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HomeMy WebLinkAbout81-155RESOLUTION NO. 81-155 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CALLING FOR SEALED BIDS ON BONDS TO BE ISSUED TO REPRESENT UNPAID ASSESSMENTS UPON LANDS IN ASSESSMENT DISTRICT NO. 246 WHEREAS, pursuant to Resolution No. 81-119 adopted July 20, 1981, and proceedings taken pursuant thereto under and in accordance with the Municipal Improvement Act of 1913, Division 12 of the Streets and Highways Code of the State of California, this City Council fixed and established the boundaries of Assessment District No. 246; and WHEREAS, the proceedings pursuant to said Municipal Improvement Act of 1913 are being taken for the purpose of acquiring and constructing certain public facilities in the district; and WHEREAS, an assessment of the proposed cost and expense of said improvements was duly made and filed, and a hearing was held thereon on August 27, 1981; and WHEREAS, it is necessary and desirable that this City Council sell bonds to be issued to represent each unpaid assessment; and WHEREAS, this City Council determined that pursuant to Chapter 7 of said Municipal Improvement Act of 1913, that said bonds would be issued pursuant to the Improvement Bond Act of 1915, Division 10 of said Streets and Highways Code; NOW, THEREFORE,.THE CITY COUNCIL OF THE CITY OF SANTA ANA, DOES HEREBY RESOLVE AND ORDER AS FOLLOWS: 1. That this City Council does hereby call for sealed bids on the bonds proposed to be issued, to be received up to the time specified in the notice set forth below. 2. That this City Council hereby selects and speci- fies as the date of the bond the date specified for that purpose in the notice set forth below. 3. That the City Clerk of the City of Santa Ana shall cause a notice inviting such bids to be given by two publications in The Register, the first publication to be at least ten (10) '~ before the bids are to be opened. 4. That the City hereby covenants and agrees with the holders of the bonds herein, that the bonds shall be enforceable and contain the terms and conditions set forth in the notice of sale as follows: NOTICE OF SALE CITY OF SANTA ANA ORANGE COUNTY, CALIFORNIA ASSESSMENT DISTRICT NO. 246 NOTICE IS HEREBY GIVEN that sealed proposals will be received and opened by a representative of the Clerk to the City Council of the City of Santa Ana, Monday, November 2, 1981, at the hour of 11:00 o'clock A.M., in the offices of the financing consultant, STONE & YOUNGBERG MUNICIPAL FINANCING CONSULTANTS, INC., Suite 400, 1541 Wilshire Boulevard, Los Angeles, California 90017, for the purchase of not to exceed $3,500,000 principal amount of improvement bonds of the City of Santa Ana, designated "Improvement Bonds, Assessment District No. 246, City of Santa Ana", issued under and pursuant to the "Municipal Improvement Act of 1913" and the "Improvement Bond Act of 1915". Proposals for the purchase of the Bonds will be made and considered subject to the following terms and condi- tions: ISSUE: Not to exceed $3,500,000. DENOMINATION: The bonds will be of the denomination of $5,000, except for Bond No. 1, which may be issued in an amount other than $5,000 to represent the difference between the total amount of bonds and a multiple of $5,000. MATURITIES: The final exact maturity schedule for the bonds will be determined following the completion of the cash collection period, estimated to end October 23, 1981. After the expiration of the cash collection period and prior to the date of delivery of the bonds, the actual aggregate amount of bonds to be issued will be certified by the City Treasurer. The maturity schedule will be arranged so as to provide for approximately equal annual payments of principal and interest, with bonds maturing on July 2nd of each year in multiples of $5,000, except that the first maturity, due July 2, 1983, may be in an amount other than a multiple of $5,000. For the purposes of calculating the best bid for the bonds, the following sample Maturity Schedule, which assumes that bonds will be issued to represent the full amount of proposed assessments, shall be used. Maturity Bonds Maturity Bonds Year Maturing Year Maturing 1983 $ 5,000 1990 $220 1984 125,000 1991 240 1985 140,000 1992 270 1986 150,000 1993 300 1987 170,000 1994 320 1988 180,000 1995 360 1989 200,000 1996 390 1997 430 000 000 000 000 000 000 000 000 DATE OF BONDS: The bonds will be dated November 15, 1981. INTEREST RATE: The bonds shall bear interest from their date at a rate or rates to be determined at the sale thereof, not to exceed the current legal maximum of ten percent (10%) per annum or the maximum allowed by law at the time of sale, whichever is higher. Said bonds shall be represented by coupons payable semiannually on January 2 and July 2 in each year except the first coupon which will be for interest from the date of said bonds to January 2, 1983. Bidders may specify any number of separate interest rates, and any rate may be repeated as often as desired; provided, however, that (i) the difference between the highest and lowest coupon rates specified in any bid shall not exceed two percent (2%); (ii) each interest rate specified must be in a multiple of 1/20 of 1% and a zero rate of interest cannot be specified; (iii) no bond shall bear more than one rate of interest, no interest payment shall be evidenced by more than one coupon and supplemental coupons are not permitted; (iv) each bond shall bear interest from its date to its stated maturity date at the interest rate specified in the bid; (v) all bonds of the same maturity date shall bear the same interest; and (vi) any premium must be paid in bank funds as part of the purchase price, and no bid will be accepted which provides for the cancellation and surrender of any interest coupon or for the waiver of interest or other concession by the bidder as a substitute for payment in full of the purchase price in bank funds. Bids which do not conform to the terms of this paragraph will be rejected. REDEMPTION: Any bond may be redeemed on any January 2 or July 2 prior to its fixed maturity date, at the option of the Treasurer of the City of Santa Ana upon giving the notice provided in the "Improvement Bond Act of 1915" and upon payment of the principal amount thereof and interest accrued thereon to the date of redemption, plus a redemption premium of five percent (5%) of the principal amount there- of. PAYMENT: Both principal and interest are payable in lawful money of the United States of America at the Office of the Treasurer of the City of Santa Ana, Santa Ana, California. NEGOTIABLE: The bonds are negotiable instruments payable to Bearer and, unless registered, title passes by physical delivery. EXECUTION AND REGISTRATION: Coupon bonds will be issued by the City. The bonds will be executed by the manual signature of at least one official authorized to execute the bonds. The bonds are registrable only as to both principal and interest, and after being registered are not subject to discharge from registration. SECURITY: The bonds herein offered for sale are issued upon and secured by unpaid assessments together with inte- rest thereon, and said unpaid assessments together with interest thereon constitute a trust fund for the redemption -2- and payment of the principal of the bonds and the interest thereon, and all the bonds are secured by the monies in the redemption fund created pursuant to said proceedings and by the unpaid assessments levied to provide for payment of said acquisitions and improvements, and, including principal and interest, are payable exclusively out of said redemption fund. The unpaid assessments are collected in annual install- ments together with interest on the declining balances on the tax roll on which general taxes for real property are collected and are payable and become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest and are subject to the same provisions for sale and redemption as are properties for non-payment of general taxes. In the event of a delinquency in the payment of any installment of principal and interest appearing on the tax roll, the City is obligated to advance from surplus funds the amount of such delinquency to the redemption fund. Passage on June 6, 1978, of the Jarvis-Gann Initiative (Proposition 13), now Article XIIIA of the California Constitution, has sharply reduced the amount of general property tax revenues received by the City; such reduction in tax revenues makes it less likely that the City will have surplus funds to advance to the Redemption Fund to cover delinquencies. In addition, passage of said Initiative and subse~_~uent statutory enactments ei~minate the forme'r'l¥ ~p.--l-~c~-b-l~- ~a---6~0~y .~uty' ~ %~e par%.q~..the city ~6 ~y and collect a special tax (in the amount necessary to meet delinquencies, bd~ not to exceed 10~'p~r $100 of assessed ~luation .of pFqp~.y githin the City)' if'~iU~ funds are not available to cover delinquencies. COVENANT FOR SUPERIOR COURT FORECLOSURE: In the event of dekinquency in the payment of any installment of an unpaid assessment, the City may order institution of an action in the Superior Court of the State of California to foreclose the lien of such unpaid assessment, as authorized in Part 14 of Division 10 of the Streets and Highways Code of the State of California (the "Improvement Bond Act of 1915"). In such action the real property subject to the unpaid assessment may be sold at judicial foreclosure sale. Upon such a sale the right of redemption is limited to one year from the date of sale, as distinguished from the five-year redemption period in the event of a tax sale. Such judicial foreclosure sale, which was authorized in Part 14 of Division 10 of the Streets and Highways Code (the "Improvement Bond Act of 1915"), is not mandatory; and the City could, absent a covenant to use judicial foreclosure, permit a tax sale and the five-year redemption period. However, by the resolution of the City Council, the City covenants with the holders of the bonds that in the event there are no available surplus funds and moneys remaining in the reserve fund from which transfers may be made into the redemption fund, pursuant to and as provided in Sections 8802, 8803 and 8806 of the Streets and Highways Code of the -3- State of California and the resolution, it will order, and cause to be commenced and thereafter diligently prosecuted, court foreclosure proceedings upon any and all such delin- quent unpaid assessments and interest, pursuant to and as provided in Sections 8830 through 8835, inclusive, of said Streets and Highways Code. Such foreclosure proceedings shall be commenced either (a) within 60 days after the receipt of written demand of any bondholder whose interest might be adversely affected by any delinquency, or (b) within 60 days following the date of such a delinquency. RESERVE FUND: By resolution of the City Council, the City will cause the creation of a special reserve fund to provide available funds from which the City can make payment of the amount of any delinquent assessments levied in the proceedings in which such reserve fund is created, and interest thereon, for transfer into the redemption fund for the bonds issued in the proceedings in which such reserve fund is created, pursuant to and as provided in Part 13 of said Division 10. Payments from such reserve fund shall be deemed an advance to be reimbursed from the proceeds of redemption or sale of the properties with respect to which payment of delinquent assessments and interest thereon was paid from such reserve fund. The reserve fund shall be held and maintained by the City as a separate trust account, distinct from all other funds of the City. Upon receipt of the proceeds of sale of the bonds, an amount equal to at least 10% of bonds issued shall be deposi't'e~' ~'the reserve fund. PROCEEDINGS: Said proceedings were authorized under the terms and provisions of the "Municipal Improvement Act of 1913", being Division 12 of the Streets and Highways Code for the construction of certain public improvement work within the assessment district, including appurtenances, with authorization for the bonds being pursuant to the provisions contained in the "Improvement Bond Act of 1915", being Division 10 of said Code. ASSESSMENT DESCRIPTION AND AMOUNTS: For a description of the respective- lots, pieces and parcels of land upon which the several assessments are levied and the bonds are issued, and for other information, reference is hereby made to the assessment presently on file in the Office of the Clerk of the City of Santa Ana and upon confirmation to be recorded in the Office of the Superintendent of Streets of the City of Santa Ana, California. TAX EXEMPT: In the opinion of the Bond Counsel, interest on the bonds is exempt from income taxes of the United States of America under present Federal Income Tax Laws and also from personal income taxes of the State of California under present State Income Tax Laws. LEGAL OPINION: The unqualified opinion of Rutan & Tucker, Santa Ana, California, approving the validity of said bonds will be furnished to the successful bidder upon delivery of the bonds at no charge, and a copy of said legal opinion will be printed on each bond. -4- BID: Said bonds will be sold for cash only to the bidder whose bid in the opinion of the City Council will best serve the interests of owners of land included in the assessment district. All bids should be unconditional. Each bid must state separately the premium or discount, if any, and the rate of interest offered for said secur- ities. The highest bid will be determined by deducting the amount of the premium bid (if any) from, or by adding the amount of the discount bid (if any) to, the total amount of interest which would be paid from the date of the bonds to their respective maturity dates at the coupon rates speci- fied in the bid, and the award will be made on the basis of the lowest net interest cost. Bids shall be for all the bonds to be issued and any bids for less than the entire amount of said bonds will be rejected. The purchaser must pay accrued interest from the date of the bonds to the date of delivery. All interest will be computed on a 360-day year basis. The cost of printing the bonds will be borne by the City. DISCOUNT: NO discount may be specified which is in excess o-~ twenty-five percent (25%) of the par value of the bonds offered for sale. FORM OF BID: Ail bids must be for not less than all of the bonds and accrued interest to date of delivery, plus such premium or less such discount as is specified in the bid. Each proposal, together with bidder's check, must be enclosed in a sealed envelope addressed to the Clerk of the City Council, City of Santa Ana and endorsed "Proposal for Improvement Bonds, Assessment District No. 246, City of Santa Ana." All proposals must be delivered to the office of the financing consultant, Stone & Youngberg Municipal Financing Consultants, Inc., Suite 400, 1541 Wilshire Boulevard, Los Angeles, California 90017, prior to 11:00 o'clock A.M., on Monday, November 2, 1981. SECURITY AND DEPOSIT: A certified or cashier's check for the sum of $25,000, payable to the order of the City, must accompany every bid as a guaranty that the bidder, if successful, will accept and pay for the securities described in the accepted bid in accordance with the terms of his bid, and said check will remain in possession of the City until payment for said securities has been received. The City reserves the right to disregard insubstantial irregularities and technical defects in bids. NET INTEREST COST: Bidders are requested, but not required, to supply an estimate of the total net interest cost and the estimated net interest rate to the City on the basis of their respective bids, which shall be considered as informative only and not binding on either the bidder or the City. RIGHT OF REJECTION: The City reserves the right, in its discretion, to reject any and all bids and to waive any irregularity or informality in any bid. -5- PROMPT AWARD: The City Council will take action awarding the bonds or rejecting all bids not later than 36 hours after the expiration of time herein prescribed for the receipt of bids; provided that the award may be made after the expiration of the specified time if the bidder shall not have given to the City a notice in writing of the withdrawal of such bid. DELIVERY OF SECURITIES: Delivery of said bonds shall be made to the successful bidder at the office of the City Treasurer, City Hall, Santa Ana, California (or any other mutually agreeable location). Payment shall be made in cash, Federal Reserve Bank funds, or other funds immediately available to the City. It is expected that the bonds will be ready for delivery to the successful bidder on or about November 15, 1981. RIGHT OF CANCELLATION: The successful bidder shall have the right, at his' option, to cancel the contract of purchase if the City shall fail to execute the bonds and tender the same for delivery within sixty (60) days from the date of sale thereof, and in such event the successful bidder shall be entitled to the return of the deposit accompanying his bid. NO LITIGATION CERTIFICATE: The City will furnish to the purchase of the bonds a no-litigation certificate, certifying that there is no controversy or litigation pending concerning the validity of the bonds or the levy and collection of the assessments securing the same, or the existence of the Assessment District, or of the City, or of the title of the officers thereof to their respective offices. OFFICIAL STATEMENT: The City has prepared an Official Statement, a copy of which will be furnished upon request made to the City or to Stone & Youngberg Municipal Financing Consultants, Inc., One California Street, San Francisco, California 94111, the City's financing consultant. Two hundred (200) copies of said Official Statement will be made available to the successful bidder without charge. APPROVED by the City Council of the City of Santa Ana, California, this 21$tday of September, 1981. City Clerk of the City of Santa Ana -6- PASSED AND ADOPTED this ]~h%~ day of s.pt.mh~~ , 1981, by the following vote: AYES: MEMBERS: Acosta, Bricken, Griset, Luxembourger, McGuigan, Serrato NOES: MEMBERS: Markel ABSENT OR NOT VOTING: None MG~r, BC~k~ Santa Ana ATTEST: APPROVED AS TO FORM: ~d Cooper-- ~_~ City Attor~y -7-