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Home My WebLink AboutTC Agd Pkt 2005-07-13 ;t1,-4fr~ cot; TOWN OF TIBURON Town Council Chambers 1505 Tiburon Boulevard Tiburon, CA 94920 July 13, 2005 . 6:00 P.M. - Special Meeting ASSISTANCE FOR PEOPLE WITH DISABILITIES Incompliance 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 Copiesof all agenda reports and supporting Clata 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 July 13, 2005 Page 2 of 2 AGENDA CALL TO ORDER AND ROLL CALL Councilmember Fredericks, Councilmember Gram, Councilmember Slavitz, Vice Mayor Smith, Mayor Berger ANNOUNCEMENT OF ACTION TAKEN IN CLOSED SESSION. IF ANY 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 and/or placed on a future Town Council meeting agenda. Please limit your comments to no more than three (3) minutes. REGULAR AGENDA 1. Approval of Town Council Minutes - June 29, 2005 2. Recommendation by Town Manager - Authorize Sale of Bonds - Del Mar Valley Underground Utilities Assessment District - continued from June 29, 2005' a) A Resolution of the Town Council of the Town of Tiburon Authorizing Issuance of Limited Obligation Improvement Bonds And Directing Related Actions COUNCIL AND COMMITTEE REPORTS ADJOURNMENT - to July 20,2005 RegularMeeting FUTURE AGENDA ITEMS - Note: These items are tentative until they appear on the final aaenda . Response to Marin County Grand Jury Report - July 20 . Cypress Hollow Landscaping & Lighting District Rate Increase - July 20 . Lyford Cove Utility Undergrounding Assessment District Award of Contract - July 20 . Funding Agreement for Downtown Plaza Fountain- July 20 . Commission Agreement for Downtown Plaza Fountain - July 20 . Tiburon Glen Precise Development Plan . Risk Management Presentation Q,l ... Z Q. ~ ", '?! ::: (:.~ . .... ~ · 1"eaC'(t. REED UNION SCHOOL DISTRICT 277-AKarenWay. Tiburon,CA94920. tel: 415.381.1112 · fax: 415.384.0890 July 12,2005 RECEIVED JUL 1 32005 Board of Trustees Merrill Boyce Teri Jacks Grace Livingston Vickie Mavromihalis Robert Weisberg Christine M. Carter Superintendent John C. Frick Business Manager TOWN MANAGERS OFFICE TOWN OF TIBURON Mr. Alex McIntyre, Town Manager Town of Tiburon 1505 Tiburon Boulevard Tiburon, CA 94920 Re: Settlement Proposal '~tJAI C()vttlC!Z LATE MAIL # :2 _ -;;J-!3-PS- Dear Mr. McIntyre: The Board of Trustees has authorized me to offer the following settlement proposal to the Tiburon Town Council regarding the disagreement over payment of the Del Mar Undergrounding Utilities Assessment District. The Board is prepared to pay the $125,350 Del Mar undergrounding assessment and necessary hookup costs. In consideration for the payment by the Board, the Town of Tiburon agrees to perform the Lyford Sidewalk Project, the terms of which are as follows: . The Town of Tiburon will install a sidewalk from Round Hill to Kleinert Way and from Kleinert Way to the Reed School drop off on Lyford Drive. . The Town of Tiburon will complete necessary street repair on Lyford Drive due to damage from tree roots at Reed School. . The Town of Tiburon shall be responsible for all costs associated with the Lyford Sidewalk Project. Once a letter is received from you with assurances that the Council has agreed to the Lyford Sidewalk Project proposal terms, as outlined in this letter, John Frick, Business Manager for the Reed Union School District, will authorize a check to be issued from the Marin County Office of Education for $125,350, payable to the Town of Tiburon. - As further consideration for the Lyford Sidewalk proposal, both the Town and the District will release all claims with respect to the validity of the Del Mar Valley Undergrounding Utilities District No. 2005-01 and the assessment imposed by the Town upon the District. Mr. Alex McIntyre July 12, 2005 Page 2 We. are hopeful that this will resolve our differences regarding the Del Mar undergfounding issue. 1 believe it is a productive solution for both the District and the Town. The Town will provide an additional drop off area for our students on Lyford Drive that will contribute to a safer environment for the students and improve the flow of traffic on busy school days. The community will also benefit with an additional sidewalk on Lyford Drive. And the Del Mar Homeowners will have their much needed undergrounding project installed. It should be noted that the Lyford Sidewalk Project was previously identified as an item to be accomplished in the Traffic Report completed a few years'ago. I look forward to your response and hope that the bonds will be sold on Wednesday evening. Sincerely, b~~~ Christine M. Carter Superintendent REED UNION SCHOOL DISTRICT CMC/sn Cc:' Board of Trustees \ .') Ik~ /()o. I TOWN COUNCIL MINUTES CALL TO ORDER Mayor Berge ed the autJl d meeting ofthe Tiburon Town Council to order at 7:30 p.m. on Wednesd y, June 29, 2005 ~;in own Council Chambers, 1505 Tiburon Boulevard, Tiburon, California. ROLLCALL PRESENT: COUNCILMEMBERS: Berger, Fredericks, Gram, Slavitz, Smith PRESENT: EX OFFICIO: Town Manager McIntyre, Town Attorney Danforth, Director of Public Works/Town Engineer Echols, Chief of Police Odetto, Director of Administrative . Services Bigall, Planning Manager Watrous, Administrative & Financial Analyst Stott, Town Clerk Crane Iacopi Prior to the beginning of the Council meeting, beginning at 6:15 p.m., the Council met in closed session to discuss the following items: CLOSED SESSION CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION (Section 54956.9(a)) Zimmerman v. Morphew et al Bonander & Mulberg v. Town ofTiburon , CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION (Section 54956.9(b)) Threat of litigation received from Reed Union School District CONFERENCE WITH LABOR NEGOTIATOR (Section 54957.6) Bargaining Unit: Negotiator: MAPE Town,Manager and Administrative Services Director Town Council Minutes # 15-2005 June 29, 2005 Page 1 ANNOUNCEMENT OFACTION TAKEN IN CLOSED SESSION. IF ANY Mayor Berger said that no specific action was taken by Council on the litigation matters; he said that direction was given to the labor negotiators. ORAL COMMUNICATIONS Mayor Berger announced that the Economic Exception Ordinance (Item No. 11) would be continued to a future meeting. The Mayor also said that adoption of the Municipal Budget (Item No.7) would be taken out of order and would be heard at the end ofthe agenda. .CONSENT CALENDAR 1. Approval of Town Council Minutes - June 15,2005 2. Re~ommendation by Director of Administrative Service - Accept Investment Summary- May 2005 3. Recommendation by Director of Administrative Services - Authorize Town Manager to Negotiate Sale of Town-Owned Real Estate at 32 Marsh Road a) A Resolution of the Town Council of the Town of Tiburon Authorizing the Town Manager to Execute Documents Related to the Sale of 32 Marsh Road, Tiburon, California and the Conveyance of the Property 4. Recommendation by Director of Public Works/Town Engineer - Authorize Execution of Cooperative Funding Agreement with CallTRANS and County of Marin for Highway 101-East Blithedale/Tiburon Boulevard Interchange Safety Improvements a) A Resolution ofthe Town Council ofthe Town of Tiburon Authorizing the Town Manager to Execute a Contribution Agreement with the State of California Department of Transportation' To Initiate Construction of, and Cost Sharing Agreement for, Safety Improvements to the U.S. Highway 101 Southbound Offramp to East Blithedale A venue/Tiburon Boulevard, and Appropriating Funds Therefor 5. Recommendation by Assistant Planner - Application for Irrigation Well Permit Address: 35 Old Landing Road Applicant: Kurcher Assessor Parcel No. 038-162-44 Town Council Minutes # 15-2005 June 29, 2005 Page 2 6. Recommendation by Town Clerk - Reappointment of Allan Bortel to Marin Commission on Aging MOTION: Moved: Vote: To adopt Consent Calendar Item Nos. 1 through 6, as written. Fredericks, seconded by Slavitz AYES: Unanimous ABSTAIN: Smith, June 15, 2005 Minutes REGULAR AGENDA 7. Recommendation by Town Manager - Adoption ofFY 2005-06 Municipal Budget and Related Resolutions a) A Resolution of the Town Council ofthe Town of Tiburon ,Adopting a Municipal Budget for the Town of Tiburon and the Tiburon Redevelopment Agency for the Fiscal Year Ending June 30, 2006 b) A Resolution of the Town Council of the Town of Tiburon Repealing Resolution No. 24'-2003 and Adopting an Amended Management Recognition and Incentive Compensation Program c) A Resolution of the Town Council ofthe Town of Tiburon Repealing Resolution No. 25-2003 and Adopting an Amended Mid-Management, Professional & Confidential Employees Recognition and Incentive Compensation Program d) A Resolution of the Town Council of the Town or Tiburon Establishing an Appropriations LImit for the Fiscal Year 2005-2006 Pursuant to Article XIII B ofthe Constitution of the State of Cali fomi a (Gann Limit) [Item heard at end of agenda) 8. Recommendation by Town Manager - Authorize Sale of Bonds - Del Mar Valley Underground Utilities Assessment District a) A Resolution of the Town Council of the Town of Tiburon Authorizing Issuance of Limited Obligation Improvement Bonds Town Manager McIntyre said that pursuant to discussion in closed session, the Council would defer taking action on the issuance of the bonds this evening for two reasons: Town Council Minutes # 15-2005 June 29, 2005 Page 3 1) the need to raise funds for the defense of a lawsuit filed against the district (by the Mulbergs and the Bonanders); . 2) the desire to reach a successful conclusion to negotiations with the Reed Union School District to avoid creating an adverse impact on the district, as well as additional litigation. Bond Counsel Steve Casaleggio explained the latter. He said that the [Del Mar] school property, along with 22 other parcels of private land, formed the entryway to the district, and were served by one set of power lines. According to the laws governing the formation of such districts, Mr. Casaleggio said that the benefits conferred by removal of the lines pertained to both sides of the street and that if the school property were excluded from the district, the 22 other property owners would also have to be excluded. Councilmember Gram said that, in other words, there was "no way" to take down the power lines, leave in the 22 property owners arid exclude the school? Mr. Casaleggio said that his statement was correct. Mayor Berger opened the public hearing. June Strunk, Hacienda Drive, district proponent, said that she did not think it was "fair" for the Council to delay the bond sale by "giving in" to someone who decided to sue. She also said that although she was certain that some money could be raised to defend the lawsuit, it amounted to "extortion" from the rest ofthe homeowners. She suggested that the Town borrow against its Rule 20A funds that would be used to place the lines under Tiburon Boulevard, rather than risk delaying the issuance of the bonds. A second resident agreed with Ms. Strunk. He stated that the homeowners had gone through an "elaborate procedure" to form the district and that 71 % had voted in favor of its formation. He said that the vote was an "unequivocal" statement that Del Mar wanted undergrounding of its utilities. He said that it seemed that the Town was now "being held hostage" by the threat of a lawsuit and asked that the Council to not let a minority "hold the rest hostage." Dave Brody, Hacienda Drive, said that the Town's legal counsel had prevailed in court on Monday and that the temporary restraining order [filed by the Mulberg's] had been denied, with the proviso that the two properties (that were the subject ofthe litigation) be excluded from the bonding. He said that the only issue now was one of who would pay [for the legal defense]. He said that there were contingency funds built into the district and other "adequate ways" to defend the lawsuit. He said that the proponents who had eachpaid $1,000 up front would "not cry" if they did not get their money back. He said that the Town should proceed [with the bond sale] and expeditiously "get rid of the lawsuit." . Jeff Appleman, Hacienda Drive, said that delaying the bond sale was, in essence, "succumbing to the lawsuit," and would ultimately increase the cost of the project. He strongly urged the Council Town Council Minutes # 15-2005 June 29, 2005 Page 4 to move forward with the district. Roy Benvenuti, Hilary Drive, said that he was disturbed by the Council's delay. He said that at the last meeting, in whic~. the 71 % vote in favor was tallied, the Council had congratulated the district and had expressed' it unanimous support of the undergrounding district. Mr. Benvenuti asked what had happened to "majority rule" and said that if compromise were not possible with' the litigants, the Town should "fight it." Mayor Berger said that the Council could still act upon the bond sale within a certain timeframe. Town Attorney Danforth concurred; she said that the Council could defer a decision until July 13 without harm to the district. Michael Bass, Hacienda Drive, agreed with his neighbors who had previously spoken. He said that there was a compromise solution which would be to "cut out" lower Hacienda; however, this would not give the neighbors in favor of the district [on lower Hacienda] what they wanted. Mayor Berger closed the public hearing. Councilmember Fredericks said that there appeared to be a misperception about the role of the Town in this matter; she stated that undergrounding of utilities was not "a service" offered by the Town, although the Town encouraged it. She said that the delay was merely "contemplative time" to identify resources in order to proceed. Councilmember Slavitz agreed. He said that the last meeting regarding the Del Mar district had been a "happy one" but that the Council now needed to address the [two] lawsuits and resolve some issues before the Town could proceed. He said that the Town did not know at the time of the [May 1 8] vote that the school district would threaten to sue. He said that there would be no increase to the assessments if the Town took action within the next two weeks, in order to resolve these issues. Vice Mayor Smith said that the Council was "not just lying down'; in the face of litigation. He stressed that the Town had stopped the temporary restraining order in court and that it was "paying the freight" on the lawsuit for now. However, Smith said that the Council needed more time to resolve the issues and to carve out the best options. He said that two weeks would be helpful to the Town and would not be a detriment to the district. Mayor Berger said thatthe Town did indeed encourage the undergrounding of utilities and spent considerable time working towards this goal. But he also stressed that district formation was something that "neighbors did themselves and paid for." The Mayor told the proponents that the Council appreciated their efforts to "line up" funds and said that the "bigger the war chest, the better the defense would be." He agreed with his colleagues that there was no harm in a two-week delay [on the bond sale] and recommended that the matter be continued to a date as yet to be determined. Town Council Minutes # 15~2005 June 29, 2005 Page 5 The Mayor also said he wanted to make clear that the school district had demonstrated a lot of "good will" in attempting to resolve the issues at hand. Someone from the public asked for a specific date ofthe next meeting. The Town Manager said that as soon as the issues were resolved, the Council would reconvene. In response to a question from Councilmember Gram, the Town Manager said that the district proponents would be notified of the date of the Council meeting. Proponent Strunk asked who would pay for the notification [mailing]. The Town Attorney said that a mailing was not required. Another resident asked precisely what would happen within the next two weeks. Vice Mayor Smith said that the issues to' be resolved were: a) how the litigation costs with the Mulbergs et al. would be paid for;. and b) how the threat of litigation with Reed Union School District would be resolved. Proponent Strunk said that the Mulberg issue could be resolved "right now;" that a proposal to stop the district boundaries at Porto Marino had been "in hand" at the last meeting [which would have excluded lower Hacienda Drive]. She also said that the two property owners affected by the decision knew about the meeting and had not "cared enough" to attend. j Vice Mayor Smith said that action on this issue would not resolve the issue with the school district. He added that the school district issue was actually a greater problem in that it affected 22 other parcels; however, he said that he had "every reason in the world" to believe that the district would go forward as formed. Chris Carter, Superintendent, Reed Union School District, asked to comment, stating that she came with "good will." Ms. Carter said that the district had been discussing this issue "since the end of March" and that "one of our options has not been to carve out a portion of the district and exclude others." However, she said that the Board continued to maintain that the $125,000 [assessment] "belongs to the students." The Mayor thanked everyone for their comments. Item continued. PUBLIC HEARINGS 9. Recommendation by Town Manager ...:.Mill Valley Refuse 18th Amendment to Franchise Agreement Town Council Minutes # 15-2005 June 29, 2005 Page 6 Vice Mayor Smith stated that his firm represented the franchisee, Mill Valley Refuse Service. He recused himself and left the Council Chambers. Town Manager McIntyre said that Mill Valley Refuse Service (MVRS) had submitted its request for an annual rate increase, which totaled 7.75%. The Town Manager said that of this amount, only2.2% represented a cost-ofliving rate adjustment guaranteed by the franchise agreement; the other totals were one-time increases for household hazardous waste collection (1.5%), and a 1.8% increase which resulted from the Town Council's adoption of a refuse vehicle impact fee earlier in the year. The Town Manager sought Council's authorization to join with the three other cities and county unincorporated areas (which are serviced by MVRS) to retain the services of a consultant (Environmental Planning Consultants) to analyze the rate system and operation, mid-term. He recommended adoption of the new rate structure. Councilmember Slavitz asked if the 10-year clock had "started ticking" on the franchise agreement. Town Manager McIntyre said that the Town was still. negotiating with MVRS on the issue of the term of the agreement. Councilmember Fredericks expressed an interest in a new agreement that was not for such a long duration; the Town Manager replied that a 1 O-year term was not uncommon, for a number of reasons. Mayor Berger opened and closed the public hearing. There was no public comment. MOTION: To accept the MVRS rate application and approve the 18th Amendment to the Franchise Agreement. Fredericks, Slavitz AYES: Unanimous RECUSED: Smith Moved: Vote: 10. Report by Planning Manager - Appeal of Design Review Board Approval of addition of Second Storyat 689 Hilary Drive . Assessor Parcel Number: Applicant: Appellants: 055-211-07 Ignatius Tsang Jocelyn McDonnell, Andy Garde & Joe Keller Planning Manager Watrous gave the staff report. He said that the original application was reviewed by the Design Review Board on April 21, 2005. The original application consisted of a much larger upper story, four bedrooms and the addition of a family room. Town Council Minutes # 15-2005 June 29, 2005 Page 7 After reviewing the application and taking testimony from the neighbors, the Board recommended that the plans be revised to address issues?f overall mass and bulk and continued the item. According to Watrous, the subsequent plans submitted by the applicant showed the movement of the bedrooms to the ground floor, resulting in a reduced second story which contained a family room, bath and deck. At its May 19 meeting, after hearing testimony from the neighbors concerning privacy impacts from the upper deck and concerns about the addition of a second story in this predominantly single-story neighborhood, the Board asked the applicant to eliminate the deck but noted that the applicant had greatly reduced the mass and bulk ofthe project. The Board voted unanimously to approve the plans, as amended. The Planning Manager said that a timely appeal had been filed by three neighbors, which included three issues: 1) view and sunlight blockage; 2) neighborhood character and precedent of a second-story addition; and 3) landscaping and lighting issues. The Planning Manager said that the Board had addressed the first issue. With regard to second- story additions, Mr. Watrous said that in considering the issue in the Bel Aire neighborhood, the Council had concluded that second stories could be permitted under certain conditions, as long as a good relationship was maintained to surrounding properties. He said that the Board considered this in their review ofthe project. With regard to the third issue, Watrous said that landscape and lighting plans were not required to be submitted with site plan and architectural review applications for additions to existing homes. The Planning Manager said that the Board had followed the Town's Hillside Guidelines and guidelines for site plan and architectural review in this matter; he stated that the Boardmemoers had visited the affected properties and had made its findings in the record. He therefore recommended that Council deny the appeal. Mayor Berger opened the public hearing to the appellants and applicant. Appellant Joe Keller, 699 Hilary Drive, 50-year resident, attempted to read a letter into the record from a Harriett Winblad, former resident of 689 Hilary Drive. Since the letter pertained to an application to add a second story to a home [at 685 Hilary Drive] that was16 years old, the Mayor questioned whether the letter was relevant to the matter at hand. Mr. Keller replied that the sentiments expressed in the letter were still valid today. Mr. Keller said that the topography of Hawthorne Terrace was much different than other neighborhoods where second story additions had been considered--Bel Aire and Belveron Gardens. Town Council Minutes # 15-2005 June 29, 2005 Page 8 Keller said that the homes in Hawthorne Terrace "sat on steps" with views of Richardson Bay; he questioned why the Town would support undergrounding of utilities in his neighborhood in order to preserve views and then allow a second-story addition that would block views. Mr. Keller said that "letting the two-story camel under the tent would cause irreparable damage to the neighborhood." Appellant Jocelyn McDonnell agreed that the neighbors did not want to see a [two-story] precedent set. She noted that a petition opposing the application had been submitted with 33 signatures, with l1}ore neighbors calling in to voice their opposition after the fact. Ms. McDonnell described the [Hawthorne Terrace] development of one-story homes that was "stepped so that we each have a view;" she said that she had already lost views from her home through "incremental changes" to the neighborhood. She said that the applicant, Mr. Tsang, had been unresponsive to the neighbor's concerns and that he was a "speculator" who had no intention ofliving in th~ home he was designing. In particular, Ms. McDonnell said that the design of the home at 689 Hilary Drive would cause her to lose a view from her master bedroom, where she spent a great deal of time. Vice Mayor Smith asked her what she saw out of those windows. Ms. McDonnell replied that she saw "trees, sun, and a view toward the Golden Gate Bridge." Ms. McDonnell said that the proposed new home was "out of proportion to the neighborhood," and that the approval of a second story would "start the battle of second stories in our neighborhood. " Appellant Andy Garde said that from his perspective, the approval of a second story at 689 Hilary would result in the addition of a second story on another nearby house on Hilary Drive which had an identical site layout. He said that he understood the review of applications on a "case by case" basis by the Town, but said that he feared that he would find himself in the same situation as Ms. McDonnell in future. Mr. Garde urged the Council to keep the character of the neighborhood intact, along with the harmonious spirit of the community, by denying the appeal. During his presentation, applicant Ignatius Tsang asked that Council to deny the appeal for several reasons--that as a property owner he had the right to develop his property; that the grounds ofthe appeal were unreasonable; that the Town Staff and Design Review Board had done their job. Mr. Tsang elaborated that his proposed home was smaller than the floor area allowed by the Town; was lower in height; and contained greater set-backs. Town Council Minutes # 15-2005 June 29, 2005 Page 9 Tsang said that the original CC&R's [of Hawthorne Terrace] said that homes "should not exceed two stories in height." Mr. Tsang said that he met extensively with Staff prior to designing the home, as well as the neighbors, who had originally expressed their support. He said that the neighbors "changed their minds" at the first Design Review Board meeting which, along with the Board's advice, caused him to redesign and resubmit plans, which were then approved. In summary, Mr. Tsang said that he appreciated the beauty of the Town; that the improvements to the home meet all the zoning requirements and design guidelines ofthe Town. He said that if the Town did not in fact want second-story additions, then the zoning regulations should be changed to reflect that, and to avoid the loss of effort, time and money, as well as development opportunities. The applicant told that Council that he had "faithfully followed" the direction ofthe Town and asked for "fairness and justice" in denying the appeal. Vice Mayor Smith asked Mr. Tsang to read the aforementioned section oftheCC&R's. He read that all plots in the tract were to be residential, single--family homes "not to exceed two stories and with two-car garages." Joe Keller objected, stating that those CC&R's expired in the first 10 years [following the development of Hawthorne Terrace]. Mr. Smith asked why he said that. Mr. Keller did not reply directly to the question. Councilmember Slavitz .asked Mr. Tsang about the hallway on the second floor that led to the former deck [that had been removed from the plans]. Mr. Tsang said that the hallway remained in the plans for "architectural integrity" which "allowed the whole dome to be symmetrical." He also said that it was a source of fresh air and that the small walkway could prove useful for washing windows. Councilmember Slavitz also asked about roof slope (4:12) and plate height (eight feet) and total elevation (22' 10"); also how high the front yard fence was that appeared in the model, presented by Mr. Tsang as a Council exhibit. Mr. Tsang said the fence was six feet high. Planning Manager Watrous clarified that the fence was four feet solid plus two feet oflattice at the top. Councilmember Fredericks asked whether there were any other street side fences in the neighborhood and how high they were. Ms. Fredericks also asked what the "bump out" was on the side of the house [nearest M?Donnell]; Mr. Tsang said that it was a storage shed (off the garage). Town Council Minutes # 15-2005 June 29, 2005 Page 10 Mayor Berger asked Mr. Tsang to summarize how the house as placed on the lot. Mr. Tsang described the setbacks and stated that the house was "pushed back on all three sides and up against the ~ll." Mayor Berger opened the hearing to the public. Noel Isaac, 20 Del Mar Drive, said that the two-story home at 30 Del Mar Drive was an "eyesore" which affected the whole neighborhood. He further noted that one Design Review Boardmember had described it as an "abomination." Mr. Isaac said that he had developed his own property five years ago and had kept it as a single- story home. He reiterated the concerns of the neighborhood and said that "mistakes could be made" even in the face of a staff recommendation of approval. Emmett O'Donnell, Vice Chair ofthe Design Review Board, said that the Board tried to create a sense of community and to make things work for all of the parties. He stated that Mr. Tsang made a lot of dramatic/changes to the plans, after he was told to scale down the plans and that a second story needed to be "stealthfully done, set in the middle of the property." Mr. O'Donnell said that Mr. Tsang had dealt with all the issues presented, including privacy. He added that privacy could not be fully expected in a suburban setting and that a larger, one-story home would also have privacy impacts on the neighborhood. Mr. O'Donnell said that he did not subscribe to Mr. Keller's theory that the addition of a second story was a "slippery slope," stating that the DRB would "not approve a series of two stories" in the neighborhood. The Vice Chair concluded that Mr. Tsang's application represented a "respectful re-design that would fit well in the neighborhood." Margaret DiMare, 44-year Hawthorne Terrace resident, said that she told the applicant that she would reserve the right to see the story poles before commenting on his design. She said that once seen, she was concerned that the second story would look down on her yard, in which she and her husband spent a great deal oftime. She complained that the DRB "has not represented our feelings," adding that "no one in our neighborhood has supported this project." Jude Agajan, 694 Hilary Drive, suggested that Mr. Tsang could improve his property another way, possibly by digging out the garage underneath the house. She added that the other two story . additions mentioned in previous testimony were part of another subdivision, not Hawthorne Terrace. Mrs. Agajan supported Ms. McDonnell's position that a second story next door would "affect her greatly" by reducing sunlight and obstructing her views. Town Council Minutes # 15-2005 June 29, 2005 Page 11 During the appellants' rebuttal period, Mr. Garde said that while Mr. Tsang had indeed talked to the neighbors during the process, "he was not listening." Ms. McDonnell said that "we also have property rights" and shouldn't have to suffer. She said that all she would see when she looked out her windows (if the application was approved) was walls. Councilmember Gram asked for a suggestion. Ms. McDonnell suggested raising the house at the back, parallel to the hillside. Also, she said the lighting plan needed review. Mr. Gram sought clarification. He asked whether Ms. McDonnell would not object to a two- story addition, if it was done properly. She said yes, and that "properly" was the operative word. Mayor Berger closed the public hearing. Vice Mayor Smith said that he was a member of the Design Review Board when the application to rebuild 30 Del Mar Drive (after it burned down) came before the Board. He said that he could not at the time conceptualize how that home would look from Tiburon Boulevard, and that it was "one of three serious mistakes" he felt that the Board made during his tenure. \ The Vice Mayor also stated that during his tenure, no second story additions were approved in Hawthorne Terrace because of the terrain. He noted how a slight increase in height could have an impact on the house in front of it. However, in this instance, Smith said it was his sense that "this property was one ofthe few that had potential for this type of house." Vice Mayor Smith said that the DRB had done its job in reviewing the application and providing guidance to the applicant. Smith stated that the design was "reasonably compatible with the neighborhood and consistent with the predominant pattern of development and changes" in the area. He said that the DRB did everything properly and ended up with a good design. He concluded that he would vote to deny the appeal. Councilmember Fredericks agreed that change was inevitable but that the "best we can do is look at the impacts" on the neighborhood. She said that her concerns were those of privacy. She acknowledged that the design called for high windows (six-foot sills) on the side of the second story which would prevent people from looking into the neighbors' backyards; however, she said that Ms. McDonnell was in her bedroom a lot, for a number of reasons, and suggested that the garage be pulled back so that she could retain the view from one of her windows. Ms. Fredericks also questioned the need for floor-to-ceiling windows at the front of the second story. All in all, she said that Mr. Tsang "did what he could" and that she would vote to partially deny/partially uphold the appeal. . Town Council Minutes # 15-2005 June 29, 2005 Page 12 Councilmember Slavitz said that no mistakes had been made in the process but that there were just differing points of view. Conceptually, he said he had "no problem with second stories;" but he said in this instance. it was out of character with the neighborhood and blocked [some] people's views. Slavitz questioned the vaulted ceilings and height of the family room and suggested that the second floor could remain while reducing the width and/or height. He also expressed concern about the remaining walkway to the former deck. . Mr. Slavitz reiterated that the front yard fence was too high; he asked that this fence be lowered to three feet. Councilmember Gram said that that Council had been "emphatic" in not prohibiting second stories; that the Council had turned down applications for second stories while leaving the concept "open." He acknowledged that it was an "uphill battle" to make a second story work in this neighborhood. He concurred with Ms. Fredericks that there were adverse impacts on Ms. McDonnell's bedroom and thought that the garage might be pulled back to mitigate this impact. Gram also expressed concern about the bulk and mass ofthe project but said that the DRB had asked for a complete redesign and got it so that, except for minor changes, he would "let it stand. " Mayor Berger apologized to Mr. Keller and said that he just wanted to make sure that the letter he read was "relevant" to the project at hand. The Mayor said that "change would come" but said that five other two-story applications had previously been turned down in the neighborhood. He said that the Council had put some \ "controls in place" and that the architect had been responsive and had pulled back the house on the lot. Berger said that the walkway on the second story was "not conducive" to looking down on the DiMare's front yard because a person would have to look through the "entire house" in order to see it. Mayor Berger said that in his opinion this application was "the kind of precedent we want to set" because it was "pulled way back," had high windows and a simple color palette. He said that he could even demonstrate to Ms. McDonnell how she would still be able to look down the street with the existing design. The Mayor said that the DRB "got it right" for this kind of project "to be done right." He said he would vote to uphold the DRB approval. Town Council Minutes # 15-2005 June 29, 2005 Page 13 Vice Mayor Smith asked whether the consensus was to send the application back to the DRB or amend it. Planning Manager Watrous said that he could take Council's direction and return with a resolution incorporating any changes. Councilmember Fredericks added her comments and suggestions. She said that she questioned the floor-to-ceiling windows on the second floor. She agreed with Councilmember Slavitz that the hallway and alcove were a "deck waiting to happen." In addressing the concerns of the neighbors, Fredericks said that although Ms. McDonnell's bedroom view was not a "primary view" it was important because she did not have a view from the front of her house and that the job of the Council, in interpreting the Hillside Design Guidelines, was also a "balancing act." She said this issue could be addressed by pulling back the garage. Councilmember Slavitz said that if the second story were removed it would be a "beautiful house." However, he said the design might be improved if the second-story hallway was "brought back to the vault" and the high windows were replaced; possibly the plate heights or roof pitch could be lowered; or the vaulted open space could be lowered; or the family room moved forward. He also recommended lowering the front yard fence. Councilmember Gram expressed his concern that approval of the application not set in motion the need to "protect" views ofthis second story area from future second stories across the'street. The Planning Manager commented that there were other homes that would be more impacted than the ones across the street (in future applications). Gram said that he would not "fiddle" with anything other than the "comer of the garage." Mayor Berger cautioned the Council that the plate height might not be able to be lowered but agreed that "pivoting the garage back" might be looked at. Applicant Tsang said that the garage was a minimal size now with "no play." MOTION: Moved: Vote: To remand the application to the DRB to consider Council's comments. Fredericks, seconded by Slavitz AYES: Fredericks, Gram, Slavitz NOES: Berger, Smith Council then returned to Item No.7 for discussion. Town Council Minutes # 15-2005 June 29, 2005 Page 14 7) Recommendation by Town Manager-- Adoption ofFY 2005-06 Municipal Budget and Related Resolutions a) A Resolution ofthe Town Council of the Town of Tiburon Adopting a Municipal Budget for the Town of Tiburon and the Tiburon Redevelopment Agency for the Fiscal Year Ending June 30, 2006 b) A Resolution ofthe Town Council of the Town ofTiburon Repealing Resolution No. 24-2003 and Adopting an Amended ManagementRecognition and Incentive Compensation Program c) A Resolution of the Town Council ofthe Town ofTiburon Repealing Resolution No. 25-2003 and Adopting an Amended Mid-Management, Professional & Confidential Employees Recognition and Incentive Compensation Program d) A Resolution of the Town Council of the Town of Tiburon Establishing an Appropriations Limit for the Fiscal Year 2005-2006 Pursuant to Article XIII B ofthe Constitution of the State of Cali fomi a (Gann Limit) Staff gave a brief report and responded to Council's comments and questions. With regard to the $925,000 earmarked for street rehabilitation in the coming year, Vice Mayor Smith commented that the Town seemed to "understate" projected revenues and wondered whether future projected surpluses could be applied to the streets program in coming years. Director of Public Works/Town Engineer Echols said that it would represent a change in policy if projected revenues were earmarked in this way. The Vice Mayor asked whether the $925,000 would have a significant impact on the [Pavement Management] streets index. The Town Engineer said that this was a "blip" but that over a period of five years, if approximately one million dollars were budgeted each year, the streets would rise to a "70" on the index. Councilmember Slavitz suggested that this would be a good goal to achieve. Town Manager McIlltyre said that two subcommittees had worked on this issue and had concluded that a) it would be difficult to sustain this amount; and b) there were other priorities within the Town. Vice Mayor Smith commented that streets were a "big priority." Town CouncilMinutes # 15-2005 June 29, 2005 Page 15 Councilmember Fredericks suggested that the council develop a "sustainable policy" for this purpose. Vice Mayor Smith said that he was also concerned about the long-range policy of tying employee compensation to an "average salary range" within the County. He said that the net result was an "escalation" which is what seemed to be a problem at the local, county and state levels. He suggested exploring additional ways to compensate employees. MOTION: Moved: Vote: To adopt the four budget resolutions, as written. Fredericks, seconded by Slavitz AYES: Unanimous 11. Recommendation by Town Attorney & Director of Community Development - Economic Exception Ordinance (continued from June 15, 2005) Introduction & First Reading of Ordinance a) An Ordinance of the Town Council oftheTown ofTiburon Adding a new Article VII to Title IV, Chapter 16 of the Tiburon Municipal Code regarding Economic Exceptions Item continued without hearing. COUNCIL AND COMMITTEE REPORTS Town Manager McIntyre asked for feedback on the customer service questionnaire. Council said that they "liked it" and would also like to see and be able guage the results. WRITTEN COMMUNICATIONS Town Council Weekly Digest - June 17,2005 Town Council Weekly Digest - June 24,2005 ADJOURNMENT There being no further business before the Town Council of the Town of Tiburon, Mayor Berger adjourned the meeting at 10:20 p.m. MILES BERGER, MAYOR Town Council Minutes # 15-2005 June 29, 2005 Page 16 ATTEST: DIANE CRANE !ACOPI, TOWN CLERK Town Council Minutes # 15~2005 June 29, 2005 Page 17 ''-' STAFF REPORT . AGENDA ITEM 2 !Jl\ i' Town of Tiburon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. .. .. .. .. .. .. .. .. . .. SUBJECT: Mayor and Members of the Town C~I Alex D. Mcintyre, Town Manager ~ Authorize Issuance of Bonds -- Del Mar Valley Utility Undergrounding Assessment District TO: FROM: MEETING DATE: July 13, 2005 .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At its June 29,2005 meeting, the Town Council continued the decision to complete the bond issuance for the Del Mar Valley Utility Undergrounding Assessment District (District). The Council was concerned about two specific legal challenges facing the District. Two District members (Bonander and Mulberg) have filed suit against the Town and there was the threat of litigation against the Town from the Reed Union School District. The Town Council did not want to authorize the sale of bonds until such a time that either: 1. the litigation was terminated; or 2. a legal defense fund was raised. The Superintendent of Schools and I met and worked out an agreement whereby the School will be able to pay its full $125,000. The School Board is scheduled to meet on Monday night (July 11, 2005) and I will know by our Town Council meeting if the School Board agrees with the tentative terms offered. I'm Confident that the School Board and the Council will be able to come to terms on this portion of the deal to avoid any type of litigation between the two agencies. The Town Council directed staff and the neighbors to raise a legai defense fund to defend the Bonander/Mulberg lawsuit. District proponent June Strunk has done a tremendous job of gaining promises from the neighbors to fund a legal defense. As of today, she has tentatively raised $20,000. The Town Attorney has estimated that the cost to fully defend this case through the superior court level would be approximately $25,000. Given the effort that the neighbors have made, it appears prudent at this time for the Town to fund any additional costs above the $20,000 raised by the neighbors. Any additional funds need to fully tender the defense of the claim can be lent to the District from the Town and repaid upon construction completion. The Town will need to authorize the sale of the bonds tonight otherwise will miss the opportunity to place the assessments on the November 2005 tax rolls. A proposed revised schedule of the bond sales is attached as Exhibit A. The attached Resolution (Exhibit B) authorizes various Town officials to complete the bond issuance process for the Del Mar Valley 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-July. The bonds will be sold to Wulff, Hansen & Co, as was done for the Lyford Cove district. !" Town of Tiburon STAFF REPORT '\ . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 I.imited obligations improvement bonds for the Del Mar Valley Utility Unaergrounding Assessment District. Exhibit A - Revised Bond Calendar Exhibit B - Draft Resolution July 8, 2005 page 2 of 2 .,. r..~j. TOWN OF TIBURON DEL MAR VALLEY UTILITY UNDERGROUNDING ASSESSMENT DISTRICT Revised Bond Calendar as of June 30, 2005 JULY 2005 T WTH F S 1 5 6 7 8 12 13 14 15 19 20 21 22 26 27 28 29 JUNE 2005 T W TH 1 2 6 7 8 9 13 14 15 16 20 21 22 23 27 28 29 30 AUGUST 2005 SMTWTHF S 1 2 3 4 5 8 9 10 11 12 15 16 17 18 19 22 23 24 25 26 29 30 JUNE 2005 27 Cash payment period ends 29 ToWn Council meeting to discuss assessment district litigation and school district issues JUL Y 2005 13 Town Council meeting to approve: -pas; -legal documents: -authorize issuance and sale of Bonds 14 Print pas 15 Distribute pas 19 Price Bonds / execute purchase contract 20 Print a/s AUGUST 2005 8 Bond Pre-closing 9 Bond Closing 'iit~~~~~~ . i( / EmmIT 4 .f 30030-05 JH:SRC:sgs 6/14(05 RESOLUTION NO. _-2005 A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TIBURON AUTHORIZING ISSUANCE OF LIMITED OBLIGATION IMPROVEMENT BONDS AND DIRECTING RELATED ACTIONS Del Mar UtilityUridergrounding Assessment District Adopted ,2005 EXHIBIT II 4 i5 o;;fi~~. - . 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 ARTICLE II THE BONDS BONDS AUTHORiZED........................................................................................... 9 TERMS OF BONDS................................................................................................ 9 REDEMPTION...................................................................................................... 10 . FORM OF BONDS ................................................................................................ t1 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 PERMITTED............................................................................... 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............................. ................... ii............:.....:............................ 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 ii 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, requestor 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 pursuantto 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, Finance Director, 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, Del Mar 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 Agreemenf' 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, Del Mar Utility Undergrounding Assessment District, Costs of Issuance Fund established under Section 4.02 hereof. "Councif' 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 whictf at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein: J , (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. "Finance Director' 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, Del Mar 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 matyrity 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 f3egister. "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 Finance Director 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 "M" 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 - 5 - 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 (3overnment 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 commercial 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 paper rated 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; (j) 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 Accounf' means the account of that name in the Redemption Fund. "Principal Amounf' 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. "Project' 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, Del Mar 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, Del Mar 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 sup'plemented, 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 Finance Director. Section 1.02. UNPAID ASSESSMENTS. The Assessments are hereby finally confirmed as shown on the list of unpaid Assessments on file with the Finance Director 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 Town Engineer as the Superintendent of Streets of the Town after confirmation thereof by the Council. ";i'" 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 forthe 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 w~atsoever, 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 requirement 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 jperform 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 '11aturity 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 Premil,.lms 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 amount equal to the unrede'emed portion of the Bond or Bonds. (D) Effect of Redemption. . From and after the date fixed for redemption, if funds available for the paymentofthe 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 shall 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 6n 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 B~nd shall be the proper officer although on the nominal date of such Bond such individual shall not hav~ 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 Se~tion 2.03 shall be subject to transfer or exchange pursuant to this Section. Neither the Town .i1or 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 Bection, 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 I 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 time 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 creditof the Town nor of the State of California or any political subdivision thereof is pledged to the pC\lyment 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 oth~r 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 orin 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 $4,700,000; (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 S~atement 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 wLth 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 I?ond 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 Finance Director, 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 Finance Director 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. Am6unts 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 Finance Director concurrently with the delivery of the Bonds. The Finance Director 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 Finance Director 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 Finance Director 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 Finance Director 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 Finance Director 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 Finance pirector 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 Finance Director 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 remai'n open so long as the Redemption Fund remains open. (B) Disbursements. On or before each Interest Payment Date, the Finance Director 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 Finance Director 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 Finance Director 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 Finance Director 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 Finance Director 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 'Finance Director 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. (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 Finance Director solely for - 17 - 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 Finance Director 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 Finance Director, the amount in the Reserve Fund exceeds the then applicable Reserve Requirement, the Finance Director 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 Finance Director 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 Finance Director to the credit of which deposits shall be made as required by Section 4.01. Moneys in the Improvement Fund ~hall be held by the Finance Director 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 Finance Director 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 - 18- (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. (0) 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 Finance Director 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 Finance Director 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 Redemptiofl Fund. (B) Auditor Record. The Finance Director shall, before the final date on which the 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 Finance Director is hereby.authorized to employ consultants to assist in computing the installments 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 iNith 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 Finance Director shall notify the Town Attorney of any such delinquency of which the Finance Director is aware, and the Town Attorney 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 - 20- 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 Finance Director not later than October 1 of each Fiscal Year: (A) If the Finance Director 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 Finance Director determines that the total amount of delinquent Assessments for the prior Fiscal Year for the entire Assessment District, less the total delinqu~ncies 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 Finance Director 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 Finance Director 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 tor 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) ofthe 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 Finance Director 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 Finance Director shall be invested by the Finance Director in Permitted Investments. The following shall apply to such investments:. . . (A) Investments. In the absence of any such Officer's Certificate, the Finance Director 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 Finance Director may act as principal or agent in the acquisition or disposition of any investment. The Finance Director 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 Finance Director.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 Finance Director hereunder, provided that the Finance Director 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 Finance Director 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 acco"unt to which such investment security is credited and the Finance Director. shall not be liable or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance herewith; and (E) Finance Director. For any funds held by the Finance Director, 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 Finance Director 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 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. - 23- (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 Agent herein 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 Finance Director, 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 Finance Director, 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 ri"sk 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 ordocument 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 <;:ertificate 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 thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. - 24- 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 an'd 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 Finance Director to , each Owner of Bonds Outstanding, but failure to mail copies of such Supplemental Resolution and request shall not affect the validityof the Supplemental Resolution when assented to as in this Section provided; (B) 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 calculati~n 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 accordahce 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 thatcase, 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 su<?h 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 oron 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 indebt~dness 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; (B) 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 qy 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 requ~st, declaration or oth!3r 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 any thing 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 be 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 Finance Director 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 Finance Director to the Town as its absolute property free from any trust, and the Finance Director 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 auth.orization. and issuance of the Bonds shall not be dependent upon the completion and/or acquisition of the Project or 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 (rom 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 Finance Director 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 Finance Director, 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 - 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 June 4, 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 Del Mar Utility 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 hereby 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. 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: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS ABSENT: 'COUNCILMEMBERS ,MAYOR TOWN OF TIBURON ATTEST: DIANE CRANE IACOPI, TOWN CLERK EXHIBIT A TOWN OF TIBURON Del Mar Utility 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 PaYlT'!ent Date is March 2, 2006. 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: Prepayment 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 of 2% of the principal amount of the Bonds redeemed. Excess Proceeds Redemption. Outstanding Bonds maturing in 2035, in the principal amount of $5,000 or any integral multiple of $5,000, will be subject to mandatory redemption at the par amount thereof, plus interest on August 2, 2005, from any moneys in the Improvement Fund which are not otherwise used qr required for service connections or other related costs. Mandatory Sinking Fuhd Redemption. 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, 20_, from sinking fund payments from the redemption fund EXHIBIT A Page 1 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 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: 1. $ 2. $ 3. $ to the Costs of Issuance Fund; 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 Del Mar Utility Undergrounding Assessment District INTEREST RATE MATURITY DATE DATED DATE ,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 June 4, 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 March 2, 2006. 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 March 2, 2006, 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 sufficient mon~ys 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 Director of Administrative Services of the Town and by its Town Clerk, and has cause its corporate seal to be reproduced in facsimile hereon all as of the _ day of ,2005. TOWN OF TIBURON Heidi Bigall, Director of Administrative Services . Diane Crane lacopi, 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, EXHIBIT B Page 2 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 corporatiqn, a partnership or a trust. 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: Redemption Dates Premium On or before March 2, 20_ March 2, 20_and September 2,20_ March 2, 20_ and thereafter Redemption % _% _% 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 redemptionprice equal to the principal amount thereof to be redeemed, without premium, asfollows: 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 UNIF GIFT 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