Resolution 1986-52
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RESOLUTION NO.
~6-52
RESOLUTION AUTHORIZING ISSUANCE OF REFUNDING BONDS
OBATA INDUSTRIAL PARK ASSESS~ffiNT DISTRICT
REASSESSNENT AND REFUNDING, SERIES 86-1
The City Council of the City of Gilroy resolves:
Section 1. RECITALS. On August 18, 1986, the City
Council of the City of Gilroy adopted its resolution of
intention to conduct reassessment proceedings and issue
refunding bonds under the provisions of the Refunding Act of
1984 for 1915 Improvement Act Bonds (the "Act"). Proceedings
taken under the Act led to the levy of reassessments by the City
Council against parcels of land within the reassessment district
in the total amount of $1,630,000.00. These reassessments will
be recorded in the office of the County Recorder of the County
of Santa Clara and thereupon will become a lien upon each of the
reassessment parcels. The refunding bonds are being issued in
the amount of the total reassessment.
Section 2. ISSUANCE OF BONDS. The City Council
hereby authorizes the issuance of refunding bonds under the
provisions of the Act to be secured by the reassessments. The
bonds shall be designated, "Refunding Bonds, Obata Industrial
Park Assessment District Reassessment and Refunding, City of
Gilroy, Santa Clara County, California, Series No. 86-1." In all
respects not specified in this resolution, the bonds shall be
issued in the manner pr~scribed by the Act. ~onds shall be
issued in denominations of $5000 or integral multiples thereof,
and shall be dated August 28, 1986. Bonds shall mature and
shall bear interest at the rates set forth in the table attached
as Exhibit A.
Section 3. APPOINT~ffiNT OF PAYING AGENT, REGISTRAR AND
TRANSFER AGENT. The City Council hereby appoints Bank of
America National Trust and Savings Association as paying agent,
registrar and transfer agent for the bonds in accordance with an
agreement between the City and Bank heretofore approved by the
City Council.
Section 4. FORM AND EXECUTION. BondsOsRhlalllNbAe Lissued
RESOLUTION NO. 86 - 52 b
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as fully registered bonds substantially in the form set forth as
Exhibit B to this resolution. The bonds shall be signed by the
Mayor, Treasurer and the Clerk and the seal of the City shall be
affixed. All signatures and seal may be reproduced on the bonds
by facsimile, but upon its registration or reregistration each
bond shall be authenticated by the manual signature of the
registrar.
The paying agent shall assign to each bond
authenticated and registered by it a distinctive letter, or
number, or letter and number, and shall maintain a record
thereof which shall be available to the City for inspection.
Section 5. ESTABLISHMENT OF SPECIAL FUNDS. For
administering the proceeds of the sale of bonds and payment of
interest and principal on the bonds, there are hereby
~stablished three funds to be known as the refunding fund, the
redemption fund and the special reserve fund, respectively, for
Obata Industrial Park Assessment District Reassessment and
Refunding.
Section 5.1. REFUNDING FUND. Except as provided in
Section 5.3, proceeds of sale of the bonds, together with the
redemption fund and special reserve fund for the outstanding
bonds for Obata Industrial Park Assessment District shall be
deposited with the City Director of Finance. Disbursements from
the refunding fund shall be made in accordance with the
Reassessment Report for these proceedings.
Section 5.2. REDEMPTION FUND. The redemption fund
shall be maintained by the City Director of Finance. All
payments of principal and interest installments on the
reassessments, together with penalties, if any, shall be
deposited in the redemption fund, which shall be a trust fund
for the benefit of the bondholders. Payment of the bonds at
maturity, or at redemption prior to maturity, and all interest
on the bonds shall be made from the redemption fund.
Section 5.3. SPECIAL RESERVE FUND. The special
reserve fund shall be maintained by the Director of Finance.
There shall tie deposited into the special reserve fund the
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amount of $130,400.00 from the proceeds of the sale of refunding
bonds. The special reserve fund shall be administered as
follows:
A. During the term of the bonds, the amount in
the special reserve fund shall be available for transfer into
the redemption fund in accordance with Section 8808 of the
Streets and Highways Code. The amount so advanced shall be
reimbursed to the special reserve fund from the proceeds of
redemption or sale of the parcel for which payment of delinquent
reassessment installments was made from the special reserve
fund.
B. If any reassessment is prepaid before final
maturity of the bonds, the amount of principal which the
assessee is required to prepay shall be reduced by an amount
which is in the same ratio to the original amount of the special
reserve fund, together with accrued interest, as the original
amount of the prepaid reassessment bears to the total amount of
assessments originally levied in Obata Industrial Park
Assessment District Reassessment and Refunding. This reduction
in the amount of principal prepaid shall be balanced by a
transfer from the special reserve fund to the redemption fund in
the same amount.
C. Whenever required to prevent the reserve fund
from exceeding the reserve limitations set by federal statute
and regulation, the City Director of Finance is directed to
transfer accrued interest from the special reserve fund to the
redemption fund from time to time, and to establish pro rata
credits against annual installments of reassessment principal
and interest in the same amount in the year following the year
of transfer.
D. When the amount in the special reserve fund
equals or exceeds the amount required to retire the remaining
unmatured bonds (whether by advance retirement or otherwise),
the amount of the special reserve fund shall be transferred to
the redemption fund, and the remaining installments of principal
and interest not yet due from assessed property owners shall be
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cancelled without payment.
Section 6. PAYMENT ON BONDS. The principal and
interest on the bonds shall be payable at Bank of America
National Trust and Savings Association, Corporate Agency
Division, P.O. Box 37000, San Francisco, CA 94137. Principal
and interest shall be paid by check, draft or warrant mailed to
the registered owner of each bond at the owner's address
appearing on the register maintained by the registrar on the
15th day preceding the date of interest payment or maturity of
each bond.
Section 7. REREGISTRATION. Any bond may be
registered to a new owner by completing the assignment
certificate on the reverse of the bond and delivering the bond
to the registrar. Upon reregistration, any bond may be replaced
by one or more bonds of the same maturity and aggregate amount
in denominations of $5000 or any integral multiple thereof.
Section 8. COVENANTS. In the event of a default in
the payment of any bond or any installment of interest thereon,
bondholders shall have the remedies set forth in the Act. In
addition, the City Council makes the following covenants, which
shall constitute a contract with the bondholders:
Section 8.1. FORECLOSURE OF LIENS. If any
installment of the principal or interest of any reassessment
levied in Obata Industrial Park Assessment District Reassessment
and Refunding, Series 86-1, becomes delinquent, the City Council
shall cause an action to be filed in the Superior Court of the
County of Santa Clara to foreclose the lien of the delinquent
reassessment under the authority of Section 8830 and following
of the Streets and Highways Code of the State of California.
This action shall be filed not later than one hundred fifty
(150) days after the date of delinquency.
Section 8.2. ARBITRAGE. During the term of the
bonds, the City will make no use of bond proceeds which, if such
use had been reasonably expected at the date the bonds are
issued, would have caused the bonds to be "arbitrage bonds"
within the meaning of Section 103(c) of the United States
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Internal Revenue Code of 1954, as amended, and regulations of
the Internal Revenue Service authorized thereby.
Section 8.3. MAINTENANCE OF TAX EXEr@TION. The City
will take all reasonable actions required to maintain the status
of the bonds as bonds exempt from federal income taxes and State
of California personal income taxes.
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I HEREBY CERTIFY that the foregoing resolution was
duly and regularly adopted and passed by the City Council of the
City of Gilroy, California, at a regular meeting thereof, held
on the 18th day of August, 1986.
AYES: Councilmembers ALBERT, GAGE, KLOECKER, MUSSALLEM, PALMERLEE,
VALDEZ and HUGHAN.
NOES: Councilmembers None
ABSENT: Councilmembers None
2I/J~
City Clerk of
APPROVED:
Mayor
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RESOLUTION NO. 86 - 52
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MATURITY SCHEDULE
Obata Industrial Park Assessment District Reassessment and Refunding
SEPT 2
MATURITY
DATE
PRINCIPAL INTEREST
AMOUNT RATE
1987 $120,000.00 5.75%
1988 125,000.00 6.25
1989 135,000.00 6.75
1990 145,000.00 7.00
1991 150,000.00 7.25
1992 165,000.00 7.50
1993 175,000.00 7.75
1994 190,000.00 7.90
1995 205,000.00 8.00
1996 220,000.00 8.00
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TOTAL: $1,630,000.00
EXHIBIT A
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United States of America
State of California
County of Santa Clara
REGISTERED REGISTERED
Number $
REFUNDING BOND
CITY OF GILROY
OBATA INDUSTRIAL PARK ASSESSMENT DISTRICT
REASSESSMENT AND REFUNDING
SERIES NO. 86-1
INTEREST RATE
MATURITY DATE
BOND DATE
August 28, 1986
CUSIP NUMBER
REGISTERED OWNER:
PRINCIPAL SUM:
Under and by virtue of the Refunding Act of 1984 for 1915
Improvement Act Bonds, Division 11.5 of the Streets and Highways
Code, (the "Act"), the City of Gilroy, County of Santa Clara, State
of California, (the "City"), will, out of the redemption fund for
the payment of the bonds issued upon the unpaid portion of
reassessments made for the refunding of all outstanding 1915 Act
bonds in Obata Industrial Park Assessment District, more fully
described in the Resolution of Intention adopted by the City Council
of the City of Gilroy on the 18th day of August, 1986, pay to the
registered owner stated above, or registered assigns, on the
maturity date stated above, the principal sum of stated above, in
lawful money of the United States of America and in like manner will
pay interest from the interest payment date next preceding the date
on which this Bond is authenticated, unless this Bond is
authenticated and registered as of an interest payment date, in
which event it shall bear interest from such interest payment date,
or unless this Bond is authenticated and registered prior to March
2, 1987, in which event it shall bear interest from its date, until
payment of such principal sum shall have been discharged, at the
rate per annum stated above, payable semiannually on March 2 and
September 2 in each year commencing on March 2, 1987. Both the
principal hereof and redemption premium hereon are payable at the
principal corporate trust office of Bank of America National Trust
and Savings Association-Corporate Agency Division, or its successor,
as Transfer Agent, Registrar and Paying Agent, in San Francisco,
EXHIBIT B
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California, and the interest hereon is payable by check or draft
mailed to the owner hereof at the owner's address as it appears on
the registration books of the Bank, or at such address as may have
been filed with the Bank for that purpose, as of the fifteenth day
immediately preceding each interest payment date.
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND
SET FORTH IN THE REVERSE SIDE HEREOF WHICH SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH HEREIN.
This bond will continue to bear interest after maturity at
thehrate above stated, provided, it is presented at maturity and
payment thereof is refused upon the sole ground that there are not
sufficient moneys in said redemption fund with which to pay same.
If it is not presented at maturity, interest thereon will run until
maturity.
This Bond shall not be entitled to any benefit under the
Act or the Resolution Authorizing Issuance of Bonds (the "Resolution
of Issuance"), or become valid or obligatory for any purpose, until
the certificate of authentication and registration hereon endorsed
shall have been dated and signed by the Bank.
IN WITNESS WHEREOF, said City of Gilroy has caused this
bond to be signed in facsimile by the Mayor and Treasurer of said
City and by its Clerk, and has caused its corporate seal to be
reproduced in facsimile hereon all as of the 28th day of August,
1986.
CITY OF GILROY
Clerk
Mayor
Treasurer
(SEAL)
Certificate of Authentication and Registration
This is one of the Bonds described in the within
mentioned Resolution of Issuance, which has been
authenticated and registered on
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
as paying agent, transfer agent and registrar
By
Authorized Officer
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(REVERSE OF BOND)
CITY OF GILROY
OBATA INDUSTRIAL PARK ASSESSMENT DISTRICT
REASSESSMENT AND REFUNDING
ADDITIONAL PROVISIONS OF THE BOND
This bond is one of several annual series of bonds of
like date, tenor and effect, but differing in amounts, maturities
and interest rates, issued by the City of Gilroy under the Act and
the Resolution of Issuance, for the purpose of refunding bonds
described in said proceedings, and is secured by the moneys in
said redemption fund and by the unpaid portion of said
reassessments made for the payment of said bonds, and, including
principal and interest, is payable exclusively out of said fund.
This Bond is transferable by the registered owner
hereof, in person or by the owner's attorney duly authorized in
writing, at said office of the Bank, subject to the terms and
conditions provided in the Resolution of Issuance, including the
payment of certain charges, if any, upon surrender and
cancellation of this Bond. Upon such transfer, a new registered
Bond or Bonds, of any authorized denomination or denominations, of-
the same maturity, for the same aggregate principal amount, will
be issued to the transferee in exchange therefor.
Bonds shall be registered only in the name of an
individual (including joint owners), a corporation, a partnership
or a trust.
Neither the City nor the Bank shall be required to make
such exchange or registration of transfer of bonds during the
fifteen (15) days immediately preceding any interest payment date.
The City and the Bank may treat the owner hereof as the
absolute owner for all purposes, and the City and the Bank shall
not be affected by any notice to the contrary.
This bond or any portion of it in the amount of $5,000
or any integral multiple thereof, may be redeemed and paid in
advance of maturity upon the second day of March or September in
any year by giving at least 60 days' notice by registered mail to
the registered owner hereof at such owner's address as it appears
on the registration books of the Bank and by paying principal and
accrued interest together with a premium equal to five percentum
of the principal.
I hereby certify that the following is a correct copy of
the signed legal opinion of STURGIS, NESS, BRUNSELL & SPERRY a
professional corporation, Emeryville, California, on file in my
office.
City Clerk