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HomeMy WebLinkAboutTC Agd Pkt 2005-02-02 TOWN OF TIBURON Town Council Chambers 1505 Tiburon Boulevard Tiburon, CA 94920 lAfA f/U< February 2, 2005 7:00 PM - Closed Session 7:30 PM - Regular Meeting ASSISTANCE FOR PEOPLE WITH DISABILITIES In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Town Clerk at (415) 435-7377. Notification 48 hours prior to the meeting will enable the Town to make reasonable arrangements to ensure accessibility to this meeting. AVAILABILITY OF INFORMATION Copies of all agenda reports and supporting data are available for viewing and inspection at Town Hall and at the Belvedere-Tiburon Library located adjacent to Town Hall. Agendas and minutes are posted on the 'Town's website, www.cLtiburon.ca.us. Upon request, the Town will provide written agenda materials in appropriate alternative formats, or disability-related modification or accommodation, including auxiliary aids or services, to enable individuals with disabilities to participate in public meetings. Please send a written request, including your name, mailing address, phone number and brief description of the requested materials and preferred alternative format or auxiliary aid or service at least 5 days before the meeting. Requests should be sent to the Office of the Town Clerk at the above address. PUBLIC HEARINGS Public Hearings provide the general publiC and interested parties an opportunity to provide testimony on these items. If you challenge any proposed action(s} in court, you may be limited to raising only those issues you or someone else raised at the Public Hearing(s} described later in this agenda, or in written correspondence delivered to the Town Council at, or prior to, the Public Hearing(s}. TIMING OF ITEMS ON AGENDA While the Town Council attempts to hear all items in order as stated on the agenda, it reserves the right to take items out of order. No set times are assigned to items appearing on the Town Council agenda. ; Agenda - Town Council Meeting February 2, 2005 Page 2 of 4 AGENDA CLOSED SESSION CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION (Section 54956(a)} Fenster v. Town Council, Planning Commission & Library Agency CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION (Section 54956.9(c)) [Property Dispute regarding Easement over a portion of 160 Gilmartin) Initiation of Litigation - Case name(s} withheld because disclosure would jeopardize existing settlement negotiations CONFERENCE WITH LEGAL COUNSEL - POTENTIAL LITIGATION (Section 54956(b)(3)(C) Name of Claimant: Kasey Boak, 1895 Mar West CALL TO ORDER AND ROLL CALL Councilmember Fredericks, Councilmember Gram, Councilmember Slavitz, Vice Mayor Smith, Mayor Berger ORAL COMMUNICATIONS Persons wishing to address the Town Council on any subject not on the agenda may do so now, Please note however, that the Town Council is not able to undertake extended discussion or action tonight on items not on the agenda. Matters requiring action will be referred to the appropriate Commission, Board, Committee or staff for consideration andlor placed on a future Town Council meeting agenda. Please limit your comments to no more than three (3) minutes. CONSENT CALENDAR All items on the Consent Calendar may be approved by one motion of the Town Council unless a request is made by a member of the public, staff or Town Council that an item be transferred to the Regular Agenda for separate discussion and consideration. Likewise, any item on the Regular Agenda may be moved to the Consent Calendar. If you would like to speak on any of these items on the Consent Calendar below, please do so now, 1. Approval of Town Council Minutes - January 19, 2005 2. Recommendation by Director of Administrative Services - Accept Second Quarter FY 2004-05 Financial Report Agenda - Town Council Meeting February 2, 2005 Page 3 of 4 3. Recommendation by Advance Planner - Amend Solar Panel Policy to Comply with New State Legislation - Continued from January 19,2005 REGULAR AGENDA 4. Recommendation by Director of Administrative Services - Lyford Cove Utility Undergrounding Assessment District Bond Issuance a} A Resolution of the Town Council of the Town of Tiburon Authorizing Issuance of Limited Obligation Improvement Bonds PUBLIC HEARING 5. Recommendation by Fountain Plaza Committee - Selection of Artist Finalist for Construction of Fountain in Downtown 6. Recommendation by Town Manager - Amendment to Town Code Pertaining to Taxicabs Introduction and First Reading of Ordinance a) An Ordinance of the Town Council of the Town of Tiburon Repealing Chapter 11 of Title III of the Tiburon Municipal Code and Adopting a New Chapter 11 Regulating Taxicab Operation WRITTEN COMMUNICATIONS Town Council Weekly Digest - January 21,2005 Town Council Weekly Digest - January 28, 2005 ADJOURNMENT FUTURE MEETINGS . February 7,2005 - Annual Town CouncillTown Staff Retreat AGENDA ITEMS - Note: These items are tentative until they aooear on the final aaenda . Revisions to Town's Street Impact Fee - (Feb, 16) . Update Town Staff Hourly Cost Recovery Resolution - (Feb. 16) . Annual Report from Marin-Sonoma Mosquito & Vector Abatement District Representative - (Feb. 16) . Soda LLC - Waiver of Annexation Request - (Feb, 16) . Resolution Partially Upholding Appeal of Charles & Dales Sofnas of Design Review Board Decision to Approve a Site Plan and Architectural Review Application for Construction of a new Single Family Dwelling at 79 Round Hill Road- continued from November 17, 2004 - (March 2) . Adoption of FY 2003-04 Audit Report Agenda - Town Council Meeting February 2, 2005 Page 4 of 4 . Special Event Permit Application for Classic Car Show at Shoreline Park - (March) Tiburon Glen Precise Development Plan Del Mar Valley Undergrounding of Utilities Assessment District - Adoption of Preliminary Engineer's Report and Actions related thereto Raccoon Lane Undergrounding Project - Reaffirm Resolution of Intention Proposed Erosion and Siltation Control Ordinance Approval of County-wide Services JPA Adoption of Updated Personnel Rules and Regulations . . . . . . .- . . . '7'k~ jUo. / ------ ,..------'..--..---.--......'.."....-.."-....--..-- TOWN COUNCIL MINUTES CALL TO ORDER ROLL CALL PRESENT: ABSENT: COUNCILMEMBERS: COUNCILMEMBERS: Fredericks, Gram, Slavitz, Smith Berger PRESENT: EX OFFICIO: Town Manager McIntyre, Town Attorney Danforth, Director of Community Development Anderson, Director of Public W orks/Town Engineer Echols, Director of Administrative Services Bigall, Chief of Police Odetto, Advance Planner Bryant, Town Clerk Crane Iacopi Prior to the start of the regular meeting, the Council met in closed session, beginning at 6:45 p.m., to discuss the following: CLOSED SESSION CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION (Section 54956(a)) Fenster v. Town Council, Planning Commission & Library Agency Siciliano v. Town of Tiburon CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION (Section 54956.9(c)) [Property Dispute regarding Easement over a portion of 160 Gilmartin) Initiation of Litigation - Case name( s) withheld because disclosure would jeopardize existing settlement negotiations CONFERENCE WITH LEGAL COUNSEL - POTENTIAL LITIGATION (Section 54956(b )(3)( C) Name of Claimant: Kasey Boak, 1895 Mar West Town Council Minutes # 02-2005 January 19,2005 Page 1 . . . i NOTICE OF ACTION TAKEN IN CLOSED SESSION. IF ANY Acting Mayor Smith said that no decisions were reached or action taken on the matters discussed in closed session. ORAL COMMUNICA TrONS None. CONSENT CALENDAR 1. Approval of Town Council Minutes - December 15, 2004 2. Approval of Town Council Minutes - January 5, 2005 3. Recommendation by Director of Administrative Services - Accept Monthly Investment Summary for December 2004 4. Recommendation by Director of Administrative Services - Pt. Tiburon Below Market Rate Units - Authorize Town Manager to Sell 20 Marsh Road to Marin Housing Authority- continued from December 15, 2004 5. Recommendation by Director of Community Development - Budget Amendment to Fund Continuation of Advance Planner Position through June 30, 2005 Motion: Moved: Vote: To adopt Consent Calendar Item Nos. 1 through 5, above. Fredericks, seconded by Slavitz AYES: Unanimous ABSENT: Berger APPOINTMENTS TO TOWN BOARDS. COMMISSIONS & COMMITTEES 6. Recommendation by Town Clerk - Appointments to Boards, Commissions and Committees a) Announcement of Pending Vacancies on Town Boards & Commissions in 2005 b) 2005 Council Committee Liaison Appointments a) Acting Mayor Smith made announced the following announcement of pending vacancies as a result ofterm expirations in February 2005: Town Council Minutes # 02-2005 January 19, 2005 Page 2 . . . . Mike Figour, Design Review Board . Michael McMullen, Parks & Open Space Commission . Andrew Morgan, Heritage & Arts Commission He also noted the current vacancy on the Hilarita- Tiburon Ecumenical Association Board of Directors. Town Clerk Crane Iacopi said that current'commissioners whose terms were expiring would be notified and asked whether they sought reappointment. b) Acting Mayor Smith asked for any changes to the Council liaison appointments. Councilmember Fredericks noted that a temporary "alternate" was needed on the JP A Oversight Committee. Vice Mayor Smith volunteered for the position. MOTION: Moved: Vote: To appoint Paul Smith as the Town's "alternate" to the Joint Oversight JP A. Slavitz, Fredericks AYES: Unanimous ABSENT: Berger Councilmember Fredericks suggested the creation of an ad hoc Council committee for Paradise Drive issues, noting that Supervisor McGlashan had expressed an interest in continuing the joint discussions with the Town and residents in this unincorporated area. Ms. Fredericks also recommended Council subcommittees for two current development projects that had attracted a lot of public interest: St. Hilary School and Kol Shofar Synagogue. She said that the formation of these ad hoc committees would demonstrate the Council's interest and commitment to the issues perceived by the public. MOTION: To appoint Alice Fredericks and Jeff Slavitz to the Paradise Drive ad hoc Council committee Gram, Smith AYES: ABSENT: Moved: Vote: Unanimous Berger MOTION: To appoint Tom Gram and Paul Smith to the St. Hilary and Kol Shofar ad hoc Council committees Fredericks, Slavitz AYES: Unanimous ABSENT: Berger Moved: Vote: Town Council Minutes # 02-2005 January 19, 2005 Page 3 . . . PUBLIC HEARING 7. Recommendation by Planning Manager - Ring Mountain Precise Plan Amendment (PD#10) Property Address: 8 Mariposa Court Owners: Jeff and Sheryl Ort Applicant: Nick Noyes Architecture Assessor Parcel No.: 038-440-08 Planning Manager Watrous gave a brief report for the application to amend the secondary building envelope to install a swimming pool at 8 Mariposa Court, and said that the Planning Commission recommended approval of the amendment. Acting Mayor Smith opened the public hearing. Nick Noyes, architect, said that he was available to answer any questions. Acting Mayor Smith closed the public hearing. MOTION: Moved: Vote: To adopt resolution approving the above precise plan amendment. Slavitz, seconded by Fredericks AYES: Unanimous ABSENT: Berger REGULAR AGENDA 8. Recommendation by Advance Planner - Amend Solar Panel Policy to Comply with New State Legislation Advance Planner Bryant said that in September 2004 the Council had adopted a policy that would waive permit fees for the installation of solar panels and had created guidelines for installing same. According to Bryant, the new policy reflected the Town's preference for roof-mounted versus ground-mounted panels, especially on hillside properties, and had established review procedures for both. Ground-mounted solar panels were to be reviewed by the Design Review Board and roof-mounted panels could be reviewed by Staff. However, Mr. Bryant said that on January 1, 2005, State law had changed so that local governments could no longer regulate design criteria of solar installations. He said that the Town's policy needed to be amended to reflect these changes. The Advance Planner suggested that the Town could continue to encourage roof-mounted installations through a fee waiver while charging a fee for ground-mounted panels, but that design guidelines would be "voluntary." Town Council Minutes # 02-2005 January 19,2005 Page 4 . . . Councilmember Gram asked how the Town could avoid view blockage issues if roof-mounted panels were installed at 45-degree angles, for instance. Bryant said that under the new law the Town had no specific regulatory authority. However, Bryant said that the Town could craft guidelines that would be "ministerial" versus "discretionary. " Councilmember Slavitz asked about encouraging "flat" versus "angled" installations that would be "flush" with the' existing roofline. Director of Community Development Anderson recommended adding a specific definition of "flush" to the guidelines, for example, six inches. Councilmember Fredericks asked whether there were other ways to create an incentive for roof- mounted panels through an interpretation of health and safety codes or through the Town's regulations pertaining to the creation of additional "impervious surface." Town Attorney Danforth said that it was not likely; however, she pointed out that the Town was not obliged to grant fee waivers at all and that while the Town could not regulate "aesthetics" under the new law, it did have a right to charge permit fees for solar panel installations. The Advance Planner said that the Town's current fee structure would charge $215 (design review fee) for roof-mounted panels and $425 for ground installations. Vice Mayor Smith said that he had long been concerned about ground-mounted panels which impacted the greater community, especially on hillsides, but concluded that there was little the Town could do to discourage them (other than charge a permit fee) under the new law. Councilmember Fredericks suggested some sort of staff "checklist" to follow when applications were submitted. Council continued the matter for further revisions to the policy per the above discussion. 9. Recommendation by Director of Public Works/Town Engineer - Trestle Glen Bike and Pedestrian Path Improvements a) Adopt Final Plans and Specifications and Authorize Bid Process b) Adopt Resolution Authorizing Application for Matching CAL/TRANS Grant Funds i) A Resolution ofthe Town Council of the Town of Tiburon Authorizing the Filing of an Application for Bicycle Transportation Authority Program Funding for the Trestle Glen Bikeway Project and Committing the Necessary Non-Federal Match for the Project and Stating the Assurance of the Town of Tiburon to Complete the Project Town Council Minutes # 02-2005 January 19, 2005 Page 5 . . . Town Engineer Echols said that conceptual plans had been prepared by Questa Engineering as a result of a Bay Trail planning grant that had been awarded to the Town by the Association of Bay Area Governments (ABAG), and that these plans had been presented to and accepted by the Council in 2003. Since that time, Staffhad been successful in obtaining additional grant funding from ABA G for the pedestrian portion of the path, and plans had been drawn, but he noted that the conditions ofthe grant required that the project be completed by June 30,2005. He also said that staff continued to seek funding for the Class II bicycle lane element ofthe project from CAL/TRANS (as stated in the proposed resolution). Councilmember Smith asked what would happen if the final portion of the grant was not received; Engineer Echols said that the Town was actively pursuing two more grants as well. However, he noted that there was a good chance of receiving the CAL/TRANS funds this time around. In describing the plans for Council's review, Mr. Echols said that a portion of the curb would be removed and replaced by a new path between Mercury and Juno, and a decomposed gravel path between Turtle Rock and Shepard Way. He said that the pedestrian path would be separated form the roadway. Councilmember Slavitz made reference to a late mail item from a resident of Turtle Rock who was concerned about the impacts of the project on his existing landscape irrigation system. Engineer Echols said that the project would not disrupt his system and that replacement landscaping, if needed, had been specified in the plans under review. Acting Mayor Smith opened the public hearing. Shaun Coughlin, 2 Turtle Rock Court, distributed photos of his current landscaping at the intersection of Trestle Glen and Turtle Rock Court. He said that he and his wife thought they might lose the landscaping which the Town had "demanded" they install when they erected a fence at that location. He said he thought that the [Questa] plans were not detailed enough to address his concerns and that he looked to the Town to commit to replacing the landscaping if lost and to allow enough money in the project budget for this contingency. Town Engineer Echols said that while there were no plans to remove any ofthe landscaping, except for overhanging limbs, there was a provision for shrub replacement in the plans. He also said there were additional ways to address Mr. Coughlin's concerns: through specific wording in the contract and [by withholding of] the notice of completion of the project. Furthermore, he said that change orders could be made "in the field" to address any unforeseen issues concerning this issue. Acting Mayor Smith closed the public hearing. Town Council Minutes # 02-2005 January 19,2005 Page 6 . . . Councilmember Slavitz congratulated Staff on a "job well done," and cited the history of the concept for the path at the BP AC (Bicycle Pedestrian Advisory Committee) level on up the ladder. He said that the project would be an improvement "on par" with the ferry plaza improvements which had also been made possible by the receipt of various State and Federal grants. MOTION: To approve the above plans, authorize contractor bids and adopt the above resolution for BT A (bikeway) grant funding. Fredericks, seconded by Slavitz AYES: Unanimous ABSENT: Berger Moved: Vote: 10. Recommendation by Director of Public Works/Town Engineer - Proposed 2004/05 Street Rehabilitation Program Streets List Council waived the Staff report. Acting Mayor Smith said that he was glad to see several of the streets listed in the report were scheduled for repair because there were in ''terrible shape." Councilmember Slavitz asked whether the Town planned to spend [budget surplus] funds in addition to the $500,000 Capital Improvement budget for the 2004-05 street rehabilitation program (funded by Gas Tax and Street Impact Funds). Town Manager McIntyre said thatthe Town planned to spend additional money in the next fiscal year for street repairs resulting from the undergrounding assessment districts being formed in the Lyford Cove and Del Mar Valley areas. However, he said that a "policy issue" for Council to consider was whether to use monies from the Town's operating budget for repair of "dead roads" ~r "live roads." He said that this would be a topic for discussion at the February 7 Town Council/Staff retreat. Acting Mayor Smith said that the Town could designate a supplemental allocation for street repairs, if necessary. Councilmember Fredericks said that the lists of streets needing repairs were drawn up before the Town actually received funding and that there were other decisions that needed to be made as to whether the supplemental funds were to be appropriated for this year or as a general rule. She also suggested that the Council revisit its list of project priorities prior to dedicating any additional funds. The Town Manager said that during the previous year's budget hearing process, there was a recommendation by Councilmember Slavitz to use a portion of any budget surplus at year-end for streets and roads repair. McIntyre said that $480,000 had been shifted at the end of the 2003- Town Council Minutes # 02-2005 January 19, 2005 Page 7 . . . 04 fiscal year into a fund for this purpose but that the question remained as to whether to the amount should be increased each year, or, conversely, whether there would even be a budget surplus in any given year. Town Manager McIntyre said that Councilmember Fredericks had requested a list of "dead streets" within the Town. Town Engineer Echols said that this list would be presented and discussed at the Council/Staff retreat. However, he also noted that on the current year's rehabilitation list, portions of Round Hill Road and Mt. Tiburon Court already qualified as "dead streets" under the Town's pavement management system, and that 23 streets had been designated in this category in all, which carried with it an approximate $3,000,000 price tag to fix. With regard to the undergrounding districts, the Town Engineer said that the Town would spend $100,000 on the Lyford Cove project ifthe cost was split with the participants ofthe district (resulting in a savings to the Town); and $200-300,000 was estimated to be needed for repairs if the Del Mar district moved forward. He said that these two districts would take a "substantial bite" out of the additional $480,000 being discussed as additional funds for the current fiscal year. Councilmember Fredericks asked whether something could be done [short of reconstructing] "dead roads" to help the local residents. Town Engineer Echols said that the Public Works Department could do some patching and pothole fixes out of the department's budget as it identified the worst problem areas. Acting Mayor Smith opened the public hearing. Paul Erickson, 14 Old Landing Road, said he lived on a "dead road" and would like to participate in the discussion about funding for same. He said that since he moved there 21 years ago, the road had seen "no asphalt" at all except after the Town had done some drainage work, there had been some "patching." He said that the road had been annexed to the Town five years ago and that in 2001 he had contacted the Town Engineer about making repairs and had been told that nothing could be done about the road because it was "too bad" and that there were no plans to do any work for at least five years. Mr. Erickson said that there were drainage issues on the road, as well, and that the Town Engineer told him that they would be fixed "in a year or so." The drainage work had been completed by the Town in 2003-04, according to Erickson, after which he had another conversation with the Town Engineer and was again told that no road repairs were scheduled for the next five years. Town Council Minutes # 02-2005 January 19, 2005 Page 8 . . . Mr. Erickson said that he would like clarification of the entire road budgeting process. Acting Mayor Smith said that the Town budgeted $500,000 per year for road rehabilitation but that, in fact, actually more than a million dollars a year was needed "just to keep up." This resulted in the Town "falling behind" on repairs over the last few years. Councilmember Gram said that Tiburon was one of the few towns or cities in Marin County that did not have a municipal services tax for street repairs. For instance, he said Belvedere's roads were in much better shape as a result of their municipal services tax. He suggested that it might be time to re-visit the idea of a parcel tax in Tiburon. Mr. Erickson said that several lawyers in the Old Landing Road neighborhood had pointed out that it was dangerous to both walk and drive on the road due to the lack of lighting and potholes. Councilmember Fredericks suggested that some ofthe potholes could be fixed by the Town. Mr. Erickson said that the Town Engineer had told him the Old Landing Road needed to be reconstructed and that once it fell into this category, it became a "dead street" and was taken off the [current] fix list. He said that the residents did not want reconstruction but rather a "smooth surface. " Francine Holberg, 24 Old Landing Road, echoed Mr. Erickson's comments about potholes and safety, and said that there was a long rut along a long curve that posed a hazard. Acting Mayor Smith closed the public hearing. MOTION: Moved: Vote: To adopt 2004-05 streets rehabilitation list. Gram, seconded by Slavitz AYES: Unanimous ABSENT: Berger 11. Recommendation by Director of Community Development - Annual Development Fee & Street Impact Fee Report a) Receive Annual Development Fee Report b) Adopt Resolution making Findings for Street Impact Fee i) A Resolution of the Town Council ofthe Town of Tiburon Making Certain Findings Regarding Fees Collected for Street Impact Purposes Council waived the Staff report. Town Council Minutes # 02-2005 January 19,2005 Page 9 . . . Councilmember Smith asked why the Town would charge a street impact fee to persons living on private streets which were accessed by Tiburon Boulevard (which was also not a Town street). Town Engineer Echols said that the policy had been developed prior to his tenure but that it pertained to the broad, global impact of construction vehicles on Town roads and streets, and that it would be difficult to come up with a unit cost per site. However, the Engineer acknowledged that an exception had been created in the Stormwater Run- off impact fee program for persons living directly on the shoreline of Richardson Bay. Acting Mayor Smith said that it was important to be able to able to answer the question of the "reasonable relationship" to the fee being charged if construction vehicles never crossed over a Town-maintained road. Town Attorney Danforth said that the law did not require the Town to precisely tailor the precise fee paid to the impacts of individual projects. Because the fee is one of "general application," the Town need only find that the fees imposes Town-wide were appropriate to the costs ofthe street damage throughout the Town. She said that, of course, the Council could make exceptions to the rule but stated that the fee itself was allowable and legally defensible. Acting Mayor Smith opened and closed the public hearing. There was no public comment. MOTION: Moved: Vote: To receive the report and adopt the street impact fee resolution. Gram, seconded by Fredericks AYES: Unanimous ABSENT: Berger WRITTEN COMMUNICA nONS Town Council Weekly Digest - December 17, 2004 Town Council Weekly Digest - December 22,2004 Town Council Weekly Digest - January 7,2005 Town Council Weekly Digest - January 14, 2005 Town Manager McIntyre said that Tom O'Neill had filed a permit application for a Classic Car Show along Shoreline Park which would be reviewed, consistent with the Town's policy, by the Town Manager and Chief of Police. He said that he would bring the permit to the Council for a courtesy review, as well. Town Council Minutes # 02-2005 Page 10 January 19,2005 . . . Councilmember Fredericks said that she was serving on the Transportation Authority of Marin's (TAM's) Executive Committee search team for the hiring of a strategy consultant. She said that no funds had been received by the agency to date, and that it faced real challenges in that there had been cuts to STIP funds and that the State had "hijacked" Proposition 42 funds. ADJOURNMENT There being no further business before the Town Council of the Town ofTiburon, Vice Mayor Smith adjourned the regular meeting at 8:35 p.m., to the next regular meeting scheduled for February 2, 2005. PAUL SMITH, ACTING MAYOR ATTEST: DIANE CRANE IACOPI, TOWN CLERK Town Council Minutes # 02-2005 January 19, 2005 Page 11 .:" . . . Town of Tiburon STAFF REPORT :L AGENDA ITEM . . . . . . . . . '. . . . . . .' . . ,. . . .. . . . . . . . . . . . . . . . . . . . . . .' . .. . . TO: Mayor and Members of the Town Council Heidi Bigall, Director of Administrative Services 8--- Interim Financial Report - Period Ended December 31, fJ(4 , February 2, 2005 REVIEWED BY: , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ..... FROM: SUBJECT: MEETING DATE: The accompanying financial statements provide summary information concerning the Operating Budget, Capital Improvement Program, Fund Transfers and Fund Resources of the Town for the second quarter. They reflect the Town's overall financial position for the fiscal year through December 31,2004, and provide projections to year-end closing on June 30, 2005. Operating Reyenues At mid-year, operating revenues are at 47.2% ($3,216,115) of projections, and are lagging operating expenditures by $135,278. Although the fiscal year is 50% completed, operating revenues will equalize and exceed operating expenditures with the receipt of the second installment of property tax revenues in April, along with certain revenues that are received on a quarterly or annual basis. As a result of conservative budgeting and unanticipated revenues, it is estimated that by fiscal year end operating revenues will exceed operating expenditures by approximately $870,000; the adopted fiscal year 2004-05 budget anticipated an operating surplus of only $100,000. The anticipated increase in the estimated operating surplus is due to the guaranteed replacement of the Vehicle License Fee baekfill ($250,000); confirmation that the Town will receive excess ERAF revenues in the amount of approximately $465,000, and greater than anticipated building permit revenues. Our top five revenues account for approximately 65% of total General Fund revenues. By focusing on these, we can gain a better understanding of the Town's revenue position. Overall, these key revenues are performing as budgeted and any year-to-date or anticipated variances are noted below: TOD Five Revenues Budget YTD Actual % Received Anticipated Property Tax $1,996,150 1,092,619 55.6% $2,416,150 Sales Tax $495,000 $159,658 32.3% $495,000 Buildinq Permits , $430,000 $306,895 81.0% $500,000 Transient Occupancy Tax $355,000 $141,517 33.3% $355,000 Vehicle License Fees $250,000 $48,825 19.5% $500,000 Total $3,526,150 $1,749,514 49.0% $4,266,150 Property Tax: Secured property tax receipts are received in December and April each fiscal year. Based on the December 2004 receipts, Staff anticipates that secured property taxes will be at budget at fiscal year end. The December payment is typically 55% of total secured property tax revenues received in a fiscal year. However, as noted above, The County of Marin . . . Town of Tiburon STAFF REPORT has advised the Town that it will receive approximately $465,000 in excess ERAF property tax funds. Historically, Staff does not budget this revenue source, as we do not know from year-to- year of its status. Therefore, the anticipated property tax line item has been adjusted accordingly. Sales Tax: Sales Tax revenues are received monthly from the State. Based on the newly instituted "triple flip", Staff anticipates that this revenue source will be at budget. The triple flip has changed how sales taxes are remitted to the Town. The monthly revenue receipts are reduced by %%, but are "repaid" to the Town through the County of Marin twice a year, in January and late June/early July. As the monthly sales tax remittance lags by two months, the figure above represents four month's sales tax revenues. Building Permits: Building permit revenues are accounted for on a weekly basis. Year-to-date receipts are up 50% ($103,000) over last fiscal year. Staff anticipates this revenue source will exceed budget estimates, unless there is a significant downtown in building permit revenues over the next six months. Transient Occupancy Tax (TOT): TOT is now received on a monthly basis from both the Water's Edge and Tiburon Lodge. Prior to this fiscal year, TOT from the Tiburon Lodge was remitted on a quarterly basis. The above represents five months remittance. IUs anticipated that by year-end this revenue source will be at budget. Vehicle License Fees: The method in which VLF fees are remitted to the Town has changed from prior fiscal years. Previously, this revenue source was received by the Town on a monthly basis from the State. However, the "backfill" portion (approximately $400,000) has been the target of actual and threatened State take backs over the past few years. With the passage of Proposition 1 A in November 2004, the voters approved the permanent elimination of the "backfill" and replacement with a like amount of property tax revenues, better known as the "VLF Swap". Beginning this fiscal year, the Town's VLF backfill has been replaced dollar-for-dollar with property taxes revenues, to be remitted by the County twice a year in January and June. It is anticipated the Town will receive approximately $250,000 more that budgeted from this revenue source. Operating Expenditures Operating expenditures are at 50.0% of budget through the second quarter and are running at the "target" of 50%, this compares to 47.3% for the same period last fiscal year. It is anticipated that operating expenditures will be at budget by fiscal year end. Department Head's are responsible for their respective budgets and are held accountable for not exceeding their overall funding sources. General Fund Reserves The Town began the fiscal year with $2,365,891 in Undesignated General Fund Reserves and $4,508,074 in General Fund Designated Reserves, as outlined in Schedule 3 of the attached . . . Town of Tiburon STAFF REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .' . . . . . . . . . . . . . . . . . . . financial statements. In October 2004 the Town Council authorized $950,000 in Fund transfers as outlined in Schedule 3. The net effect of these transfers was the reduction of the General Fund Undesignated Reserve to $1,458,182 and the increase of the Designated Reserves to $5,415,783. Staff projects that at fiscal year end, the General Fund Undesignated Reserve will be approximately $2.2 million. Capitallmprove~ent Program There has been relatively little activity in the Capital Improvement Program, which is consistent with previous fiscal years. These Improvement projects that were carried over from last fiscal year how now been completed. Historically, the Capital Improvement Projects realize expenditures towards the end of the fiscal year as projects go out for bid in the early spring and completed in early summer. Summary Based on mid-year interim results, the Town's financial condition continues to be extremely healthy, with staff estimating an operating surplus of approximately $870,000 by fiscal year end. With the passage of Proposition 1A, whichwill restore predictability .and stability to local government revenues from the State" it is anticipated the Staff will be able to more accurately projected operating revenues in the fiscal years to come. Given all the above,this needs to be placed in the context of what Staff knows at the time of writing this report and could be negatively affected by any unforeseen events that could disrupt revenue streams. Recommendation It is recommended that the Town Council accept the Interim Financial Report for the second quarter of Fiscal Year 2004-05, for the period ended December 31,2004. Attachments l.' SCHEDULE 1. . OPERATING BUDGET SUMMARY Period: July 1, 2004 to December 31, 2004 Budget Year.To.Oate Estimated to Variance Percent of Adopted Budget Revised Oec.31.2004 June.30.2005 (unfavorable) Budget YTO REVENUES & SOURCES OF FUNDS General Fund Revenues 5,360,200 5,360,200 2,489,537 6,130,200 770,000 46.4% Use of Other Fund Sources 1,448,868 1,448,868 726,578 1,448,868 50,1% I Total Revenues $ 6,809,068 $ 6,809,068 $ 3,216,115 $ 7,579,068 $ 770,000 47.2%1 EXPENDITURES Town Administration 2,109,767 2,109,767 1,054,996 2,092,362 50.0% Community Development 1,017,758 1,011,343 493,582 1,017,758 48.8% Police Department 2,420,103 2,418,993 1,172,575 2,420,103 48.5% Public Works 1,138,354 1,134,224 616,876 1,138,354 54.4% Legislative 37,500 37,500 13,364 37,500 35.6% Total Expenditures $ 6,723,482 $ 6,711,827 $ 3,351,393 $ 6,706,077 $ 49.9%1 . Total Operating Net $ 85,586 $ 97,241 $ (135,278) $ 872,991 $ 770,000 I . " SCHEDULE 2, . OVERVIEW OF OPERATING REVENUES & EXPENDITURES Period: July 1, 2004 to December 31, 2004 Budget Budget Year-to.Date Estimated to Variance Percent of Adopted Revised Dec.31-2004 June-30-2005 (unfavorable) Budget YTD REVENUES & SOURCES OF FUNDS General Fund Revenues Property Taxes 1,966,150 1,966,150 1,092,619 2,416,150 450,000 55,6% Other Taxes 1,092,500 1,092,500 399,903 1,092,500 36,6% Franchises 372,000 372,000 68,884 372,000 18.5% Fines & Forfeitures 230,000 230,000 99,060 230,000 43.1% Investment Earnings 120,000 120,000 32,104 120,000 26,8% Intergovernmental & Agency 290,000 290,000 96,184 540,000 250,000 33.2% Licenses & Permits 849,050 849,050 454,671 919,050 70,000 53,6% Charges for Services 279,000 279,000 192,921 279,000 69,1% Other Revenues 161,500 161,500 53,191 161,500 32,9% Subtotal General 5,360,200 5,360,200 2,489,537 6,130,200 770,000 46.4% Use of Other Fund Sources Employee Comp Leave Reserve 41,800 41,800 27,138 41,800 64,9% Police SLESF/COPS Fund 100,000 100,000 61,837 100,000 61.8% Low/Moderate Housing Fund 60,650 60,650 17,775 60,650 293% Long Range Planning Fund 168,017 168,017 58,726 168,017 35,0% Peninsula Library JPA Fund 845,000 845,000 482,081 845,000 57,1% Cypress Hollow LLD 24,000 24,000 3,171 24,000 13,2% PERS Surplus Assets 209,401 209,401 75,850 209,401 36.2% Subtotal Other Fund Sources 1,448,868 1,448,868 726,578 1,448,868 50,1% . Total Revenues & Funds 6,809,068 6,809,068 3,216,115 7,579,068 $ 770,000 47.2%1 EXPENDITURES Town Administrative Services Administration 1,011,180 987,906 462,854 987,906 0 46,9% Legal Services 154,837 160,706 77,634 160,706 0 483% Town Hall Facility 38,100 38,100 11,403 38,100 0 29,9% Non-Departmental 905,650 905,650 503,105 905,650 0 55,6% Community Development Planning & Design Review 600,358 604,258 261,365 604,258 0 433% Building Inspection 410,985 413,500 232,217 413,500 0 56.2% Police Department Police Services 2,367,963 2,369,073 1,155,262 2,369,073 0 48,8% Police EOC/Facility 51,030 51,030 17,313 51,030 0 33,9% Public Works Administration & Engineering 283,150 285,121 183,067 285,121 0 64.2% Streets Maintenance 406,395 406,976 218,165 406,976 0 53,6% Parks Maintenance 318,279 3 19,857 168,362 319,857 0 52,6% Street & Signal Light System 41,400 41 ,400 15,646 41 ,400 0 37,8% Corporation Yard 85,000 85,000 31,636 85,000 0 37.2% 0 Le~islative 0 Council, Boards/Commissions 37,500 37,500 13,364 37,500 0 35,6% Total Expenditures 6,711.827 6,706,077 3,351 ,393 6,706,077 0 50,0%1 . OPERATING NET: 97,241 102,991 ( 135,278) 872,991 770,000 I SCHEDULE 3. . TRANSFERS & REALLOCATIONS OF FUNDS Period: July 1,2004 to December 31,2004 Revised Fund Balance on Beginning Note July 1, 2004 Transfer in Transfer (out) Balance GENERAL FUND RESERVES UnaIlocated Reserve 2,365,891 (907,709) 1,458,182 Designated Reserves Capital Equipment Replacement 151,830 151,830 Technology Fund 149,901 50,000 199,901 Infrastructure & Facility 882,694 882,694 Employee Compensated Leave 234,124 30,000 264,124 Employee Housing Asistance 400,000 400,000 New Police Facility 42,291 (42,291) Park Improvement 398,985 250,000 648,985 PW Corp Yard Replacement 636,367 120,000 756,367 Self Insurance 209,504 209,504 Drainage Improvements 412,694 400,000 812,694 Disaster Response 100,000 100,000 Retirement Surplus Assets 439,684 100,000 539,684 Traffic System 450,000 450,000 . Subtotal General Funds $ 6,873,965 6,873,965 I Notes to Schedule . SCHEDULE 4-A. . CAPITAL IMPROVEMENT PROGRAM STREET IMPROVEMENT PROJECTS Period: July I, 2004 to December 31, 2004 Actual YTO Estimated to Project Funding Source Budget Oec-31-2004 June-30-2005 1 Streets from PMS List Various Locations Gas Tax 190,000 12,799 190,000 2 Via Capistrano Overlay Street Impact Fund 200,000 - 200,000 Tiburon Bl./Reed 3 Ranch Intersection Improvement Circulation System 60,000 60,000 Safe Routes to Lyford Dr. @ Reed Sidewalk, curb ramp School/General Fund 4 School installation Streets & Drainage 82,000 82,000 5 ' Stewart Drive Bus Shelter Circulation. Svstem 42,865 42,865 Bicycle/Pedestrian Grants/General Fund 6 Trestle Glen Bikeway Improvements Streets & Drainage 871,000 87,100 > Engineering Planning FY2005 Proiects Street Impact 75,000 14,240 75,000 >> PW Administration Provision for Contingency Gas Tax Fund 40,000 15,655 40,000 Provision for Digout >>> PW Administration Repairs Street Imoact Fund 25,000 2,988 25,000 TOTAL STREET PROJECTS $ 1,585,865 $ 45,682 $ 801,965 . . SCHEDULE 4-B. . CAPIT AL IMPROVEMENT PROGRAM DRAINAGE IMPROVEMENT PROJECTS Period: July 1,2004 to December 31,2004 Actual yrO Estimated to Project Funding Source Budget Oec-31-2004 June.30.2005 General Fund Streets & Drainage Reserve/Drainage 1 CCTV Assessment Condition Assessment Impact Fund 50,000 50,000 Culvert 2 Rehab/Replacement Drainage Drainage Impact Fund 50,000 - 50,000 3 Railroad Marsh Cattail Removal Marsh Fund 8,000 1,234 8,000 Beach Road/Upper General Fund Streets & 4 Main Street Flao Gate Drainage Reserve 20,000 20,000 General Fund Streets & 5 Shoreline Park Outfall Headwall Repair Drainage Reserve 30,000 30,000 General Fund Streets & 6 Various Location Catch Basins Drainage Reserve 15,000 15,000 General Fund Drainag~ > PW Administration Plan/Soecifications Reserve 25,000 22,639 25,000 General Fund Streets & >> PW Administration Provision for Contingency Drainage Reserve 10,000 3,346 10,000 . TOT AL DRAINAGE PROJECTS $ 208,000 $ 27 ,219 $ 208,000 . SCHEDULE 4-C. . CAPIT AL IMPROVEMENT PROGRAM COMMUNITY DEVELOPMENT PROJECTS Period: July 1,2004 to December 31,2004 Actual YTO Estimated to Project Funding Source Budget Oec.31.2004 June.30.2005 ] 1 Blackie's Pasture Irrigation Upgrades Parks In-Lieu 25,000 4,485 25,000 2 Fountain Plaza Public Art Installation Public Arts Fund 100,000 15,035 100,000 3 Sidewalks/Curb Ramps ADA Compliance General Fund 10,000 3,154 10,000 Playground 4 South of Knoll Park Tot Lot Renovation Improvement Fund 100,000 100,000 5 Elephant Rock Pier Rail Foundation Repairs General Fund 20,000 20,000 6 Tiburon Bouelvard Downtown Streetlights General Fund 25,000 25,000 Renovation/Replacement 7 PW Corporation Yard Design PW Corp Yard Fund 100,000 100,000 8 Town Hall Photovoltaic Panels In1Tastructure/F acility 113,230 13,300 113,230 Path Improvements Near 9 Multi-Use Path Pine Terrace Grants 100,000 100,000 TOTAL COMMUNITY DEVELOPMENT PROJECTS $ 593,230 $ 35,974 $ 593,230 . . SCHEDULE 5, . STATEMENT OF FUND RESOURCES Period: July 1, 2004 to December 31, 2004 Estimated to June 30th 2005 GENERAL RESERVES General Unallocated $ 1,458,182 6,130,200 5,262,959 55,000 (100,000) 712,241 $ 2,170,423 Capital Equipment Replacement 151,830 134,300 73,200 61, 100 212,930 Infrastructure & Facility 882,694 113,230 (113,230) 769,464 Employee Compensated Leave 264,124 41,800 (41,800) 222,324 Employee Housing Assistance 400,000 400,000 Retirement Surplus Assets 539,684 209,401 (209,401) 330,283 New Police Building PW Corp Yard Replacement 756,367 100,000 (100,000) 656,367 Park Development 648,985 648,985 Self Insurance 209,504 209,504 Drainage Improvement 812,694 1,178,000 895,000 (283,000) 529,694 Disaster Response 100,000 100,000 Traffic System 450,000 450,000 Technolo Fund 199,901 14,400 12,150 2,250 202,151 I General Fund $ 6,873,965 6,264,500 5,587,360 1,446,230 795,000 28,160 6,902,125 OTHER RESTRICTED FUNDS Belvedere/Tiburon Library Agency $ 845,000 845,000 $ Cypress Hollow LLD $ 73,977 16,632 24,000 (7,368) $ 66,609 Downtown Art Project Fund $ 21,028 79,048 100,000 (20,952) $ 76 Heritage & Arst Project Fund $ 5,735 $ 5,735 Low & Moderate Housing 1,105,749 87,000 60,650 26,350 $ 1,132,099 Marsh Restoration 74,202 1,000 8,000 (7,000) $ 67,202 Open Space Acquisition 158,805 2,500 2,500 $ 161,305 Police Asset Forfeiture 88 $ 88 Police Suppl Law Enforcement (741) 100,000 100,000 $ (741) Police Tech 6,689 $ 6,689 Property Development Tax (3,003) $ (3,003) State Gas Tax 160,978 185,000 230,000 (45,000) $ 115,978 State Traffic Congestion Relief 48,329 10,000 10,000 $ 58,329 Street Frontage Improvement 2,003 $ 2,003 Tiburon Circ System Improvement 151,865 102,865 (102,865) $ 49,000 Tiburon Drainage Impact 60,000 75,000 (15,000) $ (15,000) Tiburon Long Range Planning 37,081 35,000 168,017 100,000 (33,017) $ 4,064 Tiburon Parks In-Lieu 68,146 25,000 (25,000) $ 43,146 Tiburon Planning Area Mitigation 229,203 4,000 4,000 $ 233,203 Tiburon Playground Improvement 25,830 75,063 100,000 (24,937) $ 893 Tiburon Street Impact 575,958 200,000 300,000 (100,000) $ 475,958 $ 2,741,922 1,700,243 1,197,667 940,865 100,000 338,289) $ 2,403,633 REDEVELOPMENT AGENCY General Increment $ 215,527 4,000 4,500 (500) $ 215,027 Housing Set-Aside 670,509 12,500 5,500 7,000 677 ,509 . OPERATING BUDGET REVENUE SUMMARY STATUS Property Taxes Other Taxes Franchises Fines & Forfeitures Investment Earnings Intergovernmental & Agency Licenses & Pennits . Charges for Services Other Revenue USE OF OTHER FUNDS Employee Compensated Leave Reserve Police COPS/SLESF Fund Low & Moderate Income Housing Fund Long Range Planning Fund . Year-To-Date: Estimated Year: $2,969,924, or 47.5% of budget $ 6,258,925, as budgeted, Projected as budgeted. Second Installment of 45% to be received in April 2003 Projected as budgeted. Project as budgeted. Franchise fees are remitted quarterly by Mill Valley Refuse and AT&T and annually by PG&E. Projected as budgeted. Projected as budgeted. Report includes only one quarter investment earnings, Projected as budgeted, but depends on budget cuts associated with Vehicle License Fees proposed by the State Governor. Projected as budgeted. Revenues are primarily associated with building and construction activity, and regular Business Licenses. Business License revenues are realized during mid-year renewal period, Projected as budgeted. Revenues are primarily associated with building and construction activity. Projected as budgeted. Projected as budgeted, expenditues associated with vacation conversion. Projected as budgeted. Cost associated with funding Police Investigator position. Projected as budgeted. Costs associated with Town's six units in Pt. Tiburon. Projected as budgeted, Costs associated with funding Advance Planner position and General Plan Update expenses. . . . Town of Tiburon STAFF REPORT AGENDA ITEM ~ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TO: Mayor and Members of the Town Council FROM: Kevin Bryant, Advance Planner SUBJECT: Update of Solar Panel Policy REVIEWED BY:. MEETING DATE: February 2, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BACKGROUND At the last Town Council meeting, on January 19, Staff brought forth a proposed change to the Town's Policy for Solar Collector Panels due to a change in state law prohibiting design review for solar panel applications. Staff had recommended that a building permit fee waiver be granted for roof-mounted solar panels to encourage their use instead of ground-mounted panels. The Town Council expressed concern that the policy as drafted would also encourage installation of roof-mounted solar panels at angles which would cause view blockage for other properties. Staff was directed to modify the draft Policy for Solar Collector Panels and return the policy to the Town Council for consideration. ANAL YSIS Solar panels typically do not exceed 2 ~ inches in depth. For roof installation, solar panels are often raised above the finished roof to avoid overheating, which can affect the performance of the solar panels. According to the Town's Building Division, the distance from the finished roof to the top of the solar panel, including space for mounting structures and separation, need not reasonably exceed eight (8) inches. Staff recommends that the Town's Policy for Solar Collector Panels be amended to include a building permit fee waiver for solar panels mounted on a roof in a reasonably flush manner for the purpose of encouraging such installations over other methods of solar panel installation. For the purposes of this policy, roof-top solar panels would qualify for building fee waiver if they are installed at the same angle as the roof and the top of the solar panel is not more than eight (8) inches higher than the surface of the roof below it. RECOMMENDATION Staff recommends the Town Council take public testimony and adopt the amended Policy for Solar Collector Panels. EXHIBITS 1. Resolution Adopting the Policy for Solar Collector Panels . RESOLUTION NO. x-2005 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TIBURON ADOPTING AN AMENDED POLICY FOR SOLAR COLLECTOR PANELS WHEREAS, on September 15, 2004, the Town Council adopted the Town of Tiburon Policy for Solar Collector Panels, which waived building permit fees, provided design guidelines for the installation of solar collector panels, and defined the design review procedure for solar panels; and WHEREAS, effective January 1, 2005, California Government Code, Section 65850.5(b), limits the review of an application to install solar energy systems to the building official's review of whether it meets all health and safety requirements of local, state, and federal law; and WHEREAS, it is the intent of the California Government Code, Section 65850.5(a), that local agencies do not adopt ordinances which create unreasonable barriers to the installation of solar energy systems, including design review; and . WHEREAS, the Town of Tiburon supports energy efficiency and seeks to provide incentives for property owners who wish to utilize solar power to reduce the demand on non-renewable energy sources; and WHEREAS, the Town of Tiburon, while encouraging the use of solar energy, strongly desires to maintain the aesthetic qualities of the built environment that make Tiburon special and unique. NOW, THEREFORE, BE IT RESOLVED, that the Town Council hereby rescinds Resolution 47-2004; and BE IT FURTHER RESOLVED that the Town Council hereby adopts an amended Policy for Solar Collector Panels set forth in attached Exhibit A, which waives building permit fees for roof-mounted solar collector panels that meet certain criteria and provides voluntary design guidelines for the installation of solar collector panels. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Tiburon on February 2, 2005, by the following vote: AYES: COUNCILMEMBERS: . NOES: COUNCILMEMBERS: EXHIBIT NO. . ABSENT: COUNCILMEMBERS: ATTEST: DIANE CRANE IACOPI, TOWN CLERK . . MILES BERGER, MAYOR TOWN OF TIBURON EXHIBIT NO. A . TOWN OF TIBURON POLICY FOR SOLAR COLLECTOR PANELS (Town Council Resolution x-2005, adopted February 2, 2005) PURPOSE To support the State of California in encouraging the use of solar collector panels while also encouraging design which will help to protect and maintain the valued aesthetic qualities which make Tiburon unique. PERMIT FEES WAIVED FOR FLUSH -MOUNTED ROOF SOLAR COLLECTOR PANELS The Town of TiburOli will waive the building permit feest associated with the installation of flush-mounted roof solar panels that meet the Guidelines below. DESIGN GUIDELINES The Town of Tiburon encourages all property owners to voluntarily comply with the guidelines below. General . 1. Solar panels and accessory equipment should be integrated into the design ofthe building wherever possible. 2. Solar panels should be placed on roofs and in locations that are the least visible from public streets, public facilities, and neighboring properties. Accessory equipment located on the ground should be screened from off-site view through careful placement and/or the use oflandscaping or fencing. Roof-Mounted 3. Roof-mounted solar collectors should match the roof pitch and be placed in close proximity to the surface of the roof below them. To qualify for the building permit waiver, the panels must be installed at the same angle as the roof and the top ofthe solar panel shall not be more than eight (8) inches higher than the surface of the roof below it. Ground-Mounted 4. Ground-mounted solar collectors and accessory equipment should be screened from off-site view through careful placement and/or the use of landscaping or fencing. . I Building permit fees shall not include the Business License Fee and the California Seismic Tax, both of which will be collected. \ \ TOWNHALL1\shared\Planning\Policies\Solar Panel Guidelines Amended Jan 05,doc Town of Tiburon STAFF REPORT AGENDA ITEM if TO: Honorable Mayor and Members of the Town Council Heidi Bigall, Director of Administrative Services ~ FROM: SUBJECT: Authorize Issuance of Bonds - Lyford Cove Utility und~r ing Assessment District February 2, 2005 REVIEWED BY: MEETING DATE: The attached Resolution (Exhibit A) authorizes various Town officials to complete the bond issuance process for the Lyford Cove Utility Undergrounding Assessment District. The final dollar amounts will be incorporated into the document when the bonds are actually priced and sold, sometime in mid-February. The bonds will be sold to Wulff, Hansen & Co, as was done for the Stewart Drive district. This Resolution also approves the forms of the Bond Purchase Agreement and Official Statement. These forms will be separately supplied by Wulff, Hansen & Co., as underwriter, and will be completed when the bonds are sold. RECOMMENDATION It is recommended that the Town Council adopt the attached Resolution authorizing issuance of limited obligations improvement bonds for the Lyford Cove Utility Undergrounding Assessment District. Exhibit A - Draft Resolution 30030-04 JH:SRC:sgs 1/19/05 RESOLUTION NO. _-2005 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TIBURON AUTHORIZING ISSUANCE OF LIMITED OBLIGATION IMPROVEMENT BONDS Lyford Cove Utility Undergrounding Assessment District Adopted ,2005 Section 1 .01. Section 1 .02. Section 1.03. Section 2.01. Section 2.02. Section 2.03. Section 2.04. Section 2.05. Section 2.06. Section 2.07. Section 2.08. Section 2.09. Section 3.01. Section 3.02. Section 3.03. Section 3.04. Section 3.05. Section 3.06. Section 3.07. Section 3.08. Section 3.09. Section 3.10. Section 3.11. Section 4.01. Section 4.02. Section 4.03. Section 4.04. Section 4.05. Section 5.01. Section 5.02. Section 5.03. Section 5.04. Section 5.05. Section 5.06. Section 5.07. Section 5.08. Section 5.09. Section 5.10. TABLE OF CONTENTS Page ARTICLE I DEFINITIONS; GENERAL DEFINITIONS.. ................................. ............... ... ................ .... ...... ........................... 2 UNPAID ASSESSMENTS..... ............ ................:.... ............... ... ....................... ......... 8 EQUAL SECURITY ............ ..................................... ............ .......... ....... ................... 8 ARTICLE II THE BONDS BONDS AUTHORIZED ................ ...... ........... .... .................. ..... ..... .......... ...... .......... 9 TERMS OF BONDS .... .......... ................ ............. ....... ....... ...... .... ....... ...................... 9 REDEMPTION ..... ..... ............... .................................................... ....... .................. 10 FORM OF BONDS ........:.......................................................................................11 EXECUTION AND AUTHENTICATION OF BONDS ............................................11 TRANSFER OR EXCHANGE OF BONDS ........................................................... 11 BOND REGiSTER............................ ................ .................. ...... .............. ...... ......... 12 TEMPORARY BONDS ... ............. ....... .... .... ......................... ..... ..... ....... ................. 12 BONDS MUTILATED, LOST, DESTROYED OR STOLEN .................................. 12 ARTICLE III ISSUANCE OF BONDS ISSUANCE AND SALE OF BONDS ..................................................................... 13 PLEDGE OF ASSESSMENTS AND FUNDS .;;..................................................... 13 LIMITED OBLIGATIONS............................ ..... .... ............ .... ..... .... ....... .................. 13 NO ACCELERATION... ......... ... .... ..;.... ..................... .............. ....... ..... .... .... ........... 13 REFUNDING OF BONDS ..................................................................................... 13 AUTHORITIES. .... ........................ ................... ............................ .... ...................... 13 BOND PURCHASE AGREEMENT ....................................................................... 14 OFFICIAL STATEMENT ....................................................................................... 14 CONTINUING DISCLOSURE ...............................................................................14 BOND SALE AND DELIVERy.......... ........................ ..... ..... .... .................... ........... 14 ACTIONS APPROVED .................................... ....................... ............... ............... 14 ARTICLE IV FUNDS AND ACCOUNTS APPLICATION OF PROCEEDS OF SALE OF BONDS ....................................... 16 COSTS OF ISSUANCE FUND... ..... ..... ................... ........... ................... ..... ........... 16 REDEMPTION FUND ........................................................................................... 16 RESERVE FUND .................................................................................................. 17 IMPROVEMENT FUND.............. ................. ....................... ......... ......... ........ ......... 18 ARTICLE V COVENANTS COLLECTION OF ASSESSMENTS ... .... ............. ...... ........ ...... ............... ........ ...... 20 FORECLOSURE........................ .......................................... ................................. 20 PUNCTUAL PAYMENT; COMPLIANCE WITH DOCUMENTS ............................21 NO PRIORITY FOR ADDITIONAL OBLIGATIONS .............................................. 21 FURTHER ASSURANCES.......... ............... ............................ .............................. 21 PRIVATE ACTIVITY BOND LIMITATION ............................................................. 21 FEDERAL GUARANTEE PROHIBITION .............................................................. 22 NO ARBITRAGE ............................................................... ... ..................... ............ 22 REBATE REQUiREMENT...................................................... .............................. 22 YIELD OF THE BONDS ........................................................................................22 Section 5.11. Section 5.12. Section 5.13. Section 6.01. Section 6.02. Section 6.03. Section 6.04. Section 7.01. Section 7.02. Section 7.03. Section 7.04. Section 7.05. Section 7.06. Section 7.07. Section 8.01. Section 8.02. Section 8.03. Section 8.04. Section 8.05. Section 8.06. Section 8.07. Section 8.08. Section 8.09. Section 8.10. Section 8.11. Section 8.12. Section 8.13. Section 8.14. Section 8.15. Section 8.16. EXHIBIT A EXHIBIT B AMENDMENT....... ...... ........ .................................. ..... .................................. ......... 22 MAINTENANCE OF TAX-EXEMPTION................................................................ 22 CONTINUING DISCLOSURE ..... .... .................. ........ ........ ...... ........................ ...... 22 ARTICLE VI INVESTMENT OF FUNDS DEPOSIT AND INVESTMENT OF MONEYS IN FUNDS ..................................... 23 ACQUISITION, DISPOSITION AND VALUATION OF INVESTMENTS............... 23 LIABILITY OF TOWN .................................................................................. .......... 24 EMPLOYMENT OF AGENTS BY TOWN ............................................................. 25 ARTICLE VII MODIFICATION OR AMENDMENT AMENDMENTS PERM ITTED ... ..................... ......... ................ .............................. 26 OWNERS' MEETINGS .... ................................. ................. .......... .......... ............... 26 PROCEDURE FOR AMENDMENT WITH WRITTEN CONSENT OF OWNERS. .......... ........... .......................... ..... ........... ................ ......................... ..... 26 DISQUALIFIED BONDS............... .... ............................. ..... .... ..... ..... ..................... 27 EFFECT OF SUPPLEMENTAL RESOLUTION .................................................... 27 ENDORSEMENT OR REPLACEMENT OF BONDS ISSUED AFTER AMENDMENT. ... ....... ............................................................. .............. ............. .... 27 AMENDATORY ENDORSEMENT OF BONDS .................................................... 28 ARTICLE VIII MISCELLANEOUS BENEFITS OF AGREEMENT LIMITED TO PARITIES ........................................ 29 SUCCESSOR AND PREDECESSOR .................................................................. 29 DISCHARGE OF RESOLUTION..... .................. ....................... ..... ...... .................. 29 EXECUTION OF DOCUMENTS AND PROOF OF OWNERSHIP .......................30 WAIVER OF PERSONAL LIABILITY. ............................ .................... ................... 30 NOTICES AND DEMANDS ................................................................................... 30 PARTIAL INVALIDITY................ ............................. .............................................. 30 UNCLAIMED MONEyS.......... ...... ........ ..... .... .......... ..... .......... ..... ........... ...... .......... 31 APPLICABLE LAW.... .............................. ....... .......... ............ ......... ........................ 31 CONFLICT WITH ACT.. ....................... ...... ....... ........................................... ......... 31 CONCLUSIVE EVIDENCE OF REGULARITY; VALIDITy.................................... 31 PAYMENT ON BUSINESS DAY. ............ .............. ...... ..................... ......... ............ 31 REPEAL OF INCONSISTENT RESOLUTIONS .................................................,.31 CONSULTANTS.......... .......................................... ............ ............... ..................... 31 CERTIFIED COPiES.................. ................. .......... ................................. ..... .......... 31 EFFECTIVE DATE OF THE RESOLUTION......................................................... 31 *********** TERMS AND CONDITIONS FORM OF BOND ij RESOLVED by the Town Council (the "Council") of the Town of Tiburon (the "Town"), County of Marin (the "County"), State of California, that: WHEREAS, on May 21, 2003, this Council adopted its Resolution of the Town Council of the Town of Tiburon of Intention to Make Acquisitions and Improvements," (the "Resolution of Intention") under the Municipal Improvement Act of 1913, Division 12 of the Streets and Highways Code of California, as amended and modified by other applicable laws (collectively, the "Act") to initiate proceedings under the Act in and for the Town's Lyford Cove Utility Undergrounding Assessment District (the "Assessment District"); WHEREAS, by the Resolution of Intention, the Council provided that improvement bonds as more particularly described herein (the "Bonds") would be issued thereunder and reference to the Resolution of Intention is ~ereby expressly made for further particulars; WHEREAS, this Council has completed its proceedings under the Resolution of Intention for the levy of assessments, has caused all recordings and filings to be completed in accordance with the requirements in and for the Assessment District and by the adoption of this Resolution intends to provide for the issuance of the Bonds; and WHEREAS, this Council now intends to provide for the issuance of the Bonds upon the security of a the unpaid assessments, all as hereinafter provided. ARTICLE I DEFINITIONS; GENERAL Section 1.01. DEFINITIONS. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Resolution and of any Supplemental Resolution and of the Bonds and of any certificate, opinion, request or other document herein mentioned, have the meanings herein specified. All references in this Resolution to "Articles," "Sections," and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Resolution; and the words "herein," hereof," "hereunder" and other words of similar import refer to this Resolution as a whole and not to any particular Article, Section or subdivision hereof. Words of the masculine gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, including public bodies, as well as natural persons. "Act' means the Municipal Improvement Act of 1913, Division 12 of the Streets and Highways Code of California, as amended and modified by other applicable laws "Agent' means The Bank of New York Trust Company, N.A., designated in Section 2.01 hereof to perform the duties of authentication, registration, transfer and payment of the Bonds and the Agent's assigns or any corporation or association which may at any time be substituted in the Agent's place. "Assessment or Assessments" means the unpaid amounts of the special assessments levied against all taxable real property within the boundaries of the Assessment District pursuant to the Act and the proceedings of the Council under the Resolution of Intention, for the purpose of paying Debt Service on the Bonds under the Bond Law. "Auditor' means the auditor/controller or tax collector of the County, or such other official of the County who is responsible for preparing real property tax bills. "Authorized Officer' means the Mayor, Town Manager, Director of Administrative Services, Town Engineer, Clerk, Town Attorney or any other officer or employee authorized by the Town Council of the Town or by an Authorized Officer to undertake the action referenced in this Resolution as required to be undertaken by an Authorized Officer. "Available Surplus Funds" means any surplus moneys held by the Town at the end of each Fiscal Year in excess of the amounts required to pay lawful municipal obligations incurred in that Fiscal Year. "Bond' or "Bonds" means "Limited Obligation Improvement Bonds, Town of Tiburon, Lyford Cove Utility Undergrounding Assessment District," issued under this Resolution and the Act, and at any time Outstanding in substantially the form in Exhibit B attached. "Bond Date" means the dated date of the Bonds specified in Exhibit A attached hereto and made a part hereof. "Bond Denomination" means the amount of $5,000 or any integral multiple thereof, which is the minimum amount in which the Bonds may be issued, except that one Bond may contain any odd amount. - 2 - "Bond Law" means the Improvement Bond Act of 1915, Division 10 of the California Streets and Highways Code. "Bond Purchase Agreement' means the agreement between the Town and the Original Purchaser for the sale and purchase of the Bonds. "Bond Register' means the books maintained by the Agent pursuant to Section 2.07 for the registration and transfer of ownership of the Bonds. "Bond Year' means the twelve-month period beginning on September 2 in each year and ending on the day prior to September 2 in the following year except that (i) the first Bond Year shall begin on the Closing Date and end on the day prior to the next September 2, and (ii) the last Bond Year may end on a prior redemption date. "Business Day' means any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the state in which the Agent has its Principal Office are authorized or obligated by law or executive order to be closed. "Capitalized Interest Account' means the account of that name in the Redemption Fund. "Clerk" means the Town Clerk of the Town or Deputy Town Clerk or designee thereof. "Closing Date" means the date upon which there is an exchange of any of the Bonds for the proceeds representing the purchase price of such Bonds by the Original Purchaser thereof. ~'Continuing Disclosure Certificate" means any such certificate provided under Section 5.13 hereof. "Costs of Issuance" means all expenses incurred in connection with the authorization, issuance, sale and delivery of the Bonds, including but not limited to compensation, fees and expenses of the Town and the Agent and their respective counsel, compensation to any financial consultants, engineers, accountants, verification agents, and underwriters (other than those taken as discount on the Closing Date), legal fees and expenses, filing and recording costs, costs of preparation and reproduction of notice of sale documents and other related bond issuance costs, rating agency costs, costs of compliance with the Tax Code relating to any rebate to the United States and continuing disclosures and the costs of printing, mailing and publication of notices with respect to the Town. "Costs of Issuance Fund' means the fund designated "Town of Tiburon, Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Costs of Issuance Fund established under Section 4.02 hereof. "Council' means the Town Council as the legislative body of the Town. "County' means the County of Marin, State of California. "Debt Service" means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as -3- scheduled, and (ii) the principal amount of the Outstanding Bonds and the Sinking Fund Payments due in such Bond Year. "Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Tax Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Tax Code, (ii) .the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other' investment agreement) that is acquired in accordance with applicable regulations under the Tax Code, (iii) the investment is a United States Treasury Security--State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) any commingled investment fund in which the Town and related parties do not own more than a ten percent (10%) beneficial interest if the return paid by such fund is without regard to the source of the investment. "Federal Securities" means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein: (a) direct general obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America); and (b) obligations of any department, agency or instrumentality of the United States of America the timely payment of principal of and interest on which are unconditionally and fully guaranteed by the United States of America. "Director of Administrative Services" means the Director of Administrative Services or chief financial officer of the Town or designee thereof, including any deputy thereof or assistant thereto. "Fiscal Year' means the period commencing on July 1 of each year and ending on the next succeeding June 30. "Improvement Fund' means the fund designated "Town of Tiburon, Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, " established under Section 4.05 hereof. "Information Services" means Financial Information, Inc.'s "Daily Called Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; F.S. Mergent call Notification, 5250 77 Center Drive, Charlotte, NC 28217; Xcitek, 5 Hanover Square, New York, NY 10004; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such services providing information with respect to called bonds as the Town may designate in an Officer's Certificate delivered to the Agent. "Interest Payment Date" means each date upon which interest on the Bonds is payable semiannually on each March 2 and September 2 until maturity and beginning on the date specified in Exhibit A. -4- "Officer's Certificate" means a written certificate or similar document executed by an Authorized Officer on behalf of the Town. "Original Purchaser' means Wulff, Hansen & Co., as the first purchaser of the Bonds from the Town. "Outstanding," when used as of any particular time with reference to Bonds, means all Bonds theretofore executed, issued and delivered by the Town and authenticated by the Agent under this Resolution except: (a) Bonds theretofore canceled by the Agent or surrendered to the Agent for cancellation; (b) Bonds paid or deemed to have been paid within the meaning of Section 2.03; and (c) Bonds in lieu of or in substitution for which other Bonds shall have been executed, issued and delivered by the Town pursuant to this Resolution or any Supplemental Resolution. "Owner' or "Registered Owner," when used with respect to any Outstanding Bond, means the person in whose name the ownership of such Bond shall be registered on the Bond Register. "Participating Underwriter' means an underwriter or purchaser of the Bonds under the Continuing Disclosure Certificate. "Permitted Investments" means the following, but only to the extent that the same are acquired at Fair Market Value: (a) Federal Securities; (b) securities (other than those identified in paragraphs (a) and (d) of Section 53601 of the Government Code of the State) in which the Town may legally invest funds subject to its control, pursuant to Article 1, commencing with Section 53600, of Chapter 4 of Part 1 of Division 2 of Title 5 of the Government Code of the State, as now or hereafter amended; (c) shares in a California common law trust established pursuant to Title 1, Division 7, Chapter 5 of the California Government Code which invests exclusively in investments permitted by Section 53635 of Title 5, Division 2, Chapter 4 of the California Government Code, as it may be amended, including but not limited to the California Asset Management Program (CAMP); (d) the Local Agency Investment Fund of the State of California, created pursuant to Section 16429.1 of the California Government Code, to the extent the Director of Administrative Services is authorized to register such investment in the Town's name; (e) investment agreements or guaranteed investment contracts, with or guaranteed by a financial entity whose long-term unsecured obligations are rated "AA" - 5 - or better by Moody's Investor's Service ("Moody's) and Standard and Poor's Ratings Group ("S&P"), and whose short term debt is rated no lower than the corresponding level of rating category for such debt and such agreement or contract shall provide that the financial entity shall deposit collateral with a third party in accordance with criteria established by Moody's and S&P in the event that the rating of short or long-term debt of the entity is downgraded below then-current requirements of Moody's and S&P for such agreements or contracts; (f) money market funds which are rated Am or better by S&P; (g) any of the following direct or indirect obligations of the following agencies of the United States of America: (i) direct obligations of the Export-Import Bank; (ii) certificates of beneficial ownership issued by the Farmers Home Administration; (iii) participation certificates issued by the General Services Administration; (iv) mortgage- backed bonds or pass-through obligations issued and guaranteed by the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation or the Federal Housing Administration; (v) project notes issued by the United States Department of Housing and Urban Development; and (vi) public housing notes and bonds guaranteed by the United States of America; (h) interest-bearing demand or time deposits (including certificates of deposit) in federal or state chartered savings and loan associations or in federal or State of California banks (including the Agent), provided that (i) the unsecured short-term obligations of such Qommercial bank or savings and loan association shall be rated A 1 or better by S&P, or (ii) such demand or time deposits shall be fully insured by the Federal Deposit Insurance Corporation; . (i) commercial paperrated in the highest short-term rating category by S&P, issued by corporations which are organized and operating within the United States of America, and which matures not more than 180 days following the date of investment therein; U) bankers acceptances, consisting of bills of exchange or time drafts drawn on and accepted by a commercial bank whose short-term obligations are rated in the highest short-term rating category by S&P, which mature not more than 270 days following the date of investment therein; (k) obligations the interest on which is excludable from gross income pursuant to Section 103 of the Tax Code and which are rated A or better by S&P. "Prepayment Account' means the account of that name in the Redemption Fund. "Principal Amount' means the maximum aggregate principal amount of the Bonds as forth in Exhibit A. "Principal Office" means the office of the Agent in San Francisco, California, or such other office as shall be designated by the Agent in writing to the Town, or such other office of the Agent designated by the Agent for payment, transfer or exchange of the Bonds. "Projecf' means, collectively, the acquisitions and improvements described in the Resolution of Intention and funded with all or a portion of the proceeds of the Bonds. - 6- "Record Date" means, with respect to the Bonds, the fifteenth (15th) day of the calendar month immediately preceding an Interest Payment Date, whether or not a Business Day. . "Redemption Fund' means the fund designated "Town of Tiburon, Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District, Redemption Fund" established under Section 4.03 hereof. "Redemption Premium" means the percentage of the principal amount of the Bonds payable upon redemption of the Bonds, as set forth in Exhibit A hereto. "Reserve Fund' means the fund designated "Town of Tiburon, Limited Obligation Improvement Bond, Lyford Cove Utility Undergrounding Assessment District, Reserve Fund" established under Section 4.04 hereof. "Reserve Requirement" means as of any date of calculation, an amount not to exceed the lesser of (a) Maximum Annual Debt Service on the Outstanding Bonds or (b) ten percent (10%) of the total of the proceeds of the Bonds deposited under Section 4.01 hereof. "Resolution" or "Resolution of Issuance" means this Resolution, as originally adopted or as it may from time to time be supplemented, modified or amended by any Supplemental Resolution pursuant to the -provisions hereof. "Resolution of Intention" means Resolution No. 15-2003 "A Resolution of the Town Council of the Town of Tiburon of Intention to Make Acquisitions and Improvements," adopted by the Council on May 21, 2003. "Sinking Fund Payments" means amounts specified in Exhibit A to be paid by the Town with respect to any Term Bonds, as set forth in Exhibit A. "State" means the State of California. "Supplemental Resolution" means any resolution, agreement, resolution or other instrument hereafter duly adopted or executed by the Town in accordance with the provisions of this Resolution. "Tax Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Tax Code. "Term Bonds" means those Bonds identified as Term Bonds in Exhibit A. "Town" means the Town of Tiburon a municipal corporation and general law town of the State of California duly organized and validly existing under and by virtue of the Constitution and the laws of the State of California. "Town Attorney" means the duly appointed or retained attorney or firm of attorneys to the Town for purposes of rendering advice in the conduct of its general municipal affairs. - 7 - "Town Manager' means the Town Manager or the Assistant Town Manager of the Town. "Treasurer' means the official who is the elected Town treasurer, or the deputy or designee thereof, or which official may be the Director of Administrative Services. Section 1.02. UNPAID ASSESSMENTS. The Assessments are hereby finally confirmed as shown on the list of unpaid Assessments on file with the Director of Administrative Services which list is hereby approved and which is incorporated herein by this reference and made a part hereof. For a particular description of the lots or parcels of land bearing the respective assessment numbers set forth in the list, reference is hereby made to the assessment and to the diagram, and any amendments thereto, recorded in the office of the officer of the Town who is the Superintendent of Streets of the Town after confirmation thereof by the Council. Section 1.03. EQUAL SECURITY. In consideration of the acceptance of the Bonds by the Owners thereof, this Resolution shall be deemed to be and shall constitute a contract between the Town and the Owners from time to time of the Bonds; and the covenants and agreements herein set forth to be performed on behalf of the Town shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds over any of the others by reason of the number or date thereof or the time of sale, execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein. - 8- ARTICLE II THE BONDS Section 2.01. BONDS AUTHORIZED. All acts, conditions and things required by law to' exist, happen and be performed precedent to and in the issuance of the Bonds have existed, happened and been performed in due time, form and manner as required by law, and the Council is now authorized pursuant to each and every requirel')lent of law to issue the Bonds in the manner and form as provided in this Resolution. The Bonds in the Principal Amount are hereby authorized and will be issued as serial and/or term bonds as set forth in Exhibit A hereto. The Agent, at the Principal Office, is hereby designated as the Agent to perform the actions and duties required under this Resolution for the authentication, transfer, registration, and payment of the Bonds. Section 2.02. TERMS OF BONDS. (A) Denominations. The Bonds shall be issued as fully registered Bonds without coupons in the Bond Denomination or any integral multiple thereof, except that the first maturity may contain any odd amount. Bonds shall be lettered and numbered in a customary manner as determined by the Agent. (B) Date of Bonds. The Bonds shall be dated the Bond Date. (C) CUSIP. "CUSIP" identification numbers shall be imprinted on the. Bonds, but such numbers shall not constitute a part of the contract evidenced by the Bonds and any error or omission with respect thereto shall not constitute cause for refusal of any purchaser to accept delivery of and pay for the Bonds. Failure of the Town or the Agent to use such CUSIP numbers in any notice to Owners shall not constitute an event of default or any violation of the Town's contract with such Owners and shall not impair the effectiveness of any such notice. (D) Series and Maturities. The Bonds shall consist of the series and mature and become payable on September 2 of each year and shall bear interest at the rates per annum all as set forth in Exhibit A hereto and hereby made a part hereof. (E) Interest. The Bonds shall bear interest at the rates set forth above payable on the Interest Payment Dates in each year. Interest shall be calculated on the basis of a 360-day year composed of twelve. 30-day months. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication and registration thereof unless it is authenticated and registered (i) prior to an Interest Payment Date and after the close of business of the Record Date, in which event it shall bear interest from such Interest Payment Date, or (ii) prior to the close of business on the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the Dated Date. (F) Method of Payment. Both the principal of and interest and premium (if any) on the Bonds shall be payable in. lawful money of the United States of America. Interest on the Bonds (including the final interest payment upon maturity or earlier redemption) is payable by check of the Agent mailed by first class mail to the registered Owner thereof at such registered Owner's address as it appears on the registration books maintained by the Agent at the close of business on the Record Date preceding the Interest Payment Date, or by wire transfer made on such Interest Payment Date upon written instructions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds delivered to the - Agent prior to the applicable Record -9- Date. The principal of the Bonds and any premium on the Bonds are payable in lawful money of the United States of America upon surrender of the Bonds at the Principal Office of the Agent. All Bonds paid by the Agent pursuant this Section shall be canceled by the Agent. The Agent shall destroy the canceled Bonds and, upon request of the Town, issue a certificate of destruction of such Bonds to the Town. Section 2.03. REDEMPTION. (A) General. The Bonds are subject to redemption from the sources, upon the terms, the amounts, on the dates and at the Redemption Premiums as set -forth in Exhibit A hereto and hereby made a part hereof. (B) Notice to Agent. For other than redemption of any Term Bonds, the Town shall give the Agent written notice of the aggregate amount of Bonds expected to be redeemed pursuant to subsection (A) not less than sixty (60) days prior to the applicable redemption date. (C) Redemption Procedure by Agent. (i) Selection of Bonds. Except for redemption of any Term Bonds, the Agent shall select Bonds for retirement in such a way that the ratio of Outstanding Bonds to issued Bonds shall be approximately the same in each annual series insofar as possible. Within each annual series the Agent shall select Bonds for retirement by lot. (ii) Notice by Agent. The Agent shall cause written notice of any redemption to be given by registered or certified mail or by personal service to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond Register in the Principal Office of the Agent at least 30 days before the applicable Interest Payment Date. The Agent shall also cause notice of redemption to be sent to one or more of the Information Services at least one day earlier than the giving of notice to the Owners as aforesaid; provided, however, such mailing to the Information Services shall not be a condition. precedent to such redemption. Failure to so mail any notice of redemption, or of any person or entity to . receive any such notice, or any defect in any notice of redemption, shall not affect the validity of the proceeding for the redemption of such Bonds. Such notice shall state the redemption date and the Redemption Premium and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers (if applicable) and Bond numbers of the Bonds to be redeemed by giving the individual CUSIP number and Bond number of each Bond to be redeemed or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called in part the principal amount . thereof to be redeemed, and shall require that such Bonds be then surrendered at the Principal Office of the Agent for redemption at the said redemption price, and shall state that further interest on such Bonds, or the portion thereof to be redeemed, will not accrue from and after the redemption date. (iii) Payment. Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. -10- (iv) Partial Redemption. Upon surrender of Bonds redeemed in part only, the Town shall execute and the Agent shall authenticate and deliver to the registered Owner, at the expense of the Town, a new Bond or Bonds, of the same series and maturity, of authorized denominations in aggregate principal amoullt equal to the unredeemed portion of the Bond or Bonds. (D) Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of, and interest and any premium on, the Bonds so called for redemption shall have been deposited in the Redemption Fund on the date fixed for redemption, such Bonds so called shall cease to be entitled to any benefit under this Resolution other than the right to receive payment of the redemption price, and no interest shall accrue thereon on or after the redemption date specified in such notice. All Bonds redeemed by the Agent pursuant to this Section 2.03 sh~1I be canceled by the Agent. The Agent shall destroy the canceled Bonds and, upon request of the Authority, issue a certificate of destruction of such Bonds to the Town. Section 2.04. FORM OF BONDS. The Bonds, the Agent's certificate of authentication and the assignment, to appear thereon, shall be substantially in the forms, respectively, set forth in Exhibit B attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Resolution and the Act. The Bonds are being issued in fully registered form as physical certificates and, when issued, will be eligible for registration with the Depository Trust Company, New York, New York ("DTC"), however, at closing, unless issued as a temporary Bond hereunder, the Bonds will not be issued in "book-entry-only" form. Section 2.05. EXECUTION AND AUTHENTICATION OF BONDS.The Bonds shall be executed in the name and on behalf of the Town with the manual or facsimile signatures of the Treasurer and attested by the manual or facsimile signature of the Clerk. The Bonds shall then be delivered to the Agent for authentication. In case any.officer who shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed shall have been authenticated or delivered by the Agent or issued by the Town, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Town as though the individual who signed the same had continued to be such officer of the Town. Also, any Bond may be signed on behalf of the Town by any individual who on the actual date of the execution of such Bond shall .be the proper officer although on the nominal date of such Bond such individual shall not have been such officer. Only such of the Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit B, manually executed by the Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Resolution, and such certificate of the Agent shall be conclusive evidence that the Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to the benefits of this Resolution. The Agent's certificate of authentication on any Bonds shall be deemed to be executed by it if signed by the Agent or by an authorized officer or signatory of the Agent, but it shall not be necessary that the same officer or signatory sign the certificate of authentication on all of the Bonds issued hereunder. Section 2.06. TRANSFER OR EXCHANGE OF BONDS. Any Bond may, in accordance with its terms, be transferred upon the Bond Register by the registered Owner, in person or by such Owner's duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the Agent, - 11 - duly executed. Whenever any Bond shall be surrendered for transfer, the Agent shall thereupon authenticate and deliver to the transferee a new Bond or Bonds of like tenor, maturity and aggregate principal amount. Bonds may be exchanged at the Principal Office of the Agent, for Bonds of the same tenor and maturity and of other authorized denominations. No Bonds the notice of redemption of which has been given under Section 2.03 shall be subject to transfer or exchange pursuant to this Section. Neither the Town nor the Agent shall be required to make such exchange or registration or transfer of Bonds on or after the Record Date or after a Bond has been selected for redemption. For any transfer or exchange under this Section, the Town and the Agent may require the payment of a reasonable fee to cover the costs and expenses of the Town and the Agent. Section 2.07. BOND REGISTER. The Agent will keep or cause to be kept at its Principal Office a sufficient Bond Register for the registration and transfer of the Bonds, which shall at all times during regular business hours be open to inspection by the Town; and, upon presentation for such purpose, the Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on the Bond Register, Bonds as provided in this Resolution. Section 2.08. TEMPORARY BONDS. The Bonds may be issued initially in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Council and may contain such reference to any of the provisions of this Resolution as may be appropriate. Every temporary Bond shall be executed by the officers designated and in the manner provided in Section 2.05 hereof and be registered and authenticated by the Agent upon the same conditions and in substantially the same manner as the definitive Bonds. If the Town issues temporary Bonds, it will execute and furnish definitive Bonds without delay, and thereupon the temporary Bonds may be surrendered, for cancellation, in exchange therefor at the Principal Office of the Agent, and the Agent shall authenticate and deliver in exchange for . such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Resolution as definitive Bonds authenticated and delivered hereunder. Section 2.09. BONDS MUTILATED, LOST, DESTROYED OR STOLEN. If any Bond shall become mutilated, the Agent shall thereupon authenticate and deliver, a new Bond of like maturity and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Agent shall be canceled by it and delivered to, or upon the order of, the Town. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Town and the Agent and, if such evidence be satisfactory to them and indemnity satisfactory to them shall be given, the Agent shall thereupon authenticate and deliver, a new Bond of like maturity and principal amount in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been called for redemption, instead of issuing a substitute Bond the Agent may pay the same without surrender thereof upon receipt of indemnity satisfactory to the Agent). The Town and the Agent may require payment of a reasonable fee for each new Bond issued under this Section and of the expenses which may be incurred by the Town and the Agent. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original contractual obligation on the part of the Town whether or not the Bond alleged to be lost, destroyed or stolen be at any tim~ enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Resolution with all other Bonds secured by this Resolution and any Supplemental Resolution. -12- ARTICLE III ISSUANCE OF BONDS Section 3.01. ISSUANCE AND SALE OF BONDS. At any time after the adoption of this Resolution, the Town may issue the Bonds and sell and deliver them to the Original Purchaser under the Bond Purchase Agreement between the Town and Original Purchaser. The Authorized Officers, and each of them, are hereby authorized to negotiate and execute the Bond Purchase Agreement with the Original Purchaser for the sale of the Bonds, subject to such conditions as shall be as hereafter provided. Section 3.02. PLEDGE OF ASSESSMENTS AND FUNDS. The Bonds shall be secured by a first pledge (which pledge shall be effected in the manner and to the extent herein provided) of all of the Assessments and all moneys deposited in the Redemption Fund (and the Prepayment Account therein) and the Reserve Fund. The Assessments and all moneys deposited into said funds (except as otherwise provided herein) are hereby dedicated to the payment of the principal of (including any Sinking Fund Payments), and interest and any premium on, the Bonds as provided herein and in the Bond Law until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose in under Section 8.03 hereof. Section 3.03. LIMITED OBLIGATIONS. All obligations of the Town under this Resolution and the Bonds shall not be general obligations of the Town, but shall be limited obligations, payable solely from the Assessments and the funds pledged therefore hereunder. Neither the faith and credit of the Town nor of the State of California or any political subdivision thereof is pledged to the payment of the Bonds. The Bonds are "Limited Obligation Improvement Bonds" under section 8769 of the Bond Law and are payable solely from and secured solely by the Assessments and the amounts in the Redemption Fund and the Reserve Fund created hereunder. Notwithstanding any other provision of this Resolution, the Town is not obligated to advance available surplus funds from the Town treasury to cure any deficiency in the Redemption Fund; provided, however, the Town is not prevented, in its sole discretion, from so advancing funds. Section 3.04. NO ACCELERATION. The principal of the Bonds shall not be subject to acceleration hereunder. Nothing in this Section 3.04 shall in any way prohibit the prepayment or redemption of Bonds under Section 2.03 hereof, or the defeasance of the Bonds and discharge of this Resolution under Section 8.03 hereof. Section 3.05. REFUNDING OF BONDS. The Bonds may be refunded by the Town pursuant to Divisions 11 or 11.5 of the California Streets and Highways Code upon the conditions as set forth in appropriate proceedings. This Section shall not apply to or in any manner limit advancement of the maturity of any of the Bonds as provided in Parts 8, 9, 11, or 11.1 of the Bond Law, nor shall this Section 3.05 apply to or in any manner limit the redemption and' payment of any Bond pursuant to subsequent proceedings providing for the payment of amounts to eliminate previously imposed fixed lien assessments, including the Assessments. Section 3.06. AUTHORITIES. The Authorized Officers are hereby authorized and directed. to cause the various documents herein mentioned to be completed and executed with such changes, modifications, deletions or additions as may be approval by the Authorized Officer in consultation with the Town's staff and consultants with respect to these reassessment -13- proceedings, such approval to be conclusively evidenced by the execution of the such documents by the Authorized Officer. The foregoing authorization is expressly conditioned upon the satisfaction of the following: (i) the total principal amount of the Bonds shall not exceed $4,000,000; (ii) the average interest rate of the Bonds shall not exceed 6% per annum and the discount shall not exceed 2.5% of the Principal Amount. The Clerk is authorized to complete and to approve changes in any provisions of this Resolution and Exhibits A and B hereto in order to accomplish the delivery of any of the Bonds on schedule; such changes may be accomplished by attachment of a certificate, executed by the Clerk, to this Resolution on file in the office of the Clerk. Section 3.07. BOND PURCHASE AGREEMENT. The Council hereby approves the Bond Purchase Agreement in substantially the form on file with the Town and the Authorized Officer is hereby authorized and directed to complete and execute the Bond Purchase Agreement on behalf of the Town with such changes, additions, deletions and revisions as may be approved by the Authorized Officer in consultation with the Original Purchaser and Bond Counsel. Section 3.08. OFFICIAL STATEMENT. The Council hereby approves the Official Statement describing the financing for the Bonds, in substantially the form on file with the Town Clerk together with any changes therein or additions thereto deemed advisable by the Authorized Officer. The Council approves and authorizes the distribution by the Original Purchaser (as underwriter) of the Preliminary Official Statement to prospective purchasers of the Bonds, and authorizes and directs the Authorized Officer on behalf of the Town to deem "final," pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule"), the Preliminary Official Statement prior to its distribution to prospective purchasers of the Bonds. The execution of the final Official Statement, which shall include such changes and additions to the Preliminary Official Statement as may be permitted by the Rule and deemed advisable by the Authorized Officer and such information permitted to be excluded from the Preliminary Official Statement pursuant to the Rule shall be conclusive evidence of the approval of the Official Statement by the Town. Section 3.09. CONTINUING DISCLOSURE. The Council hereby approves the form of the Town's Continuing Disclosure Certificate with respect to the Bonds in substantially the forms thereof attached to the Preliminary Official Statement. The Authorized Officer is hereby authorized and directed to complete and execute the Certificate on behalf of the Town with such changes, additions, deletions as may be approved by the Authorized Officer in consultation with Bond Counsel. Section 3.10. BOND SALE AND DELIVERY.. Upon execution of the Bond Purchase Agreement by the Town, the Bonds shall be prepared, authenticated and delivered, all in accordance with the applicable terms of this Resolution and the Bond Purchase Agreement. Each Authorized Officer and other responsible Town officials are hereby authorized and directed to take such actions as are required under the Bond Purchase Agreement to complete all actions required to evidence the delivery of the Bonds and the receipt of the purchase price thereof from the Original Purchaser. Section 3.11. ACTIONS APPROVED. All actions heretofore taken by each Authorized Officer and other officials and agents of the Town with respect to the establishment of the Assessment District and the sale and issuance of the Bonds are hereby approved, confirmed and ratified, and each Authorized Officer is hereby authorized and directed to do any and all things and take any and all actions and execute any and all certificates, agreements, contracts, and other documents, which each Authorized Officer may deem necessary or advisable in order - 14- to complete the lawful issuance and delivery of the Bonds in accordance with this Resolution and any certificate, agreement, contract, and other document described in the documents herein approved. Each Authorized Officer is further authorized and directed to complete Exhibit A hereto and make such changes, amendments and corrections to this resolution as may be required to provide for the timely issuance, sale and delivery of the Bonds and to certify to such actions, as required. - 15 - ARTICLE IV FUNDS AND ACCOUNTS Section 4.01. APPLICATION OF PROCEEDS OF SALE OF BONDS. Upon receipt of the proceeds of sale of the Bonds on the Closing Date, the proceeds thereof shall be forthwith set aside, paid over and deposited by the Director of Administrative Services, as set forth in appropriate Officer's Certificate(s), Article IV hereof and Exhibit A hereto. Section 4.02. COSTS OF ISSUANCE FUND. (A) Establishment of Costs of Issuance Fund. The Costs of Issuance Fund shall be established, held and receive deposits, all as provided in Exhibit A. The moneys in the Costs of Issuance Fund shall be held by the Director of Administrative Services for the benefit of the Town and shall be disbursed as provided in subsection (B) of this Section 4.02 for the payment or reimbursement of the Costs of Issuance. (B) Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed from time to time to pay Costs of Issuance as set forth in a requisition therefor containing respective amounts to be paid to the designated payees and delivered to the Director of Administrative Services concurrently with the delivery of the Bonds. The Director of Administrative Services shall pay all Costs of Issuance upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set 'forth with respect to such payee in such requisition, or upon receipt of an Officer's Certificate requesting payment of a Cost of Issuance not listed on the initial requisition delivered to the Director of Administrative Services on the Closing Date. (C) Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited under Section 6.01 hereof. Pending its closing under Subsection (D)below, Interest earnings and profits resulting from such investment shall be retained by the Director of Administrative Services in the Costs of Issuance Fund to be used for the purposes of such fund, pending the closing of such fund. (D) Closing of Fund. The Director of Administrative Services shall maintain the Costs of Issuance Fund for a period of 90 days from the Closing Date or until the last known Costs of Issuance have been paid, whichever is earlier, and then shall transfer any moneys remaining therein, including any investment earnings thereon, the Improvement Fund and the Costs of Issuance Fund shall be closed. Section 4.03. REDEMPTION FUND. (A) Establishment of Redemption Fund and Account. The Redemption Fund is hereby established as a separate fund to be held by the Director of Administrative Services to the credit of which deposits shall be made as required by Section 4.01 and any other amounts required to be deposited therein by this Resolution or the Bond Law. Moneys in the Redemption Fund shall be held by the Director of Administrative Services for the benefit of the Town and the Bond Owners, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below. Within the Redemption Fund, the Director of Administrative Services shall establish and administer accounts as follows: -16- (i) The Capitalized Interest Account, into which a deposit shall be made under Section 4.01 and from which, disbursements shall be made to pay all or a portion of the interest on the Bonds which is due on the Interest Payment Date( s) set forth in Exhibit A. Upon the final payment of interest as herein provided, any moneys remaining in the Capitalized Interest Account shall be transferred to the Redemption Fund to pay Debt Service and the Capitalized Interest Account shall be closed; and (ii) The Prepayment Account, into which shall be placed any amounts representing the full or partial prepayments of Assessments that occur after the issuance of the Bonds. The Prepayment Account shall be administered in accordance with section 8767 of the Bond Law and shall remain open so long as the Redemption Fund remains open. (B) Disbursements. On or before each Interest Payment Date, the Director of Administrative Services shall withdraw from the accounts in the Redemption Fund and forward to the Agent for payment to the Owners of the Bonds, amounts sufficient to pay the principal of, and interest and any premium, then due and payable on the Bonds. Five (5) Business Days prior to each Interest Payment Date, the Director of Administrative Services shall determine if the amounts then on deposit in the Redemption Fund are sufficient to pay the Debt Service due on the Bonds on such Interest Payment date. In the event that amounts in the Redemption Fund are insufficient for such purpose, the Director of Administrative Services shall cause appropriate withdrawals to be made from the Reserve Fund, to the extent of any funds therein, the amount of such insufficiency, and shall transfer any amounts so withdrawn to the Redemption Fund. Amounts so withdrawn from such reserve fund and deposited in the Redemption Fund shall be applied to the payment of the Bonds. If, after the foregoing transfers, there are insufficient funds in the Redemption Fund to make the payments provided for in the first sentence of the first paragraph of this Section 4.03(B), the Director of Administrative Services shall apply the available funds first to the payment of interest on the Bonds, then to the payment of principal due on the Bonds, and then to payment of principal due on the Bonds by reason of Bonds called for redemption pursuant to Section 2.03 hereof. (C) Investment. Moneys in the Redemption Fund and the accounts therein shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits resulting from such investment and deposit shall be retained in the Redemption Fund and the accounts therein. (D) Closing of Fund. The Redemption Fund (and the Prepayment Account therein) shall be closed when all of the principal of and interest on the Bonds has been paid. Section 4.04. RESERVE FUND. (A) Establishment of Reserve Fund. The Reserve Fund is hereby established as a separate fund to be held by the Director of Administrative Services to the credit of which a deposit shall be made as required by Section 4.01, and deposits shall be made as provided in the Bond Law. Moneys in the Reserve Fund shall be held by the Director of Administrative Services for the benefit of the Town and the Bond Owners as a reserve for the payment of principal of, and interest and any premium on, the Bonds. The Town shall cause the Reserve Fund to be administered in accordance with Part 16 of the Bond Law; provided that proceeds from redemption or sale of properties with respect to which payment of delinquent Assessments and interest thereon was made from the Reserve Fund, shall be credited to the Reserve Fund. -17- (B) Use of Fund. Except as otherwise provided in this Section 4.04 all amounts deposited in the Reserve Fund shall be used and withdrawn by the Director of Administrative Services solely for the purpose of making transfers to the Redemption Fund in the event of any deficiency at any time in the Redemption Fund of the amount then required for payment of the principal of, and interest and any premium on, the Bonds or, in accordance with the provisions of this Section 4.04, for the purpose of redeeming Bonds from the Redemption Fund. (C) Transfer Due to Deficiency in Redemption Fund. Transfers shall be made from the Reserve Fund to the Redemption Fund in the event of a deficiency in the Redemption Fund, in accordance with Section 4.04(B) hereof. (D) Payment of Assessments. Whenever, after the issuance of the Bonds, an Assessment is pre-paid, in whole or in part, as provided in the Bond Law, the Director of Administrative Services shall transfer from the Reserve Fund to the Redemption Fund an amount specified in such direction equal to the product of the ratio of the original amount of the Assessment securing any Bonds so paid to the original amount of all Assessments securing any Bonds, times the initial Reserve Requirement. (E) Transfer of Excess of Reserve Requirement. Whenever, on any Interest Payment Date, or on any other date as determined by the Director of Administrative Services, the amount in the Reserve Fund exceeds the then applicable Reserve Requirement, the Director of Administrative Services shall, except as otherwise provided in Section 5.09 hereof for purposes of rebate and as evidenced by an appropriate Officer's Certificate, transfer on or before such Interest Payment Date an amount equal to the excess from the Reserve Fund to the Redemption Fund to be used in accordance with Part 16 of the Bond Law. (F) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund is sufficient to retire all the Outstanding Bonds, whether by advance retirement or otherwise, collection of the principal and interest on the Assessments shall be discontinued and the Reserve Fund liquidated by the Director of Administrative Services in retirement of the Outstanding Bonds, as directed by an Officer's Certificate. In the event that the balance in the Reserve Fund at the time of liquidation exceeds the amount required to retire all of the Outstanding Bonds, the excess shall be transferred to the Town to be used in accordance with the Act and the Bond Law. (G) Investment. Moneys in the Reserve Fund shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits resulting from said investment shall be retained in the Reserve Fund subject to the provisions of Section 4.04(E) hereof. Section 4.05. IMPROVEMENT FUND. (A) Establishment of Improvement Fund. The Improvement Fund is hereby established as a separate fund to be held by the Director of Administrative Services to the credit of which deposits shall be made as required by Section 4.01. Moneys in the Improvement Fund shall be held by the Director of Administrative Services for the benefit of the Town, and shall be disbursed, except as otherwise provided in subsection (D) of this Section, for the payment or reimbursement of costs of the Project. (B) Disbursement. Disbursements from the Improvement Fund shall be made by the Director of Administrative Services upon receipt of an Officer's Certificate, which shall: -18- (i) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made, the person to which the disbursement is to be paid and state that such disbursement is for a Project cost; and (ii) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting disbursement. (C) Investment. Moneys in the Improvement Fund shall be invested and deposited under Section 6.01 hereof. Interest earnings and profits from such investment and deposit shall be retained in the Improvement Fund to be used for the purposes of such fund. (D) Closing of Fund. Upon the filing of an Officer's Certificate stating that the Project has been completed and that all costs of the Project have been paid or are not required to be paid from the Improvement Fund, the Director of Administrative Services shall transfer the amount, if any, remaining in the Improvement Fund as directed in the Officer's Certificate which directions shall be pursuant to the Resolution of Intention and to the applicable provisions of the Act and the Improvement Fund shall be closed. -19- ARTICLE V COVENANTS Section 5.01. COLLECTION OF ASSESSMENTS. The Town shall comply with all requirements of the Act, the Bond Law and this Resolution to assure the timely collection of the Assessments, including, without limitation, the enforcement of delinquent Assessments. To that end, the following shall apply: (A) Tax Roll Collection. The Assessments as set forth on the list thereof on file with the Director of Administrative Services together with the interest thereto, shall be payable in . annual series corresponding in number and proportionate amount to the number of installments and principal amounts of the Bonds maturing or becoming subject to mandatory prior redemption under Section 2.03 hereof. An annual proportion of each Assessment shall be payable in each Fiscal Year preceding the date of maturity or mandatory prior redemption date of each of the Bonds issued sufficient to pay the Bonds when due and such proportion of each Assessment coming due in any year, together with the annual interest thereon, shall be payable in the same manner and at the same time and in the same installments as the general taxes on real property are payable, and become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interests after delinquency as do the general taxes on real property. All sums received from the collection of the Assessments and of the interest and penalties thereon shall be placed in the Redemption Fund. (B) Auditor Record. The Director of Administrative Services shall, before the final date on which th~ Auditor will accept the transmission of the Assessments for the parcels within the Assessment District for inclusion on the next tax roll, prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the installments of the Assessments on the next secured tax roll. The Director of Administrative Services is hereby authorized to employ consultants to assist in computing the if"!stallments of the Assessments hereunder and in reconciling Assessments billed to amounts received as provided in the subsection (C) of this Section 5.01. (C) Administrative Costs. In addition to any amounts authorized pursuant to section 8682 of the Bond Law to be included with the annual amounts of installments as aforesaid, the Town, pursuant to section 8682.1 of the Bond Law may cause to be entered on the assessment roll on which taxes will next become due, opposite each lot or parcel of land within the Assessment District in the manner set forth in said section 8682, each lot's pro rata share of the estimated annual expenses of the Town in connection with the administrative duties thereof for the Bonds, including, but not limited to, the costs of registration, authentication, transfer and compliance with the provisions of Article V hereof. Delinquent Assessments shall be subject to foreclosure pursuant to Section 5.02 hereof. Section 5.02. FORECLOSURE. The Town hereby covenants with and for the benefit of the Owners of the Bonds that it will order, and cause to be commenced, and thereafter diligently prosecute an action in the superior court to foreclose the lien of any Assessment or installment thereof which has been billed, but has not been paid, pursuant to and as provided in sections 8830 and 8835, inclusive of the Bond Law and the conditions specified in this Section 5.02 The Director of Administrative Services shall notify the Town Attorney of any such delinquency of which the Director of Administrative Services is aware, and the'Town Attorney r - 20- shall commence, or cause to be commenced, such foreclosure proceedings, Under this Section, "commence" means and includes any actions preparatory to filing of any complaint. The Town Attorney is hereby authorized to employ counsel to conduct any such foreclosure proceedings. The following conditions shall apply to the foreclosure proceedings which shall be commenced within 60 days of any of the following determinations which shall be made by the Director of Administrative Services not later than October 1 of each Fiscal Year: (A) If the Director of Administrative Services determines that there is a delinquency of Assessment of $1,500 or more for a prior Fiscal Year or Years for any single parcel of land in the Assessment District. (B) If the Director of Administrative Services determines that the total amount of delinquent Assessments for the prior Fiscal Year for the entire Assessment District, less the total delinquencies under. subsection (A) above, exceeds three percent (3%) of the total Assessments due and payable in the prior Fiscal Year, foreclosure shall be commenced against each parcel of land in the Assessment District with a delinquency of $750 or more for the prior Fiscal Year or Years. (C) If the Director of Administrative Services determines that the total amount of delinquent Assessment for the prior Fiscal Year for the entire Assessment District, less the total delinquencies under subsections (A) and (B) above, exceeds five percent (5%) of the total Assessments due and payable for the prior Fiscal Year, foreclosure shall be commenced against each parcel of land within the Assessment District with any amount of delinquency for the prior Fiscal Year or Years. Provided, however, that nothing herein shall prevent the Director of Administrative Services or the Town Attorney from causing the commencement of foreclosure proceedings before the occurrence of any of the foregoing. . Section 5.03. PUNCTUAL PAYMENT; COMPLIANCE WITH DOCUMENTS. The Town shall punctually payor cause to be paid the interest and principal to become due with respect to all of the Bonds in strict conformity with the terms of the Bonds and of this Resolution, and will faithfully observe and perform all of the conditions, covenants and requirements of this Resolution and all Supplemental Resolutions. Section 5.04. NO PRIORITY FOR ADDITIONAL OBLIGATIONS. The Town covenants that no additional bonds or other obligations shall be issued or incurred having any priority over the Bonds in payment of principal or interest out of the Assessments. Nothing in this Resolution shall prohibit the Town from issuing bonds or other obligations on a parity with or subordinate to the Bonds and secured by and payable from the Assessments upon such terms as the Town may determine. Section 5.05. FURTHER ASSURANCES. The Town will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Resolution, and for the better assuring and confirming unto the Owners of the Bonds the rights and benefits provided in this Resolution. Section 5.06. PRIVATE ACTIVITY BOND LIMITATION. The Town shall assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of section 141(b) of the Tax Code or the private loan financing test of section 141(c) of the Tax Code. - 21 - Section 5.07. FEDERAL GUARANTEE PROHIBITION. The Town shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Bonds to be "federally guaranteed" within the meaning of section 149(b) of the Tax Code. Section 5.08. NO ARBITRAGE. The Town shall not take, or permit or suffer to be taken by the Director of Administrative Services or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of section 148 of the Tax Code. Section 5.09. REBATE REQUIREMENT. The Town shall take any and all actions necessary to assure compliance with section 148(f) of the Tax Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Bonds. Earnings on any reserve fund established under this Resolution shall be used for rebate purposes before any application thereof as credits to the Redemption Fund under Section 4.03(E). Section 5.10. YIELD OF THE BONDS. In determining the yield of the Bonds to comply with Sections 5.08 and 5.09.hereof, the Town will take into account redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the Town, as of the Closing Date, regarding prepayments of Assessments and use of prepayments for redemption of the Bonds, without regard to whether or not prepayments are received or Bonds redeemed. Section 5.11. AMENDMENT. Without the consent of the Owners of the Bonds, the Town may amend this Resolution to add, modify or delete provisions if necessary or desirable to assure compliance with Section 148(f) of the Tax Code, or as otherwise required, to assure the exemption from federal income taxation of interest on the Bonds. Section 5.12. MAINTENANCE OF TAX-EXEMPTION. The Town shall take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the Owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Tax Code as in effect on the date of issuance of the Bonds. Section 5.13. CONTINUING DISCLOSURE. The Town hereby covenants and agrees that it will comply with and carry out all of the provisions of any continuing disclosure relating to the Bonds. Notwithstanding any other provision of this Resolution, failure of the Town to comply with any continuing disclosure shall not be considered an event of default. - 22- ARTICLE VI INVESTMENT OF FUNDS Section 6.01. DEPOSIT AND INVESTMENT OF MONEYS IN FUNDS. Subject in all respects to the provisions of Section 6.02, moneys in any fund or account created or established by this Resolution and held by the Director of Administrative Services shall be invested by the Director of Administrative Services in Permitted Investments. The following shall apply to such investments: (A) Investments. In the absence of any such Officer's Certificate, the Director of Administrative Services shall invest any such moneys in Permitted Investments described (f) in the definition of Permitted Investments, which funds, by their terms mature prior to the date on which such moneys are required to be paid out hereunder. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account, subject, however, to the requirements of this Resolution for transfer of interest earnings and profits resulting from investment of amounts in funds and accounts; (B) Principal or Agent. The Director of Administrative Services may act as principal or agent in the acquisition or disposition of any investment. The Director of Administrative Services shall incur no liability for losses arising from any investments made pursuant to this Section; (C) Commingling. Subject in all respects to the provisions of Section 5.09, investments in any and all funds and accounts may at the discretion of the Director of Administrative Services be commingled in a separate fund or funds for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Director of Administrative Services hereunder, provided that the Director of Administrative Services shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in this Resolution; (D) Sales. The Director of Administrative Services shall sell at the highest price reasonably obtainable, or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited and the Director of Administrative Services shall not be liable or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance herewith; and (E) Director of Administrative Services. For any funds held by the Director of Administrative Services, the foregoing provisions of this Section 6.01 shall also apply, except that an Officer's Certificate shall not be required. For such funds the Director of Administrative Services shall keep records or accounts of all expenditures or disbursements therefrom which records shall be available for inspection during business hours on any Business Day upon prior written request. Section 6.02. ACQUISITION, DISPOSITION AND VALUATION OF INVESTMENTS. The following shall apply to investments of funds and accounts under this Resolution: (A) Fair Market Value. Except as otherwise provided in subsection (B) of this Section, the Town covenants that all investments of amounts deposited in any fund or account - 23- under this Resolution, or otherwise containing gross proceeds of the Bonds (under section 148 of the Tax Code) shall be acquired, disposed of and valued (as of the date that valuation is required by this Resolution or the Tax Code) at Fair Market Value. (B) Reserve Fund. Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under applicable provisions of the Tax Code, and (unless valuation is undertaken at least annually) investments in any reserve fund, shall be valued at their present value (within the meaning of section 148 of the Tax Code). Section 6.03. LIABILITY OF TOWN. The Town shall not incur any responsibility in respect of the Bonds or this Resolution other than in connection with the duties or obligations explicitly provided herein or in the Bonds. The Town shall not be liable to any Owner in connection with the performance of its duties hereunder, except for its own gross negligence or willful default. The Town shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements of the Agentherein or of any of the documents executed by the Agent in connection with the Bonds, or as to the existence of a default thereunder. Under this Resolution, the following shall apply to the Town: (A) Reliance. In the absence of bad faith, the Town, including the Director of Administrative Services, may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Town and conforming to the requirements of this Resolution. The Town, including the Director of Administrative Services, shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts; (B) Expenditures. No provision of this Resolution shall require the Town to expend or risk its own general funds or otherwise incur any financial liability (other than with respect to the foreclosure proceedings for delinquent Assessments and the payment of fees and costs of the Agent) in the performance of any of its obligations hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it; . (C) Counsel. The Town may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Town may consult with counsel, who may be the Town Attorney, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith; (D) Owners. The Town shall not be bound to recognize any person as the Owner of a Bond unless duly registered and until such Bond is submitted for inspection, if required, and his. title thereto satisfactorily established, if disputed; and (E) Certificate. Whenever in the administration of its duties under this Resolution the Town shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Town, be deemed to be conclusively proved and established by a certificate of the Agent or other expert retained by the Town for the purposes hereof, and such certificate shall be full warrant to the Town for any action taken or suffered under the provisions of this Resolution or any Supplemental Resolution upon the faith thereof, but in its discretion the Town may, in lieu - 24- thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. Section 6.04. EMPLOYMENT OF AGENTS BY TOWN. In order to perform its duties and obligations hereunder, the Town may employ such persons or entities as it deems necessary or advisable. The Town shall not be liable for any of the acts or omissions of such persons or entities employed by it with reasonable care and in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or entities. - 25- ARTICLE VII MODIFICATION OR AMENDMENT Section 7.01. AMENDMENTS PERMITTED. This Resolution and the rights and obligations of the Town and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Resolution pursuant to the affirmative vote at a meeting of Owners, or with the written consent without a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 7.04. No such modification or amendment shall (i) extend the maturity of any Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation .of the Town to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation by the Town of any pledge or lien upon the Assessments superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Act, this Resolution, the laws of the State of California), or reduce the percentage of Bonds required for the amendment hereof, or to amend this Section 7.01. Any such amendment may not modify any of the rights or obligations of the Agent without its written consent. This Resolution and the rights and obligations of the Town and of the Owners may also be modified or amended at any time by a Supplemental Resolution, without the consent of any Owners, only to the extent permitted by law and only for anyone or more of the following purposes: (A) Additions. To add to the covenants and agreements of the Town in this Resolution contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the Town; (B) Affecting Bonds. To make modifications not adversely affecting any outstanding series of Bonds of the Town in any material respect; (C) Corrections. To make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Resolution, or in regard to questions arising under this Resolution, as the Town may deem necessary or . desirable and not inconsistent with this Resolution, and which shall not adversely affect the rights of the Owners of the Bonds; or (D) Tax Exemption. To make such additions, deletions or modifications as may be necessary or desirable to assure exemption from federal income taxation of interest on the Bonds. Section 7.02. OWNERS' MEETINGS. The Town may at any time call a meeting of the Owners. In such event the Town is authorized to fix the time and place of said meeting and to provide for the giving of notice thereof and to fix and adopt rules and regulations for the conduct of said meeting. Section 7.03. PROCEDURE FOR AMENDMENT WITH WRITTEN CONSENT OF OWNERS. The Town may at any time adopt a Supplemental Resolution amending the provisions of the Bonds or of this Resolution or any Supplemental Resolution, to the extent that such amendment is permitted by Section 7.01 hereof, to take effect when and as provided in this Section 7.03. With respect to such Supplemental Resolution under this Section 7.03, the following shall apply: - 26- (A) Request. A copy of such Supplemental Resolution, together with a request to Owners for their consent thereto, shall be mailed by first class mail, by the Director of . Administrative Services to each Owner of Bonds Outstanding, but failure to mail copies of such Supplemental Resolution and request shall not affect the validity of the Supplemental Resolution when assented to as in this Section provided; (8) Consents. Such Supplemental Resolution shall not become effective unless there shall be filed with the Agent the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in Section 7.04) and a notice shall have been mailed as hereinafter in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 8.04. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Agent prior to the date when the notice hereinafter in this Section provided for has been mailed; and (C) Notice. After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Resolution, the Town shall mail a notice to the Owners in the manner above provided in this Section for the mailing of the Supplemental Resolution, stating in substance that the Supplemental Resolution has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section but. failure to mail copies of said notice shall not affect the validity of the Supplemental Resolution or consents thereto). Proof of the mailing of such notice shall be filed with the Agent. A record, consisting of the papers required by this Section 7.03 to be filed with the Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Resolution shall become effective upon the filing with the Agent of the proof of matters therein of such notice, and the Supplemental Resolution shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article) upon the Town and the Owners of all Bonds at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty-day period. Section 7.04. DISQUALIFIED BONDS. Bonds owned or held for the account of the Town, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article VII, and shall not be entitled to vote upon, consent to, or take any other action provided for in this Article VII. Section 7.05. EFFECT OF SUPPLEMENTAL RESOLUTION. From and after the time any Supplemental Resolution becomes effective pursuant to this Article VII, this Resolution shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under this Resolution of the Town and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Resolution shall be deemed to be part of the terms and conditions of this Resolution for any and all purposes. Section 7.06. ENDORSEMENT OR REPLACEMENT OF BONDS ISSUED AFTER AMENDMENT. The Town may determine that Bonds issued and delivered after the effective - 27- date of any action taken as provided in this Article VII shall bear a notation, by endorsement or otherwise, in form approved by the Town, as to such action. In that case, upon request of the Owner of any Bond Outstanding at such effective date and presentation of his Bond for that purpose at the Principal Office of the Agent or at such other office as the Town may select and designate for that purpose, a suitable notation shall be made on such Bond. The Town may determine that new Bonds, so modified as in the opinion of the Town is necessary to conform to such Owners' action, shall be prepared, executed and delivered. In that case, upon request of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the Agent without cost to any Owner, for Bonds then Outstanding, upon surrender of such Bonds. Section 7.07. AMENDATORY ENDORSEMENT OF BONDS. The provisions of this Article VII shall not prevent any Owner from accepting any amendment as to the particular Bonds held by such Owner, provided that due notation thereof is made on such Bonds. - 28- ARTICLE VIII MISCELLANEOUS Section 8.01. BENEFITS OF AGREEMENT LIMITED TO PARITIES. Nothing in this Resolution, expressed or implied, is intended to give to any person other than the Town, the Agent and the Owners, any right, remedy or claim under or by reason of this Resolution. Any covenants, stipulations, promises or agreements in this Resolution contained by and on behalf of the Town shall be for the sole and exclusive benefit of the Owners and the Agent. Section 8.02. SUCCESSOR AND PREDECESSOR. Whenever in this Resolution or any Supplemental Resolution either the Town or the Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Resolution contained by or on behalf of the Town shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 8.03. DISCHARGE OF RESOLUTION. Subject to the provisions of Section 2.03 hereof, the Town may pay and discharge the entire indebtedness on all Bonds Outstanding in anyone or more of the following ways: (A) Payment. By paying or causing to be paid the principal of (including any Sinking Fund Payments) and interest and any premium on all Bonds Outstanding, as and when the same become due and payable; . (8) Cash. By depositing with the Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the Redemption Fund is fully sufficient to pay all Bonds Outstanding, including all principal, interest and any applicable redemption premiums, or; (C) Federal Securities. By irrevocably depositing with the Agent, in trust, cash and Federal Securities in such amount as the Town shall determine, as confirmed by an independent certified public accountant, which will, together with the interest to accrue thereon and moneys then on deposit in the Redemption Fund be fully sufficient. to pay and discharge the indebtedness on all Bonds, including all principal, interest and any applicable redemption premiums, at or before their respective maturity dates; (D) Actions. If such Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been given as in this Resolution provided or provision satisfactory to the Agent shall have been made for the giving of such notice, then, at the election of the Town, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Assessments and other funds provided for in this Resolution and all other obligations of the Town under this Resolution with respect to all Bonds Outstanding shall cease and terminate, except only the obligation of the Town to payor cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, the obligation of the Town to assure that no action is taken or failed to be taken if such action or failure adversely affects the exclusion of interest on the Bonds from gross income for federal income tax purposes, and all amounts owing to the Agent pursuant to Section 7.05 hereof; and thereafter Assessments shall not be payable to the Agent. Notice of such election shall be filed with the Agent. Any funds thereafter held by the Agent upon payments of all fees and expenses of the Agent, which are - 29- not required for said purpose, shall be paid over to the Town to be used by the Town as provided in the Act and the Bond Law. Section 8.04. EXECUTION OF DOCUMENTS AND PROOF OF OWNERSHIP. Any request, declaration or other instrument which this Resolution may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer. The ownership of registered bonds and the amount, maturity, number and date of holding the same shall be proved by the registry books. Any consent, request, declaration or other instrument or writing of the then registered Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the Town or the Agent in good faith and in accordance therewith. Section 8.05. WAIVER OF PERSONAL LIABILITY. No member, officer, agent or employee of the Town shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law. Section 8.06. NOTICES AND DEMANDS. Any notice or demand hereunder to the Town or the Agent may he given or served by being deposited postage prepaid in a post office letter box addressed (until another address is provided) as follows: A) Town: Director of Administrative Services Town of Tiburon 1505 Tiburon Blvd. Tiburon, CA 94920 (B) Agent: The Bank of New York Trust Company, N.A. 550 Kearny Street, Suite 600 San Francisco, CA 94108-2527 Attn: Corporate Trust Division Section 8.07. PARTIAL INVALIDITY. If any Section, paragraph, sentence, clause or phrase of this Resolution shall for any reason be held illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Resolution. The Town hereby declares that it would have adopted this Resolution and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that anyone or more Sections, paragraphs, sentences, clauses, or phrases of this Resolution may be held illegal, invalid or unenforceable. - 30- Section 8.08. UNCLAIMED MONEYS. Anything contained herein to the contrary notwithstanding, any moneys held by the Director of Administrative Services in trust for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years after the date when payments of principal, interest and any premium have become payable, shall be repaid by the Director of Administrative Services to the Town as its absolute property free from any trust, and the Director of Administrative Services shall thereupon be released and discharged with respect thereto. Section 8.09. APPLICABLE LAW. This Resolution shall be governed by and enforced in accordance with the laws of the State of California applicable to contracts made and performed in the State of California. Section 8.10. CONFLICT WITH ACT. In the event of a conflict between any provision of this Resolution with any provision of the Act, the provision of the Act shall prevail over the conflicting provision of this Resolution. Section 8.11. CONCLUSIVE EVIDENCE OF REGULARITY; VALIDITY. Bonds issued pursuant to this Resolution shall constitute conclusive evidence of the regularity of all proceedings under the Act relative to their issuance and the levy of the Assessments. The validity of the authorization and issuance of the Bonds shall not be dependent upon the completion and/or acquisition of the Projector any part thereof or the performance by any person or such person's obligation(s) with respect to the Project. Section 8.12. PAYMENT ON BUSINESS DAY. In any case where the date of the maturity of interest or of principal, (and premium, if any) of the Bonds or the date fixed for redemption of any Bonds or the date any action is to be taken pursuant to this Resolution is other than a Business Day, the payment of interest or principal, including Sinking Fund Payments, (and any redemption premium) or the action need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required and no additional interest shall accrue from such Interest Payment Date until such Business Day. Section 8.13. REPEAL OF INCONSISTENT RESOLUTIONS. Any resolution of the Council, and any part of such resolution, inconsistent with this Resolution, is hereby repealed to the extent of such inconsistency. Section 8.14. CONSULTANTS. All actions mandated by this Resolution to be performed by the Director of Administrative Services may be performed by the designee thereof or such other official of the Town or independent contractor, consultant or trustee duly authorized by the Town to perform such action or actions in furtherance of all or a specific portion of the requirements hereof. Section 8.15. CERTIFIED COPIES. The Clerk shall cause to be furnished a certified copy of this resolution to the Director of Administrative Services, to the Agent, and to the Auditor of the County. Section 8.16. EFFECTIVE DATE OF THE RESOLUTION. This Resolution shall become effective upon the date of its adoption. - 31 - PASSED AND ADOPTED at the regular meeting of the Town Council of the Town of Tiburon, State of California, on this day of 2005, by the following vote to wit: ATTEST: AYES: NOES: ABSENT: COUNCILMEMBERS: COUNCILMEMBERS COUNCILMEMBERS DIANE CRANE IACOPI, TOWN CLERK , MAYOR TOWN OF TIBURON EXHIBIT A TOWN OF TIBURON Lyford Cove Utility Undergrounding Assessment District Limited Obligation Improvement Bonds TERMS AND CONDITIONS The following terms and conditions shall be part of the within Resolution Authorizing the Issuance of Refunding Bonds (the "Resolution of Issuance") as if set forth in the text thereof: Principal Amount: Under Section 2.01, the actual aggregate principal amount of the Bonds is $ and the Bond Date is , 2005. The first Interest Payment Date is 2, 200_. Principal Maturities and Interest: Under Section 2.02 the maturities and rates of interest of the Bonds are as follows: Maturity Date (Seotember 2) Principal Amount ($) Interest Rate (%) Together with $ 'Term Bonds'?, at the interest rate of redemption hereunder. Term Bonds maturing on September 2, 20_ (the % per annum, subject to mandatory sinking fund Bond Redemption: Under Section 2.03, the Redemption provisions are as follows: Non-Sinking Fund Redemption. Each Outstanding Bond, or any portion of the principal thereof, in the principal amount of $5,000 or any integral multiple of $5,000, will be subject to mandatory redemption from any funds available therefor from proceeds of prepayments deposited in the Prepayment Account, or to optional redemption from sources other than prepayments, including the proceeds of refunding bonds, on any Interest Payment Date in any year by giving notice as provided herein and by paying the principal amount thereof, plus interest to the date of redemption and the applicable Redemption Premium determined as follows: Redemption Dates On or before September 2,20_ March 2, 20_ and September 2,20_ March 2,20_ and thereafter Redemption Premium % _% _% Mandatory Sinking Fund Redemption. The Bonds maturing on September 2, 20_, are subject to mandatory redemption, in part by lot, on September 2 in each year, EXHIBIT A Page 1 commencing September 2, 20_, from sinking fund payments from the redemption fund at a redemption price equal to the principal amount thereof to be redeemed, without premium, as follows: Sinking Fund Redemption Date (September 2) Principal Amount To Be Redeemed Funds: Deposit to Funds: Under Section 4.01, on or before, the Closing Date, the Town shall cause the following transfers and deposits shall be made: to the Costs of Issuance Fund; 1. $ 2.$ 3. $ 4. $ to the Redemption Fund (Capitalized Interest); to the Reserve Fund; and to the Improvement Fund. EXHIBIT A Page 2 EXHIBIT B FORM OF BOND United States of America State of California County of Marin County of Registered Number A- --- Registered ***$*** LIMITED OBLIGATION IMPROVEMENT BOND TOWN OF TIBURON Lyford Cove Utility Undergrounding Assessment District INTEREST RATE MATURITY DATE DATED DATE February 23, 2005 CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: *** DOLLARS*** Under and by virtue of the Improvement Bond Act of 1915, Division 10 (commencing with Section 8500) of the Streets and Highways Code (the "Act") the Town of Tiburon (the Town) County of Marin, State of California, will, out of the redemption fund for the payment of the bonds issued upon the unpaid portion of assessments made for the acquisition, work and improvements more fully described in proceedings taken pursuant to Resolution of Intention No. 15-2003 adopted by the Town Council of the Town on May 21, 2003, pay to the registered owner named above or registered assigns, on the maturity date stated above, the principal amount stated above, in lawful money of the United States of America and in like manner will pay interest at the rate per annum stated above, payable semiannually on March 2 and September 2 (each an "Interest Payment Date") in each year commencing on 2, 200_. This Bond bears interest from the Interest Payment Date next preceding its date of authentication and registration unless it is authenticated and registered (i) prior to an Interest Payment Date and after the close of business of the fifteen day preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) prior to the close of business on the fifteenth day of the calendar month preceding 2, 200_, in which event it shall bear interest from its date, until payment of such principal sum shall have been discharged. Both the principal of and redemption premium hereon of matured bonds or bonds called for redemption prior to maturity, if any, shall be paid upon surrender to The Bank of New York Trust Company, N.A., as Authentication Agent, Registrar, Transfer and Paying Agent (the "Agent") , in San Francisco, California, and interest hereon shall be paid by check or draft mailed to the registered owner hereof at the registered owner's address as it appears on the records of the Agent, or at such address as may have been filed with the Agent, for that purpose, as of the fifteenth day of the calendar month immediately preceding each Interest Payment Date; provided however, upon request in writing of an Owner of $1 ,000,000 or more in aggregate principal amount of Bonds, such request having been made before fifteen calendar days preceding an Interest Payment Date, such interest shall be paid on such Interest Payment Date by wire transfer in immediately available funds to an account in the continental United States designated by such Owner to the Agent. This Bond will continue to bear interest after maturity at the rate above stated provided that it is presented at maturity and payment hereof is refused upon the sole ground that there EXHIBIT B Page 1 are not suffi~ient moneys in said redemption fund with which to pay same. If it is not presented at maturity interest hereon will run only until maturity. This Bond shall not be entitled to any benefit under the Act or the Resolution entitled ~A Resolution of the Town Council of the Town of Tiburon Authorizing Issuance of Limited Obligation Improvement Bonds," (the "Resolution of Issuance") adopted by the Town Council on February 2, 2005, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon shall have been dated and signed by the Agent. IN WITNESS WHEREOF, the Town of Tiburon has caused this Bond to be signed in facsimile by the Treasurer of the Town and by its Town Clerk, and has cause its corporate seal to be reproduced in facsimile hereon all as of the 23rd day of February, 2005. TOWN OF TIBURON Treasurer Town Clerk CERTIFICATE OF AUTHENTICATION AND REGISTRATION This is one of the bonds described in the within mentioned Resolution of Issuance. Dated: 200_ The Bank of New York Trust Company, N.A. as Agent By , Authorized Officer (reverse side of bond) ADDITIONAL PROVISIONS OF THE BOND This Bond is one of several annual series of bonds of like date, tenor and effect, but differing in amounts, maturities and interest rates, issued by the Town under the Act and the Resolution of Issuance for the purpose of providing means for paying for the improvements and the refunding of the bonds as more particularly described in said proceedings, and is secured by the moneys in'the redemption fund (as may be limited by the Resolution of Issuance) and by the unpaid portion of said assessments made for the payment of said refunding, and, including principal and interest, is payable exclusively out of said fund. This Bond is transferable by the Owner hereof, in person or by the Owner's attorney duly authorized in writing, at said office of the Agent, subject to the terms and conditions provided in the Resolution of Issuance, including the payment of certain charges, if any, upon surrender and cancellation of this Bond. Upon such transfer, a new registered Bond or Bonds, of any authorized denomination or denominations, of the same maturity, and for the same aggregate principal amount, will be issued to the transferee in exchange herefor. Bonds shall be registered only in the name of an individual (including joint owners),. a corporation, a partnership or a trust. EXHIBIT B Page 2 Neither the Town nor the Agent shall be required to make such exchange or registration of transfer of Bonds during the fifteen (15) days immediately preceding any Interest Payment Date or any exchange or transfer of a Bond after such Bond has been called for redemption. The Town and the Agent may treat the Owner hereof as the absolute owner for all purposes, and the Town and the Agent shall not be affected by any notice to the contrary. This Bond, or any portion of the principal thereof, in the principal amount of $5,000 or any integral multiple of $5,000, will be subject to mandatory redemption from any funds available therefore from the prepayments of assessments, and to optional redemption from sources other than prepayments, including the proceeds of refunding bonds, on any Interest Payment Date in any year by giving notice as provided herein and by paying the principal amount thereof, plus interest to the date of redemption and the applicable Redemption Premium as follows: Redemotion Dates Premium On or before September 2,20_ March 2, 20_and September 2,20_ March 2, 20_ and thereafter Redemotion _% _% _% This Bond is a Limited Obligation Improvement Bond because, under the Resolution of Issuance, the Town is not obligated to advance funds from the Town treasury to cover any deficiency which may occur in the redemption fund for the bonds; however, the Town is not prevented, in its sole discretion, from so advancing funds. The bonds maturing on September 2, 20_ are subject to mandatory redemption, in part by lot, on September 2 in each year, commencing September 2, 2020, from sinking fund payments from the redemption fund at a redemption price equal to the principal amount thereof to be redeemed, without premium, as follows: Sinking Fund Redemption Date (Seotember 2) Principal Amount To Be Redeemed I hereby certify that the following is a correct copy of the signed legal opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, bond counsel: (INSERT OPINION HERE) EXHIBIT B Page 3 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this bond, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM TEN ENT JT TEN as tenants in common as tenants by the entireties as joint tenants with right of survivorship and not as tenants in common UNIFGIFT MIN ACT - Custodian (Cust) (Minor) under Uniform Gifts to Minors Act (State) Additional abbreviations may also be used though not in the above list ASSIGNMENT For value received, the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within mentioned Bond and hereby irrevocably constitute(s) and appoint(s) , attorney, to transfer the same on the registration books of the Agent, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: The signature(s) on this assignment must correspond with the name( s) as written on the face of the registered Bond in every particular without alteration or enlargement or any change whatsoever. EXHIBIT B Page 4 WULFF, HANSEN & CO. ESTABLISHED 1931 INVE STMENT BANKERS 351 CALIFORNIA STREET, SUITE 1000 SAN FRANCISCO 94104 (415) 421-8900 January 27, 2005 ~ ~~~ijW~ 1m ffil JAN 3 1 Z005 ill) J T.OWN CLERK SawN OF.:riBURON Diane Crane Iacopi Town Clerk Town Of Tiburon 1505 Tiburon Boulevard Tiburon, CA 94920 Re: Lyford Cove Utility Undergrounding Assessment District Dear Diane: For the Council meeting of February 2, 2005, I enclose seven sets of the Preliminary Official Statement and Bond Purchase Agreement. If you have any questions, please call either Mark Pressman or myself at 415-421-8900. Very truly yours, WUL~.F, HANSEN & CO. 'rov~t~ COUNCiL "'~U'''~''1l''~~~G Oll/~ "'l'lE i;"t:l rl'" ft'" Ii ht, ",' ." 5"'"tj, i 1&: ~lli!f!l~~~ a !1:4~ . ... 'ill) *' ~j' [,.., oIfzri rJjl. TN.Ii CLEd.k ----~- - .. WULFF, HANSEN & CO. ESTABLISHED 1931 INVE STMENT BANKERS 351 CALIFORNIA STREET, SUITE 1000 SAN FRANCISCO 94104 (415) 421-8900 Honorable Town Council Town of Tiburon Marin County Tiburon, California Re: Town of Tiburon Lyford Cove Utility Undergrounding Assessment District Dear Members of the Council: ,2005 WULFF, HANSEN & CO., as Managing Underwriter (the "Underwriter") of the Limited Obligation Improvement Bonds, Town of Tiburon, Lyford Cove Undergrounding Assessment District, (the "Bonds"), hereby offers to purchase all, but not less than all, Bonds to be offered by the Town of Tiburon (the "Town") pursuant to the Improvement Act of 1915, being Division 10 of the California Streets and Highways Code (the "Bond Act"), and Resolution No. adopted by the Town Council on February 2, 2005 (the "Resolution") and executed by the Town for and on behalf of the Lyford Cove Utility Undergrounding Assessment District (the "District"). Principal Amount of Bonds: $4,000,000* The Bonds in definitive form shall be in fully registered, in denominations of $5,000 or any integral multiple thereof. The Bonds will be will be physically issued in full registered form and will be eligible for registration with Cede & Co., as nominee for The Depository Trust Company ("DTC"). Form of Bonds: First Interest Payment and Maturity Schedule: Interest on the Bonds shall be payable on September 2 and March 2 of each year commencing March 2, 2006, with principal payments commencing September 2, 2007, and annually thereafter in the amounts specified below. Due September 2 Principal Amount 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Due September 2 Principal Amount 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 '. Town ofTiburon Page Two Form of Payment: Price: Date of Bonds and Closing Date: Interest Rates: Reserve Fund: Redem ptions and Redemption Premium: Paying Agent: No Litigation: Legal Opinion: Conditions Precedent: (a) ,2005 Federal Funds Wire to the account of the Town. $ % of Par). ,2005 Maturity September 2 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Maturity Septem ber 2 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Interest Rate Interest Rate The Town has agreed to establish a Reserve Fund initially in the amount of $80,000. percent ~%) (the "Paying Agent"). A no litigation certificate of the Town shall accompany the Bonds at closing. The opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, with only customary qualifications and without expense to the Underwriter to be printed on the Bonds. The obligation of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the following additional conditions: The Town shall have delivered or cause to have been delivered to the Underwriter prior to the execution of this Purchase Contract or the first sale of the Bonds, whichever first occurs, copies of the Preliminary Official Statement dated relating to the Bonds (the "Preliminary Official Statement") '~ Town ofTiburon ,2005 Page Three deemed final by the Town for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 (the "Rule") and to satisfY Municipal Securities Rulemaking Board (the "MSRB") Rule G-32 or any other rules adopted by the MSRB, and approved for distribution by resolution of the Town. Within seven business days from the date hereof, the Town shall deliver to the Underwriter a final Official Statement, executed on behalf of the Town by an authorized representative of the Town and dated the date of delivery thereof to the Underwriter, which shall include information permitted to be omitted by paragraph (b)(l) of the Rule and with such other amendments or supplements as shall have been approved by the Town and the Underwriter (the "Official Statement"). The Preliminary Official Statement and the Official Statement, including the cover pages, (the appendices thereto and all information incorporated therein by reference are hereinafter referred collectively to as the "Official Statement." (b) The Resolution shall be in full force and effect, and shall not have been amended, modified or supplemented except as may have been agreed in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the transactions contemplated thereby and by this Purchase Contract all such actions as, in the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel for the Town, shall be necessary and appropriate; (c) Between the date hereof and the Closing Date, the market price or marketability of the Bonds at the initial offering prices set forth in the Official Statement shall not have been materially adversely affected, in the judgment of the Underwriter (evidenced by a written notice to the Town terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds) by reason of any of the following: (1) Legislation enacted (or resolution passed) by the Congress of the United States of America or a decision rendered by a court established under Article 1II of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department or the Internal Revenue Service of the United States of America, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon the interest as would be received by the owners of the Bonds; (2) Legislation enacted (or resolution passed) by the Congress of the United States of America, or an order, decree or injunction issued by any court of competent jurisdiction or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the .. Town of Tiburon Page Four Limited Obligation: Judicial Foreclosure: Town Covenants: ,2005 Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Resolution is not exempt from qualification under the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, or of the Bonds, including any or all underwriting arrangements, as contemplated hereby or by the Official Statement is, or would be, in violation of the federal securities laws as amended and then in effect; (3) Any amendment to the Federal or California Constitution or action by any Federal or California court, legislative body, or other authority materially adversely affecting the Bonds, the Town or its property, income, securities (or interest thereon), the validity or enforceability of the assessments with respect to the Bonds or the ability of the Town to construct or acquire the improvements contemplated to be financed by the Bonds; (4) Any event occurring, or information becoming known which, in the judgment of the Underwriter makes untrue or misleading in any material respect any statement or information contained in the Official Statement; (5) Any calamitous act of God such as flooding, land movement, or other event which directly or indirectly affects the security of the Bonds; or (6) The declaration of war or engagement in major military hostilities by the United States or the occurrence of any other national emergency or calamity relating to the effective operation of the government or the financial community of the United States. The Bonds shall be "limited obligations" of the Town, pursuant to section 8769(b) of the California Streets and Highway Code, secured only by the property assessed in these proceedings with no Town financial responsibility for bond debt service. The Town has covenanted in the resolution to initiate judicial foreclosure in the event of a delinquency in the payment of assessment installments under certain circumstances as described in the Official Statement. The Town shall covenant III the resolution (and as more fully described III the Official Statement) to: (I) Take any action within its powers to maintain the tax-exempt status of the Bonds: (2) if on any date which payment on the Bonds is due, there are insufficient funds in the Redemption Fund to pay all amounts so due, transfer from any balance in the Reserve Fund to the Redemption Fund, funds equal to the amount of delinquency; Town of Tiburon Page Five Expenses: Continuing Disclosure: Place of Closing: Time of Closing: Expiration: ,2005 (3) annually do all things necessary to assure that the annual assessment installments appear properly on the secured property tax bills; (4) preserve and protect the security of the Bonds and the rights of the Bondholders, subject to the provisions of the Resolution; and (5) punctually pay, from the Redemption Fund, the interest on and principal of and redemption premium, if any, to become due on every Bond issued under the Resolution. Except as herein described, all expenses and costs of the Town incident to the performance of its obligations in connection with the authorization, issuance, sale and delivery of the Bonds to the Underwriter shall be paid for by the Town from the proceeds of the Bonds or contributions by the owners of the property assessed. The Underwriter shall not be responsible for and the Town shall pay from the proceeds of the Bonds or contributions by the owners of the property assessed all fees and reasonable expenses of Bond Counsel and other professional advisors employed by the Town, fees and expenses of the Paying Agent, all preparation and printing costs for the Preliminary and final Official Statements, including all costs of reproduction and distribution thereof; all costs of staff consulting, preparing the Purchase Contract, the Official Statement, and the Resolutions, including all costs of reproduction and distribution thereof; costs of preparation, printing, signing, transportation, delivery, safekeeping of the Bonds; and overnight cost of funds thereon; costs of obtaining the overlapping debt statement; regulatory agency fees, property owner notices and travel by Town staff, Town officials, or the Town's professional advisors. The Town's obligation to pay any of the foregoing expenses shall be contingent upon the issuance and delivery of the Bonds as contemplated by this Purchase Contract and the receipt by the Town of the purchase price of the Bonds as set forth above. The Town will undertake pursuant to the Resolution and a Continuing Disclosure Certificate, to provide annual reports and notices of certain material events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Final Official Statement. Offices of Bond Counsel in San Francisco. Not later than 48 hours after the Town notifies the undersigned that the Bonds are ready for delivery. If the subject Bonds are not delivered by 5:00 p.m. on the aforementioned delivery date, the Underwriter reserves the right to adjust the price to be paid for the Bonds and/or the rate of interest. This offer expires at 5:00 p.m. on ,2005. Town of Tiburon Page Six Counterparts: ,2005 This agreement may be executed in counterparts by the parties hereto. Very truly yours, Mark Pressman Reviewed and accepted by: TOWN OF TIBURON By: Town Manager Date: Approved as to fonn: By: Town Attorney Date: ~ ~ -- o -' " ~) ;.~ -. '1) ;.; GJ:; ~ U 'f ~- ,.. c:; " '-' ;J '... <:j ; ~ ~c.; :.1 - c;Y ~~ :i:~ g :' '-' .g . ""':; "" ~, .6 _ ... .~, ~; .. ,g ~S' ;.-, .,'; ,y -- .- ','., _ </1 ':) '-, ~ ~ ~~ SS r: ;:: ''! C ;::c: ~ -~ :.:::: -E -~ ..~? ~., . ,.>-, ;~ :::; ~ ::2.1 j;[ .E --:~ I, .,~~ :: ..... ?; ~ ::; ~' .X ,.... ~'~ ~' ::: () ,>.- ~L;; PRIJ.lvllNARY OFFICIAL STATEMENT DATED.. ,2005 NEW ISSUE NON RATED In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however, to certain qualifications described herein, under existing law, interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although for the purposes of computing the alternative minimum tax imposed on certain corporations, such interest is taken into account in determining certain income and earnings and the Bonds are "qualified tax exempt obligations" under section 265(b )(3) of the Internal Revenue Code of 1986. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. Bond Counsel expresses no opinion regarding other tax consequences related to the ownership or disposition of, or the accrual or receipt of interest on, the Bonds. See "TAX EXEMPTION" herein. '. -.' $4,000,000 * TOWN OF TIBURON LIMITED OBLIGA nON IMPROVEMENT BONDS LYFORD COVE UTILITY UNDERGROUNDING ASSESSMENT DISTRICT '.j o :,;; Dated: Date of Delivery Due: September 2, as shown below Authority for The bonds captioned above (the "Bonds") are being issued by the Town of Tiburon, California (the "Town") under the Improvemcnt Issuance Bond Law of 19 I 5 (the "Act"), and a Resolution of Issuance of the Town Council adopted on February 2, 2005 (the "Resolution of Issuance"). All of the proceedings of the Town undertaken to fonn the Town's Lyford Covc Assessment District (the "District") and to levy the assessments were undertaken under the Municipal Improvement Act of 19 I 3 (Division 12 of the California Streets and Highways Code). See "THE BONDS-Authority for Issuance." The Bonds are being issued (i) to provide financing to underground existing overhead electrical, telephone and cable facilities within the District, (ii) to fund capitalized interest on the Bonds through , (iii) to make a deposit into a debt service reserve fund for the Bonds, and (iv) to pay certain costs of issuing the Bonds. See "THE BONDS." Purposes Redemption The Bonds are subject to optional redemption in whole or in part in authorized denominations on an March 2 or September 2 in advance of maturity at the option of the Town upon payment of the principal and interest accrued thereon to the date ofredemption, plus a redemption premium of _% of the principal amount of the Bonds to be redeemed. See "THE BONDS-Optional Redemption of the Bonds" v :: Zi .' .-' "/"; ... .:.; ,1/ 6- The Bonds are limited obligation improvement bonds of the Town, and are issued upon and are secured by certain unpaid assessments (the "Assessments") against certain parcels ofland within the District, together with interest thereon. The Bonds are also secured by the monies in the Redemption Fund and the Reserve Fund created by the Resolution of Issuance. Under the Act, assessment installments of principal and interest sufficient to meet annual Bond debt service are included on the regular county tax bills sent to owners of property against which there are unpaid assessments. These annual assessment installments are to be paid into the Redemption Fund, to be held by the Town and used to pay debt service on the Bonds as it becomes due. will serve as paying agent (the "Paying Agent") for the Bonds. See "SECURlTY FOR THE BONDS." Interest on the Bonds is payable commencing on March 2, 2006, and semiannually thereafter on March 2 and September 2 each year. The Bonds are not general obligations of the Town and the Bonds are payable only from assessments and other specific sources of money pledged under the Resolution of Issuance. Unpaid assessments constitute fixed liens on the lots and parcels assessed within the District and do not constitute a personal indebtedness of the respective owners of those lots and parcels. Accordingly, in the event of delinquency, proceedings may be conducted only against the particular parcel of real property securing the delinquent assessment. Thus, the value of the real property within the District which has been allocated a portion of the assessment is a critical factor in determining the investment quality of the Bonds. See "THE DISTRICT." This cover page contains certain information for general reference only. It is not a summary of this issue. Investors are advised to read the entire Official Statement to obtain infonnation essential to the making of an infonned investment decision. Security I nterest Payments Limitation of Liability ~ ~~ s ;~ NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE TOWN, THE COUNTY OF MARIN, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE INFORMATION SET FORTH IN THIS OFFICIAL STATEMENT, INCLUDING INFORMATION UNDER THE HEADING "BONDOWNERS' RISKS", SHOULD BE READ IN ITS ENTIRETY. MATURITY SCHEDULE* CUSIP Maturity Numbert Due Sept. 2 Principal Amount Principal Amount Maturity Due Sept. 2 Interest Rate Interest Rate CUSIP Numbert Price Price 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 The infonnation set forth in this Official Statement, including infonnation under the heading "BONDOWNERS' RISKS," should be read in its entirety. The Bonds are offered when, as and if issued and delivered to the Underwriter subject to the approval as to their legality of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, and certain other conditions. It is expected that the Bonds in definitive form will be available for delivery in New York, New York on or about 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 WUlFF, HANSEN & CO. Investment Bankers Official Statement Dated: . Preliminary; Subject to Change. t Copyright 2004, American Bankers Association. CUSIP data herein are provided by Standard & Poor's CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc., and are provided for convenience of reference only. Neither the City nor the Underwriter assumes any responsibility for the accuracy of these CUSIP data. No dealer, broker, salesperson or other individual has been authorized by the Town or the Underwriter to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. 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 Bonds described herein by any person in any jurisdiction in which it is unlawful for such a person to make such offer, solicitation or sale. The summaries and references to the Bonds, the Bond Law, and other statutes or documents in this Official Statement do not purport to be comprehensive or definitive, and are qualified in their entireties by reference to each such statute and document and references to the Bonds are qualified in their entirety by reference to the form thereof on file with the Town. The information set forth herein is in a form deemed final, as of its date, by the Town for the purpose of Rule 1 Sc2-12 under the Securities Exchange Act of 1934, as amended. The information herein is subject to change without notice, and neither the 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 Town or the District since the date hereof. This Official Statement speaks only as of its date. The information set forth herein has been furnished to the Underwriter by the Town and from certain other sources which are believed to be accurate and reliable, but such information is not guaranteed as to accuracy or completeness by the Town, nor has it been independently verified and is not to be construed as a representation by the Underwriter. Statements contained in this Official Statement which involve estimates, forecasts, or other matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. Further, the information and expressions of opinion contained herein are subject to completion or amendment. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of th is transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The Official Statement is not to be construed as a contract between the Town or the Underwriter and the purchasers or owners of any of the Bonds. The information set forth in this Official Statement, including information in the section herein entitled "BONDOWNERS' RISKS" should he read in its entirety. * * * * * * * IN CONNECTION WITH THIS BOND UNDERWRITING, THE UNDERWRITER MAY OVERALLOT OR EFFECf TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS DESCRIBED HEREIN 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 BONDS DESCRIBED HEREIN TO CERTAIN DEALERS AND DEALER BANKS AND BANKS ACTING AS AGENT AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED IN THIS OFFICIAL STATEMENT AND SAID PUBLIC OFFERING PRICES MAYBE CHANGED FROM TIME TO TIME BY THE UNDERWRITER. TOWN OF TIBURON MARIN COUNTY, CALIFORNIA TOWN COUNCIL Miles Berger, Mayor Paul Smith, Vice Mayor Alice Fredericks, Council Member Tom Gram, Council Member Jeff Slavitz, Co~ncil Member TOWN OFFICIALS Alex McIntyre, Town Manager Heidi Bigall, Director of Administrative Services Ann Danforth, Town Attorney Diane Crane Iacopi, Town Clerk PROFESSIONAL SERVICES Jones Hall A Professional Law Corporation San Francisco, California Bond Counsel Harris & Associates Irvine, California Engineer of Work Paying Agent Wulff, Hansen & Co. Investment Bankers 351 California Street, Suite 1000 San Francisco, California 94104 (415) 421-8900 Managing Underwriter T ABLE OF CONTENTS IN TROD U CTI 0 N ............................................1 THE BON DS.. ........ ...... ........................... ..........1 Authority for Issuance........ . ................................. I Description of the Bonds............... ... ... ........ ......... 2 Optional Redemption of the Bonds........................ 2 Refunding.. ................. ..... ........... ... ......... ... ....... 2 Use of Proceeds ... ...................... ........... ..............2 SECURITY FOR THE BONDS ......................3 Assessment Liens and Installments........................ 3 Obligation of the Town Upon Delinquency.............. 3 Establishment of Special Funds............................. 4 The Teeter Plan.................................................. 7 Covenant to Commence Superior Court Foreclosure Proceedings.................. 7 Tax Covenants ." .............. .............. ........... ......... 7 Continuing Disclosure......................................... 8 Priority of Lien.................................................. 8 ANNUAL DEBT SERVICE SCHEDULE* ....10 THE IMPROVEMENTS................................. 10 ESTIMATED IMPROVEMENT COSTS..... 11 ESTIMATED BOND SOURCES AND USES OF FUNDS............. 12 Method of Spreading Assessment.................. ...... .12 Annual Administrative Assessment............... ........12 THE DISTRICT ..............................................14 Formation............................. ...........................14 Property Tax Delinquency History ........................ 15 Estimated Value................................................ 15 Value to Assessment Lien Ratios..........................]6 THE PROJECT............................................... 16 Property Ownership in the District........................ 16 BONDOWNERS' RISKS.............................. 17 Economic Uncertainty ........................................ 17 Payment of Assessments. ................... ................. 17 Ballot Initiatives ............................................... 17 Articles XIIIC and XlllD of the California Constitution........ ............................... 18 Unavailability of Town Funds............................. 18 No Acceleration................................................. 19 Direct and Overlapping Debt................................ 19 Parity Taxes and Special Assessments................... 20 Bankruptcy and Foreclosure................................. 20 Natural Disasters .... ....... .......................... ..........21 Endangered Species..... ........ ............ ...................21 Suitability Standards.......................................... 21 Secondary Market. ...... ........ .............. .................22 Disclosure to Future Purchasers of Property............ 22 Property Held By FDIC...................................... 22 Hazardous Substances.. .......................................22 THE TOWN .................................................... 24 LEGAL MATTERS ......................................... 24 TAX EXEMPTION ......................................... 24 NO LITIGATION ........................................... 25 NO RATING ................................................... 25 UNDERWRITING .............. ............................. 25 ADDITIONAL INFORMATION .................. 25 APPENDIX A ~ PHOTOS AND MAPS ASSESSMENT DIAGRAM APPENDIX B - SALIENT DATA APPENDIX C - TOWN GENERAL ECONOMIC AND DEMOGRAPHIC INFORMATION APPENDIX D - CONTINUING DISCLOSURE CERTIFICATE APPENDIX E - FORM OF BOND COUNSEL OPINION SUMMARY STATEMENT THIS SUMMARY STATEMENT IS SUBJECT IN ALL RESPECTS TO THE MORE COMPLETE INFORMATION IN THIS OFFICIAL STATEMENT, INCLUDING THE COVER PAGE AND APPENDICES HERETO AND THE OFFERING OF THE BONDS TO POTENTIAL INVESTORS IS MADE ONLY BY MEANS OF THE ENTIRE OFFICIAL STATEMENT. Pu rpose Proceeds from the Town of Tiburon, Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District (the "Bonds"), will be used for the construction of the following public improvements, including the planning, design, construction administration and general administration services, the acquisition of all necessary rights of way, the acquisition of licenses, franchises and permits and construction of all auxiliary work necessary and/or convenient to the accomplishment thereof, in accordance with the plans and specifications to be approved by the County of Marin and the Town of Tiburon.: I) Removal of existing overhead power, telephone and cable wires and poles; 2) Removal of overhead resident service drops; 3) Construction of mainline underground power, telephone and cable conduit, with appurtenant manholes and pullboxes; 4) Construction of service conduit and appurtenances to property line; 5) Installation of new conductor within said conduit and underground structures by the utility companIes. Security for the Bonds The Bonds are issued upon and secured by the unpaid assessments on real property in the District, and such unpaid assessments together with interest thereon constitute a trust fund for the redemption and payment 0 f the principal of the Bonds and the interest thereon. See "SECURITY FOR THE BONDS". The unpaid assessments represent fixed liens on the lots and parcels of property assessed. The unpaid assessments do not, however, constitute a personal indebtedness of the owners of said lots and parcels. The Bonds shall be secured by a first pledge (which pledge shall be effected in the manner and to the extent herein provided) of all of the Assessments and all moneys deposited in the Redemption Fund (including the Capitalized Interest and Prepayment Accounts therein) and the Reserve Fund. The Assessments and all moneys deposited into said funds (except as otherwise provided herein) are hereby dedicated to the payment of the principal of (including Sinking Fund Payments), and interest and any premium on, the Bonds as provided herein and in the Bond Law until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose. The Reserve Fund for the Bonds will be initially funded from proceeds of the Bonds in an amount equal to $80,000. The lesser of the following amounts: a) ten percent of the principal of the Bonds; b) maximum annual debt service on the Bonds; or c) 125% of the average annual debt service on the Bonds, less any amounts transferred to the Redemption Account pursuant to Section 8884 of the Streets and Highways Code, shall constitute the "Reserve Requirement". Transfers shall be made from the Reserve Fund to the Redemption Fund in the event of a deficiency in the Redemption Fund, in accordance with the Resolution 0 f Issuance. See "Establishment of Special Funds". Additionally, the Town has covenanted that, not later than October I in any year, the Town shall file an action in the Superior Court to foreclose the lien of each delinquent assessment, if the aggregate of uncured delinquent assessments exceeds 5% of the total assessment installments posted to the tax roll in the prior fiscal year. See "Covenant to Commence Superior Court Foreclosure Proceedings". Monies on deposit in the Reserve Fund will be available for transfer to the Redemption Fund in the event a delinquency occurs in the payment of any assessment installment, in accordance with the provisions of the Bond Law and the Resolution of Issuance. Any amounts so advanced will be reimbursed to the Reserve Fund from the proceeds of redemption or sale of the parcel for which payment of delinquent assessment installments was made from the Reserve Fund. There is no assurance that funds will be available for this purpose and if, during the period of delinquency, there are insufficient moneys in the Reserve Fund for the Bonds, a default may occur in payments to the owners of the Bonds. If there are additional delinquencies after exhaustion of funds in the Reserve Fund, the Town has no direct or contingent liability to transfer into the Redemption Fund the amount of such delinquencies out of any available monies of the Town. THE BONDS ARE NOT SECURED BY THE GENERAL TAXING POWER OF THE TOWN, THE STATE OF CALIFORNIA (THE "STATE"), OR ANY OF ITS POLITICAL SUBDIVISIONS, NOR IS TIIE FULL FAITH AND CREDIT OF THE TOWN, THE STATE, OR ANY OF ITS POLITICAL SUBDIVISIONS PLEDGED TO THE PAYMENT OF THE BONDS. THE INfEREST ON AND PRINCIP AL OF THE BONDS ARE PAY ABLE SOLELY FROM MONEYS IN THE REDEMPTION FUND ESTABLISHED IN CONNECTION WITH THE ISSUANCE OF THE BONDS AND ARE SECURED BY UNPAID ASSESSMENTS AND A PLEDGE OF AMOUNTS IN THE RESERVE FUND. THE TOWN IS NOT OBLIGATED TO USE AVAILABLE FUNDS (INCLUDING ANY SURPLUS FUNDS) TO PURCHASE DELINQUENT PARCELS OR PAY ANY DELINQUENT INSTALLMENTS OR FUTURE INSTALLMENTS OF THE ASSESSMENTS ON DELINQUENT PARCELS. TIlE OWNERS OF THE BONDS MUST ASSUME, THEREFORE, THAT THE SOLE SOURCE OF FUNDS FOR THE PAYMENT OF THE BONDS WILL BE AMOUNTS ON DEPOSIT IN THE REDEMPTION FUND AND IN THE RESERVE FUND. Form of Bonds The Bonds, the Agent's certificate of authentication and the assignment, to appear thereon, shall be substantially in the forms, respectively, set forth in the Resolution of Issuance and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Resolution and the Act. The Bonds are being issued in fully registered form as physical certificates and, when issued, will be eligible for registration with the Depository Trust Company, New York, New York ("DTC"), however, at closing, unless issued as a temporary Bond hereunder, the Bonds will not be issued in "book-entry-only" form. Redemption Any Bond, or portion thereof in the amount of $5,000 or any integral multiple thereof, may be redeemed prior to maturity on any March 2 or September 2 upon payment of % of par value, plus accrued interest to the date of redemption, following notice as described herein. See "THE BONDS-Optional Redemption of the Bonds". Refunding The Bonds may be refunded pursuant to Division 11 (commencing with Section 9000) or 11.5 (commencing with Section 9500) of the California Streets and Highways Code. See "THE BONDS-Refunding". The District The land within the District means that portion of the Town designated "Lyford Cove Utility Undergrounding Assessment District" referenced in proceedings under the Act and Resolution of Intention. Bondowners' Risks For a discussion of special factors which should be considered, in addition to other matters set forth herein, in considering the investment qual ity of this issue, refer to the section herein entitled "BONDOWNERS' RISKS", Other Information Copies of documents referred to herein and information concerning the Bonds are available upon written request to the Director of Administrative Services, Town of Tiburon, 1505 Tiburon Boulevard, Tiburon, California 94920. The Town may impose a charge for copying, mailing, and handling. .';"<:'~~~~l~[t~r .:~ ,- ;' i"_ OFFICIAL STATEMENT $4,000,000* Town of Tiburon Limited Obligation Improvement Bonds Lyford Cove Utility Undergrounding Assessment District INTRODUCTION This Official Statement (which includes the cover page, the summary statement, the table of contents and the Appendices attached hereto) is furnished by the Town .of Tiburon (the "Town") to provide information concerning the $4,000,000* aggregate principal amount of the Town of Tiburon, Limited Obligation Improvement Bonds, Lyford Cove Utility Undergrounding Assessment District (the "Bonds"), to be issued by the Town. This Official Statement makes reference to the Resolution of Intention, the Resolution of Issuance, the Engineer's Report, the Bond Law, the Improvement Act, and certain other documents and statutes. Such references do not purport to be complete, comprehensive or definitive and are qualified in their entirety by reference to each such document or statute. THE BONDS Authority for Issuance The assessment proceedings for the Town of Tiburon, Lyford Cove Utility Undergrounding Assessment District (the "District") were conducted pursuant to the provisions of the Municipal Improvement Act of 1913 (Division 12 of the California Streets' and Highways Code) (the "Improvement Act"), and the Improvement Bond Law of 1915 (Division 10 of the California Streets and Highways Code) (the "Bond Law") and all laws amendatory thereof or supplemental thereto, and the Resolution of Intention No. 15-2003 adopted by the Town Council of the Town of Tiburon (the "Town Council") on May 21, 2003. The Bonds, which are secured by the unpaid assessments levied against the property in the District, are issued pursuant to the Bond Law and the Town's Resolution No. adopted February 2, 2005 (the "Resolution of Issuance") authorizing the issuance of the Bonds. The District was formed pursuant to the Improvement Act to make acquisitions and improvements described in the Resolution of Intention for the District. See "THE DISTRICT". The proceedings for the levy of the assessments which are security for the Bonds were conducted pursuant to the Improvement Act and were initiated by adoption by the Town Council of Resolution No. 15-2003 ("Resolution of Intention") declaring its intention to construct the Improvements, and to levy assessments as security for the Bonds. The Town Council confirmed the engineer's report (the "Engineer's Report") prepared by the Engineer of Work describing the Improvements, estimated costs, and an Assessment Diagram for the parcels within the District and levying assessments 0 n November 17, 2004 by its Resolution No. 58-2004. As a part of the proceedings for the issuance of . Preliminary; Subject to Change. 1 the Bonds, the Assessment Diagram was filed with the Town Clerk and recorded in the office of the Public Works Director and recorded, along with a Notice of Assessment, in the office of the County Recorder. See "THE DISTRICT". Upon the completion of such recording, the assessment for administrative cost will become a lien at the same time as the property tax becomes a lien each year. Description of the Bonds The Bonds shall be issued as serial bonds. The Bonds will be issued as fully registered bonds in denominations of $5,000 or any integral multiple of $5,000, except that the first maturity may contain any odd amount. Interest on the Bonds is payable commencing on March 2, 2006, and semiannually thereafter on March 2 and September 2 (each an "Interest Payment Date") each year. Principal is payable in the amounts and on the dates set forth on the cover page hereof. See "TH E BONDS- Description of the Bonds." Optional Redemption of the Bonds Any Bond, or any portion thereof in the amount of $5,000 or any integral multiple thereof, may be redeemed and paid in advance of maturity on any March 2 or September 2 upon payment of __% of par value, plus accrued interest. No interest will accrue on a Bond beyond the March 2 or September 2 on which such Bond is called for redemption. Notice of redemption must be given to the registered owner of the Bond by personal service or registered or certified mail at least 30 days prior to the redemption date. Development of parcels within the District, transfers of property ownership and other similar circumstances could result in prepayment of assessments. Such prepayment would result in redemption of a portion of the Bonds prior to their stated maturities. Refunding The Bonds are subject to refunding in accordance with provisions of either Division 11 or 11.5 of th e California Streets and Highways Code and in accordance with the Resolution of Intention upon a determination by the Town that the public interest or necessity requires such refunding. Use of Proceeds Proceeds from the sale of the Bonds will be used for the construction and acquisition of the following public improvements, including the acquisition of all lands, easements, rights-of-way, licenses, franchises, and permits and the construction of all auxiliary work necessary and/or convenient to the accomplishment thereof in accordance with plans and specifications to be approved by the Town: Within the area of the District as more particularly shown on the Assessment Diagram on file in the office of the Town Clerk, the installation of new, underground facilities to replace such utility lines, including all required removal of pavement, trenching, backfilling, repaving, installation of substructures, conduits pull boxes, vaults and appurtenances and the removal of existing overhead electric, telephone and CATV utility lines, including existing transformers and other overhead structures. 2 SECURITY FOR THE BONDS Assessment Liens and Installments The Bonds are issued upon and secured by the unpaid assessments on parcels of property in the District together with interest thereon, and such unpaid assessments, together with interest thereon, constitute a trust fund for the redemption and payment of the principal of the Bonds and the interest thereon. In addition, all of the Bonds are secured by the moneys in the Redemption Fund and the Reserve Fund created pursuant to the assessment proceedings. Principal of and interest on the Bonds are payable exclusively out of the Redemption Fund. THE BONDS ARE NOT SECURED BY THE GENERAL TAXING POWER OF THE TOWN, THE STATE OF CALIFORNIA (fIlE "STATE"), OR ANY OF ITS POLITICAL SUBDIVISIONS, NOR IS THE FULL FAITH AND CREDIT OF THE TOWN, THE STATE, OR ANY OF ITS POLITICAL SUBDIVISIONS PLEDGED TO THE PAYMENT OF THE BONDS. THE INTEREST ON AND PRINCIPAL OF THE BONDS ARE PAYABLE SOLELY FROM MONEYS IN THE REDEMPTION FUND ESTABLISHED IN CONNECTION WITH TIlE ISSUANCE OF THE BONDS AND ARE SECURED BY UNPAID ASSESSMENTS AND A PLEDGE OF AMOUNTS IN THE RESERVE FUND. THE TOWN IS NOT OBLIGATED TO USE AVAILABLE FUNDS (INCLUDING ANY SURPLUS FUNDS) TO PURCHASE DELINQUENT PARCELS OR PAY ANY DELINQUENT INSTALLMENTS OR FUTURE INSTALLMENTS OF THE ASSESSMENTS ON DELINQUENT PARCELS. THE OWNERS OF THE BONDS MUST ASSUME, THEREFORE, THAT TIlE SOLE SOURCE OF FUNDS FOR THE PAYMENT OF THE BONDS WILL BE AMOUNTS ON DEPOSIT IN TIlE REDEMPTION FUND AND IN TIlE RESERVE FUND. Although the unpaid assessments constitute fixed liens on the lots and parcels assessed, they do not constitute a personal indebtedness of the respective owners of said lots and parcels. There can be no assurance as to the ability or the willingness of such owners to pay the unpaid assessments when due. See "BONDOWNERS' RISKS". The unpaid assessments will be collected in annual installments, together with interest, on the County secured tax roll on which general taxes on real property are collected and are payable and become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do such general taxes. The properties upon which the assessments are levied are subject, in the case of delinquencies in payment of assessments, to th e same provisions for sale and redemption as are properties for nonpayment of general taxes. The annual assessment installments are to be paid into the Redemption Fund which will be held by the Town Director of Administrative Services ("Director of Administrative Services") and used to pay the principal of and interest on the Bonds as they become due and to pay certain administrative fees of the Town. The installments billed against each property each year represent a pro rata share 0 f the total principal and interest coming due on all of the Bonds that year. The amount billed against each property is based on the percentage which the unpaid assessment against the property bears to the total of unpaid assessments in the District. The failure of a property owner to pay an annual assessment installment will not result in an increase in assessment installments against any other property in the District. Obligation of the Town Upon Delinquency Under the Bond Law, the Town can determine prior to issuing the Bonds whether or not it will obligate itself to advance available funds from the Town treasury to cure any deficiency which may 3 occur in the Redemption Fund. The Town has determined, pursuant to Section 8769 (b) of the Bond Law, that it will not obligate itself to advance available funds from the Town treasury to cure any deficiency which may occur in the Redemption Fund. In the event of a delinquency in the payment of any assessment installment on parcels of property in the District, the Director of Administrative Services is directed in the Resolution of Issuance to transfer from the Reserve Fund to the Redemption Fund, to the extent of available funds, the amount necessary to cause the amount on deposit in the Redemption Fund to be sufficient to pay the next maturing installment of principal of and interest on the Bonds. See "SECURITY FOR THE BONDS- Covenant to Commence Superior Court Foreclosure Proceedings" for a discussion of the Town's obligation to foreclose assessment liens upon delinquencies. Establishment of Special Funds In accordance with the Bond Law and pursuant to the Resolution of Issuance, for administering the proceeds of the sale of Bonds and payment of interest and principal on the Bonds, there are established special funds known as Costs of Issuance Fund, the Redemption Fund, the Reserve Fund and the Improvement Fund, all of which will be established and held by the Director of Administrative Services (the "Director of Administrative Services") as described below. Costs of Issuance Fund. The Costs of Issuance Fund shall be established, held and receive deposits. Moneys in the Costs of Issuance Fund shall be held for the benefit of the Town and shall be disbursed as described for the payment or reimbursement of the Costs of Issuance. Amounts in the Costs of Issuance Fund shall be disbursed from time to time to pay Costs of Issuance as set forth in a requisition therefor containing respective amounts to be paid to the designated payees, signed by an Authorized Officer and delivered to the Director of Administrative Services concurrently with the delivery of the Bonds. The Director of Administrative Services shall pay all Costs of Issuance upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee in such requisition, or upon receipt of an Officer's Certificate requesting payment of a Cost of Issuance not listed on the initial requisition delivered to the Director of Administrative Services on the Closing Date. Moneys in the Costs of Issuance Fund shall be invested and deposited under the Resolution of Issuance. Pending its closing as described below, Interest earnings and profits resulting from said investment shall be retained by the Director of Administrative Services in the Costs of Issuance Fund to be used for the purposes of such fund. The Director of Administrative Services shall maintain the Costs of Issuance Fund for a period of 90 days from the Closing Date or until the last known Costs of Issuance have been paid, whichever is earlier, and then shall transfer any moneys remaining therein, including any investment earnings thereon, to the Improvement Fund and the Costs of Issuance Fund shall be closed. Redemption Fund. The Redemption Fund is established as a separate fund to be held by the Director of Administrative Services to the credit of which deposits shall be made as required by the Resolution of Issuance and any other amounts required to be deposited therein by the Resolution of Issuance or the Bond Law. Moneys in the Redemption Fund shall be held by the Director 0 f Administrative Services for the benefit of the Town and the Bond Owners, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below. Within the Redemption Fund, the Director of Administrative Services shall establish and administer accounts as follows: (i) The Capitalized Interest Account, into which a deposit shall be made under the Resolution of Issuance and from which, disbursements shall be made to pay aU or a 4 portion of the interest on the Bonds which is due on the Interest Payment Date(s) set forth. Upon the final payment of interest as herein provided, any moneys remaining in the Capitalized Interest Account shall be transferred to the Redemption Fund to pay Debt Service and the Capitalized Interest Account shall be closed; and (ii) The Prepayment Account, into which shall be placed any amounts representing the full or partial prepayments of Assessments that occur after the issuance of the Bonds. The Prepayment Account shall be administered in accordance with section 8767 of the Bond Law and shall remain open so long as the Redemption Fund remains open. On or before each Interest Payment Date, the Director of Administrative Services shall withdraw from the accounts in the Redemption Fund and forward to the Agent for payment to the Owners of the Bonds, amounts sufficient to pay the principal of, and interest and any premium, then due and payable on the Bonds. Five (5) Business Days prior to each Interest Payment Date, the Director of Administrative Services shall determine if the amounts then on deposit in the Redemption Fund are sufficient to pay the Debt Service due on the Bonds on such Interest Payment date. In the event that amounts in the Redemption Fund are insufficient for such purpose, the Director of Administrative Services shall cause appropriate withdrawals to be made from the Reserve Fund, to the extent of any funds therein, the amount of such insufficiency, and shall transfer any amounts so withdrawn to the Redemption Fund. Amounts so withdrawn from such the Reserve Fund and deposited in the Redemption Fund shall be applied to the payment of the Bonds. If, after the foregoing transfers, there are insufficient funds in the Redemption Fund to make the payments of principal of and interest on the Bonds, the Director of Administrative Services shall apply the available funds first to the payment of interest on the Bonds, then to the payment of principal due on the Bonds, and then to payment of principal due on the Bonds by reason of Bonds called for redemption pursuant to the Resolution of Issuance. Moneys in the Redemption Fund and the accounts therein shall be invested and deposited in accordance with the Resolution of Issuance. Interest earnings and profits resulting from such investment and deposit shall be retained in the Redemption Fund and the accounts therein. The Redemption Fund (and the Prepayment Account therein) shall be closed when all of the principal of and interest on the Bonds has been paid. Reserve Fund. The Reserve Fund is established as a separate fund to be held by the Director of Adm inistrative Services to the credit of which a deposit shall be made as required by the Resolution 0 f Issuance, and deposits shall be made as provided in the Bond Law. Moneys in the Reserve Fund shall be held by the Director of Administrative Services for the benefit of the Town and the Bond Owners as a reserve for the payment of principal of, and interest and any premium on, the Bonds. The Town shall cause the Reserve Fund to be administered in accordance with Part 16 of the Bond Law; provided that proceeds from redemption or sale of properties with respect to which payment of delinquent Assessments and interest thereon was made from the Reserve Fund, shall be credited to the Reserve Fund. Except as otherwise provided in the Resolution of Issuance all amounts deposited in the Reserve Fund shall be used and withdrawn by the Director of Administrative Services solely for the purpose of making transfers to the Redemption Fund in the event of any deficiency at any time in the Redemption Fund of the amount then required for payment of the principal of, and interest and any premium on, the Bonds or, in accordance with the provisions of the Resolution of Issuance, for the purpose of redeeming Bonds from the Redemption Fund. Transfers shall be made from the Reserve Fund to the Redemption Fund in the event of a deficiency in the Redemption Fund, in accordance with the Resolution of Issuance. 5 Whenever, after the issuance of the Bonds, an Assessment is pre-paid, in whole or in part, as provided in the Bond Law, the Director of Administrative Services shall transfer from the Reserve Fund to the Redemption Fund an amount specified in such direction equal to the product of the ratio of the original amount of the Assessment securing any Bonds so paid to the original amount of all Assessments securing any Bonds, times the initial Reserve Requirement. Whenever, on any Interest Payment Date, or on any other date as determined by the Director of Administrative Services, the amount in the Reserve Fund exceeds the then applicable Reserve Requirement, the Director of Administrative Services shall, except as otherwise provided in the Resolution of Issuance for purposes of rebate and as evidenced by an appropriate Officer's Certificate, transfer on or before such Interest Payment Date an amount equal to the excess from the Reserve Fund to the Redemption Fund to be used in accordance with Part 16 of the Bond Law. Whenever the balance in the Reserve Fund is sufficient to retire all the Outstanding Bonds, whether by advance retirement or otherwise, collection of the principal and interest on the Assessments shall be discontinued and the Reserve Fund liquidated by the Director of Administrative Services in retirement of the Outstanding Bonds, as directed by an Officer's Certificate. In the event that the balance in the Reserve Fund at the time of liquidation exceeds the amount required to retire all of the Outstanding Bonds, the excess shall be transferred to the Town to be used in accordance with the Act and the Bond Law. Moneys in the Reserve Fund shall be invested and deposited in accordance with the Resolution of Issuance. Interest earnings and profits resulting from said investment shall be retained in the Reserve Fund subject to the provisions of the Resolution of Issuance. Improvement Fund. The Improvement Fund is established as a separate fund to be held by the Director of Administrative Services to the credit of which deposits shall be made as required by the Resolution of Issuance. Moneys in the Improvement Fund shall be held by the Director of Administrative Services for the benefit of the Town, and shall be disbursed, except as otherwise provided in the Resolution of Issuance, for the payment or reimbursement of costs of the Project.. . Disbursements from the Improvement Fund shall be made by the Director of Administrative Services upon receipt of an Officer's Certificate, which shall: (i) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made, the person to which the disbursement is to be paid and state that such disbursement is for a Project cost; and (ii) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed requesting disbursement. Moneys in the Improvement Fund shall be invested and deposited under the Resolution of Issuance. Interest earnings and profits from such investment and deposit shall be retained in the Improvement Fund to be used for the purposes of such fund. Upon the filing of an Officer's Certificate stating that the Project has been completed and that all costs of the Project have been paid or are not required to be paid from the Improvement Fund, the Director of Administrative Services shall transfer the amount, if any, remaining in the Improvement Fund as directed in the Officer's Certificate which directions shall be pursuant to the Resolution of Intention and to the applicable provisions of the Act and the Improvement Fund shall be closed. 6 The Teeter Plan The County and its political subdivisions operate under the provIsions of Sections 4701-4717 of th e California Revenue and Taxation Code (the "Teeter Plan"). Pursuant to those sections, the accounts of all political subdivisions which levy taxes on the County tax rolls are credited with 100 percent of their respective treasury's cash position (from taxes) and are protected by a special fund (Tax Losses Reserve Fund) into which all county-wide delinquent penalties are deposited. The County initiated this method in fiscal year 1993-94. On each July 15, the County has the option of rescinding the Teeter Plan for any sub tax district or in its entirety. At present, the County does not anticipate any such action. Covenant to Commence Superior Court Foreclosure Proceedings The Town hereby covenants with and for the benefit of the Owners of the Bonds that it will order, and cause to be commenced, and thereafter diligently prosecute an action in the superior court to foreclose the lien of any Assessment or installment thereof which has been billed, but has not been paid, pursuant to and as provided in sections 8830 and 8835, inclusive of the Bond Law and the conditions specified in the Resolution of Issuance. The Director of Administrative Services shall notifY the Town Attorney of any such delinquency of which the Director of Administrative Services is aware, and the Town Attorney shall commence, or cause to be commenced, such foreclosure proceedings. According to the Resolution of Intention, "commence" means and includes any actions preparatory to filing of any complaint. The Town Attorney is hereby authorized to employ counsel to conduct any such foreclosure proceedings. The following conditions shall apply to the foreclosure proceedings which shall be commenced within 60 days of any of the following determinations which shall be made by the Director of Administrative Services not later than October I of each Fiscal Year: (A) If the Director of Administrative Services determines that there is a delinquency of Assessment of $1,500 or more for a prior Fiscal Year or Years for any single parcel of land in th e Assessment District. (B) If the Director of Administrative Services determines that the total amount of delinquent Assessments for the prior Fiscal Year for the entire Assessment District, less the total delinquencies under subsection (A) above, exceeds three percent (3%) of the total Assessments due and payable in the prior Fiscal Year, foreclosure shall be commenced against each parcel of land in the Assessment District with a delinquency of $750 or more for the prior Fiscal Year or Years. (C) If the Director of Administrative Services determines that the total amount of del inquent Assessment for the prior Fiscal Year for the entire Assessment District, less the tota I delinquencies under subsections (A) and (8) above, exceeds five percent (5%) of the total Assessments due and payable for the prior Fiscal Year, foreclosure shall be commenced against each parcel of land within the Assessment District with any amount of delinquency for the prior Fiscal Year or Years. Provided, however, that nothing herein shall prevent the Director of Administrative Services or the Town Attorney from causing the commencement of foreclosure proceedings before the occurrence of any of the foregoing. Tax Covenants The Town has agreed to take all reasonable actions required to maintain the status of the interest 0 n the Bonds as excludable from gross income for federal income tax purposes and' as exempt from State of California personal income taxes. 7 Continuing Disclosure The Town has covenanted and agrees that it will comply with and carry out all of the proVISIOns of the Continuing Disclosure Certificate. Notwithstanding any other provision of this resolution, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an event of default however the Agent may (and, at the request of any Participating Underwriter or the Owners of at least 25% aggregate principal amount of Outstanding Bonds, shall) or any holder or beneficial owner of the Bonds may, take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order. The Town has made its covenants to assist the bond underwriter in complying with Rule 15c2-12 of the United States Securities and Exchange Commission. Priority of Lien The assessments and each installment thereof and any interest and penalties thereon constitute a lien against the lots and parcels of land on which they were imposed until said is paid. Such a lien is subordinate to all fixed special assessment liens previously imposed upon the same property, but has priority over all private liens and over all fixed special assessment liens, which may thereafter be created against the property. Such a lien is co-equal to and independent of the lien for general taxes and any lien imposed under the Mello-Roos Community Facilities Act of 1982, as amended (the "Mello-Roos Act") for community facilities district special taxes or other special taxes. As of the date of the Bonds, there are three additional authorized special taxes on some parcels in the District. The Belvedere- Tiburon Library Agency Community Facilities District No. 1995-1 has a special tax authorization of $66 per parcel per year which is on a parity with the assessments/special taxes of all parcels within the District. Similarly, the Marin County Open Space Financing Authority Series 2002 Revenue Bonds have special tax authorizations of $98 per parcel per year for the Community Facilities District No. 1993-1, (Old St. Hilary's Open Space) Special Tax Bonds Series A (1995) and an additional $98 per parcel per year for the Community Facilities District No. 1997-1, (Old St. Hilary's Open Space) Series 1997 Special Tax Bond which are on a parity with the assessments/special taxes of parcels within District. The Town is not aware of any additional authorized special taxes within the District. There have been two previous utility undergrounding districts within the area of the District: Mar East Utility Undergrounding Assessment District No. 83-1 and Linda Vista Utility Undergrounding Assessment District No. 1994-02. Mar East Assessment District No. 83-1. Most of the parcels within this assessment district are not adjacent to any poles and wires being undergrounded through the District and are therefore not included in this District; however, there are four parcels that are. Two properties within the Mar East Assessment District receive their service to the west from existing poles and overhead wires in Paradise Drive. The properties that are connected to lines in Paradise Drive are considered to receive half the benefit for improved safety and no additional benefit from property aesthetics as they have already participated in an undergrounding assessment and are deemed to have paid for this benefit. They do, however, receive full benefits from improved service reliability. The APN's with this benefit are: 059-203-03 059-203-21 8 APN's 059-203-04 and 059-203-26 appear to be adjacent to the poles and wires to be undergrounded in Paradise Drive, but due to topography have no access or view to those poles and wires. In addition, these properties are connected to the previously undergrounded facilities in Mar East Street. Therefore, these properties are deemed to receive no benefit from the proposed improvements and are exempt from this District. Linda Vista Assessment District No. 1994-01. The parcels to the north of this portion of Linda Vista Avenue are the only properties within Assessment District No. 1994-02 which paid for the undergrounding to improve the view in the southerly direction, towards San Francisco Bay. Half of the properties within the Linda Vista Assessment District receive their service to the north from existing poles and overhead wires in Paradise Drive. The properties that are connected to lines in Paradise Drive are considered to receive half the benefit for improved safety and no additional benefit from property aesthetics as they have already participated in an undergrounding assessment and are deemed to have paid for this benefit. They do, however, receive full benefits from improved service reliability. The APN's with this benefit are: 059-143-41 059-191-16 059-191-21 059-191-22 The properties that are within Assessment District No. 1994-02 and also connect into the underground Linda Vista Avenue lines are considered to receive half the benefit from service reliability, as their small system is completely surrounded by and dependent on the larger overall system that is to be undergrounded, and half the benefit from improved safety as ingress and egress from their property is directly affected by overhead lines and poles, and no additional benefit from property aesthetics, as they have already participated in an undergrounding assessment and are deemed to have paid for this benefit. The APN's with this benefit are: 059-143-39 059-143-40 059-191-19 059-191-20 The parcels adjacent to this undergrounded portion of Linda Vista Avenue are ten townhouses and two R-2 properties that receive their service connections from the previously undergrounded facilities but were not part of Assessment District No. 1994-02. There are existing poles and overhead wires to the south of these properties in Mar East Street. These properties are considered to receive half the benefit from service reliability, as their small system is completely dependent upon the larger overall system that is to be undergrounded, and half the benefit from im proved safety; however, they are deemed to benefit from the improved property aesthetics from the proposed undergrounding project. The APN's with this benefit are: 059-110-01 059-110-02 059-143-21 059-110-03 059-110-04 059-192-11 059-110-05 059-110-06 059-110-07 059-110-08 059-110-09 059-110-10 The assessment lien of the aforementioned parcels in the above two assessment districts is senior to the assessment lien of the Lyford Cove Utility Undergrounding Assessment District. See details of assessment lien amounts and assessed values in the section "THE DISTRICT-Value to Assessment Lien Ratios". 9 The scheduled annual debt service on the Bonds, assuming no redemptions by reason of assessment prepayments or optional redemption, is as follows: DUE September 2 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2029 2030 2031 2032 2033 2034 2035 ANNUAL DEBT SERVICE SCHEDULE* PRINCIPAL~ INTEREST TOTAL THE IMPROVEMENTS The Bonds are being issued to provide the Town with funds for the construction and acquisition of the Improvements (hereinafter described) constructed in the District. The Town employed Harris & Associates (the "Engineer of Work"), as its engineer of work to make recommendations with respect to the Improvements and the allocation and imposition of the assessment in accordance with the provisions of the Improvement Act. . Preliminary; Subject to Change. 10 Pursuant to the description of work set forth in the Engineer's Report dated November II, 2004 and adopted by the Town Council on November 11, 2004 (the "Engineer's Report"), prepared by the Engineer of Work for the Town with respect to the Bonds, the Improvements consist of the following: The construction and acquisition of the following public improvements, including the acquisition of all lands, easements, rights-of-way, licenses, franchises, and penn its and the construction of all auxiliary work necessary and/or convenient to the accomplishment thereof in accordance with plans and specifications to be approved by the Town: Within the area of the District as more particularly shown on the Assessment Diagram on file in the office of the Town Clerk, the installation of new, underground facilities to replace such utility lines, including all required removal of pavement, trenching, backfilling, repaving, installation of substructures, conduits pull boxes, vaults and appurtenances and the removal of existing overhead electric, telephone and CATV utility lines, including existing transformers and other overhead structures. ESTIMA TED IMPROVEMENT COSTS* The revenues necessary to construct this project will come from the sale of bonds secured by assessments on the real property within the District and contributions from property owners. It is anticipated that substantially all property owners will contribute the cost for the service conversion on his or her private property. However, some property owners may choose to finance their service conversion with bond financing. If a property owner fails to convert its own service, the Town's undergrounding ordinance requires the Town to perform this work. Otherwise, the undergrounding project could not be completed because all services must be converted to new underground positions before the overhead poles and wires can be removed. If the Town incurs any cost for individual service conversions, the confirmed assessments will be modified accordingly. Detailed Constructions Documents for the District are available for review at the Town of Tiburon's offices located at 1505 Tiburon Blvd., Tiburon, California and are incorporated herein. These include Specifications listing the type and scope of work to be performed, and Improvement Plans detailing the location of the work. IMPROVEMENT COST ESTIMA TES* Constructions Costs Contingency @ 5% Assessment District Engineering Costs Bond Financing Costs Reserve Fund Underwriter's Discount Cost of Issuance (I) Total Project Cost $ $ (I) Includes costs of Assessment Engineer, Bond Counsel, Town Administration, Paying agent initial fees and other costs of issuance less $ credit interest earnings on Bond proceeds. , Preliminary; Subject to Change. 11 ESTIMATED BOND SOURCES AND USES OF FUNDS' The proceeds of the Bonds (excluding accrued interest, if any) are estimated to be applied as shown below: Sources Par Amount of Bonds $ Total $ Uses Improvement Costs (I) Less: PG & E Credit Rule 20A Funds PG & E Payment for Rule 20A Trench PG & E Credit Rule 20B PG & E Credit Rule 16.FA.2 Cash Payments $ Total o o o o --D $ (I) See above section entitled "Improvement Cost Estimates". Method of Spreading Assessment In order to determine special benefit that each parcel in the District received from the undergrounding of utilities, the Engineer of Work first established the District boundaries. Properties were deemed to receive special benefits and thus included in the boundaries of the Assessment District if the existing overhead utilities were removed on the front, sides and/or rear parts of the properties. The primary elements of the special benefits to the properties assessed are the improvement of aesthetics by removing unsightly overhead wires, transformers and facilities, reliability, and the increase in public safety by removing the risk of falling power liens and other overhead facilities. To establish the benefit to the individual parcels within the District, a Benefit Point system is used. Each parcel of land is assigned Benefit Points (BP's) in proportion to the estimated special benefit the parcel receives relative to the other parcels within the District from the Utility Undergrounding Improvements. The highest and best use of each property is the basis on which the Benefit Points are assigned. For example, an R-2 zoned residential property with a single family home is considered as having 2 dwelling units, and a vacant property is considered developed to its highest potential and connected to the system. The special benefits from undergrounding the overhead utilities are segregated into three (3) categories, which are discussed below: . Improved Property Aesthetics Benefit. This benefit relates to the improved aesthetics due to the removal of overhead wires and utility poles from view. Per the Tiburon Munieipal Code, Seetion 15.2, view is defined as follows: "The term 'view' includes both upslope and downslope scenes..." The aesthetic benefit of removing poles and overhead lines adjacent to . Preliminary; Subject to Change. 12 properties is deemed to be the same for all properties, whether or not one property is thought to have a better view than another, because the increase in property value from the improvements is considered the same on a percentage basis. Also, there is no way to judge the view from a vacant property and developed properties can reconstruct buildings to change view characteristics. Parcels that are directly adjacent to the facilities to be underground and that view wires or poles from any part of the property are considered to receive special benefit from the undergrounding project. Therefore, these properties are assigned one (1) Aesthetic Benefit Point (ABP) per parcel for Improved Property Aesthetics. . Improved Safety Benefit. This benefit relates to the improved safety of having the overhead wires placed underground and having the power poles removed, which eliminates the threat of downed power lines and poles due to wind and rain. All parcels that are connected to and are directly adjacent to the utilities being underground are considered to receive the same special benefit from the undergrounding project. Therefore, these properties are assigned one (1) Safety Benefit Point (SBP) for Improved Safety. . Improved Service Reliability Benefit. This benefit relates to the enhanced reliability of service from the utilities being underground, due to having all new wires and equipment and having that equipment underground, which eliminates the threat of service interruption from downed power lines. All properties that receive service from the facilities to be underground are considered to receive special benefit based on the relative energy usage associated with the type of use on the property. In order to allocate this benefit fairly between the parcels, a methodology is proposed which equates different residential and non-residential land uses to each other, thereby allowing a uniform method of comparison. The single-family residential (SFR) parcel is used as the basic unit of comparison. A SFR parcel equals one (1) Reliability Benefit Point (RBP). Every other land use is converted to RBP's as described below. Other residential properties are compared to a SFR parcel based on the number of potential or actual dwelling units on them whichever is higher. These other residential properties consist of parcels with 2, 3 and 4 dwelling units on them, as well as condominiums and townhouses. Based on the Marin County Assessor's data, the median building area per dwelling unit for these types of residential properties with the Assessment District boundaries is 1,456 square feet (sf). The median SFR dwelling in this Assessment District is 2,400 sf. Looking at the PG&E Design Electrical Manual for the North Bay Area, which includes Tiburon, dwelling units between 1,000 sf and 1,499 sf use approximately 70% of the energy that dwelling units between 1,500 sf and 3,000 sf do. Therefore, multiple residential properties are assigned 0.70 RBP's for each potential or actual dwelling unit on them based on the current zoning on the property. Non-residential properties are converted to RBP's based on the average size for a SFR lot within the Assessment District. Based on the data that we have reviewed, the average SFR lot is approximately 9,600 sq. ft, which is approximately 4.5 dwelling units per acre. Therefore, non-residential parcels are assigned 4.5 RBP's per acre or any portion thereof. There is only one non-residential property within the Assessment District: Assessor's Parcel Number (APN) 059-172-46. This property is zoned Neighborhood Commercial and derives an additional economic benefit from the service it receives from the overhead wires. Therefore, this property is considered to receive twice the benefit of residential property for reliability of service and is assigned 9.0 RBP's per acre. 13 The three categories of Benefit Points are added together for each property to calculate the Total Benefit Points: Safety Benefit Points + Reliability Benefit Points + Aesthetics Benefit Points = Total Benefit Points The following types of parcels are considered to be exempt from the assessment due to their having no benefit from the improvements because they have virtually no potential for development: Parcels that are unbuildable because they are too small or are part of tidal lands Parcels that are too small for a dwelling unit but have ancillary uses to other residential properties, such as garages or carports. Parcels that are designated as Open Space, including the Lighthouse Historic Landmark. These properties are assigned 0 Benefit Points. Annual Administrative Assessment A proposed maximum annual administrative assessment shall be levied on each parcel of land and subdivision of land within the District to pay for necessary costs and expenses incurred by the Town, and not otherwise reimbursed, resulting from the administration and collection of assessments, from the administration or registration of any bonds and reserve or other related funds, or both. Th e maximum assessment is authorized pursuant to the provisions of Section 10204(f) of the Act and shall not exceed twenty thousand dollars ($20,000) per year, subject to an annual increase based on the Consumer Price Index (CPI), during the preceding year ending in January, for all Urban Consumers in the San Francisco-Oakland-San Jose areas. The exact amount of the administration charge will be established each year by the Superintendent of Streets. Each parcel within the District shall be alloc~ted an equal share of such costs. The annual administrative assessment will be collected in the same manner and In the same installments as the assessment levied to pay for the cost of the works of improvement THE DISTRICT Formation The District was created by the Town pursuant to the Improvement Act and the Resolution of Intention for the purpose of constructing and acquiring the public improvements described herein and 'to secure the resulting assessments. The total unpaid assessments securing the Bonds is $______*. See "THE IMPROVEMENTS" and "Method of Spreading Assessment" above. A copy of the Assessment Diagram for the District appears in APPENDIX A of this Official Statement. As a part of the proceedings for the issuance of the Bonds, the Assessment Diagram was filed with the Town Clerk, and recorded along with a Notice of Assessment in the office of the County Recorder. * Preliminary; Subject to Change. 14 For information concerning lot size and valuation, see "Estimated Value". For information concerning the status of development in the District, see "THE PROJECT". Property Tax Delinquency History According to the Marin County Auditor's Office, property taxes are paid current on all properties in the District except for _ parcel. This parcel is improved with an assessed value of $ . The total amount of delinquency as of the date of this Official Statement, including penalties and interest is $ for the 200_/_ tax year. See "BONDOWNERS' RISKS- Payment of Assessments". Historically, the delinquency rate on the regular property tax levy for all parcels in the District has been as set forth below for the past five years: Fiscal Year 1999/00 2000/01 2001/02 2002/03 2003/04 Delinquency Percentage 2.29% 1.14 TO FOLLOW TO FOLLOW TO FOLLOW Based on the above historical delinquency record, it is anticipated that the Reserve Account for th e Bonds will initially exceed projected delinquencies by at least _ times. It is noteworthy that Marin County has converted its tax collection procedure to the Teeter Plan in the fiscal year 1993- 94. See "The Teeter Plan". Estimated Value The Underwriter has obtained the following information relating to the valuation of parcels within the District which is believed to be current and reliable but is not guaranteed. The Town makes no representation as to the accuracy of such valuation. The total value, as near as may be determined, of parcels of land and improvements which secure the lien of the Bonds is estimated at $146,082,852 net of the value of parcels that have paid their assessments in cash. This value was estimated as the full cash value of the parcels as shown upon the last equalized assessment rol] of the County of Marin, net of the value of parcels that have paid their assessments in cash. A listing of the individual assessed values is shown in APPENDIX B of this Official Statement. The values upon which the estimated value is based include the value of infrastructure funded by the Bonds and assumes completed homes, but does not include additional liens or future indebtedness which may be imposed by public entities. See "SECURITY FOR THE BONDS-Priority of Lien", and "BONDOWNERS' RISKS-Parity Taxes and Special Assessments". No assurance can be given that the foregoing value can or will be maintained during the period of time that the Bonds are outstanding. The Town has no control over the amount of additional indebtedness that may be issued in the future by other public entities, the payment of which, through the levy of a tax or special tax could be on a parity with the assessments levied against the Assessment Parcels. While certain construction related liens and/or mortgage liens may encumber the Assessment Parcels, the value has not been reduced by the amount of these liens for purposes of the valuation, and calculation of th e value to lien ratios specified below. All private liens are subordinate to the lien of the unpaid assessments. 15 Value to Assessment Lien Ratios The value to assessment lien ratios shown below are derived by dividing the total Estimated Value by the total unpaid assessments. For example, a 3: 1 lien ratio means that the Estimated Value is three times greater than the total assessment amount. The table on APPENDIX B of this Official Statement summarizes in total the estimated average value of each parcel to total assessment lien ratio for the District based on the estimated average total value. Neither the Town nor the Underwriter makes any representation as to the accuracy of the valuation upon which the estimated values are derived, or that any lot or parcel in the District could be sold for any amount assumed in the aggregate estimated value. See "BONDOWNERS' RISKS". The total assessments levied in the District is $ Of the 227 assessed parcels in the District, 22 property owners have paid their assessments in cash for a total assessment credit of $373,573.75, thus requiring a bond issue of $4,000,000'. Value information is shown on APPENDIX B of this Official Statement. The following table shows the value to lien ration for all parcels in the District after cash payments. Estimated Assessed Value to Total Assessment Lien Ratio For all Assessable Parcels Within the District on an Aggregate Basis A verage Estimated Value to Assessment Lien Ratio Total Assessed Value $146,082,852 Total Assessments NOTE: The amount of the total assessments has been reduced by cash payments paid by 22 of the property owners to $373,573.75 The Assessed Value for those parcels which have paid in cash were deducted from the $___ total District value to determine the aggregate value of parcels which secure the unpaid assessments in the District. Additional payoff after issuance of the Bonds may change the Value to Lien Ratio. THE PROJECT Property Ownership in the District All parcels in the District are improved with single family homes, condominiums, and one non- residential property (commercial). Ownership in the District is diversified among individual homeowners. Seven individuals own 20 of the 227 parcels in the District. See APPENDIX B of this Official Statement for a listing of property owners. Lyford TOWN OF TIBURON Cove Utility Undergrounding Assessment District Assessed Valuation by Land Use # of Parcels Assessed Value 63 $ 46,456,453 163 112,633,444 I ],190,433 227 $160,280,330 Use Single Family Residence Multi Family Residence Commercial Total , Preliminary; Subject to Change. 16 BONDOWNERS' RISKS Economic Uncertainty No assurance can be given that future changes in the economy will not have an impact on the project described in this Official Statement, the valuations or the future financial condition of the parties involved in the project described in this Official Statement. Payment of Assessments Under the provisions of the Bond Law, assessment installments (from which the payment of annual installments of principal of and interest on the Bonds are derived) will be billed to properties against which there are unpaid assessments on the regular property tax bills sent to owners of such properties. Such assessment installments are due and payable, and bear the same penalties and interest for non-payment, as do regular property tax installments. Assessment installment payments cannot be made separate from property tax payments. As of , all of the District's parcels were current in all their property tax installment payments through the 2003/2004 fiscal year with exception of _ parcel. The total amount of delinquency as of the date of , including penalties and interest is $ In order to pay debt service on the Bonds, it is necessary that unpaid installments of assessments on property within the District are paid in a timely manner. Should the installments not be paid on time, the Town has established a Reserve Fund as described under "SECURlTY FOR THE BONDS- Establishment of Special - Reserve Fund". The Town has determined, pursuant to Section 8769(b) of the Bond Law, that it will not obligate itself to advance available funds from the Town treasury to cure any deficiency which may occur in the Redemption Fund. The assessments are secured by a lien on the assessed parcels of land in the District. In the event of a default in the payment of an assessment installment on a parcel of property in the District, the Town has covenanted, under the conditions set forth in the Resolution of Issuance, to file an action in the Superior Court to foreclose the lien of each delinquent assessment under the circumstances described herein under "SECURlTY FOR THE BONDS- Covenant to Commence Superior Court Foreclosure Proceedings". Failure by the owners of the parcels within the District securing the Bonds to pay installments of assessments when due, depletion of the Reserve Fund or the inability of the Town to sell property which has been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of assessments levied against such property may result in the inability of the Town to make full or punctual payment of debt service on the Bonds and Bondowners would therefore be adversely affected. Unpaid assessments do not constitute a personal indebtedness of the owners of the parcels within the District securing the Bonds or subsequent owners of these parcels. There is no assurance such owners will be able to pay the assessment installments or that they will pay such installments even though they may be financially able to do so. Development of parcels within the District, transfers of property ownership and certain other circumstances could result in prepayment of assessments. Such prepayment could result in redemption of all or a portion of the Bonds prior to their stated maturity. Ballot Initiatives Constitutional inItIatives or other 1Illtlatlve measures, including those for issues such as environmental or slow growth concerns, from time to time may be adopted by the State of California 17 or County of Marin voters in general, and Town of Tiburon voters in particular. This might result in the placement of limitations on the ability of California, the Town or other local agencies to facilitate, or on the ability of the landowners to complete, developments. As of the date of this Official Statement, there are no known initiatives that would directly affect property in the District. Articles XIIIC and XIIID of the California Constitution Proposition 218, a state ballot initiative known as the "Right to Vote on Taxes Act," was approved by California voters on November 5, 1996. Proposition 218 added Articles XIIIC and X1l1D to the California Constitution, and with the exception of certain provisions, Articles XIIIC and xmD became effective on November 6, 1996. Article XIIID, entitled "Assessment and Property Related Fee Reform" requires that beginning July I, 1997, all existing, new or increased assessments shall comply with the provisions of Section 4 of Article XIIID. Having complied with the provisions of said Act, and particularly Section 9525 thereof, the Town believes that the provisions of Section 4 of Article XIIID do not apply to the unpaid assessments which secure the Bonds. Article XIIIC entitled "Voter Approval of Local Tax Levies" provides, in Section 3 thereof, that the initiative power shall "not be prohibited or otherwise limited in marters reducing or repealing any assessment" of the Town. Article XIIIC does not define the term "assessment," and it is unclear whether this term is intended to include assessments levied under the 1913 Act. Furthermore, Section 3 is not, by its terms, restricted in its application to assessments which were levied on or after July 1, 1997. In the case of the unpaid assessments which are pledged as security for payment of the Bonds, the 1915 Act provides a mandatory, statutory duty of the Town and the Marin County Auditor to post installments on account of the unpaid assessments to the Marin County property tax roll each year while any of the Bonds are outstanding, commencing with the 2001-2002 property tax year, in aggregate amounts equal to the principal of and interest on the Bonds coming due in the succeeding calendar year. Although the provisions of Article X1l1C have not been interpreted by the courts, the Town believes that the initiative power cannot be used to reduce or repeal the unpaid assessments which are pledged as security for payment of the Bonds or to otherwise interfere with the mandatory, statutory duty of the Town and the Marin County Auditor with respect to the unpaid assessments which are pledged as security for payment of the Bonds. The Town cannot predict whether any other pending or future challenges to the State's present system of property tax assessment will be successful, when the ultimate resolution of any challenge will occur, or the ultimate effect any decision regarding the State's present system of property tax assessment will have on the Town's revenues or on the State's financial obligations to local government. Unavailability of Town Funds As discussed under "SECURITY FOR THE BONDS - Obligation of the Town Upon Delinquency", if a delinquency occurs in the payment of any assessment installment, the Director of Administrative Services is instructed in the Resolution of Issuance to transfer the amount of such delinquent installment from the Reserve Fund into the Redemption Fund. If there are additional delinquencies after exhaustion of the Reserve Fund, the Town has no direct or contingent liability to advance funds to cure any deficiency which may occur in the Redemption Fund. However, the Town does have the d~ty to file an action for judicial foreclosure under the circumstances set forth in the Resolution of 18 Issuance. See "SECURITY FOR THE BONDS- Covenant to Commence Superior Court Foreclosure Proceedings" . No Acceleration The principal of the Bonds will not be subject to acceleration under the provIsIOns of the Resolution of Issuance. Direct and Overlapping Debt Set forth below is a direct and overlapping debt report for the Town of Tiburon Lyford Cove Utility Undergrounding Assessment District, dated as of (the Debt Report) prepared by California Municipal Statistics, Inc. The Debt Report is included for general information purposes only. The Town makes no representation as to its completeness or accuracy. The Debt Report generally includes long term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the District in whole or in part. Such long-term obligations generally are not payable from revenues of the Town except as indicated, nor are they necessarily obligations secured by land within the District. In many cases long term obligations issued by a public agency are payable only from the general fund or other revenues of such public agency. Additional indebtedness could be authorized by the Town or other public agencies at any time. See also "SECURITY FOR THE BONDS- Priority of Lien" for a discussion of certain maintenance assessment district liens senior to the liens of the assessments, and "BONDOWNERS' RISKS- Parity Taxes and Special Assessments" for a discussion of possible future levies for school facilities and fire protection. STATEMENT OF DIRECT AND OVERLAPPING DEBT TO FOLLOW Source: California MuniCljJaI Statistics, Inc. 19 The Town has no control over the amount of additional debt payable from taxes or assessments on all or a portion of the property within the District that may be issued in the future by other governmental entities or districts, including but not limited to school districts or any other districts having jurisdiction over all or a portion of the land within the District. Nothing prevents the owners of land within the District from consenting to the issuance of additional debt by other public agencies which would be secured by taxes, including special taxes on a parity with the assessments for the Bonds. To the extent such indebtedness is payable from other special taxes or general taxes, such special taxes and taxes will have a lien on the property within the District on a parity with the lien of the assessments for the Bonds. Except for the Maintenance Districts described under the headings "Parity Taxes and Special Assessments" below, and "SECURITY FOR THE BONDS-Priority of Lien," there are no other known special assessment liens on parcels in the District and if imposed, any such new liens would be subordinated to those which secure the Bonds. Accordingly, the debt on the property within the District could greatly increase, without any corresponding increase in the value of the property within the District, and thereby severely reduce the ratio that exists at the time the Bonds are issued between the value of the property and the debt secured by the taxes and assessments thereon. The imposition of such additional indebtedness could also reduce the willingness and ability of the property owners within the District to pay the assessments when due. Moreover, in the event of a delinquency in the payment of assessments, no assurance can be given that foreclosure sales will occur, or that the proceeds of any foreclosure sale would be sufficient to pay the delinquent assessment and any other delinquent special taxes, assessments or taxes. Parity Taxes and Special Assessments The assessments will constitute a lien against the lots and parcels of land on which they are levied. The lien of assessments securing the Bonds is on a parity with all special taxes levied by other agencies, and is co-equal to and independent of the lien for general property taxes and any lien imposed under the Mello-Roos Act regardless of when they are imposed upon the same property. The assessments have priority over all existing and future private liens and future assessments imposed on the property. The Town has no control over the ability of other entities and districts to issue indebtedness secured by special taxes or assessments payable from all or a portion of the property within the District. Any such special taxes will have a lien on such property on a parity with the assessments for the Bonds, and any such assessments would have a lien subordinate to the assessment for the Bonds. See "Direct and Overlapping Debt" above. As of the date of funding of the Bonds, and except for the liens described in the "Priority of Lien" paragraph, there are no known existing assessment or Mello-Roos liens or other liens on parcels in the District. See also the section entitled "Direct and Overlapping Debt". Bankruptcy and Foreclosure The payment of property owners' assessments and the ability of the Town to file an action in Superior Court to foreclose the lien of a delinquent unpaid assessment pursuant to the foreclosure covenant contained in the Resolution of Issuance may be limited by bankruptcy, insolvency, or other laws generally affecting creditors' rights or by the laws of the State relating to judicial foreclosure. See "SECURITY FOR THE BONDS-Covenant to Commence Superior Court Foreclosure Proceedings". 20 The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. Although bankruptcy proceedings would not cause the assessments to become extinguished, bankruptcy of a property owner could result in a delay in procuring Superior Court foreclosure proceedings. Such delay would increase the likelihood of a delay or default in payment of the principal of, and interest on, the Bonds and the possibility of delinquent tax installments not being paid in full. Natural Disasters Natural disasters, including floods and earthquakes, could damage improvements and/or property in the District. As with other California communities, the District is affected by periodic tremors. The largest recent earthquake was the October 17, 1989 Lorna Prieta Quake which registered 7.1 on th e Richter Scale. This quake was centered on the San Andreas Fault in the Santa Cruz Mountains approximately 80 miles south of the District. No major damage was reported in the immediate area of the District from this quake. The District is outside the 100-year flood zone. Endangered Species In recent years, there has been an increase in activity at the state and federal level related to the possible listing of certain plant and animal species found in California as endangered species. An increase in the number of endangered species is expected to curtail development in a number of areas. At present, the property within the District is not known to be inhabited by any plant or animal species which either the California Fish and Game Commission or the United States Fish and Wildlife Services has proposed for addition to the endangered species list. Notwithstanding this fact, new species are proposed to be added to the state and federal protected list on a regular basis. Any action by the state or federal governments to protect species located on or adjacent to the property within the District could negatively affect the property owners' ability to develop the property within the District. This, in turn, could reduce the ability or willingness of the property owners to pay the assessments when due and would likely reduce the value of the land and the potential revenues available at a foreclosure sale for delinquent assessments. Suitability Standards Investment in the Bonds involves risk. An investment is suitable, therefore, only for persons having substantial financial resources who understand the nature of the Bonds as well as the risk factors associated with the investment. Each investor, either alone or together with the investor's advisors, should have sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of investing in the Bonds and of protecting the investor's interests in connection with the investment, and each investor should have sufficient net worth or net worth and income to be able to bear the economic risk of the investment. The broker, dealer or other person offering or selling the Bonds may request or demand oral and/or written representations from prospective investors in order to establish a reasonable belief that the investor meets the suitability standards, or make or cause to be made further inquiry and obtain such additional information as they deem appropriate with regard to suitability of prospective investors. Brokers, dealers or other persons offering or selling the Bonds may, in their discretion, reject offers to purchase in whole or in part. 21 Secondary Market There can be no assurance that there will be a secondary market for purchase or sale of the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or tenninated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price. From time to time, there may be no secondary market for the Bonds, depending upon prevailing market conditions, the financial condition or market position of firms who may make the secondary market in the Bonds, and the financial condition and results of operations of the owners of property within the District. The Bonds should therefore be considered long-term investments in which funds are committed to maturity, subject to redemption prior to maturity as described herein. Disclosure to Future Purchasers of Property As a part of the proceedings for the acquisition of the Improvements and the issuance of the Bonds, the District has recorded a notice of the assessment lien in the Office of the County Recorder. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such assessment obligation in the purchase of a parcel of land subject to the assessment or the lending of money thereon. Failure to disclose the existence of the assessments may affect the willingness and ability of future owners of property within the District to pay the assessments when due. Property Held By FDIC The ability of the Town to collect interest and penalties specified by State law and to foreclose the lien of a delinquent unpaid assessment is severely limited in certain respects with regard to properties in which the Federal Deposit Insurance Corporation (the "FDIC") has or obtains an interest. Although, at present, the Town is not aware that the FDIC has obtained any interest in property within the District, such an interest could be obtained. The FDIC has adopted a policy (the "Pol icy Statement") providing that the FDIC intends to pay its proper tax obligations when they come due and to pay claims for delinquencies as promptly as is consistent with sound business practice and the orderly administration of the institution's affairs. It may decline to pay property tax claims in situations where abandonment of its interest in the property is appropriate. The Policy Statement also provides that real property owned by the FDIC is subject to state and local real property taxes if those taxes are assessed according to the property's value, but that the FDIC is immune from real property taxes assessed on other bases. The Town is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency on a parcel within the District in which the FDIC has or obtains an interest, although prohibiting the lien of the FDIC from being foreclosed out at a judicial foreclosure sale would likely reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale. Such an outcome would cause a draw on the Reserve Fund which, if depleted, could result in a default in the payment of debt service on the Bonds. As of the date of the Bonds, no parcels in the District are known to be held by the FDIC. Hazardous Substances While governmental taxes, assessments, and charges are a common claim against the value of an assessed parcel, other less common claims may be relevant. One of the most serious in tenns of the 22 potential reduction in the value that may be realized to pay the assessments is a claim with regard to hazardous substances. In general, the owners and operators of parcels within the District may be required by law to remedy conditions of the parcels relating to the releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, sometimes referred to as "CERCLA" or the "Superfund Act," is the most well- known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substances condition of a property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the parcels within the District be affected by a hazardous substance, would be to reduce the marketability and value of the parcel by the costs of remedying the condition, because the owner is obligated to remedy the condition. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the financial and legal ability of a property owner to develop the affected parcel or other parcels, as well as the value of th e property that is realizable upon a delinquency and foreclosure. The value of the real property within the District described herein does not take into account the possible liability of the owner (or operator) for the remedy of a hazardous substance condition of the parcels. 23 THE TOWN The Town of Tiburon was incorporated in 1964. The Town is located 18 miles north of San Francisco via the Golden Gate Bridge, Highway 101 and Tiburon Blvd.; 6 miles north across the Bay by ferry boat. For more information, see "APPENDIX C - TOWN GENERAL ECONOMIC AND DEMOGRAPHIC INFORMA nON" of this Official Statement. mE BONDS ARE NOT SECURED BY THE GENERAL TAXING POWER OF TIlE TOWN, mE STATE OF CALIFORNIA (fHE "STATE"), OR ANY OF ITS POLITICAL SUBDIVISIONS, NOR IS THE FULL FAITH AND CREDIT OF mE TOWN, THE STATE, OR ANY OF ITS POLITICAL SUBDIVISIONS PLEDGED TO THE PAYMENT OF THE BONDS. mE INTEREST ON AND PRINCIPAL OF THE BONDS ARE PAYABLE SOLELY FROM MONEYS IN mE REDEMPTION FUND ESTABLISHED IN CONNECTION WITH TIlE ISSUANCE OF mE BONDS AND ARE SECURED BY UNPAID ASSESSMENTS AND A PLEDGE OF AMOUNTS IN THE RESERVE FUND. THE TOWN IS NOT OBLIGATED TO USE AVAILABLE FUNDS (INCLUDING ANY SURPLUS FUNDS) TO PURCHASE DELINQUENT PARCELS OR PAY ANY DELINQUENT INSTALLMENTS OR FUTURE INSTALLMENTS OF mE ASSESSMENTS ON DELINQUENT PARCELS. THE OWNERS OF THE BONDS MUST ASSUME, THEREFORE, THAT THE SOLE SOURCE OF FUNDS FOR THE PAYMENT OF THE BONDS WILL BE AMOUNTS ON DEPOSIT IN THE REDEMPTION FUND AND IN mE RESERVE FUND. LEGAL MA TIERS The proceedings in connection with the issuance of the Bonds are subject to the approval as to their legality of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel for the Town. The opinion of Jones Hall, A Professional Law Corporation, attesting to the validity of the Bonds, shall be supplied free of charge to the original purchaser of the Bonds. A copy of the legal opinion, certified by the official in whose office the original is filed, will be printed on each Bond. Payment of the fees and expenses of Bond Counsel is contingent upon the sale and issuance of the Bonds. TAX EXEMPTION In the opinion of Bond Counsel, subject, however, to the qualifications set forth below, under existing law, the interest on the Bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; provided, however, that for the purpose of computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), slUch interest is taken into account in determining certain income and earnings. The opinions set forth in the preceding paragraph are subject to the condition that the Town comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code") that must be satisfied subsequent to the issuance of the Bonds in order that such interest be, or continue to be, excluded from gross income for federal income tax purposes. The Town has covenanted to comply with each such requirement. Failure to comply with certai'o of such requirements may cause the inclusion of such interest in gross income for federal income tax purposes to be retroactive to the date of delivery of the Bonds. 24 In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income taxes. For the complete text of the final opinion of Bond Counsel, see APPENDIX E of this Official Statement. Owners of the Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Bonds other than as expressly described above. NO LITIGATION There is no action, suit, or proceeding pending with respect to which the Town has been served with process, or to the best knowledge of the Town threatened, at the present time restraining or enjoining the delivery of the Bonds or in any way contesting or affecting the validity of the Bonds or any proceedings of the Town taken with respect to the execution or delivery thereof. A no litigation certificate executed by an authorized representative of the Town will be required to be delivered to the Underwriter simultaneously with the delivery of the Bonds. NO RATING The Town has not made, and does not contemplate making, application to any rating agency for the assignment ofa rating to the Bonds. No such rating should be assumed based upon any other Town obligations which have been rated. Prospective purchasers of the Bonds are required to make independent determinations as to the credit quality of the Bonds and their appropriateness as an investment. See "BONDOWNERS' RISKS - Suitability Standards," and "- Secondary Market". UNDERWRITING Wulff, Hansen & Co., the Underwriter, has purchased the Bonds as set forth on the cover page of this Official Statement from the Town at an aggregate purchase price of $ , which represents the par amount of the Bonds less underwriter's discount of $ . The purchase contract for the Bonds provides that the obligation of the Underwriter to accept delivery of the Bonds is subject to certain terms and conditions, the approval of certain legal matters by counsel and certain other conditions. The public offering prices for the Bonds may be changed from time to time by the Underwriter. The Underwriter may offer and sell Bonds to certain dealers and others at a price lower than the offering price stated on the cover page hereof ADDITIONAL INFORMATION Any statements made in this Official Statement involving matters of opinIOn or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. This Official Statement is not to be construed as a contract or agreement between the Town and the purchasers or owners of any of the Bonds. Copies of this Official Statement in reasonable quantity and other documents referred to herein may be obtained during the underwriting period from the offices of the Underwriter. 25 The execution and dissemination of this Official Statement has been duly authorized by the Town. TOWN OF TIBURON By: TOWN MANAGER 26 Town of Tiburon Lyford Cove Utility Undergrounding Assessment District No. 2004-01 Final Engineer's Report November 11, 2004 Page 13 Q:\tiburon\Lyford Cove\Report\lyford cove fnl rpt ll-nov-04.doc LEGal): @I ASSESSMENT DISTRICT BOUNDARY PARCEL UNE TOWN UMITS ASSESSMENT NO. GRAPHIC SCALE '~~---T ( III nE'l ) lbwh_l~fL i:: I Harris & Assodates APPENDIX B SALIENT DATA TOWN OF TIBURON LYFORD COVE UTILITY UNDERGROUNDING ASSESSMENT DISTRICT Assessments as Assessor's Parcel Confirmed and Value to Lien Assessment No. Number Total Assessed Value Recorded Ratio 1 059-132-09 $1,279038 $20,754.94 61.6 2 059-132-30 $970,370 $18313.19 53.0 3 059-132-28 $882 149 $20,754.94 42.5 4 059-132-22 $150087 $20,754.94 7.2 5 059-132-27 $1,345 000 $18313.19 73.4 6 059-141-20 $1,052 669 $20,754.94 50.7 7 059-141-27 $193422 $20,754.94 9.3 8 059-141-26 $1 795458 $20754.94 86.5 9 059-141-31 $779280 $16,481.87 47.3 10 059-141-32 $840 402 $16,481.87 51.0 11 059-141-17 $870561 $20754.94 41.9 12 059-141-16 $1,191,843 PAID #VALUEl 13 059-141-15 $1,035 176 $20,754.94 49.9 14 059-141-33 $863,726 $16,481.87 52.4 15 059-141-34 $203,078 $16,481.87 12.3 16 059-141-13 $177,635 PAID #VALUE! 17 059-141-12 $122,392 $20754.94 5.9 18 059-141-28 $457 720 $20,754.94 22.1 19 059-141-30 $172,143 $18313.19 9.4 20 059-141-09 $777,968 $20 754.94 37.5 21 059-091-16 $915,891 $18,313.19 50.0 22 059-091-23 $184,911 $18313.19 10.1 23 059-091-48 $853,396 $20,754.94 41.1 24 059-091-50 $174,914 $20 754.94 8.4 25 059-091-49 $159,490 $20754.94 7.7 26 059-091-51 $274,289 $20,754.94 13.2 27 059-091-30 $207,527 $20,754.94 10.0 28 059-091-32 $500,020 $20 754.94 24.1 29 059-122-48 $1 098,528 $20,754.94 52.9 30 059-122-19 $155,606 $18,313.19 8.5 31 059-122-27 $175969 PAID #V ALUE! 32 059-122- 30 $162,500 $18,313.19 8.9 33 059-122-2] $360254 $20 754.94 17.4 34 059-133-14 $1 152,356 $20 754.94 55.5 35 059-133-15 $217,059 $18313.19 11.9 36 059-133-23 $1097,223 $18,313.19 59.9 37 059-133-22 $2 025 000 $18313.19 110.6 38 059-133-19 $1,500 000 $20 754.94 72.3 39 059-133-16 $181,035 $20,754.94 8.7 40 059-133-05 $1,248 526 $20,754.94 60.2 41 059-133-20 $1,298 803 $20,754.94 62.6 Assessments as Assessor's Parcel Confirmed and Value to Lien Assessment No. Number Total Assessed Value Recorded Ratio 42 059-133-24 $1,316656 PAID #V ALUE! 43 059-122-17 $946 123 $20754.94 45.6 44 059-122-40 $1,172716 $20754.94 56.5 45 059-122-47 $481 737 $18.313.19 26.3 46 059-122-46 $275026 $20,754.94 . 13.3 47 059-122-22 $475 322 $18313.19 26.0 48 059-350-04 $549,348 $16.481.87 33.3 49 059-350-03 $410,731 $16.481.87 24.9 50 059-350-02 $841 775 PAID #V ALUE! 51 059-350-01 $890.248 $16,481.87 54.0 52 059-133-13 $677,547 $20,754.94 32.6 53 059-133-12 $363981 $18,313.19 19.9 54 059-133-11 $1,268,012 $20.754.94 61.1 55 059-133-18 $281 588 PAID #V ALUE! 56 059-133-17 $573 554 $20,754.94 27.6 57 059-133-09 $476849 $20,754.94 23.0 58 059-133-08 $532,206 $20,754.94 25.6 59 059-142-10 $270,813 $20.754.94 13.0 60 059-142-11 $1,198 757 $20,754.94 57.8 61 059-142-18 $79 102 $16,481.87 4.8 62 059-142-13 $2,114,340 $20,754.94 101.9 63 059-142-02 $58,620 $20.754.94 2.8 64 059-142-19 $973,651 $16.481.87 59.1 65 059-142-14 $292,425 PAID #V ALUE! 66 059-142-15 $89,855 PAID #VALUE! 67 059-142-16 $2,119,639 $18,313.19 115.7 68 059-142-17 $963 946 $18,313.19 52.6 -. 69 059-142-07 $88 784 $18,313.19 4.8 70 059-201-08 $821,451 $18,313.19 44.9 71 059-201-37 $366,395 $18,313.19 20.0 72 059-201-42 $851,146 $18,313.19 46.5 73 059-201-66 $957 148 $20,754.94 46.1 74 059-201-11 $670,625 $18,313.19 36.6 75 059-201-32 $1,172,489 $20,754.94 56.5 76 059-201-33 $105,169 $20 754.94 5.1 77 059-201-39 $172,293 PAID #V ALUE! 78 059-201-62 $859,452 $20,754.94 41.4 79 059-201-70 $263 508 $20,754.94 12.7 80 059-201-43 $979,804 $20,754.94 47.2 81 059-201-05 $170,181 $20,754.94 8.2 82 059-201-34 $761,878 $20,754.94 36.7 83 059-201-35 $692388 $18313.19 37.8 84 059-201-02 $914,503 $20,754.94 44.1 85 059-201-01 $ J?9 266 $20,754.94 6.2 86 059-20 I-51 $767,129 $20754.94 37.0 87 059-201-50 $144474 $18,3 13 .19 7.9 88 059-201-49 $120711 $20,754.94 5.8 89 059-201-52 $109118 $20754.94 5.3 90 059-201-53 $466,874 PAID #VALUE! 91 059-201-48 $157762 $20,754.94 7.6 92 059-201-47 $904,104 $18313.19 49.4 Assessments as Assessor's Parcel Confirmed and Value to Lien Assessment No. Number Total Assessed Value Recorded Ratio 93 059-201-54 $338,001 $20754.94 16.3 94 059-201-56 $147,851 $20 754.94 7.1 95 059-201-55 $131,896 $20,754.94 6.4 96 059-201-64 $666.733 $20,754.94 32.1 97 059-201-59 $1 099,627 $16,481.87 66.7 98 059-201-60 $1,139,305 $16481.87 69.1 99 059-201-67 $1242436 PAID #VALUEl 100 059-134-09 $1,002837 $18,313.19 54.8 101 059-134-02 $1,450,000 $18313.19 79.2 102 059-134-07 $1273337 $20 754.94 61.4 103 059-134-03 $267,140 $18,313.19 14.6 104 059-134-04 $135,778 $20 754.94 6.5 105 059-134-05 $438,594 $18313.19 23.9 106 059-134-06 $162,478 $18313.19 8.9 107 059-143-37 $735,044 $20 754.94 35.4 108 059-143-36 $744752 $20 754.94 35.9 109 059-143-35 $1,249 766 $20 754.94 60.2 110 059-143-12 $386,931 $18,313.19 21.1 111 059-143-27 $129,309 $20754.94 6.2 112 059-143-29 $1,165,802 $20,754.94 56.2 113 059-143-24 $401,352 $20,754.94 19.3 114 059-143-28 $1227 970 $20,754.94 59.2 115 059-143-20 $755,238 $20,754.94 36.4 .- 116 059-143-16 $1,098,969 $20,754.94 52.9 117 059-143-15 $644,295 $20,754.94 31.0 118 059-143-21 $1.545 523 $13,429.67 115.1 119 059-143-38 $486,255 $16,481.87 29.5 120 059-143-39 $1,334 776 $5,188.74 257.0 121 059-143-41 $1,249085 PAID #V ALUE! 122 059-143-40 $299,214 $7,325.27 40.8 123 059-191-16 $350,854 $15871.43 21.7 124 059-191-19 $1,049,221 $5.188.74 201.0 125 059-191-20 $789 166 $5,188.74 150.9 126 059-191-22 $667 695 $7.325.27 91.1 127 059-191-21 $809,753 $7,325.27 109.7 128 059-191-02 $160,712 $20,754.94 7.7 129 059-191-03 $926,941 $20,754.94 44.7 130 059-191-04 $1,060,125 $20,754.94 51.1 131 059-191-05 $673 380 $20,754.94 32.4 132 059-191-06 $703 930 $20,754.94 33.9 133 059-191-14 $452,898 $20.754.94 21.8 134 059-191-15 $1,220,872 $18313.19 66.7 135 059-19]-12 $588.259 $18.313 .19 32.1 136 059-]91-11 $621 644 $20 754.94 30.0 137 059-191-10 $316,106 $18,313.19 17.3 138 059-192-15 $373 256 $20,754.94 18.0 139 059-110-10 $170,604 $11,293.13 15.1 140 059-110-09 $572,749 $11,293.13 50.7 141 059-110-08 $405.321 $11293.13 35.9 142 059-110-07 $642 624 $11,293.13 56.9 143 059-110-06 $167287 $11,293.13 14.8 Assessments as Assessor's Parcel Confirmed and Value to Lien Assessment No. Number Total Assessed Value Recorded Ratio 144 059-110-05 $929,940 $11293.13 82.3 145 059-110-04 $505,415 PAID #VALUE! 146 059-110-03 $392,164 $11,293.13 34.7 147 059-110-02 $733,792 $11,293.13 65.0 148 059-110-01 $468,229 $11,293.13 41.5 149 059-192-18 $389976 PAID #V ALUE! 150 059-192-11 $177,996 $13,429.67 13.3 151 059-192-12 $1,030,654 $20,754.94 49.7 152 059-192-06 $864,754 $20,754.94 41.7 153 059-193-21 $1,185316 $20,754.94 57.1 154 059-193-23 $596,856 $16,481.87 36.2 155 059-193-24 $568,594 $16,481.87 34.5 156 059-193-25 $549,215 $16,481.87 33.3 157 059-193-26 $192,670 $16,481.87 11.7 158 059-193-28 $110,830 $16,481.87 6.7 159 059-193-29 $218,803 $16,481.87 13.3 160 059-193-20 $964,928 $20,754.94 46.5 161 059-193-19 $217,257 $20754.94 10.5 162 059-193-27 $1.007,474 $20,754.94 48.5 163 059-172-46 $1,190,433 $14650.55 81.3 164 059-172-44 $1,132,758 $29,301.01 38.7 165 059-172-05 $317,150 $18313.19 17.3 166 059-172-43 $2,218,312 $18,313.19 121.1 167 059-340-02 $1 608005 $16,481.87 97.6 168 059-340-01 $1,448,170 $16481.87 87.9 169 059-172-42 $266,801 $18,313 .19 14.6 170 059-172-41 $1,053 869 $20,754.94 50.8 171 059-172-40 $491,976 $20754.94 23.7 172 059-172- 36 $406,226 $25,028.02 16.2 173 059-181-72 $406228 $25,028.02 16.2 174 059-181-78 $438088 $16,481.87 26.6 175 059-181-77 $282,062 $16,481.87 17.1 176 059-181-85 $76,723 $18,313.19 4.2 177 059-181-84 $147,407 $25,028.02 5.9 178 059-181-89 $518 103 $29,301.00 17.7 179 059-181-88 $478,172 $20,754.94 23.0 180 059-181-09 $258,884 PAID #V ALUEI 181 059-181-86 $193,333 $20,754.94 9.3 182 059-181-80 $995,065 PAID #V ALVEI 183 059-181-12 $1,320,229 PAID #V ALUE! 184 059-181-90 $1,553,364 $20,754.94 74.8 185 059-181-87 $519,454 $18,313.19 28.4 186 059-181-91 $972,529 $20,754.94 46.9 187 059-181-16 $421,250 $20,754.94 20.3 188 059-181-18 $1 , I 15 264 $20,754.94 53.7 189 059-181-81 $1 885,325 $18313.19 102.9 190 059-181-83 $1,839,425 PAID #VALUE! 191 059-181-73 $1,236341 $18,313.19 67.5 192 059-181-74 $248,291 $18313.19 13.6 193 059-181-75 $641 229 $20 754.94 30.9 194 059-181-76 $818 662 $18313.19 44.7 Assessments as Assessor's Parcel Confirmed and Value to Lien Assessment No. Number Total Assessed Value Recorded Ratio 195 059-400-0 I $211,608 $20,754.94 10.2 196 059-400-09 $1,860058 $18313.19 101.6 197 059-400-10 $1,500,624 $20,754.94 72.3 198 059-400-04 $925 770 $18,313.19 50.6 199 059-194-71 $195271 $18,313.19 10.7 200 059-194-88 $286,059 $20,754.94 13.8 201 059-194-89 $334482 $20754.94 16.1 202 059-194-84 $153,878 $18313.19 8.4 203 059-194-68 $139227 $18313.19 7.6 204 059-194-69 $325 869 $18,313.19 17.8 205 059-194-83 $1,496,740 $18,313.19 81.7 206 059-194-93 $1,736,531 $20,754.94 83.7 207 059-194-96 $2,123,926 $16481.87 128.9 208 059-194-97 $145,816 PAID #V ALUE! 209 059-194-81 $322,435 $20,754.94 15.5 210 059-194-72 $778,939 $16,481.87 47.3 211 059-194-73 $224,486 PAID #V ALUE! 212 059-194-78 $112,485 $20,754.94 5.4 213 059-194-38 $66,092 $20,754.94 3.2 214 059-194-74 $1,434,515 PAID #V ALVE! 215 059-194-40 $854,530 $20 754.94 41.2 216 059-194-61 $827,082 $18,313.19 45.2 217 059-194-62 $105,902 $18,313.19 5.8 218 059-204-01 $1 026,958 $18,313.19 56.1 219 059-204-02 $2 078,080 $18,313.19 113.5 220 059-203-12 $150,003 $20,754.94 7.2 221 059-203-28 $3,056,009 $20,754.94 147.2 222 059-203-23 $1,325,826 $20,754.94 63.9 223 059-203-18 $550,000 $18,313.19 30.0 224 059-203-19 $215,451 PAID #V ALUE! 225 059-203-21 $366,415 $11,598.35 31.6 227 059-203-03 $626,948 $9,156.59 68.5 228 059-203-26 $630,218 $0.00 0.0 TOTAL PARCELS IN DISTRICT: $160,910,548 $3,813,415.42 42.00 to 1 TOTAL PARCELS WITH $146,082,852 $3,813,415.42 34.30 to 1 ASSESSMENTS TO BOND: APPENDIX C TOWN GENERAL ECONOMIC AND DEMOGRAPHIC INFORMATION The following information is included for general background purposes only and is provided solely to give prospective investors an overview of the structure and general economic condition of the Town of Tiburon. The Tiburon Peninsula Location - 18 miles north of San Francisco via the Golden Gate Bridge, Highway 101 and Tiburon Blvd.; or 6 miles north across the Bay by ferry boat. Area ~ Tiburon contains 14.5 square miles consisting of 10.2 square miles of water, 3.3 miles of land and 1 square mile of Angel Island. Population - Total Population (2000) Total Housing Units Tiburon 8,666 3,893 Housing - For calendar year 2000, the average price of a home in Tiburon for single-family homes was $1,610,295; for condominiums the average price was $790,669. Rental subsidies are available for qualified persons with low or moderate income at Hilarita Apartments. Assessed Valuation (secured)- For 2000-2001 Tiburon $1,988,407,508 Climate -- (Marin county) The annual average temperature is 60 degrees with colder winter days ranging in the 40's, summer months range upwards of 70 degrees. Rain usually begins in mid- November and mild storms are spasmodic until late May. Average annual rainfall is about 29 inches. Public Utilities - Pacific Gas & Electric, Marin Municipal Water District, Mill Valley Refuse Company, Pacific Bell and Tiburon Sanitary #5 and Richardson Bay Sanitary Districts.. History - Tiburon, incorporated in 1964, acquired its name from the Spanish Punta de Tiburon (Shark Point). Today's community evolved from a waterfront settlement created in 1884 when a branch line of the San Francisco and North Pacific Railroad connected from Tiburon to San Francisco via ferry boat. The big ferry boats lasted until 1909, followed by a small shuttle boat via Sausalito until 1934. In 1962 ferry service to and from San Francisco was restored. Historical Places to Visit include: China Cabin; Lyford Tower, Paradise Drive; Old St. Hilary Historic Preserve; and Lyford House, Richardson Bay Wildlife Sanctuary. Recreation - Angel Island State Park, Belvedere Park, Paradise Beach Park, Tiburon Uplands Nature Preserve, Bicycling, Jogging and Roller Skating path, Sailing, Fishing, Wildlife Sanctuary, Nature Walks and Films. The Belvedere- Tiburon Joint Recreation Committee sponsors Adult/Youth leisure programs and activities throughout the year such as pre-school activities, youth and adult sports, specialty classes, summer recreation/academic enrichment programs and Youth Trips. Tennis - Private clubs include: Belvedere Tennis Club, Tiburon Blvd. Tiburon; Tiburon Peninsula Club, 1600 Mar West, Tiburon; Harbor Point Beach Club, 475 E. Strawberry Dr., Mill Valley; and Strawberry Recreation Center, 118 E. Strawberry Dr., Mill Valley. Del Mar, Lagoon & Point Tiburon are Public tennis courts. Restaurants - The Caprice, Dynasty, Farallone Cafe, Guaymas, Rooney's, Sam's Anchor Cafe, Servino's" Sweden House Bakery, Tiburon Lodge. Financial Institutions - Bank of America, Washington Mutual, and Wells Fargo Bank. Shopping: - Major shopping areas on the Tiburon Peninsula are Ark Row, The Boardwalk, The Cove Shopping Center, Main Street, Strawberry Town & Country Village and Tiburon Blvd. Transportation - Tiburon Ferry Service, Angel Island Ferry Service, Golden Gate Transit Bus Service. Commute - 30 minutes to the Ferry Building, San Francisco via automobile during non-commute hours; 40 minutes during the morning commute hours. Golden Gate Transit buses to downtown 55 minutes. Red & White Ferry from Tiburon to Ferry Building 20 minutes. An estimated 59% of the Belvedere/Tiburon working population commutes to San Francisco. Education/Schools - Reed Union School District includes: Bel Air School, Karen Way; Del Mar School, A venida Mira Flores; and Reed School, 1199 Tiburon Blvd. Nursery Schools include: Belvedere/Hawthorne Nursery School, Cove Rd., Belvedere; Hawthorne Nursery School, Rock Hill Dr.; Little Lambs Nursery School, Shepherd Way off Trestle Glen; and Strawberry preschool, Tiburon Blvd. Marin Community College District includes: College of Marin, Kentfield; and Indian Valley College, Novato. Library ~Belvedere-Tiburon Library, Tiburon Blvd. Newspaper - The Ark (Weekly), 1550 Tiburon Blvd. Child Care Centers - Belvedere- Tiburon Child Care and Strawberry Recreation Day Care. Churches - Community Congregational Church, First Church of Christ - Scientist, Tiburon Baptist Church, St. Hilary's Roman Catholic Church, St. Stephen's Episcopal Church, Shepherd of the Hills Lutheran Church, and Westminster Presbyterian Church. Police - Tiburon: Police Chief, 4 Lt. sergeants, 6 patrolmen, 8 trainees, 2 Community Service Officers and 3 reserve officers, I clerk, 1 secretary. Senior Citizens - Meet twice monthly the second and forth Tuesday of every month at 11 :30 a.m. at the Strawberry Recreation Center. APPENDIX D CONTINUING DISCLOSURE CERTIFICATE TOWN OF TIBURON Lyford Cove Utility Undergrounding Assessment District This Continuing Disclosure Certificate (the "Disclosure Certificate") is executed and delivered by the Town of Tiburon (the "Issuer") in connection with the issuance of its $4,000,000*, Limited Obligation Improvement Bonds, Town of Tiburon, Lyford Cove Utility Undergrounding Assessment District, dated , 2005 (the "Bonds"). The Bonds are being issued under Resolution No. , adopted by the Town Council of the Issuer on February 2, 2005 (the "Bond Documents"). The Issuer covenants and agrees as follows: Section 1. Purpose This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-12(b )(5). Section 2. Definitions. In addition to the definitions set forth in the Bond Documents, which apply to any capitalized term used herein unless otherwise defined in this Section, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 hereof. "Assessment District" means the Town of Tiburon, Lyford Cove Utility Undergrounding Assessment District "Dissemination Agent' shall mean the Issuer, or any successor Dissemination Agent designated in writing by the Issuer and which has filed with the Issuer a written acceptance of such designation. The initial Dissemination Agent shall be the Issuer. "Listed Events" shall mean any of the events listed III Section 5(a) of this Disclosure Certi ficate. "National Repository" means any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. Information on the National Repositories as of a particular date is available on the Securities and Exchange Commission's Internet site at www.sec.gov. "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Reporting Date" means March 3 I, of every year commencing , commencing with the report for the 2005/06 Fiscal Year, which is the date each year that the Annual Report shall be made. "Repository" shall mean each National Repository and each State Repository, if any. "Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. "State Repository" shall mean any public or private repository or entity designated by th e State of California as a state repository for the purpose of the Rule and recognized by the Securities and Exchange Commission. As of the date hereof, there is no State Repository. Section 3. Provision of Annual Reports. (a) The Issuer shall, or shall cause the Dissemination Agent, not later than the Reporting Date, to provide to each Repository, an Annual Report which is consistent with the requirements of Section 4 hereof. Not later than fifteen (15) Business Days prior to the Reporting Date, the Issuer shall provide the Annual Report to the Dissemination Agent (if other than the Issuer). The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 hereof; provided that the audited financial statements of the Issuer may be submitted separately from the balance of the Annual Report, and later than the Reporting Date required above for the filing of the Annual Report if not available by that date. (b) If the Issuer is unable to provide to the Repositories an Annual Report by the Reporting Date, the Issuer shall send a notice to the Municipal Securities Rulemaking Board in substantially the form attached as Exhibit A. (c) The Dissemination Agent shall: (i) determine each year prior to the Reporting Date the name and address of each National Repository, and each State Repository, if any; and (ii) if the Dissemination Agent is other than the Issuer, file a report with the Issuer certifying that the Annual Report has been provided as required hereby, stating the date it was provided and listing all the Repositories to which it was provided. Section 4. Content of Annual Reports. The Issuer's Annual Report shall contain or incorporate by reference the most recent audited financial statements of the City and the following information regarding the Assessment District: (a) Principal amount of Bonds outstanding; (b) Balances in the Redemption Fund and the Reserve Fund and the amount of the Reserve Requirement; (c) Total assessed value (per County Assessor records) of all parcels currently subject to assessment and overall value-to-lien ratio; and (d) In the event that the total delinquencies within the Assessment exceed 5% of the assessment for the previous year, delinquency information, including list of ail parcels delinquent in payment of assessments, amounts of delinquencies, length of delinquency and status of foreclosure for each parcel listed. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Issuer shall clearly identify each such other document so included by reference. Section 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: ( I) (2) (3 ) (4) (5) (6) security. (7) (8) (9) (10) ( II ) Principal and interest payment delinquencies. Non-payment related defaults. Unscheduled draws on debt service reserves reflecting financial difficulties. Unscheduled draws on credit enhancements reflecting financial difficulties. Substitution of credit or liquidity providers, or their failure to perform. Adverse tax opinions or events affecting the tax-exempt status of the Modifications to rights of security holders. Bond calls. Defeasances. Release, substitution, or sale of property securing repayment of the securities. Rating changes. (b) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, the Issuer shall as soon as possible determine if such event would be material under applicable Federal Securities law. (c) If the Issuer determines that knowledge of the occurrence of a Listed Event would be material under applicable Federal securities law, the Issuer shall promptly file a notice of such occurrence with the Municipal Securities Rulemaking Board and each State Repository. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and (9) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to owners or holders of affected Bonds pursuant to the Bond Documents. Section 6. Termination of Reporting Obligation. The Issuer's obligations hereunder shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations hereunder, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. Section 8. Amendment; Waiver. Notwithstanding any other provIsIon hereof, the Issuer may provide for the amendment or waiver of any provision hereof provided that the following conditions are satisfied: (a) the amendment or waiver, if it relates to annual or event information to be provided, is made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of the Issuer, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver (i) is approved by owners of the Bonds in the manner provided in the Bond Documents for amendments thereto with the consent of bondowners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of bondowners. Section 9. Additional Information. Nothing herein shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth herein or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required hereunder. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required hereby, the Issuer shall have no obligation hereunder to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event. Section 10. Default. In the event of a failure of the Issuer to comply with any provIsIon hereof any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations hereunder. A default hereunder shall not be deemed an event of default under the Bond Documents, and the sole remedy hereunder in the event of any failure of the Issuer to comply herewith shall be an action to compel performance. Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth herein, and the Issuer agrees to indemnifY and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. Section 12. Beneficiaries. The provisions hereof shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriters and holders and beneficial owners, from time to time, of the Bonds, and shall create no rights in any other person or entity. Date: TOWN OF TIBURON By EXHIBIT A NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Town of Tiburon. Name of Bond Issue: $ *, Limited Obligation Improvement Bonds, Town of Tiburon, Lyford Cove Utility Undergrounding Assessment District. Date of Issue: NOTICE IS HEREBY GIVEN that the above Issuer has not provided an Annual Report with respect to the above-named Bonds as required by the Bond Documents. The Issuer anticipates that the Annual Report will be filed by- Dated: , 200 TOWN OF TIBURON By: Title: APPENDIX E FORM OF BOND COUNSEL OPINION ______, 2005 The Honorable Town COlIDcil Town of Tiburon 1505 Tiburon Blvd. Tiburon, California 94920 OPINION: $ 4,000,000* Limited Obligation Improvement, Town of Tiburon, Lyford Cove Utility Under grounding Assessment District Members of the Council: We have acted as bond counsel in connection with the issuance by the Town of T:buron (the "Town") of its $4,000,000* Limited Obligation Improvement Bonds, Town of Tiburon, Lyford Cove Utility Undergrounding Assessment District, dated , 2005 (the "Bonds"), pursuant to the Improvement Bond Law of 1915, Division 10 of the California Streets and Highways Code, (the "Bond Law") and Resolution No. of the Town adopted February 2, 2005 (the "Resolution"). We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion. As to questions of fact material to our OpinIOn, we have relied upon representations of the Town contained in the Resolution and in the certified proceedings and certifications of public officials and others furnished to us, without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The Town is duly created and validly existing as a municipal corporation and general law town with the power to adopt the Resolution and to perform the agreements on its part contained therein and to issue the Bonds. 2. The Resolution has been duly adopted by the Town Council and constitutes a valid and binding obligation of the Town enforceable upon the Town. 3. Pursuant to the Bond Law, the Resolution creates a valid lien on the funds pledged by the Resolution for the security of the Bonds, subject to no prior lien granted under the Bond Law. 4. The Bonds have been duly authorized, executed and delivered by the Town and are valid and binding limited obligations of the Town, payable solely from the sources provided therefor in the Resolution. 5. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, that, for the purpose 0 f computing the alternative minimum tax imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in determining certain income and earnings. The Bonds are "qualified tax exempt obligations" within the meaning of section 265(b)(3) of the Internal Revenue Code of 1986 (the "Tax Code"), and, in the case of certain financial institutions (within the meaning of section 265(b)(5) of the Tax Code), a deduction is allowed for 80 percent of that portion of such financial institutions' interest expense allocable to interest payable on the Bonds. The opinions set forth in the preceding sentences are subject to the condition that the Town comply with all requirements of the Tax Code that must be satisfied subsequent to the issuance of the Bonds in order that such interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Town has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds. We express no opinion regarding other federal tax consequences arising with respect to the Bonds. 6. The interest on the Bonds is exempt from personal income taxation imposed by the State of California. The rights of the owners of the Bonds and the enforceability of the Bonds and the Resolution may be subject to bankruptcy, insolvency reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and also may be subject to the exercise of judicial discretion in appropriate cases. Respectfully submitted, A Professional Law Corporation * preliminary, subject to change WULFF, HANSEN & CO. Established 1931 iNVESTMENT BANKERS 351 California Street, Suite 1000 San Francisco, CA 94104 (415) 421-8900 Town of Tiburon MEMORANDUM TO: Alex Mcintyre, Town Manager Pat Echols, Director of Public Worksl Town Engineer FROM: SUBJECT: Comments Regarding Fountain Art Project Submittals DATE: January 31, 2005 Deputy Director Tony lacopi and I have reviewed the mock-ups of the three Fountain Plaza Art Project submittals and have the following observations/comments regarding potential maintenance and safety issues. Cominri About The proposed kinetic sails design utilizes stainless steel components so corrosion should not be an issue. It is not clear how vandal-proof the sails themselves would be. The weight of each sail is transferred to a small diameter stainless steel tube which is mounted as a sleeve on a pivot base. The strength of this connection must be adequate to accommodate wind and other live loads. It is unclear what friction effects might have on the sleeve/pivot base interface over time. All other mechanical components (pumps, filters, electrical, etc.) would be contained in a nearby utility vault. The exposure of the lower basin to the adjacent plaza grade is a concern as a potential trip/fall hazard and as a path for Iitter/ debris to enter the lower basin. Subsequent communications with the designer indicate that there would be a grate just below the water surface and that th~re would be a slightly raised curb to reduce debris accumulation. If selected, we should consult with the designer regarding these details. To further reduce maintenance needs, the designer should consider the use of fiber optic lighting if feasible. Finally, the concave shape of the main bench may pose an attraction to skateboarders. This may be mitigated by incorporating some kind of raised/textured feature(s) along the front edge of the bench to discourage use by skateboarders. TOWN COUNCIL LATE MAIL # ~ MEETING DA.TE X -) -i)S- Page 1 of 2 Town of Tiburon MEMORANDUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tiburon Time The 'pole' element in this design may pose an attractive nuisance and safety hazard for those who might be tempted to climb on or swing from it. L.C. Shank's Shark Bowl The raised 'bowl' of this design may be an attraction to youths wishing to climb into it. We appreciate the incorporation of fiber optic lighting would require far less maintenance effort compared to conventional underwater lighting, which would normally require draining the fountain. Town Construction Responsibilities It is 0 ur understanding that t he Town will a rrange for electrical, water, sewer and storm drain utilities for the project. We.a nticipate that such work will take several months (pending PG&E's response time) to complete. Such work will necessitate partial removal and replacement of the existing brick surfacing. The Town will also need to consult with the Post Office regarding relocation of existing mailboxes in the plaza. We further understand t hat the designers will be responsible for t he actual construction of the fountain project. We recommend that the Town require an encroachment permit for the work and that a sufficient warranty is provided to the Town for proper performance of the finished work. Page 2 of 2 Town of Tiburon STAFF REPORT AGENDA ITEM s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FROM: Mayor and Members of the Town Council Alex D. Mcintyre, Town Manager ~ TO: SUBJECT: Fountain Project Selection MEETING DATE: February 2, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . On January 2,2005, the Town Council heard presentations by three artists who were selected as finalists in the competition to install a fountain in the plaza at the corner of Tiburon Boulevard and Main Street. The models of the artists'submittals have been on display in the Council Chambers since then. The public was encouraged to visit the chambers and to offer their opinions/comments/ observations on the various pieces. While all three pieces met with tremendous public support, on Friday, January 28, 2005, the Fountain Plaza sub-committee met and nominated Jeffrey Reed and Jennifer Madden's piece "Coming About" for Council consideration. Prior to the hearing before the Town Council, the Town Engineer will submit his comments relating to the maintenance and operation of each submittal. This is meant to suggest conditions that the Town Council might choose to suggest mitigating any of these concerns to the finalist prior to commissioning any piece. Once selected, the Town Council will commission the final project once sufficient funds have been raised. Recommendation It is recommended that the Town Council hold a public hearing on the fountain plaza project and select a final project. Town of Tiburon STAFF REPORT AGENDA ITEM b . l ~.~;~~i: 0, _ , J....:.......... -"'---__.'-'---; ..... ~~:-'j ... . ~ -~.... -"'----'-:::; · \",~ ?~J ~\~'-'~"C\ ('.......-::~~_/...., .'~. I . '; .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .' .. .. .. .' .. .-. .' .. .. .' It TO: Mayor and Members of the Town Council FROM: Alex D. Mcintyre, Town Manager SUBJECT: Proposed Taxicab Ordinance MEETING DATE: February 2, 2005 .......................................... Background Government Code Section 53075.5, adopted in 1998, creates a duty for each City, Town and County to regulate taxicab operations within its jurisdiction. This section, in relevant part, requires the Town to adopt an ordinance (Exhibit A) or resolution regarding taxicab transportation that includes the following items: 1. A policy for regulating ta)(icabs services that includes the following provisions: a. A requirement that an offer of employment be conditioned upon an acceptable drug test; b. That the driver's permit will beco~e void upon termination of employment; c. The driver's permit will state the name of the employer; d. The employer will be required to notify the Town upon termination of employment; and e. The driver shall return the permit to the Town upon termination of employment. 2. A process for the establishment or registration of fees for the provisions of taxicabs services. We have the authority to set or just accept (Le., register) fees set by the companies. 3. A mandatory controlled substance and alcohol testing certification program. Proposed Program As proposed, the program will be managed by the Marin Streetlight Acquisition Joint Powers Authority (and the successor General Services Agency if that new JPA is established). Each member (City, Town and the County) must adopt the same ordinance that establishes the statutory framework for uniform taxicab regulation and delegates program administration to the JPA. The Marin Streetlight Acquisition Joint Powers Authority will then adopt the regulations, which are the specific program requirements. This provides for a more effective mechanism to amend the regulatory program, which does not require every CitylTown and the County to amend its ordinance. Town of Tiburon STAFF REPORT ................................................ The proposed ordinance requires the following: (1) a company permit conditioned on the company having a drug and alcohol policy that complies with state law; (2) insurance that names the JPA member as an additionally insured; (3) an indemnification agreement; (4) a driver's permit that includes a valid driver's license; (5) compliance with the controller substance testing program; (6) a background check performed by the Sheriff's office; and (7) a vehicle permit, which includes a vehicle license, periodic safety inspection, and clean and sanitary conditions in the vehicle. The program requires the posting of fares but does not regular them. The JPA has the ability to enforce the requirements of the Program through an administrative process. Each member entity will be responsible for ensuring that only authorized companies and drivers utilizing permitted vehicles operate within that entity's jurisdictional boundaries. In addition, each jurisdiction has the ability to require the taxi cab companies to obtain a business license and pay the requisite fee in accordance with the jurisdictions applicable regulations. The Marin Streetlight Acquisition Joint Powers Authority has agreed to fund the startup costs. Ongoing program administration will be funded by the fees levied on the company, drivers and vehicles. Initially, the fees are as follows: Company $250 (every 5 years) Driver $100 (every 5 years) Vehicle $100 (every 5 years) The Marin Streetlight Acquisition Joint Powers Authority created a Taxicab Working Group (two Board members and the Executive Officer) who meet with representatives of the cab companies. (Two of five companies were involved). This group is in agreement with the terms of the regulatory program. The first step in the establishment of the taxicab regulation program is to have the Marin Streetlight Acquisition Joint Powers Authority member agencies consider whether or not the JPA should be authorized to take on the proposed taxicab regulation program as a "special project." As set forth in Section 1, paragraph 3 of the Streetlight Agreement"... the separate entity may consider and initiate other special projects as determined appropriate by a majority of the member agencies." The "member agencies" are the County of Marin, Marinwood Community Services District, Bel Marin Keys Community Services District, City of Belvedere, Town of Fairfax, City of Mill Valley, City of San Rafael, Town of Tiburon, City of Novato, City of Larkspur, Town of San Anselmo, City of Sausalito and Town of Corte Madera. Once a majority of the JPA members approve adding the proposed taxicab regulation program as a "special project" (and adopt the taxicab ordinance), the JPA Board could adopt the proposed taxicab regulations. January 28, 2005 page 2 of 3 Town of Tiburon STAFF REPORT ...... ....... ..................................oO.................. ... Recommendation It is recommended that the Town Council waive first reading and read by title only an ordinance of the Town of Tiburon repealing the existing Chapter 11 of the Tiburon Municipal Code and adding a new Chapter 11 Regulating taxicab operations. Exhibit A - Draft Ordinance January 28. 200~ page 3 of 3 ~ '"' ,. ORDINANCE NO. 487 N.S. AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF TIBURON REPEALING THE EXISTING CHAPTER 11 OF TITLE III OF THE TOWN CODE AND ADDING A NEW CHAPTER 11 OF TITLE III REGULATING TAXICAB OPERATION 4. T Authority (the" n 5307~.:5 requires that inSt~~le,~t a minim a.fi~n ~ervices; (ii) th ontrolled substance and . es that every city or an ordinance or Recitals 1. California Government Code Section 53 county spall protect the public health, safety, and "'}i~~'~:ey adop resolution in regard to taxicab transportation se 'oes;and" 2. California Government Code established in regard to taxicab transportation ser for entry into the business of providing taxicab tran establishment or registration of ratls' d (iii) a manda alcohol testing certification program; regulates the '~treet1ight Acquisition Joint Powers ram (t rogram") in order to provide for the hout the unincorporated areas of the County of icipating in the JP A in accordance with all of the 6. and adopt a new compliance with the ncil desires to repeal Chapter 11 of the Code in its entirety require that all taxicabs operated in the Town are in adopted by and operated by the JP A. NOW THEREFORE, THE COUNCIL OF THE TOWN OF TIBURON HEREBY ORDAINS AS FOLLOWS: SECTION 1. Chapter 11 of Title III of the Tiburon Municipal Code is hereby repealed in its entirety, provided however, that this repeal shall not effect or prevent the prosecution or punishment of any person for any act done or omitted in violation of said chapter prior to the effective date of this ordinance. Town of Tiburon Ordinance No. 487 N.S. 1 Adopted on xx/xx/OS SECTION 2. A new Chapter 11 of Title III is hereby added to the Tiburon Municipal Code to read as follows: "Chapter 11, Taxicabs" Section 11-1 Definitions. "JP A" means the entity. ,ithout limitation, t, corporation, For the purpose of this chapter, the words and phrases defined' construed in accordance with the following definitions. "Town" means the Town of Tiburon. "Company" means any entity operating a Taxica a natural person, firm, association, organizatio or public entity. . "Company Permit" means a valid permit issued by t operate a Taxicab business. "Driver" means a person who drives 0 "Driver's Permit" mean control the moveme , and either solicit or pick up passengers for treet ght Acquisition Joint Powers Authority Taxicab d administered by the JP A. "Taxicab" means passengers for hire, driver. icle regularly engaged in the business of carrying ed for carrying not more than eight persons, excluding the "Vehicle Permit" means a valid permit issued by the JP A authorizing a particular vehicle to be operated as a Taxicab. Section 11-2 Compliance with Program. Town of Tiburon Ordinance No. 487 N.S. 2 Adopted on xx/xx/OS , , No Driver or Company shall operate or cause the operation of a Taxicab in the Town unless such operation complies with the terms and requirements of the Program, which shall be adopted by separate resolution ofthe Town. Section 11-3. Driver's Permit Required. A person shall only operate a Taxicab in the Town ifthat person possesses a Driver's Permit. A Company shall only allow a Driver to operate a Taxicab ifthat Driver possesses a Driver's Permit. Section 11-6 Application for Per Application for a Driver's Permit, Ve to the JP A, upon a form provided by tfi d:; fee sufficient to cover the administrative'+cos established by the lP A. fee schedule<est separate resolution . Council. ermit and/orfupany Permit shall be made d shall be ace ied by an application pplication as shall be adopted by Section 11-4 Taxicab Vehicle Permit Required. A Driver shall only operate a Taxicab in the Town if Permit. A Company shall only allow a Taxicab to be 0 if that vehicle displays a Vehicle Permit. Section 11-5 Company Permit Required. A Company shall only operate a Taxicab b a Company Permit. lIed Substan ,,~~.~nd Alcohol. lIed substailWe~ and alcohol as required by the Sec shall carry with himlher at all times proof of Section 11-9 EqUl '1:::;:~ A Taxicab operated u~~. the authority of this chapter shall be equipped according to the standards established.,J5y the lP A. Section 11-10 Mechanical Condition. A Taxicab operated under the authority of this chapter shall be maintained according to the standards established by the lP A. Section 11-11 Operational Requirements. A. A Driver shall only carry a passenger to his/her destination by the most direct and accessible route. Town of Tiburon Ordinance No. 487 N.S. 3 Adopted on xx/xx/OS -, , B. A Taxicab shall have all permits issued by the JP A conspicuously displayed according to the standards established by the JP A. C. A Taxicab shall have the following information continuously posted in a prominent location in the Taxicab passenger compartment according to the standards established by the JP A. 1. A schedule of rates and charges for the hire of said Taxicab; 2. The Company's name, address and telephone number; 3. The Company Permit; 4. The Taxicab identification number; 5. The Driver's Permit issued by the JP A; and 6. The Vehicle Permit issued by the JP A. D. A Driver shall give a receipt for the amount charge paying the fare. E. A Taxicab shall only be operated if the passen c !llpartm and sanitary condition free from offensive odors' ccordance with established by the JP A. F. The name or trade name of the Compan conspicuously on the outside of each Taxicab ace the JP A. the business licensing ompany and/or Driver o the extent required Section 11-13 Enfo Penalty Pr The Town intends to sec ce with th visions of this chapter by any of the followi~f?;z~t~iiif"t para ds. Each method set forth herein is not inte~~\e,ai'to be m xcl doe prevent concurrent or consecutive metl:1' eing used t liance against continuing violations nor does it preven' ization of an ent mechanisms and/or penalties available by law. EacH. a violation e,..ts co tutes a separate offense. Notwithstan yother "'vision ofthis chapter, each violation of the provisions of this chapter ma nforc ltematively as follows: A. Infraction. A or entity including without limitation a Driver or Company violating any of the it"?,, lOns or failing to comply with any of the mandatory . requirements of this cllapter may be prosecuted for an infraction. Written citations for infractions may be issued by police officers or nonsafety employees designated by the Town by separate resolution. Any person convicted of an infraction under the provisions of this chapter shall be punished by: 1. A fine not exceeding one hundred dollars for a first violation; 2. A fine not exceeding two hundred dollars for a second violation within one year; 3. A fine not exceeding five hundred dollars for each additional violation within one year. Town of Tiburon Ordinance No. 487 N.S. 4 Adopted on xx/xx/05 ", I B. Misdemeanor. Any person or entity including without limitation a Driver or Company violating any of the provisions or failing to comply with any of the mandatory requirements of this chapter may be prosecuted for a misdemeanor. Written citations for misdemeanors may be issued by police officers or by nonsafety employees designated by the Town by separate resolution. Any person convicted of a misdemeanor under the provisions of this chapter shall be punished by a fine not exceeding one thousand dollars or by imprisonment for a term not exceeding six months, or by both such fine and imprisonment. C. Civil Action. The Town Attorney by and at the request of the Town Council, may institute an action in any court of competent jurisdiction to resl~~l!'henjoin or abate the condition(s) found to be in violation of the provisions ofthihapter;as provided by law. SECTION 3. Severability. This ordinance and the declared to be severable. Should any section of thO ordinance as a whole, or any portion thereo unconstitutional or invalid. SECTION 4. Effective Date. the date of its adoption. SECTION 5. Publication. This Ordi days after its passage and adoption in a n Tiburon. within fifteen (15) ation in the Town of introduced at a regular meeting of the , 2005, and was adopted at a regular day of MILES BERGER, MAYOR ATTEST: DIANE CRANE IACOPI, TOWN CLERK Town ofTiburon Ordinance No. 487 N.S. 5 Adopted on xx/xx/OS