HomeMy WebLinkAboutCC Res 3875 1989-07-17
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RESOLUTION NO.
391S-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH,
PROVIDING FOR THE ISSUANCE AND SALE OF ITS 1989 TAX AND
REVENUE ANTICIPATION NOTESl APPROVING OFFICIAL STATEMENT, TERMS
OF SALE, NOTE PURCHASE AGREEMENT 1 APPOINTING BOND COUNSEL AND
FINANCIAL CONSULTANTl PLEDGING REVENUES AND ENTERING INTO
CERTAIN TAX COVENANTS IN CONNECTION 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 1989-90, it is necessary to
temporarily borrow funds in the amount of the "maximum
anticipated' cumulative cash flow deficit" as defined by Se.::tion
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 ($2,000,000), such funds to be used for any
purpose for which the City is authorized to expend moneys, in
accordance with Article 7.6, Chapter 4, Part 1, Dlvision 2,
Title 5 of the Government Code of the State of California
(commencing with Sections 53850 through 53858) (the "Act") 1
WHEREAS, the City may borrow for such purposes, such
indebtedness to be represented by tax and revenue anticipation
notes (the "Notes") issued pursuant to the Actl
WHEREAS, the City Council of the City (the "City
Council") is in need of legal services and special consultation
and advice in connection with the issuance and sale of the
Notes 1
WHEREAS, there has been presented to the City C:C"mcil
a proposal of Security Pacific Securities, Inc. to act as
Financial Consultant in connection with sale of the Notesl
WHEREAS, there has been presented to the City Council
a Request for Proposal and Terms of Sale and Note Purchase
Agreement which will be presented to a number of underwritersl
WHEREAS, the City Council now wishes to approve such
Request for Proposal and Terms of Sale and Note Purchase
Agreement and to authorize the Financial Consultant to solicit
proposals for purchase of the Notesl
WHEREAS, the City Council wishes to authorize the
Finance Director/Treasurer to enter into the Note Purchase
Agreement with the Underwriter presenting the proposal which
will result in the lowest net interest cost to the City and to
issue the Notes upon s~ch termsl
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 3B15
Section 2. The City hereby appoints the firm of
Buchalter, Nemer, Fields & Younger, a Professional Corporation,
as bond counsel ("Bond Counsel") to provide legal services in
connection with the issuance and sale of the. Notes. The City
Council agrees that the appointment of Bond Counsel will not
prevent Bond Counsel from continuing as attorney for parties
which may currently have disputes, legal or otherwise, with the
City which do not involve confidential information which Bond
Counsel gained from its representation of the City under such I
appointment, nor will Bond Counsel be prevented from acting as
attorney in the future for clients which have disputes, legal
or otherwise, with the City which do not involve confidential
information which Bond Counsel gained from its representation
of the City under this appointment, even though the same may
result in litigation, and the City specifically consents ~']
Bond Counsel's representation of such present or future clients
of Bond Counsel despite such possible conflict.
Section 3. The City hereby appoints Security Pacific
Securities, Inc. as Financial Consultant (the "Fi~ancial
Consultant"), and authorizes such Financial Consultant to
solicit proposals from underwriters for purchase of the Notes
upon the terms contained 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 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 Dollars ($2,000,000), shall be issued for
any purposes for which the City is authorized to expend
moneys, under and subject to the terms of this resolution and I
in accordance with the provisions of the Act.
Section 5. Except as provided below, the holder of
all of the Notes shall be The Depository Trust Company, New
York, New York ("DTC") and the Notes shall be registered in the
name of Cede & Co., as nominee for DTC. The Notes shall be
initially executed and delivered in the form of a single fully
registered Note in the full aggregate principal amount of the
Notes. The City may treat DTC (or its nominee) as the sole and
exclusive owner of the Notes registered in its name for all
purposes of this Resolution, and the City shall not be affected
by any notice to the contrary. The 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 other 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
principal or interest with respect to the Notes. The City
shall pay all principal and interest with respect to the Notes
only to DTC, and all such payments shall be valid and effective
to fully satisfy and discharge the City's obligations with I
respect to the principal and interest with resp~ct to the Notes
to the extent of the sum or sums so paid. Except under the
conditions noted below, np person other than DTC shall receive
a Note. Upon delivery by DTC to the City of written noti.ce to
the effect that DTC has determined to substitute a new nominee
in place of Cede & Co., the term "Cede & Co." in this
Resolution shall refer to such new nominee of DTC.
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Resolution Number ~~
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If the City determines that it is in the best
interest of the beneficial owners that they be able to obtain
Notes and delivers a written certificate to DTC to that effect,
DTC shall notify the Participants of the availability through
DTC of Notes. In such event, the City shall issue, transf~r and
exchange Notes as requested by DTC ~nd any ~ther ~olders 1~ .
appropriate amounts. DTC may determ1ne to d1sco~t1nue p:o~1d1ng
its services with respect to th~ No~es at any ~1~e.b~ g1v~ng
notice to the City and discharg1ng 1tS respons1b1l1t1es w1th
respect thereto under applicabl~ law. Und~r such circu~stances
(if there is no successor secur1ties depos1tory), the C1ty
shall be obligated to deliver Notes as described in this
Resolution. Whenever DTC requests the City to do so, the City
will cooperate with DTC in taking appropriate action after
reasonable notice to (a) make available one or more separate
Notes evidencing the Notes to any DTC Participant having Notes
credited to its DTC account or (b) arrange for another
securities depository to maintain custody of cert~ficates
evidencing the Notes.
To induce DTC to accept the Notes as eligible for
book-entry form of issuance, the city will enter into a Letter
of 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.
Section 6. The Finance Director/Treasurer is
authorized and directed to determine the amount of the
"maximum anticipated cumulative cash flow deficit" as defined
by Section l.l03-l4(c) (2) of Title 26 of the Code of Federal
Regulations and in accordance with advice from Bond Counsel,
rounded to the nearest hundred thousand dollars, and to enter
such amount into the Note Purchase Agreementl provided,
however, that such amount shall not exceed Two Million Dollars
($2,000,000).
Section 7. The form of Note Purchase Agreement,
attached hereto as Exhibit B, and incorporated herein by
reference, is hereby approved. The Finance Director/ Treasurer
is authorized to enter into such Note Purchase Agreement with
the underwriter presenting a responsible proposal to enter into
such Note Purchase Agreement at the lowest net interest cost to
the CitYl provided, however, that such rate of interest for the
Notes does not exceed twelve percent (12%) per annum, and to
insert said rate in said Note Purchase Agreement. The Finance
Director/Treasurer or his designee is hereby authorized and
directed to execute the Note Purchase Agreement in the name of
and on behalf of the City.
Section 8. The Notes shall be dated the date of
delivery and shall bear interest at the rate of interest
provided for in the Note Purchase Agreement. Such interest
shall be payable on maturity. The Notes shall mature 364 days
from the date of the Notes, shall be numbered from 1
consecutively upward in order of their issuance, and shall be
issued in the denomination of $5,000, or any integral multiple
thereof. Both the principal of and interest on the Notes shall
be payable in lawful money of the United States of America upon
presentation and surrender at the office of the Finance
Director/Treasurer of the City in Seal Beach, California.
Resolution Number .3t7I'~
Section 9. The Notes shall not be subject to call or
redemption before their fixed maturity date.
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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:
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STATE OF CALIFORNIA
COUNTY OF ORANGE
CITY OF SEAL BEACH
1989 TAX AND REVENUE ANTICIPATION NOTE
Number
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CUSIP:
FOR VALUE RECEIVED, the City of Seal Beach, a
municipal corporation organized and existing under and by
virtue of the laws of the state of California (hereinafter the
"City"), promises to pay to Cede & Co. on , 1990,
the principal sum of TWO MILLION DOLLARS ($2,000,000) in lawful
money of the United States of America, with interest thereon at I
the rate of HUNDREDTHS PERCENT ( . )
per annum from the date hereof and payable on maturity. ---
Interest shall be computed on a 30-day month and 360-day year
basis. Both the principal of and the interest on this note
(hereinafter "Note") shall be payable only upon surrender of
this Note, as the same shall become due, at the office of the
Finance Director/Treasurer of the City, in the City of Seal
Beach, California; provided, however, no interest shall be
payable for any period after maturity during which the holder
hereof fails to properly present this Note for payment.
This Note is a "qualified tax-exempt obligation"
within the meaning of Section 265(b) (3) of the Internal Revenue
Code of 1986, as amended.
This Note is part of an issue of Two Million Dollars
($2,000,000) in aggregate principal amount of notes (the
"Notes") issued by the City Council of the City of Seal Beach,
State of California in the name and on behalf of the City,
under and in accordance with the provisions of Article 7.6 of
Chapter 4 of Part 1 of Division 2 of Title 5 of the California
Government Code (constituting Sections 53850 through 53858,
inclusive, of said Code), and a resolution duly adopted by the
City Council on July 17, 1989.
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Payment of the principal of and the interest on this
Note are secured by a pledge of and first lien and charge
against moneys to be received by the City in fiscal year
1989-90 from the first taxes, income, revenue, cash receipts
and other moneys intended as receipts for the general fund of
the City and generally available for the payment of current
expenses and other obligations of the City (the "Unrestricted
Revenues"), to be received by the City in the month of
December, 1989, in an amount sufficient to pay fifty percent
Resolution Number
~B1..>
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(50%) of the aggregate principal amount of the Notes
outstanding 1 and the first Unrestricted Revenues.to be received
by the City in the month of April 1990, 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 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 lawfullj
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.
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Unless this Note is presented by an authorized
representative of DTC to the city of Seal Beach or its agent
for registration of transfer, exchange or payment, any Note
issued will be registered in the name of Cede & Co. or such
other name as requested by an authorized representative of DTC
and any payment made to Cede & Co. ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
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IT IS HEREBY CERTIFIED, RECITED AND DECLARED tha~ the
Notes are issued in conformity with the laws of the State of
California and the proceedings of the City Council of the CitYl
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 lawl 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 , 1989.
/s/
Mayor of the
City of Seal Beach
Finance Director/Treasurer
of the City of Seal Beach
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[SEAL]
COUNTERSIGNED:
City Clerk of the
City Qf Seal Beach
Resolution Number
3915"
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 directed to countersign each of the Notes, and the City
Clerk is hereby authorized and directed to impress or cause to
be imprinted by facsimile the official seal of the City on
each of ~he Notes. Anyone or two of such signatures may be
printed, lithographed or engraved by facsimile signature, but I
at least one of such signatures shall be manual. Such signing,
'countersigning and sealing as herein provided shall be
sufficient and binding execution of the Notes in the name and
on behalf of the City.
Section 12. All proceeds of sale of the Notes shall
be deposited into the general fund of the City, to be withdrawn
and expended for any purpose for which the City is authorized
to expend money, including, but not limited to, current
expenses, capital expenditures, and the discharge of any
obligation or indebtedness of the City.
The City Council covenants on behalf of itself and
the City that the City will not make any use of the proceeds of
the Notes which will cause the Notes to be "arbitrage bonds"
subject to federal income taxation by reason of Sections
103(b) or 148 of the Internal Revenue Code of 1986, as amended
(the "Code"). To that end, so long as any of the Notes are
outstanding, the City and its appropriate officers and
employees shall comply with all requirements of said Sections
103(b) and 148 and all regulations issued thereunder, to the
extent that such requirements are, at the 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 specifically covenants:
(a) That it shall file such reports or other docu-
ments with the Internal Revenue Service as are required by the
Code and the Treasury Regulationsl 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.
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The Finance Director/Treasurer is authorized and
directed to ensure compliance with these covenants.
section 13. The principal of the Notes and the
interest thereon shall be secured by a pledge of and first lien
and charge against moneys to be received by the City in fiscal
year 1989-90 and the City hereby pledges the first taxes,
income, revenue, cash receipts and other moneys intended as
receipts for the general fund of the city and generally avail-
able for the payment of current expenses and other obligations I
of the City (the "Unrestricted Revenues"), to be received by
the City in the month of December, 1989, in an amount
sufficient to pay fifty percent (50%) of the aggregate
principal amount of the Notes outstandingl and the first
Unrestricted Revenues to be received by the City in the month
of April, 1990, 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
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Resolution Number
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Unrestricted Revenues pledged in any particular month to a
repayment of the Notes has not been received by the City by the
thirtieth day of such month, the City shall make up such
deficiency from any other moneys of the City lawfully available
for the payment of the principal of and the interest on the
Notes. Such amounts shall hereinafter be called the "Pledged
Moneys."
There is hereby established and created a special
fund, designated the "City of Seal Beach 1989 Tax and Revenue
Anticipation Note Payment Fund" (hereinafter called "Payment
Fund"), into which the Finance Director/Treasurer shall deposit
all of said Pledged Moneys promptly at the time of receipt
thereof. The principal of the Notes and the interest thereon
shall be payable from said Pledged Moneys and from all other
income, revenue, cash receipts and moneys of the City lawfully
available for the payment of the principal of the Notes and the
interest thereon. However, the Notes are payable only from
revenues received or accrued during the fiscal year in which
issued.
Moneys shall be withdrawn from the Payment Fund for
the sole purpose of paying the principal of and the interest on
the Notes as the same shall become due and payable. Any money
deposited in the Payment Fund may be invested as permitted by
law, except that no such investment shall have a maturity date
later than the maturity date of the Notes. Proceeds of any
such investments may be transferred to the general fund of the
City. Any moneys remaining in the Payment Fund after payment
of the principal and interest on the Notes may be released to
the general fund.
Section 14. The City Council hereby finds and
determines that the aggregate principal amount of the Notes,
together with interest thereon, does not exceed eighty-five
percent (85%) of the estimated amount of the now uncollected
taxes, income, revenue, cash receipts and other moneys of the
City which will be available for the payment of the principal
of and the interest on the Notes.
Section 15. The Finance Director/Treasurer 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 by the proper
officers, and to deliver said notes when so executed to the
Underwriter upon the receipt of the purchase price.
Section 17. The Mayor or the Finance Director/
Treasurer of the City or his authorized deputy is further
authorized and directed to make, execute and deliver to the
Underwriter (a) a certificate attesting to the use of the
proceeds of the Notes, the investment thereof, and any other
matters relating to the tax exemption of the Notes pursuant to
Sections 103(b) and 148 of the Code; (b) a certificate
certifying to the genuineness and due execution of the Notesl
and (c) a receipt evidencing the payment of the purchase price
Resolution Number 3~%
of the Notes, which receipt shall be conclusive evidence that
said purchase price has been paid and has been received by the
City. Any purchaser or subsequent taker or holder of the Notes
is hereby authorized to rely upon and shall be justified in
relying upon any such certificate or receipt with respect to
the Notes executed pursuant to the authority of this
resolution. Such officers of the city are further directed to
timely file the appropriate Internal Revenue Service form in
the 8038 series with respect to the Notes. Such officers are
hereby authorized to execute any and all other documents I
required to consummate the sale and delivery of the Notes.
Section 18. The Preliminary Official Statement, in
substantially the form presented to this meeting together with
such changes as shall be approved by the Finance Director/
Treasurer and made a part hereof as though set forth in full
herein, be ~nd the same is hereby approved for use in connec-
tion with the offering and sale of the Notes. The City Clerk is
directed to file a copy of such Preliminary Official Statement
with this Resolution. The Finance Director/Treasurer is hereby
authorized to approve a final Official Statement ~nd 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 Statement and any such amendment or supplement to be
delivered to the Underwriter with such approval to be conclu-
sively 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 1989 calendar year
is not reasonably expected to exceed Five Million Dollars I
($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 resolution shall take effect from
and after its passage and adoption.
APPROVED AND ADOPTED this 1~th day of July, 1989.
1f1fGt~
ne M. Yeo,
y Clerk of the
city of Seal Beach
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Resolution Number ~)f~
I, Joanne M. Yeo, City Clerk of the City of Seal
Beach do hereby certify that the foregoing resolution was
passed at a regular meeting of the City Council of the City of
Seal Beach on the 17th day of July, 1989, by the following
::::: COUNCIL MEMS"" ~ if-._/Lh.u
NOES:
COUNCIL MEMBERS:
ABSENT:
COUNCIL MEMBERS:
ABSTAINED:
COUNCIL MEMBERS:
. Yeo,
lerk of the
of Seal Beach
Resolution Number
~1f'
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REQUEST FOR PROPOSAL
TO: Prospective Underwriters
RE: $1,800,000
City of Seal Beach, California
(1989 Tax and Revenue Anticipation Notes)
FROM: Security Pacific Securities, Inc.
Public Finance Department
Catherine W. Bando
(213) 229-1471
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DATE: July 24, 1989
As Financial Consultant to the City of Seal Beach (the "City"), we
are soliciting proposals from qualified underwriters for the
purchase of $1,800,000 1989 Tax and Revenue Anticipation Notes (the
"Notes"). The Notes are more fully described in the enclosed
Preliminary Official Statement dated July 24, 1989. 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: August I, 1989
10:00 A.M. Pacific Daylight Time
Security Pacific Securities, Inc.
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 7, 1988 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 6, 1988. The Financial Consultant's telecopy number
is (213) 613-1722.
Place:
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Additional information may be obtained by contacting Catherine W.
Bando at (213) 229-1471.
PROPOSAL FORI!
$1.800,000
151851 TAX AND REVENUE ANTICIPATION NOTES
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City of Seal Beach
c/o Security Pacific Securities, Inc.
California Plaza
300 South Grand Avenue, 21st Floor
Los Angeles, California 90071
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Resolution-number
.J"r
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Ladies and Gentle.en:
lie offer to purchase all, but not less than all, of the aggregate
principal amount of the Notes, IIOre particularly described in the
Preliminary Official Statement provided to us with this Proposal Form and
pursuant to the terms described in the Terlls of Sale- at a purchase price
of the par alDunt of the Notes plus a pr..ium of 5 , said
interest to be payable at the rate set forth below.
IIatur1ty
Date
Interest
Rate
Par a.aurtt
$1,800,000
s
August 14, 1990
Our calculation' of the net interest cost is S. This calculation is
constdered to be tnformattve only and not a part of the proposal. If we
are awarded the purchase of the Notes we agree to enter tnto a Note
Purchase Agreement with the Ctty substanttally tn the form provtded to us
with thts proposal form.
Respectfully submttted,
Name
Account Manager
By
Address
Ctty
State
Telephone
TERMS OF SALE
Issue and Denaltnatton: 51,800,000 and designated Ctty of Seal
Beach 1989 Tax and Revenue Antictpatton Notes (the "Notes"), conststing of
book-entry form Notes without coupons. The Notes wtll be avatlable tn
denomtnations of 55,000 or integral IIlIlttples thereof as shall be
specified by the Underwriter.
Date and Maturtttes: The Notes wtll be dated their date of
delivery which is expected to be August 15, 1989, and wtll all mature on
August 14, 1990.
Interest Rate: The maximum interest rate is eight percent (lIS)
per annum, payable upon maturity of the Notes. Proposers must specify the
rate of interest whtch the Notes bid upon shall bear, provided that: (i)
all Notes bid upon shall bear the Sale interest rate; (ii) no Notes shall
bear IIOre than one rate of tnterest; (Ht) all Notes shall bear interest
from thetr dated date to the stated maturity at the interest rate
spectfted tn the bid; (tv) the tnterest rate spectfted IDUSt be tn a
multiple of 1/1000 of one percent (.OOIS).
Resolution Number
3&15"
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Qualified Obligation: The Notes will be designated by the City
Council as a wqualified tax-exempt obligationw within the ..aning of
Section 265 (b) (3) (B) of the Internal Revenue Code of 1986, as amended.
Rede.ption: The Notes are not subject to call and redlllption
prior to ..turity.
PQlllnt: Both principal and interest are payable in lawful IIOney
of the United States of AlIerica 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 (WDTCW) or its nominee, Cede l
Co., as registered owner of the Notes. Upon receipt of IQneys, DTC will
credit the accounts of the beneficial owners.
Fo... of Proposal: Proposals MUst be for all of the Notes, and
IIUSt 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 Securities, Inc., 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 wProposal for the Purchase of City of Seal
Beach I9S9 Tax and Revenue Anticipation Notes.w 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.
Esti.te of Net Interest Cost: Proposers are requested (but not
required) to supply an estillllte of the total net interest cost on the
basts of their respective proposals, which shall be considered as
informative only and not binding on the proposer.
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Highest Proposal: The Nlltes will be awarded on the basts 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 amount, if any, are received, the City reserves the right to
exercise its own discretion and judgment in IIIIking the award and may award
the Notes on a pro rata basis in such denominations as the City
determines.
Good Faith Check/Purchase Agl'....nt: Good Faith checks are not
required. However, the Purchaser of the Notes, awarded pursuant to the
terms stated herein, shall agree to enter into a Note Purchase Agreement
with the City within 26 hours from the time said Purchaser is notified of
such award. The Note Purchase Agreement shall be substantially in the
form provided with the proposal form.
Pl'alpt Award: The City will take action awarding the Notes or
rejecting all proposals not later than twenty-six hours after the
expiration of the ti.. herein prescribed for the receipt of proposals
unless such time of award is waived by the purchaser of the Notes.
Buyel"s Certificate: The successful proposer must provide the
City c/o the Financial Consultant, on or before 10:00 A.M., P.D.T., on the
date of closing the initial offering price to the public or final
purchasers thereof (not including bond houses and brokers or similar
persons or organizations acting in the capacity of underwriter or
wholesalers) at which a substantial UIOunt of the Notes have been
committed to be sold.
Delivery and PQlllnt: It ts estimated that delivery of the Notes
will be made to the successful proposer in book-entry fol'll through the
services of the Depository Trust Company in New York, New York on or about
August 15, 19S9. 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.
I
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I
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I
Resolution Number ~~~
....
Right 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.
Right of Cancenatton: The purchaser of the Notes shan have the
rtght at tts optton to cancel the Note Purchase Agre..nt if the City
shan fatl to execute the Notes and tender the same for deltvery within
thtrty (30) d~s f~ the date of sale thereof.
Purpose of Issue: The Notes to be issued by the Ctty are
authorized pursuant to the provisions of Section 53856 of the Government
Code of the State of Caltfornia and the provisions of resolutions of the
City Council of the Ctty for any purpose for which the Ctty ts authorized
to expend moneys.
,
Security: The Notes are the obligation of the City and are
secured by a pledge of and first 'lten and 'charge against moneys to be
received by the City in fiscal year 1989-90.
The Notes are secured by the first S900,OOO of .Unrestricted Revenues.
as herein after defined, to be recehed in the month of December, 1989,
and the first $900,000 of Unrestricted Revenues (plus an amount sufficient
to pay the interest to become due on the Notes at maturity) to be received
in April, 1990.
Said revenues shall be deposited by a designated officer in a speCial
account established, created and maintained within the General Fund of the
City. Moneys shall be withdrawn from said account for the sole purpose of
paying the principal of 'and the interest on each the City's Notes as the
same shall become due and payable. '
By statute, the Notes are declared to be a general obligation of City
and to the extent not paid from taxes, income, revenues, cash receipts and
other moneys of the City attributable to the fiscal year ending June 30,
1990 and legally available for payment thereof (the .Unrestricted
Revenues.), shall be paid with the interest thereon from any other moneys
of the City lawfully avatlable therefor. If the full amount of the
Unrestricted Revenues pledged in a particular month to repayment of the
Notes has not been recehed by the City by the end of such month, the
amount of any deficiency shall be satisfied and made up frail any other
moneys of the City lawfully avatlable for repayment of the Notes.
However, the Notes are payable only from revenue received or accrued
duri ng the fiscal year in which issued. Under provisions of the
California Constitution, the City is generally prohibited frOlll 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 ~uch purpose.
Rating: The City has applted for a rating of the Notes froll Moody's
Investors Service. The rating issued reflects only the views of Moody's
and further infonution regarding the significance of such rating should
be obtained frail Moody's.
California Debt Advtsor1 ea.tsstOll: The City has duly notified
the California Debt Advisory ConIission of the proposed sale of the
Cert i ficates. PaYMnt of all fees to the California Debt Advisory
Commission in connection with the sale and issuance of the Notes shall be
the. sole responsibility of the successful bidder, and not of the City.
No Lttigation: There is no litigation pending concerning the
validity of the Notes, the existence of the City, or the entit1ellll!nt of
the officers thereof to their respective offices, and the successful
proposer wtll be furnished no-litigation certificates certifying to the
foregoing as of and at the tillll! of delivery of the Notes. '
Offictal Statellent: The City will approve an Official Statement
relating to the Notes, and win uke avatlable up to 100 copies to the
purchaser of the. Notes. A copy of the Preliminary Official Statement and
Resolution Number
.!Bf5
,
any other infonlltion concerning the proposed financing will be furnished
upon request to the financial consultant of the City, Security Pacific
Securities, Inc., 300 South Grand Avenue, HCP211, Los Angeles, California
90071; telephone (213) 229-1471.
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,
stat i ng that IS of the date thereof, to the best of the knowl edge and
belief of said official, the Official Statement does not contain an untrue
statement of a mlterial fact or o.it to state any ..terial fact necessary
in order to make the statements made therein, in 1 ight of the
circumstances under which they were made, not misleading, and further
certifying that 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.
I
$1,800,000
City of Seal Beach
STATE OF CALIFORNIA
1989 TAX AND REVENUE ANTICIPATION NOTES
NOTE PURCHASE AGREEMENT
August I, 1989
City of Seal Beach
211 Eighth Street
Seal Beach, California 90740
I
Ladies and Gentlemen:
The undersigned (the "Underwriter"), acting on behalf of ourselves,
offer to enter into this agreement with the City of Seal Beach, California
(the "City"), which, upon your acceptance hereof, will be binding upon the
City and the Underwriter. This offer is made subject to the written
acceptance of this Note Purchase Agreement by the City and delivery of
such acceptance to us at or prior to 11:59 P.M., Pacific Time, on the date
hereof.
1. Purchase and Sale of the Notes. Upon the terms and
conditions and in reliance upon the representations, warranties and
agreements herein set forth, the Underwriter hereby agrees to purchase
from the City for reoffering to the public, and the City hereby agrees to
sell to the Underwriter for such purpose, all (but not less than all) of
$1,800,000 in aggregate principal amount of the City's 1989 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
Underwri ter shall purchase the Notes at a purchase pri ce of par plus a
premium of $
2. The Notes. The Notes shall be dated date of de livery, shall
mature 364 days thereafter and shall otherwise be as described in, and
shall be issued and secured pursuant to the provisions of the Resolution
of the City adopted on July 17, 1989 (the "Note Resolution") and Article
7.6, Chapter 4, Part I, Division 2, Title 5 (conunencing with Section
53850) of the California Government Code (the "Act").
I
Resolutiop Number ..3fl?s"
"'~
I
3. Use of DocUlDents. The City hereby authorizes the Underwriter
to use, in connection with the offer and sale of the Notes, this Note
Purchase Agreement and an Official Statement in a form to be )ointly
approved by the City and the Underwriter (which, together wlth all
appendices thereto and with such changes therein and supplements thereto
as are consented to by the Underwriter, is herein called the "Official
Statement"), the Note Resolution and all information contained herein and
therein and all of the documents, certificates or statements furnished by
the City to the Underwriter in connection with the transactions
contemplated by this Note Purchase Ag~eement.
I
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 connection with the marketing of the Notes.
5. Delivery of Official Statement. At least one week prior to
the Closing, you shall deliver to the Underwriter three copies of the
Official Statement in form satisfactory to the Underwriter, duly executed
on behalf of the City, and, as promptly as practical thereafter, such
reasonable number of conformed copies as the Underwriter shall request.
The Underwriter agrees that it will not confirm the sale of any Notes
unless the confirmation of sale is accompanied or preceded by the delivery
of a copy of the Official Statement.
6. Closing. At 8:00 a.m., Pacific Time, on August IS, 1989 or
at such other time or on such other date as shall have been mutually
agreed upon by you and us (the "Closing"), you will deliver the Notes in
definitive form, duly executed, together with the other documents
hereinafter mentioned; and we will accept such delivery and pay the
purchase price thereof in immediately available funds to the order of the
City. The Notes shall be available to us in book-entry-only form in
denominations of $5,000 and integral multiples thereof as designated by
us. Notwithstanding anything to the contrary herein contained, if for any
reason whatsoever the Notes shall not have been delivered by the City to
the Underwriter prior to the close of business, Pacific Time on August 7,
1988, then the obligation to purchase Notes hereunder shall terminate and
be of no further force or effect except with respect to the obligations of
the City and the Underwriter under Section 11 hereof.
7. Representations, Warranties and Agreements of the City. The
City hereby represents, warrants and agrees with the Underwriter that:
(A) The City is a political subdivision duly organized and validly
~xisting 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 deli ver the Notes to the Underwriter and to perform its
obligations under each such document or instrument, and to carry out
and effectuate the transactions contemplated by this Note Purchase
Agreement and the Note Resolution; (iii) the execution and delivery
or adoption of, and the performance by the City of the obligations
contained in the Notes, the Note Resolution and this Note Purchase
Agreement have been duly authorized and such authorization shall be
in full force and effect at the time of the Closing; (iv) this Note
Purchase Agreement constitutes a valid and legally binding obligation
of the City; and (v) the City has duly authorized the consummation
by it of all transactions contemplated by this Note Purchase
Agreement.
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Resolution Number
38~
,
(C) No consent , approval, authortzat i on, order, ftli ng,
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 consulllllation 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 I
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 or by which it is
bound or to which it is subject.
(F) As of the time of acceptance hereof, no action, suit,
proceeding, hearing or investigation is pending or (to the best
knowledge of the City) threatened against the City or, to the best
knowledge of the City (no independent investigation having been
made), against any other person in any Court or before any
governmental agency or public body: (i) in any way affecting the
existence of the City or in any way challenging the respective powers
of the several offices of the titles of the officials of the City to
such offices; or (it) seeking to restrain or enjoin the sale,
issuance or delivery of any of the Notes, the application of the I
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 consuDlllation of
the transactions consuDlllation of the transactions contemplated by
this Note Purchase Agreement or the Note Resolution, (b) declare
this Note Purchase Agreement to be invalid or unenforceable in whole
or in material part, or (c) adversely affect the exemption of the
interest paid on the Notes from gross income for Federal income tax
purposes and California personal income taxation. .
(G) Between the date hereof and the Closing, without the prior
written consent of the Underwriter, the City will not have issued any
bonds, notes or other obligations for borrowed money except for such
borrowings as may be described in or contemplated by the Official
Statement.
(H) The City has not been notified of any listing or proposed
1 isting by the Internal Revenue Service to the effect that the City
is a bond issuer whose arbitrage certificates may not be r~lied upon.
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(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.
Resolution Number 3B~
8. Covenants of the City. The City convenants and agrees with
the Underwriter that:
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(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 qual i fy the Notes for offer and sale under the Bl ue 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;
I
(B) The City will apply the proceeds from the sale of the Notes for
the purposes specified in the Note Resolution; and
(C) For a period of gO days after the Closing or until such time (if
earlier) as the Underwriter shall no longer hold any of the Notes for
sale, the City will (a) not adopt any amendment of or supplement to
the Official Statement to which, after having been furnished with a
copy, the Underwriter shall object in writing or' which shall be
disapproved by the Underwriter and (b) if any event relating to or
affecting the City shall occur as a result of which it is necessary,
in the opinion of the Underwriter, to amend or supplement the
Official Statement in order to make the Official Statement not
misleading in light of the circumstances existing at the time it is
delivered to a purchaser, forthwith prepare and furnish (at the
expense of the City a reasonable number of copies of an amendment of
or supplement to the Official Statement (in form and substance
satisfactory to the Underwriter) which will amend or supplement the
Official Statement so that it will not contain an untrue statement of
a material fact or omit to state a material fact necessary in order
to make the statements therein, in the 1 ight of the circumstances
existing at the time the Official Statement is delivered to a
purchaser, not misleading.
g. Conditions and Closing. The Underwriter has entered into
this Note Purchase Agreement in reliance upon the representations and
warranties of the City contained herein and the performance by the City
of its obligations hereunder, both as a date hereof and as of the date of
Closing. The Underwriter's obligations under this Note Purchase Agreement
are and shall be subject, at the option of the Underwriter, to the
following further conditions at the Closing;
1
(A) The representations and warranties of the City contained herein
sha 11 be true, complete and correct in all materi a 1 respects at the
date ,hereof and at and as of the Closing, as if made at and as of the
Clos1ng, and the statements made in all certificates and other
documents delivered to the Underwriter at the Closing pursuant hereto
shall be true, complete and correct in all material respects on the
date of the Closing; and the City shall be in compliance with each of
the agreements made by it in this Note Purchase Agreement;
(B) At the time of the Closing, (i) the Official Statement, this
Note Purchase Agreement and the Note Resolution shall be in full
force and effect and shall not have been amended, modified or
supplemented except as may have been agreed to in writing by us'
(ii) all actions under the Act which, in the opinion of the fir~
Buchalter, Nemer, Fields & Younger of Newport Beach, California
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;
Resolution Number ~J1~
(C) No decision, ruling or finding shall have been entered by any
court or governmental authority since the date of this Note Purchase
Agreement (and not reversed on appeal or otherwise set aside), or to
the best knowledge of the City, pending or threatened which has any
of the effects described in Section 7 (f) hereof or contesting in any
way the completeness or accuracy of the Official Statement.
(D) No order, decree or injunction of any court of competent
jurisdiction, nor any order, ruling or regulation of the Securities I
and Exchange Conanission, shall have been issued or made with the
purpose or effect of prohibiting the issuance, offering or sale of
the Notes as contemplated hereby and no legislation shall have been
enacted, or a bill favorably reported for adoption, or a decision by
a court established under Article III of the Constitution of the
United States rendered, or a ruling, regulation, proposed regulation
or official statement by or on behalf of the Securities and Exchange
Conani ssion or other governmental agency having juri sdicti on of the
subject matter shall be made or issued, to the effect that the Notes
or any securities of the City or of any similar body of the type
contemplated here in are not exempt from the regi strat i on,
qualification or other requirements of the Securities Act of 1933, as
amended and as then in effect, or the Trust Indenture Act of 1939, as
amended and as then in 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 and satisfactory in form and substance to the Underwriter:
(1) An approving opinion of Bond Counsel, as to the Notes,
addressed to the City.
(2) A letter setting forth that the underwriter can rely upon
the approving opinion of bond counsel.
(3) The opinions of Bond Counsel and the City Attorney, I
addressed to the Underwriter, to the effect that without having
undertaken to determine 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 certain documents referred to in the Official
Statement, nothing has come to their attention which would lead them
to believe that the Official Statement contains an untrue statement
as to a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, it being understood that in rendering such opinions Bond
Counsel and the City Attorney shall not be required to express an
opinion with respect to any financial statements or other financial
statistical data included in the Official Statement.
(4) A certificate signed by an appropriate City official to the
effect that (i) the representations, agreements and warrant i es 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 Purchase Agreement to be
complied with by the City prior to or concurrently with the Closing
and such documents are in full force and effect; (ii i) there is no
action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court or publiC body, pending, or to his or I
her knowledge, threatened against the City which has any of the
effects descri bed inSect ion 7 (f) hereof or contest i ng in any way
the completeness or accuracy of the Official Statement (but in 1 ieu
of or in conjunction with such certification the Underwriter may, at
its sole discretion, accept certificates or opinions of the City
Attorney or Bond Counsel, that in their opinion the issues raised in
any such pending or threatened litigation are without substance and
that the contentions of all plaintiffs therein are without merit);
Resci:l~tlon Number .3B/~
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and (iv) such official has reviewed the Official Statement and on
such basis certifies that the Official Statement does not contain any
untrue statement of a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
(5) An arbitrage certificate of the City in form satisfactory
to Bond Counsel;
(6) Evidence satisfactory to the Underwriter that the Notes
shall have been rated by Moody's Investors Services, Inc. (or
such other equivalent rating as such rating agency may give) and that
such rating 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
(ii) that the Note Resolution was duly adopted and has not
been modified, amended, rescinded or revoked and is in full
force and effect on the date of the Closing.
(8) Such additional legal opinions, certificates, proceedings,
instruments and other documents as the Underwriter may reasonably
request to evidence compliance (i) by the City with legal
requirements (ii) the truth and accuracy, as of the time of Closing,
of the representations of the City herein contained and of the
Official Statement and (iii) the due performance or satisfaction by
the City at or prior to such time of all agreements then to be
performed and all conditions then to be satisfied by the City.
If the City shall be unable to satisfy the conditions to the
Underwriter's obligations contained in this Note Purchase Agreement or if
the Underwriter's obligations shall be terminated for any reason permitted
by this Note Purchase Agreement, this Note Purchase Agreement may be
cancelled by the Underwriter at, or at any time prior to, the time of
Closing. Notice of such cancellation shall be given to the -City in
writing, or by telephone or telegraph confirmed in writing.
Notwithstanding any provision herein to the contrary, the performance of
any and all obligations of the City hereunder and the performance of any
and all conditions contained herein for the benefit of the Underwriter may
be waived by the Underwriter in writing at its sole discretion.
The Underwriter shall also have the right to cancel its obligation to
purchase the Notes, by written notice to the City, if between the date
hereof and the Closing; (i) any event occurs or information becomes
known, which, in the reasonable professional judgment of the Underwriter,
makes untrue any statement of a material fact set forth in the Official
Statement or results in an omission to state a material fact necessary to
make the statements made therein, in 1 ight of the circumstances under
which they were made, not misleading; (11) 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 Conmittee of such
House to which such legislation has been referred for consideration, or by
the 1 egislature of the State of Cal i fornia (the "State"), or a deci sion
rendered by a court of the United States or the State or by the United
States Tax Court, or a rul ing, order, or regul ation (final or temporary)
made by the Treasury Department of the United States or the Internal
Revenue Service or other Federal or State authority, which would have the
effect of changing, directly or indirectly, the Federal income tax
consequences or State tax consequences of interest on obligations of the
general character of the Notes in the hands of the holders thereof, or
(b) any new outbreak of hostil ities or other national or international
calamity or crisis, the effect of such outbreak on the financial markets
I
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Resolution Number ~~~
of the United States begin such as, in the judgment of the Underwriter,
would affect materially and adversely the ability of the Underwriter to
market the Notes, or (c) a general suspension of trading on the New York
Stock Exchange, or fixing of minimum or maximum prices for trading or
maximum ranges for prices for securities on the New York Stock Exchange,
whether by virtue or a determination by that Exchange or by order of the
Securities and Exchange COllllllission or any other governmental authority
having jurisdiction, or (d) a general banking moratorium declared by I
either Federal or State authorities having jurisdiction; or (iii)
,additional material restrictions not in force or being enforced as of the
date hereof shall have been imposed upon trading in securities generally
by any governmental authority or by any national securities exchange
which, in the opinion of the Underwriter, materially adversely affect the
market price for the Notes.
10. Conditions to Obligations of the City. The performance by
the City of its obligations is conditioned upon (i) the performance by
the Underwriter of its obligations hereunder; and (ii) receipt by the
City and the Underwriter of opinions and certificates being del ivered at
the Closing by persons and entities other than the City.
11. Expenses. (a) The City shall pay any out-of-pocket
expenses incurred by the City from the proceeds of the 1989 TRANS issue
incl uding but not 1 imi ted to (i) the fees and di sbursements of Bond
Counsel; (i i) any cost of the preparation, and del ivery of the Notes;
(iii) the fees for Note ratings; (iv) the cost of the printing and
distribution of the Official Statement; (iv) costs of preparation and
reproduction of this Note Purchase Agreement, and (b) The Underwriter
shall pay (i) fees payable by the Underwriter to the California Debt
Advisory Commission with regard to the Notes; and (ii) all other costs and
disbursements incurred by them in connection with the transactions
contemplated hereby.
12. Notices. Any notice or other conununication to be given
under this Note Purchase Agreement (other than the acceptance hereof as
specified 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:
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13. Parties in interest; Survival of Representations and
Warranties This Note Purchase Agreement when accepted by the City in
writing as heretofore specified shall constitute the entire agreement
between the City and the Underwriter. This Note Purchase Agreement is
made solely for the benefit of the City and the Underwriter (including the
successors or assigns of the Underwriter). No person shall acquire or
have any rights hereunder or by virtue hereof. All your representations,
warranties and agreements of the City in this Note Purchase Agreement
shall survive regardless of (a) any investigation or any statement in
respect thereof made by or on behalf of the Underwriter, (b) delivery of
and payment by the Underwriters for the Notes hereunder, and (c) any
termination of this Note Purchase Agreement.
14. Execution in Counterparts. This Note Purchase Agreement may I
be executed in several counterparts each of which shall be regarded as an
original and all of which shall constitute one and the same document.
15. Applicable Law. This Note Purchase Agreement shall be
interpreted, governed and enforced in accordance with the law of the State
of California.
.
Resolution Number .!JI,1.f'"
",
Very truly yours,
[Underwriter]
I
By:
The foregoing is hereby agreed to and accepted as of the date first above
written:
The City of Seal Beach, California
By:
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I
Resolution Number .5~J'~
PRELIMINARY OFFICIAL STATEMENT DATED JULY 24, 1989
BOOK-ENTRY-ONLY
Rating: lIoocIy's
(See .Rating. herein)
In the opinion of Buchalter, Neller, Fields & Younger, Newport
Beach, California, Bond Counsel, under existing laws, regulations, rulings
and judicial decisions and assuming cOllpliance with certain covenants I
described herein, interest due with respect to the Notes is presently
exempt from gross income for federal incolIf! tax purposes, subject,
however, to certain qualifications more particularly described under the
caption .Tax Exemption. herein, and from personal income taxation illposed
by the State of California. In addition, the City has designated its
Notes as .qualified tax-ex~t obligations. with the result that interest
on debt incurred by financial institutions to acquire the Notes wi11 be
deductible to such institutions for federal income tax purposes.
$1,800,000.
CITY OF SEAL BEACH
1989 TAX AND REVENUE ANTICIPATION NOTES
Dated: Date of Delivery
Due: duly __, 1990
The Notes will be issued in fully registered form. When
delivered, the Notes will be registered in the name of Cede l 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 w111 be payable when due as described under "THE
NOTES - Book-Entry-Only System."
The Notes are by statute general obligations of the City payable
only out of taxes, income, revenue, cash receipts and other moneys of the
City attributable to the fiscal year 1989-90 and legally available for
payment thereof. The Notes are secured by a pledge of the first $900,000,
income, revenues and other moneys intended as receipts for the General
Fund of the City and which are generally available for the payment of the
current expenses and other obligations of the City (such taxes, income,
revenue and other moneys are hereinafter referred to as .Unrestricted
Revenues") to be received by the City in December, 19B9,and the
first of Unrestricted Revenues plus an amount
sufficient to pay the interest on the Notes, to be received by the City in
April 1990.
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.
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Interest Rate
-'
Priced to Yield
-'
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.Jt9?,S
Reso~u~ion Number
The Notes wf1l be offered when. IS and if issued and receilfed
in book-entry fOnl by the Underwriter. subject to the approlfal of legality
by Buchl1ter, Nelller. Fields .. Younger. Newport Beach. California, Bond
Counsel. Certain other legal ..tters wi11 be PISSed upon for the City by
the City Counsel for the City of Seal Beach. The Notes, in book-entry
forlll, wi11 be alfii1able for delilfery through the serlfices of the
Depository Trust CDlllpany in New York, New York on Dr about August 15,
1989.
Oited:
, 1989
* Subject to Change.
No dealer, broker, salesperson or other person has been authorIzed
by the City to give any infonaation or to make any representations other
than those contained herein and. if given or ..de, such other information
or representation lUst not be relied upon as having been authorized by the
City. 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
make such an offer, solicitation or sale.
This Official Statement is not to be construed as a contract with the
purchasers of the Notes. Statements contained in this Official Stitement
which involve estillates, forecasts or ..tters of opinion, whether or not
expressly so described herein. are intended solely as such and are not to
be construed as a representation of facts.
The infol'llltion set forth herein has been obtained frOll official
sources which are believed to be reliable but it is not guaranteed as to
accuracy or completeness, and is not to be construed as a representation
by the Underwriter. The infol'llltion and expressions of opinions herein
are subject to change without notice and neither delivery of this Official
Stat....nt nor any sale made hereunder shall. under any circllllstances,
create any implication that there has been no change in the affairs of the
City of Seal Beach since the date hereof. This Official Statement is
su~itted in connection with the sale of the Notes referred to herein and
may not be reproduced or used, in whole or in part, for any other purpose,
unless authorized in writing by the City.
Resol~tion Number
..1B~
,
TABLE OF toIfTENTS
Cfty Officials.......................................................................................................
Introduction ............................................................................................................
1989-90 Short-Term Borrowing Program ..............................
The Notes ..................................................................................................................
Book-Entry-Only System ......................................
Security for the Notes ............................................
Available Sources of Payment ......................................
Constitutional Limitations on Taxes ...............................
Financial Information..........................................................................................
Assessed Valuations .........................................
Ad Valorem Property Taxat10n ................................
Property lax Levies and Collections .........................
Financial Statements ........................................
Annual Budget ...............................................
Projected and Actual Cash Flows .............................
Ret i rement Program ..........................................
Long Term Obligations................................:......
Computation of Legal Debt Margin ............................
The City ..........................................................
Location ....................................................
City Government and Population ..............................
Employment and Industry.....................................
Co~rcial Activity.........................................
Building Activity...........................................
Transportat 1 on ..............................................
Ut i 1 it i es ...................................................
Education ...................................................
Recreation and Community Facilities .........................
Tax Exemption.....................................................
Legal Opinion......................................................
Legality for Investment in California .............................
Rat 1 ng ............................................................
Lit 1 gat; on ........................................................
Underwrl t i ng ......................................................
Additional Information............................................
Appendix A Financial Statements...................................
Page
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IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
NOTES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
IlARKET. SUCH STABILIZING, IF COIIIENCED, MAY BE DISCONTINUED AT ANY TIME.
THE UNDERWRITER MAY OFFER AND SELL THE NOTES TO CERTAIN DEALERS AND DEALER
BANKS AND BANKS ACTING AS AGENT AT PRICES LOWER THAN THE PUBLIC OFFERING
PRICE STATED ON THE COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICE MAY BE
CHANGED FROM TIME TO TIME BY THE UNDERWRITER.
CITY OF SEAL BEACH, CAliFORNIA
Cfty Council
Victor Grgas
Mayor
Edna Wil son
Mayor Pro Tem
Joseph Hunt
Council Member
Frank Laszlo
Council Member
Joyce A. Risner
Council Member
Joanne M. Yeo
City Clerk
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Resolution Number ~~~
City Officials
Robert Nelson
City Manager
Greg Stepanicich
City Attorney
Denis Thomas
Director of Finance/City Treasurer
Financial Consultant
Security Pacific Securities Inc.
Public Finance Department
300 South Grand Avenue, HCP211
Los Angeles, California 90071
Bond Counsel
Buchalter, Nemer, Fields' Younger
600 Newport Center D~ive
Suite 1400
Newport Beach"California 92660
OFFICIAL STATEMENT
$1,800,000*
City of Seal Beach
1989 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 $1.8 million of its 1989 Tax and Revenue Anticipation Notes
(the "Notes"). The Notes are issued under the authority of Article 7.6,
Chapter 4, Part I, Division 2, Title 5 (commencing with Section 53850) of
the California Government Code and pursuant to a resolution adopted by the
City Council on July 17, 1989. Issuance of the Notes will provide funds
to meet fiscal year 1989-90 general fund expenditures, including operating
expenses, capital expenditures, and the discharge of other obligations or
indebtedness of the City.
The Notes are general obl igations of the City but are payable only
from taxes, income, revenues, cash receipts and other moneys of the City
attributable to the 1989-90 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.
1989-90 SHORT-TERM BORROWING PROGRAM
In order to finance its General Fund cash flow requirements in fiscal
year 1989-90, the City has undertaken a short-term borrowing program which
will total SI,800,OOO. The City expects to issue, on or about August IS,
1989, S1,800,OOO in Tax and Revenue Notes with a final maturity of August
14, 1990. The Notes and the interest thereon are general obligations of
the City but are payable only from available taxes, income, revenue, cash
receipts, and other moneys of the City attributable to the fiscal year
1989-90. 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.
Resolution
Number .3B'If'
,
THE NOTES
The Notes will be dated as of the date of delivery and will all mature
on August 14, 1990. The Notes will be issued in registered form in
denominations of 55,000 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
I
Notes will be payable at maturity, computed on the basis of a 360-day year
and 3D-day months. The Notes will not be subject to redemption prior to
maturity. Principal of and interest on the Notes will be payable when due
as described below under "THE NOTES - Book-Entry-Only System."
Book-Entry-Only Syst..
When issued, the Notes will be registered in the name of Cede' Co.,
as nominee of The Depository Trust Company ("DTC"). DTC is a
limited-purpose trust company organized under the laws of the State of New
York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of th, 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.
DTC holds securities and facil itates the clearance and settlement of
securities transactions through electronic book-entry changes in accounts
of the DTC Participants, thereby eliminating the need for physical
movement of certificates. DTC Participants include securities brokers and I
dealers, banks, trust companies, clearing corporations and certain other
organizations, some of which (and/or their representatives) own DTC.
Access to the DTC system is also available to other entities such as
banks, brokers, dealers and trust companies that clear through or maintain
a custodial relationship with DTC Participants, either directly or
indirectly.
DTC Participants will be credited in the records of DTC with the
amount of such DTC Participants' interest in the Notes. Beneficial
ownership interests in the Notes in the amount of 55,000 or any integral
multiple thereof may be purchased by or through DTC Participants. The
beneficial owners will not receive certificates representing their
beneficial ownership interests. The ownership interest of each beneficial
owner will be recorded through the records of the DTC Participant from
which such beneficial owner purchased its Notes. Transfers of ownership
interests in the Notes will be accomplished by book entries made by DTC
and, in turn, by DTC Participants acting on behalf of beneficial owners.
It is anticipated that each beneficial owner will receive a written
confirmation of the ownership interest acquired by such beneficial owner
in the Notes from the person or entity from whom such ownership interest
is acquired.
Payments of interest and and principal of the Notes will be paid by
the City upon surrender of the Notes at maturity directly to DTC or its
nominee, Cede . Co. DTC will remit such payments to DYC Participants and I
such payments will thereafter be paid by DTC Participants to the
beneficial owners. No assurance can be given by the City that DYC and DYC
Participants will make prompt transfer of payments to beneficial owners.
The Ci ty is not responsible or liable for payments by DTC or DYC
Participants or for sending transaction statements or for maintaining,
supervising or reviewing records maintained by DTC or DTC Participants.
. As long as the Notes are registered in the name of Cede . Co. or a
successor securities depository (or its nominee), all payments of interest
and principal and all notices with respect to the Notes will be made and
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:JB:lS-
Resolution" Number
given, respectively, in accordance with the instructions of DTC or the
successor securities depository. With respect to any Note registered in
the name of, Cede 1 Co. or a successor securities depository (or its
nominee), thll ,City will not have any responsibility or obl1gation with
respect to ( i) the accuracy of any records wi th respect to the ownersh i p
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; (iii) the payment to any person, other than a
registered Owner as shown in the note register, of any amount with respect
to the Notes.
If DTC ceases to act as securities depository for the Notes and no
successor securities depository is designated, fully registered
certificates representing ownership of the Notes will be executed and
delivered to 'the beneficial owners, and their respective ownership
interests will be registered in the note register.
In such event, principal of and interest on the Notes will be payable
to such Owners in accordance with the terms of the Resolution, and the
Notes will be exchangeable or transferable only upon the' note register
following surrender of the Note or Notes to be exchanged or transferred
and delivery of a written transferred and delivery of a written transfer
instrument satisfactory to the City, executed by the OWner or such Owner's
duly authorized attorney. In connection with any exchange or transfer of
Notes, the Owner requesting such exchange or transfer will be required to
pay any applicable tax or other governmental charges.
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 $900,000 of Unrestricted Revenues (as
hereinafter defined) to be received by the City in December 1989, and the
first $900,000 of Unrestricted Revenues plus an amount sufficient to pay
interest on the Notes, to be received by the City in April 1990, (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 month 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 moneys being called the
.Other Pledged Moneys.). The term .Unrestricted Revenues. means taxes,
income, revenue, cash receipts and other moneys intended as receipts for
the General Fund of the City for the fiscal year 1989-90 and which are
generally available for the pay1llent of current expenses and other
obligations of the City.
The Pledged Revenues will be deposited by the City Finance Director,
beginning in the month of December 1989 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
lien and charge on, and shall be payable from, the Pledged Revenues and
Other Pledged Moneys which have been deposited in the Repayment Fund.
Moneys in the Repayment Fund will be invested as permitted by Section
53601 of the Government Code of the State of Cal ifornia, except that no
investment shall have a maturity date later than the ..turity date of the
Notes. Earnings on investments in the Repayment Fund will be transferred
to the General' Fund of the City.
Resolution Number ~~;1~
,
On or before August 14, 1990, the City Director of Finance will
arrange for the transfer to the Depository Trust COIIlpany of an amount in
immediately available funds sufficient to pay the principal of and
interest on the Notes. . Any IlOneys remaining in the Repay1lll!nt Fund after
such transfer, or provision for such transfer, will be transferred to the
General Fund of the City.
AVAILABLE SOURCES OF PAYMENT
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In accordance with California law, the Notes are general obligations
of the City, but are payable only out of taxes, income, revenue, cash
receipts and other moneys of the City attributable for payment thereof. A
1978 change in the Constitution of the State of California substantially
limited the City's ability to levy ad valorell 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
not exceed 85S of the estimated moneys legally available for the payment
of the Notes and such other debt. The amount needed to repay the Notes
and the interest thereon is estimated to be $1,912,500. The City
estimates that funds available from the General Fund for 'payment of the
Notes will be in excess of approximately $13.6 million.
ESTIMATED GENERAL PURPOSE RESOURCES
AVAILABLE FOR PAYMENT OF NOTES(l)
(,000)
Source
Unrestricted available fund balance - July 1, 1989......
Property Taxes .;.......................................
Sales and use taxes ....................................
Other Taxes ............................................
l;censes and permits ...................................
Fines and penalties....................................
Investment earn;ngs ....................................
Revenue from other agene;es ............................
Current service charges ................................
Other revenue (1).......................................
TRANs Proceeds .........................................
Amount
$ 267
2,884
1,148
2,060
559
660
311
1,174
1,677
1,358
S 1.800
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Total ................................................ $13,631
(1) Includes Tideland Revenue, the Gas Tax, Water Sewer, and Conmunity
Redevelopment Agency transfers.
CONSTITUTIONAL LIMITATIONS ON TAXES
Article XIII A of the California Constitution limits the maximum ad
valorem tax on real property to 1S 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
value of real property when purchased, newly constructed, or a change in
ownership has occurred after the 1975 assessment. The full cash value may I
be adjusted annually to reflect inflation at a rate not to exceed 2S per
year, or reduction in the consumer price index or comparable local data,
or declin4ng 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 cOlIIIH!ncing with the 1975-76 fiscal
year. This procedure has been judicially upheld.
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Resolu\~on Number j?~~
FINANCIAl INFOIlllATlON
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. .Assesse~ valuati~nsnue .~~p~~ted, at
100S 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.
CITY OF SEAL BEACH
ASSESSED VALUATION OF PROPERTY SUBJECT TO AD VALOREM TAXATION
I Total
Fiscal COIIIIOn Publ ic Unsecured Assessed
Year Prooerty Utilitv- 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
1987-88 1,163,423,632 57,594,360 48,079,019 1,269,097,011
1988-89
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Source: City of Seal Beach
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 I.
Effective July I, 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.
Resolution Number
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Under prior law, value changes due to changes in ownership and new
construction were added to the assessent roll on March 1 following the
change of ownership or completion of new construction. As a result, the
change in property tax liabil ity 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 assessent roll containing state-assessed property and property the I
taxes on which are a lien on real property sufficient, in the opinion of
the County Assessor, to secure payent of the taxes. Other property is
assessed on the "unsecured roll."
Property taxes on the secured roll are due in two installents, 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 101 from 6'. Property on
the secured rQll with respect to which taxes are delinquent becomes tax
defaulted on or about June 30 of the fiscal year. Such property may
thereafter be redeemed by payment of a penalty of 1.5' per month to the
time of redemption, plus costs and a redemption fee. If taxes are unpaid
for a period of five years or more, the property is deeded to the State
and then is subject to sale by the City Director of Finance.
Property taxes on the unsecured roll are due as of the March 1 lien
date and becoe delinquent, if unpaid, on August 31. A 101 penalty
attaches to delinquent unsecured taxes. If unsecured taxes are unpaid at
5 p.m. on October 31, an additional penalty of 1-1/~ attaches to them on
the first day of each month until paid. The City has four ways of
co 11 ect i ng deli nquent unsecured personal property taxes: (1 ) bri ng i ng a
civil action against the taxpayer; (2) filing a certificate in the office
of the county Clerk specifying certain facts in order to obtain a lien on
certain property of the taxpayer; (3) filing a certificate of delinquency
for record in the County Clerk and Recorder's office in order to obtain a
lien on certain property of the taxpayer; and (4) seizing and selling
personal property, improveents or possessory interests belonging or
assessed to the assessee.
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Property Tax Levies and Collections
Percent
Fiscal Total Current Current Tax of Levy
Year Tax Levy Collections Collections
1982-83 S 1,718,551 S 1,666,674 96.8~
1983-84 1,644,403 1,584,400 96.35
1984-85 1,696,989 1,654,528 97.50
1985-86 1,981,720 1,869,000 94.31
1986-87 2,175,106 2,279,720 104.81
1987-88 2,370,939 2,396,226 101.07
1988-89 2,590,000
1989-90 (1) N/A N/A
(1) Estimated.
Source: City of Seal Beach
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Financial Statements
The accompanying financial statements were developed from the
comprehensive audited Financial Stateents. A copy of the combined,
su.ary audited financial stateents of the City of Seal Beach for the
year ended June 30, 1988 is attached to the Official Statement as an
appendix. The specific stateents provided are for information purposes
only and do not constitute the complete financial stateents of the City.
The City's complete audited financial statements are available upon
request.
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Re~olution Number ~;1~
CITY OF SEAL BEACH
GENERAl fill)
STATEIIENT OF REVENUES AND EXPEflJITURES
YEAR ENDm .JUNE 30, 1988 AIIJ 1987
REVENUES:
Taxes ...,...........................................
Licenses and permits ...............................
Fines and forfeitures ..............................
Interest, rents and concessions ....................
From other agencies ................................
Current service charges ............................
Other ..............................................
Administrative reimbursements
Total Revenues
......................
EXPENDITURES: "
Current:
General government ...............................
Public safety ........,............................
Transportation ...................................
Co_unity development ............................
Health and san1 tat ion ............................
Cul ture and 1 e1 sure ..............................
Maintenance ......................................
Self-insurance program ...........................
Land acqu is 1 t ion .................................
Debt service:
Pri nc 1 pal ret i rement .............................
Interest expense .................................
Note discount and fiscal agent expense ...........
Total Expenditures
Excess of Revenues Over (Under) Expenditures
OTHER FINANCING SOURCES (USES):
Note, advances from City and lease option proceeds
Operating transfers in .............................
Operating transfers out ............................
Total Other Financing Sources (Uses)
Excess of Revenues and Other Sources Over
(Under) Expenditures and Other Uses
Fund Balances - July 1 ...............................
Prior period adjustment ..............................
1988 1987
S 5,333,935
551,784
398,056
612,483
1,108,956
1,010,721
252,856
340.720
$ 9.609.511
S 5,185,883
487,784
357,849
333,723
1,105,104
898,274
416,349
406.930
$ 9.191.896
1,071,678 948,598
4,930,640 4,522,822
590,795 584,392
481,063 744,117
966,230 860,080
451,671 248,999
901,207 824,800
568,545 499,249
1,590,000
1,850,000 2,200,000
78,407 103,113
14.443
$13.494.679 $11. 536.170
13.885.168) (2.344.274)
3,440,000 2,200,000
403,768 281,269
1888.352) 1527.355)
$ 2.955.416 $ 1.953.914
1929.752) $ 1390.360)
2,190,172 2,580,532
312.795
Fund Balances (As Restated) - July 1 ................. $ 2.502.967
$ 2.580.532
Fund Balances - June 30 .............................. $ 1.573.215 .$ 2.190.172
Annual Budget
On or before June 30 the City adopts an annual budget for the
ensuing fiscal year. Fomal 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.
Resolution Number ~~;r~
Budget infonution is presented for the Government fund types on
the cash basis of accounting. Budgeted revenue lIIOunts represent the
original budget lOdified by Council-authorized adjust.-nts 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
ADOPTm FINAL BUDGET FOR FISCAL YEAR lisa-ai AND
PROPOSm BUDGET FOR FISCAL YEAR liai-iO
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REVENUES:
Taxes ..................................
Licenses and permits ...................
Fines and forfeitures ..................
Interest, rents and concessions ........
From other agene;es ....................
Current service charge .................
Other ..................................
Intergovernmental Funds ................
Total General Fund Revenues
*REVENUE TRANSFERS:
Tideland Beach Funds ....................
Gas Tax Fund ............................
Traffi c Safety Funds ....................
Total Revenue Available ..............
EXPENDITURES:
Current:
General government ...................
Publ;c safety........................
Transportat;on .......................
Community development ................
Health and sanitation ................
Culture and leisure ..................
Ma 1 ntenanee ..........................
Self-Insurance Program ...............
Debt Service:
Principal retirement .................
Interest Expense .....................
Total Expenditures
Source: The City of Seal Beach.
Proposed Final
liai-iO lisa-ai
Budaet Budaet
$6,092,000 $5,791,000
559,000 , 517,000
660,000 435,000
499,000 437,000
1,173,600 958,210
1,428,000 1,256,000
83,000 105,000
f536.280l f377.600l
$9,958,320 $9,121,610
345,000 318,000
250,000 232,000
180.000 178.000 I
SI0.733.320 S 9.846.610
$ 1,025,080 $ 1,148,020
6,155,450 5,740,940
30,850 17,970
301,760 301,800
909,230 918,820
237,900 279,050
1,196,920 933,570
675.000 385.000
10,532,140 9,725,170
-0- -0-
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$10.532.140 9.725.170
PROJECTm AND ACTUAL CASH FLOWS
I
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 net proceeds.
The General Fund cash balance at July 1, 1989 is expected to be
approximately $267,000, and the General Fund is expected to realize a
maximum cash flow deficit of approximately $916,000 in the month of
November, 1989.
I
I
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Resolution Number ~t'~
The 1989-90 cash flows that follow are estimates, based on the
best information available to the City when they were prepared in
June, 1989.
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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 policy
is to fund all current retirement costs as accrued; such costs to be
funded are determined annually as of July 1 by the System's actuary. The
plan is subject to an actuarial valuation annually.
All contributions to the plan are made by the City covering both the
City's and employees shares. The City's contribution was $638,807 for the
year ended June 30, 1988, and is budgeted to be $938,490 in fiscal year
1988-89. The City's 1987-88 retirement contribution is 321 lower than the
projected 1988-89 contribution because there was no contribution for
non-safety employees in 1987-88 because of an actuarial surplus from prior
years.
I
LONG-TERM OBLIGATIONS
The City has never defaulted on the payment of principal or interest
on its long-term general obligation indebtedness. As of June 30, 1988,
the City of Seal Beach had $582,000 in direct general obligation bonded
indebtedness outstanding, supported entirely by water utility revenues.
The City of Seal Beach has entered into a lease agre\!ment with the
Seal Beach Administration Building Authority for use of its facilities.
Annual lease payments of $34,850 are being made by the City through 1993.
The City of Seal Beach al so has entered a lease/purchase agreement. The
agreement is for two parcels of land. Under the terms of the agreement a
base rental is to be paid annually by the City of Seal Beach. At any time
during the life of the lease the City of Seal Beach may purchase the land
for $1,590,000 less rental payments incurred to that date.
The Redevelopment Agency of the City of Seal Beach issued $2,000,000
of tax allocation bonds in September of 1986. The Bonds are payable from
and secured by a pledge of certain tax revenues. Such Bonds do not
constitute a debt of the City of Seal Beach.
CITY OF SEAL BEACH
COMPUTATION OF LEGAL DEBT MARGIN
JUNE 30, 1989
I
Total Assessed Value of All Real
and Personal Property .................................. S
legal Debt limit - 151 of Total
Assessed Valuation ...................................... S
Amount of Debt Applicable to limit ........................ $
Legal Debt Margin ......................................... S
Percent of legal Debt limit Authorized
....................
01
Source: City of Seal Beach
THE CITY
Location
I
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 frOlll 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.
Res~lution Number .=r~~
,
I
Seal Beach is primarily a residential connunfty, 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 IIeapons Station and
Rockwell International Corporation Satellite Systems Division, are located
in Seal Beach and employ a combined 3,200 workers.
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 ..et 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.
City Government and Population
The City of Seal Beach was incorporated in 1915 and 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 IIl!mbers
for one-year terns. 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 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.
I
CITY OF SEAL BEACH
POPULATION AND SIZE
Land Area (1l
_unt
1m PODulation Annexed Total Sfze
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
I 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 J..Ul
(1) Square miles
Source: Population - State Department of Population estimates for 1989,
all other figures are U.S. Census Bureau data. Land area - City
of Seal Beach.
Resolution Number ~~;1~
~loYl8nt 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 1988, 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
EMPLOYMENT BY INDUSTRY &ROUP (000) I
TYDe of EIID 1 oVlll8nt .lUl 1U! 1m 1HI lUZ .lUI
Agricultural 5.8 8.7 8.9 8.8 9.0
Non Agricultura)
Mining l Construction 37.5 47.2 53.5 55.9 64.3
Manufacturing 213.8 211. 9 242.0 242.3 248.3
Transportation and
Public utilities 30.1 31.4 32.8 34.1 34.5
Wholesale Trade 49.0 55.1 58.9 63.5 , 64.4
Retail Trade 178.4 182.5 192.2 197.3 206.2
Finance, Insurance and
Real Estate 64.9 70.1 74.4 83.4 91.0
Service 203.6 228.3 232.3 254.2 262.6
Government lal lD!....5. ill....j J.J.U 114.4
TOTAL 887.8 939.7 1002.5 1051.0 1094.7
Source: State Employment Development Department.
The U.S. Naval Weapons Station employing 1102 civilians and 225 I
mil i tary personnel is located in the City. The stat i on 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.
Call8rcial Activity
The City of Seal Beach contains a central business district and three
major shopping centers, the latter of which were developed since the City
began annexing subdivisions. The largest shopping center is Rossmoor
Shopping Center, which includes the Boston Store. In 1987 taxable retail
sales stood at $ .illion compared to $76.7 million in 1986, a
decrease of approximately _ percent. Total taxable transactions stood at
$ million in 1987 compared to $95.4 million in the prior
year, an increase of apprOXimately _ percent. The table below shows
taxable transactions for the City from 1984 through 1987.
I
Res~l~hon Number 3915"
.
CITY OF SEAL BEACH
TAXABLE SALES
(Thousands of Dollars)
TYD8 of Business .lH! 1m .lUi 1m
Retail Stores:
Apparel $ 5,663 $ 5,629 $ 5,636
I General Merchandise 5,366 5,425 5,884
Drug 6,836 5,848 6,235
Food 8,009 8,464 9,280
Package L1 quors 2,873 2,802 2,457
Eating and Drinking Places 16,679 18,915 20,254
Home Furnishings and
Appliances 2,530 2,646 2,667
Building Materials and
Farm Implements 1,486 1,522 1,402
Auto Dealers and Suppliers 1,490 1,447 1,545
Service Stations 15,862 17 ,343 13,645
Other Retail Stores 7.124 7.247 7.679
Retail Stores - Total $ 73,918 $ 77,288 $76,684
All Other Outlets 21.995 16.141 18.725
Total All Outlets $ 95.913 $ 93.429 $95.409
Source: State Board of Equalization.
Building Activity
I
Residential building activity in the City has fluctuated depending on
changes in the State and national economies. The number of permits for
residential dwellings totaled _ for a value of $ in 1988 while
total valuations stood at S . The following table shows the number
of, and value of building permits for the City from 1984 through 1988.
CITY OF SEAL BEACH
BUILDING PERMITS AND VALUATIONS 1984 THROUGH 1988
(000)
.rn! 1m .llH illl liU.
Valuations (in thousands):
Residential $ 8,666 $ 5,175 $ 9,859 $ 9,490 $
Non Residential 5.419 6.068 29.266 17 . 962
Total $14,085 $11,243 $39,125 $27,452 $
Number of New
Dwelling Units:
Single Family 49 15 30 15
I Multi Family ---2 ....2 ...1 ....2
Total 49 15 33 15
Source: 'California Construction Trends," Security Pacific National Bank
Resolution Number 3B1f
Transportatton
The San Diego, San Gabriel and Garden Grove Freeways Intersect within
the City limits, and the City is bisected by State Route 1 (Pacific Coast
Highway). Existing freeways provide excellent access to all north, south
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.
lIestern 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.
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 handl ing
all types of cargoes. The ports are also a stopping point for trans-Pacific
passenger lines.
I
Util ities
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.
Educatton
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 CODlllunity
College District. The district operates three colleges within Orange
County. The 122-acre Huntington Beach Campus (Golden lIest 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;
lIest Coast University, Orange; lIestern 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.
Recr.atton and Canlunity Faciltti.s
The City of Seal Beach was originally established because of its
attractiveness as a seaside resort and recreation area. IIhile the character
of the City has undergone change during the last decade from a resort
community to a stable residential cODlllunity, recreation is still an
illportant factor in the local economy. City officials estimate that more I
than 3,000,000 visitors are attracted to the one mile City-owned ocean front
recreation area each year. For the convenience and accODlllOdation of these
visitors, the City maintains a l,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. SwiDllling and
surfboarding are popular sports and are conducted under the supervision of
municipal lifeguards.
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l,
Resolut1on Number
.3~:I~
,
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 .illion project is within the Riverfront Redevelopment
Project of the Redevelopment Agency and is financed by the Agency and by gas
tax funds.
At the southern end of the City, the Orange County Harbor District has
developed the Aquatic Regional Park, which provides an eight lane launching
ramp capable of accommodating up to 500 boats per day, parking for 200 cars
and boat trailers, and overnight space for 500 house trailers. The aquatic
park provides pUblic beach and picnic facil ities 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, Newport
Beach, California, Bond Counsel, under existing laws, regulations, rulings
and judicial decisions, interest paid with respect to the Notes is
excluded from gross income for purposes of income taxation by the United
States of America and is exempt from personal income taxation imposed by
the State of California.
The Internal Revenue Code of 1986, as amended (the "Code")
imposes various restrictions, conditions and requirements relating to the
exclusion from gross income for federal income tax purposes of interest on
obligations, such as the Notes. The City has convenanted to comply with
certain guidelines designed to assure that interest on the Notes will not
become includable in gross income. Failure to comply with these covenants
may result in interest on the Notes being included in gross income,
possibly from the date of issuance of the Notes. The opinion of Bond
Counsel assumes compliance with the covenants.
Bond Counsel is further of the opinion that interest on the Notes
is not a specific preference item for purposes of the Code's alternative
minimum tax provisions. However, interest on the Notes received by
corporations will be included in corporate adjusted net book income and
adjusted current earnings, a portion of which may increase the alternative
minimum taxable income of such corporations.
Although Bond Counsel has rendered an opinion that interest on
the Notes is excluded from gross income for federal income tax purposes,
the accrual or receipt of interest on the Notes may otherwise affect the
federal income tax liability of the recipient. The extent of these other
tax consequences will depend upon the recipient's particular tax status or
other items of income or deduction. Bond Counsel expresses no opinion
regarding any such consequences.
Pursuant to the Resolution adopted by the City Council, the City
represents that the reasonably anticipated amount of qual ified tax-exempt
obligations which has been and will be issued by it in 1989 does not
exceed $10,000,000, and designates each Note to be a qualified tax-exempt
obligation pursuant to Section 265(b) (3) fB) fii) of the Internal Revenue
Code.
LEGAL OPINION
The opinion of Buchalter, Nemer, Fields & Younger, Newport Beach,
California ("Bond Counsel") approving the validity of the Notes and
stating that, in the opinion of such Bond Counsel, interest on the Notes
is excluded from gross income for federal income tax purposes and is also
exempt from personal income taxes imposed by the State of California will
be provided free of charge to the purchasers at the time of the original
delivery of the Notes. A copy of such opinion will be printed on each
definitive Note without charge to the purchasers.
Resolution Number ~~jf~
I
Bond Counsel's employment is limited to a review of the legal
proceedings required for the authorization of the Notes and to rendering
the opinion set forth above. Such opinion will not consider or extend to
any documents, agreements, representations, offering circulars or other
material of any kind concerning the Notes not mentioned in this paragraph.
Certain legal matters will be passed upon for the City by the City
Attorney.
LEGALITY FOR INVESTMENT IN CALIFORNIA
Under the provisions of the State Financial Code, the Notes are I
legal investments for cOllllll!rcial banks in the State of California to the
extent that the Notes, in the informed opinion of the bank, are prudent
for the investment of funds of its depositors and under provisions of the
State Government Code the Notes are eligible to secure deposits of public
moneys in the State of California.
RATING
The City received a 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 I
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 political existence of the City or contesting the City's
ability to levy and collect ad valorem taxes or to collect or receive
other pledged revenues or contesting the City's ability to issue and
retire the Notes.
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 Security Pacific
Securities, Inc. (the .Underwrfter"). The Underwriter 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 tems 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 publ ic offering price stated on the cover page
hereof. The offeri ng pri ce may be changed from time to time by the
Underwriter.
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Resolution NUmber ~~~
ADDITIONAL INFORMATION
The purpose of this Official StateMnt 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.
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 their knowledge and be11ef, true and correct in all
lIaterial 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
Isl Denis Thomas
Director of Finance