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HomeMy WebLinkAbout1990-02-08 - Resolution No. 90-05YORBA LINDA WATER DISTRICT RESOLUTION NO. 90-05 THIRD SUPPLEMENTAL RESOLUTION AUTHORIZING THE ISSUANCE OF $6,000,000 PRINCIPAL AMOUNT OF YORBA LINDA COUNTY WATER DISTRICT IMPROVEMENT DISTRICT NO. 2 1979 WATER BONDS, SERIES C WHEREAS, the Board of Directors (the "Board") of Yorba Linda County Water District (the "District") on April 5, 1979, duly adopted is Resolution No. 79-13, as amended by its Resolution No. 84-05 and as may be further supplemented or amended from time to time, (the "Master Resolution") authorizing the issuance of Yorba Linda County Water District Improvement District No. 2 1979 Water Bonds (the "Bonds") of, the District, for the benefit of Improvement District No. 2 (the "Improvement District") of the District, in the maximum principal amount of $41,660,000; and WHEREAS, the Master Resolution provides that the Board may by supplemental resolution establish one or more series of Bonds in such principal amount as the Board shall determine; and WHEREAS, pursuant to the Master Resolution, the Board on April 5, 1979 adopted Resolution No. 79-14 (the "First Supplemental Resolution") authorizing the issuance of $1,005,000 principal amount of Series A Bonds; and WHEREAS, the Board adopted Resolution No. 84-06 on April 19, 1984, (the "Second Supplemental Resolution") authorizing the issuance of $10,000,000 of the Bonds designated as 1979 Water Bonds, Series B, and providing for the terms thereof; and WHEREAS, in February of 1987, the District issued $11,915,000 principal amount of its Improvement District No. 2, 1987 Refunding Bonds to refund its Improvement District No. 2 1979 Water Bonds, Series B; and WHEREAS, the Board now desires that Series C Bonds in the principal amount of $6,000,000 should be issued pursuant to the Master Resolution for the purposes set forth therein and that certain terms of the Bonds be amended; and WHEREAS, the Board is duly authorized under all applicable provisions of law to adopt this resolution and issue its Series C Bonds and such Bonds, upon the issuance thereof, will be valid and legally binding general obligations of the Improvement District in accordance with their terms; and WHEREAS, pursuant to Government Code Section 53541, previously authorized Bonds may be issued at a maximum interest rate of twelve percent (12%) in lieu of a like amount of unissued Bonds authorized at an election at which voters authorized said indebtedness; and WHEREAS, an action has been brought pursuant to Water Code Section 30066 and Code of Civil Procedure Section 860 et seq. to validate the issuance of Bonds herein authorized and a final judgment validating such Bonds has been rendered and become final; NOW, THEREFORE, BE IT RESOLVED the Board of Directors of the Yorba Linda Water District as follows: 02/08/90 8032n/2608/01 -2- SECTION 23.* A third series of Bonds is hereby issued pursuant to Government Code Section 53541, and such Bonds are designated "Yorba Linda Water District Improvement District No. 2 1979 Water Bonds, Series C" (the "Series C Bonds"). The aggregate amount of Series C Bonds which may be issued and outstanding under the Master Resolution and this resolution shall not exceed Six Million Dollars ($6,000,000). The Series C Bonds shall be issued as fully registered Bonds without coupons, in denominations of $5,000 or any integral multiple thereof, and shall be numbered in consecutive numerical order from CR1 up. All of the Series C Bonds shall be dated March 1, 1990, which is hereby fixed and determined to be the date of the issuance of the Series C Bonds. The Series C Bonds shall bear interest at such rate or rates, not exceeding twelve percent (12°x) per annum, as may be fixed by he Board at the sale thereof. Such interest shall be payable semiannually on May 1 and November 1 in each year, commencing on May 1, 1991. - The Series C Bonds shall mature on May 1 in each year and become payable in consecutive numerical order from lower to higher, as set forth in the following schedule: * Sections 1 to 22, inclusive are contained in the Master Resolution, as amended by Resolution No. 84-05 and the First Supplemental Resolution, and incorporated herein by reference, except as provided herein. 02/08/90 8032n/2608/01 -3- Years Principal Years Principal Inclusive Amount Inclusive Amount 1992 145,000 2002 310,000 1993 155,000 2003 335,000 1994 170,000 2004 365,000 1995 180,000 2005 395,000 1996 195,000 2006 425,000 1997 215,000 2007 460,000 1998 230,000 2008 495,000 1999 250,000 2009 535,000 2000 270,000 2010 580,000 2001 290,000 Both the principal of and interest on the Series C Bonds shall be payable in lawful money of the United States of America at the Principal Corporate Trust Office of BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION in San Francisco, California, which is hereby appointed paying agent of the District for the Series C Bonds (the "paying agent"). At least two Business Days prior to each interest payment date, the District shall pay to the paying agent an amount sufficient to provide for the payment of interest on and principal of the Bonds on said interest payment date. SECTION 24. Bonds maturing on or before May 1, 2000 are not subject to call and optional redemption prior to maturity. Bonds maturing on or after May 1, 2001 are subject to call and optional redemption prior to their respective stated maturities, at the option of the District, in whole, or in part from the proceeds of any source of available funds, in inverse order of maturity, and by lot within any such maturity if less than all of the Bonds of such maturity are to be redeemed, on any interest payment date on or after May 1, 2000, at the respective redemption prices (expressed as percentages of the 02/08/90 8032n/2608/01 -4- • principal amount of the Bonds to be redeemed) set forth below, in each case together with accrued interest to the redemption date: REDEMPTION DATES May 1, 2000 and November 1, 2000 May 1, 2001 and November 1, 2001 May 1, 2002 and November 1, 2002 May 1, 2003 and November 1, 2003 May 1, 2004 and thereafter REDEMPTION PRICES 102 % 101-1/2% 101 % 100-1/2% 100 % SECTION 25. The Series C Bonds and the certificate of authentication and registration and form of assignment to appear thereon, shall be in substantially the forms set forth in Section 4 of the Master Resolution. The Series C Bond numbers, series designation, interest rate or rates, interest, payment and bond payment dates, denominations, maturity dates and redemption provisions shall be inserted therein in conformance with this resolution and the resolution selling said Bonds to be adopted on or about March 3, 1990. SECTION 26. At any time after the adoption of this resolution, the District may execute and deliver all or any part of the $6,000,000 aggregate principal amount of the Series C Bonds authorized hereunder. The President of the Board is hereby authorized and directed to sign by printed, lithographed or engraved facsimile signature each of the Series C Bonds on behalf of the District, and the Secretary or the Assistant Secretary is hereby authorized and directed to countersign by printed, lithographed or engraved facsimile signature each of the Series C Bonds and to impress or imprint by facsimile the official seal of the 02/08/90 8032n/2608/01 -5- District on each of the Series C Bonds. 0 The Series C Bonds shall then be delivered to the paying agent for authentication by it. SECTION 27. The proceeds received by the District from the sale of the Series C Bonds shall be paid to the Auditor of the District and shall be set aside as follows: (a) The Auditor of the District shall deposit in the Interest and Sinking Fund established pursuant to Section 8 of the Master Resolution any accrued interest and premium received upon the sale of the Series C Bonds. (b) The Auditor of the District shall deposit in the Bond Reserve Fund established pursuant to Section 29 of this resolution, an amount equal to the lesser of 10% of the Series C Bond proceeds, the maximum annual debt service on the Series C Bonds or 125% of the average annual debt service on the Series C Bonds (the "Reserve Requirement"). SECTION 28. Except as in this resolution hereinabove expressly provided, every term and condition contained in the Master Resolution, as amended, shall apply to this resolution and the Series C Bonds with the same force and effect as if the same were herein set forth at length, with such omissions, variations and modifications thereof as may be appropriate to to make the same conform to this resolution. This resolution and all the terms and provisions herein contained shall form part of the Master Resolution as fully and with the same effect as if all such terms and provisions had been set forth in the Master Resolution. 02/08/90 8032n/2608/01 -6- SECTION 29. There is hereby created and established a fund in the treasury of said District to be designated "1979 WATER BONDS, SERIES C, BOND RESERVE FUND" (the "Bond Reserve Fund"). Said fund shall be established out of the proceeds of the sale of the Series C Bonds. The amount of said fund shall be at all times equal to at least the Reserve Requirement. If the amount in said fund falls below the Reserve Requirement said fund shall be restored by the inclusion of a sufficient amount of the next annual assessment in Improvement District No. 2 to replenish said fund, except that to the extent that sufficient revenues from water charges from Improvement District No. 2 are on hand and allocated to said fund at the time of fixing the next annual assessment in the Improvement District No. 2 said inclusion need not be made. The moneys in the Bond Reserve Fund shall be used only in the event that there are insufficient moneys in the Interest and Sinking Fund to pay interest and principal of the Series C Bonds as they become due and payable. In such event, the amount of such insufficiency shall be transferred from the Bond Reserve Fund to the Interest and Sinking Fund, and used solely to pay interest and principal on the Series C Bonds. Prior to completion of construction, all amounts in excess of the Reserve Requirement shall be transferred by the Auditor to the Improvement Fund to be expended in accordance with Section 7 of the Master Resolution and following completion of construction, such excess amounts shall be transferred to the Interest and Sinking Fund. 02/08/90 8032n/2608/01 -7- SECTION 30. The District hereby covenants to the registered owners of the Series C Bonds that it will observe all obligations and all remedies conferred upon it by that certain agreement entitled "Agreement Re Sale of Series B Water Bonds of Improvement District No. 2 of Yorba Linda County Water District, Payment of Charges, Lien and Mortgage Rights with Power of Sale," dated January 19, 1984, by and between the District and C-W Associates "("C-W"), a California partnership. The Agreement, which was recorded on January 23, 1984 in the Official Records of the County of Orange and constitutes a real covenant running with the "Subject Property', provides for the District to issue the Series C Bonds and to levy and collect certain standby charges upon unimproved lands with the Improvement District No. 2 owned by C-W or their successors an assigns, in an amount which, in combination with ad valorem taxes, will be sufficient to pay "Bond Payments". For its part, C-W has covenanted, for itself and its successors and assigns, to pay both the ad valorem taxes and standby charges imposed on said property, and grants to the District a first lien and mortgage with power of sale enabling the District to foreclose upon said property in the event of default in the payment of said "Charges". SECTION 31. Tax Covenants. The District covenants and agrees to take no action which, in the opinion of Bond Counsel, would result in the interest received by the bondholders being includable in gross income for federal income tax purposes. In 02/08/90 8032n/2608/01 -8- order to preserve the exclusion from gross income for federal income tax purposes of interest due with respect to the Series C Bonds, the District covenants to comply with all applicable requirements of the Code, together with any amendments thereto or regulations promulgated thereunder necessary to preserve such exclusion and specifically covenants, without limiting the generality of the foregoing, that: (a) it will make no use of Gross Proceeds which at any time will cause the Series C Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and applicable Regulations adopted thereunder by the Internal Revenue Service; (b) it will not use in excess of 5% of the Net Proceeds of the Series C Bonds to make or finance loans to any person other than a governmental unit (other than loans which are used to acquire or carry nonpurpose investments or are for the purpose of enabling the borrower to finance any governmental tax or assessment of general application for a specific essential governmental function, all as set forth in Section 141(c) of the Code); (c) it will not use nor permit the use of more than 10% of the Net Proceeds of the Series C Bonds for any private business use, or enter into an arrangement such that more than 10% of the principal of the Series C Bonds or 10% of the interest due on the Series C Bonds during the term thereof is, directly or indirectly, secured by any interest in (i) property used or to be used for a private business use or (ii) payments in respect 02/08/90 8032n/2608/01 -9- of such property or to be derived from payments in respect of property, or borrowed money, used or to be used for a private business use, all as set forth in Section 141(b) of the Code, and, in the event that both (i) an amount in excess of five percent (5%) of the Net Proceeds is used for a private business use, and (ii) an amount in excess of five percent (5%) of the principal or five percent (5%) of the interest due on the Series C Bonds during the term thereof is, under the terms of the Series C Bonds or any underlying arrangement, directly or indirectly secured by any interest in property used or to be used for said private business use or in payments in respect of property used or to be used for said private business use or is to be derived from payments, whether or not to the District,-in respect of property or borrowed money used or to be used for said private business use, then such excess over five percent (5%) of Net Proceeds used for a private business use shall be used for a private business use related to the governmental use of the improvement project, or take any other action which would cause the Series C Bonds to be "private activity bonds within the meaning of Section 141(a) of the Code; (d) it will not take any action that would cause the Series C Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code and, in that regard, no portion of the moneys contained in any of the funds or accounts created herein shall be (i) used in making loans guaranteed by the United States (or any agency or instrumentality thereof); (ii) 02/08/90 8032n/2608/01 -10- invested directly or indirectly in deposits or accounts insured by the Federal Deposit Insurance Corporation, Federal Savings and Loan Insurance Corporation, National Credit Union Administration or any other similar federally chartered corporation; (iii) otherwise invested directly or indirectly in obligations guaranteed (in whole or in part) by the United States (or any agency or instrumentality thereof); except (1) during the three year period following issuance of the Series C Bonds and ending on the final expenditure of the bond proceeds; and (2) for amounts held in the Bond Reserve Fund, or other reserve funds satisfying Section 148(d) of the Code; (3) for amounts held in the Interest and Sinking Fund and other bona fide debt service funds; (4) for investments in obligations issued by the United States Treasury; (5) for investments in obligations guaranteed by the Federal National Mortgage Association, Government National Mortgage Association or Federal Home Loan Mortgage Corporation, or (6) for investments permitted under regulations issued pursuant to Section 149(b)(3)(B) of the Code; and (e) (i) it shall keep a detailed accounting of all transactions contemplated under this Resolution or in any way relating to the receipt or disbursement of any of the Gross Proceeds of the Series C Bonds for a period of six years after the later of the date of payment of all Excess Investment Earnings to the United States or the date on which the last of the Gross Proceeds of the Series C Bonds are disbursed; (ii) 02/08/90 8032n/2608/01 -11- except for the investment of moneys in tax-exempt Series C Bonds or Gross Proceeds invested during an applicable temporary period permitted under the Treasury Regulations, it will not allow Gross Proceeds of the Series C Bonds to be invested at any time in Nonpurpose Investment with a yield in excess of the yield on the Series C Bonds; (iii) it will neither invest Gross Proceeds nor cause Gross Proceeds to be invested in Nonpurpose Investment if the yield on such Nonpurpose Investment would be less than the yield that would have resulted in an arm's-length transaction; and (iv) it will not sell or otherwise dispose of or cause to be sold or otherwise disposed of Nonpurpose Investment, if such sale or disposition would result in a smaller profit or larger loss than would have resulted from a sale at fair market value arrived at in an arm's-length transaction. SECTION 32. Rebate Provisions. (a) The District shall calculate Excess Investment Earnings in accordance with paragraph (b) and shall pay Excess Investment Earnings to the United States government in accordance with paragraph (c). The term "Excess Investment Earnings" means an amount equal to the sum of: (i) the excess of (A) the aggregate amount earned from the Delivery Date on all Nonpurpose Investments in which 02/08/90 8032n/2608/01 -12- Gross Proceeds of the Series C Bonds are invested (other than amounts attributable to an excess described in this subparagraph (i)), over (B) the amount that would have been earned if the Yield on such Nonpurpose Investments (other than amounts attributable to an excess described in this subparagraph (i)) had been equal to the Yield on the Series C Bonds, plus (ii) any income attributable to the excess described in paragraph (i). (b) At or prior to the last day of the first Bond Year, District shall calculate and cause to be deposited with the Auditor the Excess Investment Earnings referenced in subparagraph (i) of paragraph (a) and the Auditor shall deposit the same into a special fund hereby created designated the "Excess Investment Earnings Fund." Thereafter, prior to sixty (60) days following the last day of each Bond Year, within sixty days following any optional or mandatory redemption of the Series C Bonds (other than regularly scheduled sinking fund redemptions and on the date of the retirement of the Series C Bonds, District shall calculate the amount of Excess Investment Earnings referenced in subparagraphs (i) and (ii) of paragraph (a) and direct corresponding transfers into the Excess Investment Earnings Fund. 02/08/90 8032n/2608/01 -13- a (c) Upon direction of District, the Auditor shall pay Excess Investment Earnings to the United States government in installments with the first payment to be made not later than sixty (60) days after the end of the fifth Bond Year and with subsequent payments to be made not later than five (5) years after the preceding payment was due. The District shall assure that each installment is in an amount equal to at least 90 percent of the Excess Investment Earnings with respect to the Series C Bonds as of the close of the computation period. Upon the direction of District, which direction shall be given before sixty (60) days after the retirement of the Series C Bonds, District shall pay 100 percent of the theretofore unpaid Excess Investment Earnings of the Series C Bonds. The Auditor shall remit such payments to the United States government at the address and in the manner directed by District prescribed by the regulations as the same may be from time to time in effect, together with such reports and statements prepared by District as may be prescribed by such Regulations. (d) The District shall keep and retain for a period of six (6) years following the retirement of the Series C Bonds records of the determinations made pursuant to this Section. (e) Payments pursuant to this Section shall be made to the maximum extent possible from moneys on deposit in the Excess Investment Earnings Fund and, to the extent of any deficiency therein for such purpose, shall be made from any District moneys held by the Auditor including the moneys held in the 02/08/90 8032n/2608/01 -14- Reserve Fund if no moneys for said purpose are.otherwise available from money in other funds held by the Auditor. In the event of any remaining deficiency in available moneys for the purposes of such transfer, such deficiency shall be paid by District. (f) After the payment of Excess Investment Earnings to the United States government at the end of each 5 year period as provided in subsection (c) hereof, the Auditor may transfer any money in the Excess Investment Earnings Fund to the Interest and Sinking Fund. (g) Notwithstanding the foregoing, the foregoing method of computing Excess Investment Earnings may be modified, in whole or in part, without the consent of the owners of the Series C Bonds upon receipt by District of an opinion of Bond Counsel to the effect that such modification will not adversely affect the exclusion from gross income of interest on the Series C Bonds. SECTION 33. Definitions. For the purpose of this Resolution, the following terms shall have the following meanings: Auditor. The term "Auditor" means the person at any time acting as the District Auditor, and his successors from time to time. Bond Counsel. The term "Bond Counsel" means an attorney or firm of attorneys of nationally recognized standing 02/08/90 8032n/2608/01 -15- 0 1 0 in matters pertaining to the tax-exempt status of interest on tax-exempt obligations issued by states and their political subdivision and acceptable to the District. Bond Year. The term "Bond Year" means the twelve (12) month period from May 2 of any given year through and including May 1 of the following year. Business Day. The term "Business Day" means a day which is not a Saturday or Sunday or a day on which banking institutions are authorized or required by law to be closed in the City of Boston, the State of New York or the State of California for commercial banking purposes. Code. The term "Code" means the Internal Revenue Code of 1986, as amended. Delivery Date. The term "Delivery Date" means the date the Series C Bonds are delivered to the initial purchaser. Gross Proceeds. The term "Gross Proceeds" means any proceeds of the Series C Bonds and any funds (other than proceeds of the Series C Bonds) that are part of a reserve or replacement fund for the Series C Bonds within the meaning of Section 1.148-8T(d) of the Regulations. Net Proceeds. The term "Net Proceeds" means the par amount of the Series C Bonds plus accrued interest and premium, if any, less the amount of any original issue discount, less the proceeds of the Series C Bonds applied to pay costs of issuance, and less any amount of proceeds of the Series C Bonds deposited in the Bond Reserve Fund. 02/08/90 8032n/2608/01 -16- Nonpurpose Investment. The term "Nonpurpose Investment" means any "investment property" within the meaning of Section 1.148-8T(e) of the Regulations in which Gross Proceeds are invested and which is not acquired to carry out the governmental purpose of the Series C Bonds. Payinq Aqent Aqreement. The term "Paying Agent Agreement" means that certain agreement between the District and Bank of America National Trust and Savings Association, as Paying Agent, relating to the Series C Bonds. Regulations. The term "Regulations" means regulations promulgated by the Department of Treasury relating to obligations the interest on which is excludable from gross income for federal income tax purposes. Yield. The term "Yield" shall mean that yield which, when used in computing the present worth of all payments of principal and interest (or other payments in the case of Nonpurpose Investments which require payments in a form not characterized as principal and interest) on a Nonpurpose Investment or on the Series C Bonds produces an amount equal to the Purchase,Price of such Nonpurpose Investment or the Series C Bonds, as the case may be, all computed as prescribed in the applicable Regulations. SECTION 34. This resolution is intended to be declaratory of the provisions for issuance of the Series C Bonds as previously set forth in Resolution Nos. 84-05 and 84-06, as amended hereinabove. 02/08/90 8032n/2608/01 -17- . PASSED AND ADOPTED on February 8, 1990 by the following vote: AYES : y QJ~) '~a+'n NOTES: O ABSTAIN: 0 - prpJ ABSENT: P6- Z (SEAL.} Jb,gTE,5T Secreta 02/08/90 8032n/2608/01 President of the Bo~,fd of Directors of Yorba Linda Watdr District District -18- SECRETARY'S CERTIFICATE I, WILLIAM WORKMAN, Secretary of the Yorba Linda Water Ayes: y - p A RT H uR 4i() 1, C,ROM L00k, t~t~ iCncw~~ ~~t21~ nc.1 fox Noes: 0 Absent: -?4u) ARMS~-Ronc~ Abstain: O I further certify that I have carefully compared the same District, hereby certify that the foregoing is a full, true and correct copy of a resolution duly adopted at a regular meeting of the Board of Directors duly and regularly held on February 8, 1990, of which meeting all of the members of said Board had due notice and at which a majority thereof was present; and at said meeting said resolution was adopted by the following called vote: 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; 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 affixed the official seal of said District on February 8, 1990. 02/08/90 8032n/2608/01. i Secretary o the Water District -19- rba Linda