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HomeMy WebLinkAboutTC Res 1990-07-18 (3) RESOLUTION NO. 2727 RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF TIBURON RESCINDING RESOLUTION NO. 2680 AND AUTHORIZING ISSUANCE OF BOND VIA CAPISTRANO ASSESSMENT DISTRICT NO. 1990-1 The Town Council of the Town of Tiburon resolves: On March 27,1990, this Council adopted Resolution No. 2680 authorizing issuance of bonds. This Council hereby rescinds said resolution. section 1. RECITALS. On December 6, 1989, the Town Council of the Town of Tiburon adopted its resolution of intention to order improvements in Via Capistrano Assessment District No. 1990-1, Town of Tiburon, Marin County, California, under the provisions of the Municipal Improvement Act of 1913 (the "Act"), as amended. Proceedings taken under the Act led to the levy of a special assessment by the Town Council against parcels of land within the assessment district in the total amount of $240,000.00. On July 18, 1990, the Town Council approved an amended cost estimate and assessment roll in the total amount of $225,000.00. These assessments were recorded in the office of the County Recorder of the County of Marin, and thereupon became a lien on each parcel assessed. The period within which parcel owners might pay their assessments in cash without interest was waived. section 2. ISSUANCE OF BOND. The Town Council hereby authorizes the issuance of an improvement bond under the provisions of the Improvement Bond Act of 1915 to represent unpaid assessments in the amount of $225,000.00. The bond shall be designated, "Limited Obligation Improvement Bond, Town of Tiburon, Via Capistrano Assessment District No. 1990-1, Series No. 1990-1" (the "Bond"). The Bond shall be dated July 19, 1990, and shall permit payments of principal in denominations of $1000 or integral multiples thereof. The maturity schedule and interest rates applicable to the respective serial maturities of principal, shall be established by the bond purchase commitment respecting the Bond. Said Bond, upon issuance, shall be acquired only by the Tiburon Public Facilities Financing Authority (the "Authority") from the proceeds of its Series 1990-A Marks-Roos Bonds (the "Marks-Roos Bonds") . section 3. APPOINTMENT OF FISCAL AGENT. The Town Council hereby appoints the Meridian Trust Company of California, as fiscal agent for the Bond issue in accordance with an agreement between the Town of Tiburon and Meridian Trust Company of California. section 4. FORM AND EXECUTION. The Bond shall be issued as fully registered, typewritten bond in the name of the Tiburon Public Facilities Financing Authority with a covenant that the bond may not be reregistered. The form of Bond is set forth as Exhibit A to this resolution. The Bond shall be signed by the Town' Treasurer and the Town Clerk and the seal of the Town shall be affixed. The Bond shall mature and bear interest at the rates as shown on the debt service schedule attached to the Bond. Upon the redemption of any principal amount of the Bond outstanding, the Town shall prepare, and deliver to the Authority for attachment to the Bond, a new debt service schedule showing the new principal 2 amount outstanding. Prepayments of principal shall be credited against the respective serial maturities in such a fashion as to maintain, as nearly as possible, level debt service payments for the remaining life of the Bond. Section 5. ESTABLISHMENT OF SPECIAL FUNDS. For administering the proceeds of the sale of the Bond and payment of interest and principal on the Bond, there are hereby established four funds to be known as the improvement fund, the special reserve fund, the investment earnings fund and the arbitrage rebate fund, respectively, for Via Capistrano Assessment District No. 1990-1. section 5.1. IMPROVEMENT FUND. Except as provided in Section 5.2, proceeds of sale of the Bond shall be deposited in the improvement fund to be maintained by the Finance Director. Disbursements from the improvement fund shall be made by the Finance Director in accordance with the budget of estimated costs and expenses set forth in the amended engineer's report heretofore approved by the Town Council, which report and budget are subject to modification by the Town Council from time to time as prescribed by the Act. section 5.2. SPECIAL RESERVE FUND. The special reserve fund shall be maintained by the Meridian Trust Company of California. There shall be deposited into the special reserve fund the amount of $6,750.00 (the "Reserve Requirement") from the proceeds of the sale of the bond. A. During the term of the Bond, the amount in the special reserve fund shall be available for transfer into the redemption 3 fund in accordance with section 8808 of the Streets and Highways Code. The amount so advanced shall be reimbursed to the special reserve fund from the proceeds of redemption or sale of the parcel for which payment of delinquent assessment installments was made from the special reserve fund. B. If any assessment is prepaid before final maturity of the bond, the amount of principal which the assessee is required to prepay shall be reduced by an amount which is in the same ratio to the original amount of the special reserve fund as the original amount of the prepaid assessment bears to the total amount of unpaid assessments originally securing the Bond. This reduction in the amount of principal prepaid shall be balanced by a transfer from the special reserve fund to the redemption fund in the same amount. C. The amount maintained in the special reserve fund will never exceed the Reserve Requirement. Proceeds of investment of the special reserve fund shall be deposited in the investment earnings fund. D. When the amount in the special reserve fund equals or exceeds the amount required to retire the remaining unmatur~d bond (whether by advance retirement or otherwise), the amount of the special reserve fund shall be transferred to the redemption fund, and the remaining installments of principal and interest not yet due from assessed property owners shall be cancelled without payment. 4 Section 5.3. INVESTMENT EARNINGS FUND. Proceeds of the investment of amounts in the improvement fund and the special reserve fund will be deposited in the investment earnings fund. As of September 2 of each year during the term of the bond, the Finance Director shall determine whether any portion of investment earnings must be rebated to the united States pursuant to section 148 of the united States Internal Revenue Code and regulations adopted thereunder. Any amounts required to be rebated will be transferred to the arbitrage rebate fund, and the balance will be transferred as follows: (a) To the extent that the balance in the special reserve fund is less than the Reserve Requirement, a transfer will be made from the investment earnings fund to the special reserve fund. (b) The remaining balance in the investment earnings fund, if any, will be transferred to the improvement fund until the improvement is completed and the improvement fund is closed; thereafter the balance in the investment earnings fund will be transferred to the redemption fund to be used, in the discretion of the Finance Director, as a credit upon the annual installments of assessment or for the advance retirement of bond. The Finance Director is authorized to retain independent attorneys, accountants and other consultants to assist in complying with Federal requirements. section 5.4. ARBITRAGE REBATE FUND. Amounts in the arbitrage rebate fund shall be invested in the same manner as amounts in the other funds and shall be held in trust for rebate to the United 5 states at the times required by section 148 of the United states Internal Revenue Code and regulations adopted thereunder. section 6. PAYMENT ON THE BOND. The redemption fund for the Bond shall be the Redemption Account for the Marks-Roos Bonds maintained at the principal corporate office of Meridian Trust Company of California, San Francisco, California. All payments of principal and interest installments on the assessments, together with penalties, if any, shall be deposited in the redemption fund and credited against scheduled payments of principal and interest on the Bond. The Finance Director shall deposit into the redemption fund, from the proceeds of the sale of the bond, the amount of $8,000.00, which shall be applied to payment of the first payable interest on the Bond until fully expended. Section 7. COVENANTS. In the event of a default in the payment of the Bond or any installment of principal or interest thereon, the bondholder shall have the remedies set forth in the Improvement Bond Act of 1915. In addition, the Town Council makes the following covenants, which shall constitute a contract with the bondholder: section 7.1. FORECLOSURE OF LIENS. Not later than October 1 in any year, the Town shall file an action in the Superior Court to foreclose the lien of each delinquent assessment if the sum of uncured assessment delinquencies for the preceding fiscal year exceeds $2,000, and if the amount of the special reserve fund is less than the Reserve Requirement. All of the foregoing notwithstanding, the Town may, in any particular case, elect to 6 advance the amount of any delinquency (excluding penalties and interest) to the Redemption Account of the Marks-Roos Bonds. In that event the Town need not initiate the foreclosure action. In such a case, the Town may reimburse itself, when the tax is paid on the property, for its advance plus interest and penalties. section 7.2. ARBITRAGE. During the term of the bond, the Town will make no use of bond proceeds which, if such use had been reasonably expected at the date the bond is issued, could have caused the bond to be an "arbitrage bond" within the meaning of Section 148 of the united States Internal Revenue Code of 1986, and regulations of the Internal Revenue Service adopted thereunder, and further shall rebate to the united States any amounts actually earned as arbitrage in accordance with the provisions of that Code and those regulations. section 7.3. MAINTENANCE OF TAX EXEMPTION. The Town will take all reasonable actions required to maintain the status of interest on the bond as excludable from gross income for federal income tax purposes and as exempt from the State of California personal income taxes. * * * 7 PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Tiburon on July 18, 1990, by the following vote: AYES: Councilmembers Friedman, Coxhead, Thayer and Logan NOES: None ABSENT: Councilmember Kuhni//) /i .~ ') .;.../ {) --~I- V ""\ - . ' :., ii ,--,Lt-, r -~Yrt,(v'-1- PETER B. LOq~, MAYOR Town of Tibur'on ATTEST: By 8 EXHIBIT A united states of America state of California County of Marin REGISTERED Number R-1 REGISTERED $225,000.00 LIMITED OBLIGATION IMPROVEMENT BOND TOWN OF TIBURON VIA CAPISTRANO ASSESSMENT DISTRICT NO. 1990-1 SERIES NO. 1990-1 INTEREST RATE See attached MATURITY DATE See Attached BOND DATE July 19, 1990 REGISTERED OWNER: Tiburon Public Facilities Financing Authority PRINCIPAL SUM: TWO HUNDRED TWENTY-FIVE THOUSAND 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, County of Marin, State of California, (the "Town"), will, out of the redemption fund for the payment of this Bond 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. 2662, adopted by the Town Council of the Town of Tiburon on the 6th day of December, 1989, as later amended, pay to the registered owner stated above, on the maturity date stated above, the principal sum stated above, in lawful money of the united States of America and in like manner will pay interest from the interest payment date next preceding the date on which this Bond is authenticated, unless this Bond is authenticated and registered as of an interest payment date, in which event it shall bear interest from such interest payment date, or unless this Bond is authenticated and registered prior to March 2, 1991, in which event it shall bear interest from its date, until payment of such' principal sum shall have been discharged, at the rate per annum stated above, payable semiannually on March 2 and September 2 in each year commencing on March 2, 1991. Both the principal hereof and redemption premium hereon are payable at the principal corporate trust office of the Meridian Trust Company of California, or its successor, as Fiscal Agent for the Town's Marks-Roos Bonds authorized pursuant to Resolution No. 2701, adopted May 2, 1990 (the "Marks-Roos Bonds"), as of the fifteenth day immediately preceding each interest payment date. This Bond will continue to bear interest after maturity at the rate above stated, provided, it is presented at maturity and payment thereof is refused upon the sole ground that there are not 9 sufficient moneys in said redemption fund with which to pay same. If it is not presented at maturity, interest thereon will run until maturity. This Bond shall not be entitled to any benefit under the Act or the Resolution Authorizing Issuance of Bond (the "Resolution of Issuance"), or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Finance Director of the Town. This Bond is issued by the Town of Tiburon under the Act and the Resolution of Issuance, for the purpose of providing means for paying for the improvements described in said proceedings, and is secured by the unpaid portion of said assessments made for the payment of said improvements, and, including principal and interest, is payable exclusively out of said unpaid portion of said assessments. The Town will not obligate itself to advance available funds from the Town treasury to cure any deficiency which may occur in payment on the Bond. A determination not to obligate itself shall not prevent the Town from, in its sole discretion, so advancing funds. The Town may treat the registered owner hereof as the absolute owner for all purposes, and the Town shall not be affected by any notice to the contrary. This Bond or any portion of it in the amount of $1,000 or any integral multiple thereof, may be redeemed and paid in advance of maturity upon the second day of March or September in any year by giving at least 45 days' notice by registered or certified mail or by personal service to the Fiscal Agent for the Marks-Roos Bonds and by paying principal and accrued interest together with a premium equal to three percentum of the principal. IN WITNESS WHEREOF, said Town of Tiburon has caused this Bond to be signed in facsimile by the Treasurer of said Town and by its Clerk, and has caused its corporate seal to be reproduced in facsimile hereon all as of the 19th day of July, 1990. Wln~ 'n{~A 0 Ai-OWN Clerk OF TIBURON Treasurer ( SEAL) 10 CERTIFICATE OF AUTHENTICATION AND REGISTRATION This Bond described in the within mentioned Resolution of Issuance has been authenticated and registered on TOWN OF TIBURON, as paying agent, transfer agent and registrar By Director I hereby certify that the llowing is a correct copy of the signed legal opinion of STURGIS, NESS, BRUNSELL & SPERRY a professional corporation, Emeryville, California, on file in my office. Town Clerk 11 OPINION OF BOND COUNSEL LIMITED OBLIGATION IMPROVEMENT BOND TOWN OF TIBURON VIA CAPISTRANO ASSESSMENT DISTRICT NO. 1990-1 We have acted as bond counsel for the Town of Tiburon for the issuance of an improvement bond representing unpaid special assessments in Via Capistrano Assessment District No. 1990-1. We have examined the law and such certified proceedings and other documents as we deem necessary to render this opinion. We have not independently verified questions of fact but have relied on the certifications of public officials. Nor have we reviewed the accuracy or sufficiency of the offering material related to the sale of the bond. Based on our examination, we are of the following opinion: 1. The unpaid assessments in Via Capistrano Assessment District No. 1990-1 were validly levied and now constitute a lien on the parcels of land assessed, as provided in the Municipal Improvement Act of 1913 of the State of California. The Bond representing the unpaid assessments was validly issued under the provisions of the Improvement Bond Act of 1915 of the State of California. 2. The bond is a valid special obligation of the Town of Tiburon, payable solely from the collection of installments of principal and interest on the unpaid assessments. The bond is enforceable in accordance with the Improvement Bond Act of 1915. 3. Interest on the bond is not includable in the gross income of the bondholder for purposes of federal income taxes under existing statutes, regulations and court decisions. Interest on the bond is not a preference item for federal individual or corporate alternative minimum taxes, but is included in adjusted net book income and adjusted current earnings when calculating corporate alternative minimum taxable income. Interest on the bond is exempt from State of California personal income taxes. The federal tax-exempt status of bond interest depends upon continuing compliance by the issuer with the arbitrage covenant contained in the Resolution Authorizing Issuance of Bond. Opinion of Bond Counsel Page Two 4. The rights of the bondholder and the enforceability of the bond may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, heretofore or hereafter enacted. Enforcement of the bond may be subject to the exercise of judicial discretion in accordance with general principles of equity. STURGIS, NESS, BRUNSELL & SPERRY a professional corporation By: Edwin N. Ness