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HomeMy WebLinkAbout1983-098 " :... San Bernardino 60,009-41-2 RESOLUTION NO. 83-98 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNAR- DINO, CALIFORNIA, AUTHORIZING THE ISSUANCE OF SEWER REVENUE REFUNDING BOND ANTICIPATION NOTES AND PROVID- ING THE TERMS AND CONDITIONS FOR THE ISSUANCE OF SUCH NOTES WHEREAS, pursuant to Ordinance No. 2170, a special municipal election was held in the City of San Bernardino (the "City") on June 11, 1957, for the purpose of submitting to the qualified voters of said City the proposition of issuing sewer revenue bonds of said city in the amount of $4,900,000 pursuant to the City Charter and the Reve~e Bond Law of 1941 (Chapter 6, Part 1, Division 2, Title 5 of the Government Code of the State of California) for the following purposes, to wit: The acquisition, construction and financing by the City of San Bernardino of additions to and improvements (other than repairs) of the sewage collection, treatment and disposal system of said city, consisting of a new sewage treatment plant, trunk, interceptor and outfall sewers, a sewer ventilating system, pumping stations, effluent reclamation works with pumping stations, pipelines and spreading grounds, and including the acquisi- tion of all land, easements, pipe, pumps, machin- ery, equipment and other property necessary for any of the foregoing, and including engineering, inspection and legal fees, costs of the issuance of the revenue bonds, bond reserve funds and other costs and expenses incidental to or connected with such acquisition, construction and financing; WHEREAS, said proposition was approved by the votes of more than a majority of all the voters voting on said proposition at said special election, and this City was authorized to issue said bonds as provided in said Revenue Bond Law of 1941; and DIS3l8(et) JvlB 112 3/26/83 .', " . San Bernardino 60,009-41-2 WHEREAS, pursuant to Resolution No. 4708, the Mayor and Common Council of the City issued $3,000,000 of said authorized amount of Bonds designated, maturing and being callable and redeemable prior to maturity as follows: Designation: SEWER REVENUE BONDS, ELECTION 1957, SERIES 1. Date: April 1, 1958. Maturities and Interest Rate: Year of Maturity Principal Interest April 1 of Amount Rate 1959 $ 70,000 Retired 1960 50,000 Retired 1961 55,000 Retired 1962 55,000 Retired 1963 60,000 Retired 1964 60,000 Retired 1965 65,000 Retired 1966 70,000 Retired 1967 70,000 Retired 1968 75,000 Retired 1969 75,000 Retired 1970 80,000 Retired 1971 85,000 Retired 1972 90,000 Retired 1973 90,000 Retired 1988 1,950,000 3.4% Redemption Date and Premiums April 1, 1983 3/4% ; and WHEREAS, pursuant to Resolution No. 5532, the Mayor and Common Council of the City issued $1,000,000 of said authorized amount of Bonds designated, maturing and being callable and redeemable prior to maturity as follow: 2 DIS318(et) JvlB 11 2 3/26/83 "', ',' San Bernardino 60,009-41-2 Designation: SERIES 2 SEWER REVENUE BONDS, ELECTION 1957, Date: April 1, 1960 Maturities: Year of Maturity April 1 of Principal Amount Interest Rate 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1990 $ 15,000 20,000 20,000 25,000 25,000 25,000 30,000 ;30, 000 30,000 30,000 30,000 30,000 30,000 660,000 Retired Retired Retired Retired Retired Retired Retired Retired Retired Retired Retired Retired Retired 4% Redemption Dates and Premiums April 1, 1983 3/4% ; and WHEREAS, pursuant to Resolution No, 9335, the Mayor and Common Council of the City issued $900,000 of said authorized amount of Bonds designated, maturing and being callable and redeemable prior to maturity as follows: 3 DIS318(et) JI'1B112 3/2683 "', San Bernardino 60,009-41-2 Designation: SEWER REVENUE BONDS, ELECTION 1957, SERIES 3 Date: October I, 1968 Maturities and Interest Rate: Year of Maturity Principal Interest April 1 of Amount Rate 1969 $ 40,000 Retired 1970 15,000 Retired 1971 15,000 Retired 1972 15,000 Retired 1973 20,000 Retired 1974 20,000 Retired 1975 20,000 Retired 1976 20,000 Retired 1977 20,000 Retired 1978 20,000 Retired 1979 20,000 Retired 1980 20,000 Retired 1981 20,000 Retired 1982 25,000 Retired 1983 25,000 4.80 1984 25,000 4.90 1985 30,000 4.90 1986 30,000 4.90 1987 30,000 4.90 1988 30,000 5.00 1989 40,000 5.00 1990 40,000 5.00 1991 40,000 5.00 1992 40,000 5.00 1993 40,000 5.10 1994 40,000 5.10 1995 50,000 5.10 1996 50,000 5.10 1997 50,000 5.10 1998 50,000 5.10 Callable Option: The Bonds maturing on or prior to April I, 1984, shall not be subject to call or redemp- tion prior to maturity. The Bonds maturing on or after April I, 1985, or any of them, may be called before 4 DIS318(et) JWB1l2 3/26'83 San Bernardino 60,009-41-3 maturity and redeemed, at the option of the City, on April 1, 1982, or on any interest payment date there- after prior to maturity, at a redemption price for each redeemable Bond equal to the principal amount thereof plus one-fourth of one percent for each year, or fraction of a year, from the redemption date to the maturity date; and WHEREAS, for the purposes of this Resolution, the above Sewer Revenue Bonds, Election 1957, Series 1, 2 and 3, are herein referred to as the "Refunded Bonds"; and WHEREAS, certain Holders of the Refunded Bonds above referred to raised issues concerning the proper use of the Sewer Fund and the funds derived therefrom, contending that their holdings of such Refunded Bonds had not been treated properly pursuant to the above referenced Resolutions providing for the issuance of such Refunded Bonds; and WHEREAS, without knowledge of this Mayor and Common Council, certain actions were initiated by persons purportedly employed by or at the direction of the Board of Water Commissioners which made admissions that the contentions of such Holders of the Refunded Bonds were correct, including, without limitation, the preparation of proceedings for refunding such Refunded Bonds, the limited distribution of an official state- ment relating thereto, contacting representatives of companies that might undertake to insure the refunding bonds, contacting one or more rating agencies and contacting the Holders of the Refunded Bonds; and WHEREAS, during such period representations were made to the Holders of the Refunded Bonds that the outstanding Refunded Bonds would be refunded; and WHEREAS, it has been reported that, during such period, threats of litigation were made by one or more Holders of the Refunded Bonds; and WHEREAS, such proceedings finally came to the attention of the administrative personnel in the City, and, having become aware thereof, the City's Financial Consultant and Bond Counsel (collectively the "Consul- tants") were authorized and directed to investigate the 5 DIS318(et) "\-rB112 ~26 83 San Bernardino 60,009-41-3 situation and develop a plan of action to solve any potential problems; and WHEREAS, the Consultants developed as much information as possible, given the limited time allowed, and concluded that, in light of the admissions and representations that had been previously made without proper authorization, but perhaps with ostensi- ble authority, the best procedure, even though not completely satisfactory, was to prepare proceedings for refunding the outstanding Refunded Bonds in such a way as to minimize any possible litigation and maximize the protection of the City and its good reputation in the municipal bond market; and WHEREAS, during the period of the preparation of the documentation for the Refunding Bonds, the Consultants received confirmation from certain of the Holders of the Refunded Bonds that reports of threat- ened litigation had been made and were continuing; and WHEREAS, on February 21, 1983, the Consul- tants proposed that the City initiate proceedings for the refunding of the Refunded Bonds and this Mayor and Common Council adopted Resolution No. 83-55 providing for the sale of the hereinafter referred to Refunding Bonds; and WHEREAS, proceedings for the sale of the Refunding Bonds were duly had and taken, notices of sale published and notices of call and redemption prior to maturity published; and WHEREAS, on February 24, 1983, a bill (HR 1635, hereinafter referred to as the "Pickle Bill") was introduced into the United States Congress by Congress- man Jake Pickle, Texas, which would purport to withdraw the Federal tax exemption from any bonds issued on or after April 15, 1983, which had the benefit of FDIC or FSLIC insurance; and WHEREAS, a large amount of such transactions was pending and the potential issuers involved in such transactions were attempting to beat the April 14, 1983 deadline, resulting in an overload of the rating agencies and the municipal bond market, causing an upward distortion in the interest rates; and 6 DIS3l8(et) JWBl12 3 26,83 San Bernardino 60.009-41-2 WHEREAS. on March 24. 1983. bids were received for the Refunding Bonds. and the best bid was from Smith Barney. Harris Upham & Co.. Inc. and Associ- ates at a net interest cost of 9.771365%; and WHEREAS. the City's Financial Consultants pointed out the above-referenced temporary distortion in the municipal bond market. the problems that had been encountered with the insurers of municipal bonds. who. in part at least. because of the past unauthorized actions had refused to insure the Refunding Bonds. although a rating of BBB had been assigned to the Refunding Bonds by Standard & Poor's Corporation. a national rating agency; and WHEREAS. as a result of the consideration all the facts and circumstances. including. without limita- tion. those above referred to. this Mayor and Common Council rejected the above referenced bid received as being unsatisfactory as to price which. under the Revenue Bond Law of 1941. leaves the City in a position to either readvertise or sell the Refunding Bonds at private sale. It is expected that. due to the above referenced Pickle Bill. the distortion in the municipal bond market will continue until at least April 15. 1983. and perhaps for some time thereafter as the municipal bond market absorbs inventory accumulated during this short period. The refunding of the refund- ed bonds. however. must take place on April 1. 1983. to be effective in accomplishing the goal originally contemplated when the Refunding bonds were offered for sale. Accordingly. the Mayor and Common Council. as part of the proceedings for rejecting the bids as being unsatisfactory as to price. determined to proceed pursuant to Article 11.5 of the Revenue Bond Law to issue revenue bond anticipation notes. to accomplish the refunding which could not be accomplished under the Resolution of Issuance without paying extra interest cost due to the temporary distortion of the municipal bond market. and to sell the Refunding Bonds pursuant to the Resolution of Issuance. as the same presently exists or as amended. at such time as the municipal bond market stabilizes; and WHEREAS. at the same time. at the same meeting on March 24, 1983. the Mayor and Common Council adopted the Resolution of Issuance of the Refunded 7 DIS318(et) JWEl12 326;83 San Bernardino 60,009-41-3 Bonds, herein referred to as "Resolution of Issuance", being Resolution No. 83-89 entitled: "Resolution of the Mayor and Common Council of the City of San Bernar- dino, Authorizing the Issuance of Sewer Revenue Refund- ing Bonds, Issue of 1983, of said City and Providing the Terms and Conditions for the Issuance of said Refunding Bonds," and also adopted a Resolution provid- ing for the services of the Fiscal Agent in connection with the Resolution of Issuance; and WHEREAS, this Mayor and Common Council deems it necessary to issue and sell at this time a suffi- cient amount of Sewer Revenue Refunding Bond Anticipa- tion Notes pursuant to Article 11.5 of the Revenue Bond Law, to refund the outstanding portion of said above- described issues of Bonds (herein sometimes referred to as the "Refunded Bonds"). NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, DO HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Definitions. As used in this Resolution, the following terms shall have the follow- ing meanings, unless the context otherwise requires: "Notes" means the "City of San Bernardino, Sewer Revenue Refunding Bond Anticipation Notes, Issue of 1983," authorized by this Resolution. "Resolution of Issuance" means the Resolution of Issuance for the Refunding Bonds referred to in the recitals hereof, and attached hereto as Exhibit B. All other terms as defined in the Resolution of Issuance shall have the meanings set forth therein unless the context otherwise requires. Section 2. Amount, Issuance, Purpose and Nature of Notes. Under and pursuant to Article 11.5 (commencing with Section 54664 of the Government Code) of the Revenue Bond Law, Sewer Revenue Refunding Bond Anticipation Notes, Issue of 1983, shall be issued in the principal amount of $2,600,000 for the purpose stated in the Resolution of Issuance, and to that end, the provisions of Section 2 of said Resolution of Issuance are incorporated herein, and the proceeds of 8 DIS318(et) JWB1l2 3/26 '83 San Bernardino 60,009-41-2 such Notes shall be used and for the purposes for which the Refunding Bonds were authorized. Section 3. Equality of Notes, Pledge of Revenues. The Notes shall be paid from the proceeds of the sale of the Refunding Bonds; provided, however, that the principal of, and interest on, such Notes may be paid from the Net Revenues of the Enterprise, and if such Notes have not been previously paid from the Net Revenues of the Enterprise, they shall be paid from the proceeds of the sale of the Refunded Bonds; provided, however, further, that if any principal of such Notes is paid from the Net Revenues of the Enterprise rather than from the sale of the Refunding Bonds, the amount of the Refunding Bonds authorized to be sold under the Resolution of Issuance shall be reduced accordingly. To the extent necessary to make the foregoing provi- sions of this Section meaningful, the provisions of Section 3 of the Resolution of Issuance are incorpo- rated herein. Section 4. No General City Liability. The provisions of Section 4 of the Resolution of Issuance are incorporated herein. Section 5. Description and Terms of Notes. The Notes shall have the following terms: Designation: City of San Bernardino, Sewer Revenue Refunding Bond Anticipation Notes, Issue of 1983 Amount: $2,600,000 Date: March 30, 1983 Maturity: One (1) year (i.e., March 30, 1984) Denominations: $5,000 on any integral multiple thereof, num- bered from Rl consecu- tively upward 9 DIS3l8(et) JWBl12 3/26/83 San Bernardi~o 60,009-41-2 Interest Rate: Seven percent (7%) per annum payable on September 30, 1983 and at maturity, March 30, 1984. Call and Redemption Prior to Maturity, Callable and redeemable in whole on any date prior to maturity plus accrued interest Section 6. Interest. Said Notes shall bear interest at the rate of seven percent (7%) per annum. Interest shall be payable on September 30, 1983 and at maturity on March 30, 1984. Each Note shall bear interest until the principal sum thereof has been paid; provided, however, that if funds are available for the payment thereof in full accordance with the terms of this Resolution, said Note shall then cease to bear interest. The Notes shall be issued in fully registered form, shall be numbered by the Fiscal Agent as the Fiscal Agent shall determine and shall be dated as of March 30, 1983, except that Notes issued upon exchanges and transfers of Notes shall be dated so that no gain or loss of interest shall result from such exchange or transfer. Each Note shall bear interest from March 30, 1983, unless it is dated after September 30, 1983, in which case it shall bear interest from September 30, 1983. Interest on the Notes to September 30, 1983, shall be paid by the Fiscal Agent (out of the appropri- ate funds) by check or draft mailed on such interest payment date to the registered owner as his name and address appears on the Note Register kept by the Fiscal Agent at the close of business on the fifteenth (15th) day preceding the interest payment date and interest due on maturity of the Notes, March 30, 1984, shall be paid with the principal thereof as stated below. Section 7. Place of Payment. The Notes and the interest thereon shall be payable in lawful money of the United States of America and (except for inter- est to September 30, 1983, on the Notes which is payable by check or draft as stated above) shall be payable at the corporate trust office of Security 10 DIS318(et) JWB112 3/26/83 San Bernardino 60,009-41-2 Pacific National Bank, Fiscal Agent for the City, in Los Angeles, California. Section 8. Forms of Notes and Conversion. The Notes shall be substantially in the form attached hereto and by this reference incorporated herein, marked "Exhibit A" (Fully Registered Note). Such form is hereby approved and adopted as the form of such Notes and of the redemption, exchange, and assignment provisions pertaining thereto, with necessary or appropriate variations, omissions and insertions as permitted or required by this Resolution. Any Notes issued pursuant to this Resolution may be initially issued in temporary form exchangeable for definitive Notes when the same are ready for delivery. The temporary Notes may be printed, litho- graphed or typewritten, shall be of such denominations as may be determined by the City, shall be without coupons and may contain such reference to any of the provisions of this Resolution as may be appropriate. Every temporary Note shall be executed by the City and be issued by the Fiscal Agent upon the same conditions and in substantially the same form and manner as the definitive Fully Registered Notes. If the City issues temporary Notes, it will execute and furnish definitive Notes without delay, and, thereupon, the temporary Notes shall be surrendered for cancellation at the corporate trust office of the Fiscal Agent in Los Angeles, California, or at such other place in California as the City may approve, and the City shall deliver, in exchange for such temporary Notes, an equal aggregate principal amount of definitive Notes of authorized denominations of this same issue. Until so exchanged, the temporary Notes shall be entitled to the same benefits under this Resolution as definitive Notes of the same issue delivered hereunder, except that any interest which has accrued thereon shall not be paid until the exchange has been accomplished. Section 9. Execution of Notes. The Mayor of the City and the City Treasurer of the City are hereby authorized and directed to sign all of said Notes by their printed, lithographed or engraved facsimile signatures, and the City Clerk of the City is hereby authorized and directed to countersign said Notes and 11 DIS318(et) cTi-m 112 3 26/83 San Bernardino 60,009-41-2 to cause the corporate seal of the City to be imprinted thereon. The foregoing officers are hereby authorized and directed to sign said Notes. If any City officer whose manual or facsimile signature appears on said Notes or coupons ceases to be such officer before delivery of said Notes, his signature is as effective as if he had remained in office. The Fiscal Agent shall authenticate the Notes on registration and/or exchange to effectuate the regi- stration and exchange provisions set forth herein, and only such of the Notes as shall have endorsed thereon a certificate of authentication, substantially in the form set forth in Exhibit A, duly executed by the Fiscal Agent, shall be entitled to any rights, bene- fits, or security under this Resolution. No Note shall be valid or obligatory for any purpose unless and until such certificate of authentication shall have been duly executed by the Fiscal Agent, and such Certificate of the Fiscal Agent, upon any such Note, shall be conclu- sive and the only evidence that such Note has been duly authenticated and delivered under this Resolution. The Fiscal Agent's certificate of authentication on any Note shall be deemed to have been duly executed if signed by an authorized officer of the Fiscal Agent, but it shall not be necessary that the same officer sign the certificate of authentication on all of the Notes that may be issued hereunder at anyone time. Section 10. Note Registration and Exchange. A Note or Notes may be exchanged for a Note or Notes. Transfer of ownership of a Note or Notes shall be made by exchanging the same for a new Note or Notes. All of such exchanges shall be made in such manner and upon such reasonable terms and conditions as may from time to time be determined and prescribed by the City; provided, however, no such exchange shall be made between the fifteenth (15th) day preceding any interest payment date and such interest payment date. Such exchanges shall be free of any costs or charges to the person, firm or corporation requesting such exchange, except for any tax or governmental charge that may be imposed in connection with such exchange. Each Note issued pursuant to this Resolution shall be in fully registered form and of a denomination which is $5,000 12 DIS318(et) JWBl12 3/26;33 San Bernardino . 60,009-41-2 or a whole multiple thereof and shall be of the same issue. Section 11. Bond Register. The Fiscal Agent will keep or cause to be kept at its corporate trust office in the City of Los Angeles, California, or at such other place in California as the City may approve, sufficient books for the registration and transfer of the Notes, which shall at all time be open to inspec- tion by the City; and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer, or cause to be registered or transferred, on said register, said Notes as hereinbefore provided. Section 12. Call and Redemption of Notes Prior to Maturity. A. The Notes may be called before maturity and redeemed, at the option of the City, in whole from the proceeds of the Refunding Bonds on any date prior to maturity. Notes so called for redemption shall be redeemed at a redemption price for each redeemed Note equal to the principal amount thereof, without premium, plus accrued interest to the redemption date. The date on which Notes are to be presented for redemption is hereinafter sometimes called the "redemption date." B. Call and Redemption. The Mayor and Common Council of the City may, by resolution, direct the call and redemption prior to maturity of the Notes by the Fiscal Agent in such amounts as funds are available therefor and shall give notice to the Fiscal Agent of such redemption at least thirty-five (35) days prior to the redemption date. C. Notice of Redemption. Notice of redemp- tion prior to maturity (except as provided below) shall be given by mailing, not less than thirty (30) days prior to the redemption date, to each registered Holder of such Note(s) as his name and address appear on the Bond Register notice of such redemption, but neither failure to mail such notice nor any defect in any notice so mailed shall affect the sufficiency of the proceedings for the redemption of any of the Notes. The notice of redemption shall (a) state the redemption date; (b) state the redemption price; (c) require that 13 DIS318(et) JI'lBl12 3 21)'83 San Bernardine 60,009-41-2 the Notes be surrendered at the place of redemption; and (d) state that interest on the principal portion of the Notes so designated for redemption shall cease to accrue from and after such redemption date and that on said date there shall become due and payable on each of such Notes the redemption price thereof. The actual receipt by the Holder of any Note of notice of such redemption shall not be a condition precedent to redemption, and failure to receive such notice shall not affect the validity of the proceedings for the redemption of such Notes or the cessation of interest on the redemption date. Notice of redemption of Notes shall be given by the Fiscal Agent for and on behalf of the City at the expense of the City. A certificate by the Fiscal Agent that notice of redemption has been given as herein provided shall be conclusive as against all parties, and no Holder whose Fully Registered Note is called for redemption may object thereto or object to the cessation of interest on the redemption date fixed by any claim or showing that he failed to actually receive such notice of call and redemption. The Fiscal Agent shall, on or before the date of publication of said notice of redemption, mail a similar notice, postage prepaid to any person, firm or corporation that originally purchased the Notes from the City. D. Redemption Fund. Prior to the redemption date, the Fiscal Agent shall establish, maintain and hold in trust a separate account which is hereby created for the purpose of this Resolution to be described or known as SEWER REVENUE REFUNDING BOND ANTICIPATION NOTES, ISSUE OF 1983, REDEMPTION FUND (hereinafter sometimes referred to as "Redemption Fund"), and prior to the redemption date there must be set aside in said Redemption Fund moneys available for the purpose and sufficient to redeem the Notes desig- nated in such notice of redemption. Said moneys must be set aside in said Fund solely for that purpose and shall be applied on or after the redemption date to payment of the principal of the Notes to be redeemed upon presentation and surrender of such Notes, and shall be used only for that purpose. Any interest due 14 DIS318(et) JWBl12 3/26 83 San Bernardino 60.009-41-3 on or prior to the redemption date shall be paid from the Bond Service Fund. E. Effect of Redemption. Notice of re- demption having been duly given as aforesaid. and moneys for payment of the principal of and interest payable upon redemption of the Notes being set aside as aforesaid. the Notes. so called for redemption shall. on the redemption date. become due and payable at the redemption price specified in such notice. interest on the Notes. so called for redemption shall cease to accrue. and said Notes. or parts thereof. as the case may be. shall cease to be entitled to any lien. benefit or security under this Resolution. and the Holders of said Notes shall have no rights in respect thereof except to receive payment of the redemption price thereof. All unpaid interest installments which shall have matured on or prior to the redemption date desig- nated in such notice shall continue to be payable to the respective Holders thereof but without interest thereon. All Notes redeemed pursuant to the prov1s10ns of this Section shall be cancelled upon surrender thereof and delivered to. or upon the order of. the City. If. after all of the Notes have been redeemed and cancelled or paid and cancelled. there are moneys remaining in said Redemption Fund. said moneys shall be transferred to the Sewer Fund; provided. however. that. if said moneys are part of the proceeds of refunding bonds. said moneys shall be transferred to the fund or account created for the payment of principal of and interest on such refunding bonds. Section 13. Funds and Accounts. The Funds and Accounts shall be as set forth in Section 13 of the Resolution of Issuance. which is incorporated herein. and shall have the same names as set forth in said Resolution of Issuance but shall be used for the Notes. Section 14. Disposition of Note Proceeds. The disposition of the proceeds from the sale of the Notes shall be as set forth in Section 14 of the 15 DIS318(et) JWBl12 3/26'83 . San Bernardino 60,009-41-3 Resolution of Issuance, which is incorporated herein, as applied to the Notes except that there shall only be deposited in the Reserve Fund one (1) year's interest on the Notes. Further provisions as to the disposition of the proceeds of the Notes are set forth in Section 33. Section 15. Sewer Fund. The Sewer Fund shall be operated as set forth in Section 15 of the Resolution of Issuance, which is incorporated herein, as applied to the Notes. Section 16. Maintenance and Operation Account. The Maintenance and Operation Account shall be operated as set forth in Section 16 of the Resolu- tion of Issuance, which is incorporated herein, as applied to the Notes. Section 17. Bond Service Fund. The Bond Service Fund shall be operated as set forth in Section 17 of the Resolution of Issuance, which is incorporated herein, as applied to the Notes, with the provision that, since the Notes are to be paid from the proceeds of the Refunding Bonds, no payments into said Fund shall be made on account of principal and while the Notes are outstanding said Section 17 of the Resolution of Issuance shall be construed as if princi- pal were not set forth therein. Section 18. Reserve Fund. The Reserve Fund shall be operated as set forth in Section 18 of the Resolution of Issuance, which is incorporated herein, except that as to the Notes, while the same are out- standing, there only needs to be maintained in the Reserve Fund one (1) year's interest, which sum shall be increased as provided in the Resolution of Issuance for the Refunding Bonds, when the proceeds thereof are used to retire the Notes. Section 19. Surplus. The prov~s~ons regard- ing Surplus set forth in Section 19 of the Resolution of Issuance shall operate as set forth in said Section, which is incorporated herein, as applied to the Notes, it being the intent hereof that the Net Revenues of the Enterprise shall continue to flow through to Surplus so that the payments under the Sewage Treatment Plant 16 DIS318(et) 3WB 112 3/26/83 San Bernardino 60,009-41-3 Sublease, dated as of August 1, 1970, as amended as of November 1, 1973, shall continue to be made. Section 20. Deposit and Investment of Moneys in Funds. The provisions regarding deposit and invest- ment of moneys in funds and accounts set forth in Section 19 of the Resolution of Issuance shall operate as set forth in said Section, which is incorporated herein, as applied to the Notes. Section 21. Covenants. The prov1s1onS contained in Section 21 and the Covenants therein shall be as set forth in said Section, which is incorporated herein, as applied to the Notes. Section 22. Issuance of Parity, Refunding and Additional Notes. No Parity Notes shall be issued. Should the sale of the Refunding Bonds not have occur- red prior to the maturity.of the Notes, the City Treasurer shall, in order to meet the principal pay- ments on the Notes then maturing, issue renewal notes for such purpose. No renewal notes shall be issued after the issuance of the Refunding Bonds. There shall be only one renewal of the Notes and such renewal notes shall mature within a period not to exr.eed two (2) years. Section 23. Fiscal Agent and Paying Agents. The provisions contained in Section 23 of the Resolu- tion of Issuance shall operate as provided in said Section, which is incorporated herein, as applied to the Notes, except that, as to the Notes, there are no paying agents in other cities. Section 24. Lost, Stolen, Destroyed or Mutilated Notes. The provisions contained in Section 24 of the Resolution of Issuance shall operate as provided in said Section, which is incorporated herein, as applied to the Notes. Section 25. Cancellation of Notes. The provisions contained in Section 25 of the Resolution of Issuance shall operate as provided in said Section, which is incorporated herein, as applied to the Notes. Section 26. Events of Default and Remedies. The provisions contained in Section 26 of the 17 DIS318(et) _TY'!Bl12 :!.b '83 . . San Bernardino 60,009-41-3 Resolution of Issuance shall operate as provided in said Section, which is incorporated herein, as applied to the Notes, with the provision that principal of the Notes is payable at the maturity thereof. Section 27. Supplemental Resolutions. The provisions contained in Section 27 of the Resolution of Issuance shall operate as provided in said Section, which is incorporated herein, as applied to the Notes. Section 28. Consent of Noteholders. The provisions contained in Section 28 of the Resolution of Issuance shall operate as provided in said Section, which is incorporated herein, as applied to the Notes. Section 29. Execution of Instruments by Noteholders and Proofs of Ownership of Notes. The pro- visions contained in Section 29 of the Resolution of Issuance shall operate as provided in said Section, which is incorporated herein, as applied to the Notes. Section 30. Miscellaneous. The provisions contained in Section 30 of the Resolution of Issuance shall operate as provided in said Section, which is incorporated herein, as applied to the Notes. Section 31. Future Contracts. The provi- sions contained in Section 31 of the Resolution of Issuance shall operate as provided in said Section, which is incorporated herein, as applied to the Notes. Section 32. Severability. The provisions contained in Section 32 of the Resolution of Issuance shall operate as provided in said Section, which is incorporated herein, as applied to the Notes. Section 33. Sale of Notes. In accordance with said Article 11.5, the Notes are sold hereunder on a negotiated basis to Miller & Schroeder Municipals, Inc. at the interest rate of seven percent per annum, with a discount of one percent of the principal amount thereof. Miller & Schroeder Municipals, Inc. has been acting as Financial Consultants in the preparation for sale of the Refunding Bonds, the bids on which were rejected as being unsatisfactory as to price, all as set forth in the recitals hereof. This issue of Notes, while dependent on the subsequent issuance of the 18 DIS318(et) JWBl12 3/26/83 San Bernardino 60,009-41-3 Refunding Bonds, is a different issuance from the issuance of the Bonds. Miller & Schroeder Municipals, Inc. is not the Financial Consultant as to the issuance of these Notes, but is, instead, the Underwriter. To the extent that such Financial Consulting relationship as to the Refunding Bonds might carryover as to these Notes, Miller & Schroeder Municipals, Inc., by the execution of this Resolution, (i) has terminated such relationship as to the Notes, (ii) has disclosed to the City that there may be a conflict of interest in changing from the capacity of financial advisor on the Refunding Bonds to purchaser of the Notes, and (iii) has expressly disclosed the source and anticipated amount of all remuneration, to wit: profit made upon the sale of the Notes - one percent discount plus an underwriting fee from the proceeds of the Notes of one-half of one percent equaling a total of one and one-half percent of the total amount of the issue of the Notes. By the adoption hereof, the Mayor and Common Council of the City expressly consent to the purchase of the Notes by Miller & Schroeder Municipals, Inc. on a negotiated basis. The net proceeds of the issue of Notes (after discount) shall be used to pay the above underwriting fee, to pay the costs of prepar- ing the Refunding Bonds for sale, including, without limitation, the fees of the rating agencies, and also all the costs connected with such preparation, includ- ing, without limitation, the costs of printing the Official Statement, the expenses of mailing, messenger service, courier service, etc., and the fee for bond counsel services in connection with the Notes of one percent of the principal amount thereof, and to pay all the costs in connection with the issuance of the Notes, including without limitation, the costs of printing, duplicating, mailing, messenger and courier services, etc. To the maximum extent possible, all of such fees and expenses shall be paid upon delivery of the Notes to the purchasers thereof, presently estimated to be on March 30, 1983, 50 that money will be available to make the payments and the calls and redemptions prior to maturity as previously noticed on April 1, 1983. 19 DIS318(et) JWB112 3/26/83 '. San Bernardino 60,009-41-2 Section 34. Effective Date. This Resolution shall take effect upon adoption. ADOPTED, SIGNED AND APPROVED March, 1983. City of no, California ATTEST: ,&n~h$~ Crty Clerk of the City of San Bernardino, California [SEAL] We hereby agree to purchase the Notes described in the above Resolution upon the terms stated herein and to accept delivery of'the same, in temporary form if necessary, on March 30, 1983. MILLER & SCHROEDER MUNICIPALS, INC. By: Dated: , 1983 20 DIS318(et) ]v1E1l2 2 26 '83 San Bernardin9 60,009-41-2 I HEREBY CERTIFY that the foregoing Resolu- tion was duly adopted by the Mayor and Common Council of the City of San Bernardino at an adjourned regular meeting thereof, held on the 28th day of March, 1983, by the following vote, to wit: AYES: Council Members Castaneda, Reilly, Hernandez, .Marks, Hobbs, Strickler NAYS: None ABSENT: Council r'ember Quiel ABSTAIN: None ~.e~~Ab /' Ci ty Clerk The foregoing Resolution this 28th day of March, 1983. APPROVED AS TO FORM: ~4J~,~~~ City A torney 21 DIS318(et) JWB1l2 3.26/83 San Bernardino 60,009-41-2 STATE OF CALIFORNIA ) COUNTY OF SAN BERNARDINO) ss. CITY OF SAN BERNARDINO ) I, Shauna Clark, City Clerk in and for the City of San Bernardino, DO HEREBY CERTIFY that the foregoing and attached copy of the San Bernardino City Resolution No. is a full, true and correct copy of that now on file in this office. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Bernardino this 28th day of March, 1983. City Clerk ,.. 22 DIS318(et} .J\-lB112 3/26..'83 , San BernardinQ 60,009-41-3 EXHIBIT A [FORM OF FULLY REGISTERED NOTE] UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF SAN BERNARDINO CITY OF SAN BERNARDINO SEWER REVENUE REFUNDING BOND ANTICIPATION NOTE ISSUE OF 1983 $ No. R THE CITY OF SAN BERNARDINO, a municipal corporation duly organized and existing under and pursuant to the Constitution and laws of the State of California (hereinafter sometimes called "City"), FOR VALUE RECEIVED, hereby promises to pay, solely from the Sewer Fund, as hereinafter provided, to , or registered assigns (herein sometimes referred to as "registered owner"), subject to the right of prior redemption hereinafter mentioned the principal sum of Dollars ($ ) on March 30, 1984, and to pay such registered owner on September 30, 1983 by check or draft mailed to him as his name and address appear on the register kept by the Fiscal Agent at the close of business on the fifteenth (15th) day preceding the interest payment date and at maturity as hereafter set forth, interest on such principal sum at the rate of seven (7%) percent per annum until the principal hereof shall have been paid or provided for in accordance with the Resolution hereinafter referred to. Both principal and interest are payable in lawful money of the United States of America; and (except for interest which is payable on September 30, 1983, by check or draft as stated above) are payable at the corporate trust office of Security Pacific National Bank, Fiscal Agent for the Agency, in Los Angeles, California. [TO BE PRINTED ON REVERSE OF NOTE] This Note and the interest hereon and any premium upon the redemption hereof are not a debt of 23 DIS318(et) JWB1l2 3 '2683 San Bernardino 60,009-41-3 the City of San Bernardino, nor a legal or equitable pledge, charge, lien or encumbrance upon any of its property or upon any of its income, receipts or reve- nues except the revenues of the municipal sewer system pledged to its payment, and the principal and interest of this Note are payable solely from the revenues pledged to its payment, to wit, net revenues from the sewer system of the City, and said City is not obligat- ed to pay such principal, interest and premium except from said net revenues. The Sewer Fund is established under and pursuant to the Charter of the City and the Revenue Bond Law of 1941, and under the provisions of the Resolution authorizing the issuance of this Note the gross revenues received from the services and facilities or arising from the entire sewer system of the City are required to be deposited in the City Treasury to the credit of said Sewer Fund and used only for the purposes authorized by said Resolution, includ- ing the payment of the Neyessary and Reasonable Mainte- nance and Operation Costs of the sewer system and the payment of interest of the issue of Notes of which this is one. This is one of a duly authorized issue of Notes of the City in the aggregate principal amount of $2,600,000, designated "Sewer Revenue Refunding Bond Anticipation Notes, Issue of 1983," herein called "the Notes," all of which have been issued pursuant to the Charter of the City and the Revenue Bond Law of 1941 (being Chapter 6, Part I, Division 2, Title 5 of the Government Code of the State of California), and in particular, Article 11.5 thereof, for the purpose of refunding three outstanding series of bonds of said City entitled "Sewer Revenue Bonds, Election 1957, Series 1, 2 and 3", respectively, and the creation of said issue and the terms and conditions of the Notes are provided for by the resolution of the Mayor and Common Council of said City authorizing the Notes adopted March 28, 1983, designated Resolution No. , and this reference incorporates said Resolution and said Chapter 6 herein, and by acceptance hereof the holder.of this Note assents to said terms and conditions. Said Resolution is adopted under, and this Note is issued under and is to be construed in accordance with the laws of the State of California. 24 DIS318(et) JWBl12 3/26/83 -. San Bernardinp 60,009-41-3 By the terms of said Revenue Bond Law and by covenant expressed in said Resolution, the City is obligated to levy and collect charges for service from the sewer system of the City such as to provide reve- nues sufficient to pay the Necessary and Reasonable Maintenance and Operation Costs of the sewer system and the interest on the Notes as they become due and payable in addition to all other payments required for compliance with said Resolution, are prohibited from issuing other Notes with respect to payment from the sewer system revenues except for renewal notes, if necessary, and are subject to conditions with respect to any sale of said sewer system. In the manner provided in the Resolution, any or all of the obliga- tions referred to in this paragraph and certain other obligations mentioned in said Resolution may be waived with the consent of the holders of sixty-six and two-thirds percent (66-2/3%) in aggregate principal amount of the outstanding Notes, exclusive of issuer- owned Notes, unless the modification or amendment is for the purpose of curing ambiguities, defects, etc., in which case no Noteholder's consent is required. This Note is issued in fully registered form and is non-negotiable. This Note may be exchanged for a Note or Notes. Transfer of ownership of a Note or Notes shall be made by exchanging the same for a new Note or Notes. All of such exchanges shall be made in such manner and upon such reasonable terms and condi- tions as may from time to time be determined and prescribed by the City; provided, however, no such exchange shall be made between the fifteenth (15th) day preceding any interest payment date and such interest payment date. Such exchanges shall be free of any costs or charges to the person, firm or corporation requesting such exchange, except for any tax or govern- mental charge that may be imposed in connection with such exchange. Each Note issued pursuant to the Resolution shall be of a denomination which is $5,000 or a whole multiple thereof and shall be of the same issue. [TO BE PRINTED ON FACE] This Note is callable and redeemable on any date prior to maturity at a redemption price equal to 25 DIS3l8(et) .J1'1B1l2 3;2683 San Bernardino 60,009-41-3 the principal amount thereof (without premium) plus accrued interest to the date of redemption. The City, the Fiscal Agent and any Paying Agent may treat the registered owner hereof as the absolute owner hereof for all purposes, and the Agency, the Fiscal Agent and any Paying Agent shall not be affected by any notice to the contrary. This Note shall not be entitled to any benefit under the Resolution, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been signed by the Fiscal Agent. It is hereby certified and recited that any and all acts, conditions and things required to exist, happen and to be performed precedent to and in the incurring of the indebted~ess evidenced by this Note and in the issuance of this Note exist, have happened, and have been performed in due time, form and manner as required by the Constitution, the Charter of the City and the laws of the State of California, and that this Note, together with all other indebtedness of the City pertaining to the aforesaid sewer system, is within every debt and other limit prescribed by the Constitu- tion, the Charter of the City and the laws of the State of California. IN WITNESS WHEREOF, said City of San Bernar- dino has caused this Note to be signed by the Mayor and the City Treasurer of said City by their facsimile 26 DIS318(et) JWBl12 3/26,/83 San Bernardino 60,009-41-2 signatures, countersigned by the City Clerk of said City by her manual signature, and the corporate seal of ~:~d O~i ty to be imprinted hereon all aa _? ~ / / ~an Bernardino, California City Treasurer of the City of San Bernardino, California COUNTERSIGNED: City Clerk of the City of San Bernardino, California (SEAL) 27 DIS318(et) JWBl12 3/26 83 , .' San Bernardino 60,009-41-3 " [FORM OF CERTIFICATE OF AUTHENTICATION OF FULLY REGISTERED NOTES] This is one of the Fully Registered Notes described in the within-mentioned Resolution. , Fiscal Agent By Authorized Officer , 28 DIS318(et) JvlB 112 326, /83 , . ." San Bernardino 60,009-41-3 . [FORM OF ASSIGNMENT OF FULLY REGISTERED NOTES] For value received hereby sells, assigns and transfers unto the within- mentioned Note and hereby irrevocably constitutes and appoints , attorney, to transfer the same on the books of the Fiscal Agent with fully power of substitution in the premises. Date: NOTE: The signature to this assignment must correspond with the name as written on the face of the within Note in every particular, without alteration or enlargement or any change whatsoever. 29 DIS318(et) Jr/B 11 2 3/2683