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HomeMy WebLinkAbout1978-08-03 - Resolution No. 78-47t t A YORBA LINDA COUNTY WATER DISTRICT RESOLUTION NO. 78-47 RESOLUTION OF THE BOARD OF DIRECTORS OF YORBA LINDA COUNTY WATER DISTRICT PRO- VIDING FOR THE ISSUANCE OF $27,320,000 MAXIMUM PRINCIPAL AMOUNT OF YORBA LINDA COUNTY WATER DISTRICT IMPROVEMENT DIS- TRICT NO. 1 1978 WATER BONDS, FOR THE BENEFIT OF IMPROVEMENT DISTRICT NO. 1 OF YORBA LINDA COUNTY WATER DISTRICT; PRO- VIDING FOR THE ISSUANCE OF SAID BONDS IN SERIES; PRESCRIBING THE FORM AND TERMS OF SAID BONDS; AND PROVIDING FOR THE LEVY OF A TAX TO PAY THE PRINCIPAL AND INTEREST THEREOF WHEREAS, pursuant to Resolution No. 78-27 adopted by the Board of Directors (the "Board" ) of Yorba Linda County Water District (the "District") on May 4, 1978, a special election was duly and regularly held in Improvement District No. 1 (the "Improvement District") of the District on June 13, 1978, at which election there was submitted to -1- the qualified voters of the Improvement District the follow- ing proposition: BOND PROPOSITION: Shall the Yorba Linda County Water District incur a bonded in- debtedness for Improvement District No. 1 thereof in the sum of $27,320,000 for the purpose of the acquisition and con- struction of works and facilities useful or necessary to convey, supply, store or make use of water including all land, easements, rights of way and other prop- erty necessary therefor and including all engineering, inspection, legal and fiscal agent's fees, costs of the bond election and of the issuance of bonds, and bond interest estimated to accrue during the construction period and for a period not to exceed twelve months after the completion of construction and all costs and estimated costs incidental to or connected with such acquisition, construction or financing of said facil- ities? and WHEREAS, said proposition received the affirmative vote of more than two-thirds of all the qualified voters casting votes at said election, and the Board is now author- ized to provide for the issuance of bonds in the amount of not to exceed $27,320,000 for the purposes set forth in said proposition; and WHEREAS, the Board has determined to authorize the issuance of Yorba Linda County Water District Improvement District No. 1 1978 Water Bonds in such series from time to time as may hereafter be established by supplemental resolu- tions of the Board authorizing the issuance thereof, and it -2- • is desirable to adopt this resolution in order to declare the terms and conditions upon and subject to which said bonds may hereafter be authorized and issued; NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of Yorba Linda County Water District as follows: Section 1. The Board has reviewed all proceedings heretofore taken relative to the authorization of the bonds herein provided for and has found, as a result of such re- view, and hereby finds and determines that all acts, condi- tions and things required by law to exist, happen and be performed precedent to and in the issuance of said bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the District is now authorized, pursuant to each and every requirement of law, to issue said bonds in the manner and upon the terms provi- ded in this resolution. Section 2. Bonds of the District designated gen- erally as "Yorba Linda County Water District Improvement District No. 1 1978 Water Bonds" (the Bonds") in the aggre- gate maximum principal amount of $27,320,000 are hereby authorized to be issued for the purposes specified in the Bond Proposition set forth in the recitals herein, under and subject to the terms of this resolution and in accordance with the laws governing the issuance of bonds of the Dis- trict for the benefit of the Improvement District, including -3- 1 ` r • • the County Water District Law (constituting Division 12 of the Water Code of California). The Bonds shall be divided into one or more series as shall from time to time be established by supplemental resolution of the Board, each of which supplemental resolu- tions shall provide for the distinctive designation of Bonds of the new series, the denominations, methods of numbering, date, maturity date or dates, interest rate and interest payment dates, place or places of payment of principal and interest, and such other terms and conditions as may be ap- propriate to the series of Bonds then proposed to be issued. The Bonds of each series shall be equally and ratably se- cured with all other Bonds. The Bonds may be issued as coupon Bonds or as ful- ly registered Bonds without coupons, and shall be numbered in consecutive numerical order from lower to higher in order of their respective maturities. The Bonds shall bear inter- est from their date until paid at the rate or rates as may be fixed by the Board at the time of sale thereof, not to exceed the maximum rate of interest then permitted by law. Such interest shall be payable semiannually, except that the first interest payment date on any series of the Bonds may be payable on any date on or before twelve months after the date of issuance of such series. The interest coupons ap- pertaining to the coupon Bonds shall be numbered in consecu- -4- tive numerical order from 1 up in order of their respective maturities and each coupon shall represent six months' in- terest on the coupon Bond to which it is attached, except that the first coupon shall represent interest for the period from the date of the coupon Bond to which it is attached to the first interest payment date thereon. Fully registered Bonds shall be dated as of the date of issuance, except that fully registered Bonds issued upon exchanges and transfers of fully registered Bonds and upon exchanges of coupon Bonds or fully registered Bonds shall be dated so that no gain or loss of interest shall result from such exchange or transfer. Each fully regis- tered Bond shall bear interest from the interest payment date next preceding the date thereof unless it is dated as of an interest payment date, in which event it shall bear interest from the date thereof, or unless it is dated prior to the first interest payment date, in which event it shall bear interest from the date of such Bond. Payment of in- terest upon fully registered Bonds shall be made by check mailed by the paying agent in Los Angeles, California, to the registered owner thereof at his address appearing in the registration book. Both the principal of and interest on each series of the Bonds shall be payable in lawful money of the United States of America at such office or offices of such bank or -5- J • banks (the "paying agents") as shall be designated by the supplemental resolution providing therefor in accordance with Section 6; except that the principal of and interest on the fully registered Bonds shall be payable only at the office of the paying agent in Los Angeles, California. Section 3. Any series of Bonds may be made subject to redemption prior to maturity as a whole at any time, or in part, in inverse order of maturity and by lot within a maturity, from time to time, upon payment of the principal amount thereof and accrued interest thereon plus such premium or premiums, if any, as may be determined by the Board at the time such series is authorized and as shall be specified in the supplemental resolution providing for the issuance of such series. The District shall cause notice of any redemption to be published once a week for two successive weeks (the first publication to be not less than thirty days nor more than sixty days prior to the redemption date) in a financial newspaper or journal printed in the English language, of general circulation in New York, New York. Such notice shall state the redemption date and the redemption price, shall designate the serial numbers of the Bonds to be redeemed by giving the individual number of each Bond or by stating that all Bonds between two stated numbers, both inclusive, have been called for redemption, shall -6- require that such Bonds be then surrendered with all in- terest coupons (in the case of coupon Bonds) maturing on or subsequent to the redemption date at the office of any paying agent, and shall state that interest on such Bonds will not accrue after the redemption date. A similar notice shall be mailed by the District to the respective registered owners of any Bonds designated for redemption, or to the original purchaser of any of the Bonds to be redeemed, or if said original purchaser is a syndi- cate, to the manager or managers of said syndicate, at least thirty but not more than sixty days prior to the redemption date, at their addresses appearing on the bond registration books in the office of the registration agent; but such mailing shall not be a condition precedent to such redemp- tion and failure to mail or to receive any such notice shall not affect the validity of the proceedings for the redemption of such Bonds. Upon surrender of any fully registered Bond re- deemed in part only, the District shall execute and deliver to the registered owner thereof, at the expense of the District, a new Bond or Bonds, of the same maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond surrendered, which new Bond or Bonds may be, at the option of the registered owner, -7- either a coupon Bond or Bonds with all unmatured coupons appertaining thereto or a fully registered Bond or Bonds. After the date fixed for redemption, if notice of such redemption shall have been duly published and funds available for the payment of the principal of and interest and premium on the Bonds so called for redemption shall have been duly provided, such Bonds so called shall cease to be entitled to any benefit under this resolution other than the right to receive payment of the redemption price, and no interest shall accrue thereon on or after the redemption date specified in such notice. All Bonds redeemed pursuant to the provisions of this section and the appurtenant coupons, if any, shall be cancelled and shall not be reissued. Section 4. The coupon Bonds and the interest coupons to be attached thereto, and the fully registered Bonds and the certificate of authentication, corresponding coupon Bond endorsement and form of assignment to appear thereon, shall be in substantially the following forms, respectively, with necessary or appropriate variations, omissions and insertions as permitted or required by this resolution: -8- 1 [FORM OF COUPON BOND] UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE YORBA LINDA COUNTY WATER DISTRICT IMPROVEMENT DISTRICT NO. 1 1978 WATER BOND, SERIES No. YORBA LINDA COUNTY WATER DISTRICT (the "District") of Orange County, California, hereby acknowledges itself indebted and for value received promises to pay to the bearer hereof on the principal sum of DOLLARS [(subject to any right of prior redemption hereinafter in this bond expressly reserved)], together with interest thereon from the date hereof at the rate of percent ( per annum until payment of said principal sum in full, payable [on and thereafter] semiannually on and of each year. Such interest, prior to maturity, shall be payable only on presentation and surrender of the proper interest coupons attached hereto as they respectively become due. Both the principal of and interest on this bond are payable in lawful money of the United States of America at in Los Angeles, California, or at the option of the holder at in San Francisco, -9- California, or at in New York, New York, or at in Chicago, Illinois. This bond is one of a duly authorized issue of bonds (the "bonds") aggregating $27,320,000 in maximum principal amount, of the series and designation indicated on the face hereof. Said issue of bonds consists of or may consist of one or more series, of varying denominations, dates, maturities, interest rates and other provisions as provided in the Resolution hereinafter mentioned. All of the bonds are issued and to be issued under and pursuant to the Const itution and laws of the State of California, including the County Water District Law (being Division 12 of the Water Code of California), and pursuant to a resolu- tion of the Board of Directors (the "Board") of the Dis- trict, adopted August 3, 1978, providing for the issuance of the bonds, and a Supplemental Resolution of the Board, adopted , authorizing the issuance of the Series bonds (collectively, the "Resolution"), and are authorized by a vote of more than two-thirds of the qualified voters of Improvement District No. 1 (the "Improvement District") of the District voting at a special election duly and regularly called, held and conducted in the Improvement District on June 13, 1978. Reference is hereby made to the provisions of the Resolu- tion, all of the provisions of which are hereby incorporated herein and in the coupons appurtenant hereto, for a specific -10- f description of the security for the bonds and of the obliga- tions of the District and the rights of the bearers and registered owners of the bonds and the bearers of the appur- tenant coupons, to all of which provisions the bearer here- of or of the coupons appurtenant hereto by the acceptance of this bond consents and agrees. This bond is issued by the District for the benefit of the Improvement District and, except to the extent pay- able from revenues of the Improvement District as required or permitted by law, the principal of and interest on this bond are payable exclusively from taxes levied on the tax- able property of the Improvement District established by Resolution No. 78-26, adopted by the Board on May 4, 1978, to which resolution reference is hereby made for a descrip- tion of the Improvement District and the boundaries thereof. [There shall be set forth on the face of each bond, at this point, a paragraph briefly describing the terms of redemption prior to maturity of the bonds of the series which includes said bond, or a statement that bonds of said series are not subject to redemption prior to maturity, as the case may be.] This bond shall be a negotiable instrument and shall pass by delivery, and the District and any paying agent may treat the bearer hereof, or the bearer of any coupon appertaining hereto, as the absolute owner hereof or of such coupon, as the case may be, for all purposes, -11- whether or not this bond or such coupon shall be overdue, and the District and any paying agent shall not be affected by any notice to the contrary. The bonds are issuable as coupon bonds in the denomination of $ , and as fully registered bonds without coupons in denominations of $ Subject to the limitations and upon payment of the charges, if any, provided in the Resolution, fully registered bonds may be exchanged for a like aggregate principal amount of coupon bonds or for a like aggregate principal amount of fully reg- istered bonds of other authorized denominations, and coupon bonds may be exchanged for a like aggregate principal amount of fully registered bonds of authorized denominations. It is hereby certified, recited and declared that this bond is issued in strict conformity with the Constitu- tion and laws of the State of California and with the proceedings of the Board authorizing the same, and that all acts, conditions and things required by law to exist, happen and to be performed precedent to and in the issuance of this bond have happened and been performed in due time, form and manner as required by law, and that the amount of this bond together with all other indebtedness of the Improvement District does not exceed any limit prescribed by the Consti- tution and statutes of said State, and that provision has been made as required by the statutes of said State for the levy and collection of an annual tax on the property in the -12- Improvement District for the payment of the principal of and interest on this bond as the same become due. The full faith and credit of the Improvement District are hereby pledged for the punctual payment of the principal of and interest on this bond. IN WITNESS WHEREOF, the Board of Directors of Yorba Linda County Water District has caused this bond to be signed by its President and countersigned by the Secretary of the District, and this bond to be dated , [SEAL] President of the Board of Directors of Yorba Linda County Water District Countersigned: Secretary of Yorba Linda County Water District -13- [FORM OF INTEREST COUPON] Coupon No. YORBA LINDA COUNTY WATER DISTRICT on , will [(subject to any right of prior redemp- tion reserved therein)] pay to the bearer out of the Yorba Linda County Water District Improvement District No. 1 Interest and 1978 Water Bond Sinking Fund, at in Los Angeles, California, or, at the option of the holder, at in San Francisco, California, or at in New York, New York, or at in Chicago, Illinois, the sum set forth hereon in lawful money of the United States of America, being interest then due on its Improvement District No. 1 1978 Water Bond, No. Series , dated , Auditor of Yorba Linda County Water District -14- • [FORM OF FULLY REGISTERED BOND] UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE YORBA LINDA COUNTY WATER DISTRICT IMPROVEMENT DISTRICT NO. 1 1978 WATER BOND, SERIES No. YORBA LINDA COUNTY WATER DISTRICT (the "District") of Orange County, California, hereby acknowledges itself indebted and for value received promises to pay to or registered assigns, on the principal sum of DOLLARS ) [(subject to any right of prior redemption hereinafter in this bond expressly reserved)], together with interest thereon from the interest payment date next preceding the date of registration of this bond (unless this bond is registered on an interest payment date, in which event it shall bear interest from such date of registration, or unless this bond is registered prior to the first interest payment date, in which event it shall bear interest from ) at the rate of percent ( per annum, payable [on , , and thereafter] semiannually on and in each year, until the -15- r payment of such principal sum in full. Both the principal of and interest on this bond are payable in lawful money of the United States of America at in Los Angeles, California. This bond is one of a duly authorized issue of bonds (the "bonds") aggregating $27,320,000 in maximum principal amount, of the series and designation indicated on the face hereof. Said issue of bonds consists of or may consist of one or more series, of varying denominations, dates, maturities, interest rates and other provisions as provided in the Resolution hereinafter mentioned. All of the bonds are issued and to be issued under and pursuant to the Constitution and laws of the State of California, including the County Water District Law (being Division 12 of the Water Code of California), and pursuant to a resolu- tion of the Board of Directors (the "Board") of the Dis- trict, adopted August 3, 1978, providing for the issuance of the bonds, and a Supplemental Resolution of the Board, adopted , authorizing the issuance of the Series bonds (collectively, the "Resolu- tion"), and are authorized by a vote of more than two-thirds of the qualified voters of Improvement District No. 1 (the "Improvement District") of the District voting at a special election duly and regularly called, held and conducted in the Improvement District on June 13, 1978. Reference is hereby made to the provisions of the Resolution, all of the -16- provisions of which are hereby incorporated herein, for a specific description of the security for the bonds and of the obligations of the District and the rights of the bearers and registered owners of the bonds and the bearers of the appurtenant coupons, to all of which provisions the registered owner hereof by the acceptance of this bond consents and agrees. This bond is issued by the District for the benefit of the Improvement District and, except to the extent payable from revenues of the Improvement District as required or permitted by law, the principal of and interest on this bond are payable exclusively from taxes levied on the taxable property of the Improvement District established by Resolution No. 78-26, adopted by the Board on May 4, 1978, to which resolution reference is hereby made for a description of the Improvement District and the boundaries thereof. [There shall be set forth on the face of each bond, at this point, a paragraph briefly describing the terms of redemption prior to maturity of the bonds of the series which includes said bond, or a statement that bonds of said series are not subject to redemption prior to maturity, as the case may be.] The bonds are issuable as coupon bonds in the denomination of $ , or as fully registered bonds without coupons in denominations of $ Subject to -17- ~,l t the limitations and upon payment of the charges, if any, provided in the Resolution, fully registered bonds may be exchanged for a like aggregate principal amount of coupon bonds or for a like aggregate principal amount of fully registered bonds of other authorized denominations, and coupon bonds may be exchanged for a like aggregate principal amount of fully registered bonds of authorized denomina- tions. This bond is transferable by the registered owner hereof, in person or by his attorney duly authorized in writing, at in Los Angeles, California, but only in the manner, subject to the limita- tions and upon payment of the charges provided in the Resolution, and upon surrender and cancellation of this bond. Upon such transfer a new fully registered bond or bonds without coupons, of authorized denomination or denominations, for the same aggregate principal amount will be issued to the transferee in exchange herefor. It is hereby certified, recited and declared that this bond is issued in strict conformity with the Constitu- tion and laws of the State of California and with the pro- ceedings of the Board authorizing the same, and that all acts, conditions and things required by law to exist, happen and to be performed precedent to and in the issuance of this bond have existed, happened and been performed in due time, -18- form and manner as required by law, and that the amount of this bond together with all other indebtedness of the Improvement District does not exceed any limit prescribed by the Constitution and statutes of said State, and that provision has been made as required by the statutes of said State for the levy and collection of an annual tax on the property in the Improvement District for the payment of the principal of and interest on this bond as the same become due. The full faith and credit of the Improvement District are hereby pledged for the punctual payment of the principal of and interest on this bond. IN WITNESS WHEREOF, the Board of Directors of Yorba Linda County Water District has caused this bond to be signed by its President and countersigned by the Secretary of the District, and this bond to be dated , [SEAL] Countersigned: President of the Board of Directors of Yorba Linda County Water District Secretary of Yorba Linda County Water District -19- • [FORM OF CERTIFICATE OF AUTHENTICATION] This is one of the bonds described in the within- mentioned Resolution and authenticated and registered on as Paying Agent By Authorized Officer [FORM OF CORRESPONDING COUPON BOND ENDORSEMENT] Notice: No writing below except by the Paying Agent This Registered Bond is issued in lieu of or in exchange for Coupon Bond(s) of this issue, in- terest rate and maturity, numbered in the denomination of $ each not contempo- raneously outstanding aggregating the face value hereof; and Coupon Bond(s) of this issue and of the same interest rate and maturity aggregating the face value hereof and bearing the above serial number(s) which has (have) been reserved for such Coupon Bond(s) will be issued in exchange for this Regis- tered Bond upon surrender and cancellation thereof and upon payment of charges, all as provided in the within-mentioned Resolution. -20- [FORM OF ASSIGNMENT] For value received the undersigned do(es) hereby sell, assign and transfer unto the within-mentioned registered bond and hereby irrevocably constitute and appoint attorney, to transfer the same on the books of the Paying Agent with full power of substitution in the premises. Dated: , Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within registered bond in every particular, without alteration or enlargement or any change whatsoever. Section 5. The Bonds shall be executed in the name of and on behalf of the District, and under its seal, with the signature of the President of the Board and the countersignature of the Secretary of the District, one of which signatures may be a printed, lithographed or en- graved facsimile signature. The seal of the District may be affixed to the Bonds by printed, lithographed or other reproduction thereof. The coupons to be attached to the Bonds shall be signed by the facsimile signature of the -21- Auditor of the District. Such signing, countersigning and sealing shall be a sufficient and binding execution of the Bonds, and their appurtenant coupons, if any, by the Dis- trict. If any member or officer whose signature appears on the Bonds or coupons shall cease to be such member or offi- cer before the delivery of the Bonds to the purchaser there- of, such signature shall nevertheless be valid and suffi- cient for all purposes the same as if that member or offi- cer had remained in office until the delivery of the Bonds. In the case of fully registered Bonds, only Bonds bearing a certificate of authentication, executed by the registration agent of the District, shall be or become valid or obligatory for any purpose or entitled to the benefits of this resolution. Such certificate of the registration agent, when so executed, shall be conclusive evidence that the Bonds so authenticated have been duly executed, authen- ticated and delivered hereunder and are entitled to the benefits of this resolution. As provided by law, all coupon Bonds shall be negotiable instruments transferable by delivery; and the District and any paying agent may treat the bearer of any coupon Bond or coupon as the absolute owner of such coupon Bond or coupon and neither the District nor any paying agent -22- shall be affected by any notice or knowledge to the con- trary, whether such Bond or coupon be overdue or not. Section 6. The District hereby covenants that, so long as any of the Bonds shall be outstanding and unpaid, it will at all times have a paying agent for the payment of the principal of and the interest on the Bonds in each of the following places: in Los Angeles, California, in San Fran- cisco, California, in New York, New York, and in Chicago, Illinois. The Auditor of the District shall make such credit arrangements with such paying agents as may be necessary to assure, to the extent of the moneys held for such payment, the prompt payment of the principal of, and interest on, the Bonds presented at any place of payment. The District may at any time remove any paying agent and any successor thereto, and appoint a successor thereto. The paying agent of the District in Los Angeles, California, is hereby appointed as registration agent of the District to act as registrar of the Bonds. The registration agent will keep or cause to be kept at its principal office in Los Angeles, California, sufficient books for the regis- tration and transfer of the fully registered Bonds, which shall at all times be open to inspection by the District; and, upon presentation for such purpose, the registration agent shall, under such reasonable regulations as it may -23- prescribe, register or transfer or cause to be registered or transferred, on said books, Bonds as hereinafter provided. Whenever any Bond shall be issued as a fully registered Bond, there shall be reserved by the District unissued an aggregate principal amount of coupon Bonds equal to the principal amount of such fully registered Bond, and in such case the serial number or numbers of the coupon Bond or Bonds so reserved, together with an appropriate statement as to such reservation, may be endorsed on such fully re- gistered Bond. Any fully registered Bond may, in accordance with its terms, be transferred upon the books required to be kept by the registration agent, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such fully registered Bond to the regis- tration agent for cancellation, accompanied by delivery of a written instrument of transfer in a form approved by the registration agent, duly executed. Whenever any fully registered Bond or Bonds shall be surrendered for transfer, the District shall execute and the registration agent shall authenticate and deliver a new fully registered Bond or Bonds, for a like aggregate principal amount, which shall have endorsed thereon the same coupon Bond serial number or numbers, if any, so reserved. The registration agent shall require the payment by the person requesting such transfer -24- J of any tax or other governmental charge required to be paid with respect to such transfer. No transfer of fully regis- tered Bonds shall be required to be made during the 15 days next preceding each interest payment date. Fully registered Bonds may be exchanged at the principal office of the registration agent in Los Angeles, California, for a like aggregate principal amount of coupon Bonds, or for a like aggregate principal amount of fully registered Bonds of other authorized denominations, of the same maturity, and coupon Bonds may be exchanged at said office of the registration agent for a like aggregate prin- cipal amount of fully registered Bonds of authorized de- nominations of the same maturity. All coupon Bonds surren- dered for exchange and delivered in exchange shall have attached thereto all unmatured coupons appertaining thereto (and any matured coupons in default). The registration agent shall require the payment by the person requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. No such exchange shall be required to be made during the 15 days next preceding each interest payment date. Section 7. Upon receipt of payment for any of the Bonds when the same shall have been duly sold by the Dis- trict, the proceeds from the sale shall be paid to the Auditor of the District and shall be set aside as follows: -25- (a) The Auditor of the District shall deposit in the Interest and Sinking Fund established pursuant to Section 8 a sum at least equal to any accrued interest and premium on the sale of the Bonds. (b) To the extent permitted by law, the Auditor of the District shall deposit such portion of the proceeds of sale of any series of the Bonds in such fund or funds, if any, as is required by the supplemental resolution authoriz- ing the issuance of such series of Bonds. (c) The Auditor of the District shall deposit the remainder of such proceeds in a separate fund to be known as the "Yorba Linda County Water District Improvement District No. 1 Water System Improvement Fund" (the "Improvement Fund"), to be held and accounted for by the District. Said proceeds shall be applied solely to the purposes and objects speci- fied in the Bond Proposition set forth in the recitals herein; but when such purposes and objects shall have been accomplished, any balance remaining in the Improvement Fund shall be transferred to the Interest and Sinking Fund established pursuant to Section 8; and when such purposes and objects shall have been accomplished and the principal of and interest on the Bonds shall have been paid in full, any balance remaining in the Improvement Fund shall be transferred to the general fund of the District and used for any proper purpose of the Improvement District. -26- • The Auditor of the District is hereby authorized, pursuant and subject to the provisions of Article 11 of Chapter 2 of Part 2 of Division 4 of Title 2 of the Govern- ment Code of the State of California, in his discretion to transfer and deposit, at any time and from time to time, amounts in the Interest and Sinking Fund or the Improvement Fund to the Local Agency Investment Fund in the Treasury of the State of California; provided that, as long as any amount be so deposited in the Local Agency Investment Fund, each such amount shall be deemed to remain in all respects belonging to the Interest and Sinking Fund and/or the Im- provement Fund, as the case may be, and the Auditor of the District shall so account for the respective fund to which each such amount belongs. Section 8. If the revenues of the Improvement District are, or in the judgment of the Board are likely to be, inadequate to pay the interest on or principal of the Bonds as the same become due, or any other expenses or claims against the Improvement District, the Board shall either: (a) annually, at least fifteen days before the first day of the month in which the Board of Supervi- sors of Orange County, California, is required by law to levy the amount of taxes required for county pur- poses, furnish to said Board of Supervisors, and to the -27- Auditor of said County, respectively, in writing, (i) an estimate of the minimum amount of money required by the District from the Improvement District for the pay- ment of the principal of or interest on the Bonds as the same become due, (ii) a description of the Improve- ment District, which is the improvement district bene- fited by incurring the indebtedness evidenced by the Bonds, and (iii) an estimate of the minimum amount of money required by the Improvement District to meet all charges, claims, expenditures and expenses other than a bonded debt; in which event, as required by law, said Board of Supervisors shall annually until the Bonds are paid (or moneys for the payment of both the principal and interest thereof as the same respectively become due are otherwise provided from revenues of the Im- provement District and are then on deposit in the Interest and Sinking Fund), levy upon all the property within the Improvement District a tax sufficient to pay the annual interest on the Bonds and also such part of the principal thereof as shall become due before the time for fixing the next general county tax levy; or (b) (i) elect to fix its own rates of taxation by resolution, pursuant to Section 31702.1 of the Water Code of the State of California, (ii) on or before Sep- tember 1 of each year fix the rates of taxation, based -28- upon the written statement transmitted by the Auditor of said County to the Board in such year showing the total value of all taxable property in the Improve- ment District to be used by said County for taxation for such year, which rates of taxation shall be re- quired for the payment of the principal of or interest on the Bonds as the same become due before the time for fixing the next general county tax levy and for each other purpose of the Improvement District for such year, making due allowance for delinquency as fixed by law or by the Board, and (iii) immediately certify said rates to said Auditor; which acts, as provided by law, shall be a valid assessment of the property and a valid levy of the taxes so fixed; or (c) provide for the assessment of all taxable property within the Improvement District and the levy and collection of taxes thereon to pay the principal of and interest on the Bonds as the same become due, in any other manner provided by law. As currently provided by law, the Board of Super- visors of said County shall annually cause to be collected a tax sufficient to pay the annual interest on the Bonds and also such part of the principal thereof as shall become due before the time for fixing the next general county tax levy, such tax to be known as "Yorba Linda County Water District -29- Improvement District No. 1 Bond Tax". Taxes for the payment of the interest on or principal of the Bonds shall be levied upon all the taxable property within the Improvement Dis- trict and all such taxes shall be collected at the same time and in the same manner and form as county taxes are collec- ted, and when collected shall be paid to the District, for deposit into a fund which is hereby established and desig- nated "Yorba Linda County Water District Improvement Dis- trict No. 1 1978 Water Bond Interest and Sinking Fund" (the "Interest and Sinking Fund"). The moneys in the Interest and Sinking Fund shall be used (and transferred to the pay- ing agents for the Bonds as required) for the sole purpose of paying the principal of and interest on the Bonds. There shall likewise be deposited in said fund all moneys provided from revenues of the Improvement District for the payment of the principal of and interest on the Bonds. All such taxes for the payment of the Bonds or the interest thereon shall be a lien on all the taxable property in the territory comprising the Improvement District and said taxes shall be of the same force and effect as other liens for taxes and their collection shall be enforced by the same means as provided for the enforcement of liens for state and county taxes. Section 9. If the District shall (a) deposit in the Interest and Sinking Fund, at or before maturity, money -30- or United States Treasury notes, bonds, bills or certifi- cates of indebtedness or securities for which the faith and credit of the United States are pledged or general obliga- tion bonds of the State of California in the necessary amount to pay or redeem outstanding Bonds (whether upon or prior to their maturity or the redemption date of such Bonds), and (b) if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided herein and in any applicable supple- mental resolution, or provisions satisfactory to the Board shall have been made for the giving of such notice; then all obligations of the District under this resolution and all liability of the District in respect of such Bonds and the coupons appertaining thereto shall cease, determine and be completely discharged; except that the holders thereof shall thereafter be entitled only to payment out of the money, bonds or other securities so deposited in the Interest and Sinking Fund. Section 10. The Board covenants with the holders of all Bonds at any time outstanding that it will make no use of the proceeds of the Bonds which will cause the Bonds to be "arbitrage bonds" subject to federal income taxation by reason of Section 103(c) of the Internal Revenue Code of 1954, as amended. To that end, so long as any of the Bonds are outstanding, the Board, with respect to the proceeds of -31- the Bonds, shall comply with all requirements of said Sec- tion 103(c) and all regulations of the United States Depart- ment of the Treasury issued thereunder, to the extent that such requirements are, at the time, applicable and in effect. Subject to the foregoing, the Auditor of the District is hereby authorized to invest or cause to be invested any moneys held pursuant to this resolution in any legal investments for the District which mature at such time or times as may be required to satisfy the needs of the fund or funds from which such moneys are invested. Section 11. In consideration of the acceptance of the Bonds, the issuance of which is authorized hereunder, by those who shall hold the same from time to time, this reso- lution shall be deemed to be and shall constitute a contract between the District and the holders and registered owners from time to time of the Bonds and interest coupons apper- taining thereto, and the representations set forth herein and the covenants and agreements herein set forth to be performed on behalf of the District shall be for the equal and proportionate benefit, security and protection of all holders and registered owners of the Bonds and interest coupons authorized hereunder, without preference, priority or distinction as to security or otherwise of any of the Bonds or interest coupons authorized hereunder over any of -32- the others by reason of time of issue, sale or negotiation thereof or otherwise for any cause whatsoever, and except as Bonds of various series may differ with respect to date, number, interest rates, maturity, redemption provisions or otherwise as expressly authorized hereunder. PASSED AND ADOPTED this 3rd day of August, 1978, by the following vote: AYES: Directors Knuaft, Lindow, Clodt, Korn and Cromwell NOES: None ABSTAIN: None ABSENT: None (SERE) r sidentC6f the B 'rd of Directors of Yorba Linda County Water District Attest: r Sect ary o Yor a Linda County Water District -33- SECRETARY'S CERTIFICATE I, Jean E. Mathews, Secretary of Yorba Linda County Water District, hereby certify that the foregoing is a full, true and correct copy of a resolution duly adopted at a special meeting of the Board of Directors of said District duly and regularly held at the regular meeting place thereof on August 3, 1978, of which meeting all of the members of said Board had due notice and at which a majority thereof was present; and that at said meeting said resolution was adopted by the following vote: AYES: Directors Knauft, Lindow, Clodt, Korn and Cromwell NOES: None ABSTAIN: None ABSENT: None I further certify that I have carefully compared the same with the original resolution on file and of record in my office; that the foregoing is a full, true and correct copy of said original resolution adopted at said meeting; and that the foregoing has not been amended, modified or rescinded since the date of its adoption, and is now in full force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and af- fixed the official seal of said District on August 3 , 1978. Sec- ary of Yorba Linda County Water District [SEAL] -3 4-