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HomeMy WebLinkAbout1987-06-23; City Council; Resolution 91323061 -02 HW:WHM.skd a 06/22/87 M5581 RESOLUTION NO. 9132 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD PROVIDING FOR THE BORROWING OF FUNDS FOR THE HOSP GROVE ACQUISITION AND THE ISSUANCE AND SALE OF 1987 NOTES THEREFOR WHEREAS, this City Council (the "Council") has heretofore taken certain actions to icquire for the City of Carlsbad (the "City") and its residents, ceitain real property :onsisting of an approximately 52 acre eucalyptus grove commonly known as "Hosp ;rove" (the "Property"), to be used for the preservation of open space; and WHEREAS, in connection therewith, the Council did, on May 19, 1987, authorize the !xecution of a note (the "Temporary Note") in the principal amount of $6,459,384, to be lelivered to San Diego Trust and Savings Bank (the "Bank") in order to acquire the 'roperty on June 1, 1987; and WHEREAS, the City has acquired the Property; and WHEREAS, the Council has determined to finance the Property on a long term basis hrough the issuance of general obligation bonds or certificates of participation; and WHEREAS, the Temporary Note matures on July 16, 1987; and WHEREAS, the Council has determined that there is a need to issue notes under Sections 53850 et seq. of the Government Code of the State of California to pay the Bank he principal of and interest on the Temporary Note at maturity; and WHEREAS, the Council has determined to submit to the voters of the City a )reposition which, if approved by two-thirds of the voters of the City, would authorize the ssuance of general obligation bonds to finance the Property on a long term basis; and NOW, THEREFORE, the City Council of the City of Carlsbad hereby finds, letermines, declares and resolves as follows: Section 7. Recitals True and Correct; Definitions. All of the recitals herein set orth are true and correct, and the Council so finds and determines. All capitalized terms sed herein and not defined herein shall have the meanings attributable to such terms on he attached Exhibit B. Section 2. fssuance and Terms of Notes. Solely for the purpose of paying irincipal of and interest on the Temporary Note at maturity, the City hereby determines to ind shall borrow the principal amount of Six Million Five Hundred Seventy Thousand 3ollars ($6,570,000) by the issuance of temporary notes under Sections 53850 et seq. of he Government Code of the State of California, designated "City of Carlsbad (San Diego ;ounty, California) 1987 Notes" (the "Notes"). The Notes shall be numbered from 1 ;onsecutively upward in order of issuance, shall be dated July 16, 1987, shall mature on :June 30, 19881 and shall bear interest, payable at maturity and computed on a 30-day tinonth/360-day year basis, at the rate determined in accordance with a Purchase hontract to be presented by Rauscher, Pierce, Refsnes, Inc. pursuant to Section 12 hereof. Both the principal of and interest on the Notes shall be payable, only upon surrender thereof, in lawful money of the United States of America, at the corporate agency division of Security Pacific National Bank (the "Paying Agent") in California. I Section 3. Form of Notes. The Notes shall be issued in bearer form without coupons in the denomination of $5,000 or any integral multiple thereof, and shall be substantially in the form and substance set forth in Exhibit A attached hereto and by reference incorporated herein, the blanks in said form to be filled in with appropriate words and figures. I Section 4. Use of Proceeds. The moneys so borrowed shall be used to pay the Bank the principal of the Temporary Note at maturity. I I I Section 5. Security. The principal amount of the Notes, together with the interest tbereon, shall be payable from the proceeds of general obligation bonds or certificates of participation issued to finance the Property on a long term basis, or, if such obligations are not issued prior to the maturity of the Notes, from taxes, revenue and other unrestricted moneys" (as hereinafter defined), which are held or received by the City for the general fund of the City for fiscal year 1987-1988. The term "unrestricted moneys" dhall mean taxes, income, revenue, cash receipts, and other moneys intended as receipts for the general fund of the City for fiscal year 1987-1988 and which are generally available for the payment of current expenses and other obligations of the City, as well as all other fhnds held by the City during fiscal year 1987-1988 which may legally be used to pay the avs Drior to the maturity date of the p,rincipal of and interest on the Notes. At least 30 d Notes, t he Citv shall take one of the followina actions: I I I la) issue ae neral obliaation bonds in an amount at least eau al to principal of and interest o n the Notes at maturitv and reserve the oroceeds t hereof for the oavment of the principal of and interest o n the Notes at maturitv; I 4b' co molete a Cert ificate of Particioation financina which will oroduce available proceeds in an amount at least equ al to principal of and interest o n the Notes at maturitv ahd reserve the oroceeds t hereof for the pavment of the princioal of and interest o n the Notes at maturitv; IC! reserve an amount eau al to p rincipal of and interest on the Notes. us ing a combination of advances from the Citv's funds, includina but not limited to. t he Se wer Construction Fund. the Ge neral Canital Construction Fund. the Public Facilities Fee Fund and the Planned Local Drainaae Fund. ~ Section 6. Paying Agent. Security Pacific National Bank in Los Angeles, Cialifornia, is hereby appointed to act as the Paying Agent of the City for the purpose of paying to the Noteholders upon presentation thereof, at its corporate trust department in Los Angeles, California, both the principal of and interest on the Notes at maturity and to perform such other duties and powers of the Paying Agent as are prescribed in this Resolution. -2- Section 7. Execution of Notes. The City Treasurer of the City is hereby authorized to execute the Notes by the manual or facsimile signature, and the City Clerk of the City is hereby authorized to countersign the same by the manual or facsimile signature and to affix the seal of the City thereto by facsimile impression thereof, and said officers are hereby authorized to cause the blank spaces thereof to be filled in as may be appropriate. Section 8. Covenants and Warranties. 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 proceedings necessary to be taken by them, for the prompt collection and enforcement of the taxes, revenue, cash receipts and other moneys securing the Notes to be issued hereunder in accordance with law and for carrying out the provisions of this Resolution. Section 9. No Arbitrage. The City shall not take, nor permit nor suffer to be taken by the Paying Agent or otherwise, any action with respect to the Gross Proceeds of the Notes which, if such action had been reasonably expected to have been taken, or had en deliberately and intentionally taken, on the date of the issuance of the Notes would ve caused the Notes to be "arbitrage bonds" within the meaning of section 148(a) of the de and Regulations. Section 70. Rebate of Excess lnvestment Earnings to United States. The City shall be obligated to rebate Excess Investment Earnings to the United ates in accordance with the provisions of A through F below. (A) Definition of Excess Investment Earninas. The City shall calculate Excess Investment Earnings in accordance with subsection (B) and shall assure payment of an amount equal to Excess Investment Earnings to the United States in accordance with subsection (C). The term "Excess Investment Earnings" means an amount equal to the sum of: (1) the excess of (a) the aggregate amount earned from the date of delivery of the Notes on all Nonpurpose Obligations in which Gross Proceeds of the Notes are invested (other than amounts attributable to an excess described in this paragraph (l), over (b) the amount that would have been earned if the Yield on such Nonpurpose Obligations (other than amounts attributable to an excess described in this paragraph (1) had been equal to the Yield on the Notes, plus (2) any income attributable to the excess described in paragraph (1). -3- (B) Calculation of Excess Investment Earninus. On the last day of the Note Year, the City shall calculate the Excess Investment Earnings referenced in paragraphs (1) and (2) of subsection (A). Said calculations shall be made or caused to be made by the City in accordance with the following: (1) Except as provided in (2) below, in determining the amount described in paragraph (l)(a) of subsection (A), the aggregate amount earned on Nonpurpose Obligations shall include (a) all income realized under the federal income tax accounting principles (whether or not the person earning such income is subject to federal income tax) with respect to such Nonpurpose Obligations and with respect to the reinvestment of investment receipts from such Nonpurpose Obligations (without regard to the transaction costs incurred in acquiring, carrying, selling or redeeming such Nonpurpose Obligations), including, but not limited to, gain or loss realized on the disposition of such nonpurpose Obligations (without regard to when such gains are taken into account under Section 1272 of the Code (relating to original issue discount) and (b) any unrealized gain or loss as of the date of retirement of the Notes in the event that any Nonpurpose Obligation is retained after such date. (2) In determining the amount described in paragraph (1) of subsection (A), Investment Property shall be treated as acquired for its fair market value at the time it becomes a Nonpurpose Obligation, so that gain or loss on the disposition of such Investment Property shall be computed with reference to such fair market value as its adjusted basis. (3) In determining the amount described in paragraph (l)(b) of subsection (A), the Yield on the Notes shall be determined based on the actual Yield of the Notes during the period between the date of issuance of the Notes and the date the computation is made (with adjustments for discount or premium) . (4) In determining the amount described in paragraph (2) of subsection (A), all income attributable to the excess described in paragraph (1) of subsection (A) must be taken into account, whether or not that income exceeds the Yield on the Notes, and no amount may be treated as "negative arbitrage". (5) In determining the amount described in subsection (A), there shall be excluded any amount earned on any fund or account which is used primarily to achieve a proper matching of revenues and Debt Service within each Note Year and which is depleted at least once a year except for a reasonable carryover amount not in excess of the greater of one year's earnings on such fund or account or one-twelfth of annual Debt Service as well as amounts earned on said earnings if the gross earnings on all such funds and accounts for the Note Year is less than $100,000. (C) Payment to United States. The City shall pay an amount equal to Excess Investment Earnings to the United States within 60 days of the maturity date of the Notes. The City shall remit payments to the United States at the address -4- prescribed by the Regulations as the same may be in time to time in effect with such reports and statements as may be prescribed by such Regulations. (D) Further Obliaation of City. The City shall assure that Excess Investment Earnings are not paid or disbursed except as required in this Section. To that end the City shall assure that investment transactions are on an arm's length basis. In the event that Nonpurpose Obligations consist of certificates of deposit or investment contracts, investment in such Nonpurpose Obligations shall be made in accordance with the procedures described in applicable Regulations as from time to time in effect. (E) Maintenance of Records. The City shall keep, and retain for a period of six (6) years following the retirement of the Notes, records of the determinations made pursuant to this Section 10. (F) Independent Consultants. In order to provide for the administration of this Section 10 hereof, the City may provide for the employment of independent attorneys, accountants and consultants compensated on such reasonable basis as the City may deem appropriate. Section 77. federal Guarantee Prohibition. The City shall take no action nor permit nor suffer any action to be taken if the result of the same would be to cause the Notes to be "federally guaranteed" within the meaning of Section 149(b) of the Code. Section 72. Sale of Notes. The Notes are hereby authorized to be sold to Rauscher, Pierce, Refsnes, Inc. as underwriter (the "Underwriter") pursuant to and in accordance with the Contract of Purchase, by and between the City and the Underwriter, in substantially the form on file with the City Clerk, so long as the interest rates on the Notes does not exceed 5% and so long as the discount on the Notes does not exceed $25,000. Said form of Contract of Purchase is hereby approved, and the Finance Director and the City Clerk of the City are hereby authorized and directed to execute the Contract of Purchase for and in the name and on behalf of the City. Section 13. Official Statement. The City Council hereby approves the Official Statement in preliminary form describing the Notes, in substantially the form submitted by the Underwriter and on file with the City Clerk, together with any changes therein or additions thereto deemed advisable by the Finance Director or the City Manager. Distribution by the Underwriter of said preliminary Official Statement to prospective purchasers of the Notes is hereby approved, ratified and confirmed. The Finance Director and the City Manager are hereby separately authorized and directed to approve any changes in or additions to a final form of said Official Statement deemed advisable by the Finance Director or City Manager. The City Manager of the City is hereby authorized and directed to execute and deliver the final Official Statement for and in the name and on behalf of the City. Section 74. Preparation of Notes; Official Action. Jones Hall Hill & White, A Professional Law Corporation, as bond counsel to the City, is directed to cause suitable Notes to be prepared showing on their face that the same bear interest at the rate specified in the executed Contract of Purchase, and to cause the blank spaces therein to be filled in to comply with the provisions of this Resolution, and to procure their execution -5- y the proper officers, and to cause the Notes to be delivered when so executed to the urchaser or purchasers thereof upon the receipt of the purchase price by the Finance lirector, in accordance with the Contract of Purchase. The Mayor, City Manager, Finance Director and City Clerk, or any of them, are rrther authorized and directed to make, execute and deliver to the purchaser of the Notes I) a certificate in the form customarily required by the purchaser of bonds of public orporations generally, certifying to the genuineness and due execution of the Notes, (b) a xeipt in similar form evidencing the payment of the purchase price of the Notes, which xeipt shall be conclusive evidence that said purchase price of the Notes has been paid nd has been received by the City, and (c) a certificate attesting to the use of the roceeds of the Notes, the investment thereof, and any other matters relating to the tax xemption of the Notes pursuant to Section 103 of the Internal Revenue Code of 1986, as mended. Any purchaser or subsequent taker or holder of the Notes is hereby authorized rely upon and shall be justified in relying upon any such certificate or receipt with spect to the Notes. Such officers and any other officers of the City are hereby uthorized to execute any and all other documents required to consummate the sale and elivery of the Notes. I certiw that the foregoing resolution was adopted by the Council of the City of ;arkbad at a regular meeting held June 23, 1987, by the following vote: ,YES: Council Members Lewis, Kulchin, Pettine, Mamaux and Pettine SEAL] LttttsSt. /&A City Clerk -6- No. '$ - EXHIBIT A CITY OF CARLSBAD (San Diego County, California) 1987 Notes Date: July 16, 1987 FOR VALUE RECEIVED, the City of Carlsbad (the "City"), State of California, acknowledges itself indebted to and promises to pay to the bearer hereof, at the corporate trust department of Security Pacific National Bank in Los Angeles, California, the principal sum of Dollars ($ ) lawful money of the United States of America, on June 30, 1988, together with interest thereon at the rate of percent ( %) per annum in like lawful money from the date hereof until payment in full of said principal sum. Both the principal of and interest on this Note shall be payable only upon surrender of this Note as the same shall fall due; provided, however, no interest shall be payable for any period after maturity during which the holder hereof fails properly to present this Note for payment. It is hereby certified, recited and declared that this Note is one of an authorized issue of Notes in the aggregate principal amount of Six Million Five Hundred Seventy Thousand Dollars ($6,570,000), all of like tenor, issued pursuant to the provisions of Resolution No. of the City Council of the City duly passed and adopted on June 23, 1987, and pursuant to Article 7.6 (commencing with Section 53850) of Chapter 4, Part 1, Division 2, Tittle 5, of the California Government Code, and that all things, conditions and acts required to exist, happen and be performed, exist, have happened and been performed in regular and due time, form and manner as required by law, and that this Note, together with all other indebtedness and obligations of the City, does not exceed any limit prescribed by the Constitution or statutes of the State of California. The principal amount of the Notes, together with the interest thereon, shall be payable from the proceeds of general obligation bonds or certificates of participation issued to finance on a long term basis the cost of acquiring an approximately 52 acre eucalyptus grove commonly known as "Hosp Grove" for the preservation of open space, or if such securities are not issued, from taxes, revenue and other "unrestricted moneys" which are held or received by the City for the fiscal year 1987-1988. As used herein, the term "unrestricted moneys" means the taxes, income, revenue, cash receipts, and other moneys, intended as receipts for the General Fund of the City for Fiscal Year 1987-1988 and which are generally available for the payment of current expenses and other obligations of the City, as well as all other funds held by the City during fiscal year 1987- 1988 which may legally be used to pay the principal of and interest on the Notes. -7- -1 I a. . I IN WITNESS WHEREOF, the City of Carlsbad has caused this Note to be executed by the ' City Treasurer of the City and countersigned by the City Clerk of the City, and caused its official seal to be affixed hereto all as of this 16th day of July, 1987. CITY OF CARLSBAD By: City Treasurer 1 [SEAL] ~ Countersigned: I City Clerk -8- EXHIBIT B DEFINITIONS Code. The term "Code" means the Internal Revenue Code of 1986, as amended. Debt Service. The term "Debt Service" means the scheduled amount of interest 7d principal payable on the Notes during the period of computation. Excess Investment Earninas. The term "Excess Investment Earnings" has the eaning ascribed to it in Section 10 hereof. Gross Proceeds. The term "Gross Proceeds" means the sum of the following nounts: (i) original proceeds, namely, net amounts (after payment of all expenses of issuing the Notes) received by or for the City as a result of the sale of the Notes, excluding original proceeds which become transferred proceeds (determined in accordance with applicable Regulations) of obligations issued to refund in whole or in part the Notes; (ii) investment proceeds, namely, amounts received at any time by or for the City, such as interest and dividends, resulting from the investment of any original proceeds (as referenced in clause (i) above) or investment proceeds (as referenced in this clause (ii)) in Nonpurpose Obligations, increased by any profits and decreased (if necessary, below zero) by any losses on such investments; (iii) sinking fund proceeds, namely, amounts, other than original proceeds, investment proceeds, which are held in the Repayment Fund and any other fund to the extent that the City reasonably expects to use such other fund to pay Debt Service on the Notes; (iv) Investment Property pledged as security for payment of Debt Service on the Notes by an ultimate obligor or a related person or by the City; (vi) amounts, other than as specified in this definition, used to pay Debt Service on the Notes; and (vii) amounts received as a result of investing amounts described in this definition. Investment Property. The term "investment property" means any security (as said term is defined in section 165(g)(2)(A) or (6) of the Code), obligation, annuity or investment-type property, excluding, however, obligations the interest on which is exempt from income tax under section 103 of the Code. Nonouroose Obliaation. The term "Nonpurpose Obligation" means any Investment Property which is acquired with the Gross Proceeds of the Notes and is not acquired in order to carry out the governmental purpose of the Notes. -9- . Note Year. The term "Note Year" means the period beginning on July 16, 1987 and ending on June 30, 1988. Purchase Price. The term "Purchase Price," for the purpose of computation of the 'ield of the Notes, has the same meaning as the term "issue price" in sections 1273(b) ind 1274 of the Code, and, in general, means the initial offering price to the public (not ncluding bond houses and brokers, or similar persons or organizations acting in the :apacity of underwriters or wholesalers) at which price a substantial amount of the Notes ire sold or, if the Notes are privately placed, the price paid by the first buyer of the Notes )r the acquisition cost of the first buyer. The term "Purchase Price," for the purpose of :omputation of the Yield of Nonpurpose Obligations, means the fair market value of the lonpurpose Obligations on the date of use of Gross Proceeds of the Notes for acquisition hereof, or if later, on the date that Investment Property constituting a Nonpurpose lbligation becomes a Nonpurpose Obligation of the Notes. Reaulations. The term "Regulations" means temporary and permanent regulations xomulgated under section 148 of the Code. Yield. The term "Yield" means that yield which, when used in computing the resent worth of all payments of principal and interest (or other payments in the case of donpurpose Obligations which require payments in a form not characterized as principal md interest) on a Nonpurpose Obligation or on the Notes produces an amount equal to he Purchase Price of such Nonpurpose Obligation or the Notes, all computed as )rescribed in applicable Regulations. -1 0-