HomeMy WebLinkAboutCC Res 4059-A 1991-06-24
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RESOLUTION NO. ~-I{-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH,
PROVIDING FOR THE ISSUANCE AND SALE OF ITS 1991 TAX AND REVENUE
ANTICIPATION NOTES; APPROVING OFFICIAL STATEMENT, TERMS OF SALE,
NOTE PURCHASE AGREEMENT; APPOINTING BOND COUNSEL AND
UNDERWRITER; PLEDGING REVENUES AND ENTERING INTO CERTAIN TAX
COVENANTS IN CONNECTION WITH SAIO NOTES
WHEREAS, in order for the City of Seal Beach (the
"City") to meet its lawful obligations prior to the receipt of
revenue and taxes in fiscal year 1991-92, it is necessary to
temporarily borrow funds in the amount of the "maximum
anticipated cumulative cash flow deficit" as defined by section
1.103-14(c) (2) of Title 26 of the Code of Federal Regulations,
rounded to the nearest hundred thousand dollars, but not to
exceed Two Million Five Hundred Thousand Dollars ($2,500,000),
such funds to be used for any purpose for which the city is
authorlzed to expend moneys, in accordance with Article 7.6,
Chapter 4, Part 1, Division 2, Title 5 of the Government Code of
the State of California (commencing with Sections 53850 through
53858) (the "Act");
WHEREAS, the City may borrow for such purposes, such
indebtedness to be represented by tax and revenue anticipation
notes (the "Notes") issued pursuant to the Act;
WHEREAS, the City Council of the City (the "City
Council") is in need of legal services and special consultation
and advice in connection with the issuance and sale of the
Notes;
WHEREAS, there has been presented to the city Council
a proposal of Sutro & Co., Incorporated to act as Underwriter in
connection with sale of the Notes;
WHEREAS, there has been presented to the City Council
a Note Purchase Agreement;
WHEREAS, the City Council now w~shes to approve such
Note Purchase Agreement;
WHEREAS, the City Council wishes to authorize the
Finance Director/Treasurer and/or the City Manager to enter into
the Note Purchase Agreement with the Underwriter;
NOW, THEREFORE, BE IT RESOLVED by the city Council of
the City of Seal Beach, State of California, as follows:.
Section 1. The City Council has reviewed all
proceedings heretofore taken relative to the issuance of the
Notes and has found, as a result of such review, and hereby
finds and determines that all acts, conditions and things
required by law to exist, happen and be performed precedent to
and in the issuance of the Notes have existed, happened and been
performed in due time, form and manner as required by law, and
the city Council is duly authorized to issue the Notes in the
name of the City and to incur indebtedness in the manner and
upon the terms provided in this resolution.
Section 2. The City hereby appoints the firm of
Buchalter, Nemer, Fields & Younger, a Professional Corporation,
as bond counsel ("Bond Counsel") to provide legal services in
connection with the issuance and sale of the Notes. The Clty
Council agrees that the appointment of Bond Counsel will not
prevent Bond Counsel from continuing as attorney for parties
which may currently have disputes, legal or otherwise, with the
City which do not involve confidential informati~n which Bond
Counsel gained from its representation of the City ~nder such
appointment, nor will Bo~d Counsel be prevented from acting as
attorney in the future for clients which have disputes, legal or
Resolution Number ~.tf,l/
otherwise, with the City which do not involve confidential'
information which Bond Counsel gained from its representation of
the city under this appointment, even though the same may result
in litigation, and the city specificallY consents Bond
Counsel's representation of such present or future clients of
Bond Counsel despite such possible conflict.
section 3. The City hereby appoints sutro & Co.,
Incorporated as underwriter (the "Underwrite:r"), to provide
underwriting services in connection with the issuance and sale
of the Notes.
Section 4. Notes in the name of the city in an I
aggregate principal amount of the "maximum anticipated
cumulative cash flow deficit" as defined by section 1.103-
14(C)(2) of Title 26 of the Code of Federal Regulations, rounded
to the nearest hundred thousand dollars, but not to exceed Two
Million Five Hundred Thousand Dollars ($2,500,000), shall be
issued for any purposes for which the city is authorized to
expend moneys, under and subject to the terms of this resolution
and in accordance with the provisions of the Act.
section 5. Except as provided below, the holder of
all of the Notes shall be The Depository Trust Company, New
York, New York ("DTC") and the Notes shall be registered in the
name of Cede & Co., as nominee for DTC. The Notes shall be
initially executed and delivered in the form of a single fully
registered Note in the full aggregate principal amount of the
Notes. The city may treat DTC (or its nominee) as the sole and
exclusive owner of the Notes registered in its name for all
purposes of this Resolution, and the city shall not be affected
by any notice to the contrary. The Gity shall not have any
responsibility or obligation to any participant of DTC (a
"Participant"), any person claiming a beneficial ownership
interest in the Notes under or through DTC or any participant,
or any ather person which is not shown on the register of the
city as being a holder, with respect to the accuracy of any I
records maintained by DTC or any Participant or the payment by
DTC or any Participant of any amount in respect of the principal
or interest with respect to the Notes. The City shall pay all
principal and interest with respect to the Notes only to DTC,
and all such payments shall be valid and effective to fully
satisfy and discharge the City's obligations with respect to the
principal and interest with respect to the Notes to the extent
of the sum or sums so paid. Except under the conditions noted
below, no person other than DTC shall receive a Note. Upon
delivery by DTC to the city of written notice to the effect that
DTC has determined to substitute a new nominee in place of Cede
& Co., the term "Cede & Co." in this Resolution shall refer to
such new nominee of DTC.
If the City determines that it is in the best interest
of the beneficial owners that they be able to obtain Notes and
delivers a written certificate to DTC to that effect, DTC shall
notify the Participants of the availability through DTC of
Notes. In such event, the City shall issue, transfer and
exchange Notes as requested by DTC and any other holders in
appropriate amounts. OTC may determine to discontinue providing
its services with respect to the Notes at any time by giving
notice to the City and discharging its responsibilities with
respect thereto under applicable law. Under such circumstances I
(if there is no successor securities depository), the City shall
be obligated to deliver Notes as described in this Resolution.
Whenever DTC requests the City to do so, the City will cooperate
with DTC in taking appropriate action after reasonable notice to
(a) make available one or more separate Notes evidencing the
Notes to any DTC Participant having Notes credited to its DTC
account or (b) arrange for another securities depository to
maintain custody of certificates evidencing the Notes.
To induce DTC to accept the Notes as eligible for
book-entry form of issuance, the city will enter into a Letter
of Repres~ntations with DTC (the "Letter of Representations").
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\Ref!61'U~ion Number 4657';;
Notwithstanding any other prov~s~on of this Resolu-
tion to the contrary, so long as any Note is registered in the
name of Cede & Co., as nominee of DTC, all payments with respect
to the principal and interest with respect to such Note and all
notice with respect to such Note shall be made and given,
respectively, to DTC as provided in the Letter of
Representations delivered on the date of issuance of the Notes.
Section 6. The Finance Director/Treasurer and/or the
city Manager is authorized and directed to determine the amount
of the "maximum anticipated cumulative cash flow deficit" as
defined by Section 1.103-14(c) (2) of Title 26 of the Code of
Federal Regulations and in accordance with advice from Bond
Counsel, rounded to the nearest hundred thousand dollars, and to
enter such amount into the Note Purchase Agreement; provided,
however, that such amount shall not exceed Two Million Five
Hundred Thousand Dollars ($2,500,000).
section 7. The form of Note Purchase Agreement,
attached hereto as Exhibit A, and incorporated herein by
reference, is hereby approved. The Finance Director/Treasurer
and/or the City Manager is authorized to enter into such Note
Purchase Agreement with the Underwriter; provided, however, that
such rate of interest for the Notes does not exceed twelve
percent (12%) per annum, and to insert said rate in said Note
Purchase Agreement. The Finance Director/Treasurer and/or the
city Manager is hereby authorized and directed to execute the
Note Purchase Agreement in the name of and on behalf of the
City.
section 8. The Notes shall be dated the date of
delivery and shall bear interest at the rate of interest
provided for in the Note Purchase Agreement. Such interest
shall be payable on maturity. The Notes shall mature 364 days
from the date of the Notes, shall be numbered from 1 '
consecutively upward in order of their issuance, and shall be
issued in the denomination of $5,000, or any integral multiple
thereof. Both the principal of and interest on the Notes shall
be payable in lawful money of the United States of America upon
presentation and surrender at the office of the Finance
Oirector/Treasurer of the City in Seal Beach, California.
Section 9. The Notes shall not be subject to call or
redemption before their fixed maturity date.
Section 10. The Notes shall be issued without coupons
and shall be in substantially the following form, the blanks in
said form to be filled in with appropriate words or numbers to
comply with the provisions of this resolution:
STATE OF CALIFORNIA
COUNTY OF ORANGE
CITY OF SEAL BEACH
1991 TAX AND REVENUE ANTICIPATION NOTE
Number
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CUSIP:
FOR VALUE RECEIVED, the City of Seal Beach, a
municipal corporation organized and existing under and by virtue
of the laws of the state of California (hereinafter the "City"),
promises to pay to Cede & Co. on JUly __, 1992, the'principal
sum of MILLION DOLLARS ($ ,000,000) in lawful money of
the United States of America, wIth interest thereon at the rate
of HUNDREDTHS PERCENT ( . ) per annum
from the date hereof and payable on maturitY:- Interest shall be
~esolution Number ~~j1~
computed on a 30-day month and 360-day year basis. Both the
principal of and the interest on this note (hereinafter "Note")
shall be payable only upon surrender of this Note, as the same
shall become due, at the office of the Finance
Director/Treasurer of the City, in the city of Seal Beach,
California; provided, however, no interest shall be payable for
any period after maturity during which the holder hereof fails
to properly present this Note for payment.
This Note is a "qualified tax-exempt obligation"
within the meaning of section 265(b) (3) of the Internal Revenue I
Code of 1986, as amended.
This Note is part of an issue of Million Dollars
($ ,000,000) in aggregate principal amount of notes (the
"Notes") issued by the City Council of the City of Seal Beach,
State of California in the name and on behalf of the City, under
and in accordance with the provisions of Article 7.6 of Chapter
4 of Part 1 of Division 2 of Title 5 of the California
Government Code (constituting sections 53850 through 53858,
inclusive, of said Code), and a resolution duly adopted by the
city Council on June , 1991.
Payment of the principal of and the interest on this
are secured by a pledge of and first lien and charge against
moneys to be received by the city in fiscal year 1991-92 from
the first taxes, income, revenue, cash receipts and other moneys
intended as receipts for the general fund of the city and
generally available for the payment of current expenses and
other obligations of the City (the "Unrestricted Revenues"), to
be received by the City in the month of [April], 1992, in an
amount suf~icient to pay fifty percent (50%) of the aggregate
principal amount of the Notes outstanding; and the first
Unrestricted Revenues to be received by the City in the month of
[June], 1992, in an amount sufficient to pay fifty percent (50%)
of the aggregate principal amount of the Notes outstanding, plus I
an amount sufficient to pay the interest to become due on the
Notes at maturity. If the full amount of the Unrestricted
Revenues pledged in any particular month to a repayment of the
Notes has not been received by the City by the thirtieth day of
such month, the City shall make up such deficiency from any
other moneys of the city lawfully available therefor. The
principal of and the interest on this Note shall be payable from
said pledged moneys and from all other income, revenue, cash
receipts and moneys of the City lawfully available therefor.
However, the Notes are payable only from revenue received or
accrued during the fiscal year in which the Notes are issued.
Unless this Note is presented by an authorized
representative of DTC to the City of Seal Beach or its agent for
registration of transfer, exchange or payment, any Note issued
will be registered in the name of Cede & Co. or such other name
as requested by an authorized representative of DTC and any
payment made to Cede & Co. ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest
herein.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED the Notes
are issued in conformity with the laws of the State of
California and the proceedings of the city Council of the city; I
that all acts, conditions and things required to exist, happen
and be performed precedent to and in the issuance of the Notes
have existed, happened and been performed in regular and due
time, form and manner as required by law; and that the Notes,
together with all other indebtedness and obligations of the
City, do not exceed any limit prescribed by the Constitution and
statutes of the State of California.
IN WITNESS WHEREOF, the City council of the City has
caused this Note to be executed by the Mayor and the Finance
Director/Treasurer or the City Manager of the City, and to be
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'RespluUon Number ~f911
countersigned by the city Clerk, which signatures may be manual
or facsimile signatures, except that one of such signatures
shall be manually affixed, and has caused a facsimile of "the
official seal of the city to be imprinted hereon, and has caused
this Note to be dated July __, 1991.
Mayor of the City of Seal
Beach
[Finance Director/Treasurer] [City Manager]
of the City of Seal Beach
[SEAL]
COUNTERSIGNED:
City Clerk of the
city of Seal Beach
section 11. The Mayor, the Finance Director/Treasurer
and/or the City Manager of the city are hereby authorized and.
directed to sign each of the Notes, and the City Clerk is hereby
authorized and directed to countersign each of the Notes, and
the city Clerk is hereby authorized and directed to impress or
cause to be imprinted by facsimile the official seal of the City
on each of the Notes. Anyone or two of such signatures may be
printed, lithographed or engraved by facsimile signature, but at
least one of such signatures shall be manual. Such signing,
countersigning and sealing as herein provided shall be
sufficient and binding execution of the Notes in the name and on
behalf of the City.
section 12. All proceeds of sale of the Notes shall
be deposited into the general fund of the City, to be withdrawn
and expended for any purpose for which the City is authorized to
expend money, including, but not limited to, current expenses,
capital expenditures, and the discharge of any obligation or
indebtedness of the city.
The city Council covenants on behalf of itself and the
city that the City will not make any use of the proceeds of the
Notes which will cause the Notes to be "arbitrage bonds" subject
to federal income taxation by reason of -Sections 103(b) or 148
of the Internal Revenue Code of 1986, as amended (the "Code").
To that end, so long as any of the Notes are outstanding, the
City and its appropriate officers and employees shall comply
with all requirements of said Sections 103(b) and 148 and all
regulations issued thereunder, to the extent that such
requirements are, at the ~ime, applicable and in effect.
In order to maintain the exemption from federal income
taxation of interest on the Notes and for no other purpose, the
City Council covenants to comply with each applicable
requirement of the Code and specifically covenants:
J;lesolution Number 4ft; I--
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(a) That it shall file such reports or other docu-
ments with the Internal Revenue Service as are required by the
Code and the Treasury Regulations; and
(b) That it shall cause none of the gross proceeds of
the Notes.to be invested in investments which are deemed to be
"federally. guaranteed" within the meaning of Section 149(b) of
the Code.
The Finance and the city Manager are authorized and
directed to ensure compliance with these covenants.
Section 13. The principal of the Notes and the
thereon shall be secured by a pledge of and first lien against
moneys to he received by the City in fiscal year 1991-92 and the
city hereby pledges the first taxes, income, revenue, cash
receipts and other moneys intended as receipts for the general
fund of the City and generally available for the payment of
current expenses and other obligations of the City (the
"Unrestricted Revenues"), to be received by the City as provided
in the Official statement but in no event will such pledges
occur later than the following: in the month of April, 1992, in
an amount sufficient to pay fifty percent (50%) of the aggregate
principal amount of the Notes outstanding; and the first
unrestricted Revenues to be received by the city in the month of
June, 1992, in an amount sufficient to pay fifty percent (50%)
the aggregate principal amount of the Notes outstanding plus an
amount sufficient to pay the interest to become due on the Notes
at maturity. If the full amount of the Unrestricted Revenues
pledged in any particular month to a repayment of the Notes has
not been received by the city by the thirtieth day of such
month, the City shall make up such deficiency from any other
moneys of the city lawfully available for the payment of the
principal of and the interest on the Notes. Such amounts shall
hereinafter be called the "Pledged Moneys."
There is hereby established and created a special
fund, designated the "City of Seal Beach 1991 Tax and Revenue
Anticipation Note Payment Fund" (hereinafter called "payment
Fund"), into which the Finance Director/Treasurer shall deposit
all of said Pledged Moneys promptly at the time of receipt
thereof. The principal of the Notes and the interest thereon
shall be payable from said Pledged Moneys and from all other
income, revenue, cash receipts and moneys of the city lawfully
available for the payment of the principal of the Notes and the
interest thereon. However, the Notes are payable only form
revenues received or accrued during the fiscal year in which
issued.
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Moneys shall be withdrawn from the payment Fund for
the sole purpose of paying the principal of and the interest on
the Notes as the same shall become due and payable. Any money
deposited in the Payment Fund may be invested as permitted by
law, except that no such investment shall have a maturity date
later than the maturity date of the Notes. Proceeds of any such
investments may be transferred to the general fund of the city.
Any moneys remaining in the Payment Fund after payment of the
principal and interest on the Notes may be released to the
general fund.
Section 14. The City Council hereby finds and I
determines that the aggregate principal amount of the Notes,
together with interest thereon, does not exceed eighty-five
percent (85%) of the estimated amount of the now uncollected
taxes, income, revenue, cash receipts and other moneys of the
city which will be available for the payment of the principal of
and the interest on the Notes.
Section 15. The Finance Director/Treasurer and/or the
city Manager of the City is hereby authorized and directed to
deliver the Notes to the Underwriter upon payment of the
purchase price, namely, a sum not less than the aggregate
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Resolution Number ~~9~
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principal amount of the Notes, plus premium, if any, as provided
in the Proposal submitted by the Underwriter. The Notes shall
bear interest, payable at the maturity of the Notes, at the rate
set forth in the Note Purchase Agreement.
Section 16. The Finance Director/Treasurer and/or the
City Manager of the City is directed to cause to be
lithographed, printed or engraved a sufficient number of blank
notes of suitable quality, said notes to show on their faces
that the same bear interest at the rates aforesaid, and to cause
the blank spaces therein to be filled in to comply with the
provisions of this resolution, and to procure their execution by
the proper officers, and to deliver said notes when so executed
to the Underwriter upon the receipt of the purchase price.
section 17. The Mayor or the Finance Director!
Treasurer of the City and/or the city Manager is further
authorized and directed to make, execute and deliver to the
Underwriter (a) a certificate attesting to the use of the
proceeds of the Notes, the investment thereof, and any other
matters relating to the tax exemption of the Notes pursuant to
Sections 103(b) and 148 of the Code; (b) a certificate
certifying to the genuineness and due execution of the Notes;
and (c) a receipt evidencing the payment of the purchase price
of the Notes, which receipt shall be conclusive evidence that
said purchase price has been paid and has been received by the
city. Any purchaser or- subsequent taker or holder of the Notes
is hereby authorized to rely upon and shall be justified in
relying upon any such certificate or receipt with respect to the
Notes executed pursuant to the authority of this resolution.
Such officers of the city are further directed to timely file
the appropriate Internal Revenue Service form in the 8038 series
with respect to the Notes. Such officers are hereby authorized
to execute any and all other documents required 0 consummate the
sale and delivery of the Notes.
Section 18. The Preliminary Official Statement, in
substantially the form presented to this meeting together with
such changes as shall be approved by the Finance Director/
Treasurer and/or the City Manager and made a part hereof as
though set forth in full herein, be and the same is hereby
approved for use in connection with the offering and sale of the
Notes. The city Clerk is directed to file a copy of such
Preliminary Official Statement with this Resolution. The
Finance Director/Treasurer and/or the City Manager is hereby
authorized to approve a final Official Statement which shall be
in "compliance with Rule 15c2-12 of the Securities and Exchange
Commission under the Securities Exchanqe Act of 1934, as amended
and its use in connection with the offering and sale of the
Notes. The Finance Director/Treasurer and/or the City Manager
are hereby authorized and directed, upon approval of the final
Official Statement, to execute the final Official Statement and
any amendment and supplement thereto, in the name and on behalf
of the city, and thereupon to cause the Official Statement and
any such amendment or supplement to be delivered to the
Underwriter with such approval to be conClusively evidenced by
their execution and delivery thereof.
Section 19. The City Council finds and determines
that the aggregate face amount of all tax-exempt bonds (other
than private activity bonds) issued by the City Council (and all
subordinate entities thereof) during the 1991 calendar year is
not reasonably expected to exceed Five Million Dollars
($5,000,000).
The City Council further specifically finds, deter-
mines and declares that the Notes are designated to be
"qualified tax-exempt obligations" for purposes of Section
265(b) (3) of the Code.
~esolution Number
4tJf91f
section 20. This resolution shall take effect from
and after its passage and adoption.
o APPROVED AND ADOPTED this ,;?.tj#day of June, 1991.
J~"j_krlr-
Mayor
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J arine M. Yeo,
i ' Clerk of the
ty of Seal Beach
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I, Joanne M. Yeo, city Clerk of the City of Seal Beach
do hereby certify that the foregoing resolution was passed at a
regular meeting of the City Council of the City of Seal Beach on
the day of June, 1991 by the following vote:
AYES: COUNCIL MFJlJ.BERS:~';;tI4dt"r)Yf~::J~7V I
NOES: COUNCIL MFJlJ.BERS:
ABSENT:
VACANCY:
COUNCIL MEMBERS:
M. Yeo,
Clerk of the
of Seal Beach
COUNCIL MFJlJ.BERS
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:a~~Ji~'~ion Number ~,+_
CERTIFICATE OF POSTING AGENDA
I, Joanne M. Yeo, hereby certify as follows:
I am Clerk of the city of Seal Beach. At least 72
hours prior to the following specified adjourned regular meeting
of the city council of said City, I caused to be posted a list
of items constituting the agenda for said meeting at 211 Eighth
street, Seal Beach, California, a place where members of the
public might view the same, said meeting being an adjourned
regular meeting held on June __, 1991.
copies of said list constituting said agenda, which is
in all respects the same as that so posted, is attached hereto
and incorpor~ted herein by reference.
I certify under penalty of perjury that the foregoing
is true and correct.
..
Executed at 'Seal Beach, California, this ____ day of
, 1991.
Joanne M. Yeo,
City Clerk of the
city of Seal Beach
CERTIFICATE AS TO FULL FORCE AND
EFFECT OF RESOLUTION
I, JOANNE M. YEO, Clerk of the City of Seal Beach, do
hereby certify that the attached is an excerpt from the pro-
ceedings of the City Council of the city of Seal Beach of the
County of Orange, state of California, for a regular meeting
held on the day of June, 1991.
The above-mentioned excerpt from the minutes of the
city Council is a true and correct copy for the meeting of June
__, 1991 and has not been amended, superseded or repealed.
The above-mentioned excerpt from the minutes of the
City Council was duly taken pursuant to section 40801 of the
Government Code and constitutes official minutes as provided
therein.
.
WITNESS my hand as of this
1991, at Seal Beach, California.
day of
,
[SEAL]
Joanne M. Yeo,
City Clerk of the
City of Seal Beach
Resolution Number
~9;f
EXHIBIT A
$2,500,000
City of Seal Beach
STATE OF CALIFORNIA
1991 TAX AND REVENUE ANTICIPATION NOTES
NOTE PURCHASE AGREEMENT
JUly _, 1991
-I
City of Seal Beach
211 Eighth Street
Seal Beach, california 90740
Ladies and Gentlemen:
The undersigned (the "Underwriter"), acting on
behalf of ourselves, offer to enter into this agreement with
the City of Seal Beach, California (the "City"), which, upon
your acceptance hereof, will be binding upon the city and the
Underwriter. This offer is made subject to the written
acceptance of this Note Purchase Agreement by the City and
delivery of such acceptance to us at or prior to 11:59 P.M.,
Pacific Time, on the date hereof.
1. Purchase and Sale of the Notes. Upon the terms
and conditions and in reliance upon the representations,
warranties and agreements herein set forth, the Underwriter
hereby agrees to purchase from the City for reoffering to the
public, and the city hereby agrees to sell to the Underwriter
for such purpose, all (but not less than all) of $2,500,000 in
aggregate principal amount of the City'S 1991 Tax and Revenue
Anticipation Notes (the "Notes"). The Notes shall bear I
interest at a rate of % per annum, such interest being
payable on maturity. The Underwriter shall purchase the Notes
at a purchase price of par plus a premium of $
2. The Notes. The Notes shall be dated date of
delivery, shall mature 364 days thereafter and shall otherwise
be as described in, and shall be issued and secured pursuant,
to the provisions of the Resolution of the City adopted on
June , 1991 (the "Note Resolution") and Article 7.6,
Chapter 4, Part 1, Division 2, Title 5 (commencing with
Section 53850) of the California Government Code (the "Act").
3. Use of Documents. The City hereby authorizes
the Underwriter to use, in connection with the offer and sale
of the Notes, this Note Purchase Agreement and an Official
Statement in a form to be jointly approved by the City and the
Underwriter (WhiCh, together with all appendices thereto and
with such changes therein and supplements thereto as are
consented to by the Underwriter, is herein called the
"Official Statement"), the Note Resolution and all information
contained herein and therein and all of the documents,
certificates or statements furnished by the city to the
Underwriter in connection with the transactions contemplated
by this Note Purchase Agreement.
4. Public Offering of the Notes. The Underwriter
agrees to make a bona fide public offering of all the Notes at
the initial public offering price or yield to be set forth on
the cover page of the Official Statement. Subsequent to such
initial public offering, the Underwriter reserv~s the right to
change such initial public offering price or yield as it deems
necessary in connection with the marketing of the Notes.
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5. Delivery of Official Statement. Not later than
the seventh (7th) business day following the date this Note
Purchase Agreement is executed, copies of a final Official
Statement substantially in the form of the Preliminary
Resoi~tipp Number ~k_
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Official statement with respect to the Notes (the "preliminary
Official statement"), with only such changes therein as shall
have been accepted by the Underwriter and the City (the
"Official statement") in such quantity as may be requested
(not to exceed 50 copies) by the Underwriter not later than
five (5) business days following the date this Note Purchase
Agreement is executed, to permit the Underwriter to comply
with paragraph (b)(4) of the Rule 15c2-12 of the Securities
and Exchange Commission under the Securities Exchange Act of
1934, as amended (the "Rule") and the rules of the Municipal
Securities Rulemaking Board.
6. Closing. At 8:00 a.m., Pacific Time, on
July , 1991 or at such other time or on such other date as
shall have been mutually agreed upon by you and us (the
"Closing"), you will deliver the Notes in definitive form,
duly executed, together with the other documents hereinafter
mentioned: and we will accept such delivery and nay the
purchase price thereof in immediately available funds to the
order' of the City. The Notes shall be available to us in
book-entry-only form in denominations of $5,000 and integral
multiples thereof as designated by us. Notwithstanding
anything to the contrary herein contained, if for any reason
whatsoever the Notes shall not have been delivered by the City
to the Underwriter prior to the close of business, Pacific
Time on July , 1991, then the obligation to purchase Notes
hereunder shall terminate and be of no further force or effect
except with respect to the obligations of the City and the
Underwriter under Section 11 hereof.
7. Representations, Warranties and Agreements of
the City. The City hereby represents, warrants and agrees
with the Underwriter that:
.1
(A) The City is a political subdivision duly
organized and validly existing under the laws, of the
State of california, with the power to issue the
Notes pursuant to the Act.
I
(B) (i) At or prior to the Closing, the City will
have taken all action required to be taken by it to
authorize the issuance and delivery of the Notes:
(ii) the' City has full legal right, power and
authority to enter into this Note Purchase Agreement
and to adopt the Note Resolution and full legal
right, power and authority to issue and deliver the
Notes to the Underwriter and to perform its
obligations under each such document or instrument,
and to carry out and effectuate the transactions
contemplated by this Note Purchase Agreement and the
Note ReSOlution: (iii) the execution and delivery or
adoption of, and the performance by the City of the
obligations contained in the Notes, the Note
Resolution and this Note Purchase Agreement have
been duly authorized and such authorization shall be
in full force and effect at the time of the Closing:
(iv) this Note Purchase Agreement constitutes a
valid and legally binding obligation of the City:
and (v) the City has duly authorized the
consummation by it of all transactions contemplated
by this Note Purchase Agreement.
(C) No consent, approval, authorization, order,
filing, registration, qualification, election or
referendum, of or by any person, organization, court
or governmental agency or pUblic body whatsoever is
required in connection with the issuance, delivery
or sale of the Notes or the consummation of the
other transactions effected or contemplated herein
or hereby, except for such actions as may be
necessary to qualify the Notes for offer and sale
under the Blue Sky or other securities laws and
regulations of such states and jurisdictions of the
United States as the Underwriter may designate.
Resolution
Number ~t'? /I
(D) The Notes shall be secured as to the payment of
principal and interest from the revenues and in the
manner as described in the Resolution.
(E) The issuance of the Notes, the execution,
delivery and performance of this Note Purchase
Agreement, the Note Resolution and the Notes, and
compliance with the provisions hereof do not
conflict with or constitute on the part of the City
a violation of or default under, the Constitution of
the state of California or any existing law, I
charter, ordinance, regulation, decree, order or
resolution and do not conflict with or result in a
violation or breach of, or constitute a default
under, any agreement, indenture, mortgage, lease or
other instrument to which the City is a party or by
which it is bound or to which it is subject.
(F) As of the time of acceptance hereof, no action,
suit, proceeding, hearing or investigation is
pending or (to the best knowledge of the City)
threatened against the City or, to the best
knowledge of the City (no independent investigation
having been made), against any other person in any
Court or before any governmental agency or public
body: (i) in any way affecting the existence of the
City or in any way challenging the respective powers
of the several offices of the titles of the
officials of the City to such offices: or
(ii) seeking to restrain or enjoin the sale,
issuance or delivery of any of the Notes, the
application of the proceeds of the sale of the
Notes, or the collection of revenues or assets of
the city pledged or to be pledged or available to
pay the principal of and interest on the Notes, or
the pledge thereof, or in any way contesting or I
affecting the validity or enforceability of the
Notes, this Note PurChase Agreement or the Note
Resolution or contesting the powers of the city or
its authority with respect to the Notes, the Note
Resolution or this Note Purchase Agreement: or
(iii) in which a final adverse decision could
(a) materially adversely affect the operations of
the City or the consummation of the transactions
consummation of the transactions contemplated by
this Note Purchase Agreement or the Note Resolution,
(b) declare this Note Purchase Agreement to be
invalid or unenforceable in whole or in material
part, or (c) adversely affect the exemption of the
interest paid on the Notes from qross income for
Federal income tax purposes and California personal
income taxation.
(G) Between the date hereof and the Closing,
without the prior written consent of the
Underwriter, the City will not have issued any
bonds, notes or other obligations for borrowed money
except for such borrowings as may be described in or
contemplated by the Official statement.
(H) The city has not been notified of any listing I
or proposed listing by the Internal Revenue Service
to the effect that the City is a bond issuer whose
arbitrage certificates may not be relied upon.
(I) Any certificates signed by any officer of the
City and delivered to the Underwriter shall be
deemed a representation and warranty by the City to
the Underwriter as to the statements made therein
but not of the person signing the same.
I.
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Re~~l\;.ti:on Number It; J9 k
8. Covenants ot the city. The City covenants and
agrees with the Underwriter that:
(A) The City will furnish such information, execute
such instruments, and take such other action in
cooperation with the Underwriter if and as the
Underwriter may reasonably request in order (i) to
qualify the Notes for offer and sale under the Blue
Sky or other securities laws and regulations or such
states and juriSdictions, and will use its best
efforts to continue such qualifications in effect so
long as required for distribution of the Notes:
(B) The city will apply the proceeds from the sale
of the Notes for the purposes specified in the Note
Resolution: and
(C) For a period of 90 days after the Closing or
until such time (if earlier) as-the Underwriter
shall no longer hold any of the Notes for sale, the
City will (a) not adopt any amendment of or
supplement to the Official statement to which, after
having been furnished with a copy, the Underwriter
shall object in writing or which shall be
disapproved by the Underwriter and (b) if any event
relating to or affecting the City shall occur as a
result of which it is necessary, in the opinion of
the Underwriter, to amend or supplement the Official
statement in order to make the Official Statement
not misleading in light of the circumstances
existing at the time it is delivered to a purchaser,
forthwith prepare and furnish (at the expense of the
City a reasonable number of copies of an amendment
of or supplement to the Official Statement (in form
and substance satisfactory to the Underwriter) which
will amend or supplement the Official statement so
that it will not contain an untrue statement of a
material fact or omit to state a material fact
necessary in order to make the statements therein,
in the light of the circumstances existing at the
time the Official Statement is delivered to a
purchaser, not misleading.
9. Conditions and Closing. The Underwriter has
entered into this Note Purchase Agreement in reliance upon the
representations and warranties of the City contained herein
and the performance by the city of its obligations hereunder,
both as a date hereof and as of the date of Closing. The
Underwriter's obligations under this Note Purchase Agreement
are and shall be subject, at the option of the Underwriter, to
the following furthe~ conditions at the Closing:
(A) The representations and warranties of the City
contained herein shall be true, complete and correct
in all material respects at the date hereof and at
and as of the Closing, as if made at and as of the
Closing, and the statements made in all certificates
and other documents delivered to the Underwriter at
the Closing pursuant hereto shall be true, complete
and correct in all material respects on the date of
the Closing: and the city shall be in compliance
with each of the agreements made by it in this Note
Purchase Agreement:
(B) At the time of the Closing, (i) the Official
statement, this Note Purchase Agreement and the Note
Resolution shall be in full force and effect and
shall not have been supplemented except as may have
been agreed to (ii) all actions under the Act which,
in the opinion on Buchalter, Nemer, Fields & Younger
of Los Angeles, California, bond counsel ("Bond
Counsel"), shall be necessary in connection with the
transactions contemplated hereby, shall have been
'Resolution Number
/t;$'9,1
.
duly taken and shall be in full force and effectl
and (iii) the City shall perform or have performed
all of its obligations required under or specified
in the Note Resolution, this Note purchase Agreement
or the Official statement to be performed at or
prior to the Closingl
(C) No decision, ruling or finding shall have been
entered by any court or governmental authority since
the date of this Note Purchase Agreement (and not
reversed on appeal or otherwise set aside), or to
the best knowledge of the City, pending or
threatened which has any of the effects described in
Section 7 (f) hereof or contesting in any way the
completeness or accuracy of the Official statement.
(D) No order, decree or injunction of any court of
competent jurisdiction, nor any order, ruling or
regulation of the Securities and Exchange
Commission, shall have been issued or made with the
purpose or effect of prohibiting the issuance,
offering or sale of the Notes as contemplated hereby
and no legislation shall have been enacted, or a
bill favorably reported for adoption, or a decision
by a court established under Article III of the
Constitution of the United states rendered, or a
rUling, regulation, proposed regulation or official
statement by or on behalf of the Securities and
Exchange Commission or other governmental agency
having jurisdiction of the subject matter shall be
made or issued, to the effect that the Notes or any
securities of the City or of any similar body of the
type contemplated herein are not exempt from the
registration, qualification or other requirements of
the Securities Act of 1933, as amended and as then
in effect, or the Trust Indenture Act of 1939, as
amended and as then in effectl
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(E) At or prior to the data of the Closingl the
Underwriter shall receive the following documents in
each case dated as of the Closing Date and
satisfactory in form and substance to the
Underwriter:
(1) An approving opinion of Bond Counsel, as
to the Notes, addressed to the city.
(2) A letter setting forth that the
underwriter can rely upon the approving opinion of
bond counsel.
(3) The opinions of Bond Counsel and the City
Attorney, addressed to the underwriter, to the
effect that without having undertaken to determine
independently the accuracy or completeness of the
statements con~ained in the Official Statement, but
on the basis of their conferences with the
representatives of the city, and their examination
of certain documents referred to in the Official
Statement, nothing has come to their attention which
would lead them to believe that the Official
Statement contains an untrue statement as to a
material fact or omits to state a material fact
required to be stated therein or necessary to make
the statements therein, in light of the
circumstances under which they were made, not
misleading, it being understood that in rendering
such'opinions Bond Counsel and the city Attorney
shall not be required to express an opinion with
respect to any financial statements or other
financial statistical data included in the Official
statement.
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"' , : ~\~ ..L /AA-
Resol\1eion Number '(OJ 7
I
(4) A certificate signed by an appropriate
City official to the effect that (i) the
representations, agreements and warranties of the
city herein ~re true and correct in all material
respects as of the date of Closing: (ii) the city
has complied with all the terms of the Note
Resolution and this Note Purchase Agreement to be
complied with by the City prior to or concurrently
with the Closing and such documents are in full
force and effect: (iii) there is no action, suit,
proceeding, inquiry or investigation, at law or in
equity, before or by any court or public body,
pending, or to his or her knowledge, threatened
against the City which has any of the effects
described in Section 7 (f) hereof or contesting in
any way the completeness or accuracy of the Official
statement (but in lieu of or in conjunction with
such certification the Underwriter may, at its sole
discretion, accept certificates or opinions of the
city Attorney or Bond Counsel, that in their opinion
the issues raised in any such pending or threatened
litigation are without substance and that the
cqntentions of all plaintiffs therein are without
merit): (iv) such official has reviewed the Official
statement and on such basis certifies that the
Official statement does not contain any untrue
statement of a material fact required to be stated
therein or necessary to make the statements therein,
in light of the circumstances in which they were
made, not misleading: (v) the Underwriter is
authorized to use and dtstribute the Official
Statement in connection with the offer and sale of
the Notes: and (vil the Citv will notify the
Underwriter of any event or occurrence that may
impact the accuracy or completeness of any
information set forth in the Official statement
until the earlier of ninety days from the "end of
the underwriting period" (as defined in the Rule) or
twenty-five days from "the end of the underwriting
period," in the event the Official Statement is
available to any person through a nationally
recognized municipal securities information
repository (as defined in the Rule).
(5) An arbitrage certificate of the City in
form satisfactory to Bond Counsel.
I
(6) Evidence satiSfactory to the Underwriter
that the Notes been rated by Moody'S
Investors Services, Inc. (or shall have such other
equivalent rating as such rating agency may give)
and that such rating have not been revoked or
downgraded:
(7)
executed
Clerk to
A certificate, together with fully
copies of the Note Resolution, of the
the effect that:
City
(i) such copies are true correct copies
of the Note ReSOlution. and
I
(ii) that the Note Resolution was duly
adopted and has not been modified, amended,
rescinded or revoked and is in full force and
effect on the date of the Closing.
(8) Such additional legal opinions,
certificates, proceedings, instruments and other
documents as the Underwriter may reasonably request
to evidence compliance (i) by the city with legal
requirements (ii) the truth and accuracy, as of the
time of Closing, of the representations of the City
herein contained and of the Official statement and
.Resolution Number ~.t1 A-
(iii) the due performance or satisfaction by the
City at or prior to such time of all agreements then
to be performed and all conditions then to be
satisfied by the city.
If the City shall be unable to satisfy the
conditions to the Underwriter's obligations contained in this
Note Purchase Agreement or if the Underwriter's obligations
shall be terminated for any reason permitted by this Note
Purchase Agree~ent, this Note Purchase Agreement may be
cancelled by the Underwriter at, or at any time prior to, the
time of Closing. Notice of such cancellation shall be giv~n to
the City in writing, or by telephone or telegraph confirmed in
writing. Notwithstanding any provision herein to the contrary,
the performance of any and all obligations of the City
hereunder and the performance of any and all conditions
contained herein for the benefit of the Underwriter may be
waived by the Underwriter in writing at its sole discretion.
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. The Underwriter shall also have the right to cancel
its obligation to purchase the Notes, by written notice to the
city, if between the date hereof and the Closing; (i) any
event occurs or information becomes known, which, ,in the
reasonable professional judgment of the Underwriter, makes
untrue any statement of a material fact set forth in the
Official statement or results in an omission to state a
material fact necessary to make the statements made therein,
in light of the circumstances under which they were made, not
miSleading; (ii) the market for the Notes or the market price
of the Notes or the ability of the Underwriter to enforce
contracts for the sale of the Notes shall have been materially
and adversely affected,in the reasonable professional judgment
of the Underwriter, by (a) legislation enacted by the Congress
of the United States, or passed by either House of the
Congress, or favorably reported for passage to either House of
the Congress, by any Committee of such House to which such
legislation has been referred for consideration, or by the
legislature of the State of California (:the "State"), or a
decision rendered by a court of the United states or the state
or by the United States Tax Cou~t, or a ruling, order, or
regulation (final or temporary) made by the Treasury
Department of the United states or the Internal Revenue
Service or other Federal or State authority, which would have
the effect of changing, directly or indirectly, the Federal
income tax consequences or State tax consequences of interest
on obligations of the general character of the Notes in the
hands of the holders thereof, or (b) any new outbreak of
hostilities or other national or international calamity or
crisis, the effect of such outbreak on the financial markets
of the United states begin such as, in the judgment of the
Underwriter, would affect materially and adversely the ability
of the Underwriter to market the Notes, or (c) a general
suspension of trading on the New York stock Exchange, or
fixing of minimum or maximum prices for trading or maximum
ranges for prices for securities on the New York Stock
Exchange, whether by virtue or a determination by that
Exchange or by order of the Securities and EXChange Commission
or any other governmental authority having jurisdiction, or
(d) a general banking moratorium declared by either Federal or
state aut~orities having jurisdiction; or (iii) additional
material restrictions not in force or being enforced as of the
date hereof shall have been imposed upon trading in securities
generally by any governmental authority or by any national
securities exchange which, in the'opinion of the Underwriter,
materially adversely affect the market price for the Notes.
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10. conditions to Obligations of the City. The
performance by the City of its obligations is conditioned upon
(i) the performance by the Underwriter of its obligations
hereunder; and (ii) receipt by the city and the Underwriter of
opinions and certificates being delivered at the Closing by
persons and entities other than the city.
~ '. \ ,L~A-
Rea,dllition Number 'l'OoJ'1 rr_
I
11. Expenses. (a) The City shall pay any out-of-
pocket expenses incurred by the City from the proceeds of 'the
1991 TRANS issue includinq but not limited to (i) the fees and
disbursements of Bond Counsel: (ii) any cost of the
preparation, -and delivery of the Notes: (iii) the fees for
Note ratings: (iv) the cost of the printing and distribution
of the Official statement: (iv) costs of preparation and
reproduction of this Note Purchase Agreement, and (b) The
Underwriter shall pay (i) fees payable by the Underwriter to
the California Debt Advisory -Commission with regard to the
Notes: and (ii) all other costs and disbursements incurred by
them in connection with the transactions contemplated hereby.
12. Notices. Any notice or other communication to
be given under this Note Purchase Aqreement (other than the
acceptance hereof _as specified in the first paraqraph hereof)
may be given by delivering the same in writing if to the City,
to the Mayor of the City of Seal Beach: 211 Eiqht street, Seal
Beach, California 90740, or if to the Underwriter, to:
Attention: Diane
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13. Parties in interest, survival of
Representations and Warranties. This Note Purchase Aqreement
when accepted by the City in writing as heretofore specified
shall constitute the entire agreement between the City and the
Underwriter. This Note Purchase Agreement is made solely for
the benefit of the City and the Underwriter (includinq the
successors or assigns of the Underwriter). No person shall
acquire or have any riqhts hereunder or by virtue hereof. All
your representations, warranties and agreements of the city in
this Note Purchase Aqreement shall survive regardless of
(a) any investigation or any statement in respect thereof made
by or on behalf of the Underwriter, (b) delivery of and
payment by the Underwriters for the Notes hereunder, and
(c) any termination of this Note Purchase Agreement.
14. Bxecution in counterparts. This Note Purchase
Agreement may be executed in several counterparts each of
which shall be regarded as an original and all of which shall
constitute one and the same document.
15. Applicable Law. This Note Purchase Agreement
shall be interpreted, governed and enforced in accordance with
the law of the State of california.
Very truly yours,
By:
I
The foreqoinq is hereby aqreed to and accepted as of the date
first above written:
THE CITY OF SEAL BEACH, CALIFORNIA
By:
Resolution Number laty 4'
PRELIMINARY OFFICIAL STATEMENT DATED JUNE
.1991
BOOK-ENTRY.ONLY
Rating: Moody's _
(See "Rating" herein)
In the opinion of Buchalter, Nemer, Fields &. Younger, a Professional Corporation, Bond
Counsel under existing statutes, regulations and court decisions, interest on the Notes is excluded from
gross income for purposes of federal income taxation; however, interest on the Notes, if received by a
corporation, will be included in corporate book income for purposes of computing its alternative
minimum tax and any "environmental tax liability" imposed under the Internal Revenue code of 1986 (the
''Tax Code") but the interest on the Notes is not an item for the purposes of the federal alternative
minimum tax. No opinion is expressed as to other federal tax 'consequences to the holders of the Notes.
In the opinion of Bond Counsel, interest on the Notes is also exempt from present State of California
personal income taxes. See "Tax Exemption" herein.
$0,000,000*
CITY OF SEAL BEACH
1991 TAX AND REVENUE ANTICIPATION NOTES
Dated: Date of Delivery
Due: July ----> 1992
The Notes will be issued in fully registered form. When delivered, the Notes will be registered
in the name of Cede &. Co., as nominee for The Depository Trust Company, New York, New York,
which will act as securities depository for the Notes. Purchases of beneficial interests in the Notes will
be made in book-entry form in the denomination of $5,000 or any integral multiple thereof. Purchasers
will not receive certificates representing their ownership interest in the Notes purchased. The Notes are
not subject to redemption prior to maturity. Principal and interest wiIl be payable when due as described
under "THE NOTES - Book-Entry-Only System."
The Notes are by statute general obligations of the City payable only out of taxes, income,
revenue, cash receipts and other moneys of the City attributable to the fiscal year 1991-!)2 and legaIly
available for payment thereof. The Notes are secured by a pledge of the first $ · of income,
revenues and other moneys intended as receipts for the General Fund of the City and which are generally
available for the payment of the current expenses and other obligations of the City (such taxes, income,
revenue and other moneys are hereinafter referred to as "Unrestricted Revenues") to be received by the
City in December, 1991, and the first $ · of Unrestricted Revenues plus an amount sufficient
to pay the interest on the Notes, to be received by the City in April, 1992.
The Notes are direct obligations of the City and, to the extent described herein, are legal
investments for commercial banks in California and are eligible to secure deposits of public moneys in
California.
Interest Rate
Priced to Yield
%
%
The Notes will be offered when, as and if issued and received in book-entry form by the
Underwriter, subject to the approval of legality by Buchalter, Nemer, Fields &. Younger, Bond Counsel.
Certain other legal matters wiIl be passed upon for the City by the City Counsel for the City of Seal
Beach. The Notes, in book-entry form, wiIl be available for delivery through the services of the
Depository Trust Company in New York, New York on or about July . 1991.
Daled:
.1991
. Preliminary subjecllo change.
I
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.'. ..\ -{~ A_
tResolution Number ~... 7 ~
No dealer, broker, salesperson or other person has been authorized by the City to give
any information or to make any representations other than those contained herein and, if given
or made, such other information or representation must not be relied upon as having been
authorized by the City. This Omcial Statement does not constitute an olTer to sell or the
solicitation of an olTer to buy nor shall there be any sale of the Notes by a person' in any
jurisdiction in which it is unlawful for such person to make such an olTer, solicitation or sale.
This Omcial Statement is not to be construed as a contract with the purchasers of the
Notes. Statements contained in this Omcial Statement which involve estimates, forecasts or
matters of opinion, whether or not expressly so described herein, are intended solely as such
and are not to be construed as a representation of facts.
The information set forth herein has been obtained from omcial sources which are
believed to be reliable but it is not guaranteed as to accuracy or completeness, and is not to be
construed as a representation by the Underwriter. The information and expressions of opinions
herein are subject to change without notice and neither delivery of this Omcial Statement nor
any sale made hereunder shall, under any circumstances, create any implication that there has
been no change in the alTairs of the City of Seal Beach since the date hereof. This Omcial
Statement is submitted in connection with the sale of the Notes referred to herein and may not
be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing
by the City.
This Omcial Statement has been "deemed final" by the City pursuant to Rule ISc2.12
of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amend~, except for information which is permitted to be excluded from this Omcial Statement
under said Rule ISc2.12.
TABLE OF CONTENTS
City Officials ......................................................
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1991-92 Short-Term Borrowing Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Notes .........................................................
Book-Entry-Only System ........:...................................
Security for the Notes . . . . . . . . . . . . . . . . . . . . . . . '. . . . . . . . . . . . . . . . . . . . . . .
Available Sources of Payment .........................................
Constitutional Limitations on Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assessed Valuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ad Valorem Property Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property Tax Levies and Collections ...................................
Financial Statements ..............................................
Annual Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Projected and Actual Cash Flows .....................................
Retirement Program ...............................................
Long Term Obligations .............................................
The City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Location ........................................................
City Government and Population .....................................
Employment and Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commercial Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Building Activity .... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Utilities ........................................................
Education ...............................,......................
Recreation and Community Facilities ...................................
Tax Exemption ....................................................
Legal Opinion .....................................................
Legality for Investment in California ....................................
Rating ..........................................................
Resolution Number ~ft1 It
Utlgatlon ........................................................
Underwriting ......................................................
Additional Information ..............................................
Appendix A Financial Statements ......................................
Appendix B Draft Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IN CONNECTION WlTII TIllS OFFERING, TIlE UNDERWRITER MAY OVER ALLOT
OR EFFECf TRANSACTIONS WHICH STABILIZE OR MAINTAIN TIlE MARKET PRICE
OF TIlE NOTES AT A LEVEL ABOVE THAT WHICH MIGHT OTIlERWlSE PREVAIL IN
TIlE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED
AT ANY TIME. TIlE UNDERWRITER MAY OFFER AND SELL TIlE NOTES TO CERTAIN I
DEALERS AND DEALER BANKS AND BANKS ACTING AS AGENTS AT PRICES LOWER
THAN TIlE PUBLIC OFFERING PRICE STATED ON TIlE COVER PAGE HEREOF AND
SAID PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY TIlE
UNDERWRITER.
CITY OF SEAL BEACH, CALIFORNIA
City Council
Frank Laszlo
Hayor
Gwen Forsythe
Council Member
Edna Wilson
Council Member
I
Marilyn Hastings
Council t1ember
Joanne M. Yeo
City Clerk
City Officials
Jerry Bankston
City Manager
Quinn Barrow
City Attorney
Michael Zaharas
Assistant Director of Finance/City Treasurer
I
Financial Consultant
Bond Counsel
Sutro & Co. Incorporated
Public Finance Department
555 South Flower Street
Los Angeles, California 90071
Buchalter, Nemer, Fields & Younger
700 South Flower Street
Suite 700
Los Angeles, California 90017
.~ ~asolution Number ~JiJ1~
OFFICIAL STATEMENT
$0,000,000.
City of Seal Beach
1991 TAX AND REVENUE ANTICIPATION NOTES
INTRODUCTION
I
The purpose of this Official Statement is to provide information in connection with the
issuance by the Cty of Seal Beach, California (the "City") of $_ million of its 1991 Tax and
Revenue Anticipation Notes (the "Notes"). The Notes are issued under the authority of Article
7.6, Chapter 4, Part 1, Division 2, Title 5 (commencing with Section 53850) of the California
Government Code and pursuant to a resolution adopted by the City Council on June ---' 1991.
Issuance of the Notes will provide funds to meet fiscal year 1991-92 general fund expenditures,
including operating expenses, capital expenditures, and the discharge of other obligations or
indebtedness of the City.
The Notes are general obligations of the City but are payable only from taxes, income,
revenues, cash receipts and other moneys of the City attributable to the 1990-91 fiscal year and
legally available for the payment thereof. See "AVAilABLE SOURCES OF PAYMENT."
Brief descriptions of the Notes, the security and sources of payment for the Notes, the City
and its financial status follow. Such descriptions do not purport to be comprehensive or
definitive. All references herein to various documents are qualified in their entirety by reference
to the forms thereof, all of which are available for inspection at the office of the Director of
Finance of the City.
1991-92 SHORT-TERM BORROWING PROGRAM
I
In order to finance its general fund cash flow requirements in fiscal year 1991-92, the city has
undertaken a short-term borrowing program which will total $ million. The City expects
to issue, on or about July _, 1991, $ million in Tax and Revenue Notes with a final
maturity of July _' 1992. The Notes and the interest thereon are general obligations of the
City but are payable only from available taxes, income, revenue, cash receipts, and other moneys
of the City attributable to the fiscal year 1991-92. Security for the Notes is described under
"SECURITY FOR THE NOTES." Estimated sources of payment provide a coverage factor for
estimated payment requirements of over _ to one. -
TIlE NOTES
The Notes will be dated as of the date of delivery and will all mature on July ----' 1992.
The Notes will be issued in registered form in denominations of $5,000 and any integral multiple
thereof. The Notes will be registered in the name of Cede & Co. ("Cede"), as nominee of The
Depository Trust Company, New York, New York ("DTC'). Interest on the Notes will be
payable at maturity, computed on the basis of a 360-day year and 30-day months. The Notes will
not be subject to redemption prior to maturity. Principal of and interest on the Notes will be
payable when due as described below under "THE NOTES - Book-Entry-Only System."
.Preliminary subject to change.
Book-Entry-Only System
I
When issued, the Notes will be registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC'). DTC is a limited-purpose trust company organized under
the laws of the State of New York, a member of the Federal_Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Section 17 A of the Securities Exchange Act of
1934, as amended.
DTC holds securities and facilitates the clearance and settlement of securities transactions
through electronic book-entry changes in accounts of the DTC Participants, thereby eliminating
the need for physical movement of certificates. DTC Parti~ipants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other organizations, some of
which (and/or their representatives) own DTC. Access to the DTC system is also available to
other entities such as banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with DTC Participants, either directly or indirectly.
Resolution Number ~9~
DTC Participants will be credited in the records of DTC with the amount of such DTC
Participants' interest in the Notes. Beneficial ownership interests in the Notes in the amount
of $5,000 or any integral multiple thereof may be purchased by or through DTC Participants.
The beneficial owners will not receive certificates representing their beneficial ownership
interests. The ownership interest of each beneficial owner will be recorded through the records
of the DTC Participant from which such beneficial owner purchased its Notes. Transfers of
ownership interests in the Notes will be accomplished by book entries made by DTC and, in turn,
by DTC Participants acting on behalf of beneficial owners. It is anticipated that each beneficial
owner will receive a written confirmation of the ownership interest acquired by such beneficial
owner in the Notes from the person or entity from whom such ownership interest is acquired.
I:
Payments of interest on and principal of the Notes will be paid by the City upon surrender
of the Notes at maturity directly to DTC or its nominee, Cede & Co. DTC will remit such
payments to DTC Participants and such payments will thereafter be paid by DTC Participants
to the beneficial owners. No assurance can be given by the City that DTC and DTC Participants
will make prompt transfer of payments to beneficial owners. The City is not responsible or liable
for payments by DTC or DTC Participants or for sending transaction statements or for
maintaining, supervising or reviewing records maintained by DTC or DTC Participants.
As long as the Notes are registered in the name of Cede & Co. or a successor securities
depository (or its nominee), all payments of interest and principal and all notices with respect to
the Notes will be made and given, respectively, in accordance with the instructions of DTC or
the successor securities depository. With respect to any Note registered in the name of Cede
& Co. or a successor securities depository (or its nominee), the City will not have any
responsibility or obligation with respect to (i) the accuracy of any records with respect to the
ownership interests in the Notes (other than the registered ownership of Notes as set forth in
the note register), (ii) the delivery to any person other than a registered owner as shown in the
note register of any notice with respect to the Notes; (iii) the payment to any person, other than
a registered Owner as shown in the note register, of any amount with ,respect to the Notes.
If DTC ceases to act as securities depository for the Notes and no successor securities I
depository is designated, fully registered certificates representing ownership of the Notes will be
executed and delivered to the beneficial owners, and their respective ownership interests will be
registered in the note register.
In such event, principal of and interest on the Notes will be payable to such owners in
accordance with the terms of the Resolution, and the Notes will be exchangeable or transferable
only upon the note register following surrender of the Note or Notes to be exchanged or
transferred and delivery of a written transferred and delivery of a written transfer instrument
satisfactory to the City, executed by the Owner or such Owner's duly authorized attorney. In
connection with any exchange or transfer of Notes, the Owner requesting such exchange or
transfer will be required to pay any applicable tax or other governmental charges.
SECURI1Y FOR TIlE NOTES
Pursuant to Section 53856 of the Government Code of the State of California, the
resolution of issuance with respect to the Notes specifies that, as security for the payment of the
principal of and interest on the Notes, the City pledges the first $ of Unrestricted
Revenues (as hereinafter defined) to be received by the City in December 1991, and the first
$ of Unrestricted Revenues plus an amount sufficient to pay interest on the Notes,
to be received by the City in April 1992, (such pledged amounts being called the "Pledged
Revenues"). In the event that there are insufficient Pledged Revenues received by the city by I
the 30th of each such month to permit the deposit into the Repayment Fund (as hereinafter
defined) of the full amount of the aforesaid pledge, then the amount cif any deficiency shall be
satisfied and made up from any other moneys of the city lawfully available for the payment of
the principal of and interest on the Notes (such other pledged moneys being called the "Other
Pledged Moneys"). The term "Unrestricted Revenues" means taxes, income, revenue, cash
receipts and other moneys intended as receipts for the General Fund of the City for the fiscal
year 1991-92 and which are generally available for the payment of current expenses and other
obligations of the City.
The Pledged Revenues will be deposited by the City Finance Director; beginning in the
month of December, 1992, and thereafter at intervals stated above, in trust in a special City fund
i .
'i"esbi~ttion Number 16,(9 A-
.
I
(the "Payment Fund") until the full amount of the aforesaid pledge has been deposited in the
Payment Fund. The principal of and interest on the Notes will constitute a first lien and charge
on, and shall be payable from, the Pledged Revenues and Other Pledged Moneys which have
been deposited in the Repayment Fund.
Moneys in the Payment Fund will be invested as permitted by Section 53601 of the
Government Code of the State of California, except that no investment shall have a maturity
date later than the maturity date of the Notes. Earnings on investments in the Repayment Fund
will be transferred to the General Fund of the City.
On or before July ---' 1992, the City Director of Finance will arrange for the transfer to
the Depository Trust Company of an amount in immediately available funds sufficient to pay the
principal of and interest on the Notes. Any moneys remaining in the Payment Fund after such
transfer, or provision for such transfer, will be transferred to the General Fund of the City.
AVAILABLE SOURCES OF PAYMENT
I
In accordance with California law, the Notes are general obligations of the City, but are
payable only out of taxes, income, revenue, cash receipts and other moneys of the City
attributable for payment thereof. A 1978 change in the Constitution of the State of California
substantially limited the City's ability to levy ad valorem taxes. (See "CONSTITUTIONAL
UMITATIONS ON TAXES" and ''FINANCIAL INFORMATION - Ad Valorem Property
Taxation.") The City may, under existing law, issue the Notes only if the principal of and interest
on the Notes and any other. short-term debt will not exceed 85% of the estimated moneys legally
available for the payment of the Notes and such other debt. The amount needed to repay the
Notes and the interest thereon is estimated to be $ . The City estimates that funds
available from the General Fund for payment of the Notes will be in excess of approximately
$ million.
ESTIMATED GENERAL PURPOSE RESOURCES
AVAILABLE FOR PAYMENT OF NOTES(l)
('000)
Source
Amount
I
Unrestricted available fund balance - July 1, 1991
Property Taxes
Sales and use taxes
Other Taxes
Ucenses and permits
Fines and permits
Investment earnings
Revenue from other agencies
Current service charges
Other revenue (1)
TRANs Proceeds
Total
$ 0
o
o
o
o
o
o
o
o
o
L....!!
$ 0
(1) Includes Tideland Revenue, the Gas Tax, Water Sewer, and Community Redevelopment
Agency transfers.
.
.p.
.Resolution Number ~f9 ~
CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS
Article XIIIA of State Constitution
On June 6, 1978, California voters approved Proposition 13, which added Article XIIIA to
the California Constitution ("Article XIlIA"). Article XIIIA limits the amount of any ad valorem
tax on real property to one percent of the full cash value thereof, except that additional ad
valorem taxes may be levied to pay debt service on indebtedness approved by the voters prior
to July 1, 1978 and (as a result of an amendment to Article XIIIA approved by California voters
on June 6, 1986) on bonded indebtedness for the acquisition or improvement of real property
which has been approved on or after July 1, 1978 by two-thirds of the voters voting on such
indebtedness. Article XIIIA defines full cash value to mean "the county assessor's valuation of
real property as shown on the 1975n6 tax bill under 'full cash value,' or thereafter, the appraised
value of real property when purchased, newly constructed, or a change in ownership has occurred
after the 1975 assessment." This full cash value may be increased at a rate not to exceed two
percent per year to account for inflation.
I
Article XIlIA has subsequently been amended to permit ~eduction of the "full cash value"
base in the event of declining property values caused by damage, destruction or other factors,
to provide that there would be no increase in the "full cash value" base in the event of
reconstruction of property damaged or destroyed in a disaster and in various other minor or
technical ways.
Court Challenges to Article XIIIA
The United States Supreme Court, in Allel!henv Pittsburl!h Coal Comoanv v. Countv
Commissioner of Webster Countv. West Virl!inia. recently struck down as a violation of equal
protection certain property tax assessment practices in West Virginia, which had resulted in vastly
different assessments of similar properties. A$ stated above, among other provisions, Article
XIIIA provides that property may only be reassessed up to 2% per year, except upon change of
ownership or new construction. As a result, recent purchasers may pay substantially higher
property taxes than long-time owners of comparable property in a community. The Supreme
Court in this case expressly declined to comment in any way on the constitutionality of Article
XIlIA.
I
Based on this decision, however, several property owners in California have brought suits
challenging the acquisition value assessment provisions of Article XIIIA claiming that Article
XIllA's tax assessment system violates federal constitutional equal protection guarantees by
taxing new property owners at higher rates than long-time owners and rely upon Allel!henv
Pittsburl!h Coal Comoanv in support of their position. In each such case, the Nordlinl!er v.
Lvnch and R.H. Macv & Co.. Inc.. et al. v. Contra Costa Countv were affirmed by the California
Court of Appeal. The California Supreme Court on February 28, 1991, denied review of those
cases; however, the plaintiffs have stated an intention, to petition the United States Supreme
Court. The initial appeal in Northwest Financial Inc. v. State Board of Eaualization. et al.. is
still pending in the Court of Appeal in San Diego.
The Participants cannot predict whether these challenges to California's present system of
assessing property for taxation will be successful or when the ultimate resolution of these cases
will occur. The Participants cannot evaluate the ultimate effect that any such decisions would
have on their revenues or on each participant's ability to meet their obligations with respect to'
the Certificates. If Article XIIIA is ultimately to be unconstitutional, one possible result is that
property assessments could be substantially reduced for those who purchased property after
Article XIIIA was adopted.
I
Legislation Implementing Article XIIIA
Legislation has been enacted and amended a number of times since 1978 to implement.
Article XIIIA. Under current law, local agencies are no longer permitted to levy directly any
property tax (except to pay voter-approved indebtedness). The 1 % property tax is automatically
levied by the county and distributed according to a formula among taxing agencies. The formula
apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1978.
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.. ~e's'el1Ution Number 4f? ~
Increases of assessed valuation resulting from reappraisals of property due to new
construction, change in ownership or from the 2% annual adjustment are allocated among the
various jurisdictions in the "taxing area" based upon their respective "situs." Any such allocation
made to a local agency continues as part of its allocation in future years.
Beginning in the 1981-82 Fiscal Year, assessors in California no longer record property
values on tax rolls at the assessed value of 25% of market value which was expressed as $4.00
per $100 of assessed value. AIl taxable property is now shown at full market value on the tax
rolls. Consequently, the tax rate is expressed as $1 per $100 of taxable value. AIl taxable
property value included in this Official Statement is shown at 100% of market value (unless
noted differently) and all tax rates reflect the $1 per $100 of taxable value.
Article XIllB of State Constitution
Article XIIIB to the California Constitution ("Article XIIm") was added to the Constitution
by initiative in 1979. Under Article XIIIB state and local governmental entities have an annual
"appropriations limit" and are not permitted to spend certain moneys which are called
"appropriations subject to limitation" (consisting of tax revenues, state subventions and certain
other funds) in an amount higher than the "appropriations limit." Article XIIIB does not affect
the appropriation of moneys which are excluded from the definition of "appropriations subject
to limitation," including debt service on indebtedness existing or authorized as of January 1, 1979,
or bonded indebtedness subsequently approved by the voters. In general terms, the
"appropriations limit" is to be based on certain 1978-79 expenditures, and is to be adjusted
annually to reflect changes in consumer prices, populations, and services provided by these
entities. Among other provisions of Article XIIIB, if these entities' revenues in any year excecd
the amounts permitted to be spent, the excess would have to be returned by revising tax rates
or fee schedules over the subsequent two years.
Unitary Property
AB 454 (Chapter 921, Statutes of 1986) provides that revenues derived from most utility
property assessed by the State Board of Equalization ("Unitary Property"), commencing with the
1988189 Fiscal Year, will be allocated as follows: (1) each jurisdiction will receive up to 102% of
its prior year State-assessed revenue; and (2) if county-wide revenues generated from Unitary
Property are less than the previous year's revenues or greater than 102% of the previous year's
revenues, each jurisdiction will share the burden of the shortfall or excess revenues by a specified
formula. This provision applies to all Unitary Property except railroads, whose valuation will
continue to be allocated to individual tax tate areas.
The provisions of AB 454 do not constitute an elimination of the assessment of any State.
assessed properties nor a revision of the methods of assessing utilities by the State Board of
Equalization. Generally, AB 454 allows valuation growth or decline of Unitary Property to be
shared by all jurisdictions in a county.
Statutory Limitations
On November 4, 1986, California voters approved Proposition 62, an initiative statute
limiting the imposition of new or higher taxes by local agencies. The statute (a) requires new
or higher general taxes to be approved by two-thirds of the local agency's governing body and
a majority of its voters; (b) requires the inclusion of specific information in all local ordinances
or resolutions proposing new or higher general or special taxes; (c) penalizes local agencies that
fail to comply with the foregoing; and (d) required local agencies to stop collecting any new or
higher general tax adopted after July 31, 1985, unless a majority of the voters approved the tax
by November 3, 1988. A final State Court of Appeal decision has declared the majority voter
provisions referred to in (d) above to be unconstitutional. A second appellate court decision held
unconstitutional both the effective date and majority-vote provisions of Proposition 62. However,
the California Supreme Court has ordered that the latter decision not be published (making it
unavailable for citation as precedent) thus creating uncertainty as to the voter-approval
requirement of Proposition 62.
Resolution Number M? 4'
FINANCIAL INFORMATION
Assessed Valuations
The assessed valllation of property in the City is established by the County Assessor, except
for public utility property which is assessed by the State Council of Equalization. Assessed
valuations are reported at 1()()% of the full value of the property, as defined in Article XIII A
of the California Constitution. Prior to 1981-82, assessed valuations were reported at 25% of
the full value of the property. (See "CONSTITUTIONAL LIMITATIONS ON TAXES.")
The California State Legislature adopted in 1969 the Homeowners Property Tax Relief
Program. The State reimbursed exemption currently provides a credit of $7,000 of the full value
of an owner-occupied dwelling for which application has been made to the County Assessor. The'
revenue estimated to be lost to local taxing agencies due to the exemption is reimbursed from
State sources. Reimbursement is based upon total taxes due upon such exempt value and is not
reduced by any amount for estimated or actual delinquencies.
I
The business inventory tax subvention was repealed in 1984 pursuant to Chapter 448 of the
1984 State statutes. In lieu of the business inventory tax subvention, the State distributes
additional vehicle license fee revenues t9 California cities.
In addition, certain classes of property such as churches, colleges, not-for-profit hospitals and
charitable institutions are exempt from property taxation and do not appear on the tax rolls. No
reimbursement is made by the State for such exemptions.
CIlY OF SEAL BEACH
ASSESSED VALUATION OF PROPERlY SUBJECf TO AD VALOREM TAXATION
Total
Fiscal Common Public Unsecured Assessed I
Year Prooertv Utilitv (1) Valuation Valuation
1982-83 S 841,517,449 S 40,729,030 S 55,899,143 S 938,145,622
1983-84 877,926,801 43,135,160 72,fY72,274 993,134,235
1984-85 942,335,524 44,152,480 48,792,598 1,035,280,602
1985-86 979,542,761 43,912,430 42,872,953 1,072,421,941
1986-87 1,076,662,020 50,477,200 52,236,864 1,179,376,084
1987-88 1,163,423,632 57,594,360 48,079,019 1,269,097,011
1988-89 1,234,369,783 1,483,720 47,733,907 1,283,587,410
1989.90 1,363,475,432 1,483,720 62,998,367 1,427,957,519
1990-91
Source: City of Seal Beach.
(1) Public Utility values for 1988-89, and in future years, have been reduced by enactment of
California Assembly Bill 454. The City continues to receive an equivalent tax apportionment
from Orange County.
Ad Valorem Property Taxation
Taxes are levied for each fiscal year on taxable real and personal property which is situated
in the City as of the preceding March 1. Effective July 1, 1983, real property which changes I
ownership or is newly constructed is revalued at the time the change in ownership occurs or the
new construction is completed. The current year property tax rate will be applied to the
reassessment, and the taxes will then be adjusted by a proration factor to reflect the portion of
the remaining tax year for which taxes are due.
Under prior law, value changes due to changes in ownership and new construction were
added to the assessment roll on March 1 following the change of ownership or completion of
new construction. As a result, the change in property tax liability was not reflected until the
fiscal year following the March 1 lien date.
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'R~solu_tion Number ~Jf t
For assessment and collection purposes, property is classified either as "secured" or
"unsecured" and is listed accordingly on separate parts of the assessment roll containing State-
assessed property and property the taxes on which are a lien on real property sufficient, in the
opinion of the County Assessor, to secure payment of the taxes. Other property is assessed 'on
the "unsecured roll."
Property taxes on the secured roll are due in two installments, on November 1 and February
1 of each fiscal year, and if unpaid become delinquent on December 10 and April 10,
respectively. Beginning with fiscal year 1982-83, the penalty increased to 10% from 6%.
Property on the secured roll with respect to which taxes are delinquent becomes tax defaulted
on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment
of a penalty of 1.5% per month to the time of redemption, plus costs and a redemption fee. If
taxes are unpaid for a period of five years or more, the property is deeded to the State and then
is subject to sale by th~ City Director of Finance.
Property taxes on the unsecured roll are due as of the March 1 lien date and become
delinquent, if unpaid, on August 31. A 10% penalty attaches to delinquent unsecured taxes. If
unsecured taxes are unpaid at 5 p.m. on October 31, an additional penalty of 1-1/2% attaches
to them on the first day of each month until paid. The City has four ways of collecting
delinquent unsecured personal property taxes: (1) bringing a civil action against the taxpayer; (2)
filing a certificate in the office of the county Clerk specifying certain facts in order to obtain a
lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the
County Clerk and Recorder's office in order to obtain a lien on certain property of the taxpayer;
and (4) seizing and selling personal property, improvements or possessory interests belonging or
assessed to the assessee.
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Property Tax Levies and Collections
Percent
Fiscal Total Current Current Tax of Levy
Year Tax Levv Collections Collections
1982-83 $ 1,718,55 I $ 1,666,674 96.89%
1983-84 1,644,403 1,584,400 96.35
1984-85 1,696,989 1,654,528 97.50
1985-86 1,981,720 1,869,000 94.31
1986-87 2,175,106 2,279,720 104.81
1987-88 2,370,939 2,396,226 101.07
1988-89 2,590,000 2,622,464 101.25
1989-90 2,884,000 2,887,075 100.10
1990-91 (1) 3,155,000 3,155,000 100.00
(1) Estimated.
I Source: City of Seal Beach.
Financial Statements
The accompanying financial statements were developed from the comprehensive audited
Financial Statements. A copy of the combined, summary audited financial statements of the City
of Seal Beach for the year ended June 30, 1990 is attached to the Official Statement as an
appendix. The specific statements provided are for information purposes only and do not
constitute the complete financial statements of the City. The City's complete audited financial
statements are available upon request.
Resolution Number ~~
CIlY OF SEAL BEACH
GENERAL FUND
STATEMENT OF REVENUES AND EXPENDITURES
YEAR ENDED JUNE 30, 1989 AND 1990
REVENUES
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
License ..........................................
Fines and Forfeitures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest, rents and concessions . . . . . . . . . . . . . . . . . . . . . . . . .
From other agencies ................................
Current service charge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other.......................................... .
Administrative reimbursements ........................
Total Revenues
................ ........ ..........
EXPENDITURES
Current:
General government. . . . . . . , . . . . . . . . . . . . . . . . . . . . . . .
Public Safety. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . .
Transportation .......................,...........
Community development ...........................
Health and sanitation ..................,...........
Culture and leisure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Self-insurance program .. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land acquIsItIon ..................................
Debt service:
P. . I .
nnclpa retirement ...............................
Interest expense ..................................
Note discount and fIScal agent expense . . . . . . . . . . . . . . . . .
Total Expenditures ..............................
Excess of Revenues Over (Under) Expenditures
OTHER FINANCING SOURCES (USES):
Note, advances from City and lease option proceeds ........
Operating transfers in ...............................
Operating transfers out ..............................
Total Other Financing Sources (Uses) ................
1989 1990
$ 5,720,398
594,110
673,292
610,357
1,137,639
1,279,292
307,040
340.290
$10,665,418
I
963,739
5,103,612
428,342
520,273
956,755
465,245
1,021,761
691,458
345,937
84,488
154,046
o
10.735.656
(70.238)
I
o
451,200
(428.043)
$ 23.157
Excess of Revenues and Other Sources Over
(Under) Expenditures and Other Uses. . . . . . . . . . . . ' . . . $ (47.081)
Fund Balance. July 1 ........,......,.,............. 1,573,215
Prior period adjustment .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0
Fund Balances (As Restated) - July 1 ................... $ 1.573.215
Fund Balances - June 30 ............................. t 1.526.134
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Annual Budget
R~~Ol~:t\ion Number ~
On or before June 30 the City adopts an annual budget for the ensuing fiscal year. Formal
budgets are employed as a management control device during the year for the General, Special
and Capital Project funds. From the effective date of the budget, the amounts stated herein as
proposed expenditures become appropriations to the various City departments. The City
Manager may transfer funds within a specified dollar amount within departments. Expenditures
may not legally exceed appropriations at the departments. All appropriations lapse at the end
of the fiscal year to the extent they have been expended, except for capital projects which are
carried forward until such time as the project is completed. The City employs encumbrance
accounting.
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Budget information is presented for the Government fund types on the cash basis of
accounting. Budgeted revenue amounts represent the original budget modified by Council.
authorized adjustments during the year which were contingent upon new or additional revenue
sources. Budgeted expenditure amounts represent original appropriations adjusted for
supplemental appropriations during the year.
CI1Y OF SEAL BEACH
GENERAL FUND
ADOPTED FINAL BUDGET FOR FISCAL YEAR 1990-91 AND
PROPOSED BUDGET FOR FISCAL YEAR 1991-92
I
REVENUES
Taxes ..................................
License and permits ........................
Fines and forfeitures .......................
Interest, rents and concessions ................
From other agencies .......................
Current service charge . . . . . . . . . . . . . . . . . . . . . .
Other ..................................
Intergovernmental funds . . . . . . . . . . . . . . . . . . . . .
Total General' Fund Revenues
REVENUE TRANSFERS:
Tideland Beach Funds ......................
Gas Tax Fund ............................
Traffic Safety Funds ........................
Total Revenue Available ..................
I
EXPENDITURES:
General government .......................
Public safety .............................
Transportation. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Community development ....................
Health and sanitation . . . . . . . . . . . . . . . . . . . . . . .
Culture and leisure. . . . . . . . . . . . . . . . . . . . . . . . .
Maintenance .............................
Self-Insurance Program .....................
Final
1990-91
Budl!et
Proposed
1991-92
Budl!et
$ 6,491,000
727,000
758,000
505,000
1,132,500
1,540,400
84,000
606.000
$11,842,900
342,000
288,000
185.000
$12,657,900
1,050,540
6,662,870
25,000
411,740
1,143,550
413,360
1,956,140
725.000
Total Expenditures. . . . . . . . . . . . . . . . . . . . . .. ~12.388.2oo
Source: The City of Seal Beach.
.Resolution Number ~~~
PROJECl'ED AND ACTIJAL CASH FLOWS
Cash flows are computed using the monthly anticipated cash needs and beginning fund cash
balances. Since cash out-flows are relatively even, on a month basis, and taxes and revenues,
while predictable, are not as consistent, cash short-falls occur which are funded from the net
proceeds of the Notes.
The General Fund cash balance at July 1, 1991 is expected to be approximately $
. and the General Fund is expected to realize a maximum cash flow deficit of
approximately $ in the month of . 1991.
The 1991-92 cash flows that follow are estimates, based on the best information available
to the City when they were prepared in June, 1991.
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RETIREMENT PROGRAM
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Substantially all full-time City employees are members of the State of California Public
Employees' Retirement System (PERS). The City's policy is to fund all current retirement costs
as accrued; such costs to be funded are determined annually as of July 1 by the System's actuary.
The plan is subject to an actuarial valuation annually. All contributions to the plan are made
by the City covering both the City's and employees shares. The City's contribution was $_
for the year ended June 30, 1990.
LONG-TERM OBLIGATIONS
The City has never defaulted on the payment of principal or interest on its long-term
indebtedness. At. of June 30, 1990, the City of Seal Beach had a total of $ in long term
obligations designated as follows:
Revenue Bonds $ 000,000 I
Compensated Absences 000,000
Lease Obligation 000,000
Capitalized Leases 000,000
Promissory Note 000,000
State Coastal Conservancy 000.000
Total ~ OOO.O.QQ
In addition, the Redevelopment Agency had $ in tax allocation bonds outstanding
as of June 30, 1990 and an advance payable to the City equal to $ . A complete
description of the City's long term debt is available in the June 30, 1990 financial statements of
the City which are included as Appendix A of this Official Statement.
THE CI'IY
Location
The City of Seal Beach, located on the coast of northwestern Orange cOunty, is about 27
miles southeast of Los Angeles and seven miles from the Port of Long Beach. The City was
incorporated in 1915 and remained as a small seaside resort town until about 1960. From 1961
to 1975 the City increased in size from 1.25 square miles to 11.97 square miles through
annexation of new subdivisions, which petitioned to join the City to obtain various municipal
services.
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Seal Beach is primarily a residential community, housing many employees of the
industrialized areas of northwest Orange County and southern Los Angeles County. In addition,
two major defense and space technology installations, the Seal Beach Naval Weapons Station
and Rockwell International Corporation Satellite Systems Division, are located in Seal Beach and
employ a combined 3,200 workers.
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~~SP"~U}iOn Number ~.J1I~
Freeway access from Seal Beach to all points in the Los Angeles-Orange County
metropolitan areas is provided by the San Diego, Garden Grove, and San Gabriel Freeways
which meet at the northern edge of the City and connect with other segments of the extensive
Southern California freeway network. Scheduled air transforation and air travel freight service
are provided by the nearby Long Beach Airport, the Orange County Airport and Los Angeles
International Airport.
City Government and Population
The City of Seal Beach has operated under a City charter since 1964. The City is governed
and administered under a council-manager form of government. The five member City Council
is elected by district to serve four-year alternating terms. The Mayor Pro Tempore are elected
by the Council from 'among its members for one-year terms. The City aerk is also elected. The
City Attorney and City Manager are appointed by the City Council. All other officers and
employees of the City are appointed by and responsible to the City Manager. The City has
recently reduced personnel by contracting out certain services including fire protection, which is
provided by Orange County.
The 1960's were a period of rapid growth for the City as population rose from approximately
7,000 in 1960 to about 24,500 in 1970, largely due to the annexation of new subdivisions. From
1970 to 1988 population rose from 24,441 to 27,350. A table of the City's population and land
size growth is presented below.
CIlY OF SEAL BEACH
POPULATION AND SIZE
Land Area (1)
Year
Pooulation
Amount
Annexed
Total Size
1950
1960
1961
1962
1064
1965-68
1970
1975
1980
1983
1984
1985
1986
1987
1988
1989
1990
1991
3,553
6,994
1.25
1.25
6.32
8.01
9.41
9.80
11.97
11.97
11.97
11.97
11.97
11.97
11.97
11.97
11.97
5.07
1.69
1.40
0.39
24,441
25,974
26,100
26,384
26,900
27,350
27,400
27,335
27,350
2.17
(1) Square miles
Source: Population - State Department of Population estimates for 1991, all other figures are
U.S. Census Bureau data. Land area - City of Seal Beach.
Employment and Industry
Orange County provides a large employment base for City residents. The major employment
categories are manufacturing (23% of the labor force), trade (25%) and services (24%). As of
April 1990, Orange County's unemployment rate stood at __ percent. The following table
shows a six-year history of Orange County employment by category.
Resolution Number ~Kf ;r
ORANGE COUNTY
EMPLOYMENT BY INDUSTRY GROUP ('000)
Tvoe of Emolovrnent 1985 1986 1987 1988 1989 1990
Agriculture 8.9 8.8 9.0 8.2 8.0
Non Agriculture
Mining & Construction 53.5 55.9 64.3 68.0 74.4
Manufacturing 242.0 248.3 248.3 257.1 259.1
Transportation and I
Public Utilities 32.8 34.1 3,5 34.2 34.4
Wholesale Trade 58.9 63,5 64.4 71.6 77.5
Retail Trade 192.2 197,3 206.2 215.2 225,6
Finance, Insurance and
Real Estate 74,4 83.4 91.0 93.7 95.4
Service 232,3 254.2 262.6 289.9 308.4
Government 107.5 111.5 114.4 117.8 121.2
1,002.5 1,051.0 1,094.7 1,157.2 1,203.9
Source: State Employment Development Department.
The U.S. Naval Weapons Station which employs 1102 civilians and 225 military personnel
is located in the City. The station has its own docking and vessel loading facilities in a protected
deepwater harbor. Rockwell International Corporation-Satellite Systems Division, currently
employing approximately 2531 full-time personnel, is also located in the City.
Commercial Activity
The City of Seal Beach contains a central business district and three major shopping centers,
the latter of which were developed since the City began annexing subdivisions. The largest
shopping center is the Rossmoor Shopping Center, which includes the Boston Store. In 1989 I
taxable retail sales stood at $ million compared to $_ million in 1988, an increase of
approximately percent. Total taxable transactions stood at $ million in 1989
compared to $_ million in the prior year, a decrease of approximately percent. The
table shows taxable transactions for the City from 1985 through 1989.
cm OF SEAL BEACH
TAXABLE SALES
(Thousands of Dollars)
Tvne of Business 1985 1986 1987 1988 1989
Retail Stores:
Apparel $ 5,629 $ 5,636 $ 5,397 $ 5,643
General Merchandise 5,425 5,884 6,141 6,821
Drug 5,848 6,235 6,500 6,961
Food 8,464 9,280 9,127 9,514
Package Liquors 2,802 2,457 2,341 2,075
Eating and Drinking Places 18,915 20,254 22,720 23,787
Home Furnishings and
Appliances 2,646 2,667 1,863 1,561
Building Materials and 1,846 I
Farm Implements 1,522 1,402 2,134
Auto Dealers and
Suppliers 1,447 1,545 1,475 1:,517
Service Stations 17,343 13,645 15,350 14,434
Other Retail Stores 7.247 7.679 7.645 8.062
Retail Stores - Total $77,288 $76,684 $80,693 $82,221
All Other Outlets 16.141 18.725 17.723 13.553
Total All Outlets ~93,429 ~95.409 $98.416 ~95,774
Source: State Board of Equalization.
~~,sblution Number ~n k
Building Activity
Residential building activity in the City has fluctuated depending on changes in the State and
national economies. The number of permits for residential dwellings totaled _ for a value of
$_ million in 1990 while total valuations stood at $_ million. The following table shows
the number of, and value of building permits for the City from 1985 through 1990.
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Cl1Y OF SEAL BEACH
BUILDING PERMITS AND VALUATIONS 1985 THROUGH 1!19O
('000)
1985 1986 1987 1988 1989 1990
(Valuations in
thousands):
Residential $ 5,175 $ 9,859 $9,490 $10,926 $12,281
Non Residential 6.068 29.266 17.962 33.44 17.997
Total $11,243 $39,125 $44.370 $44,370 $30,218
Number of New
I Dwelling Units:
Single Family 15 15 30 21 21
Multi Family J! J! 3 J! J!
Total 15 15 33 21 21
Source: "California Construction Trends," Security Pacific National Bank and Economic
Sciences Corporation.
Transportation
The San Diego, San Gabriel and Garden Grove Freeways Intersect within the City limits,
and the City is bisected by State Route 1 (Pacific Coast Highway). Existing freeways provide
excellent access t9 all north, south and eastern points.
Regularly scheduled airline service is available at Long Beach Airport, Orange County
Airport and Los Angeles International Airport, each of which is less than 45 minutes driving time
from Seal Beach.
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Western Greyhound Lines provides long distance passenger and package express service
form Seal Beach. Local bus service is provided by the Southern California Rapid Transit
District, Long Beach Public Transportation Company and Orange County Transit District.
Marine Transportation is provided by the facilities of the Port of Long Beach and the Port
of Los Angels at San Pedro. Both of these installations are within 10 miles of the City and
provide modem facilities for handling all types of cargoes. The ports are also a stopping point
for trans-Pacific passenger lines.
~esolution Number ~J11~
Utilities
Electricity in the City is provided by Southern California Edison Company and, natural gas,
by Southern California Gas Company. General Telephone Company serves the entire Oty.
Sewage collection and treatment facilities are provided by Orange County Sanitation District No.
3, and refuse collection is furnished by a private contractor. The City provides its own water
service.
Education
The City of Seal Beach is served by two high schools and one elementary school district. I
Most of Seal Beach is also within the Coast Community College District. The District operates
three colleges within Orange County. The 122-acre Huntington Beach Campus (Golden West
College), which began classes in 1986, is approximately eight miles from Seal Beach.
Orange County has five community colleges and eight institutions granting degrees for four-
year or graduate courses of study. The schools are: University of California at Irvine; California
State University, Fullerton; Chapman College, Orange; Southern California College, Costa Mesa;
West Coast University, Orange; Western State University, Anaheim; Orange University College
of Law, Santa Ana; and Pepperdine University, Santa Ana. A number of colleges and
universities are also located in the adjacent area of southern Los Angeles County, including the
California State University at Long Beach.
Recreation and Community Facilities
The Oty of Seal Beach was originally established because of its attractiveness as a seaside
resort and recreation area. While the character of the City has undergone change during the
last decade from a resort community to a stable residential community, recreation is still an
important factor in the local economy. City officials estimate that more than 3,000,000 visitors
are attracted to the one mile City-owned ocean front recreation area each year. For the
convenience and accommodation of these visitors, the City maintains a 1,860 foot municipal pier,
which is being repaired from the proceeds of a federal Emergency Management act grant and
other grants, and a beach park with picnic facilities. Swimming and surfboarding are popular I
sports and are conducted under the supervision of municipal lifeguards.
The Oty has acquired or leased and developed nearly 47 acres of parkland. The most recent
acquisition is an eight acre abandoned railroad right-of-way, 100 feet wide by 3,600 feet long.
The park bisects downtown Seal Beach. The $1.2 million project is within the Riverfront
Redevelopment Project of the Redevelopment Agency and is financed by the Agency and by gas
tax funds. The completed park is now enjoyed by local citizens and is known as the "Green
Belt."
At the southern end of the City, the Orange County Harbor District has developed the
Aquatic Regional Park, which provides an eight lane launching ramp capable of accommodating
up to 500 boats per day, parking for 200 cars and boat trailers, and overnight space for 500 .
house trailers. The aquatic park provides public beach and picnic facilities for 2,800 people,
public fishing floats, boat rentals, fueling docks, and berths for recreational boating.
TAX EXEMPTION
In the opinion of Buchalter, Nemer, Fields & Younger, a Professional Corporation, Bond
Counsel, interest on to the Notes is excluded from gross income for purposes of federal income
tax laws except as noted below. In addition, Bond Counsel is of the opinion that the Notes are
not "private activity bonds" as defined in section 141(a) of the Internal Revenue Code of 1986 I
(the "Tax Code") and, therefore, interest on the Notes will not be an item of tax preference for
purposes of the alternative minimum tax provisions of the Code, except, however, that the
interest on the Notes received by corporations may be included in corporate book income and
adjusted current earnings in calculating alternative minimum taxable income.
Bond Counsel is further of the opinion that interest on the Notes is exempt from personal
income taxes of the State of California under present state law.
In rendering these opinions, Bond Counsel will rely upon representations and covenants in
the City Resolution and representations in the Nonarbitrage Certificate of the City, dated as of
the date of initial delivery of the Notes, concerning the i~vestment and use of proceeds and the
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'Re\oi.ii~lon Number ~.f9,f-
rebate, if necessary, to the federal government of certain earnings thereon. Furthermore, Bond
Counsel assumes that all such representations are true and correct and that the City will comply
with such covenants. Bond Counsel expresses on opinion with respect to the exclusion of interest
with respect to the Notes from gross income under Section 103(a) of the Tax Code in the event
that any of such representations are untrue or the City should fail to comply with such
representations and covenants may cause interest on the Notes to be included in the gross
income of the holders of the Notes retroactive to the date of delivery thereof.
Although Bond Counsel will render an opinion that the interest with respect to the Notes
is excluded from gross income to the extent described above, the holders of the Notes should be
aware that the receipt of the interest with respect to the Notes may otherwise affect the federal
income tax liability of the recipient. The presence of any such effect, as well as the magnitude
thereof, depends on the specific factual situation with respect to the particular recipient of such
interest. Bond Counsel expresses no opinion regarding any impact of holding of the Notes other
than as specifically described above. Holders of the Notes should consult with their tax advisors
as to the applicability if any collateral federal income tax consequences.
Pursuant to the Resolution adopted by the City Council, the City represents that the
reasonably anticipated amount of qualified tax-exempt obligations which has been and will be
issued by it in 1991 does not exceed $10,000,000, and designates each Note to be a qualified tax-
exempt obligation pursuant to Section 265(b) (3) (B) (ij) of the Internal Revenue Code.
LEGAL OPINION
The opinion of Buchalter, Nemer, Fields & Younger, California ("Bond Counsel") approving
the validity of the Notes and stating that, in the opinion of such Bond Counsel, interest on the
Notes is excluded from gross income for federal income tax purposes and is also exempt from
personal income taxes imposed by the State of California will be provided free of charge to the
purchasers at the time of the original delivery of the Notes.
Bond Counsel's employment is limited to a review of the legal proceedings required for the
authorization of the Notes and to rendering the opinion set forth above. Such opinion will not
consider or extend to any documents, agreements, representations, offering circulars or other
material of any kind concerning the Notes not mentioned in this paragraph. Certain legal
matters will be passed upon for the City by the City Attorney.
LEGALI1Y FOR INVESTMENT IN CALIFORNIA
Under the provisions of the State Financial Code, the Notes are legal investments for
commercial banks in the State of California to the extent that the Notes, in the informed opinion
of the bank, are prudent for the investment of funds of its depositors and under provisions of
the State Government Code the Notes are eligible to secure deposits of public moneys in the
State of California.
RATING
The City received a MIG-_ rating on the Notes from Moody's Investors Service, Inc.
Certain information was supplied by the City to the rating agency to be considered in evaluating
the Notes. The rating issued reflects only the views of the rating agency, and any explanation
of the significance of such rating should be obtained from the rating agency. There is no
assurance that any rating obtained will be retained for any given period of time or that the same
will not be revised downward or withdrawn entirely by the rating agency if, in its judgement,
circumstances so warrant. The City undertakes no responsibility either to bring to the attention
of the holders of the Notes any downward revision or withdrawal. Any such downward revision
or withdrawal of the rating obtained may have an adverse effect on the market price of the
Notes.
LmGATION
No litigation is pending or threatened concerning the validity of the Notes, and a certificate
of the City Attorney to that effect will be furnished to the purchaser at the time of the original
,Resolution Number 1f;!?J J
delivery of the Notes. The City is not aware of any litigation pending or threatened questioning
the political existence of the City or contesting the City's ability to levy and collect ad valorem
taxes or to collect or receive other pledged revenues or contesting the City's ability to issue and
retire the Notes.
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There are a number of law suits and claims pending against the City. The aggregate amount
of the uninsured liability of the City and the timing of any anticipated payment of judgements
which may result from suits and claims will not, in the opinion of the City Attorney, materially
affect the City's finances or impair its ability to repay the Notes.
UNDERWRITING
The Notes are being purchased for reoffering by (the "Underwriter"). The
Underwriter has agreed to purchase the Notes at a purchase price of $ The
Note Purchase Agreement provides that the Underwriter will purchase all of the Notes if any
are purchased. The obligation to make such purchase is subject to certain terms and conditions
set forth in the Contract of Purchase. The Underwriter may offer and sell the Notes to certain
dealers and others at prices lower than the public offering price stated on the cover page hereof.
The offering price may be changed from time to time by the Underwriter.
ADDITIONAL INFORMATION
The purpose of this Official Statement is to supply information to purchasers of the Notes. I
Quotations from and summaries and explanations of the Notes, the resolution authorizing the
Notes and of statues and documents contained herein do not purport to be complete, and
reference is made to said resolution, statues and documents for full and complete statements of
their provisions.
All data contained herein have been taken or constructed from City records and other
sources. Appropriate City officials, acting in their official capacity, have reviewed this Official
Statement and have determined that the date hereof the information contained herein is, to the
best of their knowledge and belief, true and correct in all material respects and does not contain
an untrue statement of a material fact or omit to state a material fact necessary in order to
make statements made, in light of the circumstances under which they were made, not
misleading. An appropriate City official will execute a certificate to this effect upon delivery of
the Notes. This Official Statement and its distribution have been duly authorized and approved
by the City Council of the City of Seal Beach.
City of Seal Beach
Director of Finance
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