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MEMORANDUM
To:
Mayor and Common Council of the City of San Bernardino
From:
Timothy J. Sabo
Date:
March 6, 1986
Bid Opening for the 12,600,000 City of
California, Sewer Revenue Refunding Bonds,
(Wastewater Treatment Plant Project)
San Bernardino,
Issue of 1986
Re:
The bid opening for the $2,600,000 City of San Bernardino,
California, Sewer Revenue Refunding Bonds, Issue of 1986 (Wastewater
Treatment Plant Project) (the "Bonds") was held as scheduled on March 6,
1986 at 1l:00 A.M. at Security Pacific National Bank, 333 South Beaudry
Avenue, 24th Floor, Conference Room C. in downtown Los Angeles. The
parties in attendance at the bid opening repruenting the City were
Mr. J. Jeffery Kinsell and Mr. William Fawell of Miller & Schroeder
Financial, Inc. ("Miller & Schroeder"), Mr. Craig Graves, City Treasurer,
and Deborah A. Thompson of Sabo & Gondek, a Professional Corporation. A
copy of the attendance record is attached hereto.
Six (6) bids were received for the Bonds and were opened in the
order received with the first Ost) bid opened being that of Bear,
Stearns .. Co., Inc., then the bid of Smith Barney, Harris Upham .. Co.,
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Inc., Prudential-Bache Securities, Inc., Merrill Lynch Capital Markets
(Merrill Lynch, Pierce, Fenner.. Smith, Incorporated), John Nuveen & Co.,
Incorporated and finally the bid of Stone & Youngberg. All bids were
received prior to the 11:00 A.M. deadline. The winning bid of Bear,
Stearns & Co., Inc. offered a net interest cost of 6.47820%. The net
interest costs associated with the other bids are set forth in said bids
and all are attached to the Resolution Awarding the Bonds. All six (6)
bids are in conformity with the Notice Invitini Bids and the Bid Form and
there are no irregularities in any of the bids. Each of the six (6) bids
had the appropriate $50,000 cashier's check as a "good faith" deposit as
required by the Notice Inviting Bids. Those individuals in attendance at
the bid opening were in telephonic communication with me at City Hall at
approximately 10:55 A.M. prior to the opening of the bids and once again
at approximately 11: 10 A.M. after the decision was made as to which was
the .uccessful bid.
Mr. Kinsell of Miller.. Schroeder then telephoned a computer
operator with his office to verify the net interest cost for each bid and
to verify that the Bear, Stearns & Co., Inc. bid was, in fact, the
winning bid based upon the discount and the interest rates bid on each of
the six (6) bids.
The Resolution Awardi1'l.g the Bonds is substantially similar to
that which was previously distributed to the City for agenda package
purposes and has the complete information inserted with regard to the
bids.
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Attached to the Resolution Awarding the Bonds are copies of the
six (6) bids which are included as exhibits thereto.
Additionally, it is necessary that the Mayor and Common Council
at this time specifically authorize the amendment of Resolution No. 86-40
(the "Resolution of Issuance") as initially adopted and approved by the
Mayor and Conunon Council on February 13, 1986, by adopting a resolution
approving such amendments. The amendments are necessitated by the
present requirements of Moody's and the municipal bond insurance
companies as a result of the pending federal tax legislation commonly
referred to as H.R. 3838. Other modifications were requested by Security
Pacific National BanK, the Fiscal Agent for the Bonds.
It is still anticipated that a closing will occur on March 14,
1986, so that the payment in full of the 1984 Notes on their maturity
date of March 15, 1986, can be accomplished.
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SBE071-18/1553S/k1
03/05/86
RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA, AMENDING
RESOLUTION NO. 86-40 WHICH AMENDS
RESOLUTION 83-93 AND WHICH AUTHORIZES THE
ISSUANCE OF SEWER REVENUE REFUNDING BONDS, ISSUE
OF 1986, (WASTEWATER TREATMENT PLANT PROJECT), OF
SAID CITY AND PROVIDES THE TERMS AND CONDITIONS
FOR THE ISSUANCE OF SAID REFUNDING BONDS TO MAKE
TECHNICAL CHANGES
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WHEREAS, this Mayor and Common Council has duly and
regularly adopted Resolution No. 86-40 entitled;
"RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF
THE CITY OF SAN BERNARDINO, CALIFORNIA, AMENDING
RESOLUTION NO. 83-93, AS AMENDED, AND AUTHORIZING
THE ISSUANCE OF CITY OF SAN BERNARDINO,
CALIFORNIA, SEWER REVENUE REFUNDING BONDS, ISSUE
OF 1986 (REGIONAL WASTEWATER TREATMENT PLANT
PROJECT), OF SAID CITY AND PROVIDING THE TERMS
AND CONDITIONS FOR THE ISSUANCE OF SAID REFUNDING
BONDS"
hereinafter referred to as "Resolution No. 86-40"; and
WHEREAS, Security Pacific National Bank (the "Fiscal
Agent"), the municipal bond insurance companies proposing to insure
the Bonds and the municipal bond rating agency proposing to issue a
rating on the Bonds have requested certain changes, modifications
and Amendments to Resolution No. 86-40; and
WHEREAS, the Mayor and Common Council deem it appropriate
at this time to amend said Resolution No. 86-40.
NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO, CALIFORNIA, DO HEREBY RESOLVE, DETERMINE AND ORDER
AS FOLLOWS:
Section 1. Amendment of Resolution. Resolution
No. 86-40 is amended to read as set forth in those certain changed
pages of said Resolution No. 86-40 as such pages are set forth
hereto as Exhibit "A", with such changes, additions and deletions to
said Resolution No. 86-40 as set forth in the underscored portions
of the attached pages.
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Section 2. Further Amendment Authorized. The Mayor and
Common Council approve the specific modifications and amendments to
Resolution No. 86-40 as set forth in those certain changed pages of
said Resolution No. 86-40 as such pages are attached hereto as
Exhibit "A". The Mayor and Common Council hereby additionally
authorize and direct the Mayor, the City Clerk and any other
authorized officer of the City and the City Attorney, with the
approval of Bond Counsel, to make any and all necessary and required
changes, modifications or amendments to said Resolution No. 86-40 as
may be reasonably requested by the Fiscal Agent, the purchaser of
the Bonds, any municipal bond insurer proposing to insure the bonds
or Moody's Investors Service, Inc., or any other municipal bond
rating agency issuing a rating on the Bonds, or any other changes,
modifications or amendments as deemed necessary by the Mayor, the
City Attorney and Bond Counsel.
After the issuance and delivery of the Bonds Resolution
No. 86-40, as amended, and any supplemental resolutions thereto
shall be irrepealable, but shall be subject to modification to the
extent and in the manner provided in Sections 28 and 29, inclusive,
of Resolution No. 86-40, as amended, but to no greater extent and in
no other manner.
In all other respects, Resolution No. 86-40, as amended,
shall remain as originally adopted.
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Section 3. Effective Date.
take effect upon adoption.
I HEREBY
adopted by the
San Bernardino at
held on the
the following vote,
CERTIFY
Mayor
a
This
Resolution
that the foregoing
and Common Counci 1
resolution
of the
meeting
day of
to wit:
AYES:
l.
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NAYS:
1
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ABSENT:
Council Members
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was duly
City of
thereof,
19 B 6 , by
City Clerk
day of
The foregoing resolution is hereby approved this
, 19B6.
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Approved as to form:
City Attorney
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Mayor of the City of
San Bernardino
Recitals
Section 1.
Section 2.
Section 3.
Section 4 .
Section 5.
Section 6.
Section 7.
Section 8.
Section 9.
Section 10.
Section 1l.
Section 12.
Section 13.
Section 14.
Section 15.
Section 16.
Section 17.
Section 18.
Section 19.
Section 20.
TABLE OF CONTENTS
Page
......................................... .
1
Amendment of Resolution........... ...
8
De fin it ion s . . . . . . . . . . . . . . . . . . . . . . . . . .
8
Amount, Issuance, Purpose
and Nature of Bonds............ .....
11
Equality of Bonds, Pledge
of Revenues......................... 12
No General City Liability............ 13
Description of Bonds............ ..... 14
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Place of Payment.. ..... ........ ... ... 15
Forms of Bonds and Conversion........ 15
Execution of Bonds................... 15
Types of Bonds, Registration and
Excha nge. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Bond Register........................ 16
Call and Redemption of Bonds Prior
to Maturity......................... 17
Funds and Accounts..... ........ ...... 20
Disposition of Bond
Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Sewe r Fund........................... 21
Maintenance and Operation
Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Bond Service Fund................ .... 22
Reserve Fund......................... 23
Surplus.............................. 23
( i )
Section 2l.
Section 22.
Covenant l.
Covenant 2.
Covenant 3.
Covenant 4.
Covenant 5.
Covenant 6 .
Covenant 7 .
Covenant 8.
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Page
Deposit and Investment of
Moneys in Funds..................... 24
Covenants........................... 26
Punctual Payment.................... 26
Discharge Claims.................... 26
Accomplish Purpose.................. 26
Operate Enterprise in Efficient and
Economical Manner.................. 26
Against Sale........................ 27
Insurance........................... 27
Records and Accounts................ 28
No Free Service..................... 29
Covenant 9. Rates and Charges....... ..... ......... 30
Covenant 10. Compliance with Conditions
Precedent....... ................... 31
Covenant 11. Eminent Domain Proceeds............. 31
Covenant 12. Power to Issue Bonds and Make
Pledges. . . . . . . . . . . . . . .. . . . . . . . . . . . . 32
Covenant 13. Further Assurances................... 32
Covenant 14. Unconditional........................ 32
Covenant 15. Agreement and Performance Thereof.... 33
Covenant 16. Non-Arbitrage........................ 33
Section 23. Issuance of Parity, Refunding and
Additional Bonds....... ........... 33
Section 24. The Fiscal Agent and the Paying
Agents. . . . . . .. . . . . . . . . . .. . . . . . .... 36
Section 25. Lost, Stolen, Destroyed or Mutilated
Bo nds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 26. Cancellation of Bonds............ ..... 37
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Page
Section 27. Events of Default and Remedies......... 37
Section 28. Supplemental Resolutions............... 40
Section 29. Consent of Bondholders................. 44
Section 30. Execution of Instruments by
Bondholders and Proofs of
Ownership of Bonds................. 46
Section 31. Miscellaneous............... ........... 47
Section 32. Future Contracts....................... 48
Section 33. Severability....................... .... 48
Section 34. Effective Date......................... 49
Exhibit A. Form of Fully Registered Bond...........
( i i i)
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SBE071-2a/157IS/ca
03/04/86
RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA, AMENDING
RESOLUTION NO. 83-93, AS AMENDED, AND AUTHORIZING
THE ISSUANCE OF CITY OF SAN BERNARDINO,
CALIFORNIA, SEWER REVENUE REFUNDING BONDS, ISSUE
OF 1986 IN/ASTEWATER TREATMENT PLANT PROJECT), OF
SAID CITY'AND PROVIDING THE TERMS AND CONDITIONS
FOR THE ISSUANCE OF SAID REFUNDING BONDS
WHEREAS, pursuant to Ordinance No. 2170, a special
municipal election was held in the City of San Bernardino,
California (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 Revenue Bond Law of 1941
(Chapter 6, Part 1, Division 2, Title 5 of the Government Code of
the State of California) (the "Revenue Bond Law") for the following
purposes, to wit:
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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
acquisition of all land, easements, pipe, pumps, machinery,
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; and
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 sewer
revenue bonds as provided in said Revenue Bond Law; and
WHEREAS, pursuant to Resolution No. 4708, the Mayor and
Common Council of the City issued $3,000,000 of the total authorized
principal amount of Bonds designated, maturing and being callable
and redeemable prior to maturity as follows:
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Designation: SEWER REVENUE BONDS, ELECTION 1957, SERIES 1.
Date
April 1, 1958.
Maturities and Interest Rate
Year of
Maturity Principa 1 Interest
(April 1 ) Amount Rate
1959 $ 70,000 Reti red
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 Retired
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 the total authorized
principal amount of Bonds designated, maturing and being callable
and redeemable prior to maturity as follows:
Designation: SEWER REVENUE BONDS, ELECTION 1957, SERIES 2
Date
April 1, 1960
Maturities
Year of
Maturity
(April 1)
1961
1962
1963
1964
Principal
Amount
Interest
Rate
$ 15,000
20,000
20,000
25,000
Retired
Retired
Retired
Retired
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1965
1966
1967
1968
1969
25,000
25,000
30,000
30,000
30,000
Retired
Retired
Retired
Retired
Retired
Maturities
Year of
Maturity
(April 1)
1970
1971
1972
1973
1990
Interest
Rate
Principal
Amount
Retired
Retired
Retired
Retired
Retired
30,000
30,000
30,000
30,000
660,000
Redemption Dates and Premiums
April 1, 1983
3/4%
; and
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WHEREAS, pursuant to Resolution No. 9335, the
Common Council of the City issued the final $900,000 at
authorized principal amount of Bonds designated, maturing
callable and redeemable prior to maturity as follows:
Designation: SEWER REVENUE BONDS, ELECTION 1957, SERIES 3
Date:
October 1, 1968
Maturities and Interest Rate
Year of
Maturity Principal Interest
(April 1) 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
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~layor and
the total
and being
1983 25,000 Retired
1984 25,000 Retired
1985 30,000 Retired
1986 30,000 Retired
1987 30,000 Retired
1988 30,000 Retlred
Year of
Maturity Principal Interest
(April 1 ) Amount Rate
1989 40,000 Retired
1990 40,000 Retired
1991 40,000 Retlred
1992 40,000 Retired
1993 40,000 Retlred
1994 40,000 Retlred
1995 50,000 Retlred
1996 50,000 Retired
1997 50,000 Retired
1998 50,000 Reti red
Callable Optio'l: The Bonds maturing on or prior to April 1, 1984,
shall not be subject to call or redemption prior to maturity. The
Bonds maturing on or after April 1, 1985, or any of them, may be
called before maturity and redeemed, at the option of the City, on
Apri 1 1, 1982, or on any interest payment date thereafter prior to
maturity, at a redemption price for each redeemable Bond equal to
the principal amount thereof plus one-fourth of one percent (114%)
for each year, or fraction of a year, from the redemption date to
the maturity date; and
WHEREAS, for the purposes of this Resolution,
Sewer Revenue Bonds, Election 1957, Series L 2 and 3,
collectively referred to as the "Refunded Bonds"; and
the above
are herein
WHEREAS, pursuant to Ordinance No. 2170, the Necessary and
Reasonable Maintenance and Operation Costs of the Enterprise (which
include the reasonable expenses of billing and collection of service
charges, management, repair and other expenses necessary to maintain
and preserve the sewer system and said works in good repair and
working order) shall be paid from the Net Revenues of the Enterprise
prior to the payment of the principal and interest on the Refunded
Bonds and sums for other security funds which may be provided; and
WHEREAS, pursuant to Section 16 of Resolution Nos. 4708,
5532 and 9335 approving the issuance of the Refunded Bonds, all
monthly sums sufficient for the Necessary and Reasonable Maintenance
and Operation Costs of the Enterprise shall be apportioned from the
Gross Revenues of the Enterprise and transferred within the Sewer
Fund to the M & 0 Account prior to the payment of sums into the
Sinking Account and the Reserve Account; and
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WHEREAS, pursuant
amounts on deposit in the
following:
tot he
Sewer
Section 149
Fund sha 11
of
be
the City Charter
used to pay the
(a) the necessary and reasonable maintenance and operation
costs of the sewer system, including any sewage treatment and
effluent reclamation works, which include the reasonable
expenses of billing and collection of sewer charges, management,
repair and other expenses necessary to maintain and preserve the
sewer system and said works in good repair and working order;
(b) the principal and interest of bonds issued for sewer
purposes;
(c) any payments specifically authorized
the Mayor and Common Council in any ordinance
providing for the issuance of said bonds;
or required by
or resolution
(d) amounts, as the Mayor and Common Council may direct,
for the payment of the costs of extensions and improvements of
or additions to the sewer system and said works or for any other
sewer purposes.
WHEREAS, Section 134 of the Charter authorizes the
following charges to be levied: The Mayor and Common Council shall
levy charges for sewer service which, if so ordered by the Mayor and
Common Council, may be collected together with or sep.Hately from
charges for water service and all charges received fur SEwer service
and all other income and receipts derived from the operations of the
sewer system, including any sewage treatment and effluent
reclamation works, or arising from the sewer system or said works
shall be paid into the Sewer Fund. Said charges shall be at least
sufficient to pay the following amounts in the order set forth:
(a) The necessary and reasonable maintenance and operation costs of
the sewer system, inCluding any sewage treatment and effluent
reclamatiOn works (which include the reasonable expenses of billing
and collection of service charges, management, repair and other
expenses necessary to maintain and preserve the sewer system and
said works in good repair and working order);
(b) The principal and interest On bonds issued for sewer purposes;
(c) Any payment specifically authorized or required by the Mayor and
Common Counci 1 in any ordinance or resolution providing for the
issuance of said bonds.
WHEREAS,
Gross Revenues of
in the Sewer Fund
payments from the
Section 149 of the
Law; and
pursuant to Section 134 of the City Charter the
the Enterprise shall be transferred to and placed
as required by Section 134 of the Charter and
Sewer Fund shall be made only as provided by
Charter, this Resolution and the Revenue Bond
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WHEREAS, on February 21, 1983, consultants to the City
proposed that the City initiate proceedings for the refunding of the
Refunded Bonds and the 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 held and taken, notices of sale published and notices of
call and redemption prior to maturity published pursuant to the
California Government Code Section 54388; and
WHEREAS, on March 24, 1983, the Mayor and Common Council
also adopted the Resolution of Issuance of the Refunding Bonds,
herein referred to as the "1983 Resolution of Issuance", being
Resolution No. 83-93 entitled: "Resolution of the Mayor and Common
Council of the City of San Bernardino, Authorizing the Issuance of
Sewer Revenue Refunding Bonds, Issue of 1983, of said City and
Providing the Terms and Conditions for the Issuance of said
Refunding Bonds," which authorized the issuance of certain sewer
revenue refunding bonds for the purpose of refunding the Refunded
Bonds which refunded bonds were to be secured by a pledge of and
lien upon, and payable as to the principal thereof and interest
thereon and any premiums upon the redemption thereof, solely from
the Net Revenues of the Enterprise, such Net Revenues of the
Enterprise being defined as the amount of Gross Revenues of the
Enterprise remaining after payment therefrom of the Necessary and
Reasonable Maintenance and Operation Costs of the Enterprise (as
defined in the 1983 Resolution of Issuance); and
WHEREAS, Section 19 of the 1983 Resolution of Issuance
required that after the uses and transfers specified in said
Section 19 had been duly performed any remaining money derived from
the Net Revenues of the Enterprise shall be used exclusively for the
following purposes:
(a) To make the
Treatment Plant Sublease,
as of November 1, 1973;
payments required under the
dated as of August 1, 1970, as
Sewage
amended
(b) To pay the cost of unusual or extraordinary
maintenance and operation costs of the Enterprise;
(c) To pay interest on any bonded debt incurred for the
improvement of the Enterprise;
(d) To pay the principal of any such debt;
(e) To pay the principa 1 of, interest and premiums on
Bonds called prior to maturity;
(f) To pay the principal of, interest and premiums on
Bonds purchased in the open market at prices offered at or below
the sum required to be paid in the event of redemption by call;
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(g) To pay the principal of and interest on Bonds which
may hereafter be issued pursuant to Section 22 hereof. of equal
parity or subordinate as to the lien thereof to the lien of the
Bonds, and the premium upon any of such Bonds called or
purchased prior to maturity;
(h) To pay the costs of extensions and improvements of or
additions to the Enterprise for any other sewer purpose; and
(i) For any lawful purpose not prohibited by the Charter.
;and
WHEREAS, as a result of the consideration of all the facts
and circumstances taking place in the municipal bond market at the
time of sale of the Refunding Bonds, the Mayor and Common Council
rejected the bids received for the Refunding Bonds as being
unsatisfactory as to price which, under the Revenue Bond Law,
permitted the City to either readvertise the sale of the Refunding
Bonds at public sale or sell the Refunding Bonds at private sale.
It was expected that, due to the bi 11 int roduced into the United
States Congress (H.R. 1635, hereinafter referred to as the "pickle
Bill"), the distortion in the municipal bond market would continue
until at least April 15, 1983, and perhaps for some time thereafter
as the municipal bond market absorbed inventory accumulated during
the short period. The refunding of the Refunded Bonds, however, was
required to 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 1983 Resolution of Issuance without paying
extra interest costs due to the temporary distortion of the
municipal bond market, and to sell the Refunding Bonds pursuant to
the 1983 Resolution of Issuance, as the same presently exists or as
amended, at such time as the municipal bond market stabilizes; and
WHEREAS, the Mayor and Common Council determined to proceed
pursuant to Article 11.5 of the Revenue Bond Law to issue an
aggregate principal amount equal to $2,600,000 of revenue bond
anticipation notes entitled "City of San Bernardino, Sewer Revenue
Refunding Bond Anticipation Notes, Issue of 1983" (the "1983
Notes"), a portion of proceeds which were used to accomplish the
refunding of the Refunded Bonds, and to sell the Refunding Bonds
pursuant to the 1983 Resolution of Issuance, as the same may be
amended, at such later time as the same became feasible; and
Charter,
portion
WHEREAS, in accordance with Ordinance No. 2170, the City
the Revenue Bond Law and the 1983 Resolution of Issuance a
of the proceeds from the revenue bond anticipation notes
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issued as the 1983 Notes were used to accomplish the refunding of
the Refunded Bonds and a portion of such proceeds were deposited to
the M & 0 Account of the Sewer Fund for the payment of the Necessary
and Reasonable Maintenance and Operation Costs of the Enterprise as
required pursuant to Section 149 of the Charter and for the payment
of certain unusual and extraordinary maintenance and operation costs
of the Enterprise; and
WHEREAS, a portion of the proceeds of 1983 Notes were
required for the payment of certain extraordinary repairs to the
Enterprise and certain Necessary and Reasonable Maintenance and
Operation Costs of the Enterprise prior to the payment of the
principal of, premium, if any, and interest on the Refunded Bonds;
and
:;
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WHEREAS, the Mayor and Common Council determined on
March 21, 1984, pursuant to Resolution No. 84-97 (the "1984
Resolution"), to issue and sell a sufficient amount of City of
San Bernardino, Renewal Sewer Revenue Refunding Bond Anticipation
Notes, Issue of 1984 (the "1984 Notes"), pursuant to Article 11. 5 of
the Revenue Bond Law, to pay the principal amount of the 1983 Notes,
maturing on March 30, 1984, and to amend Resolution No. 83-93
pursuant to Resolution No. 84-98 (Resolution No. 83-93 together with
any and all amendments and supplements thereto adopted prior to the
date of this Resolution, including said Resolution Nos. 83-97 and
84-98, shall be known as the "1983 Resolution of Issuance"); and
WHEREAS, the Mayor and Common Council deems it necessary to
amend the 1983 Resolution of Issuance and to issue and sell at this
time a sufficient amount of City of San Bernardino, California,
Sewer Revenue Refunding Bonds, Issue of 1986 (Regional Wastewater
Treatment Plant Project), as authorized pursuant to the 1983
Resolution of Issuance and this Resolution, to pay the principal
amount of the 1984 Notes on their maturity date, being March 15,
1986, in an aggregate principal amount equal to $2,600,000, as
authorized pursuant to California Government Code Section 54662.
NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO, CALIFORNIA, DO HEREBY RESOLVE, DETERMINE AND ORDER
AS FOLLOWS:
Section 1. Amendment of Resolution. Resolution No. 83-93,
adopted by the Mayor and Common Council on March 24, 1983, as
amended by Resolution Nos. 83-97 and 84-98, adopted by the City on
March 21, 1984, is hereby amended to read in its entirety as
provided in Sections 2 through 34, inclusive, as hereinafter set
forth.
Section 2. Definitions.
following terms shall have the
context otherwise requires:
As used
following
in this Resolution
meanings, unless
the
the
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"Bonds" or "said Bonds" means the "City of San Bernardino,
California, Sewer Revenue Refunding Bonds, Issue of 1986 (Regional
Wastewater Treatment Plant Project)", authorized by this Resolution
"Bondholder" or "Holder of Bonds" or any similar term, means any
person who shall be the registered owner or his duly authorized
attorney, trustee, representative or assign of any Outstanding Fully
Registered Bond. For the purpose of Bondholders' voting rights or
consents, Bonds owned by or held for the account of the City,
directly or indirectly, shall not be counted.
"Charter" or "City Charter" means the City Charter of the
City of San Bernardino.
"City" means the City of San Bernardino, California.
"City Treasurer"
means the officer who is
the City.
or "Treasurer", "Treasurer of the City"
then performing functions of Treasurer of
"Costs of Issuance" means all of the costs and expenses
incident to the calling, retiring or paying of the 1984 Notes and to
the issuance of the Bonds including, but not limited to, those fees
and expenses of Bond Counsel, the Financial Consultant and the
underwriter, and rating agency fees, printing and advertising costs,
City administrative expenses, and the charges of the Escrow Agent or
the fiscal Agent in connection with the issuance of the Bonds or in
connection with the retirement of the 1984 Notes dS such costs and
expenses shall be set forth in a certificate of the City as
presented to the fiscal Agent on the date of the issuance of the
Bonds.
"Enterprise" means the enterprise defined in said Ordinance
No. 2170 calling the election for the authorization by the voters of
the Refunded Bonds, as follows:
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I
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"the entire sewer system (including all buildings, systems,
plants, works, facilities or undertakings used for or
useful in the collection, treatment or disposal of sewage
and the reclamation of effluent therefrom) of the City of
San Bernardino as such system now exists, together with all
improvements and extensions to said system later
constructed or acquired, including the improvements and
extensions made with funds derived from the sale of the
revenue bonds herein proposed to be issued."
"Fiscal Agent" means the Fiscal Agent appointed by the City
pursuant to this Resolution, to wit: Security Pacific National
Bank, its successors and ass igns, and any other co rpo r at ion 0 r
association which may at any time be substituted in its place, as
provided in this Resolution.
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"Fiscal Year" means the year period beginning on July 1st
and ending on the next following June 30th.
"Gross Revenues of the Enterprise" means all charges
received for sewer service and all other income and receipts derived
from the operations of the Enterprise, including any sewage
treatment and effluent reclamation works, or arising from the
Enterprise of said works, and includes all revenues (as defined in
Section 54315 of the Government Code to mean "all chareRs rRcRivRO
for, and all other income and receipts derived by the local agency
from, the operation of the enterprise or arising from the
enterprise. Revenues include revenue deposited in a sinking,
redemption, or reserve fund or other fund to secure the bonds or to
provide for the payment of them or the interest on them" received
y e CIty from the serVIces and facilities of the Enterprise.
Fees received pursuant to San Bernardino Code Section 13.08.050 as
hereinafter set forth and other fees referred to in Section 1L5
hereof, WhICh are received for a special purpose, are not part of
the Gross Revenues of the Enterprise. The fees received pursuant to
San Bernardino Code Section 13.08.050 are fees accompanying an
application for a permit to connect any property with a public sewer
and include the following:
"A. Connection fee designated for off-site trunk
lines and collection facilities required for
the disposal of sanitary sewage, which fee
shall be deposited in the sewer line
construction fund of the City, in an amount
established by resolution of the City.
B. Connection fee designated for construction
and improvement of wastewater treatment
plant, to provide additional capacity to
meet increased demand, which fee shall be
transmitted to the Water Department, in an
amount established by resolution of the City.
C. Connection fee designated to recover extra
administrative costs relating to processing
an application for property located outside
the incorporated limits of the City and
served by the City sewer system, which fee
shall be deposited in the general fund of
the City, in an amount established by
resolution of the City."
"Independent Financial Consultant," "Independent Engineer"
or "Independent Certified Public Accountant" means any individual or
firm engaged in the prOfession involved, appointed by the City, and
who, or each of whom, has a favorable reputation in the field in
which his opinion or certificate will be given, and:
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(1)
City; and
IS in fact independent and not under domination of the
(2) does not have any substantial interest, direct or
indirect, with the City; and
(3) is no t
employee of the City,
reports to the City.
connected
bu t who
with the City
may be regularly
as an officer or
retained to make
obtained
totaling
Year.
"Maximum Annual Debt Service" means the largest of the sums
for any Fiscal Year after the computation is made. by
the following "Annual Debt Service" for each such Fiscal
(1) The principal amount of all serial Bonds and
serial Parity Bonds payable in such Fiscal Year; and
term
with
Fund
(2) The amount of Minimum Sinking Fund Payments for
Parity Bonds to be made in such Fiscal Year in accordance
the applicable schedule or schedules of Minimum Sinking
Payments*; and
(3) The interest which would be due during such
Fiscal Year on the aggregate principal amount of Bonds and
Parity Bonds which would be outstanding in such Fiscal Year if
the Bonds and Parity Bonds outstanding on the date of such
computation were to mature or be redeemed in accordance with the
maturity schedule or schedules for the serial parity Bonds and
the schedule or schedules or Minimum Sinking Fund Payments for
term Pa r i ty Bonds. At the time and for the pu rpose of maki ng
such computation, the amount of term Parity Bonds already
retired in advance of the above-mentioned schedule or schedules
shall be deducted pro rata from the remaining amounts thereon.
"Mayor and Common Council" means the legislative body of
the City acting under and pursuant to the City Charter.
"Necessary and Reasonable Maintenance and Operation Costs
of the Enterprise" include the necessary and reasonable maintenance
and operation costs of the Enterprise (which include the reasonable
expenses of billing and collection of service charges management,
repair and other expenses necessary to maintain and preserve the
Enterprise in good repair and working order).
*
There are no term Bonds in this issue and these provisions
regarding term Parity Bonds and Minimum Sinking Fund Payments
therefor are inserted in the event the City issues term Parity
Bonds in accordance with the provisions of this Resolution.
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"Net Revenues of the Enterprise" means the amount of Gross
Revenues of the Enterprise remaining after payment therefrom of the
Necessary and Reasonable Maintenance and Operation Costs of the
Enterprise.
"Opinion of Counsel" means a written opinion of an attorney
or firm of attorneys of favorable reputation in the field of
municipal bond law. Any opinion of such counsel may be based upon,
insofar as it relates to factual matters, information which is in
the possession of the City as shown by a certificate or opinion of,
or representation by, an officer or officers of the City, unless
such counsel knows. or in the exercise of reasonable care should
have known, that the certificate or opinion or representation with
respect to the matters upon which his opinion may be based, as
aforesaid, is erroneous.
"Outstanding", as to the Bonds, means that they are unpaid
or that provision for the full payment and discharge thereof at
maturity or upon redemption thereof prior to maturity through the
setting apart in the Bond Service Fund or in the Redemption Account
or in a special trust fund (as the case may be) of money and/or
securities, as provided in Section 4 hereof. sufficient to insure
the payment at maturity or redemption thereof prior to maturity has
not been made. For the purpose of determining whether the required
consent of Bondholders has been obtained pursuant to Section 29
hereof. Bonds owned di rect ly 0 r indi rect ly by the Ci ty
("Issuer-Owned Bonds") shall not be counted.
"Parity Bonds" means any bonds, notes, interim
certificates, debentures or other obligations of whatever nature
issued by the City, or any other governmental or private person with
whom the City may contract, which payments to service the same,
and/or provide secur i ty therefo r, sha 11 rank on a pa r i ty wi th the
payments on the Bonds, all as authorized or required by Section 23
hereof.
"Record Date" means the fifteenth (15th) day of the month
preceding an interest payment date.
"Refunded Bonds" means,
Bonds, Election 1957, Series 1, 2
hereof which were refunded with
1983 Notes.
collectively, the Sewer Revenue
and 3 referred to in the recitals
a portion of the proceeds of the
"Revenue Bond Law" means the Revenue Bond Law of 1941 as
cited in the recitals hereof
"Series Resolutions" means the several Resolutions of the
Mayor and Common Council of the City providing for the issuance of
the Sewer Revenue Bonds, Election 1957, Series 1, 2 and 3.
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"Sewer
Section 143 of
Revenues of the
Fund" means the special fund established pursuant to
the Charter into which shall be deposited the Gross
Enterprise as required by Section 134 of the Charter.
Section 3. Amount, Issuance, Purpose and Nature of Bonds.
That under and pursuant to the Charter and the Revenue Bond Law,
sewer revenue refunding bonds of the City of San Bernardino in the
amount of $2,600,000 shall be issued for the purpose stated herein
and designated as the "City of San Bernardino, California, Sewer
Revenue Refunding Bonds, Issue of 1986 (Regional Wastewater
Treatment Plant Project)." The Bonds shall be and are special
obligations of the City and shall be and are secured by a pledge of
and lien upon, and shall be and are a charge upon, and shall be and
are payable as to the principal thereof and interest thereon and any
premiums upon the redemption of any thereof, solely from the Net
Revenues of the Enterprise, such Net Revenues being hereby pledged,
charged and assigned for the security of the Bonds.
The proceeds of the Bonds shall be used by the City for the
purpose of paying the principal of the 1984 Notes, maturing on
March 15, 1986, by paying the same so that, in accordance with the
Resolution authorizing the issuance of the 1984 Notes, referred to
in the recitals hereof, the lien of said Resolution, including,
without limitation, the pledge of Net Revenues of the Enterprise
thereunder, shall thereupon cease, terminate and become void and be
discharged and satisfied, and the 1984 Notes, and interest
inc-rements thereon shall no longer be deemed to be outstanding and
unpaid. In connection therewith:
(a) Section 15 hereof, provides for a portion of the
proceeds of the sale of the Bonds to be paid to the Fiscal Agent
for the 1984 Notes, in sufficient time to accomplish their
payment in full on March 15, 1986. Upon delivery of the Bonds
hereunder, such sums a re to be depos i ted and to be used as
provided in this Resolution.
(b) The City and/or the Fiscal Agent, as the case may
be, shall take all action necessary to pay, retire and defease
the 1984 Notes, as set forth in (c) below, including, without
limitation, all actions required by this Resolution
(c) The City hereby directs the City Treasurer and the
Fiscal Agent for the 1984 Notes, and the Fiscal Agent to pay
upon their maturity on March 15, 1986, and hereby gives the
Fisca 1 Agent not ice tha t such payment sha 11 be on Ma rch 15,
1986, all as more particularly set forth in this Resolution.
Section 4. Equality of Bonds, Pledge of Revenues.
Pursuant to the Revenue lJond Law and this Resolution, the lJonds
shall be equally secured by a pledge, charge and lien upon the Net
Revenues of the Enterprise without priority for number, date of the
Bonds, date of sale, date of execution or date of delivery, and the
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payment of the interest on and principal of such Bonds and any
premiums upon the redemption of any thereof shall be and are secured
by an exclusive pledge, charge and lien upon the Net Revenues of the
Enterprise, and all of the Net Revenues of the Enterprise are hereby
pledged, charged and assigned for the security of said Bonds, and
such Net Revenues of the Enterprise and any interest earned on the
Net Revenues of the Enterprise shall constitute a trust fund for the
security and payment of the interest on and principal of said Bonds,
and so long as any of the Bonds or interest thereon are unpaid said
Net Revenues of the Enterprise and interest thereon shall not be
used for any other purpose, except as permitted by this Resolution,
and shall be held in trust for the benefit of the Bondholders and
shall be applied pursuant to this Resolution, or to this Resolution
as modified pursuant to provisions herein.
Nothing in this Resolution shall preclude (a) the
redemption prior to maturity and payment of the Bonds of this issue
from proceeds of refunding bonds issued under the Revenue Bond Law
as the same now exists or as hereafter amended, or under the Charter
of the City or under any other law of the State of California; (b)
the issuance subject to the limitations in Section 23 hereof of
additional indebtedness evidenced by revenue bonds, notes, interim
certificates, debentures or other obligations of whatever nature,
issued by the City, or any governmental or private person with whom
the City may contract, which payments rank on a parity with the
Bonds, payable out of the Net Revenues of the Enterprise.
If the City shall payor cause to be paid, or shall have
made provision to pay upon maturity or upon redemption prior to
maturity, to the Holders of the Bonds, the principal of, premium, if
any, and interest to become due thereon, through setting aside trust
funds or setting apart in a reserve fund or special trust account
created pursuant to this Resolution or otherwise, or through the
irrevocable segregation for that purpose in some sinking fund or
other fund or trust account with a fiscal agent or otherwise, funds
sufficient therefor, including, but not limited to, interest earned
to be earned on Federal Securities, then the lien of this
Resolution, including, without limitation, the pledge of the Net
Revenues of the Enterprise, and all other rights granted hereby,
shall thereupon cease, terminate and become void and be discharged
and satisfied, and the principal of, premium, if any, and interest
on the Bonds shall no longer be deemed to be Outstanding and unpaid;
provided, however, that nothing in this Resolution shall require the
deposit of more than such Federal Securities as may be sufficient,
taking into account both the principal amount of such Federal
Securities and the interest to become due thereon, to implement any
refunding of the Bonds. In such event, the Fiscal Agent shall cause
an accounting for such period or periods as shall be requested by
the City to be prepared and filed with the City, and the Fiscal
Agent, upon the request of the City, shall release the rights of the
Bondholders under this Resolution and execute and deliver to the
City all such instruments as may be desirable to evidence such
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release, discharge and satisfaction, and the Fiscal Agent shall pay
over or deliver to the City all moneys or securities held by it
pursuant to this Resolution which are not required for the payment
or redemption of Bonds not theretofore surrendered for such payment
or redemption, and the Bonds shall no longer be considered to be
Outstanding. As used in this paragraph, "Federal Securities" means
United States Treasury notes, bonds, bills or certificates of
indebtedness, or obligations for which the faith and credit of the
United States are pledged for the timely payment of principal and
interest; bonds, consolidated bonds, collateral trust debentures,
consolidated debentures, or other obligations issued by federal land
banks or federal intermediate credit banks established under the
Federal Farm Loan Act, as amended, and Farm Credit Act of 1971,
debentures and conso 1 ida ted debentures issued by the Cent r a 1 Bank
for Cooperatives and banks for cooperatives established under the
Farm Credit Act of 1933, as amended, and the Farm Credit Act of
1971, bonds or debentures of the Federal Home Loan Bank Board
established under the Federal Home Loan Bank Act, bonds of any
federal home loan bank established under said act and stocks, bonds,
debentures, participations and other obligations of or issued by the
Government National- Mortgage Association and the Federal Home Loan
Mortgage Corporation; and bonds, notes or other obligations issued
by the Federal Financing Bank, the United States Postal Service, or
issued or assumed by the International Bank for Reconstruction and
Development, the Tennessee Valley Authority, the Inter-American
Development Bank, the Government Development Bank for Puerto Rico,
or the Asian Development Bank and any other types of Federal
Securities authorized by law to be and for refunding purposes at the
time that such refunding occurs.
The City shall provide, in a manner satisfactory to the
Fiscal Agent, for the publication, at least twice, at an interval of
not less than seven (7) days between publications, in a financial
newspaper or journal, of a notice to the Holders of such Bonds that
such funds are so available for such payment.
Section 5. No General City Liability. The general fund
of the City is not liable for the payment of the Bonds or their
interest, nor is the credit or taxing power of the City pledged for
the payment of the Bonds or their interest or premium, if any. The
Holders of the Bonds shall not compel the exercise of the taxing
power by the Ci ty or the forfeiture of any of its property. The
principal of and interest on the Bonds and any premiums upon the
redemption of any thereof are not a debt of the City nor a legal or
equitable pledge, charge, lien or encumbrance, upon any of its
property, or upon any of its income, receipts or revenues, except
the Net Revenues of the Enterprise which are, under the terms of
this Resolution and the Revenue Bond Law, pledged to the payment of
the Bonds and interest.
Section 6.
the principal sum of
Description of Bonds. The Bonds shall be in
$2,600,000, shall be numbered in consecutive
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numerical order from one (1) upwards, and shall be of the
denomination of $5,000 or any integral multiple thereof. Said Bonds
shall be designated CITY OF SAN BERNARDINO, CALIFORNIA, SEWER
REVENUE REFUNDING BONDS, ISSUE OF 1986 (REGIONAL WASTEWATER
TREATMENT PLANT PROJECT), shall be dated March 1, 1986, and shall be
payable in consecutive numerical order on 11arch 1 in each year of
maturity in the amounts for each of the several years as follows:
Year of
Maturity
(March 1)
Principal
Amount
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
$100,000
105,000
115,000
120,000
130,000
140,000
150,000
165,000
175,000
190,000
205,000
220,000
240,000
260,000
285,000
Section 7. Interest. Said Bonds shall bear interest at
the rates per annum to be established by resolution of the City upon
the sale of the Bonds. All interest shall be payable semiannually
on March 1 and September 1 of each yea r, commencing September 1,
1986. Each Bond 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 Bond shall then cease to bear interest.
The Fully Registered Bonds shall be numbered by the Fiscal
Agent as the Fiscal Agent shall determine and shall be dated as of
March 1, 1986, except that Fully Registered Bonds issued upon
exchanges and transfers of Fully Registered Bonds shall be dated so
that no gain or loss of interest shall result from such exchange or
transfer. Each Fully Registered Bond shall bear interest from the
interest payment date next preceding the date thereof unless (i) it
is dated as of an interest payment date, in which event it shall
bear interest from that interest payment date, or (ii) it is dated
prior to the first interest payment date, in which event it shall
bear interest from March 1, 1986. Interest on Fully Registered
Bonds shall be paid by the Fiscal Agent (out of the appropriate
funds) by check or draft mailed on the interest payment date to the
registered owner as his name and address appears on the Bond
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Register
fifteenth
date.
kept by the Fiscal Agent
(15th) day of the month
at the close of
preceding the
business
interest
on the
payment
Section 8. Place of Payment. The Bonds, the interest
thereon and any premiums upon the redemption thereof prior to
maturity shall be payable in lawful money of the United States of
America and (except for interest only on the Bonds which is payable
by check or draft as stated above) shall be payable at theAcorporate
trust office of Security Pacific National Bank, Fiscal Agent for the
City in Los Angeles, California.
Section 9. Forms of Bonds and Conversion. The Fully
Registered Bonds shall be substantially in the form attached hereto
and by this reference incorporated herein, marked "Exhibit A". Such
form is hereby approved and adopted as the form of such Bonds and of
the redemption, exchange, registration and assignment provisions
pertaining thereto, with necessary or appropriate variations,
omissions and insertions as permitted or required by this Resolution.
Any Bonds issued pursuant to this Resolution may be
initially issued in temporary form exchangeable for definitive Bonds
when the same are ready for delivery. The temporary Bonds may be
printed, lithographed 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 Bond 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 Bonds. If the City issues temporary Bonds, it will
execute and furnish definitive Bonds without delay, and, thereupon,
the temporary Bonds shall be surrendered for cancellation at the
Acorporate trust office of the Fiscal Agent in Los Angeles,
California, and the City shall deliver in exchange for such
temporary Bonds an equal aggregate principal amount of definitive
Fully Registered Bonds without coupons of authorized denominations
of this same issue. Until so exchanged, the temporary Bonds shall
be entitled to the same benefits under this Resolution as definitive
Bonds 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 10. Execution of Bonds. The Mayor of the City
and the City Clerk of the City are hereby authorized and directed to
execute the Bonds by their manual or facsimile signatures, and the
City Clerk is hereby authorized and directed to cause the corporate
seal of the City to be imprinted thereon.
The foregoing officers are hereby authorized and directed
to execute the Bonds in accordance with this Section. If any City
officer whose manual or facsimile signature appears on the Bonds
ceases to be such officer before delivery of the Bonds, his or her
signature is as effective as if he or she had remained in office.
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The Fiscal Agent shall authenticate the Bonds on
registration and/or ^upon the registration of any transfer or
exchange,^and only such of the Bonds as shall have endorsed thereon
a Certlflcate of Authentication, substantially in the form set forth
in Exhibit A, duly executed by the Fiscal Agent, shall be entitled
to any rights, benefits or security under this Resolution. No Fully
Registered Bond 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 Authentication
of the Fiscal Agent upon any such Fully Registered Bond shall be
conclusive and the only evidence that such Fully Registered Bond has
been duly autI:lenticated and delivered under this Resolution. The
Fiscal Agent's Certificate of Authentication on any Fully Registered
Bond shall be deemed to have been duly executed if executed by an
authorized officer of the Fiscal Agent, but it shall not be
necessary that the same officer execute the Certificate of
Authentication on all of the Fully Registered Bonds that may be
issued hereunder at anyone time.
Section 11. Types of Bonds, Registration and Exchange.
The Bonds shall be issued as fully registered Bonds payable to the
registered owner (herein sometimes referred to as "Fully Registered
Bonds"). A Fully Registered Bond or Fully Registered Bonds may be
exchanged for a Fully Registered Bond or Fully Registered Bonds.
Transfer of ownership of a Fully Registered Bond or Fully Registered
Bonds shall be made by exchanging the same for a new Fully
Registered Bond or Fully Registered Bonds. 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 of the month 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 Fully
Registered Bond issued pursuant to this Resolution shall be of a
denomination which is $5,000 or a whole multiple thereof and shall
be of the same issue.
Section 12. Bond Register. The Fiscal Agent will keep
or cause to be kept at its~orporate trust office in the City of Los
Angeles, California, sufficient books for the registration and
transfer of the Bonds, which shall at all time be open to inspection
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, the Bonds as hereinbefore provided.
Section 13.
Maturity.
Call
and
Redemption of
Bonds
Prior
to
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A. The Bonds maturing on or prior to March 1, 1993, shall
not be subject to call or redemption prior to maturity. The
Outstanding Bonds maturing on or after March 1, 1994, may be called
before maturity and redeemed at the option of the City, in whole
from the proceeds of refunding bonds and other available funds, or
in whole or in part from any other source of funds, on March 1,
1993, or on any interest payment date thereafter prior to maturity.
If less than all of the Bonds Outstanding are to be so redeemed at
anyone time, the Bonds to be redeemed shall be redeemed in inverse
order of maturity and within a maturity by lot. Bonds so called for
redemption shall be redeemed at a redemption price for each redeemed
Bond equal to the principal amount thereof, plus accrued interest to
the redemption date and a premium (percentage of principal amount)
if redeemed on the following dates:
Redemption Dates Premium
March 1, 1993 and September 1, 1993 1-112%
March 1, 1994 and September 1, 1994 1 0
'0
March 1, 1995 and September L 1995 112%
March C 1996 and thereafter 0 %
Bonds may be called on March 1, 1996, and on any interest payment
date thereafter, without premium. The interest payment date on
which Bonds are to be presented for redemption is hereinafter
sometimes called the "redemption date"
B. Ca 11 and Redempt ion. The Mayor and Common Counc i 1 of
the City may by resolution direct the call and redemption prior to
maturity of Bonds 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 sixty (60) days prior to the redemption date.
C. Notice of Redemption. Notice of redemption prior to
maturitYAshallAbe mailed first class, postage prepaid, not less than
thi rty (30) nor more than sixty (60) days prior to the redempt ion
date^to the registered owner of each such Bond at the address of
such registered owner as it appears on the bond register of the
Fiscal Agen'A; 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 Bonds. The notice of redemption
shall (a) state the redemption date; (b) state the redemption price;
(c) state the numbers of the Bonds to be redeemed; provided,
however, that whenever any call includes all of the Outstanding
Bonds, the numbers of the Bonds need not be stated; (d) state, as to
any Bonds redeemed in pa r t only, the reg is tered Bond numbers and the
principal portion thereof to be redeemed; and (e) state that
interest on the principal portion of the Bonds 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 Bonds the redemption price thereof.
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The actual receipt by the Holder of any Bond 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 Bonds or the cessation of
interest on the redemption date. Notice of redemption of Bonds
shall be given by the Fiscal Agent for and on behalf of the City at
the expenseAof the City.
All notices required by this section shall be given by the
Fiscal Agent. A certificate by the Fiscal Agent that notice of call
and redemption has been given to the original purchasers and to
Holders of Fully Registered Bonds as herein provided shall be
conclusive as against all parties, and no Bondholder whose Fully
Registered Bond 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.
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 CITY OF SAN BERNARDINO, CALIFORNIA,
SEWER REVENUE REFUNDING BONDS, ISSUE OF 1986 (REG IONAL WASTEWATER
TREATMENT PLANT PROJECT), REDEMPTION FUND (hereinafter sometimes
referred to as "Redemption Fund"), and prior to the redempt ion date
there must be set aside in said Redemption Fund moneys available for
the purpose and sufficient to redeem, at the premiums, if any,
payable as provided in this Resolution, the Bonds designated 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 (principal and premium, if any) of the
Bonds to be redeemed upon presentation and surrender of such Bonds,
and shall be used only for that purpose. Any interest due on or
prior to the redemption date upon Fully Registered Bonds shall be
paid from said Bond Service Fund.
E. Partial Redemption of Fully Registered Bonds. Upon
surrender of any Fully Registered Bond redeemed in part only, the
City shall execute and the Fiscal Agent shall authenticate and
deliver to the registered owner thereof, at the expense of the City,
a new Bond or Bonds of authorized denominations equal in aggregate
principal amount to the unredeemed portion of the Fully Registered
Bond surrendered and of the same interest rate or rates and same
maturity or maturities, which new Bond or Bonds shall be a Fully
Registered Bond or Fully Registered Bonds. ASuch partial redemption
shall be valid upon payment of the amount thereby required to be
paid to such registered owner, and the City and the Fiscal Agent
shall be released and discharged from all liability to the extent of
such payment irrespective of whether such endorsement shall or shall
not have been made on the reverse of such Fully Registered Bond by
such registered owner and irrespective of any error or omission in
such endorsement.
- 20 -
F. Effect of Redemption. Notice of redemption having
been duly given as aforesaid, and moneys for pay~ent of the
principal of, premium, if any, and interest payable upon redemption
of the Bonds being set aside as aforesaid, the Bonds, or parts
thereof, as the case may be, so ca lled for redempt ion sha 11, on the
redemption date, become due and payable at the redemption price
specified in such notice, interest on the Bonds, or parts thereof,
as the case may be, so called for redemption shall cease to accrue,
and said Bonds, 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 Bonds shall have no rights in respect
thereof except to receive payment of the redemption price thereof,
and, in the case of partial redemption of Fully Registered Bonds, to
also receive a new Bond or Bonds for the unredeemed balance as
aforesaid.
All unpaid interest installments which shall have matured
on or prior to the redemption date designated in such notice shall
continue to be payable to the respective Holders thereof but without
interest thereon.
All Bonds, or parts thereof, as the case may be, redeemed
pursuant to the provisions of this Section shall be cancelled upon
surrender thereof and delivered to, or upon the order of, the City.
If after all of the Bonds 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 14. Funds and Accounts. In the City Treasury of
the City in the Sewer Fund (which Fund exists under Section 143 of
the Charter) there is hereby continued the following account:
1.
Sewer Maintenance
sometimes called the
and Operation Account
"M & 0 Account").
(herein
There is hereby created with the Fiscal Agent the following
Funds:
1. City of San Bernardino, California, Sewer Revenue
Refunding Bonds, Issue of 1986 (kIastewater Treatment
Plant Project), Costs of I ss.t.la nce Fund (herein
sometimes called the "Costs of Issuance Fund");
2 .
City of San Bernardino, California, Sewer
Refunding Bonds, Issue of 1986 Wastewater
Plant Project), Bond Service Funt! (herein
called the "Bond Service Fund"); and
Revenue
Treatment
sometimes
- 21 -
--
---
3. City of San Bernardino, California, Sewer Revenue
Refunding Bonds, Issue of 1986 Wastewater Treatment
Plant project), Reserve Fund (herein sometimes called
the "Reserve Fund").
4. City of San Bernardino, California, Sewer Revenue
Refunding Bonds, Issue of 1986 (Wastewater Treatment
Plant Project) Proceeds Fund (herein sometimes called
the "Proceeds Fund").
So long as any of the Bonds or the interest thereon remains
outstanding and unpaid (or in law thereof defeased), the moneys in
the foregoing Funds and Accounts shall be used for no purposes other
than those required or permitted by this Resolution and the Revenue
Bond Law.
Section 15. Disposition of Bond Proceeds. For the
purpose of ensuring the application of the proceeds received from
the sale of the Bonds and other moneys on deposit in the funds and
accounts established pursuant to the 1984 Resolution to the purposes
set forth in the recitals hereof, for which said Bonds are to be
issued, the proceeds of the sale of the Bonds and such other moneys
shall be paid to the Fiscal Agent and shall be deposited and
expended by the Fiscal Agent as set forth below. In addition, the
City shall pay to the Fiscal Agent a City contribution in an amount
equal to that amount to be set forth in a certificate of the City
(the "City Contribution") which shall be expended by the Fis~~l
Agent for the payment of the costs incurred in connection with the
issuance of the Bonds, including the underwriter's discount, all as
set forth below:
(a) Costs of Issuance Fund: Upon delivery of the Bonds,
the Fiscal Agent shall deposit the City Contribution into the
Cost of Issuance Fund in an amount as set forth in a certificate
duly executed by an authorized City Representative. All Costs
of Issuance shall be paid from the Cost of Issuance Fund to
those persons entitled thereto or to the appropriate City fund
to be reimbursed therefor. It is recognized that the Costs of
Issuance Fund may be over funded initially because of the
necessity to rely upon estimates pending receipt of the final
bills, statements and invoices for the costs of issuance. Any
remaining balance in the Cost of Issuance Fund after all of Ithe
foregoing payments have been made and no later than one-hundred
eighty (180) days after the issuance of the Bonds shall be
transferred to the Bond Service Fund.
(b) Bond Service Fund: Upon delivery of the Bonds, the
Fiscal Agent shall deposit frum such proceeds into the Bund
Service Fund an amount equal to the interest accrued on the
Bonds from their date to the date of their delivery, and any
premium on their sale.
- 22 -
(c) Reserve Fund: Upon delivery of the Bonds, the Fiscal
Agent shall deposit an amount equal to the Maximum Annual Debt
Service into the Reserve Fund from other moneys on deposit in
the funds and accounts established pursuant to the 1984
Resolution and moneys of the City available for such purpose.
(d) Proceeds Fund: Concurrently with the delivery of the
Bonds to the purchasers thereof, the Fiscal Agent shall/\deposi t
into the Proceeds Fund a sufficient amount to pay at matuoty,
all of the principal and lnterest due on the 1984 Notes the
balance of the proceeds of the sale of the Bonds. At the same
time, the Treasurer shall pay to the fiscal agent for the 1984
Notes for deposit in the Proceeds Fun4\ such additional amounts
from funds and accounts held pursuant to the 1984 Resolution as
shall be set forth in a Certificate executed by an appropriate
City Representative, based upon computations made by the
Independent Financial Consultan~ all to the end that the 1984
Notes, which are subject to being paid in full on their maturity
on March 15, 1986, will be so paid. Any interest earned on such
deposit shall be paid to the City for deposit into the Sewer
Fund.
Section 16. Sewer Fund. The Gross Revenues of the
Enterprise shall continue to be transferred to and placed ln the
Sewer Fund as required by Section 134 of the Charter and the 1983
Resolution of Issuance, and thereafter so long as any of the Bonds
are Ou'tstanding, the Gross Revenues of the Enterprise shall be paid
into the Sewer Fund, and payments from the Sewer Fund shall be made
only as provided by Section 149 of the Charter, the 1983 Resolution
of Issuance, this Resolution and the Revenue Bond Law.
Notwithstanding the foregoing, at the direction of the City
Treasurer, there shall be established in the Sewer Fund such account
or accounts as are necessary to properly account for and maintain as
separate trust funds all connection fees which have been and may
continue to be changed to private persons and/or public agencies and
are required to be used for the payment of the costs of extensions
and improvements of or additions to the Enterprise or any parts
thereof. Such sums shall remain in such account or accounts until
expended, pursuant to Section 149 of the Charter for the purposes
for which such connection fees have and may continue to be charged.
Section 17. Maintenance and Operation Account. Monthly
sums sufficient for the Necessary and Reasonable Maintenance and
Operation Costs of the Enterprise (and to maintain in the MO.O
Account a reasonably required reserve and replacement fund not to
exceed three (3) months' estimated Necessary and Reasonable
Maintenance and Operation Costs of the Enterprise) shall be
apportioned from the Gross Revenues of the Enterprise and
transferred at the direction of the Treasurer within the Sewer Fund
to the MO.O Account, and immediately thereafter, the balance, i.e.,
the Net Revenues of the Enterprise, shall be transferred to the
Fiscal Agent and applied as hereinafter provided in this Resolution.
- 23 -
Section 18. Bond Service Fund. Upon delivery of the
Bonds to the purchasers thereof, any accrued interest paid by said
purchasers shall be placed in the Bond Service Fund. On the date of
the Bonds and thereafter, so long as any of the Bonds are
Outstanding, on the first day of each calendar month, there shall be
set aside and transferred from the Net Revenues of the Enterprise
paid to the Fiscal Agent for deposits into the Bond Service Fund at
least one-sixth (1/6th) of the interest which will become due and
payable on Outstanding Bonds and any Parity Bonds within the next
ensuing six (6) months and also at least one-twelfth (1I12th) of the
principal amount of such Bonds and any Parity Bonds which will
mature and be payable within the next ensuing twelve (12) months, so
that at least the full amount required to pay, as it becomes due,
the interest on such Bonds and any Parity Bonds and any maturity or
installment of principal of such Bonds and any Parity Bonds shall be
set aside in the Bond Service Fund at least one (1) month prior to
the date the installment of interest and/or principal become due.
No such transfer need be made prior to the actual delivery of the
Bonds and Parity Bonds, if any, to the purchaser thereof; provided,
however, that if the Bonds and Parity Bonds, if any, are issued and
delivered subsequent to their date there shall be set aside,
transferred to and placed with the Fiscal Agent in the Bond Service
Fund on the first (1st) business day of the calendar month
subsequent to the date of delivery sums at least sufficient,
together with other transfers of the same amount made on the first
(1st) business day of each calendar month thereafter, to provide in
said Bond Service Fund one (1) month prior to the payment date of
the first (1st) installment of interest and/or principal on such
Bonds and Parity Bonds, if any, the full amount of such interest
and/or principal. Any amount required to be set aside, transferred
to and placed with the Fiscal Agent in the Bond Service Fund may be
prepaid in whole or in part by being earlier set aside, transferred
to and placed in the Bond Service Fund and in that event the monthly.
transfer which has been so prepaid need not be made at the time
appointed therefor. In any event, at least one (1) month prior to
the due date of any maturity or installment of principal of and/or
interest on Bonds or any Parity Bonds, all sums required for the
payment thereof must be on deposit in such Bond Service Fund in
cash. All such sums shall be so transferred from the sums which the
Treasurer has received into the Sewer Fund as hereinbefore provided,
except for transfers to said Fund from the Reserve Fund, as
hereinafter provided in this Resolution. It is hereby directed that
such sums be so set aside through transfers made in such amounts as
may be necessary to comply with the foregoing provisions of this
Section. Money set aside and placed in said Bond Service Fund shall
remain therein until from time to time expended for the payment of
such principal and interest, and shall not be used for any other
purpose whatever, except that any such money so set aside and placed
in said Bond Service Fund which at any time may be in excess of the
amount which at that time is required by the terms of this Section
to be in the Bond Service Fund in cash may be temporari 1y invested
as hereinafter provided; provided, however, that such investment
- 24 -
shall not affect the obligation of the City through the Fiscal Agent
to cause the full amount required by the terms of this Section to be
available in said Bond Service Fund in cash at the time required by
the terms of this Section. If, at the time any Bond is presented
for payment, the moneys in the Bond Service Fund are insufficient to
make such payment, money sufficient for such payment shall be
transferred from the Reserve Fund to said Bond Service Fund. Any
money remaining in said Bond Service Fund after payment in full
(including interest) of the Bonds and Parity Bonds, if any, may be
transferred to the Sewer Fund. The Bonds and Parity Bonds, if any,
shall recite that they are payable from the Sewer Fund, but said
Bonds and Parity Bonds, if any, notwithstanding such recital, shall
be paid from the Bond Service Fund, which is derived from the Sewer
Fund.
Section 19. Reserve Fund. On the date of delivery of
the Bonds there shall be immediately placed in the Reserve Fund an
amount equal to that as aforesaid to be set forth in a certificate
of the City, and thereafter there shall be maintained in said
Rese rve Fund an amount a t leas t equa 1 to the Maximum Annua 1 Debt
Service.
Moneys in the Reserve Fund shall be used solely for the
purpose of paying the principal of and interest on the Bonds and any
Parity Bonds in the event that the moneys in the Bond Service Fund
are insufficient therefor and for that purpose may be withdrawn and
transferred to the Bond Service Fund. No payment need be made into
the Reserve Fund so long as there shall be in the Reserve Fund a sum
at least equal to the Maximum Annual Debt Service. Whenever moneys
are withdrawn frofl'. the Reserve Fund for the purposes provided in
this Section, the amount in the Reserve Fund shall be restored to
the amount required in this Section by transfers from Surplus. Any
amount in the Reserve Fund in excess of the Maximum Annua 1 Debt
Service shall be transferred to Surplus.
Section 20. Surplus. After the monthly transfers
required or permitted by Section 17, 18 and 19 hereof have been made
any remaining balance of the amount of Net Revenues of the
Enterprise derived from the Sewer Fund during the preceding month
shall be used for the restoration, if necessary, of the Reserve Fund
as provided in Section 19 hereof.
After the above transfers and uses have been made and all
other covenants of the City contained herein have been duly
performed, any money derived from the Net Revenues of the Enterprise
(herein sometimes referred to as "Surplus") shall be set aside in
the City Treasury in such account or accounts as may be established
by the City Treasurer, or otherwise, therefor to be used for any of
the following purposes exclusively:
(a) To make the
Treatment Plant Sublease,
as of November 1, 1973;
payments required under the Sewage
dated as of August 1, 1970, as amended
- 25 -
-
(b) To pay the cost of unusual or extraordinary
maintenance and operation costs of the Enterprise;
(c) To pay interest on any bonded debt incurred for the
improvement of the Enterprise;
(d) To pay the principal of any such debt;
(e) To pay the principal of. interest and premiums on
Bonds called prior to maturity;
(f) To pay the
Bonds purchased in the
the sum required to be
principal of. interest and premiums on
open market at prices offered at or below
paid in the event of redemption by call;
(g) To pay the principal of and interest on bonds which
may hereafter be issued pursuant to Section 23 hereof, of equal
parity or subordinate as to the lien thereof to the lien of the
Bonds, and the premium upon any of such Bonds called or
purchased prior to maturity;
(h) To pay the costs of extensions and improvements of or
additions to the Enterprise for any other sewer purpose; and
(i) For any lawful purpose not prohibited by the Charter.
No moneys shall be otherwise paid or transferred therefrom
unless all of the requirements of this Resolution then required to
be performed have been fully accomplished.
Section 21. Deposit and Investment of Moneys in Funds.
Subject to the provisions of Covenant 16 of Section 22 hereof, all
moneys held by the Treasurer and/or the Fiscal Agent hereunder,
except such moneys which are at the time invested, shall be held in
time or demand deposits in any bank, trust company or other company
or association authorized to accept deposits of public funds
(including the banking department of the Fiscal Agent) and shall be
secured as required by law.
Moneys in the Sewer Fund, in the M & 0 Account thereof, may
from time to time be invested by the City Treasurer, and moneys in
the other Funds held by the Fiscal Agent may, and, upon written
request of the City, shall be invested by the Fiscal Agent as
permitted by law, subject to the following restrictions:
(a) Moneys in the Sewer Fund, in the M & 0 Account thereof,
shall be invested only in obligations which will by their terms
mature not later than the date the City estimates the moneys
represented by the particular investment will be needed for
withdrawal from such Fund or Account.
- 26 -
(b) Moneys in the Bond Service Fund shall be invested only
in obligations which will by their terms mature on such dates as
to ensure that before each interest payment date there will be
in such Fund, from matured obligations and other moneys already
in such Fund, cash equal to the interest, principal and
redemption premiums, if any, payable on such date, as may be
recommended from time to time by the opinion of an Independent
Financial Consultant appointed by the City.
(c) Moneys In the Reserve Fund may be invested either in
Federal Securities or such other investment obligations,
securities or other investment arrangements as may be legal
under the laws of the State and as directed by the Treasurer,
which will by their terms mature on such dates as to ensure that
before each interest payment date there will be in such Fund
from matured obligations and other moneys already in such Fund,
cash equal to the interest and/or principal payable on such
date, as may be recommended from time to time by the opinion of
an Independent Financial Consultant appointed by the City.
(d) Moneys in the Sewer Fund as "Surplus" may be invested
in any legally authorized investments in such manner as seems
reasonably likely at the time of investment to maximize the
earnings thereon, all at the discretion of the Treasurer.
Obligations purchased as an investment of moneys in any of
said Account and Funds shall be deemed at all times to be a part of
such Account or Funds and the interest accruingtheleon and any gain
realized from such investment shall be credited to such Account or
Funds and any loss resulting from any such authorized investment
shall be charged to such Account or Funds without liability to the
Ci ty or the of f icers and employees thereof 0 r to the Fisca 1 Agent.
The City or the Fiscal Agent, as the case may be, shall sell at the
best price obtainable or present for redemption any obligation so
purchased whenever it shall be necessary to do so in order to
provide moneys to meet any payment or transfer from any Account or
Funds as required by this Resolution. For the purpose of
determining at any given time the balance in any such Account or
Funds, any such investment shall be valued at the then estimated or
appraised market value of such investment. NotWIthstandIng any
other prOVIsIon of thIS paragraph, Interest earnings on the amounts
on deposit in the Reserve Fund, to the extent not otherwise required
to maintain in the Reserve Fund the Minimum Reserve Fund
Requirement, shall be transferred and used as Surplus.
.,.~
Section 22. Covenants. So long as any of the Bonds and
any Parity Bonds are Outstanding, the City makes the following
covenants with the Bondholders under the provisions of the City
Charter and the Revenue Bond Law (to be performed by the City or its
proper officers, agents or employees) which covenants are necessary,
convenient and desirable to secure the Bonds and any Parity Bonds
and tend to make them more marketable; provided, however, that said
- 27 -
covenants do not require the City to expend any funds other than the
Gross Revenues of the Enterprise or the Net Revenues of the
Enterprise, as the context may require,
Covenant 1. Punctua 1 Payment. The Ci ty sha 11 du 1y and
punctually payor cause to be paid the principal of and interest on
every Bond and Parity Bond, if any, together with the premium
thereon, if any be payable on the date, at the place and in the
manner mentioned in the Bonds and Parity Bonds, if any, and in
accordance with this Resolution, and that the payments into the Bond
Service Fund and the Reserve Fund shall be made, all in strict
conformity with the terms of said Bonds and Parity Bonds, if any, of
this Resolution, and that it shall faithfully observe and perform
all of the conditions, covenants and requirements of this Resolution
and all resolutions supplemental thereto and of the Bonds and Parity
Bonds, if any, and that time of such payment and performance is of
the essence of the City's contract with the Bondholders.
Covenant 2. Discharge Claims. In order to fully
preserve and protect the priority and security of the Bonds and
Parity Bonds, if any, the City shall pay from the Gross Revenues of
the Enterprise and discharge all lawful claims for labor, materials
and supplies furnished for or in connection with the Enterprise
which, if unpaid, may become a lien or charge upon the Gross
Revenues of the Enterprise prior or superior to the lien of the
Bonds and Parity Bonds, if any, and impair the security of the Bonds
and Parity Bonds, if any. The City shall also pay from the Gross
Revenues of the Enterprise all taxes and assessments or other
governmental charges lawfully levied or assessed upon or in respect
of the Enterprise or upon any part thereof or upon any of the Gross
Revenues of the Enterprise.
Covenant 3. Accomplish Purpose. As soon as funds are
available therefor, the City shall commence the accomplishment of
the purposes for which the Bonds and Parity Bonds, if any, are
issued and shall continue the same to completion with all practical
dispatch and in an economical manner.
Covenant 4. Operate Enterprise in
Economical Manner. The City shall operate the
efficient and economical manner and maintain
Enterprise in good repair and working order.
Efficient
Enterprise in
and preserve
and
an
the
Covenant 5. Against Sale. The Enterprise shall not be
mortgaged or otherwise encumbered, so ld, leased, pledged, any cha rge
placed thereon, or disposed of as a whole or substantially as a
whole unless such sale or other disposition be so arranged as to
provide for a continuance of payments into the Sewer Fund sufficient
in amount to permit payment therefrom of the principal of and
interest on and premiums, if any, due upon the redemption thereof,
of the Bonds and Parity Bonds, if any, payment of which is required
to be made out of the Net Revenues of the Enterprise, and also to
- 28 -
provide for such payments into the Reserve Fund as are required
under the terms of this Resolution. The Gross Revenues of the
Enterprise, the Net Revenues of the Enterprise, or any other funds
pledged or otherwise made available to secure payment of the
principal of and interest on the Bonds and Parity Bonds, if any,
shall not be mortgaged, encumbered, sold, leased, pledged, any
charge placed thereon, or disposed of or used except as authorized
by the terms of this Resolution. The City further covenants that it
will not enter into any agreement which impairs the operation of the
Enterprise or any part of it necessary to secure adequate Net
Revenues of the Enterprise to pay the principal and interest of the
Bonds and Parity Bonds, if any, or which otherwise would impair the
rights of the Bondholders with respect to the Net Revenues of the
Enterprise or the operation of the Enterprise. If any substantial
part of the Enterprise is sold the payment therefor shall either be
used for the acquisition and/or construction of improvements and
extensions of the Enterprise or shall be placed in the Bond Service
Fund or the Redemption Fund and shall be used to payor call
Outstanding Bonds in the manner provided in this Resolution.
Covenant 6.
Insurance.
A. The City shall procure and maintain insurance on the
Enterprise with responsible insurers in such amounts and against
such risks (including accident to Or destruction of the Enterprise)
as are usually insurable in connection with similar enterprises,
'vhich such insurance shall be in an amount at least sufficient to
enable the City to retire all Outstanding Bonds and Parity Bonds, if
any.
In the event of any damage to or destruction of the
Enterprise caused by the perils covered by such insurance, the net
proceeds of such insurance shall be applied to the repair,
reconstruction or replacement of the damaged or destroyed portion of
the Enterprise. The City shall cause such repair, reconstruction Or
replacement to begin promptly after such damage or destruction shall
occUr and to continue and to be properly completed as expeditiously
as possible, and shall payout of the net proceeds of such insurance
all costs and expenses in connection with such repair,
reconstruction or replacement so that the same shall be completed
and the Enterprise shall be free and clear of all liens and claims.
If the net proceeds received by reason of any such loss shall exceed
the costs of such repair, reconstruction or replacement, the excess
shall be deposited by the City in the Sewer Fund.
Alternatively, if the net proceeds of such insurance are
sufficient to enable the City to retire all Outstanding Bonds and
Parity Bonds, if any, the City may elect not to repair, reconstruct
or replace the damaged or destroyed portion of the Enterprise, and
thereupon such net proceeds shall be paid to the Fiscal Agent and
applied to redeem or purchase all Outstanding Bonds and Parity
Bonds, if any, in the manner specified in Section 13 of this
Resolution.
- 29 -
Without limiting the generality of the foregoing, the City
shall also comply with the following provisions of this Covenant.
B. The City shall procure and maintain suitable and
adequate fidelity insurance or bonds on all officers and employees
of the City handling or responsible for any of the Gross Revenues of
the Enterprise.
C. The City shall procure and obtain a policy of title
insurance from a recognized title insurance company insuring the
City for the full cost of the future acquisition of any real
property in fee simple acquired comprising any portion of the
Enterprise, excluding any improvements thereon.
D. The City shall procure and maintain public liability
insurance covering claims against the City for bodily injury or
death, or damage to property occasioned by reason of the ownership
or operation of the Enterprise, such insurance to afford protection
in such amounts and against such risks as are usually covered in
connection with similar enterprises.
E. All policies of insurance required to be maintained
herein shall provide that an authorized City representative and the
Fiscal Agent shall be given thirty (30) days' written notice of any
intended cancellation thereof or reduction of coverage provided
thereby.
Covenant 7. Records and Accounts. The Ci ty sha 11 keep
proper books of record and accounts of the Enterprise, separate from
all other records and accounts, in which complete and correct
entries shall be made of all transactions relating to the
Enterprise. Said books shall at all reasonable times be subject to
the inspection of not less than ten percent (10%) of the Bondholders
or their representatives authorized in writing.
The City shall cause the books and accounts of the
Enterprise to be audited annually by an Independent Certified Public
Accountant (a reasonable time after the close of the Fiscal Year so
that the Summary Statement hereinafter referred to can be published)
and shall make available for inspection by the Bondholders at the
office of the City Clerk of said City, at the office of the City
Treasurer thereof and at the office of the Fiscal Agent, a copy of
the report of the Independent Certified Public Accountant. Without
limiting the generality of the foregoing, such annual audit shall
include the following:
(a) Balance Sheet. A balance sheet including balances of
all Funds and Accounts herein continued or created.
(b) Revenue and Payments.
cash receipts and disbursements of
Enterprise.
A statement in detail of
the income and expenses of
the
the
- 30 -
(c) Insurance. A statement
the City relating to the Enterprise,
of each policy as to its coverage and
as to the insurance carried by
including a brief description
name of company issuing it.
(d) Customers. The number of customers classified by rate
or charge for service groups.
(e) Billing. The annual billings and the average monthly
billings by service group.
(f) Rate Schedules. The schedules
prescribed by the rate ordinance then in effect.
of
the
charges
(g) Recapitulation. A recapitulation of Funds and
Accounts continued or created by this Resolution into which are
depos i ted moneys derived f rom the opera t ion of the Enterpr ise and
from the sale of any Bonds or Parity Bonds, if any, issued therefor
or in connection therewith, which shall show balances at the
beginning of period and balances at the end of the period; and also
the monthly deposit requirements for Funds and Accounts during the
next succeeding fiscal period.
(h) Comments. Comments relative to the fulfillment of the
provisions of this Resolution.
The City shall cause to be published annually, not more
than one hundred and twenty (120) days after the close of each
fiscal year a summary statement showing the amount of Gross Revenues
of the Enterprise and the amount of all other funds collected which
are required to be pledged or otherwise made available as security
for payment of principal of and interest on the Bonds and Parity
Bonds, if any, the disbursements from such Gross Revenues of the
Enterprise and other funds in reasonable detail, and a general
statement of the financial and physical condition of the Enterprise
(the "Summary Statement").
The City shall furnish a copy of the Summary Statement to
any Bondholder upon request.
In connection with the audits and the preparation of the
Summary Statement the City and its officer, agents, employees,
counsel and auditors shall, to the extent that such document
involves any other public entity, be entitled to rely on any audited
or certified statements of such entity.
Covenant 8. No Free Service. Except to the extent that
the City is required under agreements and/or contracts existing on
the effective date of this Resolution, no service from the
Enterprise sha 11 be furnished or rendered to the Uni ted States of
America, the State of California, any municipal or public
corporation (other than the City) or district or public agency or
any private corporation or person free, and that, except to the
- 31 -
extent that the City is required under agreements and/or contracts
existing on the effective date of this Resolution, no such service
shall be rendered to the United States of America, the State of
California, any municipal or public corporation (other than the
City) or district or any private corporation or person at rates
lower than those charged other persons for simi lar service;
provided, however, that not withstanding the foregoing the City may
continue any agreement and/or contract with the United States of
America, the State of California, any municipal or public
corporation (other than the City) or district or public agency on
substantially the same basis as to free service and rates as are 1n
existence on the effective date of this Resolution; and, provided,
however, further, that notwithstanding any provision of this
Covenant 8, the City shall comply with any obligation validly
imposed by law. No building or other real property of the
Enterprise shall be furnished free to the City, but the City shall
pay into the Sewer Fund the reasonable rental value of any property
so used, and reasonable and proper charges for service rendered or
quarters furnished to the Enterprise shall be paid to the City from
the Sewer Fund. The City shall maintain and enforce valid
regulations for the payment of bills for sewer service and such
regulations shall provide that the charges for sewer service shall
be collected together with and not separately from charges for water
service rendered by the City, and, except for sewer users not being
rendered ',-Jater service by the City, charges for sewer service shall
be billed upon the same bill as charges for water service and
collected as one item. and the City shall discontinued water service
to any user whose water and sewer bill has not been paid within the
time fixed by said regu lat ions, which sha 11 not be mo re than sixty
(60) days from the date the water and sewer bill became delinquent;
and, for sewer users not being rendered water service by the City
such regulations shall provide that the City shall discontinu~
service to any -user whose sewer bill has not been paid within the
time fixed by said regulations, which shall not be more than sixty
(60) days from the date the sewer bill became delinquent
Covenant 9. Rates and
covenants that pursuant to Section
Revenue Bond Law. it sha 11 levy
service which shall be at least
amounts in the order set forth:
Charges. The City hereby
134 of the City Charter and the
and collect charges for sewer
sufficient to pay the following
(a) The Necessary and Reasonable Maintenance and Operation
Costs of the Enterprise;
(b)
The principal of
Parity Bonds as
payments required
the Bonds;
and interest on the Bonds and
they become due and payable
to be made into the Reserve Fund
any
and
for
(c) All payments
Resolution;
required
for
compliance
wi th
this
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(d) Any other payment or payments specifically authorized
or required by this Resolution;
and the charges shall be so fixed that, during each Fiscal Year,
after the payment of item designated (a) of this Section the Net
Revenues of the Enterprise available for the payment: of item
designated (b) shall be at least 1.25 times the amount payable under
said (b) and at least one (1) times the amounts payable under said
(c) and (d) (this requirement to be considered as a minimum and not
as preventing the City from changing any minimum amounts payable
under items (c) and (d)).
Covenant 10. Compliance with Conditions Precedent. Upon
the date of issuance of the Bonds, all conditions, acts and things
required by law or by the Resolution to exist, to have happened or
to have been performed precedent to or in the issuance of such Bonds
shall exist, have happened and have been performed, and such Bonds
shall be within every limit prescribed by law.
Covenant 11. Eminent Domain Proceeds. If all or any part
of the Enterprise shall be taken by eminent domain proceedings, the
net proceeds rea lized by the Ci ty the ref rom sha 11 be depos i ted by
the City Vlith the Treasurer in a special fund in trust and applied
by the City to the cost of acquiring or constructing or financing
improvements to the Enterprise if: (A) the City first secures and
files with the Treasurer an Independent Engineer's Certificate
showing (i) the estimated loss in annual Net Revenues of the
Enterprise, if any, suffered, or to be suffered, by the City by
reason of such eminent domain proceedings, (ii) a general
description of the improvements to the Enterprise then proposed to
be acquired or constructed by the City from such net proceeds, and
(iii) an estimate of the additional Net Revenues of the Enterprise
to be derived from such improvements; and (B) the Treasurer, on the
basis of such Independent Engineer's Certificate, determines that
such additional Net Revenues of the Enterprise will sufficiently
offset the loss of Net Revenues of the Enterprise resulting from
such eminent domain proceedings so that the ability of the City to
meet its obligations hereunder will not be substantially impaired,
Vlhich determination shall be final and conclusive. If the foregoing
conditions are met, the City shall then promptly proceed with the
acquisition or construction or financing of such improvements
substantially in accordance with such Independent Engineer's
Certificate and payments therefor shall be made by the Treasurer
from such net proceeds and from other moneys of the City lawfully
available therefor, and any balance of such net proceeds not
required by the City for the purposes aforesaid shall be deposited
in the Sewer Fund. If the foregoing conditions are not met, then
such net proceeds shall be paid to the Fiscal Agent for deposit ill
the Redemption Fund and application pro rata, among the various
maturities, to the redemption or purchase of the Bonds and Parity
Bonds, if any, then Outstanding in the proportion which the
principal amount of the Outstanding Bonds and Parity Bonds, if any,
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bears to the aggregate principal amount of all Bonds and Parity
Bonds, if any, then Outstanding. If the Fiscal Agent is unable to
purchase or redeem Bonds and Parity Bonds, if any, in amounts
sufficient to exhaust the available moneys allocable to the Bonds
and parity Bonds, if any, the remainder of such moneys shall be held
in trust by the Fiscal Agent and applied to the payment of the Bonds
and Parity Bonds, if any, as the same become due by their terms,
and, pending such application, such remaining moneys may be invested
by the Treasurer in the manner provided in section 21.
If such eminent domain proceedings have had no effect, or
at most a relatively immaterial effect, upon the Net Revenues of the
Enterprise and the security of the Bonds and Parity Bonds, if any,
and an Independent Eng ineer' s Cert i fica te to such effect has been
filed with the Treasurer, the Treasurer may so determine, which such
determination by the Treasurer shall be final and conclusive and,
upon not ice thereof, the City sha 11 forthwi th depos i t such net
proceeds in the Sewer Fund.
Covenant 12. Power to Issue Bonds and Make P1edqes. The
City is duly authorized pursuant to the Charter and the Revenue Bond
Law to create and issue the Bonds and to adopt this Resolution and
to pledge the Net Revenues of the Enterprise, the Funds and Accounts
and other moneys. securities, funds and property purported to be
pledged by this Resolution in the manner and to the extent provided
in this Resolution. The Bonds and the provisions of this Resolution
are and will be valid and legally enforceable obligations of the
City in accordance with their terms and the terms of this
Resolution. The City shall at all times, to the extent permitted by
law, defend, preserve and protect the pledge of the Net Revenues of
the Enterprise, the Funds and Accounts and other moneys, securities,
funds and property pledged under this Resolution and all the rights
of the Bondholders under this Resolution against all claims and
demands of all persons whomsoever.
Covenant 13. Further Assurances. Whenever and so often
as requested so to do by the Treasurer or the Fiscal Agent, the City
will promptly execute and delivery or cause to be executed and
delivered all such other and further instruments, documents or
assurances, and promptly do or cause to be done all such other and
further things, as may be necessary or reasonably required in order
to further and more fully vest in the Treasurer, the Fiscal Agent
and the Bondholders all rights, interest, powers, benefits,
privileges and advantages conferred or intended to be conferred upon
them by this Resolution.
Covenant 14. Unconditional Ob1iqation. Except only as
provided herein for alteration of the Bonds or this Resolution,
nothing in this Resolution or in the Bonds shall affect or impair
the obligation of the City, which is absolute and unconditional, to
pay the principal of, interest and premium, if any, on the Bonds to
the respective Holders of the Bonds at the respective dates of
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maturity, or upon prior redemption,
impair the right of action,
unconditional, of such Holders to
payment by virtue of the contract
Bond Law and this Resolution.
as herein
which is
institute
embodied in
provided or affect or
also absolute and
suit to enforce such
the Bonds, the Revenue
Covenant 15. Agreement and Performance Thereof. The
performance of the duties prescribed in this Resolution, the Charter
and the Revenue Bond Law by the City or its proper officers agents
or employees, is of the essence of the City's contract with the
Bondholders. Each subsequent Holder of the Bonds has recourse to
all of the provisions of this Resolution, the Charter and the
Revenue Bond Law and is bound by thei r terms. Each and a 11 of the
terms of this Resolution shall be and constitute a covenant on the
part of the City to and with each and every Bondholder from the time
the Bonds are issued hereunder. The Resolution, the Charter and the
Revenue Bond Law and the covenants, agreements, provisions and
conditions herein contained, constitute a continuing agreement with
the Holders of all of the Bonds issued or to be issued hereunder and
then Outstanding, to secure the full and final payment of the
principal and redemption price of and the interest on all Bonds
which may from time to time be executed and delivered hereunder.
Whenever all of the Bonds and all interest then accrued thereon
shall have been fully paid, discharged or defeased, the agreements
in this Resolution contained shall cease and terminate, and the City
shall be under no further obligation to apply the Revenues as herein
reguired, or otherwise to do or perform any of the covenants,
conditions or agreements contained in this Resolution.
Covenant 16. Non-Arbitrage. The City hereby covenants
that it will make no use of the proceeds of the Bonds at any time
during the term thereof which, if such use had been reasonably
expected on the date of issue of the Bonds, would have caused the
Bonds to be arbitrage bonds within the meaning of Section 103(c) of
the Internal Revenue Code of 1954, as amended, and any applicable
regulations promulgated thereunder. The City further covenants that
it will be in compliance with and will direct the Fiscal Agent to be
in compliance with the Tax Reform Act of 1985 (H.R. 3838), if
applicable, regarding investment of proceeds such that it will not
make any use of the proceeds from the sale of the Bonds which will
cause the Bonds to be "arbitrage bonds" as that term is used in the
Tax Reform Act of 1985. To that end, so long as any of the Bonds
are Outstanding, the City and the Fiscal Agent shall comply with all
requirements of Section 103(c) and of all regulations of the United
States Department of the Treasury issued thereunder and the
applicable provisions of the Tax Reform Act of 1985, to the extent
that such requirements are at the time either applicable or in
effect or deemed necessary to be complied with to ensure the
continued tax-exempt nature of the Bonds.
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Section 23.
Issuance of Parity, Refunding and Additional
Bonds.
A. Issuance of Parity Bonds. No additional bonds shall
be issued or other obligations incurred which shall be payable from
the Net Revenues of the Enterprise and constitute a lien thereon
which shall have priority over the Bonds and any Parity Bonds. The
City may issue additional bonds, notes, certificates of
participation or other obligations of whatever nature issued by the
City or any other governmental or private person with whom the City
may contract, payable from and secured by a lien on the Net Revenues
on a parity with the lien of any of the then Outstanding Bonds (the
"Parity Bonds"). subject to the provisions of this Section.
1. Such
manner provided by
a resolution or
Parity Bonds and.
and describing the
Parity Bonds shall be duly authorized in the
law. and the Mayor and Common Council shall adopt
resolutions providing for the issuance of such
specifying the maximum principal amount thereof
terms and conditions of such Parity Bonds.
such
are
such
2. The City shall not, at the time of
Parity Bonds, be in default hereunder unless
for funding or refunding defaulted Bonds or
default .
the issuance of
the Parity Bonds
otherwise curing
3. The Net Revenues of the Enterprise for the last Fiscal
Year preceding the date of adoption by the Mayor and Common Council
of the Resolution providing for the issuance of such Parity Bonds.
audited as provided in Covenant 7 of Section 22 hereof, as shown by
a certificate of an Independent Certified Public Accountant on file
with the City and Fiscal Agent shall equal at least 1.25 times the
Maximum Annual Debt Service on the Bonds and parit Bonds in
uture FIscal Year after the issuance of such Parity Bonds; plus
(i) an allowance for increases in the Net Revenues of
the Enterprise for such Fiscal Year from any additions.
extensions or improvements to the Enterprise to be acquired.
constructed or financed with the proceeds of such Parity Bonds
or with the proceeds of any Bonds previously issued. and also
for Net Revenues of the Enterprise from any such additions.
extensions or improvements which have been made from moneys from
any source but which. during all or any part of such Fiscal
Yea r, were not in service. a 11 in an amount equa 1 to
seventy-five percent (75%) of the estimated additional average
annual Net Revenues of the Enterprise to be derived from such
additions. extensions or improvements for the first thirty-six
(36) months in which each such addition. extension or
improvement is to be in operation. all as shown by an
Independent Engineer's Certificate on file with the City and the
Fiscal Agent;
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(ii) an allowance for increases in the Net Revenues of
the Enterprise to be received as compensation to the City for
collecting and/or transporting and/or treating and/or disposing
of sewage or other wastes under a contract or contracts executed
with the united States of America, the State of California or
any municipal or public corporation or district, or any private
corporation or person but which, during all or part of such
Fiscal Year or last completed twelve-month period, were not
received, all in an amount equal to seventy-five percent (75%)
of the estimated additional average annual Net Revenues of the
Enterprise to be derived under such contract or contracts for
the first thirty-six (36) month period of service under the
contract involved, all as shown by an Independent Engineer's
Certificate on file with the City and the Fiscal Agent; and
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(iii) an allowance for increases in the Net Revenues
of the Enterprise arising from any increases in the charges
which became ef fect i ve pr io r to the issuance of such Pa r i ty
Bonds but which, during all or any part of such Fiscal Year,
were not in effect, in an amount equal to seventy-five percent
(75%) of the amount by which the Net Revenues of the Enterprise
would have been increased if such increase in charges had been
in effect during the whole of such Fiscal Year, as shown by an
Independent Engineer's Certificate on file with the City and the
Fiscal Agent.
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4. The resolution providing for the issuance of the
Parity Bonds shall provide for an increase in the amount in the
Reserve Fund so that there shall, after issuance of the Parity
Bonds and at all times thereafter, be on deposit therein a sum
equa I to the Maximum Annua I Debt Service computed as to the
aggregate principal amount of all Bonds to be Outstanding
following the issuance of the Parity Bonds.
B. Nothing in this Resolution shall be deemed to limit or
restrict the power of the City to issue additional bonds payable
from Surplus on a basis which is subordinate as to the lien of any
of the Net Revenues to the Outstanding Bonds and Pari ty Bonds (in
this Resolution sometimes referred to as "Junior Lien Bonds").
without compliance with the provisions of this Section or of any
other provisions of this Resolution.
C. The Mayo r and Common Counci 1 may refund the Bonds 0 r
Parity Bonds, if any, in any manner, which at the time of such
refunding may be permitted by law. The refunding bonds may be on a
parity of lien with all or a portion of the refunded Bonds. Nothing
herein shall prohibit the Mayor and Common Council from issuing such
refunding bonds as Junior Lien Bonds. For the purpose of curing a
def au 1t 0 r threa tened def au It, the Mayo r and Common Counc i 1 may
issue additional bonds and exchange such bonds for maturing or
matured Bonds or Parity Bonds, if any, or sell them and use the
proceeds thereof to pay said Bonds or Parity Bonds, if any, provided
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that the new bonds shall
Bonds or Parity Bonds,
issued in such principal
be made to mature after the maturity
if any. Funding or refunding bonds
amount as may be authorized by law.
oft he
may be
D. The issuance of types of debt obligations other than
Bonds issued as Parity Bonds or as Junior Lien Bonds is specifically
authorized and required by this Resolution. Such other types of
debt obligations which may be issued as Parity Bonds or Junior Lien
Bonds, as the case may be, may include, without limitation, debt
issued by a joint powers authority, the Redevelopment Agency of the
City of San Bernardino, or any pUblic or private authority, agency
or person through lease with the City or otherwise or through lease
participation certificates, conditional sale certificates or lease
purchase certificates or any other financia1lY,feasible means.
Section 24.
The Fiscal Agent and the Paying Agents.
A. Appointment of Fiscal Agent. Security Pacific
National Bank in Los Angeles, California, is hereby appointed Fiscal
Agent for the City to act as the agent and depositary of the City
for the purpose of receiving all moneys required to be paid to the
Fiscal Agent hereunder, to allocate, use and apply the same, to
hold, receive and disburse the funds pledged or held hereunder, and
otherwise to hold all the offices and perform all the functions and
duties provided in this Resolution to be held and performed by the
Fiscal Agent. The Fiscal Agent shall signify its acceptance of the
duties and obligations imposed upon it by this Resolution by
executing and delivering to the City a written acceptance thereof;
and by executing and delivering such acceptance, the Fiscal Agent
shall be deemed to have accepted such duties and obligations, but
only upon the terms and conditions set forth in this Resolution.
The City may remove the Fiscal Agent initIally appointed or
any successor thereto and in such case shall forthwith appoint a
successor thereto but any successor shall be a bank or trust company
doing business and having an office in the City of Los Angeles,
having a combined capital and surplus of at least $50,000.000. The
Fiscal Agent herein appointed or any substituted Fiscal Agent may at
any time resign as such by writing filed with the City in which
event the City shall forthwith appoint a substitute Fiscal Agent and
the res igna tion sha 11 become ef fect i ve upon such appointment. In
the event that the Fiscal Agent or any successor becomes incapable
of acting as such, the Agency shall forthwith appoint a substitute
Fiscal Agent. Any bank or trust company into which the Fiscal Agent
may be merged or with which it may be consolidated shall become the
Fiscal Agent without action of the City. The Fiscal Agent may
become the owner of any of the Bonds authorized by this Resolution
with the same rights it would have had if it were not the Fiscal
Agent.
The
whatsoever to
Fiscal Agent shall have no duty or obligation
enforce the collection of or to exercise diligence in
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the enforcement of the collection of funds assigned to it hereunder,
or as to the correctness of any amounts received, but its liability
shall be limited to the proper accounting for such funds as it shall
actually receive. As to an other actions taken or erformed at the
written direction of the City, or, upon the recommendation of an
Independent Financial Consultant appointed by the City. the Fiscal
Agent shall not be liable in connection therewith, except for its
own negligence or default, and in taking such actions the Fiscal
Agent shall be fully protected in relying upon an Opinion of Counsel
that such action is authorized or permitted by the provisions of
this Resolution.
The City covenants and agrees to indemnify the Fiscal Agent
and hold it harmless against any loss, liability or expense arising
out of or in connection with performance of its dutles hereunder,
including without limitation legal and other fees and expenses
except that the Fiscal Agent shall not be indemnified against any
such loss, liability or expense arising out of its. negligence or
willful misconduct provided, however, that the City's obligation to
indemnify the Fiscal Agent shall be limited to those amounts
available therefor in the Sewer Fund and to the extent that the City
can legally pay such fees and expenses from said Sewer Fund. The
Fiscal Agent shall be under no obligation to institute or defend any
action, suit or legal proceeding in connection herewith, unless
first indemnified and held harmless to its satisfaction in
accordance with the foregoing.
The Fiscal Agent may consult with Counsel, who may be
counsel to the Ci ty, wi th reg ard to leg a 1 ques tions, and the opinion
of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered by the Fiscal
Agent in good faith and in accordance therewith.
The recitals of fact and all promises, covenants and
agreements herein and in the Bonds sha 11 be taken as statements,
promises, covenants and agreements of the City, and the Fiscal Agent
assumes no responsibility for the correctness of the same, and makes
no representations as to the validity or sufficiency of this
Resolution or of the Bonds and shall incur no responsibility in
respect thereof, other than in connection with the duties or
obligations herein or in the Bonds assigned to or imposed upon the
Fiscal Agent. The Fiscal Agent shall not be liable in connection
with the performance of its duties hereunder, except for its own
negligence or default.
Section 25. Lost, Stolen, Destroyed or Mutilated Bonds.
In the event that any Bond is lost, stolen, destroyed or mutilated,
the City will cause to be issued a new Bond similar to the original
to replace the same in such manner and upon such reasonable terms
and conditions, including the payment of costs and the posting of a
surety bond if the City deems such surety bond necessary, as may
from time to time be determined and prescribed by resolution. The
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City may authorize such new Bond to be signed and authenticated ln
such manner as it determines in said resolution.
Section 26. Cancellation of Bonds. All Bonds
surrendered to the Fiscal Agent of the City for payment upon
maturity or for redemption shall upon payment therefor be cancelled
immediately and forthwith transmitted to the Treasurer of the City.
All of the Bonds surrendered to the Treasurer for redemption shall
upon payment therefor be cancelled immediately. Any Bonds purchased
by the City as authorized herein shall be cancelled forthwith and
shall not be reissued. All of the cancelled Bonds shall remain in
the custody of the Treasurer until destroyed pursuant to due
authorization.
Section 27.
Events of Default and Remedies.
(herein
default :
A. Event of Default. One or more of the following events
called "Events of Default") shall constitute an event of
1. Principal. If default shall be
punctual payment of the principal of any Bond
shall become due and payable, whether at
expressed, by proceedings for redemption,
othenlise; or
made in the due and
when and as the same
maturity as therein
by declaration or
2. Interest.
punctual payment of any
such interest installment
If default shall be made in the
installment of interest of any Bond
shall become due and payable; or
due and
when as
3. Covenants. If default shall be made in the
observation of any of the covenants, agreements or conditions on its
part herein or in the Bonds contained, and such default shall have
continued for a period of sixty (60) days; or
4. Bankruptcy. If the City shall file a petition or
answer seeking reorganization or arrangement under the Federal
Bankruptcy laws or other applicable laws or statutes of the United
States of America, or if a court of competent jurisdiction shall
approve a petition, filed with or without the consent of the City,
seeking reorganization under the Federal Bankruptcy laws or any
other applicable laws or statutes of the United States of America,
or if, under the Federal Bankruptcy laws or the provisions of any
other law for the relief or aid of debtors, any court of competent
jurisdiction shall assume custody or control of the City or of the
whole or any substantial part of its property.
B. Acce ration. In each and every Event of Default, the
Fiscal Agent, or t Holders of not less than sixty-six and
two-thirds percent (66- 3%) in aggregate principal amount of the
Bonds at the time Outstan' shall be entitled, upon notice in
writing to the City, to decla the principal of all of the Bonds
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then Outstan . ng hereunder and the interest accrued thereon to be
due and payab immediately, and upon any such declaration the same
shall become an immediately due and payable, anything in
this Resolution the Bonds contained to the contrary
notwithstanding; p ovided, however, that no such acceleration shall
be made in the cas of a default under subsections A 1 and 2 above,
if such default has been cured within thirty (30) days of the date
thereof.
C. 1ica 'on of Funds. When acceleration has been
dec la red under subsec . on B above, a 11 of the Net Revenues of the
Enterprise shall be app ie~n the following order:
1. Costs and Ex enses. To the payment of the costs and
expenses the Bondho1de in declaring such Event of Default,
including reasonable co pensation to their agents, attorneys and
counsel, and to the payme t of the costs and expenses of the Fiscal
Agent in carrying out t e provisions of this Section, including
reasonable compensation to its agents, attorneys and counsel;
2. Interest on Un ue Bonds. In case the principal of the
Bonds shall not have becom due and shall not then be due and
payable, to the payment of th interest in default in the order of
the maturity of the insta11men s of such interest, with interest on
the overdue installments at the same rate, such payments to be made
ratably to the persons entitle thereto without discrimination or
preference;
3. Princi al and
principal of the Bonds shall have
payable, to the payment of the who1
upon the Bonds for the principal and
overdue principal and installments of
on Due Bonds. In case any
ecome and shall be then due and
amount then owing and unpaid
'nterest, with interest on the
i terest at tne same rate; and
4. Insuf f icient Funds. In case such moneys sha 11 be
insufficient to pay in full the whole amount so owing and unpaid
upon the Bonds, then to the payment of such principal and interest
without preference or priority of principal over interest, or of
interest over principal, or of any installment of interest over any
other installment of interest, ratably to the aggregate of such
principal and interest then due.
D. Procedure for Application to Bonds. No application of
funds to the Bonds shall be made except upon presentation of the
several Bonds, and the stamping thereon of the payment, if only
partially paid, or upon the surrender thereof if fully paid.
E. Refunding Defaulted Bonds. The City may refund any
defaulted Bond as to which the maturity has been accelerated by the
issuance of a new bond maturing after the maturity of the last Bond
issued hereunder, but otherwise on a parity as to payment of
interest with the Bonds issued hereunder, and with the consent of
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the Holder thereof, exchange such Bonds
without his consent, issue and sell said
defaulted Bond, and in such event such
cure such default hereunder.
for such matured Bond, or,
refunding bond and pay said
action shall be deemed to
F. proceedings Constitute Contract; Bondholder Remedies.
The provisions of this Resolution and of the resolutions providing
for the sale of the Bonds and awarding the Bonds and fixing the
interest rate or rates thereon shall constitute a contract between
the City and the Bondholders and the provisions thereof shall be
enforceable by any Bondholder for the equal benefit and protection
of all Bondholders similarly situated by mandamus, accounting,
mandatory injunction or any other suit, action or proceeding at laY!
or in equity that is now or may hereafter be authorized under the
laws of the State of California in any court of competent
jurisdiction. Said contract is made under and is to be construed in
accordance with the laws of the State of California.
..
No remedy conferred hereby upon any Bondholder is intended
to be exclusive of any other remedy, but each such remedy is
cumulative and in addition to every other remedy and may be
exercised without exhausting and without regard to any other remedy
conferred by the Revenue Bond Law or any other law of the State of
California. No waiver of any default or breach of duty or contract
by any Bondholder shall affect any subsequent default or breach of
duty or contract or shall impair any rights or remedies on said
subsequent default or breach. No delay or omissicn cf any
Bondholder to exercise any right or power accruing upon any default
shall impair any such right or power or shall be 'construed as a
waiver of any such default or acquiescence therein. Every
substantive right and every remedy conferred upon the Bondholders
may be enforced and exercised as often as may be deemed expedient.
In case any suit, action or proceeding to enforce any right or
exercise any remedy shall be brought or taken, and the Bondholder
shall prevail, said Bondholder shall be entitled to receive from the
Net Revenues of the Enterprise reimbursement for reasonable costs,
expenses, outlays and attorney's fees and should said suit, action
or proceeding be abandoned, or be determined adversely to the
Bondholders then, and in every such case, the City and the
Bondholders shall be restored to their former positions, rights and
remedies as if such suit, action or proceeding had not been brought
or taken.
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After the issuance and delivery of the Bonds this
Resolution and supplemental resolutions thereto shall be
irrepealable, but shall be subject to modification to the extent and
in the manner provided in Sections 28 and 29, inclusive, of this
Resolution, but to no greater extent and in no other manner.
Section 28.
Supplemental Resolutions.
A. The City may,
as provided in Section 29,
without
adopt at
the consent of the Bondholders
any time or from time to time
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Supplemental Resolutions for anyone or more of the following
purposes, and any such Supp lement a 1 Reso 1ut ion sha 11 become
effective in accordance with its terms upon the filing with the
Fiscal Agent of a copy thereof certified by the City Clerk:
(1) To add additional covenants and agreements of the City
for the purpose of further securing the payment of the Bonds;
(2) To prescribe further limitations and restrictions upon
the issuance of Parity Bonds and Junior Lien Bonds and the
incurring of indebtedness by the City from the Net Revenues of
the Enterprise;
(3) To surrender any right, power or privilege reserved to
or conferred upon the City by the terms of this Resolution;
(4) To confirm as further assurance any pledge under and
the subjection to any lien, claim or pledge created or to be
created by the provisions of this Resolution of the Net Revenues
of the Enterprise and the Accounts and/or Funds or of any other
moneys, securities or funds;
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(5) To cure any ambiguity or defect or inconsistent
provision in this Resolution or to insert such provisions
clarifying matters or questions arising under this Resolution as
are necessary or desirable, provided that such modifications do
not adversely affect the rights of the Bondholders.
B. Supplemental Resolutions Effective with Consent of
Bondholders. The provisions of this Resolution may also be modified
at any time or from time to time by a Supplemental Resolution,
subject to the consent of Bondholders in accordance with and subject
to the provisions of Section 29 hereof, such Supplemental Resolution
to become effective upon the filing with the Fiscal Agent of a copy
thereof certified by the City Clerk.
C. General Provisions Relating to Supplemental
Resolutions. This Resolution shall not be modified or amended in
any respect except in accordance with and sUbject to the provisions
of this Section 28 and Section 29. Nothing contained in this
Section 28 or Section 29 shall affect or limit the right or
obligation of the City to execute and deliver to the Fiscal Agent or
any paying Agent any instrument elsewhere in this Resolution
provided or permitted to be delivered to the Fiscal Agent or any
Paying Agent.
A copy of every Supplemental Resolution adopted by the City
when filed with the Fiscal Agent shall be accompanied by an Opinion
of Counsel stating that such Supplemental Resolution has been duly
and lawfully adopted in accordance with the provisions of this
Resolution, is authorized or permitted by this Resolution and is
valid and binding upon the City and enforceable in accordance with
its terms.
- 43 -
The Fiscal Agent is hereby authorized to accept delivery of
a certified copy of any Supplemental Resolution permitted or
authorized pursuant to the provisions of this Resolution and to make
all further agreements and stipulations which may be contained
herein, and, in taking such action, the Fiscal Agent shall be fully
protected in relying on Opinion of Counsel that such Supplemental
Resolution is authorized or permitted by the provisions of this
Resolution.
Section 29.
Consent of Bondholders.
A. The consents of Bondholders are required by this
Section for the amendment, waiver or modification of any provision
of this Resolution not referred to in Section 28; provided, however,
that modification or amendment shall be made under or pursuant to
this Resolution, which shall, without the express consent of the
Bondholder affected, reduce the amount of any Bond, reduce the
interest rate or premium, if any, payable thereon, extend its
maturity or terms for paying interest thereon or change the monetary
medium in which principall and interest or premium, if any, is
payable or reduce the percentage of consent required for amendment
or modification. Any act relating to such amendment, waiver or
modification consented to by Bondholders holding sixty-six and
two-thirds percent (66-2/3%) in aggregate principal amount of the
Bonds, exclusive of Issuer-Owned Bonds as hereinafter defined, shall
be binding upon the Holders of all of the Bonds and shall not be
deemed an infringement of any of the provisions of this Resolution
or of said Revenue Bond Law, whatever the character of such act may
be, and may be done and performed as fully and freely as if
expressly permitted by the terms of this Resolution, and after such
consent relating to such specified matters has been given, no
Bondholder shall have any right or interest to object to such action
or in any manner to question the- propriety thereof or to enjoin or
restrain the City or any officer thereof from taking any action
pursuant thereto.
B. Calling Bondholders' Meeting.
desire to obtain any such consent it shall
Bondholders, by resolution, for the purpose
action, the consent to which is desired.
If the City shall
call a meeting of
of considering the
C. Notice of Meeting. Notice specifying the purpose,
place, date and hour of such meeting shall be published by the City
once in a financial newspaper or journal of national circulation
published in the City of New York, New York. not less than sixty
(60) days and not more than ninety (90) days prior to the date fixed
for the meeting. Such notice shall set forth the nature of the
proposed action, consent to which is desired. The Fiscal Agent
shall, on or before the first publication of such notice, mail a
similar notice, postage prepaid, to the respective registered owners
thereof at their addresses appearing on the Bond Register. The
place, date and hour of holding such meeting and the date or dates
- 44 -
of publishing and mailing such notice shall be determined by the
City, in its discretion.
The actual receipt by any Bondholder of notice of any such
meeting shall not be a condition precedent to the holding of such
meeting, and failure to receive such notice shall not affect the
validity of the proceedings thereat. A certificate by the Fiscal
Agent, approved by resolution of the Mayor and Common Council of
said City, that the meeting has been called and that notice thereof
has been given as herein provided shall be conclusive as against all
parties and it shall not be open to any Bondholder to show that he
failed to receive notice of such meeting.
D. Voting Qualifications. Any Bondholder may, prior to
any such meeting, deliver his Bond or Bonds to the Fiscal Agent, and
shall thereupon be entitled to receive an appropriate receipt for
the Bond or Bonds so deposited, calling for the redelivery of such
Bond or Bonds at any time after the meeting. The Fiscal Agent shall
prepare and deliver to the Chairman of the meeting a list of the
names and addresses of the registered owners of Bonds, with a
statement of the maturities and serial numbers of the Bonds held and
deposited by each of such Bondholders, and no Bondholder shall be
entitled to vote at such meeting unless his name appears upon such
list or unless he shall present his Bond or Bonds at the meeting or
a certificate of deposit thereof, satisfactory to the Fiscal Agent,
executed by a bank or trust company. No Bondholder shall be
permitted to vote with respect to a larger aggregate principal
amount of Bonds than is set against his name on such list, unless he
shall produce the Bonds upon which he desires to vote, or a
certificate of deposit thereof as above provided.
E. I ssuer-Owned Bonds. The Ci ty sha 11 present at the
meeting a certificate, signed and verified by the City Treasurer
stating the maturities and serial numbers of all Bonds owned by, or
held for account of, the City, directly or indirectly. No person
shall be permitted at the meeting to vote or consent with respect to
any Bond appearing upon such certificate, or any Bond which it shall
be established at or prior to the meeting is owned by the City,
directly or indirectly, and no such Bond (in this resolution
referred to as "Issuer-Owned Bond") shall be counted in determining
whether a quorum is present at the meeting.
F. Quorum and Procedure. A representation of at least
sixty-six and two-thirds percent (66-2/3%) in aggregate principal
amount of the Bonds then outstanding (exclusive of Issuer-Owned
Bonds) shall be necessary to constitute a quorum at any meeting of
Bondholders, but less than a quorum may adjourn the meeting from
time to time, and the meeting may be held as so adjourned without
further notice, whether such adjournment shall have been had by a
quorum or by less than a quorum. The City shall. by an instrument
in writing, appoint a temporary chairman of the meeting, and the
meeting shall be organized by the election of a permanent chairman
- 45 -
and a secretary. At any meeting each Bondholder shall be entitled
to one vote for every $5,000 principal amount of Bonds with respect
to which he shall be entitled to vote as aforesaid, and such vote
may be given in person or by proxy duly appointed by an instrument
in writing presented at the meeting. The City, by its duly
authorized representative, may attend any meeting of the
Bondholders, but shall not be required to do so.
G. Vote Required. At any such meeting held as aforesaid
there shall be submitted for the consideration and action of the
Bondholders a statement of proposed action, consent to which is
desired, and if such action shall be consented to and approved by
Bondholders holding at least sixty-six and two-thirds percent
(66-2/3%) in aggregate amount of the Bonds then Outstanding
(exclusive of Issuer-Owned Bonds) the chairman and secretary of the
meeting shall so certify in writing to the City, and such
certificate shall constitute complete evidence of consent of
Bondholders under the provisions of this Resolution. A certificate
signed and verified by the chairman and the secretary of any such
meeting, shall be conclusive evidence and the only competent
evidence of matters stated in such certificate relating to
proceedings taken at such meeting.
Section 30. Execution of Instruments by Bondholders and
Proofs of Ownership of Bonds.
A. Evidence of Siqnatures of Bondholders and_Ownership of
Bonds. Any request, direction, consent, revocation of consent, or
other instrument in writing required or permitted by this Resolution
to be signed or executed by Bondholders may be in any number of
concurrent instruments of similar tenor, and may be signed or
executed by such Bondholders in person or by their attorneys or
agents appointed by an instrument in writing for that purpose.
Proof of the execution of any such instrument, or of any instrument
appointing any such attorney or agent, and of the holding and
ownership of Bonds shall be sufficient for any purpose of this
Resolution (except as otherwise herein provided), if made in the
following manner:
1. The fact and date of the execution of any Bondholder
or his attorney or agent of any such instrument and of any
instrument appointing any such attorney or agent, may be proved
by delivery of a certificate, which need not be acknowledged or
verified, of an office of any bank, or trust company, or of any
notary public, or other officer authorized to take
acknowledgements. Where any such instrument is executed by an
officer of a corporation or association or a member of a
partnership on behalf of such corporation, association or
partnership, such certificate shall also constitute sufficient
proof of his authority; and
- 46 -
2. The ownership of registered Bonds shall be proved by
the bond register held by the Fiscal Agent under the provisions
of this Resolution.
Nothing contained in this Section shall be construed as
limiting the Fiscal Agent to such proof, it being intended that the
Fiscal Agent may accept any other evidence of the matters herein
stated which may seem sufficient. Any request or consent of the
Holder of any Bond shall bind every future Holder of the same Bond
in respect of anything done or suffered to be done by the City, the
Fiscal Agent or any Paying Agent in pursuance of such request or
consent.
Section 31.
Miscellaneous.
A. Preservation and Inspection of Documents. All
documents received by the Fiscal Agent and Treasurer or any Paying
Agent under the provisions of this Resolution shall be retained in
its possession and shall be subject at all reasonable times durinq
regular business hours to the inspection of the City, the Fiscal
Agent or any Paying Agent, and, upon written request of not less
than five percent (5%) in principal amount of the Holders of the
Outstanding Bonds, Bondholders and their agents and representatives,
any of whom may make copies thereof.
B. Parties of Interest. Nothing in this Resolution, or
adopted pursuant to the provisions hereof, expressed or implied, is
intended to or shall be construed to confer upon or to give to any
person or party other than the City, Fiscal Agent, Paying Agents and
the Holders of the Bonds any rights, remedies or claims under or by
reason of this Resolution or any covenants, condition or stipulation
thereof; and all covenants, stipulations, promises and agreements in
this Resolution contained by or on behalf of the City shall be for
the sole and exclusive benefit of the City, Fiscal Agent and Paying
Agents and the Holders from time to time of the Bonds.
C. No Recourse Under Resolution or on Bonds. All
covenants, stipulations, promises, agreements and obligations of the
City contained in this Resolution shall be deemed to be the
covenants, stipulations, promises, agreements and Obligations of the
City and not of any officer or employee of the City in his
individual capacity, and no recourse shall be had for the payment of
the principal of, premium, if any, or interest on the Bonds or for
any claim based thereon or on this Resolution against any officer or
employee of the City or any person executing the Bonds.
D. CUSIP: CUSIP identifications numbers will be
imprinted on the Bonds, but such numbers shall not constitute a part
of the contract evidenced by the Bonds and no liability shall
hereafter attach to the Agency or any of the officers or agents
thereof because of or on account of said numbers. Any error or
omission with respect to said numbers shall not constitute cause for
refusal by the successful bidder to accept delivery of and pay for
the Bonds.
- 47 -
E. Headings. Any headings preceding the text of the
several Sections hereof, and any table of contents or marginal notes
appended to copies hereof, shall be solely for convenience or
reference and shall not constitute a part of this Resolution, nor
shall they affect its meaning, construction or effect.
F. Conflict. All resolutions or parts of resolutions or
other proceedings of the City in conflict herewith shall be and the
same are repealed insofar as such conflict exists.
Section 32. Future Contracts. Nothing herein contained
shall be deemed to restrict or prohibit the City from making
contracts or creating bonded or other indebtedness payable from the
general fund of the City or from taxes or any source other than the
Net Revenues of the Enterprise as defined herein and the general
fund of the City shall not include the Net Revenues of the
Enterprise, and no contract or other obligation payable from the
general fund of the City shall be payable from the Net Revenues of
the Enterprise unless specifically authorized pursuant to Section 23
hereof.
Section 33. Severability. If any covenant, agreement or
provision, or any portion thereof, contained in this Resolution, or
the application thereof to any person or circumstance, is held to be
unconstitutional, invalid or unenforceable, the remainder of this
Resolution and the application of any such covenant, agreement or
provision, or portion thereof, to other person~ 01 circumstances
shall be deemed severable and shall not be aftected thereby, and
this Resolution and the Bonds issued pursuant hereto shall remain
valid and the Bondholders shall retain all valid rights and benefits
accorded to them under this Resolution and the Constitution and laws
of the State of California and the Charter of the City.
- 48 -
This Resolution shall take
Effective Date.
Section 34.
effect upon adoption.
was duly
Ci ty of
thereof,
1986, by
resolution
oft he
meeting
the foregoing
Common Council
that
and
CERTIFY
Mayor
a
I HEREBY
adopted by the
San Bernardino at
held on the
the following vote,
day of
to wit:
Council Members
AYES:
NAYS:
ABSENT:
City Clerk
,
i
I
The foregoing resolution is hereby approved this
. 1986.
day of
I
.)
Mayor of the City of
San Bernardino
Approved as to form:
City Attorney
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EXHIBIT A
[FORM OF FULLY REGISTERED BOND]
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO
CITY OF SAN BERNARDINO, CALIFORNIA
SEWER REVENUE REFUNDING BOND
ISSUE OF 1986
(Wastewater Treatment Plant Project)
^
INTEREST RATE:
MATURITY DATE:
ORIGINAL ISSUE DATE:
CUSIP:
!
THE CITY OF SAN BERNARDINO, a municipal corporation and a
charter city, duly organized and existing under and pursuant to the
Constitution and laws of the State of California (hereinafter
sometimes ca lled "Ci ty"), FOR VALUE RECEIVED, hereby promi ses to
pay, solely from the Net Revenues of the Enterprise so available in
the Sewer Fund, as hereinafter provided, to the Registered Owner set
forth above, or registered assigns (herein sometimes referred to as
"registered owner"), subject to the right of prior redemption
hereinafter mentioned the Principal Sum stated above maturing on the
Maturity Date and bearing interest at the Interest Rate set forth
above and to pay such registered owner on the interest payment date
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 of the month preceding the interest
payment, interest on such principal sum from the interest payment
date next preceding the date hereof (unless (i) the date hereof is
an interest payment date, in which event from the interest payment
date, or (ii) the date hereof is prior to September 1, 1986, in
which event from March 1, 1986) until the principal hereof shall
have been paid or provided for in accordance with the Resolution
hereinafter referred to, interest payable semiannually on March 1
and September 1 in each year commencing on September 1, 1986. Both
principal and interest and any premium upon the redemption prior to
maturity of all or part thereof are payable in lawful money of the
united States of America; and (except for interest which is payable
by check or draft as stated above) are payable at the principal
corporate trust office of Security Pacific National Bank, Fiscal
Agent for the City, in Los Angeles, California.
This Bond and the interest hereon and any premium upon the
redemption hereof are not a debt of 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 revenues except
the revenues of the municipal sewer system pledged to its payment,
and the principal and interest of this Bond and any premium upon the
redemption hereof are payable solely from the revenues pledged to
its payment, to wit, the Net Revenues (as defined in the Resolution
hereinafter referred to) from the sewer system of the City, and said
City is not obligated to pay such principal, interest and premium
except from said Net Revenues of the Enterprise. The Sewer Fund is
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established under and pursuant to the Charter of the City and the
Revenue Bond Law (as hereinafter defined), and under the provisions
of the Resolution authorizing the issuance of this Bond. The Gross
Revenues of the Enterprise (as defined in the Resolution hereinafter
referred to) 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, including
the payment of the Necessary and Reasonable Maintenance and
Operation Costs (as defined in the Resolution hereinafter referred
to) of the sewer system and the payment from the Net Revenues of the
Enterprise of the principal of and interest on the issue of Bonds of
which this is one.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND
SET FORTH ON THE REVERSE HEREOF WHICH FOR ALL PURPOSES SHALL HAVE
THE SAME EFFECT AS THOUGH FULLY SET FORTH HEREIN.
This Bond 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 indebtedness evidenced by
this Bond payable from the Net Revenues of the Enterprise and in the
issuance of this Bond exist, have happened, and have been performed
in due time, form and manner as required by the Constitution, the
Cha rter of the Ci ty and the laws of the State of Ca 1 i forni a, and
that this Bond, together with all other indebtedness of the City
pertaining to the aforesaid sewer system, is within every debt and
other limit prescribed by the Constitution, the Charter of the City
and the laws of the State of California.
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IN WITNESS WHEREOF, said City of San Bernardino has caused
this Bond to be signed by the Mayor and the City Clerk of said City
by their facsimile signatures and the corporate seal of said City to
be imprinted hereon all as of the day of , 1986.
Mayor of the City of
San Bernardino, California
ATTEST:
City Clerk of the City
of San Bernardino, California
(SEAL)
- 3 -
~ERTIFICATE OF AUTHENTICATIO~
This is one of the Fully Registered Bonds described in the
within-mentioned Resolution.
SECURITY PACIFIC NATIONAL BANK
Fiscal Agent
By
Authorized Officer
A
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(Reverse side of bond)
This is one of a duly authorized issue of Bonds of the City
in the aggregate principal amount of $2,600,000, designated "City of
San Bernardino, California, Sewer Revenue Refunding Bonds, Issue of
1986 (,wastewater Treatment Plant Project)," (the "Bonds"), all of
which 7~ave been issued pursuant to the Charter of -the C1ty 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) (the "Revenue
Bond Law") for the purpose of refunding the outstanding^"$2,600,OOO
City of San Bernardino'ASewer Revenue Refunding Bond Anticipation
Note, Issue of 1984" (the "1984 Notes") and the creation of said
issue and the terms and conditions of the Bonds are provided for by
the resolution of the Mayor and Common Council of said City
authorizing the issuance of the Bond~ adopted February 13, 1986,
designated Resolution No. 86-40, as amended (the "Resolution") and
this reference incorporates said Resolution and said Chapter 6
herein, and by acceptance hereof the holder of this Bond assents to
sa id terms and condi t ions. Said Reso 1ut ion is adopted under, and
this Bond is issued under and are to be construed in accordance with
the laws of the State of California.
I
l
j
.
!
By the terms of said Revenue Bond Law and by covenants
expressed in said Resolution, the City is Obligated to levy and
collect charges for service from the Enterprise of the City such as
to provide revenues sufficient to pay the Necessary and Reasonable
Maintenance and Operation Costs of the Enterprise and the principal
of and interest on the Bonds as they become due and payable in
addition to all other payments required for compliance with said
Resolution, is prohibited from issuing bonds having any priority
with respectto payment from the sewer system revenues, and i..2.
subject to conditions with respect to any sale of said sewer
system. In the manner provided in the Resolution, any or all of the
Obligations referred to in this paragraph and certain other
Obligations mentioned in said Resolution may be amended, waived or
modified with the consent of the holders of sixty-six and two-thirds
percent (66-2/3%) in aggregate principal amount of the Outstanding
Bonds, exclusive of Issuer-Owned Bonds (as defined in the
Resolution), unless the modification or amendment is tor the purpose
of curing ambiguities, defects .or inconsistencies in the Resolution
or to insert such provisions clarifying matters or questions arising
under the Resolution as are necessary or desirable, provided that
such modifications do not adversely affect the rights of the
Bondholders and as otherwise provided in the Resolution, in which
case no Bondho1der~ consent is required.
^
The Bonds shall be dated as of March 1, 1986, and shall be
payable in consecutive numerical order on March 1 in each year of
maturity in the amounts for each of the several years as set forth
in the Resolution. The Bonds shall bear interest at the rates per
annum as established by the resolution of the City authorizing the
sale of the Bonds (the "Resolution of Sale"). All interest shall be
payable semiannually on March 1 and September 1 of each year,
commencing on September 1, 1986. Each Bond shall bear interest
- 5 -
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 the Resolution, said Bond shall then
cease to bear interest.
The Bonds maturing on or before March 1, 1993, are not
subject to call and redemption prior to maturity. The Bonds
maturing on or after March 1, 1994, are subject to call and
redemption, in whole or in part, at the option of the City, on any
interest payment date on or after March 1, 1993, at a redemption
price equal to the principal amount thereof plus accrued interest on
the redemption and a redemption premium equal to a percentage of the
principal amount thereof on the following redemption dates:
Redemption Dates
March 1, 1993, and September 1, 1993
March 1, 1994, and September 1, 1994
March 1, 1995, and September 1, 1995
March 1, 1996, and thereafter
Redemption
Premium
1.5%
1.0%
5'l,
. 0
0%
Notice of redemption shall be given by first-class mail,
postage prepaid, not less than thirty (30) nor more than sixty (60)
days prior to the redemption date, to the registered owner of each
such Bond at the address of such registered owner as it appears on
the bond register of the Fiscal Agent or at such other address such
registered owner may have filed with the Fiscal Agent for such
purpose. The notice of redemption shall (a) state the redemption
date; (b) state the redemption price; (c) state the numbers of the
Bonds to be redeemed; provided, however, that whenever any call
includes all of the outstanding Bonds, the numbers of the Bonds need
not be stated; (d) state, as to any Bonds redeemed in part only, the
registered Bond numbers and the principal portion thereof to be
redeemed; and (e) state that interest on the principal portion of
the Bonds 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 Bonds the redemption price
thereof.
The actual receipt by the Holder of any Bond of notice of
such redemption shall not be a condition precendent to redemption,
and failure to receive such notice shall not affect the validity of
the proceedings for the redemption of such Bonds or the cessation of
interest on the redemption date.
This Bond is issued in fully registered form (herein
sometimes referred to as "Fully Registered Bond") and is
non-negotiable. This Bond may be exchanged for a like aggregate
principal amount of Bonds of other authorized denominations of the
same issue, all as more fully set forth in the Resolution. This
Bond is transferable by the registered owner hereof, in person or by
his attorney duly authorized in writing, at theAcorporate trust
office of the Fiscal Agent in the City of Los Angeles, California,
but only in the manner subject to the limitations and upon payment
- 6 -
of the charges provided in the Resolution, upon surrender and
cancellation of this Bond. Upon such transfer a new Fully
Registered Bond of authorized denomination or denominations for the
same aggregate principal amount of the same issue will be issued to
the transferee in exchange therefor. No exchange or transfer shall
be made between the fifteenth (15th) day of the month preceding any
interest payment date and such interest payment date.
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 City., the Fiscal Agent and any Paying Agent shall
not be affected by any notice to the contrary.
^
- 7 -
(ENDORSEMENT)
This Fully Registered Bond (issued in fully registered
form) is issued in the denomination of $5,000, or any whole multiple
thereof, aggregating the face value hereof; and Fully Registered
Bonds of this same issue and of the denomination of $5,000 will be
issued in exchange for this Bond in the manner, with the effect and
under the terms and conditions stated on the face of the Bond and in
the Resolution referred to therein.
(ASSIGNMENT)
For value received
assigns and transfers unto
hereby
sells,
the wi thin-mentioned Bonds
and hereby irrevocably constitutes and appoints
, attorney, to
transfer the same on the books of the Fiscal Agent with full power
of substitution in the premises.
Dated:
NOTE: The signature to this assignment
must correspond with the name as
wri tten on the f ace of the
within Bond in every particular,
without alteration or
enlargement or any change
whatsoever.
j'
I:
i; ,
j
:;
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