HomeMy WebLinkAboutCC Res 3692 1987-05-26
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RESOLUTION NO. 369:L
RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SEAL BEACH PROVIDING FOR THE ISSUANCE
AND SALE OF ITS 1987 TAX AND REVENUE ANTI-
CIPATION NOTES IN THE AMOUNT OF $1,850,000
APPROVING OFFICIAL STATEMENT, NOTE PURCHASE
AGREEMENT AND PAYING AGENCY AGREEMENT,
PLEDGING REVENUES AND ENTERING INTO CERTAIN
TAX COVENANTS IN CONNECTION WITH SUCH NOTES
WHEREAS, in order for this City to meet its lawful obli-
gations prior to the receipt of revenue and taxes in fiscal
year 1987-88 it is necessary to temporarily borrow funds in
the amount of
WHEREAS, the City may borrow for such purposes, such
indebtedness to be represented by Tax and Revenue Anticipa-
tion Notes (the "Notes") issued pursuant to Article 7.6,
Chapter 4, Part 1, Division 2, Title 5 of the Government Code
of the State of California;
WHEREAS, the City has successfully negotiated with
Security Pacific Capital Markets Group for the sale of
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of the Notes, and has sold the Notes subject to the terms set
forth in a Note Purchase Agreement, and the City now wishes
to issue the Notes;
WHEREAS, there has been presented to this Council a form
of Note Purchase Agreement by and between the City and
Security Pacific Merchant Banking Group providing for the
sale of the Notes on certain terms and conditions; and
WHEREAS, there has been presented to this Council a form
of Paying Agency Agreement by and between the City and
Security Pacific National Bank.
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NOW, THEREFORE, BE IT RESOLVED by the City Council of
the City of Seal Beach, California, as follows:
Section 1.
The Council has reviewed all pIoceedings
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 per-
Resolution Number ~J7~
formed in due time, form and manner as required by law, and
the Council is duly authorized to issue the Notes in the name
of the City and to incur indebtedness in the manner and upon
the terms provided in this resolution.
Section 2. The form of Note Purchase Agreement is here-
by approved. The Director of Finance is authorized to nego-
tiate the rate of interest for the Notes at a rate not to
exceed twelve percent (12\) per annum and to insert said rate
in said Note Purchase Agreement. The Mayor or his designee
is hereby authorized and directed to execute the Note Pur-
chase Agreement in the name of and on behalf of the City.
Section 3. Negotiable notes in the name of the City in
the aggregate principal amount of One Million Eight Hundred
and Fifty Thousand Dollars shall be issued for
any purposes for which the City is authorized to expend
moneys, under and subject to the terms of this resolution and
in accordance with the provisions of Article 7.6 of Chapter 4
of Part 1 of Division 2 of Title 5 of the Government Code of
the State of California.
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 365 days after the date of
delivery, shall be numbered from 1 consecutively upward in
order of their issuance, and shall be issued in the denomina-
tion 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 presenta-
tion and surrender at the offices of Security pacific Nation-
al Bank in Los Angeles, California.
Section 4. The Notes shall not be subject to call or
redemption before their fixed maturity date.
Section 5. 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 num-
bers to comply with the provisions of this resolution:
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Resolution Number ~J'~
STATE OF CALIFORNIA
COUNTY OF ORANGE
CITY OF SEAL BEACH
1987 TAX AND REVENUE ANTICIPATION NOTE
Number
$
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FOR VALUE RECEIVED, the City of Seal Beach, California,
a municipal corporation organized and existing under and by
virtue of the laws of the St:ate of California (the "City"),
promises to pay to BEARER on , 1987, the princi-
pal sum of
THOUSAND DOLLARS ($ ) in lawful money of the
United States of America, with interest thereon at the rate
of percent ( %) per annum from the date hereof
and payable on maturity. Interest shall be computed on a
30-day month, 360-day year basis. Both the principal of and
interest on this note shall be payable only upon surrender of
this note as the same shall become due at the office of
Security Pacific National Bank in the City of Los Angeles,
California, the Paying Agent: 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.
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This note is part of an issue of $
aggregate principal amount of notes (the "Notes") issued by
the City Council of the City of Seal Beach, State of Cali-
fornia in the name and on behalf of the Ci ty, 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 53850-53858, inclusive of said
Code), and a Resolution duly adopted by the City Council on
May 26, 1987.
Payment of the principal and 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 1987-88
from: (a) the first $ 00,000 of unrestricted taxes, income,
revenues, cash receipts and other moneys to be received by
the City in the month of , 1987: (b) the first
$ 00,000 of such moneys to be received in the month of
, 1988: (c) the first $ 00,000 of such moneys to
be received in the month of , 1988: and (d) the
first of such moneys in an amount sufficient to pay the
interest on the Notes at maturity to be received in the month
of 1988. This Note and the interest: thereon shall
be payable from said pledged moneys and from all other
income, revenue, cash receipts and moneys of the Ci ty law-
fully available therefor. However, the Notes are payable
only from revenue received or accrued during the fiscal year
in which issued.
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IT IS HEREBY CERTIFIED" RECITED AND DECLARED that the
Notes are issued in conformity with the laws of the State of
California and the proceedings of the City Council of the
City: that all acts, conditions and things required to exist,
happen and be performed precedent to and in the issuance of
the Notes have existed, happened and been performed in
regular and due time, form and manner as required by law: and
that the Notes, together with all other indebtedness and
obligations of the City, do not exceed any limit prescribed
by the Constitution and statutes of the State of California.
Resolution Number ~rL
IN WITNESS WHEREOF, the City Council of the City has
caused this Note to be executed by its Mayor and by its
Director of Finance, and countersigned by the City Clerk,
which signatures may be manual or facsimile signatures,
(except that one of such signatures shall be manually af-
fixed) and has caused its official seal (or facsimile there-
of) to be affixed hereon, and has caused this Note to be
dated
Mayor of the City of Seal Beach
Director of Finance of
the City of Seal Beach
[SEAL]
COUNTERSIGNED:
City Clerk of the City
of Seal Beach
Section 6. The Mayor of the City is hereby authorized
and directed to sign each of the Notes, the City Clerk and
the Director of Finance of the City of Seal Beach are hereby
authorized and directed to countersign each of the Notes, and
the City Clerk is hereby authorized and directed to impress
or cause to be imprinted by facsimile the official seal of
the City on each of the Notes. Anyone or two of such signa-
tures may be printed, lithographed or engraved by facsimile
signature, but at least one of such signatures shall be
manual. Such signing, countersigning and sealing as herein
provided shall be sufficient and binding execution of the
Notes in the name and on behalf of the City.
Section 7.
All proceeds of sale of the Notes shall be
deposited into the General Fund of the City, to be withdrawn
and expended for any purposes for which the City is authoriz-
ed to expend money, including, but not limited to, current
expenses, capital expenditures, and the discharge of any
obligation or indebtedness of the City.
The 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"
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Resolution Number ~~
subject to federal income taxation by reason of Sections
103(b) or 148 of the Internal Revenue Code of 1986, as
amended.
To that end, so long as any of the Notes are
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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 Council covenants on behalf of itself and the Ci ty to
comply with each applicable requirement of the Internal
Revenue Code of 1986, as amended (the "Code") and specifical-
ly covenants: (a) That not in excess of the lesser of five
percent (5%) or Five Million Dollars ($5,000,000) of the net
proceeds of the Notes (as such term is defined in Code
Section 150(a)(3)) will be used, directly or indirectly,
either to make or finance a loan (other than loans which are
used to acquire or carry Nonpurpose Investments) to any
person other than a state or local governmental unit.
(b) That not in excess of ten percent (10%) of the net
proceeds of the Notes (as such term is defined in Code
Section l50(a)(3)) will be used, directly or indirectly in
any activity carried on by anyone other than a state or local
governmental unit if, in addition, the payment of more than
ten percent (10%) of the principal or ten percent (10%) of
the interest due on the Notes during the term thereof is,
under the terms of the resolution of issuance or any under-
lying arrangement, directly or indirectly, secured by any
interest in property used or to be used, directly or indirec-
tly, in any activity carried on by anyone other than a state
or local governmental unit or is to be derived from payments,
whether or not to the City, in respect of property or
borrowed money used or to be used, .dlz'ectly or indirectly, in
any activity carried on by anyone other than a state or local
governmental unit.
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Resolution Number ~
(c) That, in the event that both (A) an amount in excess
of five percent (5%) of the net proceeds of the Notes (as
such term is defined in Code Section 150(a)(3)), directly or
indirectly, in any activity carried on by anyone other than a
state or local governmental unit, and (S) an amount in excess
of five percent (5%) of the principal or five percent (5%) of
the interest due on the Notes during the term thereof is,
under the terms of the Notes or any underlying arrangement,
directly or indirectly, secured by any interest in property
used or to be used in any activity carried on by anyone other
than a state or local governmental unit or in payments in
respect of property used or to be used in any activity
carried on by anyone other than a state or local governmental
unit or is to be derived from payments, whether or not to the
City, in respect of property or borrowed money used or to be
used in any activity of anyone other than a state or local
governmental unit, then said excess over said five percent
(5%) of net proceeds, of the Notes (as such term is defined in
Code Section l50(a)(3)) used in any activity carried on by
anyone other than a state or local governmental unit shall be
used for uses related to the governmental use of the pro-
ceeds, and shall not exceed the amount of the proceeds of the
Notes which are to be used for the governmental use of the
portion of the proceeds to which such use by anyone other
than a state or local governmental unit is related.
(d) That it shall file such reports or other documents
with the Internal Revenue Service as are required by the Code
and the Treasury Regulations.
(e) That it will invest none of the Gross Proceeds of
the Notes in investments which are deemed to be "federally
guaranteed" within the meaning of Section l49(b) of the Code.
The Finance Director is authorized and directed to
ensure compliance with these covenants.
Section 8. The Notes and the interest thereon shall be
secured by a pledge of and first lien and charge against, and
the City hereby pledges: (a) the first $ l.000.000 of unre-
stricted taxes, income, revenues, cash receipts and other
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Resolution Number ~~~
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moneys to be received by the City in the month of
December , 1987: (b) the first $ 850.000 of such
moneys to be received in the month of April, 1988: (c)
the first $ -0- of such moneys to be received in the
month of , 1988: and (d) the first of such
moneys in an amount sufficient .to pay the interest on the
Notes at maturity to be received in the month of
1988 such amounts hereinafter called the "Pledged Moneys".
There is hereby established and created a special account
within the General Fund designated the "1987 Tax and Revenue
Anticipation Notes Repayment Account," (hereinafter called
"Repayment Account"), into which the Director of Finance
shall deposit all of said pledged moneys promptly at the time
of distribution thereof. In the event that there are insuf-
ficient moneys received by the City to permit deposit into
the Repayment Account of the full amount of the Pledged
Moneys to be deposited by April 30, 1988, 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. 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 Notes
and the interest thereon.
Moneys shall be withdrawn from said account 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 said special account may be invested as permit-
ted by Section 53601 of the Government Code of the State of
California, 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. On or before the third day prior
to the maturity date of the Notes, the City shall transfer to
the Paying Agent in immediately available funds an amount
sufficient to pay the pr incipal of and the interest on the
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Resolution Number ~~~
Notes. Any moneys remaining in the Repayment Fund after such
transfer may be released to the General Fund.
Section 9. The 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 10. The Director of Finance of the City is
hereby authorized and directed to deliver the Notes to the
Security Pacific Merchant Banking Group (the "Underwriter")
upon payment of the purchase price, namely, a sum not less
than the aggregate principal amount of the Notes, less a
discount, as provided in the Note Purchase Agreement, not to
exceed _% plus accrued interest to the date of delivery
thereof. The Notes shall bear interest, payable at the
maturity of the Notes, at the rate hereinabove set forth.
Section 11. The Director of Finance of the City is
directed to cause the Notes to be lithographed, printed or
engraved, said Notes to show on their face that the same bear
interest at the rates aforesaid, and to cause the blank
spaces ~o be filled in to comply with the provisions of the
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 12. The Mayor of the City or the Director of
Finance of the City or his authorized deputy are further
authorized and directed to make, execute and deliver to the
Underwriter (a) a certificate attesting to the use of the
proceeds of the Notes, the investment thereof, and any other
matters relating to the tax exemption of the Notes pursuant
to Sections 103(b) and 148 of the Code: (b) a certificate
certifying to the genuineness and due execution of the Notes:
and (c) a receipt evidencing the payment of the purchase
price of the Notes, which receipt shall be conclusive evi-
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Resolution Number~~.z
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dence that said purchase price has been paid and has been
received by the City of Seal Beach. Any purchaser or subse-
quent 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
II are hereby authorized to execute any and all other documents
required to consummate the sale and delivery of the Notes.
Section 13. The Preliminary Official Statement, dated
, 1987, in substantially the form presented
to this meeting and made a part hereof as though set forth in
full herein, be and the same is hereby appr!,ved for us in
connection with the offer ing and sale of the Notes. The
Finance Director is hereby authorized to approve a final
Official Statement and its use in connection with the
offer ing and sale of the notes.
The Finance Director is
hereby authorized and directed, upon approval of the final
Official Statement, to execute the final Official Statement
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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 to be delivered to the
Underwriter with such approval to be conclusively evidenced
by his execution and delivery thereof.
Section 14. The form of the Paying Agency Agreement is
hereby approved and the Mayor or his designee is hereby
authorized and directed to execute the same in the name of
and on behalf of the City.
Section 15. The Council finds and determines that the
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aggregate face amount of all tax-exempt bonds (other than
private activity bonds) issued by the Council (and all
subordinate entities thereof) during the 1987 calendar year
is not reasonably expected to exceed Five Million Dollars
($5,000,000).
The Council further specifically finds, determines and
declares that the Notes are designated to be "qualified tax-
exempt obligations" for purposes of Section 265(b) (3) of the
Code.
Resolution Number
J6f.z
Section 16.
This resolution shall take effect from and
after its passage and adoption.
APPROVED AND ADOPTED this 26th day of May, 1987.
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~A) R.~~'
Mayor, City of Seal Beach
I, Joanne M. Yeo, , City Clerk of the City of Seal Beach I
do hereby certify that the foregoing Resolution was passed at
a regular meeting of the Ci ty Council of the City of Seal
Beach on the 26th day of May, 1987,. by the f0l1~9 vote:,
AYES: COUNCIL MEMBERS: ~~ ~~/Lt.A.Jt)~
NOES: COUNCIL MEMBERS:~
ABSENT: COUNCIL MEMBERS~~
ABSTAINED: COUNCIL MEMBERS:~
AT ST:
Ci
STATE OF CALIFORNIA)
COUNTY OF ORANGE ) SS
CITY OF SEAL BEACH )
I, Joanne M. Yeo, City Clerk of the City of Seal Beach, I
California, do hereby certify that the forejJoin~ resolution
is an original copy of Resolution Number 2Pt706 on file in
the office of the City Clerk, passed, pproved and adopted by
the City Council of th~~rY of Seal B at a regular meeting
ther~of held on the ~ day of , 1987.
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5/17/87
5/211/064075-0005/101
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Resolution Number.::rb9~
AGREEMENT BETWEEN THE CITY OF SEAL BEACH
AND RUTAN & TUCKER FOR LEGAL SERVICES IN CONNECTION
WITH PROPOSED TAX AND REVENUE ANTICIPATION NOTE ISSUE
THIS AGREEMENT, dated as of this day of 1987,
by and between THE CITY OF SEAL BEACH, (hereinafter referred to
as nCityn, of the County of Orange, (hereinafter referred to as
"County") and RUTAN & TUCKER, a partnership, including profes-
sional corporations, (hereinafter referred to as "R & T");
R E C I TAL S:
A. City proposes to undertake a Tax and Revenue Antici-
pation note issue pursuant to Article 7.6 of Chapter 4 of Part 1
of Division 2 of Title 5 of the Government Code to borrow money
by the issuance of temporary notes, the proceeds of which may be
used and expended for any purpose for which the City is author-
ized to spend moneys; and
B. City wishes to appoint, employ and retain R & T to
provide legal services and advice in connection with the issuance
of Tax and Revenue Anticipation Notes, as hereinafter described,
upon the terms and conditions as hereinafter set forth; and
C. R & T is qualified to provide such legal services and
represents that it is ready, willing and able to perform said
legal work.
NOW, THEREFORE, in consideration of the premises, and of the
mutual covenants, terms and conditions herein contained, the
parties agree as follows:
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ISSUANCE AND BOND COUNSEL SERVICES
City retains R & T to provide and R & T will provide the
following legal services in connection with the proposed issuance
of the notes:
1. Consult with City, its officers, employees, and speciai
consultants of City, as needed, to assist in formula-
tion of a coordinated financial and legal program for
the issuance of the notes.
2. Render to City, its officers, employees, and any spe-
cial consultants of City, all legal advice and services
required for the initiation, conduct and completion of
all proceedings for the financing, including printing,
issuance and sale of the notes.
3.
Prepare, in consultation with City, its employees,
counsel and employees, all certificates, resolutions,
ordinances, forms, orders, reports, notices, affidav-
its, documents related to the security of the notes,
and other documents required for the initiation, con-
duct and completion of all proceedings for the issuance
of the notes.
4.
Assist City and prepare and review the legal documents
involved in the giving of notice (if required) for sale
of the notes and bids thereon.
5. Upon request of City, attend all meetings of the City
Councilor other public or private meetings which are
necessary to initiate, conduct or complete the issuance
proceedings.
6. Provide a legal opinion regarding the validity and tax
exempt characteristic of the notes.
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Resolution Number ;r~~
7. Compile a sufficient record of proceedings for the
authorization, sale and issuance of the notes.
8. Consult with the trustee, if any, and counsel to the
trustee.
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CITY'S OBLIGATIONS
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1. Compensation for R & T's services rendered under Arti-
cle I shall be Four Thousand Dollars ($4,000) for a Three Million
Dollar ($3,000,000) issue. In the event the amount of the notes
issued is less than Three Million Dollars ($3,000,000); however,
the compensation for services under Article I (except as pro-
vided in paragraph 4 of this Article) shall not be less than
Four Thousand Dollars ($4,000). In the event the amount of the
notes issued is more than Three Million Dollars ($3,000,000), the
fee will be increased by an amount equal to $1.00 per $1,000 of
face value in excess of Three Million Dollars ($3,000,000).
2. R & T shall be compensated for "Expenses" incurred in
connection with services rendered to City pursuant to this Agree-
ment including Expenses incurred prior to the date hereof.
"Expenses" shall include the following items: the cost of out-
of-pocket expenses reasonably incurred by R & T; reproduction and
printing costs; the actual cost of supplies furnished such as
notebooks or binders and indexes for the record of proceedings;
computer-assisted research fees; filing fees; long distance
telephone calls; messenger services; air courier costs; costs for
secretaries, law assistants, clerks (including law clerks) and
document clerks beyond the normal working hours necessitated by
extraordinary requirements of the City or its consultants; mile-
age reimbursements to our employees; all travel costs (including
costs for travel of our partners) for travel outside of Los
Angeles and Orange Counties (including lodging and meals, as
required) at the request of the City; publication costs, and
notary fees. "Expenses" shall not include normal overhead costs.
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3. In the event that R & T is requested to perform addi-
tional work outside of the services described in Article I, such
as litigation, contacting legislators and drafting language for
legislative changes, bankruptcy or investment opinions, and for
all other legal services to the City following the delivery of
the notes, R & T will be paid additional compensation therefor at
the customary hourly rate of the person performing such services,
as set forth on Exhibit A attached hereto and by this reference
incorporated herein; provided, however, there shall be no addi-
tional compensation due R & T under this paragraph without the
prior approval of the "Designated Administrator", who is hereby
specifically directed and authorized to approve additional ser-
vices under this paragraph in an amount not to exceed One Thou-
sand Dollars ($1,000).
4. Payment of R & T' s compensation provided for in para-
graphs 2 and 3 of this Article, shall be paid monthly upon
receipt of statement therefor. Payment of R & T's compensation
provided for in paragraph 1 of this Article shall be made to I
R & T at the time of delivery to the purchaser of the notes to be
issued and sold in the proceedings or as soon thereafter as
practicable. It is understood and agreed that R & T'S compensa-
tion for all services rendered pursuant to paragraph 1 of this
Article shall be paid solely from the proceeds of the notes
issued and sold pursuant to the proceedings, and that City shall
not be obligated otherwise therefor. Notwithstanding any of the
foregoing provisions of this paragraph, in the event the proceed-
ings are abandoned and/or there are not proceeds of notes issued
and sold pursuant to the proceedings from which to pay R & T,
R & T shall be reimbursed by City for all Expenses.
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Resolution Number
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5. It is understood and agreed between City and R & '1' that
retention of R & '1' will not prevent R & '1' from continuance as
attorney for parties which may currently have disputes, legal or
otherwise, with City which do not involve confidential informa-
tion which R & '1' gained from its representation of Ci ty under
this Agreement, nor will R & '1' be prevented from acting as attor-
ney in the future for clients which have disputes, legal or
otherwise, with City which do not involve confidential informa-
tion which R & '1' gained from its representation of Ci ty under
this Agreement, even though the same may result in litigation,
and City specifically consents to R & T's representation of such
present or future clients of R & '1' despite such possible con-
flict.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement the day and year hereinabove written.
THE CITY OF SEAL BEACH
"City"
By
DENIS THOMAS
Finance Director,
CITY OF SEAL BEACH
"Designated Administrator"
RUTAN & TUCKER
"R & '1'''
By
M. Toni Perry, Partner
5/17/87
5/211/064075-0005/001
Resolution Number ~~~
EXHIBIT "A"
Adams $ 85 Lanphar $175
Alberts 240 Larsen 190
Aleshire 170 Laubscher 200
Andel 85 Little 145
Armstrong 175 MacLachlan 125
Arrington 225 Mann 120 I
Babbush 160 Marticorena 170
Barregar 25 McCormick 225
Bidwell 85 McElveny 25
Bie1 210 Miller 65
Bower 175 Monteleone 65
Braun 200 Montevideo 105
Brier 95 Moore, J. 220
Brockington 165 Morris 175
Calem 85 Nichols 160
Caplan 170 Oderman 180
Carruth 205 Owen 85
Ce10tti 170 Packer 65
Cosgrove 105 Pearlman 210
Cowles 95 perry 160
Cox 40 pinzone 125
Crane 160 Prince 155
Cristerna, J 40 Purcell 85
Cristerna, L. 25 Ramsden 120
Curnutt 220 Raposa 85
Dahl 205 Renee 50
Dahl, Jr. 210 Riley 25
Dallas 160 Rivin 185
Day 65 Robichaud 125
Edge 125 Rosansky 95
Eisen 95 Ross 100 I
Emard 145 Rubin 190
Fellows 150 Salinger 200
Finerty 110 Sarner-Smith 110
Finger 35 Schmidt 200
Flynn, C. 120 Schwabauer 40
Flynn, M. 110 Schwalbe 25
Forsyth 185 Shaffer 110
Frazier 145 Shallenberger 240
Frieden 185 Sims 220
Friesen 50 Smith-Schefris 65
Gastelum 120 Sprecher 85
Goldfarb 85 Stevens 110
Gonzalez 25 Sybesma 200
Grable 200 Tarnofsky 95
Graham 145 Taylor 100
Green 140 Thompson $ 95
Halfhill 35 Thompson, D. 125
Hanly 85 Turner 85
Hampel 225 Tyler 85
Hill 65 Van Lighten 95
Hochner 145 Volkert 85
Honeywell 120 Wallace, T. 200
Hornak 170 Warren 65
Houston 75 Wertheimer 95 I
Hurlbut 215 Whitaker 65
Imme11 210 Whitehead 65
Jenson 120 Wolcott 210
Kidman 180 Wooton 75
K1atte 110 Wray 110
Kohn 150 Wynder 155
Krogius 150 Pre-Bar Associates 85
Kuperberg 150 Summer Associates 80
EXHIBIT "A"
5/17/87
5/211/064075-0005/001.1
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Resolution Number ~~~~
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Draft of 5/14/87
PRELIMINARY OFFICIAL STATEMENT DATED JUNE ___, 1987
NEW ISSUE
Ratin9: Moody's
(See "Rating" herein)
In the opinion of Rutan & Tucker, Costa Mesa, Ca7ifornia, Bond
Counse7, under existing laws, regu7ations, ru7ings an djudicia7 decisions
and assuming comp7iance with certain covenants described herein, interest
due with respect to the Notes is present7y exempt from gross income for
federa7 income tax purposes, subject, however, to certain qua7ifications
more particularly described under the caption "Tax Exemption" herein, and
from persona7 income taxation imposed by the State of Ca7ifornia.
s
CITY OF SEAL BEACH
19S7-88 TAX AND REVENUE ANTICIPATION NOTES
Dated: July 7, 19S7
Due: July 6, 1988
Principal and interest on the Notes wfll be payable upon maturity
at the office of the paying agent, Security Pacific National Bank, in Los
Angeles, California. The Notes are not subject to redemption prior to
maturity. The Notes will be ne90tiable and nonregistrable.
The Notes are by statute general obligations of the City but are
payable only out of taxes, income, revenue, cash receipts and other moneys
of the City attributable to the fiscal year 1987-88 and le9ally available
for payment thereof. The Notes are secured by a pledge of (i) the
first dollars ($ ) of taxes, 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 moneys") to be
received by the City in , 1987, (ii) the first dollars
($ ) of unrestricted moneys to be received by the City in _,
1988, and (iii) the first dollars ($_), plus an
amount sufficient to pay the interest on the Notes, of unrestricted moneys
to be received by the City in , 1988.
The Notes are direct obligations of the City and, to the extent
described herein, are legal investments for commercial banks in California
and are eligible to secure deposits of public moneys in California.
Interest Rate
~
The Notes wi77 be offered when, as and if issued and received
by the Underwriter, subject to the approva7 of 7ega7ity by Rutan & Tucker,
Costa Mesa, Ca7ifornia, Bond Counse7. Certain other 7ega7 matters wi77 be
passed upon for the City by the City Counse7 for the City of Sea7 Beach.
The Notes, in temporary or definitive form, wi17 be availab7e for de7ivery
in Los Ange7es, Ca7ifornia on or about Ju7y 15, 1987.
Security Pacific Merchant Bank
* Subject to change
Dated: July ___, 1987
.
Resolution Number ~~~
No dealer, broker, salesperson or other person has been authorized
by the City to give any information or to make any representations other
than those contained herein and, if given or made, such other information
or representation must not be relied upon as havin9 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 Statement I
which involve estimates, forecasts or matters of opinion, whether or not
expressly so described herein, are intended solely as such and are not to
be construed as a representation of facts.
The information set forth herein has been obtained from 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 information and expressions of opinions herein
are subject to change without notice and neither delivery of this Official
Statement nor any sale made hereunder shall, under any circumstances,
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
submitted in connection with the sale of the Notes referred to herein and
may not be reproduced or used, in whole or in part, for any other purpose,
unless authorized in writing by the City.
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Resolution Number ~9c:2
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TABLE OF CON1ENTS
Page
City Offi cia 1 s .................................................... i i i
Introductory Statement ............................................ 1
1987-88 Short-Term Borrowin9 Pr09ram .............................. 1
The Notes ......................................................... 2
Security for the Notes ............................................ 2
Avail abl e Sources of Payment ...................................... 3
Constitutional Limitations on Taxes and Appropriations ............ 4
City Financial Information........................................ 4
Assessed Valuations ......................................... 4
Ad Valorem property Taxation................................ 5
Property Tax Levi es and Coll ect ions ......................... 6
Financial Statements........................................ 7
General Fund ................................................ 7
Statement of Revenues, Expenditures and Changes ............. 8
Annual Budget ............................................... 9
Projected and Actual Cash Flows ............................. 9
Ret i rement Program .......................................... 13
Long Term Obl igations ....................................... 13
Computation of Legal Debt Margin ............................ 14
The City .......................................................... 16
Locat ion .................................................... 16
City Government and Population .............................. 16
Employment and Industry ..................................... 18
Commercial Activity......................................... 19
Building Activity........................................... 20
Transportat i on .............................................. 20
Ut il it i es ................................................... 21
Education................................................... 21
Recreation and Community Facilities ......................... 21
Tax Exemption..................................................... 22
Legal Opinion...................................................... 24
Legality for Investment in California ............................. 24
Rating............................................................ 25
Lit i gat i on ........................................................ 25
Underwrit i ng ...................................................... 25
Additional Information ............................................ 26
Appendix A Financial Statements...................................
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
MARKET. SUCH STABILIZING, IF COMMENCED, 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.
Resolution Number~~~
Edna Wilson
Mayor Pro Tem
Victor Grgas
Council Member
Robert Nelson
City Manager
CITY OF SEAL BEACH, CALIFORNIA
Elected Officials
Frank Cl i ft
Mayor
Joanne M. Yeo, City Clerk
Citv Staff
Denis Thomas, Director of Finance
SDecial Services
Rutan & Tucker
Costa Mesa, California
Bond Counsel
Joseph Hunt
Council Member
I
Joyce A. Risner
Council Member
Greg Stepanicich
City Attorney
Diehl, Evans and Company
Santa Ana, California
Certified Public Accountant
I
Security Pacific Merchant Bank
Los Angeles, California
Underwriter
Security Pacific National Bank
Los Angeles, California
Paying Agent
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Resolution Number
&9,,2,
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OFFICIAL STATEMENT
$
City of Seal Beach
1987-88 TAX AND ~EVENUE ANTICIPATION NOTES
INTRODUCTION
The purpose of this Official Statement is to provide information in
connection with the issuance by the City of Seal Beach, California (the
"City") of 2.2 million of its 1987-88 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 May 26, 1987. Issuance of the Notes will provide funds to
meet fiscal year 1987-88 general fund expenditures, includin9 operating
expenses, capital expenditures, and the discharge of other obligations or
indebtedness of the City.
The Notes are general obli9ations of the City but are payable only
from taxes, income, revenues, cash receipts and other moneys of the City
attributable to the 1987-88 fiscal year and le9ally available for the
payment thereof. See SECURITY FOR AND SOURCES OF PAYMENT OF THE NOTES.
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.
1987-88 SHORT-TERM BORROWING PROGRAM
In order to finance its General Fund cash flow requirements in fiscal
year 1987-88, the City has undertaken a short-term borrowing pr09ram which
will total $ ____ million. The City expects to issue, on or about July 7,
1987, $ mi 11 ion in Tax and Revenue Notes with a final maturity of
July 6, 1988. 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 1987-88. Security for the Notes is described under "SECURITY FOR AND
SOURCES OF PAYMENT OF THE NOTES - Security for the Notes." Estimated
sources of payment provide a coverage factor for estimated payment
requirements of over to one.
THE NOTES
The Notes will be dated July 7, 1987 and will all mature on July
6, 1988. The Notes will be issued in nonregistered form without coupons,
1n denominations of $5,000 and integral multiples thereof. Interest on
the Notes will be payable at maturity, computed on the basis of a 360-day
year and 3D-day months.
Principal of and interest on the Notes will be payable upon the
surrender thereof at the principal office of Security Pacific National
Bank in Los Angeles, California, the Paying Agent. Notes may be
transferred or exchanged for Notes of authorized denominations and of
authorized form at the office of the Paying Agent, without charge, except
for any applicable tax or other 90vernmental charge.
SECURITY FOR AND SOURCES OF PAYMENT OF THE NOTES
Security for the Notes
Pursuant to Section 53856 of the Government Code of the State of
California, the resolution of issuance with respect to the Notes specifies
that, as security for the payment of the principal of and interest on the
Resolution Number ~~~
Notes, the City pledges the first dollars ($ ) of
unrestricted revenues (as hereinafter defined) received by the City in
the , 1987 accounting period, the first dollars
of unrestricted revenues ($ ) to be received by the City in _____,
1988 accounting period, the first Dollars ($ )
of unrestricted revenues received by the City in the , 1988
accounting period, and an amount sufficient to pay interest on the Notes
of unrestricted revenues received by the City in , 1988 (such
pledged amounts being called the "Pledged Revenues"). In the event that I
there are insufficient Pledged Revenues received by the City by ,
1988 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 moneys" means taxes, income, revenue,
cash receipts and other moneys intended as receipts for the General Fund
of the City for the fiscal year 1987-88 and which are generally available
for the payment of current expenses and other obligations of the City.
The Pledged Revenues will be deposited by the City Director of
Finance, beginning on , 198__ and thereafter at intervals
stated above, in trust in a special City fund (the "Repayment Fund"). The
Other Pledged Moneys, if any, will be deposited by the City Director of
Finance in the Repayment Fund in the , 1988 accounting period
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 Amounts 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 I
that no investment shall have a maturity date later than the maturity date
of the Notes. Earnings on investments in the Repayment Fund will be
transferred to the General Fund of the City.
On or before , 1988, the City Director of Finance will
arrange for the transfer to the Payin9 Agent of an amount in immediately
available funds sufficient to pay the principal of and interest on the
Notes. Any moneys remaining in the Repayment Fund after such transfer, or
provision for such transfer, will be transferred to the General Fund of
the City.
Available Sources of Payment
In accordance with California law, the Notes are general
obli9ations of the City, but are payable only out of taxes, income,
revenue, cash receipts and other moneys of the City attributable for
payment thereof. A 1978 change in the Constitution of the State of
California substantially limited the City's ability to levy ad valorem
taxes. (See "CONSTITUTIONAL 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 85% of the estimated
moneys legally available for the payment of the Notes and such other
debt. The estimated amount needed to repay the Notes and the interest I
thereon is $ million. The City estimates that funds available from
the General Fund for payment of the Notes wi 11 be in excess of
approximately $ million.
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Resolution Number ~)7~
ESTIMATED GENERAL PURPOSE RESOURCES
AVAILABLE FOR PAYMENT OF NOTES(I)
(000)
Source
Amount
. Unrestricted available fund balance - July I, 1987...... $
Property Taxes .........................................
Sales and use taxes ....................................
Other Taxes ............................................
Licenses and permi ts ...................................
Fines and penalties ....................................
Investment earnings ....................................
Aid from governmental agencies .........................
Current service charges................................
Other revenue (I).......................................
TRANS Proceeds ......................................... $
Total ................................................ $
(I) Includes Tideland Revenue, the Gas Tax and Water Sewer Charges
CONSTITUTIONAL LIMITATIONS ON TAXES
Existing Limitations
Article XIII A of the California Constitution limits the maximum
ad valorem tax on real property to 1% of "full cash value" which is
defined as "the County assessor's valuation of real property as shown on
the 1975-76 tax bill under "full cash value" or, thereafter, the appraised
value of real property when purchased, newly constructed, or a change in
ownership has occurred after the 1975 assessment. The full cash value may
be adjusted annually to reflect inflation at a rate not to exceed 2% per
.year, or reduction in the consumer price index or comparable local data,
or declining property value caused by substantial damage, destruction, or
other factors.
After the adoption of Article XIII A, most California
municipalities including Seal Beach, applied the two per cent inflationary
factor to the full cash value for each fiscal year commencing with the
1975-76 fiscal year. This procedure has been judicially upheld. For
fiscal year 1984.85 a 1% inflationary factor was applied to the full cash
value due to the small rise in the Consumer Price Index.
FINANCIAL INFORMATION
Assessed Valuations
The assessed valuation of property in the City is established by
the County Assessor, except for public utility property which is assessed
by the State Council of Equalization. Assessed valuations are reported at
100% of the full value of the property, as defined in Article XIII A of
the Cal ifornia Constitution. Prior to 1981-82, assessed valuations were
reported at 25% of the full value of property. (See "CONSTITUTIONAL
LIMITATIONS ON TAXES.")
The C~lifornia State Legislature adopted in 1969 the Homeowners
Property Tax Relief Pr09ram. 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 taxin9 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 1 ieu of the
business inventory tax subvention, the State distributes additional
vehicle license fee revenues to California Counties.
Resolution Number~~
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
Total
Fiscal Common Public Unsecured Assessed
Year ProDertv Utility Valuation Valuation
1980-81 164,730,439 7,918,320 13,248,837 185,897,596
1981.82 (1) 722,649,906 35,603,960 52,203,288 810,457,154
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 1,066,328,144
1986-87
I
(1) Starting with fiscal year 1981-82, assessed valuations are based on 100%
of market value, while prior years' assessed valuations are 25% of market
value.
Source: Orange County
Ad Valorem Property Taxation
Taxes are levied for each fiscal year on taxable real and
personal property which is situated in the City as of the precedin9 March
1. Effective July 1, 1983, real property which changes ownership or is I
newly constructed is revalued at the time the change in ownership occurs
or the new construction is completed. The current year property tax rate
will be applied to the reassessment, and the taxes will then be adjusted
by a proration factor to reflect the portion of the remaining tax year for
which taxes are due.
Under prior law, value changes due to changes in ownership and
new construction were added to the assessment roll on March 1 following
the change of ownership or completion of new construction. As a result,
the change in property tax liability was not reflected until the fiscal
year following the March 1 lien date.
For assessment and collection purposes, property is classified
either as "secured" or "unsecured" and is listed accordingly on separate
parts of the assessment roll containing State-assessed property and
property the taxes on which are a lien on real property sufficient, in the
opinion of the County Assessor, to secure payment of the taxes. Other
property is assessed on the "unsecured roll."
Property taxes on the secured roll are due in two installments,
on November 1 and February 1 of each fiscal year, and if unpaid become
delinquent on December 10 and April 10, respectively. Beginning with
fiscal year 1982-83, the penalty increased to 10% from 6%. Property on
the secured roll with respect to which taxes are delinquent becomes tax
defaulted on or about June 30 of the fiscal year. Such property may I
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 become delinquent, if unpaid, on August 31. A 10% penalty
attaches to delinquent unsecured taxes. If unsecured taxes are unpaid at
5 p.m. on October 31, an additional penalty of 1-1/2% attaches to them on
the first day of each month until paid. The City has four ways of
collecting delinquent unsecured personal property taxes: (1) bringing a
civil action a9ainst the taxpayer; (2) filing'a certificate in the office
Resolution Number ~~ . ~
of the county Clerk specifying certairi~facts in order to obtain a lien on
certain property of the taxpayer; (3) filing a certificate of delinquency
for record in the County Clerk and Recorder's office in order to obtain a
lien on certain property of the taxpayer; and (4) seizing and selling
personal property, improvements or possessory interests belongin9 or
assessed to the assessee.
Property Tax Levies and Collections
Percent
Fiscal Total Current Current Tax of Levy
Year Tax Levv Collections Co 11 ect i ons
I 1980-81 (1) 1,749,247 1,706,840 97.58
1981-82 1,427,457 1,337,716 93.29
1982-83 '1,718,551 1,666,674 96.89
1983-84 1,644,403 1,584,400 96.35
1984.85 1,696,989 1,654,528 97.50
1985-86 1,981,720 1,869,000 94.31
1986-87 (2) 2,045,000
1987-88 (2) N/A N/A
(1) Beginning with the 1981-82 fiscal year, assessed values are 100% of
full market value compared to 25% in prior years.
(2) Estimated
Source: City of Seal Beach
Financial Statements
The accompanying financial statements were developed from the
comprehensive audited Financial Statements. A copy of the combined,
summary audited financial statements of the City of Seal Beach for the
year ended June 30, 1986 is attached to the Official Statement as an
appendix. The specific statements provided are for information purposes
only and do not constitute the complete financial statements of the City.
The City's complete audited financial statements are available upon
request.
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CITY OF SEAL BEACH
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
YEAR ENDED JUNE 30, 1985 AND 1986
I
Revenues:
Taxes .............................................
Licenses, Fees and Permits ........................
Court Fi nes ................................. ~ . . . . .
Interest and Rentals..............................
From Other Governmental Agencies ..................
Charges for Services..............................
Miscellaneous.................................... .
Total Revenues................................
Expenditures:
Current Operating:
General Government ..............................
Pub 1 i c Safety ...................................
Public Works and Environment ....................
Total Expenditures ............................
1985
$4,523,359
481,616
291,833
231,435
1,397,526
879,085
173.354
$7.978.208
$1,191,980
4,355,430
2.477.800
8.025.210
Deficiencies of Revenues Over Expenditures .......... ( 47.002)
Total Other Financing Sources .................
Excess (Deficiency) of Revenues and Other Sources
Over Expenditures and Other Uses ..................
Fund Balance - Beginning of Year ...................
Fund Balance - End of Year .........................
163.388
116,386
1. 853.805
$1,970,191
a========
1986
$
$
$
$
==c========
Resolution Number ~
Annual Budget
On or before June 30 the City adopts an annual budget for the
ensuing fiscal year. Formal budgets are employed as a management control
device during the year for the General, Special and Capital Project
funds. From the effective date of the budget, the amounts stated herein
as proposed expenditures become appropriations to the various City
departments. The City Manager may transfer funds within a specified
dollar amount within departments. Expenditures may not legally exceed
appropriations at the department level. All appropriations lapse at the I
end of the fiscal year to the extent they have been expended, except for
capital projects which are carried forward until such time as the project
is completed. The City employs encumbrance accounting.
Budget information is presented for the Government fund types on
the cash basis of accounting. Budgeted revenue amounts represent the
original budget modified by Council-authorized adjustments during the year
which were contingent upon new or additional revenue sources. Budgeted
expenditure amounts represent original appropriations adjusted for
supplemental appropriations during the year.
CITY OF SEAL BEACH
GENERAL FUND
ADOPTED FINAL BUDGET FOR FISCAL YEARS 1986-87 AND
PROPOSED BUDGET FOR FISCAL YEAR 1987-88
Final
1986-87
Budaet
REQUIREMENTS
General Government
Public Safety
Public Works and Environmental
$ 812,970
4,416,970
Service 2.597.930
Total Requirements
$7,827,870
, AVAILABLE FUNDS
Property Taxes
Sales and Use Taxes
Other Taxes
Licenses and Permits
Fines, Forfeitures and Penalties
Use of Money and Property
Pier Restoration Revenues
Revenue from Other Agencies
Charges for Current Services
Transfers from Other Funds (net)
Other Revenue
$2,045,000
1,100,000
1,787,000
501,000
325,000
376,600
330,000
859,000
914,000
381,690
98.000
$8,716,790
Total Revenue
Source: The City of Seal Beach.
PROJECTED AND ACTUAL CASH FLOWS
Proposed
1987-88
Budaet
$
$
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$
$
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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, 1987 is expected to be
approximately $ , and the General Fund is expected to realize a
maximum cash flow deficit of approximately $ in the month of
November, 1987.
The 1987-88 cash flows that follow are estimates, based on the
best information available to the City when they were prepared in May,
1987.
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Resolution Number~
"
CITY OF SEAL BEACH
1987-88 GENERAL FUND CASH FLOW
(To Be Provided)
CITY OF SEAL BEACH
1985-86 GENERAL FUND CASH FLOW
ACTUAL/ESTIMATED
(To Be Provided)
CITY OF SEAL BEACH
1984-85 GENERAL FUND CASH FLOW
~TUAl
(To Be Provided)
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.
Contributions to the plan are made
employees. The City's contribution was $
30, 1987, and is budgeted to be S in fiscal
by both the City and
for the year ended June
year 1987-88.
The City's contribution rates vary annually depending on
actuarial valuations, benefits provided under contract, and quadrennial
changes in actuarial assumptions. The last actuarial valuation, as of
June 30, 1986, indicates that _____% of accrued actuarial liabilities were
funded for safety members and % for non.safety members. Current
employer contribution rates have been established by PERS to amortize the
remaining unfunded actuarial liability of $ by the year 2011.
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,
1985, the City of Seal Beach had $257,000 in direct general obligation
bonded indebtedness outstanding, supported entirely by water utility
revenues.
Resolution Number ~It
The City of Seal Beach has entered into a lease agreement with
the Seal Beach Administration Building Authority for use of its
facilities. Annual lease payments of $34,850 are being made by the City
throu9h 1993.
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, 1987
I
Total Assessed Value of All Real
and Personal Property .................................. $
Legal Debt Limit - 15% of Total
Assessed Valuation...................................... $
Amount of Debt Applicable to Limit ........................ $
Lega 1 Debt Marg in. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $
257.000
Percent of Legal Debt Limit Authorized ....................
%
Source: City of Seal Beach
THE CITY
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Location
The City of Seal Beach, located on the coast of northwestern
Orange County, is about 27 miles southeast of Los Angeles and seven miles
from the Port of Lon9 Beach. The City was incorporated in 1915 and
remained as a small seaside resort town until about 1960. From 1961 to
1975 the City increased in size from 1.25 square miles to 11.97 square
miles through annexation of new subdivisions, which petitioned to join the
City to obtain various municipal services.
Seal Beach is primarily a residential community, housing many
employees of the industrialized areas of northwest Orange County and
southern Los Angeles County. In addition, two major defense and space
technology installations, the Seal Beach Naval Weapons Station and
Rockwell International Corporation Satellite Systems Division, are located
in Seal Beach and employ a combined 3,200 workers.
Freeway access from Seal Beach to all points in the Los
Angeles-Orange County metropolitan areas is provided by the San Diego,
Garden Grove, and San Gabriel Freeways which meet at the northern edge of
the City and connect with other segments of the extensive Southern
Cal ifornia freeway network. Scheduled air transportation and air freight I
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 90verned and administered
under a council-manager form of government. The five member City Council
is elected by district to serve four-year alternating terms. The Mayor
and Mayor Pro Tempore are elected by the Council from among its members
for one-year terms. The City Clerk is also elected. The City Attorney
and City Manager are appointed by the City Council. All other officers
and employees of the City are appointed by and are responsible to the City
Manager. The City has recently reduced personnel by contracting out
certain services including fire protection, which is provided by Orange
County.
Resolution Number ~~~
'.
. .
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 1984
population rose from 24,441 to 26,400. A table of the City's population
and land size growth is presented below.
CITY OF SEAL BEACH
POPULATION AND SIZE
I
Population
Land Area Cl)
Year
Amount
Annexed
Total Size
1950
1960
1961
1962
1964
1965-68
1970
1975
1980
1983
1984
1985
1986
1987
3,553
6,994
24,441
25,974
26,100
26,384
26,900
27,350
5.07
1.69
1.40
0.39
2.17
1.25
1.25
6.32
8.01
9.41
9.80
11.97
11.97
11.97
11.97
11.97
11.97
11.97
(1) Square mil es
Source: Population - State Department of Population estimates for 1987,
all other figures are U.S. Census Bureau data. Land area - City
of Seal Beach.
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Employment and Industry
Orange County provides a large employment base for City residents.
The major employment categories are manufacturing (24.1% of the labor
force), trade (25.6%) and services (22.9%). As of April 1987, Orange
County's unemployment rate stood at ___ percent compared to ___ percent
for the state and ___ for the nation. The following table shows a
seven-year history of Orange County employment by category.
ORANGE COUNTY
EMPLOYMENT BY INDUSTRY GROUP (000)
TVDe of EmDlovment 1980 1981 1982 1983 1984 1985 1986
Agri cul tural 7.4 7.4 7.7 5.8 8.7 8.9
Non A9ricultural 650.2 666.5 663.4 676.0 953.0 993.5
Mining & Construction 52.3 52.5 42.3 37.5 47.2 53.5
I ManUfacturing 220.6 223.9 214.0 213.8 211. 9 242.0
Transportation and
Publ ic Util ities 27.3 29.4 29.B 30.1 31.4 32.8
Wholesale Trade 40.2 44.7 44.9 49.0 55.1 58.9
Retail Trade 161.1 166.4 165.1 178.4 182.5 192.2
Finance, Insurance and ..
Real Estate 57.2 62.2 62.2 64.9 70.1 74.4
Service 172.1 182.6 190.2 203.6 228.3 232.3
Government 105.6 105.2 1QU 104.7 104.5 107.5
TOTAL 843.8 873.8 859.5 887.6 962.2 1,996.0
Source: State Employment Development Department.
Resolution Number~~
. . The u.s. Naval Weapons Station employing 1102 civilians and 225
ml1l~ary personnel is located in the City. The station has its own
docklng and vessel loading facilities in a protected deepwater harbor.
Rockwe.ll Intern.ational Corporation-Satellite Systems Division, currently
emploYlng approxlmately 2531 full-time personnel is located in the City.
Commercial Activity
The City of Seal Beach contains a central business district and
three major shopping centers, the latter of which were developed since
the City began annnexing subdivisions. The largest shopping center is I
Rossmoor Shopping Center, which includes the Boston Store. In 1986
taxable retail sales stood at $_____ million compared to $77 million in
1985, an increase of approximately percent. Total taxable
transactions stood at $_____ million in 1986 compared to $93 million in
the prior year, a decrease of approximately percent. The table
below shows taxable transactions for the City from 1982 through 1986.
CITY OF SEAL BEACH
TAXABLE SALES
(Thousands of Dollars)
TVDe of Business 1982 1983 1984 1985 1986
Retail Stores:
Apparel $ 5,501 $ 5,323 $ 5,663 $ 5,629 $
General Merchandise 5,323 5,133 5,366 5,425
Drug 5,843 6,349 6,836 5,848
Food 7,868 8,181., 8,009 8,464
Package Li quors 2,557 2,448 2,873 2,802
Eating and Drinking Places 14,335 16,109 16,679 18,915
Home Furnishings and
Appliances 2,074 2,858 2,580 2,646 I
Building Materials and 359*
Farm Implements 1,397 1,486 1,522
Auto Dealers and Suppliers 1,538 1,649 1,490 1,447
Service Stations 16,756 16,390 15,862 17,343
Other Retail Stores 5.498 6.876 7 .124 7.247
Retail Stores - Total $ 68,690 $ 71,675 $ 73,918 $ 77,288 $
All Other Outlets 17.755 18.610 21. 995 16.141
Total All Outlets $ 86,445 $ 90,285 $ 95,913 $ 93,429 $
=-=====- ===-== ::1_==== ====::1= ===a_==-
*
Sales omitted because publication would result in disclosure
of confidential information; amounts are included in "Other
Retail Stores."
Source: State Board of Equalization.
BUilding Activity
Residential building activity in the City has fluctuated
depending on changes in the State and national economies. The number of
permits for residential dwellings totaled ____ for a value of $___ million
in 1986 while total valuations stood at $ million. The followin9
table shows the number of, and value of building permits for the City from
1982 through 1986.
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Resolution Number ~ ; .-
CITY OF SEAL BEACH
BUILDING PERMITS AND VALUATIONS 1981 THROUGH 1986
(000)
.
1981 1982 1983 1984 1985 1986
Valuations (in thousands):
Res ident i al $ 5,893 $ 4,726 $ 8,281 $ 8,666 $ 5,175 $
Non Residential 2.422 1.671 6.503 5.419 6.068
I Total $ 8,315 $ 6,397 $14,784 $14,085 $11,243 $
Number of New
Dwelling Units:
Single Family 27 17 55 49 15
Mul t i Family ...z ---1 --..Q --..Q ....Q
Tota 1 29 19 55 49 15
Source: "California Construction Trends," Security Pacific National Bank
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Transportation
The San Diego, San Gabriel and Garden Grove Freeways Intersect
within the City limits, and the City is bisected by State Route 1 (Pacific
Coast Highway). Existing freeways provide excellent access to all north,
south and eastern points.
Re9ularly scheduled airline service is available at the Long
Beach Airport, Orange County Airport and Los Angeles International
Airport, each of which is less than 45 minutes driving time from Seal
Beach.
Western Greyhound Lines provides long distance passenger and
package express service from Seal Beach. Local bus service is provided by
the Southern California Rapid Transit District, Long Beach Public
Transportation Company and Orange County Transit District.
Marine transportation is provided by the facilities of the Port
of Lon9 Beach and the Port of Los Angeles at San Pedro. Both of these
installations are within 10 miles of the City and provide modern
facilities for handling all types of cargoes. The ports are also a
stopping point for trans-Pacific passenger lines.
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.
Education
The City of Seal Beach is served by two high schools and one
elementary school district. Most of Seal Beach is also within the Orange
Coast Communitiy College District. The district operates three colleges
within Orange County. The 122-acre Huntington Beach Campus (Golden West
College), which began classes in 1966, is approximately ei9ht miles from
Seal Beach.
Orange County has five community colleges and ei9ht institutions
granting degrees for four-year or graduate courses of study. The schools
are: University of California at Irvine; California State University,
Fullerton; Chapman College, Orange; Southern California College, Costa
Mesa; West Coast University, Orange; Western State University, Anaheim;
Orange University College of Law, Santa Ana; and Pepperdine University,
Santa Ana. A number of colleges and universities are also located in the
adjacent area of southern Los Angeles County, includin9 the California
State University at Long Beach.
Resolution Number ~
Recreation and Community Facilities
The City of Seal Beach was ori9inally established because of its
attractiveness as a seaside resort and recreation area. While the
character of the City has under90ne change during the last decade from a
resort community to a stable residential community, recreation is still an
important factor in the local economy. City officials estimate that more
than 3,000,000 visitors are attracted to the one mile City-owned ocean
front recreation area each year. -For the convenience and accommodation of
these visitors, the City maintains a 1,860 foot municipal pier, which is
being repaired from the proceeds of a federal Emergency Management Act I
grant and other grants, and a beach park with picnic facilities. Swimming
and surfboardin9 are popular sports and are conducted under the
supervision of municipal lifeguards.
The City has acquired or leased and developed nearly 47 acres of
parkland. The most recent acquisition is an eight acre abandoned railroad
right-of-way, 100 feet wide by 3,600 feet long. The park bisects downtown
Seal Beach. The $1.2 million project is within the Riverfront
Redevelopment Project of the Redevelopment Agency and is financed by the
Agency and by gas tax funds.
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 acquatic park provides public beach and picnic facilities
for 2,800 people, public fishin9 floats, boat rentals, fueling docks, and
berths for recreational boating.
TAX EXEMPTION
In the oplnlon of Rutan & Tucker, Costa Mesa, California, Bond
Counsel, under existing laws, regulations, rulings and judicial decisions, I
interest paid with respect to the Notes is exempt from income taxation by
the United States of America and 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 relatin9 to the
exclusion from 9ross income for federal 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 interst 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 I
tax consequences will depend upon the recipient's particular tax status or _
other items of income or decution. 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 qualified tax-exempt
obligations which has been and will be issued by it in 1987 does not
exceed $10,000,000, and designates each Note to be a qualified tax-exempt
obligation pursuant to Section 265(b) (3) IBl liil of the Internal Revenue
Code.
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Resolution Number ~~~
LEGAL OPINION
The oplnlon of Rutan & Tucker, Costa Mesa, California ("Bond
Counsel") approvin9 the validity of the Notes and stating that, in the
opinion of such Bond Counsel, interest on the Notes 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 ori9inal delivery of
the Notes. A copy of such opinion will be printed on each definitive Note
without charge to the purchasers.
Bond Counsel's employment is limited to a review of the legal
proceedings required for the authorization of the Notes and to renderin9
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 para9raph.
Certain legal matters will be passed upon for the City by the City
Attorney.
LEGALITY FOR INVESTMENT IN CALIFORNIA
Under the provisions of the State Financial Code, the Notes are
legal investments for commercial banks in the State of California to the
extent that the Notes, in the informed opinion of the bank, are prudent
for the investment of funds of its depositors and under provisions of the
State Government Code the Notes are eligible to secure deposits of public
monies in the State of California.
RATING
The City received a MIG-____ rating on the Notes from Moody's
Investors Service, Inc. Certain information was supplied by the City to
the rating agency to be considered in evaluatin9 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 ratin9 agency if, in its judgment,
circumstances so warrant. The City undertakes no responsibility either to
bring to the attention of the holders of the Notes any downward revision
or withdrawal. Any such downward revision or withdrawal of the rating
obtained may have an adverse effect on the market price of the Notes.
LITIGATION
No litigation is pending or threatened concerning the validity of
the Notes, and a certificate of the City Attorney to that effect will be
furnished to the purchaser at the time of the original delivery of the
Notes. The City is not aware of any litigation pending or threatened
questioning the political existence of the City or contestin9 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 pendin9 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
Merchant Bank (the "Underwriter"). The Underwriter has agreed to purchase
the Notes at a purchase price of $ plus accrued interest. The
Contract of Purchase provides that the Underwriter will purchase all of
the Notes if any are purchased. The obli9ation to make such purchase is
sUbject to certain terms and conditions set forth in the Contract of
Purchase. The Underwriter may offer and sell the Notes to certain dealers
and others at prices lower than the public offerin9 price stated on the
cover page hereof. The offerin9 price may be changed from time to time by
the Underwriter.
Resolution Number~
ADDITIONAL INFORMATION
The purpose of this Official Statement 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 1
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 belief, true and correct in all
material respects and does not contain an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements made, in li9ht 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.
Copies of the final fiscal year 1987.88 budget and fiscal year
1986-87 audited financial statements may be obtained from the City, as
they become available.
City of Seal Beach
Director of Finance
I'
APPENDIX A
Table of Contents
Accountants' Report
Statement of Changes in Cash Balances
Statement of Treasurer's Accountability
Statement of Bonded Indebtedness
Paae
A-I
A-3
A-S
A-6
I
Statement of Cash Receipts -- Budget and Actual A-8
Statement of Cash Disbursements and Reserves A-II
Compared with Appropriations
Notes to Financial Statements A-17
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Resolution Number ::1{,9~
'.
,
S
City of Seal Beach
STATE OF CALIFORNIA
1987-88 TAX AND REVENUE ANTICIPATION NOTES
NOTE PURCHASE AGREEMENT
June _, 1987
City of Seal Beach
211 Eighth Street
Seal Beach, California 90740
Ladies and Gentlemen:
The undersigned (the "Underwriter"), acting on behalf of ourselves,
offer to enter into this agreement with the City of Seal Beach, California
(the "City"), which, upon your acceptance hereof, will be binding upon the
City and the Underwriter. This offer is made subject to the written
acceptance of this Note Purchase Agreement by the City and delivery of
such acceptance to us at or prior to 11:59 P.M., Pacific Time, on the date
hereof.
1. Purchase and Sal e 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 Underwriters for such purpose, all (but not less than all) of
$ in aggregate principal amount of the City's 1987-88 Tax and
Revenue Anticipation Notes (the "Notes"). The Notes shall bear interest
at a rate of % per annum, such interest being payable on maturity.
,The Underwriter shall purchase the Notes at an aggregate discount of
'$ from the initial public offering price set forth on the cover
page of the Official Statement relating to the Notes.
2. The Notes. The Notes shall be dated the date of delivery,
shall mature 365 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 , 1987 (the "Note Resolution")
and Article 7.6, Chapter 4, Part 1, Division 2, Title 5 (commencing with
Section 53850) of the California Government Code (the "Act").
3. Use of Documents. The City hereby authorizes the Underwriier
to use, in connection with the offer and sale of the Notes, this Note
Purchase Agreement and an Official Statement in a form to be jOintly
approved by the City and the Underwriter (which, together with all
appendices thereto and with such changes therein and supplements thereto
as are consented to by the Underwriter, is herein called the "Official
Statement"), the Note Resolution and all information contained herein and
therein and all of the documents, certificates or statements furnished by
the City to the Underwriter in connection with the transactions
contemplated by this Note Purchase Agreement.
4. Public Offering of the Notes. The Underwriter agrees to make
a bona fide public offering of all the Notes at the initial public
offering price or yield to be set forth on the cover page of the Official
Statement. Subsequent to such initial public offering, the Underwriter
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. '-
Resolution Number ~
6. Closing. At 10:00 a.m., Pacific Time, on , 1987 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 to us, at our office
in Los Angeles, California or at such other place as we may mutually agree
upon, 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 will be made available for checking and packaging at
the place of Closing, two business days prior to the Closing. The Notes
shall be in bearer form in denominations designated by us at least five
business days prior to the Closing. 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 I
of the business, Pacific Time on , 1987, 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
existing under the laws of the State of California, with the power to
issue the Notes pursuant to the Act.
(B) (i) At or prior to the Closing, the City will have taken all
action required to be taken by it to authorize the issuance and
delivery of the Notes; (ii) the City has full legal right, power and
authority to enter into this Note Purchase Agreement and to adopt the
Note Resolution and full legal right, power and authority to issue
and deliver the Notes to the Underwriter and to perform its
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 I
Purchase Agreement constitutes a valid and legally binding obligation
of the City; and (v) the City has duly authorized the consummation
by it of all transactions contemplated by this Note Purchase
Agreement.
(C) No consent, approval, authorization, order, filing,
registration, qualification, election or referendum, of or by any
person, organization, court or governmental agency or public body
whatsoever is required in connection with the issuance, delivery or
sale of the Notes or the consummation 'of the other transactions
effected or contemplated herein or hereby, except for such actions as
may be necessary to qualify the Notes for offer and sale under the
Blue Sky or other securities laws and regulations of such states and
jurisdictions of the United States as the Underwriter may designate.
(0) The City has complied in all respects with the Act.
(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 I
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 knowledge
of the City) threatened against the City: (i) in any way affecting
the existence of the City or in any way challenging the respective
powers of the several offices of the titles of the officials of the
City to such offices; or (ii) seeking to restrain or enjoin the
sale, issuance or delivery of any of the Notes, the application of
the proceeds of the sale of the Notes, or the collection of revenues
or assets of the City pledged or to be pledged or available to pay
the principal of and interest on the Notes, or the pledge thereof, or
Resolution Number ~9~
,
1
in any way contesting or affecting the validity or enforceability of
the Notes, this Note Purchase Agreement or the Note Resolution or
contesing the powers of the City or its authority with respect to the
Notes, the Note Resolution or this Note Purchase Agreement; or (iii)
in which a final adverse decision could (a) materially adversely
affect the operations of the City or the consummation of the
transactions consummation of the transactions contemplated by this
Note Purchase Agreement or the Note Resolution, (b) declare this
Note Purchase Agreement to be invalid or unenforceable in whole or in
material part, or (c) adversely affect the exemption of the interest
paid on the Notes from Federal income 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 Offical
Statement.
(H) The City has not been notified of any listing or proposed
listing by the Internal Revenue Service to the effect that the City
is a bond issuer whose arbitrage certificates may not be relied upon.
"
(I) Any certificates signed by any officer of the City and delivered
to the Underwriter shall be deemed a representation and warranty by
the City to the Underwriter as to the statements made therein but not
of the person signing the same.
I"
8. Covenants of the City. The City convenants and agrees with
the Underwriter that:
(A) The City will furnish such information, execute such
instruments, and take such other action in cooperation with the
Underwriter if and as the Underwriter may reasonably request in order
(i) to qualify the Notes for offer and sale under the Blue Sky or
other securities laws and regulations or such states and
jurisdictions, and will use its best efforts to continue such
qualifications in effect so long as required for distribution of the
Notes;
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 90 days after the Closing or until such time (if
earlier) as the Underwriter shall no longer hold any of the Notes for
sale, the City will (a) not adopt any amendment of or supplement to
the Official Statement to which, after having been furnished with a
copy, the Underwriter shall object in writing or which shall be
disapproved by the Underwriter and (b) if any event relating to or
affecting the City shall occur as a result of which it is necessary,
in the opinion of the Underwriter, to amend or supplement the
Official Statement in order to make the Official Statement not
misleading in 1 fght of the circumstances existing at the time it is
delivered to a purchaser, forthwith prepare and furnish (at the
expense of the City a reasonable number of copies of an amendment of
or supplement to the Official Statement (in form and substance
satisfactory to the Underwriter) which will amend or supplement the
Official Statement so that it will not contain an untrue statement of
a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
existing at the time the Official Statement is delivered to a
purchaser, not misleading.
9. Conditions and Closing. The Underwriter has entered into
this Note Purchase Agreement in reliance upon the representations and
warranties of the City contained herein and the performance by the City
of its obligations hereunder, both as a date hereof and as of the date of
Closing. The Underwriter's obligations under this Note Purchase Agreement
are and shall be subject, at the option of the Underwriter, to the
following further conditions at the Closing;
Resolution Number~~
(A) The representations and warranties of the City contained herein
shall be true, complete and correct in all material respects at the
date hereof and at and as of the Closing, as if made at and as of the
Closing, and the statements made in all certificates and other
documents delivered to the Underwriter at the Closing pursuant hereto
shall be true, complete and correct in all material respects on the
date of the Closing; and the City shall be in compliance with each of
the agreements made by it in this Note Purchase Agreement;
(B) At the time of the Closing, (i) the Official Statement, this
Note Purchase Agreement and the Note Resolution shall be in full I
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 firm
Rutan & Tucker, Costa Mesa, 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;
(C) No decision, ruling or finding shall have been entered by any
court or governmental authority since the date of this Note Purchase
Agreement (and not reversed on appeal or otherwise set aside), or to
the best knowledge of the City, pending or threatened which has any
of the effects described in Section 7 (F) hereof or contesting in any
way the completeness or accuracy of the Official Statement.
(D) No order, decree or injunction of any court of competent
jurisdiction, nor any order, ruling or regulation of the Securities
and Exchange Commission, shall have been issued or made with the
purpose or effect of prohibiting the issuance, offering or sale of
the Notes as contemplated hereby and no legislation shall have been
enacted, or a bill favorably reported for adoption, or a decision by
a court established under Article III of the Constitution of the
United States rendered, or a ruling, regulation, proposed regulation
or official statement by or on behalf of the Securities and Exchange
Commission or other governmental agency having jurisdiction of the
subject matter shall be made or issued, to the effect that the Notes
or any securities of the City or of any similar body of the type
contemplated herein are not exempt from the registration,
qualification or other requirements of the Securities Act of 1933, as
amended and as then in effect, or the Trust Indenture Act of 1939, as
amended and as then in effect;
I
(E) At or prior to the data of the Closing; the Underwriter shall
receive three copies of the following documents in each case dated as
of the Closing Date and satisfactory in form and substance to the
Underwriter:
(1) An approving opinion of Bond'Counsel, as to the Notes,
addressed to the City.
(2) A letter setting forth that the underwriter can rely upon
the approving opinion of bond counsel.
(3) The opinions of Bond Counsel and the City Attorney,
addressed to the Underwriter, to the effect that without having undertaken
to determine independently the accuracy or completeness of the statements I
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.
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Resolution Number ~,,~
(4) The opinion of our counsel, addressed to us, to the effect
that under existing laws, the Notes may be offered and sold without
registration or qualification under (i) the Securities Act of 1933, as
amended; and (ii) the California Corporate Securities Law of 196B, as
amended.
(5) A certificate signed by an appropriate City official to the
effect that (i) the representations, agreements and warranties of the
City herein are true and correct in all material respects as of the date of
Closing; (ii) the City has complied wit~ all the terms of the Note
Resolution and this Note Purchase Agreement to be complied with by the City
prior to or concurrently with the Closing and such documents are in full
force and effect; (iii) there is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court or public body,
pending, or to his or her knowledge, threatened against the City which has
any of the effects described in Section 7 (F) hereof or contesting in any
way the completeness or accuracy of the Official Statement (but in lieu of
or in conjunction with such certification the Underwriter may, at its sole
discretion, accept certificates or opinions of the City Attorney or Bond
Counsel, that in their opinion the issues raised in any such pending or
threatened litigation are without substance and that the contentions of all
plaintiffs therein are without merit); 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;
(6) An arbitrage certificate of the City in form satisfactory to
Bond Counsel;
(7) Evidence satisfactory to the, Underwriter that the Notes
shall have been rated MIG- 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;
(B) 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.
(9) 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 wrltlng.
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 for~h_in.the Official Statement
Reso 1 uti on Number ~69 2
or results in an omission to state a material tact necessary to make the
statements made therein, in light of the circumstances under which they
were made, not misleading; (ii) the market for the Notes or the market
price of the Notes or the ability of the Underwriter to enforce contracts
for the sale of the Notes shall have been materially and adversely
affected, in the reasonable professional judgment of the Underwriter, by
(a) legislation enacted by the Congress of the United States, or passed by
either House of the Congress, or favorably reported for passage to either
House of the Congress, by any Committee of such House to which such
legislation has been referred for consideration, or by the legislature of
the State of California (the "State"), or a decision rendered by a court of
the United States or the State or by the United States Tax Court, or a
ruling, order, or regulation (final or temporary) made by the Treasury
Department of the United States or the Internal Revenue Service or other
Federal or State authority, which would have the effect of changing,
directly or indirectly, the Federal income tax consequences or State tax
consequences of interest on obligations of the general character of the
Notes in the hands of the holders thereof, or (b) any new outbreak of
hostilities or other national or international calamity or crisis, the
effect of such outbreak on the financial markets of the United States begin
such as, in the judgment of the Underwriter, would affect materially and
adversely the ability of the Underwriter to market the Notes, or (c) a
general ~uspension of trading on the New York Stock Exchange, or fixing of
minimum or maximum prices for trading or maximum ranges for prices for
securities on the New York Stock Exchange, whether by virtue or a
determination by that Exchange or by order of the Securities and Exchange
Commission or any other governmental authority having jurisdiction, or (d)
a general banking moratorium declared by either Federal or State
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 delivered 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 1987 TRANS issue. (b) The
Underwriter estimates that the costs of issuance, excluding out-of-pocket
expenses incurred by the City, should not exceed $ which the
Underwriter will pay from the aggregate discount. The costs of issuance
include (i) the fees and disbursements of Bond Counsel; (ii) the cost of
the preparation, printing and delivery of the Notes; (iii) the fees for
Note ratings; (iv) the cost of the printing and distribution of the
Official Statement; (v) any costs or expenses incurred with any signature
company incident to signing the Notes, (vi) costs of preparation and
reproduction of this Note Purchase Agreement, and (vii) the cost of Bond
Counsel. (c) The Underwriter shall pay all other costs and disbursements
incurred by them in connection with the transactions contemplated hereby.
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12. Notices. Any notice or other communication 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 I
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 Security
Pacific Merchant Bank, 300 South Grand Avenue, (HCP-211), Los Angeles,
California 90071, Attn: Malcolm L. Jones.
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13. Parties in interest; Survival of Representations and
Warrenties. 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,
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Resolution Number ~~
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
be executed in several counterparts each of which shall be regarded as an
original and all of which shall constitute one and the same document.
15. Applicable Law. This Note Purchase Agreement shall be
interpreted, governed and enforced in accordance with the law of the State
of California.
Very truly yours,
Security Pacific Merchant Bank
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The foregoing is hereby agreed to and accepted as of the date first above
written:
The City of Seal Beach, California
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