Resolution 1999-07
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RESOLUTION NO. 99-7
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
GILROY PROVIDING FOR THE ISSUANCE OF CITY OF
GILROY LIMITED OBLIGATION REFUNDING BONDS OF
THE NORTH FOREST STREET REASSESSMENT DISTRICT;
PRESCRIBING THE FORM OF SAID BONDS AND CERTAIN
TERMS AND PROVISIONS THEREFOR; AUTHORIZING THE
EXECUTION OF SAID BONDS; PROVIDING FOR THE
COLLECTION OF REASSESSMENTS TO PAY THE
PRINCIPAL OF AND INTEREST ON SAID BONDS;
APPROVING THE SALE OF SAID BONDS TO THE CITY OF
GILROY PUBLIC FACILITIES FINANCING AUTHORITY
(WHICH ESTABLISHES THE MATURITIES OF AND
INTEREST RATES ON SAID BONDS); AND APPROVING
FORM AND SUBSTANCE OF PRELIMINARY OFFICIAL
STATEMENT AND EXECUTION OF FINAL OFFICIAL
STATEMENT TO BE DERIVED THEREFROM
(North Forest Street Reassessment District)
WHEREAS, the City Council of the City of Gilroy (the "City"), by proceedings
duly had and taken, duly provided for the issuance of the City of Gilroy Limited Obligation
Improvement Bonds (the "Original Bonds") of the City's North Forest Street Assessment District
(the "Prior Assessment District"), under and pursuant to the conditions and terms of the
Improvement Bond Act of 1915, being Division 10 of the California Streets and Highways Code
(the "1915 Act"), the unmatured portion of which is now outstanding; and
WHEREAS, this City Council has determined to establish a reassessment district
to be known as the "North Forest Street Reassessment District" (the "Reassessment District")
and to issue Limited Obligation Refunding Bonds (the "Local Obligations") upon the security of
the unpaid reassessments levied in the Reassessment District for the purpose of refunding the
unmatured portion of the Original Bonds now outstanding, said reassessment proceedings to be
conducted and said Local Obligations to be issued under and pursuant to the conditions and
terms of the Refunding Act of 1984 for 1915 Improvement Act Bonds, being Division 11.5 of
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the California Streets and Highways Code (the "1984 Act"), and to provide for the levy and
collection of annual installments on account of unpaid reassessments as security for the Local
Obligations; and
WHEREAS, the City has determined pursuant to Section 6588(v) of the
Government Code to sell the Local Obligations to the Gilroy Public Facilities Financing
Authority (the "Authority") pursuant to a Local Obligation Purchase Contract, dated as of the
January 1, 1999 (the "Local Obligation Purchase Contract") by and between the City and the
Authority, the form of which Local Obligation Purchase Contract has been filed with the City
Clerk for presentation to this City Council, and hereby finds and determines that such sale will
result in significant public benefits including demonstrable savings in effective interest rate,
bond preparation, bond underwriting discount, original issue disconnt or bond issuance costs and
more efficient delivery oflocal agency services to residential and commercial development; and
WHEREAS, the Authority intends to issue its 1999 Authority Refunding Revenue
Bonds (the "Revenue Bonds") pursuant to an Indenture of Trust, each dated as of January 1,
1999 (the "Indenture"), by and between the Authority and Union Bank of California, N.A. (the
"Trustee") for the purpose, among other purposes, of acquiring the Local Obligations; and
WHEREAS, there has been presented to this City Council a form of Preliminary
Official Statement, describing certain information about the Reassessment District, the Local
Obligations, and the Revenue Bonds, and this City Council wishes to approve the form and
substance of the Preliminary Official Statement and to authorize the preparation and execution of
a final Official Statement to be derived therefrom and to authorize the distribution of the same in
connection with the offering of the Revenue Bonds to the public by Redwood Securities Group,
Inc., the original purchaser thereof (the "Underwriter");
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NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Gilroy, as follows:
S ecti on 1.
The foregoing recitals are true and correct, and this City Council so
finds and determines.
Section 2.
This City Council has reviewed all proceedings heretofore taken
relative to the foregoing and has found, as a result of such review, and does hereby find and
determine that all acts, conditions and things required by law to exist, to happen and to be
performed precedent to and in the issuance of the Local Obligations under the 1984 Act as
hereinafter authorized and provided do exist, have happened and have been performed in due
time, form and manner as required by the 1984 Act and all other applicable laws, and the City is
now authorized pursuant to each and every requirement of law to issue the Local Obligations in
the manner and form as provided in this resolution.
Section 3.
The Local Obligations shall be issued upon and shall represent and
shall be secured by said reassessments in accordance with the provisions of the 1984 Act to
provide means for refunding the Original Bonds, including payment of all costs of issuing the
Local Obligations and the Revenue Bonds. The Local Obligations shall be issued as hereinafter
set forth and shall be known as the "City of Gilroy North Forest Street Reassessment District,
Limited Obligation Refunding Bonds." The Local Obligations shall be issued as fully registered
bonds, shall be of the denomination of$5,000 or any integral multiple of$5,000 (except possibly
for the first numbered Local Obligation, which shall be an odd amount if the aggregate principal
amount is not evenly divided by $5,000), as determined by the registered owners thereof (not
exceeding the principal amount of Local Obligations maturing at anyone time), shall be dated
their date of delivery, presently expected to be during the month of January, 1999, and shall
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mature and bear interest as hereinafter provided in Exhibit A to the Local Obligation Purchase
Contract, as more fully specified in Section 14 ofthis resolution.
The Local Obligations shall bear interest from the interest payment date next
preceding the date of authentication and registration thereof, unless such date of authentication
and registration is on a day during the period from the sixteenth (16th) day of the month next
preceding an interest payment date to such interest payment date, both inclusive, in which event
they shall bear interest from such interest payment date, or unless such date of authentication and
registration is on a day on or before the fifteenth (15th) day of the month next preceding the first
interest payment date, in which event they shall bear interest from their dated date. Such interest
shall be payable on September 2, 1999, and thereafter semiannually on March 2 and September 2
of each year until and at the respective maturity dates of the Local Obligations.
The interest on and principal of and redemption premiums, if any, on the Local
Obligations shall be payable in lawful money of the United States of America at the office of the
Finance Director of the City (the "Paying Agent") at 7351 Rosanna Street, Gilroy, California.
Payment of the interest on the Local Obligations due on or before the maturity or prior
redemption thereof shall be made by check mailed to the registered owners of the Local
Obligations at their addresses as they appear at the close of business as of the fifteenth (15th) day
of the month prior to each such interest payment date on the registration books maintained by the
Paying Agent, and payment of the principal of and redemption premiums, if any, on the Local
Obligations shall be made only upon surrender thereof by the registered owners thereof on their
maturity dates or on redemption prior to maturity to the Paying Agent; provided that, for the
period during which the Trustee, as assignee of the Authority, is the registered owner of the
Local Obligations, payment of the principal of and the interest and redemption premiums, if any,
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on the Local Obligations will be paid on each March 2 and September 2 payment date by wire
transfer to the Trustee or such other party as is specified in writing by the Authority to the Paying
Agent.
Any Local Obligation may be redeemed in whole or in part in integral multiples
of $5,000 of the Local Obligations on the second day of March or September in any year, at the
option of the City, upon payment of the principal amount thereof and interest accrued thereon to
the date of redemption, together with a redemption premium equal to three percent (3%) of the
principal amount redeemed. The City shall proceed pursuant to Part 11.1 of the 1915 Act in
determining those Local Obligations or portions thereof to be redeemed and the manner of the
redemption thereof, and notice of advance redemption of any Local Obligation shall be given by
the City as provided in the 1915 Act.
This City Council declares and determines that it does not and will not obligate
itself to advance funds from the City treasury to cure any deficiency which may occur at any
time in the Redemption Fund created pursuant to Section 10 of this resolution.
Section 4.
(a) The Local Obligations shall be initially issued and registered in
the name of the Trustee, as assignee of the Authority, and shall be executed and delivered in such
denominations and numbered in such manner as determined by the Authority and registered in
the names of such persons as are requested in such written request of the Authority, subject to the
limitations of Section 3 of this resolution; and thereafter, such Local Obligations shall be
transferred pursuant to Section 7 of this resolution.
(b) The City and the Paying Agent shall be entitled to treat the person in whose
name any such Local Obligation is registered as the owner thereof for all purposes hereof and
any applicable laws, notwithstanding any notice to the contrary received by the Paying Agent or
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the City; and the City and the Paying Agent shall have no responsibility for transmitting
payments to, commnnication with, notifYing, or otherwise dealing with any persons other than
the registered owners of such Local Obligations; and neither the City nor the Paying Agent shall
have any responsibility or obligation, legal or otherwise, to any other party, except the registered
owner of any such Local Obligations.
Section 5.
The Local Obligations shall be in substantially the following form,
the blanks in said form to be filled in with appropriate words or figures, namely:
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[FORM OF BOND]
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
SANTA CLARA COUNTY
REGISTERED
REGISTERED
NUMBER
$
CITY OF GILROY
LIMITED OBLIGATION REFUNDING BOND
NORTH FOREST STREET REASSESSMENT DISTRICT
INTEREST
RATE
MA TURlTY
DATE
BOND
DATE
%
September 2, _
January _, 1999
REGISTERED OWNER:
UNION BANK OF CALIFORNIA, N.A., AS ASSIGNEE OF
THE GILROY PUBLIC FACILITIES FINANCING
AUTHORITY
PRINCIPAL AMOUNT:
DOLLARS
Under and by virtue of the "Refunding Act of 1984 for 1915 Improvement Act
Bonds," being Division 11.5 of the California Streets and Highways Code (the "Act"), the City
of Gilroy in the State of California (the "City") will, out of the Redemption Fund hereinafter
referred to, pay to the registered owner set forth above on the maturity date set forth above
(subject to the right of prior redemption hereinafter reserved) the principal amount set forth
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 and
registered (unless this bond is authenticated and registered on a day during the period from the
sixteenth (16th) day of the month next preceding an interest payment date to such interest
payment date, both inclusive, in which event it shall bear interest from such interest payment
date, or unless this bond is authenticated and registered on a day on or before the fifteenth (15th)
day of the month next preceding the first interest payment date, in which event it shall bear
interest from the Bond Date set forth above) until payment of such principal sum shall have been
discharged, at the interest rate per annum set forth above, payable semiannually on March 2 and
September 2 in each year, commencing on September 2,1999.
Both the principal hereof and redemption premium hereon are payable at the
office of the Finance Director of the City (the "Paying Agent") at 7351 Rosanna Street, Gilroy,
California, and the interest hereon is payable by check mailed to the owner hereof at the owner's
address as it appears on the registration books of the Paying Agent, or at such address as may
have been filed in writing with the Paying Agent for that purpose, at the close of business as of
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the fifteenth (15th) day of the month next preceding each interest payment date; provided that,
for the period during which Union Bank of California, N.A., as assignee of the Gilroy Public
Facilities Financing Authority, is the registered owner of this Bond, payment of the principal of
and the interest and redemption premium, if any, on this Bond will be made by wire transfer on
each March 2 and September 2 payment date to such party as shall be specified in writing by the
Authority to the Paying Agent.
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 under the Act and the
resolution providing for its issuance (the "Resolution") for the purpose of providing funds for
refunding assessment bonds originally issued to pay for the improvements described in said
proceedings, and is secured by the moneys in the Redemption Fund provided in the Resolution
and by the unpaid portion of reassessments levied for the payment hereof, and, including
principal and interest, is payable exclusively out of said fund.
The City Council has declared and determined that it does not and will not
obligate itself to advance funds from the City treasury to cure any deficiency which may occur at
any time in said Redemption Fund.
This bond will continue to bear interest after maturity at the rate 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 the same. If it is not
presented at maturity, interest thereon will run until maturity.
This bond, or any portion of it in the amount of five thousand dollars ($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 thirty (30) days' notice by registered or
certified mail to the registered owner hereof at the owner's address as it appears on the
registration books of the Paying Agent by paying principal and accrued interest together with a
redemption premium equal to three percent of the principal amount of bonds redeemed.
This bond is transferable by the registered owner hereof, in person or by the
owner's attorney duly authorized in writing, at the office of the Paying Agent, subject to the
terms and conditions provided in the Resolution, 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 Paying Agent shall be required to make such exchange or
registration of transfer of bonds during the period from the sixteenth (16th) day of the month
next preceding an interest payment date to such payment date, both inclusive.
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The City and the Paying Agent may treat the registered owner hereof as the
absolute owner for all purposes, and the City and the Paying Agent shall not be affected by any
notice to the contrary.
This bond shall not be entitled to any benefit under the Act or the Resolution, 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 Finance Director.
IN WITNESS WHEREOF, the City Council of City of Gilroy has caused this
bond to be signed manually or in facsimile by the Finance Director of the City and by the City
Clerk, and has caused its corporate seal to be impressed hereon manually or in facsimile, all as of
the Bond Date set forth above.
CITY OF GILROY
Finance Director
[SEAL]
City Clerk
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[Form of and Certificate
of Authentication and Registration]
CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is one of the bonds described in the within-mentioned Resolution which has
been authenticated and registered on January _,1999.
FINANCE DIRECTOR,
CITY OF GILORY,
as Paying Agent
[Form of Assignment]
ASSIGNMENT
and do(es) hereby irrevocably constitute and appoint
to transfer the same on the register of the Finance Director,
substitution in the premises. .
For value received the undersigned doe es) hereby sell, assign and transfer unto
the within Bond
attorney
as Registrar, with full power of
Date:
SIGNATURE GUARANTEED:
NOTE:
The signature(s) must be guaranteed by an eligible guarantor institution. The
signature(s) to this Assignment must correspond with the name(s) as written on
the face of the within Bond in every particular, without alteration or enlargement
or any change whatsoever.
Social Security Number, Taxpayer Identification Number or other Identifying Number of
Assignee:
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Section 6. The Finance Director of the City (the "Finance Director") and the
City Clerk are hereby authorized and directed, respectively, as such officers to execute each of
the Local Obligations on behalf of the City, either manually or in facsimile, and the City Clerk is
hereby authorized and directed to affix the official seal of the City thereto either manually or in
facsimile; and such signing and sealing as herein provided shall be a sufficient and binding
execution of the Local Obligations by the City. In case either of such officers whose signature
appears on the Local Obligations shall cease to be such officer before the delivery of the Local
Obligations to the purchaser, such signature shall nevertheless be valid and sufficient for all
purposes the same as though such officer had remained in office until the delivery of the Local
Obligations. Only such of the Local Obligations as shall bear thereon a certificate ofregistration
and authentication in the forrn hereinabove set forth, executed and dated by the Paying Agent,
shall be entitled to any benefits hereunder or be valid or obligatory for any purpose, and such
certificate shall be conclusive evidence that the Local Obligations so authenticated have been
duly authorized, executed, issued and delivered hereunder and are entitled to the benefits hereof.
Section 7.
The Paying Agent shall pay interest on the Local Obligations due
on or before the maturity or prior redemption thereof to the registered owners thereof as their
names appear at the close of business as of the fifteenth (15th) day of the month next preceding
each interest payment date on the registration books required to be kept by the Paying Agent
pursuant to this section as the registered owners thereof, such interest to be paid by check mailed
to such registered owners at their addresses appearing on such books or at such other addresses
as they may have filed in writing with the Paying Agent for that purpose, and to pay to such
registered owners the principal of and redemption premiums, if any, on the Local Obligations
upon presentation and surrender of the Local Obligations to the Paying Agent at maturity or on
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redemption pnor to maturity; provided that, for the period during which Union Bank of
California, N.A., as assignee of the Gilroy Public Facilities Financing Authority, is the registered
owner of any Local Obligation, the principal of and the interest and redemption premium, if any,
on said Local Obligation shall be paid by wire transfer on the Business Day prior to each March
2 and September 2 payment date to the Trustee or such other party as is specified in writing by
the Authority to the Paying Agent.
The Paying Agent will keep at his or her office at the City's offices in Gilroy,
California, sufficient books for the registration, transfer and exchange of the Local Obligations,
and upon presentation for such purpose the Paying Agent shall, under such reasonable
regulations as he may prescribe, register or transfer or exchange Local Obligations on such
books as hereinafter provided.
Any Local Obligation may be transferred or exchanged on such books by the
registered owner thereof, in person or by his duly authorized attorney, upon payment by the
person requesting such transfer or exchange of any tax or other governmental charge required to
be paid with respect to such transfer or exchange and upon surrender of such Local Obligation
for cancellation accompanied by delivery of a duly executed written instrument of transfer or
exchange in a form approved by the Paying Agent. Whenever any Local Obligation or Local
Obligations shall be surrendered for transfer or exchange, the City shall execute and the Paying
Agent shall authenticate and deliver a new Local Obligation or Local Obligations of authorized
denominations and of the same maturity date aggregating the principal amount of the Local
Obligation or Local Obligations so surrendered. The City and the Paying Agent may deem and
treat the registered owner of any Local Obligation as the absolute owner of such Local
Obligation for the purpose of receiving payment thereof and for all other purposes, whether such
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Local Obligation shall be overdue or not, and neither the City nor the Paying Agent shall be
affected by any notice or knowledge to the contrary; and payment of the interest on and principal
of and redemption premium, if any, on such Local Obligation shall be made only to such
registered owner as above provided, which payment shall be valid and effectual to satisfy and
discharge liability on such Local Obligation to the extent of the sum or sums so paid.
Section 8.
The reassessments levied on the respective parcels III the
Reassessment District, together with interest thereon computed at the rate specified in the Local
Obligations (which interest shall begin to run from the date of the Local Obligations), shall, in
accordance with and consistent with the 1984 Act, remain and constitute a trust fund for the
redemption and payment of the principal of the Local Obligations and for the interest due
thereon, and said reassessments and each installment thereof and the interest and penalties
thereon shall constitute a lien against the lots and parcels of land on which they are made until
the same be paid. The Finance Director of the City shall furnish or cause to be furnished to the
County Auditor of Santa Clara County (the "Auditor") and, as prescribed by the 1984 Act, the
Auditor shall keep records in his office showing, the several installments of principal and interest
on said reassessments which are to be collected in each year during the term of the Local
Obligations; and an annual installment of said reassessments shall be payable and shall be
collected in each year corresponding in amount to the amount of Local Obligations unpaid and to
accrue that year, which amount shall be sufficient to pay the Local Obligations as the same
become due, and an annual installment of interest on said reassessments shall be payable and
shall be collected in each year corresponding in amount to the amount of interest which will
accrue on the Local Obligations outstanding for such year, which amount shall be sufficient to
pay the interest thereon that shall become due in the next succeeding March and September. The
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annual proportion of said reassessments coming due in any year, together with the annual interest
on such reassessments, shall be payable in the same manner and at the same time and in the same
installments as the general taxes on real property in the City are payable, and said reassessment
installments and said annual interest on said reassessments shall be payable and become
delinquent on the same dates and in the same proportionate amounts and bear the same
proportionate penalties and interest after delinquency as do general taxes on real property in the
City.
Section 9. This City Council hereby covenants for the benefit of (1) the
registered owners of the Local Obligations and (2) the registered owners of the Revenue Bonds
of the Authority that, not later than October 1 of each year while any of the Local Obligations
remaining outstanding, it will order and cause to be commenced and thereafter diligently
prosecute judicial foreclosure proceedings to foreclose the lien of any single nnpaid assessment
then delinquent in an amount exceeding $10,000 (including principal, interest, late charges and
monthly penalties) and to foreclose the lien of all delinquent reassessments whenever the
aggregate amount of delinquent installments is greater than five percent (5%) of the total
installments billed on the preceding year's tax roll. The City Council hereby further covenants
with the registered owners of the Local Obligations and the registered owners of the Revenue
Bonds that it will monitor or cause to be monitored the records ofthe Auditor-Controller of
Santa Clara County for the purpose of ascertaining the occurrence of any delinquency.
Section 10. There is hereby created and established a fund to be known as the
"North Forest Street Reassessment District Redemotion Fund," which fund shall be kept by the
Finance Director and shall constitute a trust fund for the benefit ofthe registered owners of the
Local Obligations, and all sums received by the City which are received from the collection of
said reassessments (except for those amounts allocable to administrative expenses), and ofthe
interest and penalties thereon, and including amounts paid to the City on account of any prior
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pay-off and discharge of a reassessment lien (whether in whole or in part), shall upon receipt be
deposited in said fund. At the time of the issuance of the Local Obligations, the City shall
deposit in the Redemption Fund from the proceeds of sale of the Local Obligations the amount
representing the capitalized interest, if any, and the accrued interest, if any, received on the
delivery ofthe Local Obligations. All sums to become due for the principal of and the interest
on the Local Obligations shall be withdrawn by the Finance Director from said fund for transfer
to the Paying Agent for use for the payment ofthe principal of and the interest on the Local
Obligations, and the Local Obligations and the interest thereon shall not be paid out of any other
funds. Any surplus remaining in said fund after payment of all Local Obligations and the
interest thereon shall be applied as directed by the City.
Section 11. There is hereby created and established a fund to be known as the
"North Forest Street Reassessment District Expense Fund," which fund shall be kept by the
Finance Director. After making the deposits in the Redemption Fund as required by Section 10,
and after making the payment or payments prescribed by Section 12 of the amounts required for
redemption of the remaining outstanding Original Bonds on March 2, 1999, all remaining
proceeds of the sale of the Local Obligations, if any, shall be deposited in the Expense Fund and
shall be kept separate and distinct from all other City funds. All moneys collected by the City as
administrative costs pertaining to administration of the reassessments and the Local Obligations
shall also be deposited in the Expense Fund. All money in the Expense Fund shall be disbursed
on such dates and in such amounts as are necessary to pay all costs of administering the
reassessments and the Local Obligations (as provided under the 1984 Act), including all
expenses incident to administering installments and prepayments collected on account of the
unpaid reassessments, apportioning the reassessments if necessary in the event of division of any
reassessment parcel, and all expenses incident to the calling, retiring or paying of the Local
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Obligations, and including, but not limited to, fees of bond counsel, underwriters, trustees,
certified public accountants and rating agencies, arbitrage and rebate service providers,
continuing disclosure service providers, administrative expenses of the City and the charges of
the Finance Director in connection with the Local Obligations and the Revenue Bonds.
Section 12. Upon delivery of the Local Obligations to the Authority, and in
lieu of payment by the Authority to the City of that portion of the purchase price of the Local
Obligations required for purposes of redemption of the Original Bonds on March 2, 1999, as the
amount of said portion is specified in the Indenture pertaining to the Authority's 1999 Refunding
Revenue Bonds, the City will provide the Authority with written instructions at the time of such
delivery providing for payment of the specified amount to the Paying Agent for the Original
Bonds (or to the Escrow Agent in the event a Refunding Escrow Agreement is utilized to
accomplish such redemption).
Section 13. The City will not take or omit to take any action that would cause
the interest on the Local Obligations to be included in gross income for federal income tax
purposes. Without limiting the generality ofthe foregoing:
(a) The City will not directly or indirectly use or allow the use of more than 10%
of the proceeds of the Local Obligations in the trade or business of any nongovernmental
persons, and the City will not allow any actions to be taken that would result in the Local
Obligations being treated as federally guaranteed pursuant to Section l49(b) of the Internal
Revenue Code of 1986, as amended (the "Code"); and
(b) The City will not directly or indirectly use or allow the use of the proceeds of
the Local Obligations in a manner that would cause the Local Obligations to be arbitrage bonds
described in Section 148 of the Code, and in particular, the City will not invest or allow the
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investment of proceeds of the Local Obligations in investments with a yield materially higher
than the yield on the Local Obligations except as described in the Tax Certificate executed in
connection with the issuance of the Local Obligations. In addition, the City will pay from time
to time all amounts, if any, required to be rebated to the United States Government pursuant to
Section l48(f) of the Code. If the City fails to expend all proceeds of the Local Obligations
within six (6) months of the date of issue thereof, or establishes any funds pledged to the
payment of the Local Obligations other than as currently provided herein, the City shall contact
nationally recognized bond counsel for advice relative to compliance with the rebate
requirements of Section 148 of the Code.
Section 14. The form and substance of the Local Obligation Purchase Contract
on file with the City Clerk and presented to this City Council is hereby approved. The Local
Obligation Purchase Contract makes reference to Exhibit A to be attached thereto to set forth and
establish, among other things, the Bond Date, the maturity schedule and the interest rates for the
Local Obligations. This City Council hereby authorizes the Finance Director to approve Exhibit
A after the date of this resolution, provided that as established by said Exhibit A, the Local
Obligations shall (a) be structured so as to assure compliance with the requirement of the 1984
Act that annual debt service on the Local Obligations shall be less than the annual debt service
for the corresponding year on the remaining outstanding Original Bonds, (b) have a final
maturity not later than the final maturity on the remaining outstanding Original Bonds, and (c) be
issued in an aggregate principal amount less than the aggregate principal amount of the
remaining outstanding Original Bonds.
Following attachment of the approved Exhibit A, and subject to such modification
and revisions to the body thereof not inconsistent with the essential terms thereof, which
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modifications shall be approved by the Finance Director (such approval to be conclusively
established by execution thereof by the Finance Director), and concurrently with execution
thereof by the authorized representative of the Authority, the Finance Director is authorized to
execute the Local Obligation Purchase Contract on behalf of the City.
Section 15. The form and substance of the Preliminary Official Statement
describing the Authority's 1999 Refunding Revenue Bonds and the Local Obligations is hereby
approved. The facts contained therein, as of this date, are true and correct in all material
respects, and said Preliminary Official Statement neither contains any untrue statement of a
material fact nor omits to state any material fact necessary to make any statement therein not
misleading in light of the circumstances under which it was made. The Finance Director is
authorized to execute a certificate as to finality of the Preliminary Official Statement and to
execute the final Official Statement to be derived therefrom.
This City Council hereby finds and determines that said Preliminary Official
Statement is and shall be deemed "nearly final" for purposes of Rule l5c(2)-12 of the Securities
and Exchange Commission, and the Finance Director is hereby authorized to execute a certificate
to such effect in the customary form upon request of the Underwriter.
The Finance Director is authorized to approve corrections and additions to the
Preliminary Official Statement by supplement or amendment thereto, by appropriate insertions,
or otherwise as appropriate, provided that such corrections or additions shall be regarded by the
Finance Director as necessary to cause the information contained therein to conform to facts
material to the Local Obligations or the Revenue Bonds or to the proceedings of this City
Councilor the Authority Board or that such corrections or additions are in form rather than in
substance.
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Section 16. The form and substance of the Indenture, in the form of such
Indenture on file with the City Clerk, is hereby approved.
Section 17. The City Clerk is directed to cause the Local Obligations to be
typewritten, lithographed, printed or engraved, and to cause the blank spaces thereof to be filled
in to comply with the provisions hereof and the terms and conditions of the Local Obligation
Purchase Contract (including Exhibit A thereto), and to procure their execution either manually
or in facsimile by the proper officers, and thereafter to deliver them, when so executed, to the
Paying Agent, who shall authenticate them, and thereafter to deliver them to the purchaser
thereof on receipt by the City of the purchase price thereof (subject to portions of the purchase
price being paid directly to other parties in accordance with Section 12 hereof). The Finance
Director and the City Clerk are further authorized and directed to make, execute and deliver to
the purchaser of the Local Obligations a signature certificate in the form customarily required by
purchasers of municipal bonds, certifying to the genuineness and due execution of the Local
Obligations. The Finance Director and the City Clerk are authorized and directed to make,
execute and deliver to the purchaser of the Local Obligations a no-litigation certificate in the
form customarily required by purchasers of municipal bonds, certifying to all facts within their
knowledge relative to any litigation which mayor might affect the City or said officers or the
Local Obligations. The Finance Director is further authorized and directed to make, execute and
deliver to the purchaser of the Local Obligations a receipt in the form customarily required by
purchasers of municipal bonds, evidencing the payment of the purchase price of the Local
Obligations, which receipt shall be conclusive evidence that said purchase price has been paid
and has been received by the City (in part) and the party or parties specified pursuant to Section
12 (in part). Any purchaser or subsequent taker or holder of the Local Obligations is hereby
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authorized to rely upon and shall be justified in relying upon such signature certificate, such no-
litigation certificate and such receipt with respect to the Local Obligations executed, sold and
delivered pursuant to the authority of this resolution. Additionally, the officers of the City are
hereby authorized and directed, jointly and severally, to do any and all things and to execute and
deliver any and all documents and contracts which they may deem necessary or advisable in
order to consummate the sale, execution and delivery of the Local Obligations and otherwise to
carry out, give effect to and comply with the terms and intent of this resolution, the Local
Obligations, and the Local Obligation Purchase Contract; and any such actions heretofore taken
by such officers in connection therewith are hereby ratified, confirmed and approved.
Section 18. This City Council hereby covenants for the benefit of the Authority
and the holders of the Revenue Bonds, from time to time, to establish and to implement a
program of continuing disclosure in compliance with the requirements of Rule 15c(2)-12 of the
Securities and Exchange Commission. Without limiting the generality of the foregoing, the
Finance Director is hereby authorized and directed to execute an appropriate continuing
disclosure undertaking, in a form and containing such matters as are recommended by Orrick,
Herrington & Sutcliffe LLP, the City's bond counsel for this proposed refunding, which such
undertaking shall provide for preparation and filing of an annual report containing the matters
specified in such undertaking and for issuance and publication of notices of material events, if
such material events shall occur, pertaining to the Local Obligations and related matters as
prescribed by said Rule 15c(2)-12. This City Council hereby further covenants and agrees that it
will comply with and carry out all of the provisions of the continuing disclosure undertaking.
The estimated cost and expense of such continuing disclosure services shall be included in the
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annual administrative cost assessment to be added to the annual installments billed on account
of unpaid reassessments, as provided in the Reassessment Report.
Section 19. This resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED this 4th day of January, 1999 by the following vote:
AYES:
COUNCILMEMBERS: ARELLANO, GIFFORD, MORALES,
ROWLISON, SPRINGER, and GILROY
NOES:
COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: SUDOL
APPROVED:
K. A Mike Gilroy, Mayor
ATTEST:
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Rhonda Pellin, City Clerk
-21-
RESOLUTION NO. 99-7
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1, RHONDA PELLIN, City Clerk of the City of Gilroy, do hereby certifY that the attached
Resolution No. 99-7 is an original resolution, duly adopted by the Council of the City of Gilroy at
a regular meeting of said Council held on the 4th day of January, 1999, at which meeting a
quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of
the City of Gilroy this 5th day ofJanuary, 1999.
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City Clerk of the City of Gilroy
(Seal)