. The bonds maturing on or
prior to July 1, 1981, shall not be subject to call or redemption prior to maturity. The bonds
maturing on or after July 1, 1982, or any of them, may be called before maturity and redeemed,
at the option of the City Council, on July 1, 1981, or on any interest payment date thereafter prior
to maturity, at a redemption price for each redeemable bond equal to the principal amount thereof
plus the following premiums (percentage of par value) if redeemed at the following times :
REDEMPTION DATES AND PREMIUMS
On or After And Prior to Revenue
July 1 July 1 Premium
1981 1982
1982 1983 4%
1983 1984 Zy2%
1984 1985 3%
1985 1986 2Y*%
1986 1987 2%
1987 1988 iy2%
1988 1989 1%
1989 Maturity
All or any of the bonds subject to call may be called for redemption at any one time. If less than
all of the bonds subject to such call are redeemed at any one time, such bonds shall be redeemed
only in inverse order of maturity and number, beginning with the highest numbered bond. The
interest payment date on which bonds are to be presented for redemption is hereinafter some-
times called the "redemption date".
Section 10. Notice of Redemption. Notice of the intended redemption shall be published
by one insertion in a newspaper of general circulation in the City of Carlsbad, California, and
in a financial newspaper or journal of national circulation published in the City of New York,
New York, said publications to< be at least 30 days but not more than 60 days prior to the
redemption date. The notice of redemption shall (a) state the redemption date; (b) state the
redemption price ; (c) state the numbers and dates of maturity of the bonds to be redeemed,
provided, however, that whenever any call includes all of the bonds of a maturity the numbers of
the bonds of such maturity need not be stated ; (d) require that such bonds be surrendered with all
interest coupons maturing subsequent to the redemption date (except that no coupons need be
surrendered on bonds registered as to both principal and interest) at the main office of Security
Pacific National Bank in the City of Los Angeles, California, or at any fiscal agency of the City of
Carlsbad in Chicago, Illinois, or in New York, New York; (e) require that bonds which at the
time of call are registered so as to be payable otherwise than to bearer shall be accompanied by
appropriate instruments of assignment duly executed in blank; and (f) give notice that further
interest on such bonds will not accrue after the designated redemption date.
The City Treasurer shall, on or before the date of publication of said notice of redemption, mail
a similar notice, postage prepaid to any person, firm or corporation that originally purchased any
of the bonds from the City.
If any of the bonds designated for redemption shall be registered so as to be payable otherwise
than to bearer, the City Treasurer shall, on or before the date of publication of said notice of
redemption, mail a similar notice, postage prepaid, to the respective registered owners thereof at
the addresses appearing on the bond registry books.
The actual receipt by the holder of any bond (hereinafter referred to as "bondholder") or by
any original purchaser of notice of such redemption shall not be a condition precedent to redemp-
tion, and failure to receive such notice shall not affect the validity of the proceedings for the
redemption of such bonds or the cessation of interest on the date fixed for redemption. The notice
or notices required by this section shall be given by the City Treasurer. A certificate by the City
Treasurer that notice of call and redemption has been given to holders of registered bonds and to
original purchasers as herein provided shall be conclusive as against all parties, and no bondholder
whose registered bond is called for redemption may object thereto or object to the cessation of
interest on the redemption date fixed by any claim or showing that he failed to actually receive
such notice of call and redemption.
Section 11. Redemption Fund. Prior to the date fixed for redemption there shall be estab-
lished in the City Treasury a redemption fund to be described or known as WATERWORKS
REVENUE BONDS, 1970, Series A, REDEMPTION FUND (hereinafter sometimes referred
to as "Redemption Fund"), and prior to the redemption date there must be set aside in said
Redemption Fund moneys available for the purpose and sufficient to redeem, at the premiums
payable as in this resolution provided, the bonds designated in such notice for demeption. Said
moneys must be set aside in said fund solely for that purpose and shall be applied on or after
the redemption date to payment (principal and premium) for the bonds to be redeemed upon
presentation and surrender of such bonds and (except as to bonds registered as to both principal
and interest) all interest coupons maturing after the redemption date, and shall be used only for
that purpose. Any interest coupon due on or prior to the redemption date shall be paid from the
Bond Service Fund provided in Section 16 hereof upon presentation and surrender thereof. Any
interest due on or prior to the redemption date upon bonds registered as to both principal and
interest shall be paid from said Bond Service Fund. Each bond presented (if unregistered or
registered as to principal only) must have attached thereto or presented therewith all interest
coupons maturing after the redemption date. If after all of the bonds have been redeemed and
cancelled or paid and cancelled there are moneys remaining in said Redemption Fund, said
moneys shall be transferred to the Water Fund; provided, however, that if said moneys are part
of the proceeds of refunding bonds said moneys shall be transferred to the fund created for the
payment of principal of and interest on such refunding bonds.
Section 12. Effect of the Notice of Redemption. When notice of redemption has been given,
substantially as provided in Section 10 hereof, and when the amount necessary for the redemption
of the bonds called for redemption (principal and premium) is set aside for that purpose in the
Redemption Fund, as provided in Section 11 hereof, the bonds designated for redemption shall
become due and payable on the date fixed for redemption thereof, and upon presentation and
surrender of said bonds and (except as to bonds registered as to both principal and interest) all
interest coupons maturing after the redemption date, at the place specified in the notice of redemp-
tion, and, if any of said bonds be registered, upon the appropriate assignment thereof in blank,
such bonds shall be redeemed and paid at said redemption price out of the Redemption Fund, and
no interest will accrue on such bonds called for redemption or on any interest coupons thereof
after the redemption date specified in such notice, and the holders of said bonds so called for
redemption after such redemption date shall look for the payment of such bonds and the premium
thereon only to said Redemption Fund. All bonds redeemed and all interest coupons thereof shall
be cancelled forthwith by the City Treasurer and shall not be reissued.
All interest coupons pertaining to any redeemed bonds, which coupons have matured on
or prior to the time fixed for redemption, shall continue to be payable to the respective holders
thereof but without interest thereon. All unpaid interest payable at or prior to the date fixed for
redemption upon bonds registered in such manner that the interest is payable only to the registered
owners shall continue to be payable to the respective registered owners of such bonds, or their
order, but without interest thereon.
Section 13. Funds. Pursuant to Resolution No. 397 there were created in the City Treasury
of the City of Carlsbad the following funds:
1. Water Fund;
2. Waterworks Maintenance and Operation Fund (hereinafter sometimes called "Main-
tenance and Operation Fund");
Said funds were created under and pursuant to said Revenue Bond Law and are hereby expressly
continued and shall be applied pursuant to said Resolution Nos. 397, 711 and this resolution
and under and pursuant to said Revenue Bond Law of 1941.
There are hereby created in the City Treasury of the City of Carlsbad the following funds:
1. Waterworks Revenue Bonds, 1970, Construction Fund (hereinafter sometimes called
"Construction Fund");
2. Waterworks Revenue Bonds, 1970, Series A, Bond Service Fund (hereinafter some-
times called "Bond Service Fund");
3. Waterworks Revenue Bonds, 1970, Series A, Reserve Fund (hereinafter sometimes
called "Reserve Fund") ;
Said funds are created under and pursuant to said Revenue Bond Law and shall be applied
pursuant to this resolution and under and pursuant to said Revenue Bond Law.
Section 14. Construction Fund. To insure the application of the proceeds received from the
sale of the bonds to the purposes set forth in the recitals hereof, for which said bonds hereof are
to be issued, the proceeds of the sale of the bonds shall be placed in the Construction Fund, to
remain therein until from time to time expended for the purposes set forth in Proposition N in
the recitals hereof, except for the accrued interest which shall be placed in the Bond Service Fund
and the amount to be placed in the Reserve Fund as provided in Section 17 hereof.
The City may deposit money received from any other source in the Construction Fund. Money
in the Construction Fund may be temporarily invested in any authorized negotiable direct obliga-
tions of the United States, provided that the maturity shall not be later than 91 days from the
date of investment. If any sum remains in said Fund after the full accomplishment of the
purposes for which the bonds were issued, it shall be transferred to and placed in the Reserve
Fund to the extent necessary at that time to bring said Fund to the amount required in Section
17 hereof and, as to any remaining balance, to the Bond Service Fund.
Section 15. Water Fund. All gross revenues of the enterprise shall be paid into the Water
Fund, and payments from said fund shall be made only as provided by law, Resolution Nos. 397,
711 and this resolution.
Section 16. Bond Service Fund. So long as any of said bonds are outstanding, on the first
day of each calendar month there shall be set aside and transferred fom the Water Fund to the
Bond Service Fund sums in equal aliquot parts for each one-half year so that at least the full
amount required to pay, as it becomes due, the interest on the bonds and/or any maturity or
installment of principal of the bonds shall be set aside in the Bond Service Fund at least one
month prior to the date the installment of interest and/or principal becomes due. No such transfer
need be made prior to the actual delivery of the bonds to the purchaser thereof; provided, how-
ever, that if the bonds are issued and delivered subsequent to their date there shall be set aside,
transferred to and placed in the Bond Service Fund on the first day of the calendar month next
subsequent to the date of delivery sums at least sufficient, together with other transfers of the
same amount made on the first day of each calendar month thereafter, to provide in said Bond
Service Fund one month prior to the maturity of the first installment of interest and/or principal
of the bonds the full amount of such interest and/or principal. Any amount required to be set
aside, transferred to and placed in the Bond Service Fund may be prepaid in whole or in part by
being earlier set aside, transferred to and placed in the Bond Service Fund and in that event the
monthly transfer which has been so prepaid need not be made at the time appointed therefor.
In any event at least one month prior to the due date of any maturity or installment of principal
of and/or interest on the bonds all sums required for the payment thereof must be in such Bond
Service Fund in cash. Such sums shall be so transferred out of the Water Fund. The City Council
directs that such sums be so set aside through transfers or payments made in such amounts as
may be necessary to comply with the foregoing provisions of this section. Money set aside and
placed in said Bond Service Fund shall remain therein until from time to time expended for the
payment of such principal and/or interest, and shall not be used for any other purpose whatever,
except that any such money so set aside and placed in said Bond Service Fund which at any time
may be in excess of the amount which at that time is required by the terms of this section to be
in the Bond Service Fund in cash may be temporarily invested in any authorized negotiable
direct obligations of the United States, provided that the maturity shall not be later than 18
months from the date of investment but such investment shall not affect the obligation of the
City to cause the full amount required by the terms of this section to be available in said Bond
Service Fund in cash at the time required by the terms of this section. Any money remaining in
said Bond Service Fund in excess of the amount required to accomplish the purpose of its estab-
lishment shall be transferred to the Water Fund. The bonds and interest coupons shall recite
that they are payable from the Water Fund, but said bonds and coupons, notwithstanding such
recital, shall be paid from the Bond Service Fund, which is derived from the Water Fund and is
a subdivision thereof. If at the time any bond or interest coupon is presented for payment the
moneys in the Bond Service Fund are insufficient to make such payment, funds sufficient for such
payment shall be transferred from the Reserve Fund to said Bond Service Fund.
Section 17. Reserve Fund. Immediately upon receiving the proceeds of the sale of the bonds
there shall be placed in the Reserve Fund an amount equal to the maximum amount of annual
debt service on said bonds and thereafter there shall be maintained in said Reserve Fund a sum
equal to said maximum amount of annual debt service. Moneys in the Reserve Fund shall be
used solely for the purpose of paying the principal of and interest on the bonds in the event that
the moneys in the Bond Service Fund are insufficient therefor and for that purpose may be
withdrawn and transferred to the Bond Service Fund, except that said moneys may be invested
in any authorized negotiable direct obligations of the United States, provided that the maturity
shall not be later than 36 months from the date of investment. Any interest earned from invest-
ment of money in the Reserve Fund shall be deemed to be a part of the gross revenues of the
enterprise and shall be placed in the Water Fund. No payment need be made into the Reserve
Fund so long as there shall be in said fund a sum at least equal to said maximum amount of
annual debt service. Whenever moneys are withdrawn from the Reserve Fund to pay principal
and interest of bonds, the amount in the Reserve Fund shall be restored to the amount required
in this section by transfers from surplus. Any amount in the Reserve Fund in excess of the maxi-
mum amount of annual debt service shall be transferred to the Bond Service Fund and money
in the Reserve Fund may be used for paying the last outstanding maturity of said bonds.
Section 18. Maintenance and Operation Fund. Monthly sums sufficient for the necessary
and reasonable maintenance and operation costs of the enterprise shall be apportioned from the
revenues and paid from the Water Fund into the Maintenance and Operation Fund after the
8
payment of the principal and interest on the parity bonds and the 1970, Series A bonds and after
the payment of sums into the Reserve Funds.
Section 19. Additional Fund Uses. After the monthly transfers required or permitted by
Sections 16, 17 and 18 hereof have been made and all other covenants of the City contained herein
and in Resolution Nos. 397 and 711 have been duly performed, except for the amount needed
in said Water Fund as working capital, equal to at least three months' estimated necessary and
reasonable maintenance and operation costs, any money remaining in the Water Fund (herein
sometimes referred to as "surplus") shall be used to build up the Reserve Funds to the maximum
amount of annual debt service, or for their restoration, if necessary, as provided in Sections 17
in Resolution Nos. 397, 711 and in this resolution and after the above use said surplus may be
used in any or all of the following ways: (a) investment in any authorized negotiable direct
obligations of the United States provided that the maturity shall not be later than 5 years from
the date of investment, (b) the redemption of any of said bonds which are subject to redemption
prior to maturity, (c) the purchase from time to time of any bonds which are subject to redemption
prior to maturity (irrespective of the maturity or number of such bonds) at such prices and in
such manner, either at public or private sale, or otherwise as the City Council in its discretion
may determine, but the purchase price (including brokerage or other charges but excluding
accrued interest) shall not exceed 104^4% of the principal amount thereof, (d) the payment of the
costs of extensions of or additions to and improvements of the enterprise, (e) the payment of
principal and interest of general obligation bonds of the City issued for waterworks purposes,
(f) any of the ways set forth in Sections 19 of said Resolution Nos. 397 and 711, (g) any other
waterworks purpose, and, except as otherwise permitted by this resolution, no other transfer or
uses of said revenues may be made.
Section 20. Warranty. The City shall preserve and protect the security of the bonds
and the rights of the bondholders and warrant and defend their rights against all claims and
demands of all persons.
Section 21. Covenants. So long as any of the bonds issued hereunder are outstanding and
unpaid, or so long as provision for the full payment and discharge thereof at maturity or upon
redemption thereof prior to maturity through the setting apart in the Bond Service Fund or in the
Redemption Fund or in a special trust fund to insure the payment or redemption thereof (as the
case may be) of money sufficient for that purpose has not been made, the City makes the following
covenants with the bondholders under the provisions of the Revenue Bond Law of 1941 (to
be performed by the City or its proper officers, agents or employees) which covenants are
necessary, convenient and desirable to secure the bonds and tend to make them more marketable;
provided however, that said covenants do not require the City to expend any funds other than
the revenues received or receivable from the enterprise.
Covenant 1. Punctual Payment. The City covenants that it will duly and punctually pay
or cause to be paid the principal of and interest on every bond issued hereunder, together with
the premium thereon, if any be payable on the date, at the place and in the manner mentioned
in the bonds and coupons and in accordance with this resolution, and that the payments into the
Bond Service Fund, and Reserve Fund will be made, all in strict conformity with the terms of
said bonds and of this resolution, and that it will faithfully observe and perform all of the con-
ditions, covenants and requirements of Resolution Nos. 397, 711, this resolution and all reso-
lutions supplemental thereto and of the bonds issued hereunder and the parity bonds, and that
time of such payment and performance is of the essence of the City's contract with the bondholders.
Covenant 2. Discharge Claims. The City covenants that in order to fully preserve and pro-
tect the priority and security of the bonds the City shall pay from the Water Fund and discharge
all lawful claims for labor, materials and supplies furnished for or in connection with the enterprise
which, if unpaid, may become a lien or charge upon the revenues prior or superior to the lien
of the bonds and impair the security of the bonds. The City shall also pay from the Water Fund
all taxes and assessments or other governmental charges lawfully levied or assessed upon or in
respect of the enterprise or upon any part thereof or upon any of the revenues therefrom.
Covenant 3. Commence Acquisition. As soon as funds are available therefor, the City will
commence the accomplishment of the purposes for which the bonds are issued and will continue
the same to completion with all practical dispatch and in an economical manner.
Covenant 4. Operate Enterprise in Efficient and Economical Manner. The City covenants
and agrees to operate the enterprise in an efficient and economical manner and to operate, maintain
and preserve the enterprise in good repair and working order.
Covenant 5. Against Sale. The City covenants that the enterprise shall not be mortgaged
or otherwise encumbered, sold, leased, pledged, any charge placed thereon, or disposed of as a
whole or substantially as a whole unless such sale or other disposition be so arranged as to provide
for a continuance of payments into the Water Fund sufficient in amount to permit payment there-
from of the principal of and interest on and premiums, if any, due upon the redemption thereof, of
the parity bonds and the 1970, Series A bonds, payment of which is required to be made out of the
revenues of the enterprise, and also to provide for such payments into the Reserve Funds as are
required under the terms of Resolution Nos. 397, 711 and this resolution. The revenues from the
enterprise or any other funds pledged or otherwise made available to secure payment of the
principal of and interest on the bonds shall not be mortgaged, encumbered, sold, leased, pledged,
any charge placed thereon, or disposed of or used except as authorized by the terms of Resolution
Nos. 397, 711 and this resolution. The City further covenants that it will not enter any agreement
which impairs the operation of the enterprise or any part of it necessary to secure adequate
revenues to pay the principal and interest of the parity bonds and the 1970, Series A bonds or which
otherwise would impair the rights of the bondholders with respect to the revenues or the operation
of the enterprise. If any substantial part of the enterprise is sold the payment therefor shall be
placed in the Bond Service Funds or the Redemption Funds created by Resolution Nos. 397, 711
and this resolution in the proportion that the then outstanding parity bonds and the then out-
standing 1970, Series A bonds bear to the total of all of the then outstanding bonds of both issues,
and shall be used to pay or call outstanding parity bonds and the 1970, Series A bonds in the
manner provided in Resolution Nos. 397, 711 and this resolution.
Covenant 6. Insurance. The City covenants that it shall at all times maintain with respon-
sible insurers all such insurance on the enterprise as is customarily maintained with respect to
works and properties of like character against accident to, loss of or damage to such works or
properties. If any useful part of the enterprise shall be damaged or destroyed, such part shall be
restored to use. The money collected from insurance against accident to or destruction of the
physical enterprise shall be used for repairing or rebuilding the damaged or destroyed enterprise,
and to the extent not so applied, shall be paid into the Bond Service Funds created by Resolution
Nos. 397, 711 and this resolution in the proportion that the then outstanding parity bonds and the
then outstanding 1970, Series A bonds bear to the total of all of the then outstanding bonds of
both issues to be applied to the retirement of any outstanding and unredeemed bonds issued for
the enterprise.
The City shall also maintain with responsible insurers workmen's compensation insurance and
insurance against public liability and property damage to the extent reasonably necessary to
protect the City and the bondholders.
10
Covenant 7. Records and Accounts. The City covenants that it shall keep proper books of
record and accounts of the enterprise, separate from all other records and accounts, in which
complete and correct entries shall be made of all transactions relating to the enterprise. Said
books shall at all times be subject to the inspection of the holders of not less than 10% of the
outstanding bonds or their representatives authorized in writing.
The City covenants that it will cause the books and accounts of the enterprise to be audited
annually by an independent certified public accountant or firm of certified public accountants and
will make available for inspection by the bondholders at the office of the City Clerk of said City
and at the office of the City Treasurer thereof, a copy of the report of such accountant or
accountants and will also upon request furnish a copy thereof to any bondholder and to any
person, firm or corporation who originally purchased the bonds from the City.
The City covenants that it will cause to be published annually, not more than 120 days after
the close of each fiscal year, a summary statement showing the amount of gross revenues and the
amount of all other funds collected which are required to be pledged or otherwise made available
as security for payment of principal of and interest on the bonds, the disbursements from such
revenues and other funds in reasonable detail, and a general statement of the financial and physical
condition of the enterprise. The City shall furnish a copy of the statement to any bondholder
upon request.
Covenant 8. No Free Service. The City covenants that no water or other service from the
enterprise may be furnished or rendered to the United States of America, the State of California,
the City, any other municipal or public corporation or public agency or any private corpo-
ration or person free nor at rates lower than those charged other persons for similar service, except
that charges to the City for water used for street or sewer flushing and for fire hydrants may be
made at rates lower than those charged private persons, and all rates for service rendered the City
shall be at a reasonable charge for the service rendered. No building or other real property of the
enterprise shall be furnished free to the City, but the City shall pay into the Water Fund the
reasonable rental value of any property so used, and reasonable and proper charges for service
rendered or quarters furnished to the enterprise shall be paid to the City from the Water Fund.
The City covenants that it will at all times during the period any of the bonds are outstanding
maintain and enforce valid regulations for the payment of bills for water service and that such
regulations shall at all times during such period provide that the City shall discontinue service to
any user whose water bill has not been paid within the time fixed by said regulations, and such
time shall not be more than 45 days from the date the water bill became delinquent.
Covenant 9. Rates and Charges. The City shall and hereby covenants that it shall prescribe,
revise and collect such charges for the services, facilities and water of the enterprise which, after
making allowances for contingencies and error in the estimates, shall be at least sufficient to pay
the following amounts in the order set forth:
(a) The interest on and principal of the parity bonds and the 1970, Series A bonds as
they become due and payable;
(b) All payments required for compliance with Resolution Nos. 397, 711 and this
resolution including the payments required to be made into the Reserve Funds;
(c) All current expenses for the necessary and reasonable maintenance and operation
costs of the enterprise;
(d) All payments to meet any other obligations of the City which are charges, liens,
encumbrances upon or payable from the revenues of the enterprise;
11
and the charges shall be so fixed that after the payment of item designated (c) of this covenant the
net revenues of the enterprise available for the payment of items designated (a), (b) and (d) of this
covenant shall be at least 1.35 times the amounts payable under said (a) and (b) and 1 times the
amounts payable under said (d).
Covenant 10. No Priority for Additional Bonds. The City covenants that no additional
bonds shall be issued pursuant to said Revenue Bond Law or any other law of the State of Cali-
fornia or under the charter of said City (in the event said City should hereafter adopt a charter)
having any priority in payment of principal or interest out of the revenues of the enterprise over
the bonds hereby authorized and payable out of said revenues.
Covenant 11. Limits on Additional Debt. The City covenants that (except for bonds issued
to refund these bonds) no additional indebtedness evidenced by revenue bonds, revenue notes or
other similar evidences of indebtedness payable out of revenues derived from the enterprise and
ranking on a parity with these bonds shall be created or incurred unless:
First: The City is not in default under the terms of this resolution.
Second: The net revenues of the enterprise, calculated on sound accounting principles,
as shown by the books of the City for the latest fiscal year ending prior to the incurring of such
additional indebtedness as shown by an audit certificate or opinion of an independent certified
public accountant or firm of certified public accountants employed by the City, plus, at the
option of the City either or both of the items hereinafter in this Covenant 11 designated (a)
and (b), shall have amounted to at least 1.35 times the maximum amount of annual debt
service in any fiscal year thereafter on all indebtedness to be outstanding immediately sub-
sequent to the incurring of such additional indebtedness.
The items either or both of which may be added to such net revenues for the purpose of
applying the restriction contained in this Covenant 11 are the following:
(a) An allowance for estimated increase in net revenues from any additions to or improve-
ments or extensions of the enterprise which have been made but which, during all or any part
of such fiscal year, were not in service and from any such additions, improvements or exten-
sions to be made with the proceeds of such additional indebtedness or with the proceeds of
bonds previously issued, all in an amount equal to 75% of the estimated additional average
annual net revenues to be derived from such additions, improvements and extensions for the
first 36 month period in which each addition, improvement or extension is respectively to be in
operation, all as shown by the certificate or opinion of a qualified independent engineer
employed by the City,
(b) An allowance for estimated increases in net revenues arising from any increase in
water rates which has become effective prior to the incurring of such additional indebtedness
but which, during all or any part of such fiscal year, was not in effect, in an amount equal to
75% of the amount by which the net revenues of the enterprise would have been increased if
such increase in rates had been in effect during the whole of such fiscal year, as shown by the
certificate or opinion of a qualified independent engineer employed by the City.
Section 22. Investment of Funds. Obligations purchased as an investment of moneys in any
funds created by Resolution Nos. 397, 711 and this resolution which are authorized to be invested
shall be deemed at all times to be a part of such funds and any profit realized from the investment
shall be credited to such funds and any loss resulting from such investment shall be charged to
such funds and, except for the Reserve Funds, the interest accruing thereunder shall be credited
to such funds. The City shall sell at the best price obtainable or present for redemption any
12
obligations so purchased whenever it shall be necessary to do so in order to provide moneys to
meet any payment or transfer from such account or from such funds. For the purpose of deter-
mining at any given time the balance in any such fund, any such investment constituting a part
of such fund shall be valued at the then estimated or appraised market value of such investment.
Section 23. Lost, Destroyed or Mutilated Bonds. In the event that any bond or any interest
coupon pertaining thereto is lost, stolen, destroyed or mutilated, the City will cause to be issued
a new bond or coupon similar to the original to replace the same in such manner and upon such
reasonable terms and conditions, including the payment of costs and the posting of a surety
bond if the City deems such surety bond necessary, as may from time to time be determined
and prescribed by resolution. The City Council may authorize such new bond or coupon or
coupons to be signed and authenticated in such manner as it determines in said resolution.
Section 24. Cancellation of Bonds. All bonds and coupons surrendered to any fiscal agent
of the City for payment upon maturity or for redemption shall upon payment therefor be cancelled
immediately and forthwith transmitted to the Treasurer of the City. All of the bonds and interest
coupons surrendered to the Treasurer for payment upon maturity or for redemption shall upon
payment therefor be cancelled immediately. All of the cancelled bonds and interest coupons shall
remain in the custody of the Treasurer until destroyed pursuant to due authorization.
Section 25. Consent of Bondholders. The consents of bondholders provided for in Sections
25 to 31 inclusive, hereof shall relate solely to the amendment, waiver or modification of the
covenants specified in Section 21 hereof and shall not be effective to waive or modify any other
provisions of this resolution or any of the proceedings for issuance of said bonds. Any act
relating to the amendment, waiver or modification of any of the said covenants consented to by
bondholders holding sixty per cent (60%) in aggregate principal amount of the outstanding bonds,
exclusive of bonds, if any, owned by the City, shall be binding upon the holders of all of the bonds
and interest coupons, whether such coupons be attached to bonds or detached therefrom, and
shall not be deemed an infringement of any of the provisions of this resolution or of said Revenue
Bond Law, whatever the character of such act may be, and may be done and performed as fully
and freely as if expressly permitted by the terms of this resolution, and after such consent relating
to such specified matters has been given, no bondholder or holder of any interest coupon, whether
attached to a bond or detached therefrom, shall have any right or interest to object to such action
or in any manner to question the propriety thereof or to enjoin or restrain the City Council or
any officer of said City from taking any action pursuant thereto.
Section 26. Calling Bondholders' Meeting. If the City Council shall desire to obtain any such
consent it shall duly adopt a resolution calling a meeting of bondholders for the purpose of
considering the action, the consent to which is desired.
Section 27. Notice of Meeting. Notice specifying the purpose, place, date and hour of such
meeting shall be published once in a financial newspaper or journal of national circulation
published in the City of New York, New York not less than sixty (60) days and not more than
ninety (90) days prior to the date fixed for the meeting. Such notice shall set forth the nature
of the proposed action, consent to which is desired. If any of the bonds shall be so registered as
to be payable otherwise than to bearer, the City Clerk shall, on or before the first publication of
such notice, mail a similar notice, postage prepaid, to the respective registered owners thereof
at their addresses appearing on the bond registry books. The place, date and hour of holding
such meeting and the date or dates of publishing and mailing such notice shall be determined
by the City Council, in its discretion.
13
The actual receipt by any bondholder of notice of any such meeting shall not be a condition
precedent to the holding of such meeting, and failure to receive such notice shall not affect the
validity of the proceedings thereat. A certificate by the City Clerk, approved by resolution of the
City Council of said City, that the meeting has been called and that notice thereof has been given
as herein provided shall be conclusive as against all parties and it shall not be open to any
bondholder to show that he failed to receive notice of such meeting.
Section 28. Voting Qualifications. Any bondholder may, prior to any such meeting, deliver
his bond or bonds to any agency designated by the City Council of the City for the purpose, and
shall thereupon be entitled to receive an appropriate receipt for the bond or bonds so deposited,
calling for the redelivery of such bond or bonds at any time after the meeting. The City Treasurer
shall prepare and deliver to the Chairman of the meeting a list of the names and addresses of the
registered owners of bonds, with a statement of the maturities and serial numbers of the bonds
held and deposited by each of such bondholders, and no bondholder shall be entitled to vote at such
meeting unless his name appears upon such list or unless he shall present his bond or bonds at the
meeting or a certificate of deposit thereof, satisfactory to the City Coucil, executed by a bank or
trust company. No bondholder shall be permitted to vote with respect to a larger aggregate
principal amount of bonds than is set against his name on such list, unless he shall produce
the bonds upon which he desires to vote, or a certificate of deposit thereof as above provided.
Section 29. Issuer-owned Bonds. The City Council covenants that it will present at the
meeting a certificate, signed and verified by one member thereof and by the City Treasurer, stating
the maturities and serial number of all bonds owned by, or held for account of, the City, directly
or indirectly. No person shall be permitted at the meeting to vote or consent with respect to any
bond appearing upon such certificate, or any bond which it shall be established at or prior to the
meeting is owned by the City, directly or indirectly, and no such bond (in this resolution referred
to as "issuer-owned bond") shall be counted in determining whether a quorum is present at the
meeting.
Section 30. Quorum and Procedure. A representation of at least sixty per cent (60%) in
aggregate principal amount of the bonds then outstanding (exclusive of bonds, if any, owned
by the City) shall be necessary to constitute a quorum at any meeting of bondholders, but less
than a quorum may adjourn the meeting from time to time, and the meeting may be held as so
adjourned without further notice, whether such adjournment shall have been had by a quorum or
by less than a quorum. The City Council shall, by an instrument in writing, appoint a temporary
chairman of the meeting, and the meeting shall be organized by the election of a permanent
chairman and a secretary. At any meeting each bondholder shall be entitled to one vote for every
$1,000 principal amount of bonds with respect to which he shall be entitled to vote as aforesaid,
and such vote may be given in person or by proxy duly appointed by an instrument in writing
presented at the meeting. The City Council, by its duly authorized representative, may attend any
meeting of the bondholders, but shall not be required to do so.
Section 31. Vote Required. At any such meeting held as aforesaid there shall be submitted
for the consideration and action of the bondholders a statement of proposed action, consent to
which is desired, and if such action shall be consented to and approved by bondholders holding
at least sixty per cent (60%) in aggregate amount of the bonds then outstanding (exclusive of
issuer-owned bonds) the chairman and secretary of the meeting shall so certify in writing to the
City Council, and such certificate shall constitute complete evidence of consent of bondholders
under the provisions of this resolution. A certificate signed and verified by the chairman and
the secretary of any such meeting, shall be conclusive evidence and the only competent evidence
of matters stated in such certificate relating to proceedings taken at such meeting.
14
Section 32. Bond and Coupon Forms. Said bonds shall be payable to bearer, shall be issued
in negotiable form, and shall be negotiable, and the form of said bonds and interest coupons
thereof shall be substantially as follows:
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF SAN DIEGO
CITY OF CARLSBAD
WATERWORKS REVENUE BOND, 1970, SERIES A
No $5,000
THE CITY OF CARLSBAD, a municipal corporation situated in the County of San
Diego, State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from
the Water Fund, as hereinafter provided, to the bearer or, if this bond be registered, to the
registered owner hereof, on July 1, 19..., upon presentation and surrender of this bond,
the sum of FIVE THOUSAND DOLLARS, with interest thereon at the rate of ...% per
annum, payable semiannually on the first days of January and July of each and every year
from the date hereof until this bond is paid upon presentation and surrender of the respective
interest coupons hereto attached; provided, however, that if at the maturity date of this bond
or, if the same is redeemable prior to maturity and shall be duly called for redemption, then
at the date fixed for redemption, funds are available for the payment or redemption thereof,
as provided in the resolution of the City Council of said City authorizing the bonds adopted
on , 19... designated Resolution No (hereinafter sometimes
referred to as "said resolution"), this bond shall then cease to bear interest. Both principal
and interest are payable in lawful money of the United States of America at the main office
of Security Pacific National Bank in the City of Los Angeles, California, or, at the option
of the holder hereof, at any fiscal agency of the City of Carlsbad in Chicago, Illinois, or in
New York, New York.
This bond and the interest hereon and any premium upon the redemption hereof are not a
debt of the City of Carlsbad, nor a legal or equitable pledge, charge, lien or encumbrance upon
any of its property or upon any of its income, receipts, or revenues except the revenues of the
municipal waterworks system pledged to its payment, and the principal and interest of this
bond and any premium upon the redemption hereof are payable solely from the revenues
pledged to its payment, to wit, gross revenues from the waterworks system of the City of
Carlsbad, and said City is not obligated to pay such principal, interest and premium except
from said revenues. The Water Fund is established under and pursuant to the Revenue
Bond Law of 1941, and under the provisions of Resolution No. 397 of the City Council of
said City and said Resolution No the gross revenues received from the services, facilities
and water or arising from the entire waterworks system of the City (except for inclusion fees
as defined in said resolutions) are required to be deposited in the City Treasury to the credit
of said Water Fund and only used for the purposes authorized by Resolution Nos. 397, 711
and said Resolution No including the payment of principal and interest of the issue of
bonds of which this is one.
This is one of a duly authorized issue of bonds of the City designated "Waterworks
Revenue Bonds, 1970, Series A," hereinafter called "the bonds," all of which have been issued
pursuant to Article 8, Chapter 3, Division 2, Title 5 of the Government Code of the State of
California and the Revenue Bond Law of 1941 (being Chapter 6, Part 1, Division 2, Title 5 of
said Government Code) and the creation of said issue and the terms and conditions of the
15
bonds are provided for by said Resolution No and this reference incorporates said resolu-
tion and said Chapter 6 herein, and by acceptance hereof the holder of this bond and the
coupons hereto attached assents to said terms and conditions. Said resolution is adopted under,
and this bond and the interest coupons hereto attached are issued under and are to be construed
in accordance with the laws of the State of California.
By the terms of said Revenue Bond Law and by covenant expressed in said resolution,
officers of the City are obligated to fix rates and collect charges for service from the water-
works system of the City such as to provide revenues sufficient to pay the interest on and
principal of the bonds as they become due and payable in addition to all other obligations
and indebtedness payable from such Water Fund or any fund derived therefrom and all
current expenses for the necessary and reasonable maintenance and operation costs of the
waterworks system, are prohibited from issuing bonds having any priority with respect to
payment from the waterworks revenues, and are subject to conditions with respect to any
sale of said waterworks system. In the manner provided in said resolution, any or all of
the obligations referred to in this paragraph and certain other obligations mentioned in said
resolution may be waived with the consent of the holders of 60% in aggregate principal
amount of the outstanding bonds, exclusive of issuer-owned bonds.
If this bond matures on or after July 1, 1982, it is callable and redeemable prior to
maturity, all in accordance with the provisions for redemption endorsed hereon.
This bond and the coupons hereto attached are negotiable instruments and shall be
negotiable by delivery. This bond may be registered as to principal only or as to both
principal and interest, in accordance with the provisions for registration endorsed hereon.
It is hereby certified and recited that any and all acts, conditions and things required
to exist, to happen and to be performed precedent to and in the incurring of the indebtedness
evidenced by this bond and in the issuance of this bond exist, have happened, and have been
performed in due time, form and manner as required by the Constitution and Statutes of the
State of California, and that this bond, together with all other indebtedness of the City
pertaining to the aforesaid waterworks system, is within every debt and other limit prescribed
by the Constitution and Statutes of the State of California.
IN WITNESS WHEREOF, said City of Carlsbad has caused this bond to be signed by
the Mayor and the City Treasurer of said City by their facsimile signatures, countersigned by
the City Clerk of said City, and sealed with the corporate seal of said City, and the interest
coupons hereto attached to be signed by the City Treasurer by his facsimile signature, and
has caused this bond to be dated the first day of July, 1970.
Mayor of the City of Carlsbad,
California
COUNTERSIGNED:
City Treasurer of the City of
Carlsbad, California
City Clerk of the City of
Carlsbad, California
(SEAL)
16
(COUPON FORM)
Coupon No.
On the first day of 19
THE CITY OF CARLSBAD, CALIFORNIA,
will pay to the bearer, at the main office of Security Pacific National
Bank in the City of Los Angeles, California, or at the option of the
holder hereof, at any fiscal agency of the City of Carlsbad in Chicago,
Illinois, or in New York, New York, out of the Water Fund of said
City and not out of any other fund or moneys of the City, the sum of
in lawful money of the United States of America, being the interest
then due on WATERWORKS REVENUE BOND, 1970, Series A, No.
dated July 1, 1970, subject to the provisions on the reverse hereof.
City Treasurer of the City of
Carlsbad, California
On the reverse side of the coupon there shall be printed substantially the following:
(REVERSE OF COUPON)
If the bond to which this coupon is attached is redeemable and is duly called for redemp-
tion on a date prior to the maturity date of this coupon, this coupon will be void.
Substantially the following provisions for redemption prior to maturity and for registration
shall be printed on the reverse side of the bond :
PROVISIONS FOR REDEMPTION PRIOR TO MATURITY
If this bond matures on or after July 1, 1982, it is redeemable prior to maturity in the
manner and subject to the terms and provisions, and with the effect, set forth in Resolution
No. ..., at the option of said Council, on July 1, 1981, or on any interest payment date
thereafter prior to maturity, upon at least 30 days' prior notice published in a newspaper
circulated in the City of Carlsbad, California, and in a financial newspaper or journal of
national circulation published in the City of New York, New York, at a redemption price
for each redeemable bond equal to the principal amount thereof plus the following premiums
(percentage of par value) if redeemed at the following times :
REDEMPTION DATES AND PREMIUMS
On or After And Prior to Refunding
July 1 July 1 Premium
1981 1982
1982 1983 4%
1983 1984 3y2%
1984 1985 Z%
1985 1986 2y2%
1986 1987 2%
1987 1988 . \y2%
1988 1989 1%
1989 Maturity
17
PROVISIONS FOR REGISTRATION
This bond may be registered in the name of any person as the registered owner hereof,
either as to principal only or as to both principal and interest, and, if registered in either of
said forms may be changed to registration in the other of said forms or discharged from
registration.
Each registration, transfer after registration, change of form of registration, or discharge
from registration of this bond shall be entered by the City Treasurer in books kept by him
for the purpose and noted by him in the registration blank below. Registration as to principal
only shall not affect the negotiability by delivery of the coupons pertaining hereto. Upon
registration as to both principal and interest, all unmatured coupons pertaining hereto shall
be surrendered to the Treasurer and may be preserved or cancelled in his discretion.
So long as this bond is registered no transfer hereof shall be valid for any purpose unless
made by the registered owner and entered and noted as herein provided, and the principal
hereof and any redemption premium shall be payable only to the registered owner, or to his
order. Interest on this bond, if registered as to both principal and interest, shall be payable
to the person whose name appears upon the registry books as the registered owner hereof at
the close of business on the tenth day preceding the interest payment date, or to his order.
If this bond is registered as to both principal and interest and its registration is changed to
registration as to principal only, or if it is discharged from registration, there shall be attached
hereto coupons representing interest hereon to become due thereafter to the date of maturity
hereof. In lieu thereof, and upon surrender and cancellation hereof, the Treasurer in his
discretion may issue in exchange therefor a new bond, with such coupons attached, identical
with this bond, except for the previous notations on the registration blank hereon, and except
that the signatures on the new bond shall be those of the persons holding the offices at the
time of affixing such signatures. The issuance of any such new bond or new coupons shall
be at the expense of the registered owner.
Each discharge hereof from registration shall be effected by an entry on the registry
books, and a notation in the blank below, that this bond is payable to bearer, whereupon this
bond shall become an unregistered bearer instrument, negotiable by delivery as if it had never
been registered. Each request for registration, transfer, change or discharge must be in form
satisfactory to the Treasurer and must be made in writing, signed by the registered owner,
or by his agent duly authorized in writing, or by the bearer, as the case may be.
Date of In Whose Name Manner of Signature of
Registration Registered Registration City Treasurer
Section 33. Proceedings Constitute Contract. The provisions of this resolution and of the
resolutions providing for the sale of the bonds and awarding the bonds and fixing the interest
rate or rates thereon shall constitute a contract between the City and the bondholders and the
provisions thereof shall be enforceable by any bondholder for the equal benefit and protection
of all bondholders similarly situated by mandamus, accounting, mandatory injunction or any
other suit, action or proceeding at law or in equity that is now or may hereafter be authorized
under the laws of the State of California in any court of competent jurisdiction. Said contract is
made under and is to be construed in accordance with the laws of the State of California.
18
No remedy conferred hereby upon any bondholder it intended to be exclusive of any other
remedy, but each such remedy is cumulative and in addition to every other remedy and may be
exercised without exhausting and without regard to any other remedy conferred by the Revenue
Bond Law of 1941 or any other law of the State of California. No waiver of any default or breach
of duty or contract by any bondholder shall affect any subsequent default or breach of duty or
contract or shall impair any rights or remedies on said subsequent default or breach. No delay
or omission of any bondholder to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed as a waiver of any such default or
acquiescence therein. Every substantive right and every remedy conferred upon the bondholders
may be enforced and exercised as often as may be deemed expedient. In case any suit, action
or proceeding to enforce any right or exercise any remedy shall be brought or taken and the
bondholder shall prevail, said bondholder shall be entitled to receive from the Water Fund
reimbursement for reasonable costs, expenses, outlays and attorney's fees and should said suit,
action or proceeding be abandoned, or be determined adversely to the bondholders then, and in
every such case, the City and the bondholders shall be restored to their former positions, rights
and remedies as if such suit, action or proceeding had not been brought or taken.
After the issuance and delivery of the bonds this resolution and supplementary resolutions
thereto shall be irrepealable, but shall be subject to modification to the extent and in the manner
provided in Sections 25 to 31, inclusive, of this resolution, but to no greater extent and in no
other manner.
Section 34. Future Contracts. Nothing herein contained shall be deemed to restrict or pro-
hibit the City from making contracts or creating bonded or other indebtedness payable from
the general fund of the City or from taxes or any source other than the revenues of the enter-
prise as denned herein, and from and after the sale of the bonds the general fund of the City
shall not include the revenues of the enterprise and no contract or other obligation payable from
the general fund of the City shall be payable from the revenues of the enterprise, except as
provided in Section 19 hereof.
Section 35. Severability. If any covenant, agreement or provision, or any portion thereof,
contained in this resolution, or the application thereof to any person or circumstance, is held to
be unconstitutional, invalid or unenforceable, the remainder of this resolution and the application
of any such covenant, agreement or provision, or portion thereof, to other persons or circum-
stances, shall be deemed severable and shall not be affected thereby, and this resolution and the
bonds issued pursuant hereto shall remain valid and the bondholders shall retain all valid rights
and benefits accorded to them under this resolution and the Constitution and laws of the State of
California.
Section 36. Effective Date. This resolution shall take effect upon adoption.
ADOPTED, SIGNED AND APPROVED this 1st day of September, 1970.
DAVID M. DUNNE
Mayor of the City of Carlsbad, California
ATTEST:
MARGARET E. ADAMS
City Clerk of the City of Carlsbad, California
(SEAL)
19
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO V ss.
CITY OF CARLSBAD )
I, MARGARET E. ADAMS, City Clerk of the City of Carlsbad, California, DO HEREBY
CERTIFY that the foregoing resolution was duly adopted by the City Council of said City and
was approved by the Mayor of said City at a regular meeting of said City Council held on the
1st day of September, 1970, and that it was adopted by the following vote, to wit:
AYES: COUNCILMEN: DUNNE,
JARDINE, CASTRO, LEWIS
NOES: COUNCILMEN: NONE
ABSENT: COUNCILMEN: McCOMAS
MARGARET E. ADAMS
City Clerk of the City of
Carlsbad, California
(SEAL)
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO I ss.
CITY OF CARLSBAD )
I, MARGARET E. ADAMS, City Clerk of the City of Carlsbad, California, DO HEREBY
CERTIFY that the above and foregoing is a full, true and correct copy of Resolution No. 1779
and that the same has not been amended or repealed.
Dated September 1, 1970.
MARGARET E. ADAMS
City Clerk of the City of
Carlsbad, California
(SEAL)
20
RESOLUTION NO. 1780
RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF CARLSBAD, CALIFORNIA, DIRECT-
ING THE CITY CLERK TO PUBLISH NOTICE
INVITING SEALED PROPOSALS FOR REVENUE
BONDS OF SAID CITY
WHEREAS, the City Council of the City of Carlsbad adopted
Resolution No. 1^7j providing for the issuance of revenue
bonds of the City in the amount of $1,225,000 to be designated
"Waterworks Revenue Bonds, 1970, Series A"; and
WHEREAS, it is desirable that said bonds be sold;
NOW, THEREFORE, the City Council of the City of Carlsbad
DOES HEREBY RESOLVE, DETERMINE AND ORDER as follows:
SECTION 1. That said revenue bonds be sold and that
sealed bids or proposals for the purchase of said bonds be
received up to the time stated in the notice hereinafter set
forth.
SECTION 2. That the City Clerk be and is hereby author-
ized and directed to publish said notice once in the CARLSBAD
JOURNAL, a newspaper of general circulation, said publication to
be at least seven (7) days prior to the date for receiving bids.
SECTION 3. That the City Clerk is hereby authorized and
directed to cause to be furnished to prospective bidders copies
of the notice inviting proposals and information relating to the
properties, operations and finances of said City, but failure in
whole or in part to comply with this section shall not in any
manner affect the validity of the sale.
SECTION 4. That said notice "shall be substantially as
follows:
-1-
NOTICE INVITING BIDS ON $1,225,000
CITY OF CARLSBAD WATERWORKS REVENUE
BONDS
NOTICE IS HEREBY GIVEN that sealed proposals for the
purchase of $1,225,000 par value City of Carlsbad Waterworks
Revenue Bonds, 1970, Series A, of the City of Carlsbad will be
received by the City Council at the place and up to the time
below specified.
TIME: Tuesday October 6, 1970
11:00 o'clock A.M.
PLACE: City of Carlsbad
City Hall Council Chambers
1200 Elm Avenue
Carlsbad, California
MAILED BIDS: Mailed bids should be addressed
to: City of Carlsbad
C/0 City Clerk
1200 Elm Avenue
Carlsbad, California
OPENING OF BIDS: The bids will be received by the City
Clerk on October 6, 1970, at 11:00 o'clock'A.M. at the Council
Chambers of the City of Carlsbad, City Hall, 1200 Elm Avenue,
Carlsbad, California. The bids will be opened by the City Clerk
immediately following receipt and will be presented to the City
Council at its meeting to be held at 7:00 o'clock P.M. on October
6, 1970 at the City Hall.
ISSUE: $1,225,000 designated "Waterworks Revenue Bonds,
1970, Series A", dated July 1, 1970.
DENOMINATION: The Bonds shall be all in the denomination
of $5,000, numbered 1 to 245, inclusive.
MATURITIES: The Bonds will mature on July 1 in each
•year and mature in the amounts and on the dates as follows:
-2-
Maturity Principal
Date Amount
1972 $ 35,000
1973 40,000
1974 40,000
1975 40,000
1976 45,000
1977 50,000
1978 55,000
1979 55,000
1980 55,000
1981 60,000
1982 60,000
1983 65,000
1984 75,000
1985 80,000
1986 85,000
1987 90,000
1988 95,000
1989 100,000
1990 100,000
INTEREST: The Bonds shall bear interest at a rate or
rates to be fixed upon the sale thereof but not to exceed seven
percent (770) per annum, payable semiannually on the first day
of July and the first day of January in each year, commencing
January 1, 1971.
PAYMENT: Said bonds and the interest thereon will be
payable in lawful money of the United States of America at the
office of the City Treasurer of the City of Carlsbad, in said
city, or, at the option of the holder, at any fiscal agency of
the City of Carlsbad in Los Angeles, California, or in Chicago,
Illinois, or in New York, New York.
REGISTRATION: The Bonds will be coupon Bonds registrable
as to principal only or as to both principal and interest, and
the form of registration may be changed, or the Bonds discharged
from registration, all in accordance with the provisions of the
Resolution Providing for the Issuanpe of the Bonds.
-3-
REDEMPTION PROVISIONS: Bonds maturing on or prior to
July 1, 1981, are not subject to call and redemption prior to
maturity. Bonds maturing on or after July 1, 1982, are subject
to call and redemption prior to maturity, at the option of the
City, as a whole, or in part in inverse order of maturity,
from funds derived by the City from any source, on July 1,
1981, or on any interest payment date thereafter, upon payment
of a redemption price equal to the principal amount thereof,
plus the following premium (percentage of par value) for
redemption at the following times:
On or After And Prior to
July 1 July 1 Premium
1981 1982 4-1/27.
1982 1983 4%
1983 1984 3-1/2%
1984 1985 37o
1985 1986 2-1/2%
1986 1987 2%
1987 1988 1-1/2%
1988 1989 1%
1989 Maturity " 1/2%
All or any of the bonds subject to call may be called
for redemption at any one time. If less than all of die Bonds
subject to such call are redeemed at any one time, such Bonds
shall be redeemed only in inverse order of maturity and number
beginning with the highest numbered Bonds.
PURPOSE OF ISSUE: Said Bonds were authorized for the
i
acquisition, construction and financing of extensions, enlarge-
ments and improvements of the water system for the City of
Carlsbad.
SECURITY: Said Bonds are issued pursuant to Article 8,
Chapter 3, Division 2, Title 5 (commencing at Section 53540)
-4-
of the Government Code of the State of California and the
Revenue Bond Law of 1941 (Government Code Sections 54300, et
seq.). Said Bonds are equally secured by a pledge, charge and
lien upon the gross revenues of the water system of the City
of Carlsbad (defined as the "enterprise" in the Resolution
Providing for the Issuance of the Bonds), together with all
additions and improvements to said system later constructed or
acquired. The principal of and interest on the Bonds and any
premiums upon the redemption of any thereof are not a debt of
the City of Carlsbad nor a legal or equitable pledge, charge,
lien or encumbrance upon any of its property or upon any of its
income, receipts or revenues, except the gross revenues of said
water system which are under the terms of the Resolution of
Issuance, and said Revenue Bond Law of 1941, pledged to the
payment of said Bonds and interest. The general fund of the
City of Carlsbad is not liable for the payment of the bonds or
their interest, nor is the credit or the taxing power of the
City pledged. The holder of the Bonds or coupons shall not
compel the exercise of the taxing power by the City of Carlsbad
or the forfeiture of any of its property.
TERMS OF SALE
Interest Rate; The maximum rate bid may not exceed 770
per annum, payable semiannually commencing January 1, 1971.
NEach rate bid must be a multiple of l/8th or l/20th of 1%. No
bond shall bear more than one interest rate and all bonds of
the same maturity shall bear the same rate. Each bond must
bear interest at the rate specified in the bid from its date to
its fixed maturity date. Only one coupon will be attached to
*
each bond for each installment of interest thereon, the bids
providing for additional or supplemental coupons will be rejected,
-5-
The rate on any maturity or group of maturities shall not be
more than 17« higher than the interest rate on any other maturity
or group of maturities.
Award; The bonds shall be sold for cash only. All bids
must be for not less than all of the bonds hereby offered for '
sale and each bid shall state that the bidder offers par and
accrued interest to the date of delivery, the premium, if any,
and the interest rate or rates not to exceed those specified
herein, at which the bidder offers to buy said bonds. Each
bidder shall state in his 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.
Highest Bidder; The bonds will be awarded to the highest
responsible bidder or bidders considering the interest rate or
rates specified and the premium offered, if any. The highest
bid will be determined by deducting the amount of the premium
bid (if any) from the total amount of interest which the City
would be required to pay from the date of said bonds to the
respective maturity dates thereof at the coupon rate or rates
specified in the bid, and the award will be made on the basis of
the lowest net interest cost to the City. The purchaser must pay
accrued interest from the date of the bonds to the date of deli-
very computed on a 360-day year basis. The cost of printing the
bonds will be borne by the City.
Right of Rejection; The City reserves the right, in its
discretion,to reject any and all bids and to the extent not pro-
hibited by law to waive any irregularity or informality in any
bid.
-6-
Prompt Award; The City will take action awarding the bonds
or rejecting all bids not later than twenty-six (26) hours after
the time herein prescribed for the receipt of proposals; provided
that the award may be made after the expiration of the specified
time if the bidder shall not have given to the City Council notice
in writing of the withdrawal of such proposal.
Place of Delivery; Delivery of said bonds will be made
to the successful bidder at:
Security Pacific National Bank
124 West Fourth Street
Los Angeles, California
or at any other place agreeable to both the City and the successful
bidder.
Prompt Delivery; Cancellation for Late Delivery; It is
expected that said bonds will be delivered to the successful
bidder within thirty (30) days from the date of sale thereof.
The successful bidder shall have the rightj at his option, to
cancel the contract of purchase if the City shall fail to execute
the bonds and tender them for delivery within sixty (60) days from
the date herein fixed for the receipt of bids, and in such event
the successful bidder shall be entitled to the return of the check
accompanying his bid.
Form of Bid; Each bid, together with the bid check, must
be in a sealed envelope, addressed to the City with the envelope
and bid clearly marked "Proposal for City of Carlsbad Waterworks
Revenue Bonds, 1970, Series A".
Bid Check; A certified or cashier's check on a responsible
bank or trust company in the amount^of $22,500 payable to the
order of the City must accompany each proposal as a guaranty that
the bidder, if successful, will accept and pay for said bonds in
-7-
accordance with the terms of his bid. The check accompanying
any accepted proposal shall be 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 the City, shall then be cashed and the proceeds retained,
by the City. The check accompanying each unaccepted proposal
will be returned promptly.
Change in Tax Exempt Status: At any time before the
bonds are tendered for delivery, the successful bidder may
disaffirm and withdraw the proposal if the interest received
by private holders from bonds of the same type and character
shall be declared to be taxable income under present federal
income tax laws, either by a ruling of the Internal Revenue
Service or by a decision of any federal court, or shall be
declared taxable by the terms of any federal income tax law
enacted subsequent to the date of this notice.
Legal Opinion; The unqualified opinion of Rutan & Tucker,
Attorneys, approving the validity of said bonds will be furnished
the successful bidder at or prior to the time of delivery of
the bonds, at the expense of the City. A copy of such opinion,
certified by an officer of the City by his facsimile signature
will be printed on the back of each bond. No charge will be made
to the purchaser for such printing or certification.
No Litigation Certificate; At the time of payment for and
delivery of said bonds, the City will furnish the successful
bidder a certificate that there is no litigation pending affect-
ing the validity of the bonds.
-8-
INFORMATION AVAILABLE: Requests for information concern-
ing the City should be addressed to:
Bartle Wells Associates
260 California Street
San Francisco, California 94111
GIVEN by order of the City Council of the City of Carlsbad,
California, adopted September 1, 1970.
City Clerk, City of Carlsbad
(SEAL)
-9-
ADOPTED, SIGNED AND APPROVED this 1st day of September,
1970.
Mayor, City of Carlsbad
(SEAL)
ATTEST:
City Clerk, City of Carlsbad
-10-
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO ) ss.
CITY OF CARLSBAD )
I, MARGARET E. ADAMS, City Clerk of the City of Carlsbad,
California, do hereby certify that the foregoing resolution was
duly adopted by the City Council of said City and was approved
by the Mayor of said City at a regular meeting of said City
Council held on the 1st day of September, 1970, and that it was
so adopted as follows:
AYES: COUNCILMEN Dunne, Jardine, Castro and Lewis.1
NOES: COUNCILMEN None.
ABSENT: COUNCILMEN MeComas.
City Clerk^City of Carlsbad
(SEAL)
-11-
STATE OF CALIFORNIA )
CITY OF CARLSBAD ) ss.
COUNTY OF SAN DIEGO )
I, MARGARET E. ADAMS, City Clerk of the City of
Carlsbad, California, do hereby certify that the above and
foregoing is a full, true and correct copy of Resolution No,
1780 , and that the same has not been amended or
repealed.
DATED: September 1 , 1970.
City ClerkTCity of
Oceanside
(SEAL)
RESOLUTION NO. 1781
RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF CARLSBAD APPROVING THE
OFFICIAL STATEMENT
BE IT RESOLVED, DETERMINED AND ORDERED as follows:
That the Official Statement prepared by Bartle Wells Associates
and presented to this City Council on this date, is hereby
approved in substantially the form presented. This Statement
is hereby authorized to be mailed to prospective bidders for
the City of Carlsbad Waterworks Revenue Bonds, 1970, Series A.
It is the understanding of this City Council that Bartle Wells
Associates will make such additions and corrections thereon as
may be necessary to bring this Statement up-to-date prior to
mailing.
ADOPTED, SIGNED AND APPROVED this 1st day of,
September , 1970.
Mayor of the City of Carlsbad(SEAL)
ATTEST:
City Clerk of the City of Carlsbad
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO ) ss.
CITY OF CARLSBAD )
I, MARGARET E. ADAMS, City Clerk of the City of
Carlsbad, California, do hereby certify that the foregoing
resolution was dulyadopted by the City Council of said City
and was approved by the Mayor of said City at a regular meeting
of said City Council held on the 1st day of September, 1970,
and that it was so adopted as follows;
AYES: COUNCILMEN Dunne, Jardtne, Castro and Lewis.
NOES: COUNCILMEN None.
ABSENT: COUNCILMEN McComas
City Clerk, City of Carlsbad
(SEAL)
-2-
STATE OF CALIFORNIA)
COUNTY OF SAN DIEGO) ss.
CITY OF CARLSBAD )
I, MARGARET E. ADAMS, City Clerk of the City of
Carlsbad, California, DO HEREBY CERTIFY that the above and
foregoing is a full, true and correct copy of Resolution
No' 1781 , and that the same has not been amended or
repealed.
DATED: September 1 19 70 .
City Clerk of the City of
Carlsbad, California
(SEAL)