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HomeMy WebLinkAboutRES 91-39RESOLUTION NO. 91 - 39 A RESOLUTION OF THE COUNCIL OF THE CITY OF DIAMOND BAR PROVIDING FOR THE BORROWING OF FUNDS FOR FISCAL YEAR 1991/1992 AND THE ISSUANCE AND SALE OF 1991 TAX AND REVENUE ANTICIPATION NOTES THEREFOR A. Recitals. (i) Pursuant to Article 7.6 (commencing with section 53850) of Chapter 4 of Part 1 of Division 2 of Title 5 of the California Government Code (the "Law"), this City Council (the "Council") has found and determined that moneys are needed for the requirements of the City, a municipal corporation and general law city duly organized and existing under the laws of the State of California, to satisfy obligations payable from the General Fund of the City (the "General Fund"). (ii) It is necessary that said sum be borrowed for such purpose at this time by the issuance of temporary notes therefor in anticipation of the receipt of taxes, revenue and other moneys to be received by the City for the General Fund during or allocable to the fiscal year of the City beginning July 1, 1991, and ending June 30, 1992 ("Fiscal Year 1991/199211); B. Resolution. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DIAMOND BAR RESOLVES AS FOLLOWS: Section 1. Limitation on Maximum Amount. The principal amount of notes issued pursuant hereto, when added to the interest i payable thereon, shall not exceed eighty-five percent (85$) of the estimated amount of the uncollected taxes, revenue and other moneys of the City for the General Fund attributable to Fiscal Year 1 1991/1992, and available for the payment of said notes and the interest thereon (as hereinafter provided). $eation 2. Authorization and Terms of Notes. Solely for the purpose of anticipating taxes, revenue and other moneys to be received by the City for the General Fund during or allocable to Fiscal Year 1991/1992, and not pursuant to any common plan of financing, the City hereby determines to and shall borrow the principal amount of one million seven hundred thousand dollars ($1,700,000) by the issuance of temporary notes under the Law, designated "City of Diamond Bar (Los Angeles County, California) 1991 Tax and Revenue Anticipation Notes" (the "Notes"), to be issued as a single note numbered R-1. The Notes shall be dated as i of their date of delivery, shall mature (without option of prior redemption) on June 30, 1992, and shall bear interest from their date, payable at maturity and computed on a 30 -day month/360-day year basis, at the rate determined in accordance with a certificate purchase agreement (the "Certificate Purchase Agreement") to be executed among the City, certain other note issuers (the "Participants") and an underwriting firm (the "Underwriter") to be identified by Sutro & Co. Incorporated, financial advisor to the City (the "Financial Advisor"), pursuant to which the Underwriter will agree to purchase certificate of participation in the repayment amounts to be made by the City with respect to the Notes and in the repayment amounts to be made by the Participants with respect to their notes (the "Certificates"). Both the principal of and interest on the Notes shall be payable in lawful money of the United States of America, at the office of Security Pacific National Bank, San Francisco, California, as Paying Agent (the 2 j "Paying Agent"). Pursuant to a Paying Agent and Servicing Agent Agreement, dated as of July 1, 1991, by and among the Paying Agent, the City and the Participants (the "Paying Agent and Servicing Agent Agreement"), the Notes shall be delivered and placed in trust With the Paying Agent, which will execute and deliver the Certificates. Section 3. Form of Notes. The Notes shall be issued in registered form, without coupons, shall be registered in the name of the Paying Agent, and shall be substantially in the form and substance set forth in Exhibit A attached hereto. Section 4. Use of Proceeds. The proceeds of the sale of the Notes shall be deposited in a segregated account in the General Fund and used and expended by the City for any purpose for which it i is authorized to expend funds from the General Fund. Beotic Security. The principal amount of the Notes, together with the interest thereon, shall be payable from taxes, revenue and other moneys which are received by the City for the General Fund for Fiscal Year 1991/1992. As security for the payment of the principal of and interest on the Notes the City hereby pledges the first "unrestricted moneys" (as hereinafter defined) to be received by the City (a) in the amount of $s50,000 in the month of February, 1992, and (b) in the amount of $s50,000, plus an amount sufficient to pay interest as due on the Notes at their maturity, in the month of May, 1992 (such pledged amounts being hereinafter called the "Pledged Revenues"). The principal of the Notes and the interest thereon shall constitute a first lien and charge thereon and shall be payable from the Pledged Revenues. 3 To the extent not so paid from the Pledged Revenues, the Notes shall be paid from any other moneys of the City lawfully available therefor. In the event that there are insufficient "unrestricted moneys" received by the City to permit the deposit into the Repayment Account (as hereinafter defined) of the full amount of the Pledged Revenues to be deposited in any month by the last business day of such month, then the amount of any deficiency shall r be satisfied and made up from any other moneys of the City lawfully available for the repayment of the Notes and interest thereon. The i term "unrestricted moneys" shall mean taxes, income, revenue, cash receipts, and other moneys intended as receipts for the General Fund for Fiscal Year 1991/1992 and which are generally available for the payment of current expenses and other obligations of the City. i section 6. Repayment Account. There is hereby created, within the General Fund, a special account to be designated the "1991 Tax and Revenue Anticipation Note Repayment Account" (the "Repayment Account") and applied as directed in this Resolution. Any money placed in the Repayment Account shall be for the benefit of the owners of the Notes and, until the Notes and all interest thereon are paid or until provision has been made for the payment of the Notes at maturity with interest to maturity, the moneys in the Repayment p yment Account shall be applied solely for the purposes for which the Repayment Account is created; provided, however, that any interest earned on amounts deposited in the Repayment Account shall periodically ally be transferred to the General Fund. During the months of February, 1992, and May, 1992, the City shall deposit all Pledged Revenues in the Repayment Account. On the 4 date on which payment is required on the Notes, the moneys in the Repayment Account shall be transferred to the Paying Agent as registered owner of the Notes for remittal in accordance with the Paying Agent and Servicing Agent Agreement. Any moneys remaining in the Repayment Account after such payments have been made, or provision for such payments have been made, shall be transferred to the City's General Fund. SectiOU 7. Deg sit and Investment of Renay ent Accoun All moneys held by the City in the Repayment Account, if not invested, shall be held in time or demand deposits as public funds and shall be secured at all times by bonds or other obligations which are authorized bylaw as security for public deposits, of a market value I at least equal to the amount required by law. Moneys in the Repayment Account shall, to the greatest extent Possible, be invested by the City Treasurer directly, or through an investment agreement, in investments as permitted by the laws of the State of California as now in effect and as hereafter amended, and the proceeds of any such investments shall be deposited in the Repayment Account. Section 8. Execution of Notes. The Mayor, the City Manager or the Finance Director is hereby authorized to execute the Notes by manual or facsimile signature, and the City Clerk is hereby authorized to countersign the same by manual or facsimile signature (although at least one of such signatures shall be manual) and to affix the seal of the City thereto by facsimile impression thereof, and said officers are hereby authorized to cause the blank spaces thereof to be filled in as may be appropriate. Section 9. No Transfer or Exchange of Notes. The Notes are 5 not subject to transfer or exchange by the Paying Agent. fiction 10. Covenants and Warranties. It is hereby covenanted and warranted by the City that all representations and recitals contained in this Resolution are true and correct, and that the City and its appropriate officials have duly taken all proceedings necessary to be taken by them, and will take any additional proceedings necessary to be taken by them, for the prompt collection and enforcement of the taxes, revenue, cash receipts and other moneys pledged hereunder in accordance with law and for carrying out the provisions of this Resolution. 8e2tfon 11. Tax Covenants. (a) Private Business Use Limitation. The City shall assure that: (i) not in excess of ten percent (10%) of the face amount of the Notes, plus accrued interest and premium, if any, less original issue discount, if any (the "Proceeds"), is used, directly or indirectly, in a trade or business carried on by a natural person or in any activity carried on by a person other than a natural person, excluding, however, use by a governmental unit and use as a member of the general public ("Private Business Use") if, in addition, the payment of the principal of, or the interest on more than 10 percent of the Proceeds of the Notes is (under the terms of the Notes or any underlying arrangement) directly or indirectly, (i) secured by any interest in property, or payments in respect of P property, used or to be used for a Private Business Use, or (ii) to be derived from payments in respect of property, or borrowed money, used or to be used for a Private Business Use; and in the event that in excess of five percent (5%) of 6 the Proceeds of the Notes is used for a Private Business Use, and, in addition, the payment of the principal of, or the interest on, more than five (5%) percent of the Proceeds of the Notes is (under the terms of the Notes or any underlying arrangement), directly or indirectly, secured by any interest in property, or payments in respect of property, used or to be used for said Private Business Use or is to be derived from payments in respect of property, or borrowed money, used or to be used for a Private Business Use, then, (A) said excess over said five percent (5%) of the Proceeds of the Notes which is used for a Private Business Use shall be used for a Private Business Use related to a government use of such Proceeds and (B) each such Private Business use over five percent (5%) of the Proceeds of the Notes which is related to a government use of such Proceeds shall not exceed the amount of such Proceeds i which is used for the government use of Proceeds to which such Private Business Use is related. (b) Private Loan Limitation. The City shall assure that not in excess of five percent (5$) of the Proceeds of the Notes is to be used, directly or indirectly, to make or finance loans (excluding investments and excluding loans which enable the borrower to finance any governmental tax or assessment of general application for a specific essential governmental function) to persons other than state or local government units. (c) Federal Guarantee prohibition. The City shall not take any action or permit or suffer any action to be taken if the result _ of the same would be to cause the Notes to be "federally guaranteed" within the meaning of section 149(b) of the Internal Revenue Code of 1986 (the "Code") and the regulations promulgated 7 thereunder. (d) No Arbitrage. The City shall not take, or permit or suffer to be taken any action with respect to the Proceeds of the Notes which if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date upon which there is a physical delivery of the Notes in exchange for the amount representing the purchase of the Notes by the original purchasers thereof would have caused the Notes to be "arbitrage bonds" within the meaning of section 148(a) of the Code and regulations promulgated thereunder. (e) Small Issuer Exemption from Rebate Requirements. In accordance with section 148(f)(4)(C) of the Code, the City i covenants that it is a governmental unit with general taxing powers; that the Notes are not private activity bonds as defined in section 141 of the Code; that ninety-five percent (95%) or more of the Proceeds of the Notes are to be used for local governmental activities of the city (or of a governmental unit the jurisdiction of which is entirely within the jurisdiction of the City); and that the aggregate face amount of all tax-exempt obligations issued by the City (including all subordinate entities of the City and all entities which may issue obligations on behalf of the City) during the calendar year 1991 will not exceed $5,000,000, excluding, however, private activity bonds, as defined in section 141 of the Code and current refunding obligations having a principal amount not in excess of the refunded obligation. -- (f) Bmall Issuer Ex mntinn from Bank Nond dnntihil,ty Restriction. The City hereby designates the Notes for purposes of paragraph (3) of section 265(b) of the Code and covenants that the 8 Notes do not constitute private activity bonds as defined in section 141 of the Code and that the aggregate face amount of all tax-exempt obligations issued by the City (including all subordinate entities of the City and all entities which may issue obligations on behalf of the City) during the calendar year 1991 will not exceed $10,000,000, excluding, however, private activity bonds, as defined in section 141 of the Code (other than qualified 501(c)(3) bonds as defined in section 145 of the Code) and current - refunding obligations having a principal amount not in excess of r the refunded obligation. erection 1?. Offic;a� St temen . The City Council hereby approves the Official Statement describing the Notes and the Certificates, in substantially the form on file with the City Clerk, together with any changes therein or additions thereto i deemed advisable by the Mayor, the City Manager, the Finance Director or any other qualified officer of the City. The City Council authorizes and directs the Finance Director or his designee on behalf of the City to deem "final" pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule") the Official Statement prior to its distribution by the Underwriter. The execution of the Official Statement, which shall include such changes and additions thereto deemed advisable by the Finance Director or any other qualified officer of the City and such information permitted to be excluded from the Official Statement pursuant to the Rule, shall be conclusive evidence of the approval of the Official Statement by the City. The Finance Director or his designee is authorized and directed to execute the Official Statement and a statement that the 9 facts contained in the Official Statement, and any supplement or amendment thereto (which shall be deemed an original part thereof for the purpose of such statement) were, at the time of sale of the Notes and the Certificates, true and correct in all material respects and that the Official Statement did not, on the date of sale of the Notes, and does not, as of the date of delivery of the Notes and the Certificates contain an untrue Y statement of a material fact with respect to the City or omit to state material i facts with respect to the City required to be stated where necessary to make any statement made therein not misleading in the light of the circumstances under which it was made. The Finance Director or his designee shall take such further actions prior to the signing of the Official Statement as are deemed necessary or appropriate to verify the accuracy thereof. Section 13, Paving Agent and Servicing Agent Agreement. Pursuant to the Paying Agent and Servicing Agent Agreement, the Notes shall be delivered and placed in trust with the Paying Agent, which will execute and deliver the Certificates under and pursuant to the provisions of the Paying Agent and Servicing Agent Agreement, which Paying Agent and Servicing Agent Agreement is hereby approved. The Mayor, the City Manager, the Finance Director or any other qualified officer of the City is hereby separately authorized and directed on behalf of the City to execute and deliver the Paying Agent and Servicing Agent Agreement, substantially in the form presented at this meeting, together with _ such changes or modifications therein as the Mayor, the City Manager, the Finance Director or any other qualified officer of the City may approve as appropriate to carry out the purposes of this 10 Resolution, which approval shall be evidenced by the execution of the Paying Agent and Servicing Agent Agreement. Section la. Sale of the Notes. The Notes shall be sold to the Paying Agent in accordance with the Paying Agent and Servicing Agent Agreement. section is. Sale of Certificates. The Certificates are hereby authorized to be sold to the Underwriter pursuant to the terms of the Certificates Purchase Agreement to be presented to the City by the Underwriter. The Mayor, the City Manager, the Finance Director or any other qualified officer of the City is hereby separately authorized to execute the Certificates Purchase Agreement and the City Clerk is hereby authorized to attest to such signature and to affix the seal of the City thereto, so long as the interest rate on the Notes does not exceed eight percent (8%) and so long as the discount on the Certificates does not exceed one percent (1t). section 16. Official Action. The Mayor, the City Manager, the Finance Director or any other qualified officer of the City is further authorized and directed to make, execute and deliver such certificates, agreements and other closing documents as are necessary to consummate the transactions contemplated by this Resolution. PASSED, APPROVED AND ADOPTED this 18th day of June , 1991. 11 I, LYNDA BURGESS, City Clerk of the City of Diamond Bar, do hereby certify that the foregoing Resolution was passed, approved and adopted at a regular meeting of the City Council of the City of Diamond Bar held on 18th day of June 1991, by the following Roll Call vote: AYES: COUNCILMEMBERS Werner, Nardella, Papen, NOES:COUNCILMEMBERS Mayor Pro Tem Kim and Mayor Forbing - None ABSENT: COUNCILMEMBERS - None ABSTAINED: COUNCILMEMBERS None ATTEST: Q/ "YN�BUMR-GESS, Cit Clerk City of Diamond Bar 12