HomeMy WebLinkAboutCC Res 3955 1990-06-25
RESOLUTION NO. .39Sfr"
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RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH,
PROVIDING FOR THE ISSUANCE AND SALE OF rTS 1990 TAX AND
REVENUE ANTICIPATION NOTES; APPROVING OY'FICIAL STATEMENT,
TERMS OF SALE, NOTE PURCHASE AGREEMENT; APPOINTING BOND
COUNSEL AND FINANCIAL CONSULTANT; PLEDGING REVENUES AND
ENTERING INTO CERTAIN TAX COVENANTS IN CONNEC~ION WITH SAID
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 1990-91, 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 One Hundred Thousand Dollars
($2,100,000), such funds to be used for any purpose for which
the city is authorized to expend mone~'s, in accordance with
Article 7.6, Chapter 4, Part 1, Divisi'n 2,' Title 5 of the
Government Code of the State of Calif~,rnia (commencing with
Sections 53850 through 53858) (the ";'Ict.");
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WHEREAS, the City may borrow for such purposes, such
indebtedness to be represented by tax 6nd revenue anticipation
notes (the "Notes") issued pursuant tc the Act;
WHEREAS, the City Council oJ: the City (the "City
Council") is in need of legal services and special
consultation and advice in connectior w~th the issuance and
sale of the Notes;
WHEREAS, there has been presented to the city
Council a proposal of Security Pacif:c 11erchant Bank to act as
Financial Consultant in connection with sale of the Notes;
WHEREAS, there has been preser.ted to the city
Council a Request for proposal and Terms of Sale and Note
Purchase Agreement which will be prese.l~ed to a number of
underwriters;
WHEREAS, the City Council now wishes to approve such
Request for Proposal and Terms of Salta and Note Purchase
Agreement. and to authorize the Financ'.a:. '::onsultant to solicit
proposals for purchase of the Notes: . ~
WHEREAS, the City Council wishes to authorize the
Finance Director/Treasurer to enter into the Note Purchase
Agreement with the Underwriter presenti~; the proposal which
will result in the lowest net interest cost to the City and to
issue the Notes upon such terms;
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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.
Resolution Number ~~~~
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 connectio~ ~'ith the issuance and sale of the
Notes. The City CounC6' agrees that the appointment of Bond
Counsel will not pre'.re:t Bond Counsel from continuing as
attorney for parti6s wh.ch may currently have disputes, legal
or otherwise, with the r.ity which do not involve confidential
information which Bond '"ounsel gained from its representation
of the City under such .ppointment, nor will Bond Counsel be
prevented from acting ~s attorney in the future for clients
which have disputes, l~gal or otherwise, with the City which I
do not involve confi~~1~ial information which Bond Counsel
gained from its representation of the City under this
appointment, even tho~gh the same may result in litigation,
and the city specifically consents Bond Counsel's
representation of SU.~.l present or future clients of Bond
Counsel despite such pos:...ible conflict.
Section 3. The City hereby appoints security
Pacific Merchant Bank il.S Financial Consultant (the "Financial
Consultant"), and authlJr.Lzes such Financial Consultant to
solicit proposals from uuderwriters for purchase of the Notes
upon the terms contain(.ti in the "Request for Proposal and
Terms of Sale," attached hereto as Exhibit A and incorporated
herein by reference.
Section 4. Notes in the name of the city in an
aggregate principal 3Il,,;;" of the "maximum anticipated
cumulative. cash flow ,iei'..::it" as de~ined by Section 1.103-
14(C)(2) of Title 26 ~~ t~e Code of Federal RegUlations,
rounded to the nearest hunc~ed thousand dollars, but not to
exceed Two Million One Hundred Thousand Dollars ($2,100,000),
shall be issued for any curposes 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.
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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 City 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 ::,':her person which is not shown on the
register of the City as being a holder, with respect to the
accuracy of any records maintained by DTC or any Participant
or the payment by DTC or any Participant of any amount in
respect of the prin~ipal or interest with respect to the
Notes. The City sha~l. pay all principal and interest with
respect to the Not~b only to DTC, and all such payments shall
be valid and efft.C'''.i'v," to fully satisfy and discharge the
City's obligations ~ith respect to the principal and interest
with respect to the N~tes 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 subc~.:. t'lte a new nominee in place of Cede & Co.,
the term "Cede & Co." in this Resolution shall refer to such
new nominee of DTC.
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If the City determines that it is in the best
interest of the be~e!i:ial owners that they be able to obtain
Notes and delivers a written certificate to DTC to that
effect, DTC shall nctify the Participants of the availability
through DTC of Notes. In such event, the.City shall issue,
. Resolution Number .:!95S-
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transfer and exchang~ ~otes as requested by DTC and any other
holders in appropri~~e amounts. DTC may determine to
discontinue providin~ 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 (if there is no successor securities
depository), the city shall be obligated to deliver Notes as
described in this R~,~' tion. Whenever DTC requests the City
to do so, the City ~i1" =ooperate with DTC in taking
appropriate action ~:'pr reasonable notice to (a) make
available one or more se.,arate Notes evidencing the Notes to
any DTC Participant ha~ing Notes credited to its DTC account
or (b) arrange for anoth~r securities depository to maintain
custody of certificates dvidencing 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 Representations with DTC (the "Letter of Representations").
Notwithstanding any other provision 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.
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Section 6. The Finance Director/Treasurer is
authorized and directed to determine the amount of the
"maA~::um 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
suc~ amount into the Note Purchase Agreement; provided,
howe, or, that such amount shall not exceed Two Million One
Hu~d:ed Thousand Dollars ($2,100,000).
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section 7. The form of Note Purchase Agreement,
attac}'9d hereto as Exhibit B, and incorporated herein by
refer'nce, is hereby approved. The Finance Director/
TreaFJrer is authorized to enter into such Note Purchase
AgreoDent with the underwriter presenting a responsible
pr~~'~al to enter into such Note Purchase Agreement at the
lowest net interest cost to the City; provided, however, that
such r~te of interest for the Notes does not exceed twelve
perc.ent (12%) per annum, and to insert said rate in said Note
PUl",'hase Agreement. The Finance Director/Treasurer or his
desJ.gn...e 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
deli,ery and shall bear interest at the rate of interest
provid~d 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 $5,000, or any integral multiple
thereof. Both the principal of and interest on the Notes
shal. ~ payable in lawful money of ~he United states of
Amer.c~ ~pon presentation and surrender at the office of the
Fillil,....:-' Director/Treasurer of the city in Seal Beach,
Californ~~.
Section 9. The Notes shall not be subject to call or
redemptil,n befor.e their fixed maturity date.
section 10. The Notes shall be issued without
coupons and shall be in substantially the following form, the
blanks in said form to be filled in with appropriate words or
numbers to comply with the provisions of this resolution:
Resolution Number .19$'6
STATE OF CALIFORNIA
COUNTY OF ORANGE
CITY OF SEAL BEACH
1990 TAX AND REVENUE ANTICIPATION NOTE
Number
$
CUSIP:
FOR VALUE RECEIVED, the City of Seal Beach, a I
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 17, 1991, 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
-.,..,.......
matur1ty. ' Interest shall be computed on a 30-day month and
360-day y~ar basis. Both the principal of and the interest on
this note (hereinafter "Note") shall be payal:lle 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 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 I
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 __, 1990.
Payment of the principal of and the interest on this
ar~ secured by a pledge of and first lien and charge against
moneys to be received by the City in fiscal year 1990-91 from
the first taxes, income, revenue, cash receipts and other
moneys intended as receipts for the 4eneral 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
December, 1990, 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 April __, 1991, in an
amount sufficient to pay fifty percent (50%) of 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 I
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
. ....:
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Resolution Number -:rJ1~
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 regis~ered 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; 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 of.the city, and to be countersigned by the
City Clerk, which signatures may be manual or facsimile signa-
tures, 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 __, 1990.
Mayor of the City of Seal
Beach
Finance Director/Treasurer
of the city of Seal Beach
[SEAL]
COUNTERSIGNED:
"
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City Clerk of the
City of Seal Beach
Resolution Number ~~~tr
section 11. The Mayor and the Finance Director/
Treasurer of the city are hereby authorized and directed to
sign each of the Notes, and the City Clerk is hereby
authorized and direct~d 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. Arty one 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 I
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 time,
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 specif ically covena:1t!;:.
(a) That it shall file such reports or other docu-
ments with the. Internal Revenue Service as are required by th,~
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 Director/Treasurer is authorized and
directed to ensure compliance with these covenants.
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,section 13. The principal of the Notes and the
thereon shall be secured by a pledge of and first lien against
moneys to be received by the City in fiscal year 90-91 and the
city hereby pledges the first taxes, income, revenue, cash
receipts a~d 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 December, 1990, 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 April, 1991, 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 v~ .he principal
of and the interest on the Notes. Such amounts shall
hereinafter be called the "Pledged Moneys."
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'Re'solution Number ..5f5r
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There is hereby established and cre:'lte.d a special
fund, designated the "City of Seal Beach 1990 _'''x and Revenue
Anticipation Note Payment Fund" (hereinafter c..'J.led "Payment
Fund"), into which the Finance Director/TrEa~uL.r shall
deposit all of said Pledged Moneys promptly at ~he time of
receipt thereof. The principal of the Notes an,' the interest
thereon shall be payable from said Pledged Mo~~'s and from all
other income, revenue, cash receipts and money~ of the City
lawfully available for the payment of the principal of the
Notes and the interest thereon. However, th~ ~~ltes are
payable only form revenues received or accrued during the
fiscal year in which issued.
Moneys shall be withdrawn from the nayment Fund for
the sole purpose of paying the principal of and ~.he interest
on the Notes as the same shall become due and payable. Any
money deposited in the Payment Fund may be invasted as
permitted by law, except that no such investment shall have a
maturity date later than the maturity date of t.ht! Notes.
Proceeds of any such investments may be transferted to the
general fund of the City. Any moneys remainins 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
determines that the aggregate principal amount :: ~he Notes,
together with interest thereon, does ~ot excee.1 ~'~hty-five
percent (85%) of the estimated amount of the n'" llncollected
taxes, income, revenue, cash receipts and other m:>r,~ys of the
City which will be available for the payment of the principal
of and the interest on the Notes.
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Section 15. The Finance Director/Treasurer 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 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 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 bv the proper
officers, and to deliver said notes when so c:ecuted to the
Underwriter upon the receipt of the purchftse price.
Section 17. The Mayor or the Finance Director/
Treasurer of the City or his authorized dep~T.Y is further
authorized and directed to make, execute and ~eliver to the
Underwriter (a) a certificate attesting to t~e 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 ce!.tificate
certifying to the genuineness and due executi 'n 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 ...... ~.l received by the
city. Any purchaser or subsequent taker or holder of the
Notes is hereby authorized to rely upon and ~h~ll be justified
in relying upon any such certificate or rec~ipt with respect
to the Notes executed pursuant to the authn.'ity of this"
resolution. Such officers of the City are 1ur~her directed to,
timely file the appropriate Internal Revenue Service form in J
the 8038 series with respect to the Notes. Such officers are
hereby authorized to execute any and all othr.r documents
required 0 consummate the sale and delivery (,f the Notes.
I.
Resolution Number ~~
Section 18. The Preliminary Offici~~ Statement, in
substantially the form presented to this meeting together with
such changes as shall be approved by the Finan.-;:e Director/
Treasurer and made a part hereof as though Get forth in full
herein, be and the same is hereby approved for use in connec-
tion with the offering and sale of the Notes. ,..a City Clerk
is directed to file a copy of such Pr~limina.~- ~~ficial
Statement with this Resolution. The Finance
Director/Treasurer is hereby authorized to approv~ a final
Official Statement which shall be in compliance with
Rule 15c2-12 of the Se~urities and Exchange CQmm1ssion under I
the Securities Exchange Act of 1934, as amended .tnd its use in
connection with the offering and sale of the Notes. The
Finance Director/Treasurer is 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 Statemeni. and any such amendment or
supplement to be delivered to the Underwriter with such
approval to be conclusively evidenced by his 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 1990 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.
Section 20. This ~esolution shall take effect from I
and after its passage and ~do~tion.
APPROVED AND ADOPTE'" this ~day of June, 1990.
'.
cgcLwJ iMk:)
Edna Wilson, Mayor
ATTEST:
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ne M. Yeo,
C' y Clerk of the
ity of Seal Beach
~.
".
..',
~'-::w'
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Resolution Number ..J~~
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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 _~~,ting of the City Council of the City of
Seal Beach on the o?~day of June, 1990 by the following
vote:
AYES:
COUNCIL MEMBERS~~~, ~t,,~~Z:~aM.~
COUNCIL MEMBERS: ~ ~
COUNCIL MEMBERS: ~
COUNCIL MEMBERS ~
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NOES:
ABSENT:
ABSTAINED:
e M. Yeo,
.tlerk of the
City of Seal Beach
CERTIFICATE OF POSTING AGENDA
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I, Joanne M. Yeo, hereby certify as follows:
I a'n 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 __, 1990.
Copies of said list constituting said agenda, which
is in all respects the same as that so posted, is attached
hereto and incorporated herein by reference.
I certify under penalty of perjury that the
foregoing is true and correct.
F.xncuted at Seal Beach, California, this ____ day of
, 1990.
Joanne M. Yeo,
City Clerk of the
City of Seal Beach
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Resolution Number c59~
CERTIFICATE AS TO FULL FORCE AND
EFFECT OF RESOLUTION
J, JOANNE M. YEO, Clerk of the City of Seal Beach,
do hereby certify that the attached is an excerpt from the
proceedings 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, 1990.
The above-mentioned excerpt from the minutes of the I
City council is a true and correct copy for the meeting of
June , 1990 and has not been amended, superseded or
repealed.
rhe 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
1990, at Seal Beach, california.
day of
[SEAL]
Joanne M. Yeo,
City Clerk of the
City of Seal Beach
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Resolution Number 3f-Sr
REQUEST FOR PROPOSAL
TO: Prospective Underwriters
RE: $2,100,000
city of Seal Beach, California
(1990 Tax and Revenue Anticipation Notes)
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FROM:
Security Pacific Merchant Bank
Public Finance Department
Catherine W. Bando
(213) 229-1471
DATE:
June
, 1990
As Financial Consultant to the City of Seal Beach (the
"City"), we are soliciting proposals from qualified
underwriters for the purchase of $2,100,000 1990 Tax and
Revenue Anticipation Notes (the "Notes"). The Notes are more
fully described in the enclosed Preliminary Official statement
dated July __, 1990. . The terms of sale are itemized in the
attached pages entitled "Terms of Sale."
Proposals will be received by the Financial Consultant on
behalf of the City at the place and up to the time specified
below:
Time:
July 12, 1990
10:00 A.M. Pacific Daylight Time
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Place:
Security Pacific Merchant Bank
California Plaza
300 South Grand Avenue
21st Floor
Los Angeles, California 90071
Telephoned proposals will be accepted up to 9:30 A.M. P.D.T.
on July 12, 1990 provided a telecopied or original signed
proposal form is received by the Financial Consultant no later
than 6:00 P.M. P.D.T. on July 11, 1990. The Financial
Consultant's telecopy number is (213). 613-1722.
Additional information may be obtained by contacting Catherine
W. Bando at (213) 229-1471.
PROPOSAL FORK
$2,100,000
1990 TAX AND REVENUB ANTICIPATION NOTBS
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City of Seal Beach
c/o Security Pacific Merchant Bank
California Plaza
300 South Grand Avenue, 21st Floor
Los Anqeles, California 90071
Ladies and Gentlemen:
We offer to purchase all, but not less than all, of the
aggregate principal amount of the Notes, more particularly
described in the Preliminary Official statement provided to us
with this Proposal Form and pursuant to the terms described in
the Terms of Sale at a purchase price of the par amount of the
Notes plus a premium of $ , said interest to
be payable at the rate set forth below.
Resolution Number a3~~5'
Maturity
Date
Par Amount
Interest
Rate
July 17, 1991
$2,100,000
%
Our calculation of the net interest cost is %. This
calculation is considered to be informative only and not a
part of the proposal. If we are awarded the purchase of the
Notes we agree to enter into a Note Purchase Agreement with
the City substantially in the form provided to us with this
proposal form.
We have received and reviewed the Preliminary
Official Statement with respect to the Notes (the "Preliminary
Official statement") and as a condition to offering to
purchaser the Notes, have determined that we can comply with
the requirements of Rule 15c2-12 of the securities and
Exchange Commission under the Securities Exchange Act of 1934,
as amended.
We hereby request that (not to exceed
50) printed copies of the Official Statement with respect to
the Notes be furnished to us in accordance with the terms of
the Request for Proposals.
Respectfully submitted,
Name
Account Manager
By
Address
city
state
Telephone
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\ . ,'"
Resolutibn Number ~~
TERHS OF SALE
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Issue and Denomination: $2,100,000 and designated City
of Seal Beach 1990 Tax and Revenue Anticipation Notes (the
"Notes"), consisting of book-entry form Notes without coupons.
The Notes will be available in denominations of $5,,000 or
integral multiples thereof as shall be specified by the
Underwriter.
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Date and Maturities: The Notes will be dated their
date of delivery which is expected to be July 18, 1990, and
will all mature on July 17, 1991.
Interest Rate: 'The maximum interest rate is eight
percent (8%) per annum, payable upon maturity of the Notes.
Proposers must specify the rate of interest which the Notes
bid upon shall bear, provided that: (i) all Notes bid upon
shall bear the same interest rate; (ii) no Notes shall bear
more than one rate of interest; (iii) all Notes shall bear
interest from their dated date to the stated maturity at the
interest rate specified in the bid; (iv) the interest rate
specified must be in a multiple of 1/1000 of one percent
(.001%) .
Qualified O~liqation: The Notes will be designated by
the City Council as a "qualified tax-exempt obligation" within
the meaning of section 265(b) (3)(B) of the Internal Revenue
Code of 1986, as amended.
Redemption: The Notes are not subject to call and
redemption prior to maturity.
Payment: Both principal and interest are payable in
lawful money of the United States of America at the office of
the Director of Finance of the city of Seal Beach. The
principal and interest on the Notes will be paid to The
Depository Trust Company ("DTC") or its nominee, Cede & Co.,
as registered owner of the Notes. Upon receipt of moneys, DTC
will credit the accounts of the beneficial owners.
Form of Proposal: Proposals must be for all of the
Notes, and must be for not less than the par value thereof.
Each proposal, must be enclosed in a sealed envelope addressed
to the City of Seal Beach, c/o Security Pacific Merchant Bank,
300 South Grand Avenue, 21st Floor, Los Angeles, California
90071, not later than 10:00 a.m., P.D~T.. on said date of
sale, and endorsed "Proposal for the Purchase of City of Seal
Beach 1990 Tax and Revenue Anticipation Notes." Each proposal
must be in accordance with the terms and conditions set forth
herein, and must be submitted on, or in substantial accordance
with, proposal forms provided.
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Estimate of Net Interest Cost: Proposers are requested
(but not required) to supply an estimate of the total n!t
interest cost on the'basis of their respective proposals,
which shall be considered as informative only and not binding
on the proposer.
Highest proposal I The Notes will be awarded on the basis
of the lowest net interest cost including premium offered in
the proposals. No proposal for less than par will be
entertained. In the event two or more proposals setting forth
identical interest rates and premium per dollar principal
~mount, if any, are received, the City reserves the right to
exercise its own discretion and judgment in making ~u::! award
and may award the Notes on a pro rata basis in such
denominations as the City determines.
Good Faith Check/Purchase Aqreement: Good Fait~ checks
are not required. However, the Purchaser of the Note~.
awa~ded pursuant to the terms stated herein, shall ~G~ee to
,
Resolution Number
~?.55'
enter into a Note Purchase Agreement with the City ~i~ain 26
hours from the time said Purchaser is notified of su~h award.
The Note Purchase Agreement shall be substantially in T.he form
provided with the proposal form.
prompt Award: The City will take action awarding the
Notes or rejecting all proposals not later than tY"-I.~}'-six
hours after the expiration of the time herein prescribed for
the receipt of proposals unless such time of award ir. waived
by the purchaser of the Notes.
Buyer'S Certificate: The successful proposer ~us~
provide the City c/o the Financial Consultant, on or before I
10:00 A.M., P.D.T., on the date of closing the initi~l
offering price to the public or final purchasers thereof (not
including bond houses and brokers or similar persons ~r
organizations acting in the capacity of underwriter O~
wholesalers) at which a substantial amount of the Not,~c; have
been committed to be sold.
Delivery and Payment: It is estimated that delivery of
the Notes will be made to the successful proposer in book-
entry form through the services of the Depository Trl.4..'~
Company in New York, New York on or about July 18, 1~90
Payment of the purchase price must be made in funds
immediately available to the City. The cost of preparing the
Notes with be borne by the City.
Riqht of Rejection: The City reserve the right, in their
discretion, to reject any and all proposals and to waive any
irregularity or informality in any proposal.
Riqht of Cancellation: The purchaser of the N01.es shall
have the right at its option to cancel the Note Purcnase
Agreement if the city shall fail to execute the Notes and
tender the same for delivery within thirty (30) days from the
date of sale thereof.
purpose of Issue: The Notes to be issued by the city are
authorized pursuant to the provisions of Section 53856 of the
Government Code of the state of California and the provisions
of resolutions of the City Council of the city for any purpose
for which the city is authorized to expend moneys.
security: The Notes are the obligation of the City and
are secured by a pledge of and first lien and charge against
moneys to be received by the City in fiscal year 1990-91.
The Notes are secured by the first $1,050,000 nf
"Unrestricted Revenues" as herein after defined, t.':'> be
received in the month of December, 1990, and the fhst
$1,050,000 of Unrestricted Revenues (plus an amou~t sufficient
to pay the interest to become due on the Notes at m~turity) to
be received in April, 1991.
Said revenues shall be deposited by a designa~ed officer
in a special account established, created and ma::'.:':ained
withi~ the General Fund of the city. Moneys shall be
withdrawn from said account for the sole purpose cf caying the
principal of and the interest on each the City'S tlotes as the
same shall become due and payable.
By statute, the Notes are declared to be a q~neral
obligation of City and to the extent not paid from taxes,
income, revenues, cash receipts and other moneys o~ the City
attributable to the fiscal year ending June 30, 19~,l and
legally available for payment thereof (the "Unrestril.:ted
Revenues"), shall be paid with the interest there or' f.rom any
other moneys of the City lawfully available therefor. If the
full amount of the Unrestricted Revenues pledged in a
particular month to repayment of the Notes has no~ been
received by the city by the end of such month, the amount of
any deficiency shall be satisfied and made up fro~ _. other
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I.
"Resoiution Number ~
I
moneys of the City lawfully available- for repaymer.-:. I" the
Notes. However, the Notes are payable only from rv.a~ue
received or accrued during the fiscal year in which is~ued.
Under provisions of the California Constitution, the city is
generally prohibited from incurring any indebtedness or
liability exceeding in any year the income and revenue
provided for such year, without the assent of two-thirds of
its qualified electors voting at an election called for such
purpose.
. Rating: The City has applied for a rating of the Notes
from Moody's Investors Service. The rating issued reflects
only the views of Moody's and further information regarding
the significance of such rating should be obtained from
Moody's.
California Debt Advisory co=mission: The city has duly
notified the California Debt Advisory commission of the
proposed sale of the Certificates. Payment of all fees to the
California Debt Advisory Commission in connection with the
sale and issuance of the Notes sha':'l be the sole
responsibility of the successful bidder, and not of the City.
No Litigation: There is no litigation pending concerning
the validity of the Notes, the existp.nce of the City, or the
entitlement of the officers thereof to their respective
offices, and the successful propcsL~ will be furnished no-
litigation certificates certify~l'1" '....~ the foregoing as of and
at the time of delivery of the Not~s.
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Official statement: The city <ill approve an Official
Statement relating to the Notes, anr. will make available up to
50 copies to the purchaser of the Notes. A copy of the
Preliminary Official statement ar.~ any other information
concerning the proposed financing will be furnished upon
request to the financial consultant of the city, Security
Pacific Merchant Bank, 300 South G~and Avenue, HCP211, Los
Angeles, California, 90071; telep~one (213) 229-1471.
Delivery of Official Statem'9nt: Not later than the
seventh (7th) business day following the date of award of the
Notes to the successful proposal, copies of a final Official
Statement substantially in the form of the Preliminary
Official statement with respect to 1:h..! Notes (the "Preliminary
Official Statement"), with only sucl' r:hanges therein as shall
have been accepted by the purchaser and the City (the
"Official statement") in such quantity as may be requested
(not to exceed 50 copies) by the p~rchaser not later than five
(5) business days following the date of award of the Notes to
the successful proposal, to permit .~. ?urchaser to comply
with paragraph (b) (4) of the Rule l.'C;: -~2 of the Securities
and Exchange Commission under the s'.--J-cities Exchange Act of
1934, as amended (the "Rule") and the rt,les of the Municipal
Securities Rulemaking Board.
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Certificate: The City will deliver to the purchaser of
the Notes a certificate of an official of the city, dated the
date of Note delivery, stating that as of the date thereof:
(i) to the best of the knowledge and belief of said official,
the Official Statement does not cOlltain an untrue statement of
a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading,
(ii) the signatory knows of no material adverse change in the
condition of the city which would make it unreasonable for the
purchaser of the Notes to rely upon the Official Statement in
connection with the resale of the Notes, (iii) the purchaser
is authorized to use and distribute the Official Statement in
connection with the offer and sale of the Notes, and (iv) the
city will notify the purchaser of any event or occurrence that
may impact the accuracy or comp~~.eness 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
Resolution Number 39%
.~. .
the Rule) or twenty-five days from "the end of the
underwriting period," in the ev,~nt the Official Statement is
available to an~ ~ers~n throu~h ~ nationally recognized
municipal secur1t1es 1nformat1~n repository (as defined in the
Rule) .
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$2,100,000
city of Seal Beach
STATE OF CALIFORNIA
1990 TAX AND REVENUE ANTICIPATION NOTES
NOTE PURCHASE AGREEMENT
July _, 1990
City of Seal Beach
211 Eighth street
Seal Beach, California 90740
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Ladies and Gentlemen:
The undersigned (the "Underwriter"), acting on behalf
of ourselves, offer to enter into this agreement with the city
of Seal Beach, C"lifornia (the "City"), which, upon your
acceptance hereoL. will be binding upon the city and the
Underwriter. T~is offer is made subject to the written
acceptance of th.'.s Note Purchase Agreement by the City and
delivery of such a~ceptance to us at or prior to 11:59 P.M.,
Pacific Time, on r'le date hereof.
1. purohase and 8a1e of the Notes. Upon the terms
and conditions rr.d 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 $2,100,000 in
aggregate principal amount of the city's 1990 Tax and Revenue
Anticipation Notes (the "Notes"). The Notes shall bear 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. 'rhe llotes. 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 provisiors of the Resolution of the City adopted on
June 25; 1990 (t.he "Note Resolution") and Article 7.6,
Chapter 4, Part:, Division 2, Title 5 (commencing with
Section 53850) of tt,~ California Gov~nment Code (the "Act").
3. Use of ,.ocuments. The City hereby authorizes the
Underwriter to use, in connection with the offer and sale of the
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Resolution Number ~~~
I
Notes, this Note ~urchase 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 an 1 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 reserves the right to
change such initial public offering price or yield as it deems
necessary in ~v~~ection with the marketing of the Notes.
5. Delivery of Ofticial statement. Not later than
the seventh (7th) business day following the date this Note
Purchase Agreelllent is executed, copies of a final Official
statement SUbstantially in the form of the Preliminary Official
statement witl1 :-espect to the Notes (the "Preliminary Official
Statement"), ",it.. only such changes therein as shall have been
accepted by t,'e Underwriter and the City (the "Official
statement") in su~h quantity as may be requested (not to exceed
50 copies) by ttl'l 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. Pule 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.
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6. c1o;sing. At 8:00 a.m., Pacific Time, on July 18,
1990 or at such other time or on such other date as shall have
been mutually aqreed upon by you and us (the "Closing"). you
will deliver the Notes in definitive form, duly executed,
together with th~ ~ther documents hereinafter mentioned; and we
will accept such d3livery and nay the purchase price thereof in
immediately availa~le 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 aL~: "red by the city to the Underwriter prior to
the close of bu~in-~s, Pacific Time Oft July 19, 1990, then the
obliqation to ~l~~hase Notes hereunde~ 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 Aqreements of the
city. The City hereby represents, warrants and agrees with the
Underwriter that:
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(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.
(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 obliqations under each
such document or instrument, and to carry out and
effectuate the transactions contemplated by this Note
Resolution Number ~
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, I
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. .
(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, 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 o~ 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 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 (~) adversely affect the
exemption of the interest paid on the Notes from gross
income for Federal income tax purposes and California
personal income taxation.
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Resolut.ion Number ~9~
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(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 conte~plated by
the Official statement.
(H) The city has not been notified of any listing 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.
8. Covenants of 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;
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(B) The city will apply the proceeds from the sale
of the Notes for the purposes specified in the Note
Resolution; and
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(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 ~epare 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 Clo.inq. 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
Underwr iter I s Obligations under this Note Purchase Agreement are
and shall be subject, at the option of the Underwriter, to the
following further 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
Resolution Number .!l9~
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 I
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, Cali~ornia, bond counsel ("Bond Counsel"),
shall be necessary in connection with the transactions
contemplated hereby, shall have been duly taken and
shall be in full force and effect; 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 Closing;
(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.
(0) No order, decree or injunction of any court of
competent jurisdiction, nor any order, rUling or I
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 behal~ :.f
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 sim}~<r
body of the type contemplated herein are not exe......t
from the registration, qualification or ot.'er
requirements of the Securities Act of 1933, as am~nu..d
and as then in effect, or the Trust Indenture Act ~f
1939, as amended and as then in effect;
(E) At or prior to the data of the Closing; the
Underwriter shall receive the following documents in
each case dated as of the Closing Date 3ad
satisfactory in form and substance to the Underwriter:
(1) An approving opinion of Bond Counsel, as to I
the Notes, addressed to the City.
(2) A letter setting forth that the undervri te:o:
can rely upon the approving opinion of bond counsel.
(3) The opinions of Bond Counsel and the c_t~
Attorney, addressed to the Underwriter, 'to the effe'cl
that without having undertaken to determin~
independently the accuracy or completeness of the
statements contained in the Official Statement, but
on the basis of their conferences with the
representatives of the City, and their examination of
Resolution Number .;r~
I
certain documents referred to in the Offic~~j
statement, nothing has come to their attention wh.cl
would lead them to believe that the Official statl<ll,'_::"
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 opi~ion
with respect to any financial statements or ot.her
financial statlstical data included in the Official
statement.
I
(4) A certificate signed by an appropriate City
official to the effect that (i) the representations,
agreements and warranties of the City herein are 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 Purc~ase
Agreement to be complied with by the City prior to or
concurrently with the Closing and such documen~~ are
in full force and effect; (iii) there is nn 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, thr~~tened
against the city which has any of the e~fects
described in section 7 (f) hereof or contesting j n any
way the completeness or accuracy of the CifJcial
Statement (but in lieu of or in conjunction wit~ such
certification the Underwriter may, at its sole
discretion, accept certificates or opinions O' the
City Attorney or Bond Counsel, that in their orinion
the issues raised in any such pending or threatened
litigation are without substance and the.. the
contentions of all plaintiffs therein are without
merit); (iv) such official has reviewed the Offi~ial
statement and on such basis certifies th~t the
Official Statement does not contain any untrue
statement' of a material fact required to be st~ted
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 distribute the Official Statemenc in
connection with the offer and sale of the Notes; a~d
(vi) the City will notify the Underwriter of any "'lent
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 ...: ..e
underwriting period," in the event the Of..'iC"::.l
Statement is available tb any person thru'.,;, a
nationally recognized municipal securities inforlllatlc,..
repository (as defined in the Rule).
(5) An arbitrage certificate of the City in form
satisfactory counsel: to Bond Counsel:
I
(6) Evidence satisfactory to the Underwriter
that the Notes been rated b~ Moody's Investors
Services, Inc. (or shall 'have such other equivalent
rating as such rating agency may give) and that such
~ating have not been revoked or downgraded;
(7) A certificate, together with fully executed
copies of the Note Resolution, of the City Clerk to
the effect that:
(i) such copies are true correct copies of
the Note Resolution; and
Resolution Number .!J,Ijg
, .
(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, ;n~~ruments and other
documents as the Underwriter m~y 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 represe.ltations of the City
herein contained and of the Official Statement and I
(iii) the due performance or E~tisfaction 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 sa~~sfy the conditions
to the Underwriter's obligations containec in this Note Purchase
Agreement or if the Underwriter's ooligations shall be
terminated for any reason permitted by t.his Note Purchase
Agreement, this Note Purchase Agreement mal be cancelled by the
Underwriter at, or at any time prior to, tt.e time of Closing.
Notice of such cancellation shall be givt".n to the City in
wri ting, or by telephone or telegraph conf irmed- in writing.
Notwithstanding any provision herein to the contrary, the
performance of any and all obligations of th~ City hereunder and
the performance of any and all conditionE contained herein for
the benefit of the Underwriter may be wah -0:: "y the Underwriter
in writing at its sole discretion.
.
The Underwriter shall also have the right to cancel
its obligation to purchase the Notes, by wr~tten 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 I
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 Cahfornia (the "state"),
or a decision rendered by a court of ~~~ United states or the
state or by the United States Tax Court, or a ruling, order, or
regulation (final or temporary) made by the Trea5ury Department
of the United states or the Internal Revenue Service or other
Federal or State authority, which wculd have the effect of
changing, directly or indirectly, th~ Federal income tax
consequences or state tax consequt.~ces of interest on
obligations of the general character ~f ~he No~es in the hands
of the holders thereof, or (b) any new outbreak of hostilities
or other national or international caJ 'imi ty or crisis, the
effect of such outbreak on the financi~' markets of the United
States begin such as, in the judgment of the Underwriter, would
affect materially and adversely the ability of the Underwriter I
to market the Notes, or (c) a general ~'l.pension 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 o:~der of the Securities and
Exchange Commission or any other governm~~tal authority having
jurisdiction, or Cd) a general banking moratorium declared by
either Federal or State authorities t.aving jurisdiction; or
(iii) additional material restrictions not in force or being
enforced as of the date hereof shall ,lave been imposed upon
trading in securities generally by any governmental authority
Res~iu'tion Number ~
or by any national securities exchange w,i=h, in the opinion of
the Underwriter, materially adversely affect the market price
for the Notes.
I
10. Conditions to Obligations of the City. The
performance by the city of its obligat~.~_ is conditioned upon
(i) the performance by the Underwrit~r' ~f its obligations
hereunder; and (ii) receipt by the CYty '<nd the Underwriter of
opinions ami certificates being delivered at the Closing by
persons and entities other than the city.
11. Expenses. Ca) The city shall pay any out-of-
pocket expenses incurred by the City from the proceeds of the
1990 TRANS issue including 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 print1ng and distribution of the Official
statement; (iv) costs of preparation and reproduction of this
Note Purchase Agreement, and (b) The underwriter shall pay
(1) 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. Botices. Anv notice or other communication to be
given under this Note Purchase Agreement (other than the
acceptance hereof as ~~~~lfied in the first paragraph hereOf)
may be given by delivering the same in writing if to the City,
to the Mayor of the City of Seal Beach; 211 Eight street, Seal
Beach, California 90740, or if to the Underwriter, to:
, Attention:
I
13. Parti~s i~ interest; Survival of Representations
and Warranties. This N~te Purchase Agreement when accepted by
the City in writing as her~tofore specified shall constitute the
entire agreement between the City and the Underwriter. This
Note Purchase Agreement .s made solely for the benefit of the
city and the Underwriter (including the successors or assigns
of the Underwriter). Po:..' p'arson shall acquire or have any rights
hereunder or by virtue hereof. All your representations,
warranties and agreemenes of the City in this Note Purchase
Agreement shall survive regardless of (a) any investigation or
any statement in respe.ct thereof made by or on behalf of the
Underwriter, (b) delively.::f and payment by the Underwriters for
the Notes hereunder, and (c) any termination of this Note
Purchase Agreement.
14. Execution 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. Applical:lle Law. This Note Purchase Agreement
shall be interpreted, governed and enforced in accordance with
the law of the state of California.
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Very truly yours,
Resolution Number ~~;r-
By:
The foregoing is her~by agreed to and accepted as of the date
first above written:
The City of Seal Beacr, California
By:
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R~sbLution Number .;r~~
Draft Dated 6/13/90
PRELIMINARY OFFICIAL STATEMENT DATED JUNE 26, 1990
BOOK-ENTRY-ONLY
Rating: Moody's _____
(See "Rating" herein)
In the opinion of Buchalter, Neller, Fields & Younger, a
Professional Corporation, Bond Counsel under existing statutes,
regulations and court decisions,. interest with respect to the Notes is
excluded froll gross income for purposes of federal income taxation;
however, interest with respect to the Notes, if received by a corporation,
wil1 be included in corporate book incolIIe for purposes of computing its
alternative .inimum tax and any "environlllental tax liability" imposed
under the Internal Revenue code of 19B6 (the "TIX Code"). In the opinion
of Bond Counsel, such interest is also eXUlfJt froll present State of
California personal income taxes. See "Tax Exemption" herein.
$2,100,000*
CITY OF SEAL BEACH
1990 TAX AND REVENUE ANTICIPATION NOTES
Dated: Date of Delivery
Due: July 17, 1991
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 will be payable when due as described under "THE
NOTES - Book-Entry-Dnly 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 1990-91 and legally available for
payment thereof. The Notes are secured by a pledge of the first
$1,050,000 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 obl igations 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, 1990, and
the first $1,050,000 of Unrestricted Revenues plus an amount sufficient to
pay the interest on the Notes, to be received by the City in April, 1991.
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 wil1 be offered when, IS and if issued and received
in book-entry fOnl by the Underwriter, subject to the approval of legality
by Buchalter, Nemer, Fields & Younger, Bond Counsel. Certain other legal
matters will be passed upon for the City by the City Counsel for the City
of Seal Beach. The Notes, in book-entry fOnl, wil1 be available for
delivery through the services of the Depository Trust Company in New York,
New York on or about July __, 1990.
Dated:
, 1990
* Subject to Change.
Resolution Number .3I15b
No dealer, broker, salesperson or other person has been authorized
bl the Citl to give any inforaation or to aake any representations other
than those contained herein and, if given or aade, such other inforaation
or representation must not be relied upon as having been authorized bl the
Citl. This Official Statement does not constitute an offer to sell or the
solicitation of an offer 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
aake such an offer, solicitation or sale.
This Offtctal Statement ts not to be construed as a contract wtth the I
purchasers of the Notes. Statements contatned tn thts Offtctal Statement
which tnvolve esttaates, forecasts or matters of optnton, whether or not
expressll so described herein, are intended sol ell as such and are not to
be construed as a representation of facts.
The infol'lllltion set forth heretn has been obtatned frOll official
sources whtch are believed to be reliable but it ts not guaranteed as to
accuracy or cOlllpleteness, and is not to be construed as a representatton
bl the Underwrtter. The tnfo....tion and expresstons of optntons herein
are subJect to change without notice and neither deltvery of thts Offictal
Statement nor any sale aade hereunder shall, under any circIDDStances,
create any implication that there has been no change in the affairs of the
Citl of Seal Beach stnce the date hereof. Thts Offictal Statement is
submitted tn connectton with the sale of the Notes referred to herein and
_., not be reproduced or used, in whole or in part, for any other purpose,
unless authorized in writing bl the Cit,.
TABLE OF CONTENTS
City Official s ....................................................
Introduction..................................................... .
1990-91 Short-Term Borrowing Program ..............................
The Notes.........................................................
Book-Entry-Only System ......................................
Secur1 ty for the Notes ............................................
Avail abl e Sources of Payment ......................................
Constitutional Limitations on Taxes ...............................
Financial Information.............................................
Assessed Valuations.........................................
Ad Yalore.. Property Taxation ................................
Property Tax Levies and Collections .........................
Financial Statements........................................
AnnuIl Budget ...............................................
Projected and Actual Cash Flows .............................
Ret 1 rement Program ..........................................
Long Term Obligations .......................................
Computation of Legal Debt Margin ............................
The City ..........................................................
Location ....................................................
City Government and Population..............................
Employment and Industry.....................................
COl1ll1ercial Activity .........................................
Building Activity...........................................
Transportal i on ..............................................
Ut 11i ties ...................................................
Educat i on ...................................................
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11
1
1
1
2
3
4
5
5
6
6
8
8
10
11
16
16
16
17
17
17
19
19
20
21
22
22
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:'~R~~olution Number .39d.5"
Recreation and Community Facilities ......................... 22
Tax Exemption .................................,................... 23
Legal Opinion...................................................... 23
Legality for Investment in California ............................. 24
Rating ......................,..................................... 24
Litigation........................................................ 24
UndeJ"Wrftfng ...................................................... 2S
Additional Information ............................................ 25
Appendix A Financial Statements................................... A-I
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OYER ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE IlARKET PRICE OF THE
NOTES AT A LEVEL ABOYE TlfAT WHICH MlllHT OTHERWISE PREVAIL IN THE OPEN
IlARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTlflJED AT ANY TIME.
THE UNDERWRITER MAY OFFER AND SELL THE NOTES TO CERTAIN DEALERS AND DEALER
BANKS AND BANKS ACTIN8 AS AGENTS AT PRICES LOWER THAN THE PUBLIC OFFERING
PRICE STATED ON THE COYER PAGE HEREOF AND SAID PUBLIC OFFERING PRICE MAY BE
CHANGED FROM TIME TO TIME BY THE UNDERWRITER.
CITY OF SEAL BEACH, CALIFORNIA
City Council
Edna lIilson
Mayor
Gwen Forsythe
Council Member
Joseph Hunt
Council Member
Frank Laszlo
Council Member
Marilyn Hastings
Council Member
Joanne M. Yeo
City Clerk
City Officials
Robert Nelson
City Manager
Greg Stepanicich
City Attorney
Denis Thomas
Director of Finance/City Treasurer
Financial Consultant
Security Pacific Merchant Bank
Public Finance Department
300 South Grand Avenue, HCP211
Los Angeles, California 90071
Bond Counsel
Buchalter, Nemer, Fields & Younger
700 South Flower Street
Suite 700
Los Angeles, California 90017
Resolution Number ~~~
OFFICIAL STATEMENT
$2,100,000*
City of Seal Beach
1990 TAX AND REVENUE ANTICIPATION NOTES
INTRODUCTION
The purpose of this Official Statement is to provide information in
connection with the issuance by the City of Seal Beach, California (the
"City") of $2.1 million* of its 1990 Tax and Revenue Anticipation Notes
(the "Notes"). The Notes are issued under the authority of Article 7.6, I
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 _, 1990. Issuance of the Notes will provide funds
to meet fiscal year 1990-91 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.
1990-91 SHORT6TERM BORROWING PROGRAM
In order to finance its General Fund cash flow requirements in fiscal
year 1990-91, the City has undertaken a short-term borrowing program which
will total $2.1 million*. The City expects to issue, on or about July __,
1990, $2.1 million* in Tax and Revenue Notes with a final maturity of I
July _, 1991. 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 IIOneys of the City attributable to the fiscal
year 1990-91. 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 six to one.
THE NOTES
The Notes will be dated as of the date of delivery and will all mature
on July _, 1991. The Notes will be issued in registered fonn in
denOlinations 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
* Subject to Change.
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 I
maturity. Principal of and interest on the Notes will be payable when due
as described below under "THE NOTES - Book-Entry-Only System."
Book6EntrY60nly Syst..
When issued, the Notes will be registered in the name of Cede' Co.,
as nominee of The Depository Trust Company ("DTC"). DTe is a
limited-purpose trust company organized under the laws of the State of New
York, a member of the Federal Reserve Systell, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to the proviSions of Section 17A of the
Securities Exchange Act of 1934, as amended.
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Re~olution Number ~~~
D1C holds securities and facil itates the clearance and settlement of
securities transactions through electronic book-entry changes in accounts
of the OlC Participants, thereby eliminating the need for physical
movement of certificates. OlC Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations, some of which (and/or their representatives) own OlC.
Access to the OlC system is also available to other entities such as
banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with OlC Participants, either directly or
indirectly.
OlC Participants will be credited in the records of OlC with the
amount of such OlC Participants' interest in the Notes. Beneficial
ownership interests in the Notes in the amount of 55,000 or any integral
multiple thereof may be purchased by or through OTC 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 OTC Participant from
which such beneficial owner purchased its Notes. Transfers of ownership
interests in the Notes will be accomplished I)y book entries made by OTC
and, in turn, by OlC 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 frOlll whom such ownership interest
is acqu ired.
Payments of interest on and principal of the Notes will be paid by the
City upon surrender of the Notes at maturity directly to OTC or its
nominee, Cede l Co. OTC will remit such payments to OTC Participants and
such payments will thereafter be paid by OTC Participants to the
beneficial owners. No assurance can be given by the City that OlC and OTC
Participants wll1 make prompt transfer of payments to beneficial owners.
The City is not responsible or Hable for payments by OTC or OTC
Participants or for sending transaction statements or for maintaining,
supervising or reviewing records maintainad by OTC or OTC Participants.
As long as the Notes are registered in the name of Cede l Co. or a
successor securities depository (or its nominee), all payments of interest
and principal and all notices with respect to the Notes wlll be made and
given, respectively, in accordance with the instructions of OTC or the
successor securities depository. With respect to any Note registered in
the nlllM! of Cede l Co. or a successor securities depository (or its
nominee), the City wll1 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), (11) the delivery to any person other
than a registered Owner as shown in the note register of any notice with
respect to the Notes; ( 11 i ) 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 OTC ceases to act as securities depository for the Notes and no
successor securities 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 terns 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 deHvery of a written transferred and del ivery 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.
Resolution Number ~~
SECURITY FOR THE 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 $1,050,000 of Unrestricted Revenues (as
hereinafter defined) to be received by the City in December 1990, and the
first $1,050,000 of Unrestricted Revenues plus an amount sufficient to pay
interest on the Notes, to be received by the City in April 1991, (such
pledged amounts being called the "Pledged Revenues"). In the event that
there are insufficient Pledged Revenues received by the City by the 30th
of each such IIOnth to permit the deposit into the Repayment Fund (as
hereinafter defined) of the full amount of the aforesaid pledge, then the
amount of 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 DIOneys being called the
"Other Pledged Moneys"). The term "Unrestricted Revenues" means taxes,
incoa, revenui, cash receipts and other DIOneys intended as receipts for
the General Fund of the City for the fiscal year 1990-91 and which are
generally available for the payment of current expenses and other
obligations of the City.
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The Pledged Revenues will be deposited by the City Finance Director,
beginning in the month of December, 1990, and thereafter at intervals
stated above, in trust in a special City fund (the "Repayment Fund") until
the full amount of the aforesaid pledge has been deposited in the
Repayment Fund. The principal of and interest on the Notes will
constitute a first Hen 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 Repayment 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 ___, 1991, 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 Repayment Fund after
such transfer, or provision for such transfer, will be transferred to the
General Fund of the City.
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AVAILABLE SOURCES OF PAYMENT
In accordance with California law, the Notes are general obligations
of the City, but are payable only out of taxes, incoa, 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
LIMITATIONS 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 I
not exceed 85S of the estillated DIOneys 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 $2,231,250. The City
estimates that funds available from the General Fund for payment of the
Notes will be in excess of approximately $14.9 million.
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Resolution Number ~~
ESTIMATED GENERAL PURPOSE RESOURCES
AVAILABLE FOR PAYMENT OF NOTES{l)
( '000)
Source
Amount
$ 275
3,155
1,198
2,138
727
758
230
1,132
1,865
1,420
$ 2.000
Unrestricted available fund balance - July 1, 1990......
Property Taxes .........................................
Sa 1 es and use taxes ....................................
Other Taxes ............................................
L 1 censes and permi ts ...................................
Fines and penalties....................................
Investment earnings....................................
Revenue froll other agencies ............................
Current service charges................................
Other revenue (1).......................................
TRANs Proceeds.........................................
Total ................................................ $14,898
(1) Includes Tideland Revenue, the Gas Tax, Water Sewer, and COlllllunity
Redevelopment Agency transfers.
CONSTITUTIONAL LIMITATIONS ON TAXES
Article XIII A of the California Constitution limits the maximum ad
valorem tax on real property to 1" of "full cash value" which is defined
as "the County assessor's valuation of real property as shown on the
1975-76 tax bill under "full cash value" or, thereafter, the appraised
val ue of real property when purchased, newly constructed, or a change in
ownership has occurred after the 1975 assessment. The full cash value may
be adjusted annually to reflect inflation at a rate not to exceed 2" per
year, or reduction in the consumer price index or comparable local data,
or declining property value caused by substantial damage, destruction, or
other factors.
After the adoption of Article XIII A, most California municipalities
including Seal Beach, applied the two per cent inflationary factor to the
full cash value for each fiscal year cOlllllencing with the 1975-76 fiscal.
year. This procedure has been judicially upheld.
FINANCIAL INFORMATION
Assessed Valuations
The assessed valuation of property in the City is established by the
County Assessor, except for public util ity property which is assessed by
the State Council of Equalization. Assessed valuations are reported at
10~ 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 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.
The business inventory tax subvention was repealed in 1984 pursuant to
Chapter 448 of the 1984 State statues. In lieu of the business inventory
tax subvention, the State distributes additional vehicle license fee
revenues to 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.
Resolution Number ~~~~
CITY OF SEAL BEACH
ASSESSm VALUATION OF PROPERTY SUBJECT TO AD VALOREM TAXATION
Total
Fiscal Coaaon Public Unsecured Assessed
Year PrODer-tv Utility ill Valuation Valuation
1982-83 $ 841,517,449 $ 40,729,030 $ 55,899,143 $ 938,145,622
1983-84 877,926,801 43,135,160 72,072,274 993,134,235
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 I
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
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 Valor.. 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 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 I
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.
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 alien 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 IOS 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 pa.YJlll!nt 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 the City Director of Finance.
Property taxes on the unsecured roll are due as of the March 1 1 i en
date and become delinquent, if unpaid, on August 31. A lOS penalty I
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 IIIOnth 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 sell ing
" 'personal property, improvements or possessory interests belonging or
assessed to the assessee.
Resolution Number ~~
Property Tax Levies and Collections
Percent
Fiscal Total Current Current Tax of Levy
Year Tax Levy Collections Collections
1982-83 S 1,718,551 S 1,666,674 96.89S
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
I 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 (l) 3,155,000 3,155,000 100.00
(l) Estimated.
Source: City of Seal Beach
Financial Statements
The accompanying financial statements were developed from the
comprehensive audited Financial Statements. A copy of the combined,
sUlllRary audited financial statements of the City of Seal Beach for the
year ended June 30, 1989 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.
I
CITY OF SEAL BEACH
GENERAL FUND
STATEMENT OF REVENUES AND EXPENDITURES
YEAR ENDED JUNE 30, 1988 AND 1989
REVENUES:
Taxes ..............................................
Licenses and permits ...............................
Fines and forfeitures ..............................
Interest, rents and concessions ....................
From other agencies................................
Current service charges............................
Other ..............................................
Administrative reimbursements
Total Revenues
......................
I
EXPENDITURES:
Current:
Genera 1 government ...............................
Public safety ....................................
Transportat ion ...................................
Conmunity development ............................
Health and sanitation............................
Cul ture and 1 e; sure ..............................
Ha i ntenanee ......................................
Self-insurance program...........................
land acqu 151 t ion .................................
Debt service:
Pr; nc i pal ret i rement .............................
Interest expense .................................
Note discount and fiscal agent expense ...........
Total Expenditures
Excess of Revenues Over (Under) Expenditures
1988 1989
S 5,333,935
551,784
398,056
612,483
1,108,956
1,010,721
252,856
340.720
S 9.609.511
S 5,720,398
594,110
673,292
610,357
1,137,639
1,279,292
307,040
340.290
$10.665.418
1,071 ,678 963,739
4,930,640 5,103,612
590,795 428,342
481,063 520,273
966,230 95.6,755
451,671 465,245
901,207 1,021,761
568,545 691,458
1,590,000 345,937
1,850,000 84,488
78,407 154,046
14.443 -0-
$13.494.679 $10.735.656
13.885.168) 170.238)
Resolution Number ~5'tr
OTHER FINANCING SOURCES (USES):
Note, advances from City and lease option proceeds
Operating transfers in .............................
Operating transfers out ............................
Total Other Financing Sources (Uses)
Excess of Revenues and Other Sources Over
(Under) Expenditures and Other Uses
Fund Balances - July 1 ...............................
Prior period adjustment..............................
Fund Balances (As Restated) - July I .................
Fund Balances - June 30 ..............................
3,440,000 -0-
403,76B 451,200
(888.352) (428.043)
S 2.955.416 S 23.157
(929.752) S C47 .081)
2,190,172 1,573,215 I
312.795 -o-
S 2.502.967 S 1.573.215
S 1.573.215 S 1. 526.134
Annual Budget
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 department level. 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.
Budget information is presented for the Government fund types on I
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.
CITY OF SEAL BEACH
GENERAL FUND
ADOPTED FINAL BUDGET FOR FISCAL YEAR 1989-90 AND
PROPOSED BUDGET FOR FISCAL YEAR 1990-91
Proposed
1990-91
Buduet
REVENUES:
Taxes ..................................
$ 6,491,000
727,000
758,000
505,000
1,132,500
1,540,400
84,000
605.000
Li censes and permi ts ...................
Fines and forfeitures ..................
Interest, rents and concessions ........
From other agencies ....................
Current service charge .................
Other ..................................
Intergovernmental Funds ................
Total General Fund Revenues
Final
1989-90
Budaet
$ 6,092,000
559,000
660,000
499,000
1,173,600
1,428,000
83,000
546.000
I
$11,842,900 $11,040,600
REVENUE TRANSFERS:
Tideland Beach Funds ....................
342,000
288,000
185.000
$12.657.900
Gas Tax Fund ............................
Traffic Safety Funds ....................
Total Revenue Available ..............
320,000
267,000
180.000
SI1.807.600
I
I
I
Resolution Number .:!95~
EXPENDITURES:
Current:
General government ...................
Public safety........................
Transportation .......................
Community development ................
Health and sanitation ................
Culture and leisure..................
1,050,540
6,662,870
25,000
411,740
1,143,550
413,360
1,956,140
725.000
1,025,080
6,155,400
30,850
301,760
1,113,820
389,190
1,883,620
675.000
Maintenance......................... .
Self-Insurance Program
Total Expenditures
...............
SI2.388.200 SII.574.720
Source: The City of Seal Beach.
PROJECTED AND ACTUAL 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 I, 1990 is expected to be
approximately $275,000, and the General Fund is expected to realize a
maximum cash flow deficit of approximately $1,023,000 in the month of
November, 1990.
The 1990-91 cash flows that follow are estimates, based on the
best infomation available to the City when they were prepared in
June, 1990.
Resolution Number !!tJ5S'"
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Resolution Number ~~~
RETIREMENT PROGRAM
Substantially all full-time City employees are members of the State of
California Public Employees' Retirement System (PERS). The City's pol icy
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 $775,576 for the year ended June 30,
1989.
LONG-TERM OBLIGATIONS
The City has never defaulted on the payment of principal or interest
on its long-term indebtedness. As of June 30, 1989, the City of Seal
Beach had a total of 54,752,204 in long term obligations designated as
follows:
Revenue Bonds
Compensated Absences
Lease Obligation
Capitalized Leases
Promissory Note
State Coastal Conservancy
Total
$ 150,000
694,301
1,543,000
393,166
1,755,692
216.045
S 4.752.204
In addition, the Redevelopment Agency had 55,005,000 in tax allocation
bonds outstanding as of June 30, 1989 and an advance payable to the City
equal to 5938,936. A complete description of the City's long term debt is
available in the June 30, 1989 financial statements of the City which are
included as Appendix A of this Official Statement.
THE CITY
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.
Seal Beach is primarily a residential cOllllllunity, 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 w~rkers.
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 transportation and air freight
service are provided by the nearby Long Beach Airport, the Orange County
Airport and Los Angeles International Airport.
Resolution Number .JtI55
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 and Mayor Pro Tempore are
elected by the Council from among its members for one-year terms. The
City Clerk 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 are responsible to the City Manager. The City I
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.
CITY OF SEAL BEACH
POPULATION AND SIZE
Land Area (1)
Amount I
lm Pooulation Annexed Total Size
1950 3,553 1.25
1960 6,994 1.25
1961 5.07 6.32
1962 1.69 8.01
1964 1.40 9.41
1965-68 0.39 9.80
1970 24,441 11.97
1975 2.17 11.97
1980 25,974 11.97
1983 26,100 11.97
1984 26,384 11. 97
1985 26,900 11. 97
1986 27,350 11.97
1987 27,400 11. 97
1988 27,335 11.97
1989 27,350 11.97
(1) Square miles
Source: Population - State Department of Population estimates for 1989,
all other figures are U.S. Census Bureau data. Land area - City I
of Seal Beach.
Resolution Number ~tr~
.
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 1989, Orange County's
unemployment rate stood at 2.9 percent. The following table shows a
six-year history of Orange County employment by category.
ORANGE COUNTY
I EMPLOYMENT BY INDUSTRY GROUP (000)
'vae of Emalovment In! 1m lW mz illl 1m
Agricultural 8.7 8.9 8.8 9.0 8.2 8.0
Non Agricultural
Mining & Construction 47.2 53.5 55.9 64.3 68.0 74.4
Manufacturing 211.9 242.0 242.3 248.3 257.1 259.1
Transportation and
Public Utilities 31.4 32.8 34.1 34.5 34.2 34.4
Wholesale Trade 55.1 58.9 63.5 64.4 71.6 77.5
Retail Trade 182.5 192.2 197.3 206.2 215.2 225.6
Finance, Insurance and
Real Estate 70.1 74.4 83.4 91.0 93.7 95.4
Service 228.3 232.3 254.2 262.6 289.9 308.4
Government lll!....5. l.lU..,j .l.lL.5. 114.4 117.8 121.2
TOTAL 939.7 1002.5 1051.0 1094.7 11 57 . 2 1203.9
Source: State Employment Development Department.
I
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.
Commerctal Acttvtty
The City of Seal Beach contains a central bustness district and three
major shopping centers, the latter of which were developed since the City
began annexing subdivistons. The largest shopping center is Rossmoor
Shopping Center, which includes the Boston Store. In 1988 taxable retail
sales stood at $82.2 million compared to $80.6 million in 1987, an
increase of approximately 2 percent. Total taxable transactions stood at
$95.7 million in 1988 compared to $98.4 million in the prior year, a
decrease of approximately 2.8 percent. The table below shows taxable
transactions for the City from 1984 through 1988.
CITY OF SEAL BEACH
I TAXABLE SALES
(Thousands of Dollars)
TWDe of Business In! 1m lW mz illl
Reta il Stores:
Apparel $ 5,663 $ 5,629 $ 5,636 $ 5,397 $ 5,643
General Merchandise 5,366 5,425 5,884 6,141 6,821
Drug 6,836 5,848 6,235 6,500 6,961
Food 8,009 8,464 9,280 9,127 9,514
Package Liquors 2,873 2,802 2,457 2,341 2,075
Eating and Drinking Places 16,679 18,915 20,254 22,720 23,787
Resolution Number !Jtf55"
Home Furnishings and 2,667 1,863 1,561
Appliances 2,530 2,646
Building Materials and 1,522 1,402 2,134 1,846
Farm Implements 1,486
Auto Dealers and Suppliers 1,490 1,447 1,545 1,475 1,517
Service Stations 15,862 17 ,343 13,645 15,350 14,434
Other Retail Stores 7 .124 7.247 7.679 7.645 8.062
Retail Stores - Total $73,918 $77,288 $76,684 $80,693 $82,221
All Other Outlets 21. 995 16.141 18.725 17.723 13.553
Total All Outlets S95.913 S93.429 S95.409 S98.416 S95.774 I
Source: State Board of Equalizltion.
Building Activity
Resident ial buil ding act i vi ty in the Ci ty has fl uctuated dependi ng on
changes in the State and national economies. The number of permits for
residential dwellings totaled 21 for a value of $12.2 million in 1989 while
total valuations stood at $30.2 million. The following table shows the
number of, and value of building permits for the City from 1984 through
1989.
CITY OF SEAL BEACH
BUILDING PERMITS AND VALUATIONS 1984 THROUGH 1989
( '000)
ill! lln 1m. illZ .liH 1m
Valuations (in thousands): I
Residential $ 8,666 $ 5,175 $ 9,859 $ 9,490 $10,926 $12,281
Non Residential 5.419 6.068 29.266 17 . 962 33.444 17.997
Total $14,085 $11,243 $39,125 $27,452 $44,370 $30,218
Number of New
Dwelling Units:
5i ngl e Family 49 15 30 15 21 21
Multi Family ~ ...Q ...1 ...Q ...Q ...Q
Total 49 15 33 15 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 (Pac1fic Coast
Highway). Existing freeways provide excellent access to all north, south I
and eastern points.
Regularly scheduled airline service is available at the Long Beach
Airport, Orange County Airport and Los Angeles International Airport, each
of which is less than 45 minutes driving time from Seal Beach.
Western Greyhound Lines provides long distance passenger and package
express service from Seal Beach. local bus service is provided by the
Southern California Rapid Transit District, Long Beach Public Transportation
Company and Orange County Transit District.
I
I
I
Resolution Number ~~
Marine transportation is provided by the facilities of the Port of Long
Beach and the Port of Los Angeles at San Pedro. Both of these installations
are within 10 miles of the City and provide modern facil ities for handling
all types of cargoes." The ports are also a stopping point for trans-Pacific
passenger lines.
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 City. 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. Most of Seal Beach is also within the Coast COlllllunity
College District. The district operates three colleges within Orange
County. The 122-acre Huntington Beach Campus (Golden West College), which
began classes in 1966, 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 City 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 cOlllllunity, 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 accolllllodation of these
visitors, the City maintains a 1,B60 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. Swillllling and
surfboarding are popular sports and are conducted ul)der the supervision of
municipal lifeguards.
The City 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 Dlstrict 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 with respect to the Notes
is excluded from gross income for purposes of federal income tax laws. 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 (the "Tax Code") and, therefore, interest with respect to the
Resolution Number c5~~~
Notes wi 11 not be an item of tax preference for purposes of the
alternative minimum tax provisions of the Code, except, however, that
interest with respect to 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 with respect
to the Notes is exempt from personal income taxes of the State of
California under present state law except as noted below.
In rendering these opinions, Bond Counsel will rely upon I
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 investment and use of
proceeds and the 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 no 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
covenants.
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 1 iabil ity 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.
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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 19B9 does not
exceed $10,000,000, and designates each Note to be a qualified tax-exempt
obligation pursuant to Section 265(b) 13\ IB\ lii\ 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 del ivery 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. I
Certain legal matters will be passed upon for the City by the City
Attorney.
LEGALITY FOR INVESTMENT IN CALIFORNIA
Under the provisions of the State Financial Code, the Notes are
legal investments for cOl1lll8rcial 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 defositors and under provisions of the
State Government Code the Notes are e igible to secure deposits of public
moneys in the State of California.
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~ Resolution Number .3?.5S'
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 judgment,
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.
LITIGATION
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 del ivery of the
Notes. The City is not aware of any litigation pending or threatened
questioning the pol itical 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 abil ity to issue and
retire the Notes.
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 judgments 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 .Underwri ter") . The Underwri ter has
agreed to purchase the Notes at a purchase price of S . 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 Stateme!lt is to supply information
to purchasers of the Notes. Quotations from and summaries and
explanations of the Notes, the resolution authorizing the Notes and of
statutes and documents contained herein do not purport to be complete, and
reference is made to said resolution, statutes and documents for full and
complete statements of their provisions.
Resolution Number ~~
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 as of the date hereof the information contained herein is,
to the best of thetr 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 the
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
/s/ Denis Thomas
Director of Finance
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