Resolution 1991-10
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RESOLUTION NO.
91-10
RESOLUTION ORDERING SALE OF BONDS
COUNTRY ESTATES - PHASE I ASSESSMENT DISTRICT
The City Council of the City of Gilroy resolves:
The City Council accepts the offer of Mark Pressman
Associates (attached to this resolution and by reference
incorporated ~~ it) to purchase all of the improvement bonds t9 be
issued in Country Estates - Phase I Assessment District.
The City Council directs the sale and delivery of the bonds
to the offeror in accordance with the terms and conditions stated in
the offer.
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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 19th
day of February, 1991, by the following vote of the members thereof:
AYES, and in favor, thereof, Councilmembers: GAGE, HALE,
MUSSALLEM, NELSON, VALDEZ and HUGHAN.
NOES, Councilmembers: None
ABSENT, Councilmembers: KLOECKER
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Clerk of the
APPROVED
RESOLUTION NO. 91 - 10
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'ARK PRESSMAN ASSOCIA.I
Investment Banking
250 Montgomery Street, Suite 1200
San Francisco, CA 94104
FAX: (415) 421-0755
(415) 421-7300
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February 19, 1991
The Honorable City Council
City of Gilroy
Gilroy, California 95020
Re: Country Estates Phase I - Assessment District
Series No. 91-1
Dear Members of the Council:
MARK PRESSMAN ASSOCIATES (MPA), as managing underwriter (the "Underwriter") of
the above referenced issue, hereby offers to purchase all, but not less than all, bonds to be
offered by the City of Gilroy (the "City") pursuant to the provisions of the Municipal
Improvements Act of 1913 and the Improvement Act of 1915, Division 10 of the California
Street and Highways Code to represent the cost of improvement bonds in the County Estates
- Phase I Assessment District, Series No. 91-1 (the "District").
Amount of Bonds:
$4,030,000.00
Form of Bonds:
Registered bonds to be issued serially. Bond denominations in
multiples of $5,000 or any integral thereof up to $100,000.
First Interest Payment
and Approximate
Maturity Schedule:
The first interest payment on the Bonds shall be September 2,
1991, with principal payments commencing September 2, 1993,
and annually thereafter as specified below:
1993 $ 175,000.00 2000 $285,000.00
1994 185,000.00 2001 305,000.00
1995 200,000.00 2002 330,000.00
1996 210,000.00 2003 355,000.00
1997 230,000.00 2004 385,000.00
1998 245,000.00 2005 415,000.00
1999 265,000.00 2006 445,000.00
Price:
98.40% of par value plus accrued interest.
Term:
15 years.
Net Interest Cost:
7.85878%.
Mailing Address: P. O. Box 26690, San Francisco, CA 94126
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City Council
City of Gilroy
February 19, 1991
Page Two
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Interest Rates: 1993 6.20% 2000 7.60%
1994 6.45% 2001 7.70%
1995 6.70% 2002 7.80%
1996 6.90% 2003 7.85%
1997 7.10% 2004 7.90%
1998 7.30% 2005 7.95%
1999 7.50% 2006 8.00%
Date of Bonds and
Delivery Date:
Foreclosure Clause:
Reserve Fund:
Redemption Premium:
Paying Agent
and Registrar:
No Litigation:
Legal Opinion:
Conditions Precedent:
March 13, 1991.
Not later than October 1 in any year, the City shall file an action in the
Superior Court to foreclose the lien of each delinquent assessment if the
sum of uncured assessment delinquencies for the preceding fiscal year
exceeds five percent (5%) of the assessment installments posted to the tax
roll for that fiscal year, and if the amount of the special reserve fund is
less than the Reserve Requirement as described in the Resolution
Authorizing Issuance of Bonds (the "Resolution").
The City shall establish a reserve fund in the amount of eight and one-
half percent (8.50%) of the bond par value. In our view, it is reasonably
required for this issue, and vital to the marketing of the Bonds, that
proceeds from the investment of monies in said reserve fund should be
retained in said fund until the amount in said fund reaches the maximum
allowed by law and earnings above that amount will be credited to the
Redemption Fund to be applied to debt service.
3% of unmatured principal on thirty (30) days notice to bondholders.
Bank of America, San Francisco, California.
A no litigation certificate of the City shall accompany the Bonds at
delivery.
The opinion of Sturgis, Ness, Brunsell & Sperry, Emeryville, California,
without qualification and without expense to the Underwriter as to the
legality of the proceedings leading to the issuance of the Bonds and as to
the federal and state tax status of the Bonds. Such opinion dated at the
Closing Date to be printed on the Bonds when issued.
The obligation of the Underwriter to accept delivery of and pay for the
Bonds on the Closing Date shall be subject, at the option of the
Underwriter, to the following additional conditions:
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City Council
City of Gilroy
February 19, 1991
Page Three
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(a) The City shall have delivered or caused to have been delivered to the
Underwriter prior to the execution of this Purchase Contract or the first sale
of the Bonds, whichever first occurs, copies of the Draft Official Statement
dated February 19, 1991 relating to the Bonds (the "Draft Official
Statement" deemed final by the City for purposes of Rule 15c2-12 under the
Securities Exchange Act of 1934 (the "Rule") and to satisfy Municipal
Securities Rulemaking Board (the "MSRB") Rule G-32 or any other rules
adopted by the MSRB and approved for distribution by resolution of the
City. Within seven business days from the date hereof, the City shall
deliver to the Underwriter a final Official Statement, executed on behalf of
the City by an authorized representative of the City and dated the date of
delivery thereof to the Underwriter, which shall include information
permitted to be omitted by paragraph (b)(1) of the Rule and with such
other amendments or supplements as shall have been approved by the City
and the Underwriter (the "Official Statement"). The Draft Official
Statement and the Official Statement, including the cover pages, the
appendices thereto and all information incorporated therein by reference
are hereinafter referred collectively to as the "Official Statement." The
Underwriter agrees that it will not confirm the sale of any Bonds unless the
confirmation of sale is accompanied or preceded by the delivery of a copy of
the Official Statement.
(b) The Resolution and any other applicable agreements shall be in full
force and effect, and shall not have been amended, modified or
supplemented except as may have been agreed in writing by the
Underwriter, and there shall have been taken in connection therewith,
with the issuance of the Bonds and with the transactions contemplated
thereby and by this Purchase Contract, all such actions as, in the opinion of
Sturgis, Ness, Brunsell & Sperry, Emeryville, California, Bond Counsel for
the City, shall be necessary and appropriate;
(c) Between the date hereof and the closing date, the market price or
marketability of the Bonds at the initial offering prices set forth in the
Official Statement shall not have been adversely affected in a material
way in the judgment of the Underwriter (evidenced by a written notice to
the City terminating the obligation of the Underwriter to accept delivery
of and pay for the Bonds) by reason of any of the following:
(1) Legislation enacted (or resolution passed) by the Congress of the
United States of America or a decision rendered by a court established
under Article III of the Constitution of the United States of America or
by the Tax Court of the United States of America, or an order, ruling,
regulation (final, temporary or proposed), press release or other form of
notice issued or made by or on behalf of the Treasury Department or the
Internal Revenue Service of the United States of America, with the
purpose or effect, directly or indirectly, of imposing federal income
taxation upon the interest as would be received by the owners of the
Bonds;
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City Council
City of Gilroy
February 19, 1991
Page Four
Limited Obligation:
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(2) Legislation enacted (or resolution passed) by the Congress of the
United States of America, or an order, decree or injunction issued by any
court of competent jurisdiction or an order, ruling, regulation (final,
temporary or proposed), press release or other form of notice issued or
made by or on behalf of the Securities and Exchange Commission, or any
other governmental agency having jurisdiction of the subject matter, to
the effect that obligations of the general character of the Bonds, or the
Bonds, including any or all underlying arrangements, are not exempt from
registration under or other requirements of the Securities Act of 1933, as
amended, or that the Resolution is not exempt from qualification under or
other requirements of the Trust Indenture Act of 1939, as amended, or that
the issuance, offering or sale of obligations of the general character of
the Bonds, or of the Bonds, including any or all underwriting
arrangements, as contemplated hereby or by the Official Statement or
otherwise is, or would be, in violation of the federal securities laws as
amended and then in effect;
(3) Any amendment to the Federal or California Constitution or action
by any Federal or California court, legislative body, or other authority
materially adversely affecting the tax status of the City, its property,
income, securities (or interest thereon), validity or enforceability of the
assessment or the ability of the City to construct or acquire the
improvements as contemplated by the Resolution and the Official
Statement; or
(4) Any event occurring, or information becoming known which, in the
judgment of the Underwriter makes untrue or misleading in any material
respect any statement or information contained in the Official Statement
concerning the City, the improvement project, the landowners, or the
property assessed.
(5) Any calamitous act of God such as flooding, land movement, or other
which directly or indirectly affects the value of the property assessed
and/ or the security of the Bonds.
(6) The declaration of war or engagement in major military hostilities
by the United States or the occurrence of any other national emergency or
calamity relating to the effective operation of the government of or the
financial community in the United States.
(7) The declaration of a general banking moratorium by federal, New
York or California authorities, or the general suspension of trading on
any national securities exchange.
The Bonds shall be "limited obligations" of the City, secured only by the
property assessed in these proceedings with no City financial responsibility
for bond debt service.
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City Council
City of Gilroy
February 19, 1991
Page Five
City Covenant:
Place of Delivery:
Time of Delivery:
Expiration:
MBL:MP /pat
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The City shall covenant to take any action within its powers to maintain
the tax-exempt status of the Bonds.
To be arranged.
Not later than 48 hours after the City notifies the undersigned that the
Bonds are ready for delivery. If the subject Bonds are not delivered by 5:00
p.m. on the aforementioned delivery date, the Underwriter reserves the
right to renegotiate the price and/or the rate of interest.
This offer expires at noon on February 20, 1991.
Very truly yours,
MARK PRESSMAN ASSOCIATES
,
Mark Pressman