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HomeMy WebLinkAboutReso 1990-15540 RESOLUTION NO. 15540 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA, AUTHORIZING ISSUANCE OF BONDS, APPROVING BOND IDENTURE AND OFFICIAL STATEMENT FOR A SPECIAL ASSESSMENT DISTRICT WHEREAS, the City Council of the City of Chula Vista is conducting proceedings for the acquisition of certain public improvements in a special assessment district pursuant to the terms and provisions of the "Municipal Improvement Act of 1913", being Division 12 of the Streets and Highways Code of the State of California, said special assessment district known and designated as Assessment District No. 88-2 (Otay Lakes Road) (hereinafter referred to as the "Assessment District"); and WHEREAS, this legislative body has previously declared in its Resolution of Intention to issue bonds to finance said improvements, said bonds to issue pursuant to the terms and provisions of the "Improvement Bond Act of 1915," being Division lO of said Code; and WHEREAS, at the time this legislative body is desirous to set forth all formal terms and conditions relating to the authorization, issuance and administration of said bonds; and WHEREAS, there has been presented, considered and ready for approval a bond indenture setting forth formal terms and conditions relating to the issuance and sale of bonds; and WHEREAS, there has also been presented an Official Statement containing information including but not limited to the Assessment District and the type of bonds, including terms and conditions thereof; and WHEREAS, this legislative body hereby further determines that the unpaid assessments shall be specifically in the amount as shown and set forth in the Certificate of Paid and Unpaid Assessments as certified by and on file with the Treasurer, and for particulars as to the amount of said unpaid assessments, said Certificate and list shall control and govern. NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: RECITALS SECTION 1. That the above recitals are true and correct. BOND AUTHORIZATION SECTION 2. That this legislative body does authorize the issuance of bonds pursuant to the terms and provisions of the "Improvement Bond Act of 1915", Resolution No. 15540 Page 2 being Division lO of the Streets and Highways Code of the State of California, and also pursuant to the specific terms and conditions as set forth in the Bond Indenture presented herein. BOND INDENTURE SECTION 3. The Bond Indenture is approved substantially in the form presented herein, and is subject to modifications as necessary and as approved by the Finance Director, with the concurrence of Bond Counsel. Final approval of the Bond Indenture shall be conclusively evidenced by the signature of the Finance Director upon final delivery of bonds and receipt of proceeds. A copy of said Bond Indenture shall be kept on file with the transcript of these proceedings and open for public inspection. OFFICIAL STATEMENT SECTION 4. That the Official Statement, as prepared and submitted, is hereby approved and adopted, and the execution and distribution is hereby authorized. A copy of said Official Statement shall be kept on file with the transcript of these proceedings and remain open for public inspection. FINAL ASSESSMENTS SECTION 5. That the certificate of Paid and Unpaid Assessments, as certified by the Treasurer, shall remain on file in that office and be open for public inspection for all particulars as it relates to the amount of unpaid assessments to secure bonds for this Assessment District. SUPERIOR COURT FORECLOSURE SECTION 6. In the event of delinquency in the payment of any installment of unpaid assessments, this legislative body does specifically covenant for the benefit of the owners of the bonds that it shall initiate judicial foreclosure proceedings within 150 days following the date of such delinquencies and that such proceedings shall be diligently prosecuted to final judgment and sale; however, foreclosure actions may be deferred if the reserve fund balance is maintained in an amount equal to the Reserve Requirement as defined in the Bond Indenture. For further paticulars and Resolution No. 15540 Page 3 specifics, reference is made to the Bond Indenture to be approved prior to any issuance and delivery of bonds. Presented by: Approved as to form by: J Ruth M. Fritsch t f P W Assistant City Attorney D~rec or o ublic orks Resolution No. 15540 Page 4 PASSED, APPROVED, and ADOPTED by the City Council of the City of Chula Vista, California, this 6th day of March, 1990 by the following vote: AYES: Councilmembers: Malcolm, Moore, Nader, McCandliss NOES: Councilmembers: None ABSENT: Councilmembers: Cox ABSTAIN: Councilmembers: None ATTEST: STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA ) I, Beverly A. Authelet, City Clerk of the City of Chula Vista, California, do hereby certify that the foregoing Resolution No. 15540 was duly passed, approved, and adopted by the City Council of the City of Chula Vista, California, at a regular meeting of said City Council held on the 6th day of March, 1990. Executed this 6th day of March, 1990. ever y A~Au~he~et'~/ City C~erk ' Resolution No. 15540 Page 5 BOND INDENTURE This Bond indenture (the "Indenture") dated as of March 6, 1990, entered into and approved byethe City of Chula Vista (the "Issuer"), a municipal corporation, to establish the terms and conditions pertaining to the issuance of bonds in a special assessment di!strict known and designated as ASSESSMENT DISTRICT NO. 88-2 (OTAY LAKES ROAD) (the "Assessment District"). SECTION 1. Issuance, Designation and Amount. Pursuant to the provisions of the rImprovement Bond Act of 1915", being Division 10 of the Streets and ~ighways Code of the State of California, as amended (the "Act"), the Issuer does hereby authorize the issuance of bonds to represent unpaid assessments within the Assessment District in principal amount not to exceed $7,976,330.81 and designated as the City of Chula vista, Assessment District No. 88-2 (Otay Lakes Road) Limited Obligation improvement Bonds (the "Bonds"). SECTION 2. Term of Bonds. Bonds to represent the unpaid assessments, and bear interest at a rate not to exceed the current legal maximum rate of 12% ~er annum, will be issued in the manner provided in the Act, the last :installment of which Bonds shall mature a maximum of and not to exceed twenty-four (24) years from the second day of September next succeeding twelve (12) months from their date. The provisions of Part 11.1 Of the Act, providing an alternative procedure for the advance payment of assessments and the calling of Bonds shall apply. SECTION 3. Registered Bonds. Said Bonds shall be issuable only as fully regis- tered Bonds in the denomination of $5,000, Or any integral multiple thereof, except for one bond maturing in the first year of maturity, ~hich shall include the amount by which the total issue exceeds the maximum integral multiple of $5,000 contained therein. . ECTION 4. Date of Bonds. All of said Bonds shall be dated the 17th day of March, 1990, and interest shall accrue from that date. SECTION 5. Maturity and Denomination. The Bonds shall be issued in serial form with annual maturities on September 2nd of every year succeeding twelve (12) months after their date, until the whole is paid. The amount maturing each year shall be as set forth in Exhibit "A" attached hereto and incorporated herein by this reference and has been established so as to result in approximately equal annual debt service during the term of the issue as reflected by the interest rate and/or rates and principal amounts maturing in the respective years of maturity. The Issuer shall, immediately upon completion of the cash collection period, prescribe the denominations of the Bonds, which shall be in 'convenient amounts, not necessarily equal, and shall further provide for their issuance and delivery. SECTION 6. Interest. Each Bond shall be of a single maturity and shall bear interest at the rate as set forth in Exhibit '~A" attached hereto from the interest payment date next preceding the date on which it authenticated and registered, unless said Bond is authenticated and Res61ution No. 15540 Page 6 registered as of an interest payment date, in which case it shall bear interest from said interest payment date, or unless said Bond authenticated and registered prior to the first interest payment dat in which case it shall bear interest from its date, until payment its principal sum has been discharged. SECTION 7. :Place of Payment. The principal on the Bonds shall be payable in 'lawful money of the United States of America upon surrender of the Bond at the office of Bank of America National Trust & Savings Associates, the designated registrar, transfer agent and paying agent of the Issuer ~("Paying Agent"), Or such other registraP, transfer agent or paying iagent as may be designated by supplemental Indenture approved by the 'Issuer. Interest on said Bonds shall be paid on March 2 and September 2 of each year commencing September 2, 1990, by check or draft to the registered owner thereof at his address as it appears on the books of registra- tion, or at such address as may have been filed with the Paying Agent for that purpose, as of the 15th day of the month immediately preceding said interest payment date. SECTION 8. 2Redemption. This Bond, or a portion thereof if issued in a denomina- :tion greater than $5,000, shall be subject to redemption and payment in advance of maturity in increments of $5,000 as provided in Section 8768 of the Streets and Highways Code, on the 2nd day of March or September in any year, by giving the notice provided in said law to the regis- tered owner thereof at his address as it appears on the books of regi~ ~tration and by paying principal of and accrued interest on st redeemed amount, together with a premium equal to three percent (3%) ~_ the redeemed principal amount. If less than the entire BOnd is redeemed, the unredeemed portion shall be reissued to the registered ,owner thereof. The Bonds shall not be subject to refunding pursuant to ~Division 11 or Division 11.5 of the Streets and Highways Code of the State of California prior to September 2, 1994 for the purpose of refunding Bonds maturing on Or after September 2, 1995. SECTION 9. Transfer of Registered Bonds. Any fully registered Bond may, in accor- dance with its terms, be transferred upon the books of registration required to be kept pursuant to the provisions of Section ll by the owner in whose name it is registered, or by his duly authorized attorney or legal representative, upon surrender of such fully regis- tered Bond for registration of such transfer, accompanied by delivery of a written instrument or transfer in a form approved by the Paying Agent and by the owner of said Bonds, duly executed. SECTION 10. Exchange of Registered Bonds. Fully registered Bonds may be exchanged at the office of the Paying Agent for a like aggregate principal amount 'of Bonds of the'same series, interest rate and maturity, subject to the terms and conditions provided in the system of registration for regis- tered debt obligations, including the payment of certain charges, if any, upon surrender and cancellation of this Bond. Upon such transfer and exchange, a new registered Bond or Bonds of any authorized denomina- tion or denominations of the same maturity for the same aggreg~ principal amount will be issued to the transferee in exchange therefo~ Resolution No. 15540 Page 7 SECTION 11. Books of Registration. There shall be kept by the Paying Agent sufficient books for the registration and transfer of the Bonds and, ,upon presentation for such purpose, the Paying Agent shall, under such reas6nable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said register, Bonds as hereinbefore provided. SECTION 12. ,Execution of Bonds. The Bonds shall be executed in facsimile by the Treasurer and by the City,Clerk, and the corporate seal shall be imprinted in facsimile on the Bonds. The Bonds shall then be delivered ito the Paying Agent for authentication and registration. In case an 'officer who shall have signed or attested to any of the Bonds by facsimile or otherwise shall cease to be such officer before the authentication, delivery and issuance of the Bonds, such Bonds nevertheless may be authenticated, delivered and issued, and upon such .authentication, delivery and issue, shall be as binding as though those who signed and attested the same had remained in office. SECTION 13. Authentication. Only such of the Bonds as shall bear thereon a certifi- 'cate of authentication substantially in the form below, manually ~executed by the Paying Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the transfer agent and registrar shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder, and are entitled to the benefits of this Indenture. FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION This bond has been authenticated and registered on BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION as Transfer Agent, Registrar and Paying Agent By: SECTION 14. Negotiability, Registration and Transfer of Bonds. The transfer of any Bond may be registered only upon such books Of registration upon surren- der thereof to the Paying Agent, together with an assignment duly executed by the owner or his attorney or legal representative, in satis- factory form. Upon any such registration of transfer, a new Bond or Bonds shall be authenticated and delivered in exchange for such Bond, in the name of the transferee, of any denomination or denominations authorized by this Indenture, and in an aggregate principal amount equal to the principal amount of such Bond or principal amount of such Bond or Bonds so surrendered. In all cases in which Bonds shall be 'exchanged or transferred, the Paying Agent shall authenticate at the earliest practical time, Bonds in accordance with the provisions of this Indenture. All Bonds surrendered in such exchange or registration transfer shall forthwith be cancelled. The Paying Agent may make a charge for every such exchange or regimtration of transfer of Bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of 3 Resolution No. 15540 Page 8 transfer. NO transfer of fully registered Bonds shall be required..to be made between the fifteenth (15th) day of the month next prece each interest payment date, nor during the fifteen (15) days prece, the selection of any Bonds for redemption prior to the maturity thereof, nor with respect to any Bond which has been selected for redemption prior to the maturity thereof. SECTION 15., Ownership of Bonds. The person in whose name any Bond shall be regis- tered shall be deemed and regarded as the absolute owner thereof for : all purposes, and payment of or on account of the principal and redemp- ~ tion premium, if any, of any such Bond, and the interest on any such : Bond, shall be made only to or upon the Order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond, including the redemption premium, if any, and interest thereon, to the extent of the sum or sums so paid. SECTION 16. Mutilated, Destroyed, Stolen or Lost Bonds. In case any Bond secured hereby shall become mutilated or be destroyed, stolen or lost, the Issuer shall cause to be executed and authenticated a new Bond of like date and tenor in exchange and substitution for and upon the cancella- tion of such mutilated Bond or in lieu of and in substitution for such Bond mutilated, destroyed, stolen or lost, upon the owner's paying the reasonable expenses and charges in connection therewith, and, in the case of a Bond destroyed, stolen or lost, his filing with the Paying Agent and Issuer of evidence satisfactory to them that such Bond was destroyed, stolen or lost, and of his ownership thereof, and furnish~, the Paying Agent and Issuer with indemnity satisfactory to them. SECTION 17. Cancellation of Bonds. All Bonds paid or redeemed, either at or before maturity, shall be cancelled upon the payment or redemption of suc~ Bonds, and shall be delivered to the Paying Agent when such payment or redemption is made. All Bonds cancelled under any of the provisions of this Indenture shall be destroyed by the Paying Agent, which shall execute a certificate in duplicate describing the Bonds so destroyed, and shall retain said executed certificate in its permanent files for the issue. SECTION 18. Creation of Funds. The Treasurer is hereby authorized and directed to establish the following Funds for purposes of making payment for the costs and expenses for the works of improvement and payment of principal and interest on the Bonds. The Funds to be created are designated as follows: IMPROVEMENT FUND: The proceeds from the sale of the Bonds, after deposit of required amounts in the Reserve Fund and Redemption Fund, shall be placed in the Fund hereby created, pursuant to Sections 10602 'and 10424 of the California Streets ~nd Highways Code, as amended, which shall be called the "Improvement Fund", and the monies in said Fund shall be used only for the purposes authorized in said assessment proceedings, and specifically to pay for the costs and expenses of the construction or acquisition of the authorized public capital improy ments, together with all incidental expenses. Any surplus in Improvement Fund after completion of the improvements shall remain Resolution No. 15540 Page 9 the Improvement Fund for a period Of not less than two (2) years from the receipt Of 8ond proceeds as provided in Section 10427.1 Of California Streets and Highways Code, and thereafter shall be utilized or distributed as determined by the Issuer. REDEMPTION FUND: The Treasurer is hereby authorized and directed to keep a Redemption Fund designated by the name of the proceedings, into which he shall place accrued interest, if any, on the Bonds from the date of the Bonds to the date of delivery to the initial purchaser thereof, all sums received for the collection of the assessments and the interest thereon, together with all penalties, if applicable. ~Principal of and interest on said Bonds shall be paid to the registered. Owner out of the Redemption Fund created pursuant to Section 8671 Of the California Streets and Highways Code. Accrued interest paid by the purchaser of the Bonds, if any, shall be deposited in the Redemption ~Fund. In all respects not recited herein, said Bonds shall be governed !by the provisions of the Act. Under no circumstances shall the Bonds or interest thereon be paid out of any other fund except as provided by law. 'RESERVE FUND: Pursuant to Part 16 of the Act, there shall be created a !special reserve fund for the Bonds to be designated by the name of the Assessment District and specified as the special "Reserve Fund". An amount equal to ten percent (10%) Of the Original Bond proceeds shall be deposited in the Reserve Fund Out Of said Bond proceeds. ~Monies in the Reserve Fund shall be applied as follows: A. whenever there are insufficient funds in the Redemption Fund to pay the next maturing installment of principal of or interest on the Bonds, an amount necessary to make up such deficiency shall be transferred from the Reserve Fund to the Redemption Fund. The amounts so advanced shall be reimbursed from the proceeds of redemption or sale of the parcels for which payment of delinquent installments of assessments and interest thereon has been made from. the Reserve Fund. B. In the event an unpaid assessment is paid in cash in advance of the final Bond maturity date ("Prepaid Assessment"), the Treasurer shall credit such Prepaid Assessment with a proportionate share of the Reserve Fund, thus reducing the total amount of the Reserve Fund. The amount to be so credited is ten percent (10%) of the original amount of the assessment being prepaid (i.e., the original pro-rata amount deposited in the Reserve Fund). C. Interest earned on permitted isvestmente of Reserve Fund monies shall remain in the Re~erve Fund to maintain it at an amount equal to the lesser of (i) the Maximum Annual Debt service on the Bonds, of (ii) ten percent (10%) of the principal amount of the Bonds. The term "Maximum Asnual Debt Service on the Bonds" means the sum of (1) the interest falling due on thee outstanding Bonds, assumisg that all then outstanding Bonds are retired as scheduled, and (2) the principal amount of then outstanding Bonds falling due by their Resolution No. 15540 Page 10 terms, all as computed for the twelve-month period ending September 2 in which any such sum is largest. The Treasurer shall determ] if there is any amount in the Reserve Fund in excess of the Maxi~ Annual Debt Service on the Bonds as of June 30 of each year, and shall transfer any such excess to the Redemption Fund by July 15 of such year in the manner provided in Part 16 of the Act. D. Any excess in the Reserve Fund transferred by the Treasurer to the Redemption Fund shall be used to advance the maturity of Bonds or credited towards unpaid assessments each year during which any part of the Bonds remain outstanding. The Auditor's record prepared pursuant to Section 8682 of the Act shall reflect credits against each of the unpaid Assessments in the manner provided in Section 10427.1 of the Act in amounts equal to each assessment parcel's proportionate share of any Reserve Fund disbursement. E. Except as provided above, no Reserve Fund disbursement shall be made in any year in excess of the amount which would cause the Reserve Fund to fall below the minimum amount required to be maintained therein. ~F. All sums remaining in the Reserve Fund in the year in which the last installments of the assessments become due and payable shall be credited toward the assessments as follows: Prior to June 30th of the fiscal year next preceding the fiscal year in which the last unpaid assessment installment becomes du~_ and payable, the Treasurer shall determine the amount remaining the Reserve Fund, if any, after all sums advanced and interes~ thereon have been reimbursed, and shall order same to be distributed and/or credited in the manner set forth in Section 10427.1 of the Act, provided only that where all or any part of such assessments remain unpaid and are payable in installments, the amount apportioned to each parcel shall be credited against the last unpaid assessment installment, then such excess shall be credited against the next to last unpaid assessment installment. _ SECTION 19. No Issuer Liability. It is hereby further determined and declared that the Issuer will not obligate itself to advance any available funds from its Treasury to cure any deficiency or delinquency which may occur in the Bond Redemption Fund by failure of property owners to pay annual special assessments. This determination shall be clearly set forth and stated in the title of the Bonds to be issued pursuant to these proceed- ings as authorized and required by Section 8769 of the Streets and Highways Code of the State of California. SECTION 20. Covenant for Superior Court Foreclosure. The legislative body does 'hereby covenant that upon the delinquency of the payment of any installment of unpaid assessments, the Issuer will commence foreclosure action(s) in the Superior Court of the State of California (Part 14, Division 10, "Improvement Bond Act of 1915", Streets and Highways Code) within one hundred fifty (150) days of such delinquency, and diligently prosecute and pursue such foreclosure proceedings to judgment and na] Initiation of such foreclosure actions may be deferred in any fisc~ year if the Reserve Fund ie maintained in an amount equal to the Reserve Requirement, 6 Resolution No. 15540 Page 11~ SECTION 21. Covenant to Maintain Tax-Exempt Status. The Issuer covenants that it will not make any use of the proceeds of the Bonds issued hereunder which would cause the Bonds to become ."arbitrage bonds" subject to Feder'al income taxation pursuant to the provisions of Section 148(a) of the Code, or to become "Federally-guaranteed obligations" pursuant to the provisions of Section 149(b) of the Code, or to become "private activity bonds" pursuant to the provisions of Section 141(a) of the Code. To that end, the Issuer will comply with all applicable require- ment~ of the Code and all regulations of the United States Department of Treasury issued thereunder to the extent such requirements are, at the time, applicable and in effect. Additionally, the Issuer agrees to implement and follow each and every recommendation provided by Bond Counsel and deemed to be necessary to be undertaken by the Issuer to ensure compliance with all applicable provisions of the Code in Order to preserve the exemption of interest on the Bonds from Federal income taxatlon. SECTION 22. Covenant Regarding Arbitrage. The Issuer shall not take or permit nor suffer to be taken any action with respect to the gross proceeds of the Bonds as such term is defined under the Code which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds, would have .caused the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and the regulations promulgated thereunder. SECTION 23. Order to Print and Authenticate Bonds. The Treasurer is hereby instructed to cause Bonds, as set forth above, to be printed, and to proceed to cause said Bonds to be authenticated and delivered to an authorized representative of the purchaser, upon payment of the purchase price as set forth in the accepted proposal for the sale of Bonds. ~mC"ION 24. Arbitrage Certificate. On the basis of the facts, estimates and circum- stances now in existence and in existence on the date of issue of the Bonds, as determined by the Treasurer, said Treasurer is hereby autho- rized to certify that it is not expected that the proceeds of the issue will be used in a manner that would cause such obligations to be arbitrage Bonds. Such certification shall be delivered to the purchaser together with the Bonds. SECTION 25. Arbitrage Rebate Exemption Covenant. The term "bond proceeds" as used in this Section shall mean amounts actually or constructively received by the Issuer from the sale of the Bonds. The term "investment proceeds" a~ used in this Section means amount~ actually or construc- tively received from the investment of tile bond proceeds. The Issuer shall expend all of the bond proceeds, other than bond proceeds deposited in the Reserve Fund, and all of the investment proceeds (including investment proceeds received from the investment of bond proceeds deposited in the Reserve Fund) for the purposes for which the Bonds have been authorized to be issued, within six (6) months following the date of delivery of the Bond~ to the initial purchaser thereof. _ Resolution No. 15540 Page 12 In determining the amount to be expended in accordance with the previously described requirement, investment proceeds shall be li~' 1 to amounts earned on the bond proceeds before the close of the six ~ month period described hereinabove. In the event that the Issuer does not satisfy the expenditure require- ments of this Section, the Issuer shall assure compliance with applic- able requirements contained in the code for rebate to the Federal government of excess investment earnings, if any, with respect to earnings on the bond proceeds, the investment proceeds, and on other applicable funds. Notwithstanding any other provision of this Section, the Issuer shall assure compliance with applicable requirements contained in the Code for rebate to the Federal government of excess investment earnings, if any,'with respect to earnings on the Reserve Fund and on other applic- able funds after the date which is six (6) months from the date of delivery of the bonds to the initial purchaser thereof. IN WITNESS ~HEREOF, the Issuer has executed this Bond Indenture effective the date first written hereinabove. FINANCE DIRECTOR CITY OF CHULA VISTA STATE OF CALIFORNIA 8 Resolution No. 15540 Page 13 CITY OF CHULA VISTA ASSESSMENT DISTRICT NO. 88-2 (OTAY LAKES ROAD) EXHIBIT MATURITY SCHEDULE