HomeMy WebLinkAboutRESO NO. TPFA 95-1t
RESOLUTION NO. TPFA 95-1
A RESOLUTION OF THE BOARD OF DIRECTORS OF
THE TUSTIN PUBLIC FINANCING AUTHORITY
AUTHORIZING THE ISSUANCE OF NOT TO EXCEED
$46,0009000 AGGREGATE PRINCIPAL AMOUNT OF
TUSTIN PUBLIC FINANCING AUTHORITY
REVENUE BONDS (TUSTIN RANCH), SERIES A,
APPROVING THE EXECUTION AND DELIVERY OF
AN INDENTURE AND BOND PURCHASE
AGREEMENTS AND THE PREPARATION OF AN
OFFICIAL STATEMENT AND OTHER MATTERS
RELATED THERETO
WHEREAS, pursuant to an Indenture of Trust, dated as of August 1, 1986 (the "85-1
Indenture"), by and between the City of Tustin (the "City") and Citibank, N. A., as trustee, the
City issued City of Tustin Assessment District No. 85-1 Improvement Bonds (the "85-1 Bonds")
in the original principal amount of $50,650,000;
WHEREAS, pursuant to an Indenture of Trust, dated as of September 1, 1988 (the "86-2
Indenture"), by and between the City and Citibank, N. A., as trustee, the City issued City of
Tustin Assessment District No. 86-2 Limited Obligation Improvement Bonds (the "86-2 Bonds")
in the original principal amount of $81,400,000;
WHEREAS, the City has determined that certain savings and efficiencies may be obtained
by refunding the outstanding $14,490,000 aggregate principal amount of 85-1 Bonds that have
been converted to a fixed interest rate pursuant to the 85-1 Indenture and the outstanding
$35,910,000 aggregate principal amount of 86-2 Bonds that have been converted to a fixed interest
rate pursuant to the 86-2 Indenture (collectively, the "Prior Bonds");
WHEREAS, in order to provide a portion of the moneys required to refund the Prior
Bonds, the City has authorized the issuance of the City of Tustin Limited Obligation Improvement
Bonds, Reassessment District No. 95-1 (Tustin Ranch) (the "Assessment Bon(&"), in an aggregate
principal amount of $46,000,000;
WHEREAS, the Tustin Public Financing Authority (the "Authority") was established for
the purpose, among others, of providing for the refinancing of public capital improvements of any
local agency, including the City, through the purchase by the Authority of obligations of such local
agency pursuant to a bond purchase agreement;
WHEREAS, the Authority desires to assist the City in refinancing the public
improvements financed with the Prior Bonds by purchasing the Assessment Bonds from the City;
WHEREAS, in order to provide the funds necessary to purchase the Assessment Bonds
from the City, the Authority desires to authorize the issuance of the Tustin Public Financing
Authority Revenue Bonds (Tustin Ranch), Series A (the `Bonds"), in an aggregate principal
amount of not to exceed $46,000,000;
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to
establish and declare the terms and conditions upon which the Bonds are to be issued and secured
and to secure the payment of the principal thereof, premium, if any, and interest thereon, the
Authority proposes to enter into an Indenture of Trust with State Street Bank and Trust Company
of California, N.A., as trustee (such Indenture, in the form presented to this meeting, with such
changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein
as the "Indenture');
WHEREAS, the Authority proposes to purchase the Assessment Bonds pursuant to a
Bond Purchase Agreement between the City and the Authority (such Bond Purchase Agreement, in
the form presented to this meeting, with such changes, insertions and omissions as are made
pursuant to this Resolution, being referred to herein as the "City Purchase Agreement");
WHEREAS, the Authority has found and determined that the purchase of the Assessment
Bonds by the Authority will result in substantial public benefits, namely, the interest savings with
respect to the Assessment Bonds to be achieved by reason of the credit rating to be assigned to the
Bonds;
WHEREAS, PaineWebber Incorporated (the "Underwriter") has presented the Authority
with a proposal, in the form of a Bond Purchase Agreement, to purchase the Bonds from the
Authority (such Bond Purchase Agreement, in the form presented to this meeting, with such
changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein
as the "Authority Purchase Agreement");
WHEREAS, there have been prepared and submitted to this meeting forms of:
(a) the Indenture;
(b) the City Purchase Agreement;
(c) the Authority Purchase Agreement; and
(d) the Preliminary Official Statement to be used in connection with the offering and sale of
the Bonds (such Preliminary Official Statement in the form presented to this meeting, with such
changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein
as the "Preliminary Official Statement'); and
WHEREAS, the Authority desires to proceed to issue and sell the Bonds and to authorize
the execution of such documents and the performance of such acts as may be necessary or
desirable to effect the offering, sale and issuance of the Bonds;
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Tustin
Public Financing Authority as follows:
Section 1. Subject to the provisions of Section 2 hereof, the issuance of the Bonds, in
the aggregate principal amount of not to exceed $46,000,000, on the terms and conditions set forth
in, and subject to the limitations specified in, the Indenture, is hereby authorized and approved.
The Bonds shall be dated, shall bear interest at the rates, shall mature on the dates, shall be issued
in the form, and shall be as otherwise provided in the Indenture, as the same shall be completed as
provided in this Resolution.
Section 2. The Indenture, in substantially the form submitted to this meeting and made a
part hereof as though set forth herein, be and the same is hereby approved. The Chairperson of the
Board of Directors, or such other member of the Board of Directors as the Chairperson may
designate, the Executive Director of the Authority, the Assistant Executive Director of the Authority
and the Treasurer of the Authority (the "Authorized Officers") are, and each of them is, hereby
authorized and directed, for and in the name of the Authority, to execute and deliver the Indenture
in the form submitted to this meeting, with such changes, insertions and omissions as the
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Authorized Officer executing the same may require or approve, such requirement or approval to be
conclusively evidenced by the execution of the Indenture by such Authorized Officer; provided,
however, that such changes, insertions and omissions shall not authorize an aggregate principal
amount of Bonds in excess of $46,000,000, shall not result in a final maturity date of the Bonds
later than September 2, 2013 and shall not result in a true interest cost on the Bonds in excess of
7.0%.
Section 3. The City Purchase Agreement, in substantially the form submitted to this
meeting and made a part hereof as though set forth in full herein, be and the same is hereby
approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for
and in the name of the Authority, to execute and deliver the City Purchase Agreement in the form
presented to this meeting, with such changes, insertions and omissions as the Authorized Officer
executing the same may require or approve, such requirement or approval to be conclusively
evidenced by the execution of the City Purchase Agreement by such Authorized Officer.
Section 4. The Authority Purchase Agreement , in substantially the form submitted to
this meeting and made a part hereof as though set forth in full herein, be and the same is hereby
approved. The Authorized Officers are, and each of them is, hereby authorized and directed, for
and in the name of the Authority, to execute and deliver the Authority Purchase Agreement in the
form presented to this meeting, with such changes, insertions and omissions as the Authorized
Officer executing the same may require or approve, such requirement or approval to be
conclusively evidenced by the execution of the Authority Purchase Agreement by such Authorized
Officer; provided, however, that such changes, insertions and omissions shall not result in an
aggregate underwriter's discount (not including any original issue discount) from the principal
amount of the Bonds in excess of .25% of the aggregate principal amount of the Bonds, plus
expenses of not to exceed $60,000.
Section 5. The Preliminary Official Statement, in substantially the form presented to this
meeting and made a part hereof as though set forth in full herein, with such changes therein as may
be approved by an Authorized Officer, be and the same is hereby approved, and the use of the
Preliminary Official Statement in connection with the offering and sale of the Bonds is hereby
authorized and approved. The Authorized Officers are, and each of them is, hereby authorized and
directed, for and in the name of the Authority, to certify to the Underwriter that the Preliminary
Official Statement has been "deemed final" for purposes of Rule 15c2-12 promulgated by the
Securities and Exchange Commission.
Section 6. The preparation and delivery of a final Official Statement (the "Official
Statement"), and its use in connection with the offering and sale of the Bonds, be and the same is
hereby authorized and approved. The Official Statement shall be in substantially the form of the
Preliminary Official Statement with such changes, insertions and omissions as may be approved by
an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery
thereof. The Authorized Officers are, and each of them is, hereby authorized and directed to
execute the final Official Statement and any amendment or supplement thereto, for and in the name
of the Authority.
Section 7. The Authorized Officers are hereby authorized and directed to investigate, or
cause to be investigated, the availability and economic viability of bond insurance for the Bonds
and, if such insurance is determined to be cost effective, to select a bond insurer and to negotiate
the terms of such bond insurance.
Section 8. The Authorized Officers are, and each of them hereby is, authorized and
directed to execute and deliver any and all documents and instruments and to do and cause to be
done any and all acts and things necessary or proper for carrying out the issuance of the Bonds and
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the transactions contemplated by the Indenture, the City Purchase Agreement, the Authority
Purchase Agreement, the Official Statement and this Resolution.
Section 9. All actions heretofore taken by the officers and employees of the Authority
with respect to the issuance and sale of the Bonds, or in connection with or related to any of the
agreements or documents referenced herein, are hereby approved, confirmed and ratified.
Section 10. This Resolution shall take effect immediately upon its adoption.
APPROVED and ADOPTED by the Board of Directors of the Tustin Public Financing
Authority on November 20, 1995.
ATTEST:
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It T
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
I, Pamela Stoker, Secretary of the Tustin Public Financing Authority hereby certify that the
foregoing is a full, true and correct copy of a Resolution duly adopted at a meeting of the Board of
Directors of said Authority duly and regularly held on November 20, 1995, of which meeting all of
the members of said Board of Directors had due notice and at which a majority thereof were
present; and that at said meeting said Resolution was adopted by the following vote:
AM: DIRECTORS: Potts, Worley, Doyle, Saltarelli, Thomas
NOES: DIRECTORS: None
ABSENT: DIRECTORS: None
An agenda of said meeting was posted at least 72 hours before said meeting at 300
Centennial Way, Tustin, California, a location freely accessible to members of the public, and a
brief general description of said Resolution appeared on said agenda.
I further certify that I have carefully compared the same with the original minutes of said
meeting on file and of record in my office; that the foregoing Resolution is a full, true and correct
copy of the original Resolution adopted at said meeting and entered in said minutes; and that said
Resolution has not been amended, modified or rescinded since the date of its adoption, and the
same is now in full force and effect.
Dated: November 20 1995
f 6.
BOND PURCHASE AGREEMENT
by and between the
CITY OF TUSTIN
and the
TUSTIN PUBLIC FINANCING AUTHORITY
Dated as of .1995
t N
TABLE OF CONTENTS
Section1. Definitions............................................................................................................. 2
Section 2. Purchase and Sale of Assessment Bonds............................................................... 2
Section 3. Representations and Warranties of the City .......................................................... 3
Section 4. Conditions to the Obligations of the Authority ..................................................... 4
Section5. Expenses................................................................................................................ 9
Section6. Indemnification...................................................................................................... 9
Section 7. Benefits; Survival.................................................................................................. 9
Section8. Counterparts.........................................................................................................10
Section9. Governing Law....................................................................................................10
EXHIBIT A — Maturity Schedule.........................................................................................A-1
BOND PURCHASE AGREEMENT
THIS BOND PURCHASE AGREEMENT, is entered into as of , 1995, by
and between the Tustin Public Financing Authority (the "Authority") and the City of Tustin (the
t.Cin,,,)
WITNESSETH:
WHEREAS, the Authority is a joint exercise of powers authority duly organized and
existing under the provisions of Articles 1 through 4 (commencing with Section 6500) of
Chapter 5 of Division 7 of Title 1 of the California Government Code (the "Act'), and is
authorized pursuant to Article 4 of the Act to borrow money for the purpose of financing the
acquisition of bonds, notes and other obligations to provide financing or refinancing for public
capital improvements of local agencies within the State of California (the "State");
WHEREAS, pursuant to an Indenture of Trust, dated as of August 1, 1986 (the "85-1
Indenture"), by and between the City and Citibank, N. A., as trustee, the City issued City of
Tustin Assessment District No. 85-1 Improvement Bonds (the "85-1 Bonds") in the original
principal amount of $50,650,000;
WHEREAS, pursuant to an Indenture of Trust, dated as of September 1, 1988 (the "86-2
Indenture"), by and between the City and Citibank, N. A., as trustee, the City issued City of
Tustin Assessment District No. 86-2 Limited Obligation Improvement Bonds (the "86-2 Bonds")
in the original principal amount of $81,400,000;
WHEREAS, the City has determined that certain savings and efficiencies may be
obtained by refunding the outstanding $ aggregate principal amount of 85-1 Bonds
that have been converted to a fixed interest rate pursuant to the 85-1 Indenture and the
outstanding $ aggregate principal amount of 86-2 Bonds that have been converted to
a fixed interest rate pursuant to the 86-2 Indenture (collectively, the "Prior Bonds");
WHEREAS, in order to provide a portion of the moneys required to refund the Prior
Bonds, the City has authorized the issuance, pursuant to a Fiscal Agent Agreement, dated as of
, 1995 (the "Fiscal Agent Agreement"), by and between the City and State Street
Bank and Trust Company of California, N.A., as fiscal agent (the Fiscal Agent'), of the City of
Tustin Limited Obligation Improvement Bonds, Reassessment District No. 95-1 (Tustin Ranch)
(the "Assessment Bonds"), in the aggregate principal amount of $ ;
WHEREAS, the Authority desires to assist the City in refinancing the public
improvements financed with the Prior Bonds by purchasing the Assessment Bonds from the City;
WHEREAS, in order to provide the funds necessary to purchase the Assessment Bonds
from the City, the Authority has authorized the issuance, pursuant to an Indenture of Trust, dated
as of , 1995 (the "Indenture"), by and between the Authority and State Street
Bank and Trust Company of California, N.A., as trustee (the "Trustee"), of the Tustin Public
Financing Authority Revenue Bonds (Tustin Ranch), Series A (the "Authority Bonds"), in the
aggregate principal amount of $ ;
WHEREAS, the Authority and the City have found and determined that the sale of the
Assessment Bonds to the Authority will result in substantial public benefits to the City, namely,
the interest savings with respect to the Assessment Bonds to be achieved by reason of the credit
rating to be assigned to the Authority Bonds; and
WHEREAS, the Authority and the City desire to enter into this Agreement providing for
the sale of the Assessment Bonds by the City to the Authority and containing the other
agreements herein set forth;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
Authority and the City agree as follows:
Section 1. Definitions. Capitalized undefined terms used herein shall have the meanings
ascribed thereto in the Fiscal Agent Agreement.
Section 2. Purchase and Sale of Assessment Bonds, (a) Upon the terms and conditions
and upon the basis of the representations, warranties and agreements hereinafter set forth, the
City hereby agrees to sell to the Authority, and the Authority hereby agrees to purchase from the
City, all (but not less than all) of the $ aggregate principal amount of the
Assessment Bonds. The Assessment Bonds will mature on the dates and in the amounts and will
bear interest at the rates shown in Exhibit A hereto.
(b) The Assessment Bonds and interest thereon will be payable from annual assessments
levied and collected in accordance with the Fiscal Agent Agreement and the proceedings relating
thereto. The Assessment Bonds shall be substantially in the form described in, and shall be
executed, delivered and secured under and pursuant to, and shall be payable and subject to
redemption as provided in, the Fiscal Agent Agreement. The proceeds of the Assessment Bonds
will be used by the City to (i) refund the Prior Bonds pursuant to an Escrow Agreement (95-1),
dated as of . 1995 (the "Escrow Agreement"), by and between the City and State
Street Bank and Trust Company, N.A., as escrow bank (the "Escrow Bank"), and (ii) fund the
Reserve Fund established under the Fiscal Agent Agreement. The Fiscal Agent Agreement, the
Escrow Agreement and this Bond Purchase Agreement are collectively referred to as the "Legal
Documents".
(c) The City hereby ratifies, confirms and approves the Preliminary Official Statement
of the Authority, dated . 1995, relating to the Bonds, which contains certain
information about the City, the City's Reassessment District No. 95-1 (Tustin Ranch) (the
"District"), the Fiscal Agent Agreement and the Assessment Bonds (which, together with the
cover page and all appendices thereto, is referred to herein as the "Preliminary Official
Statement"), which Preliminary Official Statement the City deemed final and so certified as of its
date for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as
amended ("Rule 15c2-12"), except for information permitted to be omitted therefrom by Rule
15c2-12. The City hereby agrees to assist the Authority in the preparation of a final official
statement (the "Official Statement"), consisting of the Preliminary Official Statement, with such
changes as may be made thereto with the approval of the Authority, the City and PaineWebber
Incorporated, as underwriter of the Authority Bonds (the "Underwriter"), so that the Authority
may deliver or cause to be delivered to the Underwriter, no later than the earlier of the day prior
to the Closing Date (as hereinafter defined) or seven business days after the date the Underwriter
agrees to purchase the Authority Bonds, copies of the Official Statement in such reasonable
quantity as the Underwriter shall request. The City hereby approves of the use and distribution
by the Underwriter of the Official Statement in connection with the offer and sale of the
Authority Bonds.
(d) The aggregate purchase price for the Assessment Bonds shall be $ ,
which shall be payable solely from proceeds of sale of the Authority Bonds.
(e) At 8:00 a.m., California time, on . 1995, or at such other time or on
such other date as the Authority, the City and the Underwriter may mutually agree upon (the
"Closing Date"), at the offices of Jones Hall Hill & White, A Professional Law Corporation, in
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San Francisco, California, the City will deliver or cause to be delivered to the Authority, the
Assessment Bonds in the form of a separate single fully registered certificate (which may be
typewritten) for each maturity date, registered in the name of the Trustee, as assignee of the
Authority, duly executed and authenticated, and the other documents mentioned herein. The
Authority will accept such delivery and pay the purchase price of the Assessment Bonds as
provided in subparagraph (d) above in immediately available funds (such delivery and payment
being herein referred to as the "Closing").
Section 3. Reuresentations and Warranties of the C*M The City represents and
warrants to the Authority that:
(a) The City is a municipal corporation and political subdivision, duly organized and
existing under the laws of the State, and has, and on the Closing Date will have, full legal right,
power and authority (i) to enter into the Legal Documents, (ii) to adopt Resolution No._,
Resolution No._ and Resolution No._ relating to the Assessment Bonds (collectively, the
"Resolutions"), (iii) to issue, sell and deliver the Assessment Bonds to the Authority as provided
herein, and (iv) to carry out and consummate the transactions contemplated by the Legal
Documents, the Resolutions and the Official Statement;
(b) The City has complied, and will on the Closing Date be in compliance in all respects,
with the Resolutions;
(c) By official action of the City, the City has duly adopted the Resolutions, has duly
authorized and approved the execution and delivery of, and the performance by the City of the
obligations contained in, the Legal Documents and the Assessment Bonds, and has duly
authorized and approved the consummation by it of all other transactions contemplated by the
Official Statement;
(d) The execution and delivery of this the Legal Documents and the Assessment Bonds
and the adoption of the Resolutions, and compliance with the provisions of each thereof, and the
carrying out and consummation of the transactions contemplated by the Official Statement, will
not conflict with or constitute a breach of or a default under any applicable law or administrative
regulation of the State or the United States, or any applicable judgment, decree, agreement or
other instrument to which the City is a party or is otherwise subject;
(e) At the time of the City's execution hereof and at all times subsequent thereto up to
and including the Closing Date, with respect to information describing the City, the Legal
Documents, the Resolutions, the District and the proceedings conducted by the City relating
thereto, the Official Statement does not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
(f) Except as described in the Official Statement, there is no action, suit, proceeding or
investigation before or by any court, public board or body pending or, to the knowledge of the
City, threatened, wherein an unfavorable decision, ruling or finding would: (i) affect the creation,
organization, existence or powers of the City or the titles of its members and officers to their
respective offices, (ii) enjoin or restrain the issuance, sale and delivery of the Assessment Bonds,
the levy and receipt of the assessments which secure the Assessment Bonds, or the pledge
thereof, (iii) in any way question or affect any of the rights, powers, duties or obligations of the
City with respect to the moneys pledged or to be pledged to pay the principal of, premium, if
any, or interest on the Assessment Bonds, or (iv) in any way question or affect any authority for
the issuance of the Assessment Bonds, or the validity or enforceability of the Assessment Bonds,
the Legal Documents or the proceedings relating thereto;
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(g) The City will furnish such information, execute such instruments and take such other
action in cooperation with the Authority as the Authority may reasonably request to qualify the
Authority Bonds for offer and sale under the Blue Sky or other securities laws and regulations of
such states and other jurisdictions of the United States as the Authority may designate, and will
assist, if necessary therefor, in the continuance of such qualifications in effect as long as required
for the distribution of the Authority Bonds; provided, however, that the City shall not be required
to qualify as a foreign corporation or to file any general consent to service of process under the
laws of any state; and
(h) Any certificate signed by any official of the City authorized to do so shall be deemed
a representation and warranty by the City as to the statements made therein.
Section 4. Conditions to the Obligations of the AuthorilL The Authority has entered
into this Bond Purchase Agreement in reliance upon the representations, warranties and
agreements of the City contained herein and to be contained in the documents and instruments to
be delivered on the Closing Date, and upon the performance by the City of its obligations
hereunder, both as of the date hereof and as of the Closing Date. Accordingly, the Authority's
obligations under this Agreement to purchase, to accept delivery of and to pay for the
Assessment Bonds shall be subject to the performance by the City of its obligations to be
performed hereunder and under such documents and instruments at or prior to the Closing Date,
and shall also be subject to the following conditions:
(a) The representations and warranties of the City contained herein shall be true,
complete and correct on the date hereof and on and as of the Closing Date, as if made on the
Closing Date;
(b) On the Closing Date, the Legal Documents shall be in full force and effect and shall
not have been amended, modified or supplemented, and the Official Statement shall not have
been amended, modified or supplemented, except in either case as may have been agreed to by
both the Authority and the Underwriter,
(c) As of the Closing Date, all official action of the City relating to the District, the
Assessment Bonds and the refunding of the Prior Bonds shall be in full force and effect, and
there shall have been taken all such actions as, in the opinion of Jones Hall Hill & White, A
Professional Law Corporation, bond counsel (`Bond Counsel'), shall be necessary or appropriate
in connection therewith, with the issuance of the Authority Bonds and the Assessment Bonds,
and with the transactions contemplated by the Legal Documents, all as described in the Official
Statement;
(d) Between the date hereof and the Closing Date, the market price or marketability, at
the initial offering price or prices set forth in the Official Statement, of the Authority Bonds shall
not have been materially adversely affected, in the reasonable judgment of the Underwriter, by
reason of any of the following:
(i) an amendment to the Constitution of the United States or the constitution of
the State shall have been past or legislation enacted (or resolution passed) by or
introduced or pending legislation amended in the Congress or recommended for passage
by the President of the United States, the Speaker of the House of Representatives, the
President Pro Tempore of the Senate, the Chairman or ranking minority member of the
Committee of Ways and Means of the House of Representatives or the Chairman or
ranking minority member of the Committee on Finance of the Senate, or a decision
rendered by a court established under Article III of the Constitution of the United States
or by the Tax Court of the United States, or an order, ruling, regulation (final, temporary
or proposed) or press release issued or made (A) by or on behalf of the Treasury
Department of the United States or the Internal Revenue Service, with the purpose or
effect, directly or indirectly, of imposing federal income taxation upon such interest as
would be received by the owners of the Authority Bonds, (B) by or on behalf of the State
or the California Franchise Tax Board, with the purpose or effect, directly or indirectly,
of imposing California personal income taxation upon such interest as would be received
by the owners of the Authority Bonds, or (C) by or on behalf of the Treasury Department
of the United States or the Internal Revenue Service or by or on behalf of the State or the
California Franchise Tax Board, with the purpose or effect, directly or indirectly, of
changing the federal or State income tax rates, respectively;
(ii) the declaration of war or engagement in major military hostilities by the
United States or the occurrences of any other national emergency or calamity relating to
the effective operation of the government of the United States;
(iii) the declaration of a general banking moratorium by federal, New York or
California authorities, or the general suspension of trading on any national securities
exchange;
(iv) the imposition by the New York Stock Exchange or other national securities
exchange or any governmental authority, of any material restrictions not now in force
with respect to the Authority Bonds or obligations of the general character of the Bonds,
or the material increase of any such restrictions now in force;
(v) an amendment to the Constitution of the United States or the constitution of
the State shall have been past or legislation enacted (or resolution passed) by or
introduced or pending legislation amended in the Congress or recommended for passage
by the President of the United States, or an order, decree or injunction issued by any court
of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed) or
press release issued or made by or on behalf of the Securities and Exchange Commission,
or any other governmental agency having jurisdiction of the subject matter, to the effect
that obligations of the general character of the Authority Bonds, or the Authority Bonds,
including any or all underlying arrangements, are not exempt from registration under the
Securities Act of 1933, as amended, or that the Fiscal Agent Agreement or the Indenture
is not exempt from qualification under the Trust Indenture Act of 1939, as amended, or
that the execution, offering or sale of obligations of the general character of the Authority
Bonds, or of the Authority Bonds, including any or all underlying arrangements, as
contemplated hereby or by the Official Statement, otherwise is or would be in violation of
the federal securities laws as amended and then in effect;
(vi) the withdrawal or downgrading of any rating of the Authority Bonds by a
national rating agency;
(vii) any event occurring, or information becoming known which, in the
judgment of the Underwriter, makes untrue in any material respect any statement or
information contained in the Official Statement, or has the effect that the Official
Statement contains any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and
(e) On the Closing Date, the Authority Bonds shall have been issued and delivered to the
Underwriter and all of the conditions to closing contained in the [Purchase Contract], dated
.1995 (the "Purchase Contract"), by and between the Authority and the Underwriter
shall have either been satisfied or waived.
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(f) At or prior to the Closing Date, the Authority and the Underwriter shall have
received the following documents, in each case satisfactory in form and substance to the
Authority and the Underwriter:
(i) Two copies of the Legal Documents, each duly executed and delivered by the
respective parties thereto, with only such amendments, modifications or supplements as
may have been agreed to in writing by the Authority and the Underwriter;
(ii) The approving opinion, dated the Closing Date and addressed to the City, of
Bond Counsel approving, without qualification, the validity of the Assessment Bonds,
and a letter of such counsel, dated the Closing Date and addressed to the Authority and
the Underwriter to the effect that such opinion may be relied upon by the Authority and
the Underwriter to the same extent as if such opinion were addressed to it;
(iii) Copies of the Resolutions, certified by the City Clerk;
(iv) The opinion of the City Attorney, dated the Closing Date and addressed to
the Authority and the Underwriter, to the effect that (A) the City is a municipal
corporation and political subdivision, duly organized and existing under the laws of the
State, (B) the Resolutions were duly adopted at meetings of the City Council which were
called and held -pursuant to law and with all public notice required by law and at which a
quorum was present and acting throughout, (C) to the best knowledge of such counsel
after reasonable investigation, there is no action, suit, proceeding or investigation at law
or in equity before or by any court, public board or body, pending or threatened against or
affecting the City, to restrain or enjoin the collection of assessments under the
Resolutions and the Fiscal Agent Agreement or in any way contesting or affecting the
validity of the Assessment Bonds or the Legal Documents, (D) the execution and delivery
of the Legal Documents[ and the Official Statement], the adoption of the Resolutions, and
compliance by the City with the provisions of the foregoing, under the circumstances
contemplated thereby, do not and will not in any material respect conflict with or
constitute on the part of the City a breach or default under any agreement or other
instrument to which the City is a party or by which it is bound or any existing law,
regulation, court order or consent decree to which the City is subject, (E) [the Official
Statement has been duly authorized, executed and delivered, and ]the Legal Documents
have been duly authorized, executed and delivered by the City and, assuming due
authorization, execution and delivery by the other parties thereto, constitute legal, valid
and binding agreements of the City enforceable in accordance with their respective terms,
subject to laws relating to bankruptcy, insolvency or other laws affecting the enforcement
of creditors' rights generally and the application of equitable principles if equitable
remedies are sought, (F) except as described in the Official Statement, no authorization,
approval, consent, or other order of the State or any other governmental authority or
agency within the State having jurisdiction over the City is required for the valid
authorization, execution, delivery and performance by the City of the Legal Documents
or the Official Statement or for the adoption of the Resolutions which has not been
obtained, and (G) the information contained in the Official Statement describing the City,
the Legal Documents, the Resolutions, the District and the proceedings conducted by the
City relating thereto (except for any financial or statistical data or forecasts, estimates,
projections, assumptions or expressions of opinion, as to which no opinion need be
expressed), as of the date hereof and the Closing Date, does not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstance under which they
were made, not misleading;
-6-
(v) The opinion, dated the Closing Date and addressed to the City, the
Underwriter and the Authority of counsel to the Fiscal Agent, to the effect that (A) the
Fiscal Agent has been duly organized and is in good standing as a [national banking
association] under the laws of the [United States], having full power and authority to
enter into and to perform its duties as Fiscal Agent under the Fiscal Agent Agreement,
(B) the Fiscal Agent has duly authorized, executed and delivered the Fiscal Agent
Agreement, (C) the Fiscal Agent Agreement constitutes the legally valid and binding
agreement of the Fiscal Agent, enforceable against the Fiscal Agent in accordance with
its terms, (D) the Assessment Bonds have been validly authenticated and delivered by the
Fiscal Agent, (E) no authorization, approval, consent, or other order of any other
governmental authority or agency having jurisdiction over the Fiscal Agent is required
for the valid authorization, execution, delivery and performance by the Fiscal Agent of
the Fiscal Agent Agreement, and (F) the execution and delivery of the Fiscal Agent
Agreement and compliance by the Fiscal Agent with the provisions thereof, under the
circumstances contemplated thereby, do not and will not in any material respect conflict
with or constitute on the part of the Fiscal Agent a breach or default under any agreement
or other instrument to which the Fiscal Agent is a party or by which it is bound or any
existing law, regulation, court order or consent decree to which the Fiscal Agent is
subject;
(vi) A certificate, dated the Closing Date, signed by a duly authorized official of
the City, in form and substance satisfactory to the Authority and the Underwriter, to the
effect that the representations and warranties of the City contained in this Bond Purchase
Agreement are true and correct in all material respects on and as of the Closing Date with
the same effect as if made on the Closing Date;
(vii) A certificate, dated the date of Closing, signed by a duly authorized official
of the Fiscal Agent, satisfactory in form and substance to the Authority and the
Underwriter, to the effect that (A) the Fiscal Agent is a [national banking association]
duly organized and validly existing and in good standing under and by virtue of the laws
of the [United States], having the full power and being qualified to enter into and perform
its duties under the Fiscal Agent Agreement, (B) the Fiscal Agent is duly authorized to
enter into the Fiscal Agent Agreement and to authenticate the Assessment Bonds, (C) the
Assessment Bonds have been duly authenticated by the Fiscal Agent, (D) the execution
and delivery of the Fiscal Agent Agreement and compliance with the provisions on the
Fiscal Agent's part contained therein, will not conflict with or constitute a breach of or
default under any law, administrative regulation, judgment, decree, loan agreement,
indenture, bond, note, resolution, agreement or other instrument to which the Fiscal
Agent is a party or is otherwise subject, nor will any such execution, delivery, adoption or
compliance result in the creation or imposition of any lien, charge or other security
interest or encumbrance of any nature whatsoever upon any of the properties or assets
held by the Fiscal Agent pursuant to the lien created by the Fiscal Agent Agreement
under the terms of any such law, administrative regulation, judgment, decree, loan
agreement, indenture, bond, note, resolution, agreement or other instrument, except as
provided by the Fiscal Agent Agreement, and (E) there is no action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any court, governmental agency,
public board or body pending against the Fiscal Agent, nor, to the best of its knowledge,
is any such action or other proceeding threatened against the Fiscal Agent, affecting the
existence of the Fiscal Agent, or the titles of its officers to their respective offices or
seeking to prohibit, restrain or enjoin the execution and delivery of the Assessment Bonds
or the collection of the assessments securing the Assessment Bonds, or the pledge
thereof, or in any way contesting or affecting the validity or enforceability of the Fiscal
Agent Agreement, or contesting the powers of the Fiscal Agent or its authority to enter
into, adopt or perform its obligations under the Fiscal Agent Agreement;
Ire
(viii) A certificate, dated the date of Closing, signed by a duly authorized official
of the Escrow Bank, satisfactory in form and substance to the Authority and the
Underwriter, to the effect that (A) the Escrow Bank is a national banking association
organized and existing under and by virtue of the laws of the United States, having the
full power and being qualified to enter into and perform its duties under the Escrow
Agreement, (B) the Escrow Bank is duly authorized to enter into the Escrow Agreement,
(C) the execution and delivery of the Escrow Agreement and compliance with the
provisions on the Escrow Bank's part contained therein, will not conflict with or
constitute a breach of or default under any law, administrative regulation, judgment,
decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument
to which the Escrow Bank is a party or is otherwise subject, nor will any such execution,
delivery, adoption or compliance result in the creation or imposition of any lien, charge
or other security interest or encumbrance of any nature whatsoever upon any of the
properties or assets held by the Escrow Bank pursuant to the lien created by the Escrow
Agreement under the terms of any such law, administrative regulation, judgment, decree,
loan agreement, indenture, bond, note, resolution, agreement or other instrument, except
as provided by the Escrow Agreement, and (D) there is no action, suit, proceeding,
inquiry or investigation, at law or in equity, before or by any court, governmental agency,
public board or body pending against the Escrow Bank, nor, to the best of its knowledge,
is any such action or other proceeding threatened against the Escrow Bank, affecting the
existence of the Escrow Bank, or the titles of its officers to their respective offices or
seeking to prohibit, restrain or enjoin the execution and delivery of the Escrow
Agreement, or in any way contesting or affecting the validity or enforceability of the
Escrow Agreement, or contesting the powers of the Escrow Bank or its authority to enter
into, adopt or perform its obligations under the Escrow Agreement;
(ix) Two certified copies of the general resolution of the Fiscal Agent authorizing
the execution and delivery of the Fiscal Agent Agreement by the Fiscal Agent;
(x) Two certified copies of the general resolution of the Escrow Bank authorizing
the execution and delivery of the Escrow Agreement by the Escrow Bank;
(xi) A letter addressed to the City, the Underwriter and the Authority, dated the
date of the Closing, from . Certified Public Accountants, verifying the
accuracy of the mathematical computations concerning the adequacy of the maturing
principal amounts of and interest earned on the government obligations, together with
other escrowed moneys, to be deposited with the Escrow Bank under the Escrow
Agreement to pay when due at the stated maturity or call for redemption the principal of
and interest and premium, if any, on the Prior Bonds; and
(xii) Such additional legal opinions, certificates, proceedings, instruments or
evidences thereof and other documents as the Authority, the Underwriter or Bond
Counsel may reasonably request to evidence the truth and accuracy, as of the date hereof
and as of the Closing Date, of the representations of the City herein and of the statements
and information contained in the Official Statement, and the due performance or
satisfaction by the Fiscal Agent and the City at or prior to the Closing of all agreements
then to be performed and all conditions then to be satisfied by any of them in connection
with the transactions contemplated hereby and by the Legal Documents.
All of the opinions, letters, certificates, instruments and other documents mentioned
above or elsewhere in this Bond Purchase Agreement shall be deemed to be in compliance with
the provisions hereof if, but only if, they are in form and substance satisfactory to the Authority,
but the approval of the Authority shall not be unreasonably withheld. Receipt of, and payment
-8-
for, the Assessment Bonds shall constitute evidence of the satisfactory nature of such as to the
Authority. The performance of any and all obligations of the City hereunder and the
performance of any and all conditions contained herein for the benefit of the Authority may be
waived by the Authority in its sole discretion.
If the City shall be unable to satisfy the conditions to the obligations of the Authority to
purchase, accept delivery of and pay for the Assessment Bonds contained in this Bond Purchase
Agreement, or if the obligations of the Authority to purchase, accept delivery of and pay for the
Assessment Bonds shall be terminated for any reason permitted by this Bond Purchase
Agreement, this Bond Purchase Agreement shall terminate, and neither the Authority nor the
City shall be under further obligation hereunder, except that the respective obligations of the City
and the Authority set forth in Section 5 and Section 6 hereof shall continue in full force and
effect.
Section 5. Expenses, The Authority shall be under no obligation to pay, and the City
shall pay (a) the cost of the preparation of the Authority Bonds, (b) the fees and disbursements of
Bond Counsel, (c) the fees and disbursements of accountants, advisers and of any other experts
or consultants retained by the City, and (d) any other expenses incident to the performance of the
City's obligations hereunder.
Section 6. Indemnification. To the extent permitted by law, the City shall indemnify
and hold harmless the Authority, and its officers, directors, employees and agents, against any
and all losses, claims, damages, liabilities, costs and expenses (including without limitation fees
and disbursements of counsel and other expenses) incurred by them or any of them in connection
with investigating or defending any loss, claim, damages, liability or any suit, action or
proceeding, joint or several, to which they or any of them may become subject, insofar as such
losses, claims, damages, liabilities, costs and expenses (or any suit, action or proceeding in
respect thereof) arise out of or are based upon the issuance and sale of the Assessment Bonds by
the City or any untrue statement or alleged untrue statement of a material fact contained in the
Official Statement or in any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact relating to the City, the Legal Documents, the
Resolutions, the District or the proceedings conducted by the City relating thereto, which is
required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. This indemnity shall be in addition
to any liability which the City may otherwise have. Additionally, to the extent permitted by law,
the City shall indemnify and hold harmless the Authority against any and all losses, claims,
damages, liabilities, costs and expenses (including without limitation fees and disbursements of
counsel and other expenses) incurred by it in connection with its indemnification of the Trustee
in accordance with the Indenture.
Section 7. Benefits: Survival. This Bond Purchase Agreement is made solely for the
benefit of the City, the Authority and the Underwriter, and no other person shall acquire or have
any right hereunder or by virtue hereof. All of the City's representations, warranties and
agreements contained in this Bond Purchase Agreement shall remain operative and in full force
and effect regardless of (a) any investigations made by or on behalf of the Authority, or (b)
delivery of and payment for the Assessment Bonds pursuant to this Agreement. The agreements
contained in this Section and in Section 6 shall survive any termination of this Bond Purchase
Agreement.
Section 8. Counteruarts, This Bond Purchase Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the same instrument.
-9-
Section 9. Governing Law. The validity, interpretation and performance of this Bond
Purchase Agreement shall be governed by the laws of the State.
-ia
IN WITNESS WHEREOF, the Authority and the City have each caused this Bond
Purchase Agreement to be executed by their duly authorized officers all as of the date first above
written.
TUSTIN PUBLIC FINANCING
AUTHORITY
CITY OF TUSTIN
By
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EXHIBIT A
Maturity Date Principal Interest Maturity Date Principal Interest
(September 2) Amt Rate (September 2) Amt $=
$37,829,000
TUSTIN PUBLIC FINANCING AUTHORITY
REVENUE BONDS
(Tustin Ranch)
Series A
BOND PURCHASE AGREEMENT
1995
City of Tustin
300 Centennial Way
Tustin, California 92680
Tustin Public Financing Authority
c/o City of Tustin
300 Centennial Way
Tustin, California 92680
Ladies and Gentlemen:
PaineWebber Incorporated (the "Underwriter") offers to
enter into this Purchase Agreement with the Tustin Public Financing
Authority (the "Authority") with regard to the purchase and sale of
the Bonds described herein, which will be binding upon the
Authority and the Underwriter upon the Authority's acceptance
hereof. All capitalized terms not otherwise defined herein shall
have the meanings prescribed in the Indenture of Trust (defined
below).
1. Purchase. Sale and Delivery of the Bonds.
(a) Upon the terms and conditions and upon the
basis of the representations, warranties and agreements hereinafter
set forth, including the simultaneous purchase of the Local
Obligations by the Authority pursuant to a separate bond purchase
agreement pertaining thereto, the Underwriter hereby agrees to
purchase from the Authority and the Authority agrees to sell to the
Underwriter all (but not less than all) of the Authority's
$37,892,000 aggregate principal amount of Revenue Bonds, Series A
(the "Bonds"), at the aggregate purchase price of $
(being the principal amount of the Bonds plus accrued interest from
, 1995 until the Closing Date, less an Underwriter's
discount of $ and less original issue discount of
$ ). The Bonds will have the maturities and shall bear
interest as set forth in "Exhibit All hereto. The Bonds will be
subject to redemption and such other terms as set forth in the
Indenture of Trust (defined below), and shall be issued in
book -entry only form.
SF2-37734.1 4OMS7.SS4-11/12/95
(b) The Bonds shall be issued and secured under the
provisions of a resolution (the "Resolution") adopted by the
Authority authorizing the issuance of the Bonds, and an Indenture
of Trust, by and between the Authority and State Street Bank and
Trust Company of California, N.A. (the "Trustee"), dated as of
, 1995, relating to the Bonds (the "Indenture"), and
shall be as described in the Indenture. The Authority is
purchasing the Local Obligations from the City and selling the
Bonds to the Underwriter as authorized by the Marks -Roos Local Bond
Pooling Act of 1985, constituting Section 6584 gt sea. of the
California Government Code (the "JPA Act"). The City has approved
and issued the Local Obligations pursuant to the Refunding Act of
1984 for 1915 Improvement Act Bonds (the "Refunding Law"), and a
Fiscal Agent Agreement, by and between the City and State Street
Bank and Trust Company of California, N.A. (the "Fiscal Agent"),
dated as of , 1995, relating to the Local Obligations
(the "Fiscal Agent Agreement"). The Local Obligations are
described in "Exhibit B" hereto.
The proceeds of the Bonds shall be applied (i) to
establish the Reserve Fund (as defined and described in the
Indenture and (ii) to purchase the Local Obligations. The proceeds
of the Local Obligations shall be applied (iii) to refund certain
obligations of the City (the "Refunded Bonds") as described in the
Official Statement, and (iv) to pay the cost of issuing the Local
Obligations and the Bonds.
(c) The Underwriter agrees to offer all the Bonds
to the public initially at the prices (or yields) set forth on the
cover pages of the Official Statement of the Authority pertaining
to the Bonds, dated , 1995 (the Official Statement,
together with all appendices thereto, and with such changes therein
and supplements thereto as are consented to in writing by the
Authority and the Underwriter, are herein called the "Official
Statement"). Subsequent to the initial public offering of the
Bonds, the Underwriter reserves the right to change the public
offering prices (or yields) as it deems necessary in connection
with the marketing of the Bonds. The Bonds may be offered and sold
to certain dealers at prices lower than such initial public
offering prices. "Public Offering" shall include an offering to a
representative number of institutional investors or registered
investment companies, regardless of the number of such investors to
which the Bonds are sold.
(d) The Authority shall deliver to the Underwriter
ten (10) copies of the Official Statement manually executed on
behalf of the Authority by the President of the Authority. The
Authority shall also deliver a sufficient number of copies of the
Official Statement to enable the Underwriter to distribute a single
copy of each Official Statement to any potential customer of the
Underwriter requesting an Official Statement during the time period
beginning when the Official Statement becomes available and ending
on the End Date (defined below). The Authority shall deliver these
copies to the Underwriter within seven (7) business days after the
sF2-37734.1 2 40879-57344-11/12195
execution of this Purchase Agreement and in sufficient time to
accompany or precede any sales confirmation that requests payment
from any customer of the Underwriter. The Underwriter shall inform
the Authority in writing of the End Date, and covenants to file the
Official Statement with a nationally recognized municipal
securities information repository ("NRMSIR") on a timely basis.
"End Date" as used herein is that date which is the
earlier of:
(a) ninety (90) days after the end of the
underwriting period (as defined in SEC Rule 15c2-12 adopted by the
Securities and Exchange Commission on June 28, 1989 ("Rule
15c2-1211); or
available from
days after the
ends.
(b) the time when the Official Statement becomes
a NRMSIR, but in no event less than twenty-five (25)
underwriting period (as defined in Rule 15c2-12)
Pursuant to a resolution of the Authority adopted on
1995, the Authority has authorized the use of the
Official Statement in connection with the public offering of the
Bonds. The Authority also has consented to the use by the
Underwriter prior to the date hereof of the Preliminary Official
Statement of the Authority dated , 1995, relating to the
Bonds in connection with the public offering of the Bonds (which,
together with all appendices thereto, is herein called the
"Preliminary Official Statement"). An authorized officer of the
Authority and of the City have certified to the Underwriter on
behalf of the Authority and the City that such Preliminary Official
Statement was deemed to be final as of its date for purposes of
Rule 15c2-12, with the exception of certain final pricing and
related information referred to in Rule 15c2-12. The Underwriter
has distributed a single copy of each Preliminary Official
Statement to potential customers on request.
(e) At 9:00 A.M., California time, on ,
1995, or at such other time or on such earlier or later business
day as shall have been mutually agreed upon by the City, the
Authority and the Underwriter (the "Closing Date"), the Authority
will deliver (i) the Bonds to The Depository Trust Company ("DTC")
in New York, New York, and (ii) the closing documents hereinafter
mentioned at the offices of Jones Hall Hill & White, A Professional
Corporation, San Francisco, California ("Bond Counsel"), or such
other place to be mutually agreed upon by the City, the Authority
and the Underwriter, and the City shall deliver the Local
Obligations to the Authority at the office of Bond Counsel. The
Authority will accept such delivery from the City, and the
Underwriter, subject to the provisions of this Purchase Agreement,
will accept such delivery from the Authority. The Underwriter will
pay the purchase price of the Bonds as set forth in Section 1(a)
hereof by wire transfer of immediately available funds, which
payment will satisfy the Authority's obligation to pay the purchase
sF2-37734.1 3 4M79 -57 -M -11/12M
price of the Local Obligations to the City pursuant to Section 1(a)
hereof. The date of this payment and delivery, together with the
delivery of the aforementioned documents, is herein called the
"Closing Date."
2. Representations Warranties and Covenants of the
Authority. The Authority represents, warrants and covenants to the
City and the Underwriter that:
(a) The Authority is a joint powers authority, duly
organized and existing under the laws of the State, including the
Joint Exercise of Powers Act (Section 6500 gt =. of the
California Government Code), with full right, power and authority
to adopt, enter into, execute and deliver this Purchase Contract
and to perform its obligations thereunder.
(b) By all necessary official action, the Authority
has duly authorized and approved the execution and delivery of, and
the performance by the Authority of the obligations on its part
contained in this Purchase Contract, and has approved the use by
the Underwriter of the Preliminary Official Statement and the
Official Statement and, as of the date hereof, such authorizations
and approvals are in full force and effect and have not been
amended, modified or rescinded. When executed and delivered by the
parties thereto, this Purchase Agreement and the Indenture will
constitute the legally valid and binding obligations of the
Authority enforceable upon the Authority in accordance with their
respective terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
or equitable principles relating to or affecting creditors rights
generally. The Authority has complied, and will at the Closing be
in compliance in all respects, with the terms of this Purchase
Agreement.
(c) The Preliminary Official Statement provided to
the Underwriter has been deemed final by the Authority, as required
by Rule 15c2-12. As of the date thereof and at all times
subsequent thereto up to and including the End Date, the
information contained in the Official Statement was and will be
complete. The information contained in the Official Statement is
true and correct in all material respects and such information does
not contain any untrue or misleading statement of a material fact
or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.
(d) Until the End Date, if any event shall occur of
which the Authority is aware, as a result of which it may be
necessary to supplement the Official Statement in order to make the
statements contained in the Official Statement, in light of the
circumstances existing at such time, not misleading, the Authority
shall forthwith notify the Underwriter of any such event of which
it has knowledge and shall cooperate fully in furnishing any
information available to it for any supplement to the Official
sae -37734.1 4 4M79-57-SS4-1tnan5
Statement necessary, in the Underwriter's opinion, so that the
statements therein as so supplemented will not be misleading in the
light of the circumstances existing at such time;
(e) After the Closing and until the End Date
(i) the Authority will not adopt any amendment of or supplement to
the Official Statement to which the Underwriter shall object in
writing or which shall be disapproved by counsel for the
Underwriter, and (ii) if any event relating to or affecting the
Authority shall occur as a result of which it is necessary, in the
opinion of counsel for the Underwriter, to amend or supplement the
Official Statement in order to make the Official Statement not
misleading in the light of the circumstances existing at the time
it is delivered to an initial purchaser of the Bonds, the Authority
will forthwith prepare and furnish to the Underwriter a reasonable
number of copies of an amendment of or supplement to the Official
Statement (in form and substance satisfactory to counsel for the
Underwriter) which will amend or supplement the Official Statement
so that it will not contain an untrue statement of a material fact
necessary in order to make the statements therein, in the light of
the circumstances existing at the time the Official Statement is
delivered to an initial purchaser of the Bonds, not misleading.
The costs of preparing any necessary amendment or supplement to the
Official Statement shall be borne by the City and the Authority.
For the purposes of this section the Authority will furnish such
information with respect to itself as the Underwriter may from time
to time request.
(f) At the time of the Closing, there shall not
have been any material adverse changes in the financial condition
of the Authority.
(g) As of the time of acceptance hereof and as of
the time of the Closing, except as otherwise disclosed in the
Official Statement, the Authority is not and will not be in breach
of or in default under any applicable constitutional provision, law
or administrative rule or regulation of the State or the United
States, or any applicable judgment or decree or any indenture, loan
agreement, bond, note, resolution, ordinance, agreement or other
instrument to which the Authority is a party or is otherwise
subject, and no event has occurred and is continuing which, with
the passage of time or the giving of notice, or both, would
constitute a default or event of default under any such instrument
which breach, default or event could have an adverse effect on the
Authority's ability to perform its obligations under this Purchase
Agreement; and, as of such times, except as disclosed in the
Official Statement, the authorization, execution and delivery of
this Purchase Agreement and the Indenture and compliance by the
Authority with the provisions thereof and hereof do not and will
not conflict with or constitute a breach of or default under any
applicable constitutional provision, law or administrative rule or
regulation of the State or the United States or any applicable
judgment, decree, license, permit, indenture, loan agreement, bond,
note, resolution, ordinance, agreement or other instrument to which
SF2-37734.1 5 40679-57-SS4-11/12/95
the Authority (or any of its officers in their respective
capacities as such) is subject, or by which it or any of its
properties is bound, nor will any such authorization, execution,
delivery or compliance result in the creation or imposition of any
lien, charge or other security interest or encumbrance of any
nature whatsoever upon any of its assets or properties or under the
terms of any such law, regulation or instrument except as provided
in this Purchase Agreement.
(h) (1) As of the time of acceptance hereof and the
Closing, except as disclosed in the Official Statement, there is no
action, suit, proceeding, inquiry or investigation, at law or in
equity, before or by any court, government agency, public board or
body, pending, or to the best knowledge of the Authority threatened
against the Authority:
(i) in any way questioning the corporate
existence of the Authority or the titles of the officers of the
Authority to their respective offices;
(ii)- affecting, contesting or seeking to
prohibit, restrain or enjoin the issuance or delivery of any of the
Bonds, or the payment or collection of any amounts pledged or to be
pledged to pay the principal of and interest on the Bonds, or in
anyway contesting or affecting the validity of this Purchase
Agreement, the Indenture, the Bonds and such other documents
requested to be issued by the Authority in connection with the
issuance of the Bonds (collectively, the "Authority Documents") or
the consummation of the transactions on the part of the Authority
contemplated thereby, or contesting the exclusion of the interest
on the Bonds from taxation or contesting the powers of the
Authority or its authority to issue and sell the Bonds and to
pledge the payments on the Local Obligations for repayment thereof;
(iii) which may result in any material
adverse change relating to the financial condition of the
Authority;
(iv) contesting the completeness or
accuracy of the Preliminary Official Statement or the Official
Statement or any supplement or amendment thereto or asserting that
the Preliminary Official Statement or the Official Statement
contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary
to make the statements therein, in light of all the circumstances
under which they were made, not misleading; or
(v) challenging the ability of the
Authority to sell the Bonds to the Underwriter, or to purchase the
Local Obligations from the City.
(2) To the best knowledge of the Authority,
there is no basis for any action, suit, proceeding, inquiry or
M-37734.1 6 4OMS7ss4-11/12195
investigation of the nature described in clauses (i) through (v)
above.
(i) All authorizations, approvals, licenses,
permits, consents and orders of or filings with any governmental
authority, legislative body, board, agency or commission having
jurisdiction in the matters which are required for the due
authorization of, which would constitute a condition precedent to
or the absence of which would adversely affect the due performance
by the Authority of its obligations in connection with, the
Authority Documents have been duly obtained or made, except as may
be required under the Blue Sky or securities laws of any state in
connection with the offering and sale of the Bonds.
(j) The Authority will furnish such information,
execute such instruments and take such other action in cooperation
with the Underwriter as the Underwriter may reasonably request in
order for the Underwriter to qualify the Bonds for offer and sale
under the "blue sky" or other securities laws and regulations of
such states and other jurisdictions of the United States as the
Underwriter may designate; provided, however, the Authority shall
not be required to register as a dealer or a broker of securities
or consent to the jurisdiction of any State of the United States,
other than the State of California;
(k) Any certificate signed by any authorized
officer of the Authority and delivered to the Underwriter shall be
deemed to be a representation and warranty by the Authority to the
Underwriter as to the statements made therein.
(1) As of the time of acceptance hereof and as of
the Closing Date, except as otherwise disclosed in the Official
Statement, the Authority has complied with the filing requirements
of Section 6503.5 of the Joint Exercise of Powers Act.
(m) The Authority is not in default, nor has been
in default at any time, as to the payment of principal or interest
with respect to an obligation issued by the Authority or with
respect to an obligation guaranteed by the Authority as guarantor.
3. Representations Warranties and Agreements of the
City. The City hereby represents and warrants to and agrees with
the Authority and the Underwriter that:
(a) The City is a California general law city, duly
organized and validly existing pursuant to the Constitution and
laws of the State of California;
(b) The City has, and at the Closing Date will
have, full legal right, power and authority (i) to execute, deliver
and perform its obligations under the Fiscal Agent Agreement and
this Purchase Agreement and to carry out all transactions
contemplated hereby and thereby, (ii) to adopt the resolutions and
enter into the Fiscal Agent Agreement and the other authorizing
SF2-37734.1 7 40679-57ss4-11/12/95
documents necessary for the issuance of the Local Obligations,
(iii) to issue, sell and deliver the Local Obligations to the
Authority as provided herein, and (iv) to carry out, give effect to
and consummate the transactions contemplated by this Purchase
Agreement, the Fiscal Agent Agreement and the Local Obligations and
any other applicable agreements relating to the issuance of the
Local Obligations, (collectively, the "City Documents");
(c) The City is, and at the Closing Date will be,
in compliance, in all respects, with the City Documents;
(d) The City Council has duly and validly approved
the City Documents the execution and delivery of the Local
Obligations and the City Documents, and the performance by the City
of its obligations contained therein, and the taking of any and all
action as may be necessary to carry out, give effect to and
consummate the transactions contemplated by each of said documents;
(e) The City is not, and at the Closing Date will
not be, in breach of or in default under any applicable law or
administrative rule or regulation of the State of California or the
United States of America, or of any department, division, agency or
instrumentality of either thereof, or under any applicable court or
administrative decree or order, or under any loan agreement, note,
resolution, indenture, contract, agreement or other instrument to
which the City is a party or is otherwise subject or bound, a
consequence of which could be to materially and adversely affect
the performance by the City under the Local Obligations or the
other City Documents;
(f) The execution and delivery of the Local
Obligations and the other City Documents or any other applicable
agreements and the other instruments contemplated by any of such
documents to which the City is a party, and compliance with the
provisions thereof, will not conflict with or constitute a breach
of or default under any applicable law or administrative rule or
regulation of the State of California or the United States of
America, or of any department, division, agency or instrumentality
of either thereof, or under any applicable court or administrative
decree or order, or under any loan agreement, note, resolution,
indenture, contract, agreement or other instrument to which the
City is a party or is otherwise subject or bound;
(g) All approvals, consents, authorizations,
elections and orders of or filings or registrations with any
governmental authority, board, agency or commission having
jurisdiction which would constitute conditions precedent to, or the
absence of which would materially adversely affect, the performance
by the City of its obligations hereunder, or under the Local
Obligations, or any other applicable agreements, have been obtained
and are in full force and effect;
(h) The Local Obligations and other applicable
agreements conform as to form and tenor to the descriptions thereof
SF2-37734.1 8 40M57 -M-11/1285
contained in the Preliminary Official Statement, and which will be
contained in the Official Statement as of the Closing Date, and
when delivered to and paid for by the Authority on the Closing Date
as provided herein, the Local Obligations will be validly issued
and outstanding;
(i) The reassessments constituting the security for
the Local Obligations have been duly and lawfully levied under and
pursuant to the Refunding Law and such reassessments constitute
valid and legally binding liens on the properties on which they
have been levied;
(j) Other than as described in the Official
Statement, there are no outstanding assessment liens against any of
the properties within the Reassessment District No. 95-1 (the
"Reassessment District") which are senior to the reassessment liens
ref erred to in paragraph ( i) hereof, and the City has no present
intention of conducting further proceedings leading to the levying
of additional assessments against any of the properties within the
Reassessment District except as described in the Preliminary
Official Statement;
(k) The Preliminary Official Statement provided to
the Underwriter has been deemed final by the City, as required by
Rule 15c2-12. As of the date thereof and at all times subsequent
thereto up to and including the End Date, the information contained
in the Official Statement was and will be complete. The
information contained in the Official Statement is true and correct
in all material respects and such information does not contain any
untrue or misleading statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(1) Until the End Date, if any event shall occur of
which the City is aware, as a result of which it may be necessary
to supplement the Official Statement in order to make the
statements contained in the Official Statement, in light of the
circumstances existing at such time, not misleading, the City shall
forthwith notify the Underwriter of any such event of which it has
knowledge and shall cooperate fully in furnishing any information
available to it for any supplement to the Official Statement
necessary, in the Underwriter's opinion, so that the statements
therein as so supplemented will not be misleading in the light of
the circumstances existing at such time;
(m) After the Closing and until the End Date
(i) the City will not adopt any amendment of or supplement to the
Official Statement to which the Underwriter shall object in writing
or which shall be disapproved by counsel for the Underwriter, and
(ii) if any event relating to or affecting the City shall occur as
a result of which it is necessary, in the opinion of counsel for
the Underwriter, to amend or supplement the Official Statement in
order to make the Official Statement not misleading in the light of
SF2-37734.1 9 40679-57-SS4-11/12/95
the circumstances existing at the time it is delivered to an
initial purchaser of the Bonds, the City will forthwith prepare and
furnish to the Underwriter a reasonable number of copies of an
amendment of or supplement to the Official Statement (in form and
substance satisfactory to counsel for the Underwriter) which will
amend or supplement the Official Statement so that it will not
contain an untrue statement of a material fact necessary in order
to make the statements therein, in the light of the circumstances
existing at the time the Official Statement is delivered to an
initial purchaser of the Bonds, not misleading. The costs of
preparing any necessary amendment or supplement to the Official
Statement shall be borne by the City and the Authority. For the
purposes of this section the City will furnish such information
with respect to itself as the Underwriter may from time to time
request.
(n) The Fiscal Agent Agreement and all other
documents providing for the issuance of the Local Obligations will
create a valid pledge of, lien upon and security interest in the
unpaid reassessments in the Reassessment District and the interest
thereon and the moneys in all funds and accounts established
pursuant to therein, including the investments thereof, subject in
all cases to the provisions permitting the application thereof for
the purposes and on the terms and conditions set forth therein;
(o) No action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court,
regulatory agency, public board or body is pending, or threatened
in any way, affecting the existence of the City or the titles of
its officers to their respective offices or seeking to restrain or
to enjoin the issuance, sale or delivery of the Local Obligations,
the application of the proceeds thereof, or the collection or
application of reassessments pledged or to be pledged to pay the
principal of and interest in the Local Obligations, or the pledge
thereof, or in any way contesting or affecting the validity or
enforceability of the Local Obligations and other City Documents,
or any other applicable agreements, or any action of the City
contemplated by any of said documents, or in any way contesting the
completeness or accuracy of the Preliminary Official Statement or
the Official Statement or the powers of the City or its authority
with respect to the Local Obligations and other City Documents, or
any other applicable agreements, or any action of the City
contemplated by any of said documents, or which would adversely
affect the exemption of interest paid on the Local Obligations from
federal income taxation or California personal income taxation, nor
to the knowledge of the City is there any basis therefor;
(p) The City will furnish such information, execute
such instruments and take such other action in cooperation with the
Underwriter as the Underwriter may reasonably request in order for
the Underwriter to qualify the Bonds for offer and sale under the
"blue sky" or other securities laws and regulations of such states
and other jurisdictions of the United States as the Underwriter may
designate; provided, however, the City shall not be required to
sF2-37734.1 10 40879-57ss4-11/12195
register as a dealer or a broker of securities or consent to the
jurisdiction of any State of the United States, other than the
State of California;
(q) Any certificate signed by any authorized
official of the City authorized to do so shall be deemed a
representation and warranty by the City to the Underwriter as to
the statements made therein;
(r) During the period from the date hereof until
the Closing Date, the City agrees to furnish the Underwriter with
copies of any documents it files with any regulatory authority
which are requested by the Underwriter;
(s) The City will agree to notify the Underwriter
prior to any reapportionment of reassessments to the end that they
will be approved only if security is not reduced or impaired;
(t) The City is not in default, nor has the City
been in default at any time, as to the payment of principal or
interest with respect to an obligation issued by the City or with
respect to an obligation guaranteed by the City as guarantor.
(u) The City will undertake, pursuant to the Fiscal
Agent Agreement and the Continuing Disclosure Agreement, to provide
certain annual financial information and information about the
property in the Reassessment District, together with notices of the
occurrence of certain events, if material. A copy of the
Continuing Disclosure Agreement is set forth in Appendix F of the
Preliminary Official Statement and will also be set forth in the
Official Statement, and the specific nature of the information to
be contained in the Annual Report or the notices of material events
is set forth in the Continuing Disclosure Agreement.
4. Conditions to the Obligations of the Underwriter.
The obligations of the Underwriter to accept delivery of and pay
for the Bonds on the Closing Date shall be subject, at the option
of the Underwriter, to the accuracy in all material respects of the
representations and warranties on the part of the City and
Authority contained herein, as of the date hereof and as of the
Closing Date, to the accuracy in all material respects of the
statements of the officers and other officials of the City and
Authority and other persons and entities made in any certificates
or other documents furnished pursuant to the provisions hereof, to
the performance by the City and the Authority of its obligations to
be performed hereunder at or prior to the Closing Date and to the
following additional conditions:
(a) At the Closing Date, the Indenture and any
other applicable agreements shall be in full force and effect, and
shall not have been amended, modified or supplemented, except as
may have been agreed to in writing by the Underwriter, and there
shall have been taken in connection therewith, with the issuance of
the Bonds and the Local Obligations and with the transactions
sF2•37134.1 11 4W7947 -SM -11/12M5
contemplated thereby and by this Purchase Agreement, all such
actions as, in the opinion of Bond Counsel, shall be necessary and
appropriate;
(b) At the Closing Date, the Official Statement
shall be in form and substance satisfactory to the Underwriter, the
Authority and the City;
(c) Between the date hereof and the Closing Date,
the market price or marketability of the Bonds at the initial
offering prices shall not have been materially adversely affected,
in the judgment of the Underwriter (evidenced by a written notice
to the Authority terminating the obligation of the Underwriter to
accept delivery of and pay for the Bonds), by reason of any of the
following:
(1) Legislation introduced in or enacted (or
resolution passed) by the Congress of the United States of America
or recommended to the Congress by the President of the United
States, the Department of the Treasury, the Internal Revenue
Service, or any member of Congress, or favorably reported for
passage to either House of Congress by any committee of such House
to which such legislation has been referred for consideration, or
a decision rendered by a court established under Article III of the
Constitution of the United States of America or by the Tax Court of
the United States of America, or an order, ruling, regulation
(final, temporary or proposed), press release or other form of
notice issued or made by or on behalf of the Treasury Department or
the Internal Revenue Service of the United States of America, with
the purpose or effect, directly or indirectly, of imposing federal
income taxation upon the interest as would be received by the
holders of the Bonds or the Local Obligations;
(2) Legislation introduced in or enacted (or
resolution passed) by the Congress of the United States of America,
or an order, decree or injunction issued by any court of competent
jurisdiction, or an order, ruling, regulation (final, temporary or
proposed), press release or other form of notice issued or made by
or on behalf of the Securities and Exchange Commission, or any
other governmental agency having jurisdiction of the subject
matter, to the effect that the Bonds or the Local Obligations,
obligations of the general character of the Bonds or the Local
Obligations, including any or all underlying arrangements, are not
exempt from registration under of other requirements of the
Securities Act of 1933, as amended, or that the Indenture is not
exempt from qualification under or other requirements of the Trust
Indenture Act of 1939, as amended, or that the issuance, offering
or sale of obligations of the general character of the Bonds or the
Local Obligations, or of the Bonds, including any or all
underwriting arrangements, as contemplated hereby or by the
Official Statement or otherwise, is or would be in violation of the
federal securities laws as amended and then in effect;
sa2-37734.1 12 40879-57ss4-11/12195
(3) A general suspension of trading in
securities on the New York Stock Exchange, or a general banking
moratorium declared by Federal, State of New York or State of
California officials authorized to do so, or a war, outbreak or
escalation of hostilities, or other national calamity;
(4) The withdrawal or downgrading of any
rating of any securities of the City or the Authority by a national
rating agency;
(5) Any amendment to the federal or California
Constitution or action by any federal or California court,
legislative body, regulatory body or other authority materially
adversely affecting the tax status of the City or the Authority,
its property, income or securities (or interest thereon), the
validity or enforceability of the reassessments or the ability of
the City to issue the Local Obligations or the Authority to issue
the Bonds as contemplated by the Indenture and the Official
Statement;
(6) Any event occurring, or information
becoming known which, in the judgment of the Underwriter, makes
untrue in any material respect any statement or information
contained in the Preliminary Official Statement or the Official
Statement, or results in the Preliminary Official Statement or the
Official Statement containing any untrue statement of a material
fact or omitting to state a material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
(7) The entry of an order by a court of
competent jurisdiction which enjoins or restrains the City from
issuing permits, licenses or entitlements within the City or which
order, in the reasonable opinion of the Underwriter, otherwise
materially and adversely affects the proposed developments within
the City;
(8) Any legislation, ordinance, rule or
regulation shall be introduced in, or be enacted by any
governmental body, department or agency of the State or a decision
by any court of competent jurisdiction within the State or any
court of the United States shall be rendered which, in the
reasonable opinion of the Underwriter, materially adversely affects
the market price of the Bonds;
(9) Additional material restrictions not in
force as of the date hereof shall have been imposed upon trading in
securities generally by any governmental authority or by any
national securities exchange which restrictions materially
adversely affect the Underwriter's ability to market the Bonds; or
(10) The United States has become engaged in
hostilities which have resulted in a declaration of war or a
national emergency or there has occurred any other outbreak of
M -tea 13 4M79 -574%U -11/12M
hostilities or a national or international calamity or crisis,
financial or otherwise, the effect of such outbreak, calamity or
crisis on the financial markets of the United States, being such
as, in the reasonable opinion of the Underwriter, would affect
materially and adversely the ability of the Underwriter to market
the Bonds.
(d) On or prior to the Closing Date, the
Underwriter shall have received counterpart originals or certified
copies of the following documents, in each case satisfactory in
form and substance to the Underwriter, or shall have waived the
receipt of such documents as a condition to the Underwriter's
purchase of the Bonds:
(1) The Official Statement, executed on behalf
of the Authority and the City;
(2 ) A fully executed copy of the Indenture and
the Fiscal Agent Agreement;
(3) An approving opinion of Bond Counsel dated
the date of the Closing and substantially in the form included as
APPENDIX E, to the Official Statement, together with a letter from
such counsel, dated the date of the Closing Date and addressed to
the Underwriter, to the effect that the foregoing opinion may be
relied upon by the Underwriter to the same extent as if such
opinion were addressed to it.
(4) A supplemental opinion of Bond Counsel,
dated as of the Closing Date and addressed to the Underwriter, in
form and substance satisfactory to the Underwriter and its counsel,
to the effect that:
(a) The Authority has full power and
authority to execute, deliver and perform the Authority Documents,
and the same has been duly authorized, executed and delivered by
the Authority and constitute the binding agreement of the
Authority, are in full force and effect as of the Closing Date, and
are enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other laws
affecting enforcement of creditors rights and by the application of
equitable principles if equitable remedies are sought.
(b) The City has full power and authority
to execute, deliver and perform the City Documents, and the same
have been duly authorized, executed and delivered by the City and
constitute the legal, valid and binding obligations of the City,
are in full force and effect as of the Closing Date, and are
enforceable in accordance with their respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or
other laws affecting enforcement of creditors rights and by the
application of equitable principles if equitable remedies are
sought.
sF2-37734.1 14 40979-57-S34.11/12/95
(c) The statements contained in the
Official Statement on the cover page and under the captions
"INTRODUCTION," "THE REFUNDING PLAN," "THE SERIES A BONDS,"
"SECURITY FOR THE SERIES A BONDS," "CONCLUDING INFORMATION - Tax
Matters," "CONCLUDING INFORMATION - No Litigation" and "APPENDICES
B and E" insofar as such statements purport to summarize certain
provisions relating to the Bonds, the Indenture, the Local
Obligations, the pledge of the Revenues, the Refunding Law, the
Joint Exercise of Powers Act, the JPA Act or state and federal tax
law, fairly and accurately summarize the information presented
therein; provided that Bond Counsel need not express any opinion
with respect to any financial or statistical information contained
therein.
(d) The Bonds and the Local Obligations
are not subject to the registration requirements of the Securities
Act of 1933, as amended, and the Indenture is exempt from
qualification pursuant to the Trust Indenture Act of 1939, as
amended.
(e) The Refunded Bonds are deemed to be
paid and are no longer Outstanding within the meaning and with the
effect expressed in the documents relating to the issuance thereof,
and the assessments securing the Refunded Bonds have been
superseded and supplanted by the reassessments security the Local
Obligations, as provided for in the Refunding Law.
(f) The Local Obligations representing
the unpaid assessments were validly issued under the provisions of
the Refunding Law and the Fiscal Agent Agreement;
(g) The Local Obligations constitute
valid and binding limited obligations of the City, payable solely
from the proceeds of the unpaid reassessments, subject to
bankruptcy, insolvency, reorganization, arrangement, moratorium and
other similar law affecting creditor's rights, to the application
of equitable principles and to the exercise of judicial discretion
and appropriate cases and to - the limitations on legal remedies
against general law cities in the State of California; and
(h) Interest on the Local Obligations is
excluded from gross income for federal income tax purposes, is
exempt from California personal income taxes and is not a specific
preference item for purposes of the federal individual or corporate
alternative minimum taxes.
(5) An opinion, dated as of the Closing Date
and addressed to the Underwriter, of counsel to the Authority, in
form and substance acceptable to the Underwriter and its counsel,
to the effect that:
(i) the Authority is a joint powers
authority, duly organized and validly existing pursuant to the laws
of the State of California (including the Joint Exercise of Powers
sF2-37734.1 15 4M79 -57-,v4-11/12/95
Act) with full legal right, power and authority to issue the Bonds
and purchase the Local Obligations and to perform all of its
obligations under this Purchase Agreement, the Bonds the Authority
Documents;
(ii) the preparation and distribution of
the Preliminary Official Statement and the Official Statement and
this Purchase Agreement have been duly approved by the Authority;
(iii) this Purchase Agreement, the Bonds
and all other Authority Documents constitute the legal, valid and
binding obligations of the Authority enforceable against the
Authority in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights in general and to
the application of equitable principles if equitable remedies are
sought;
(iv) no action, suit, proceeding, inquiry
or investigation, at law or in equity, before or by any court,
regulatory agency, public board or body is pending or threatened in
any way affecting the existence of the Authority or the titles of
its officers to their respective offices, or seeking to restrain or
to enjoin the issuance, sale or delivery of the Bonds or the
application of the proceeds thereof, or in any way contesting or
affecting the validity or enforceability of the Bonds, this
Purchase Agreement or any other Authority Document or any action of
the Authority contemplated by any of said documents, or in any way
contesting the purchase of the Local Obligations or the
completeness or accuracy of the Preliminary Official Statement or
the Official Statement or the powers of the Authority or its
authority with respect to this Purchase Agreement or any other
applicable agreement, or any action on the part of the Authority
contemplated by any of said documents, nor is there any basis
therefor;
(v) the Authority is not in breach of or
in default under any applicable law or administrative rule or
regulation of the State of California or the United States of
America,. or of any department, division, agency or instrumentality
of either thereof, or under any applicable court or administrative
decree or order, or under any loan agreement, note, resolution,
indenture, contract, agreement or other instrument to which the
Authority is a party or is otherwise subject or bound, a
consequence of which could be to materially and adversely affect
the performance by the Authority under the Bonds, this Purchase
Agreement or any other Authority Document as the case may be;
(vi) the execution and delivery of the
Bonds, this Purchase Agreement or any other applicable agreements
and the other instruments contemplated by any of such documents to
which the Authority is a party, and compliance with the provisions
of each thereof, will not conflict with or constitute a breach of
or default under any applicable law or administrative rule or
SP2-37734.1 16 4M79-57-Ss4-11/12/"
regulation of the State of California or the United States of
America, or of any department, division, agency or instrumentality
of either thereof, or under any applicable court or administrative
decree or order, or under any loan agreement, note, ordinance,
resolution, indenture, contract, agreement or other instrument to
which the Authority is a party or is otherwise subject or bound;
(vii) all approvals, consents,
authorizations, elections and orders of or filings or registrations
with any governmental authority, board, agency or commission having
jurisdiction which would constitute a condition precedent to, or
the absence of which would materially adversely affect, the
performance by the Authority of its obligations hereunder, or under
the Bonds or any other Authority Document, have been obtained and
are in full force and effect; and
(viii) as of the Closing Date, the
information contained in the Official Statement under the captions
"INTRODUCTION," "THE AUTHORITY" and "CONCLUDING INFORMATION - No
Litigation," (excluding therefrom statistical and financial data)
is true and correct and such information does not contain any
untrue statement of a material fact required to be stated in the
Official Statement or omit to state any fact necessary to make the
statements made therein, in light of the circumstances under which
they are made, not misleading in any material respect;
(6) An opinion, dated as of the Closing Date
and addressed to the Underwriter, of the City Attorney of the City,
in form and substance acceptable to the Underwriter and its
counsel, to the effect that:
(i) the City is a general law city, duly
organized and validly existing pursuant to the Constitution and the
laws of the State of California with full legal right, power and
authority to issue the Local Obligations and to perform all of its
obligations under this Purchase Agreement, the Fiscal Agent
Agreement, the Local Obligations and all other applicable
agreements;
(ii) the preparation and distribution of
the Preliminary Official Statement and the Official Statement and
this Purchase Agreement have been duly approved by the City;
(iii) this Purchase Agreement, the Local
Obligations and all other City Documents constitute the legal,
valid and binding obligations of the City enforceable against the
City in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights in general and to
the application of equitable principles if equitable remedies are
sought;
(iv) no action, suit, proceeding, inquiry
or investigation, at law or in equity, before or by any court,
SF2-3'n34.1 17 40679-57-SS4-11112195
regulatory agency, public board or body is pending or threatened in
any way affecting the existence of the City or the titles of its
officers to their respective offices, or seeking to restrain or to
enjoin the issuance, sale or delivery of the Fiscal Agent
Agreement, Local Obligations or the application of the proceeds
thereof, or the collection or application of the assessments to pay
the principal of and interest on the Local Obligations, or in any
way contesting or affecting the validity or enforceability of the
Fiscal Agent Agreement, the Local Obligations, this Purchase
Agreement or any other City Document or any action of the City
contemplated by any of said documents, or in any way contesting the
completeness or accuracy of the Preliminary Official Statement or
the Official Statement or the powers of the City or its authority
with respect to this Purchase Agreement or any other applicable
agreement, or any action on the part of the City contemplated by
any of said documents, nor is there any basis therefor;
(v) the City is not in breach of or in
default under any applicable law or administrative rule or
regulation of the State of California or the United States of
America, or of any department, division, agency or instrumentality
of either thereof, or under any applicable court or administrative
decree or order, or under any loan agreement, note, resolution,
indenture, contract, agreement or other instrument to which the
City is a party or is otherwise subject or bound, a consequence of
which could be to materially and adversely affect the performance
by the City under the Fiscal Agent Agreement, the Local
Obligations, this Purchase Agreement or any other City Document as
the case may be;
(vi) the execution and delivery of the
Fiscal Agent Agreement, the Local Obligations, this Purchase
Agreement or any other applicable agreements and the other
instruments contemplated by any of such documents to which the City
is a party, and compliance with the provisions of each thereof,
will not conflict with or constitute a breach of or default under
any applicable law or administrative rule or regulation of the
State of California or the United States of America, or of any
department, division, agency or instrumentality of either thereof,
or under any applicable court or administrative decree or order, or
under any loan agreement, note, ordinance, resolution, indenture,
contract, agreement or other instrument to which the City is a
party or is otherwise subject or bound;
(vii) all approvals, consents,
authorizations, elections and orders of or filings or registrations
with any governmental authority, board, agency or commission having
jurisdiction which would constitute a condition precedent to, or
the absence of which would materially adversely affect, the
performance by the City of its obligations hereunder, or under the
Local Obligations or any other applicable agreements, have been
obtained and are in full force and effect; and
SF2-37734.1 is 40979-5784-11112/95
(viii) as of the Closing Date, the
information contained in the Official Statement under the captions
"INTRODUCTION," "THE REFUNDING PLAN," "CONSOLIDATED REASSESSMENT
DISTRICT NO. 95-1," "THE CITY" and "CONCLUDING INFORMATION - No
Litigation," (excluding therefrom statistical and financial data)
is true and correct and such information does not contain any
untrue statement of a material fact required to be stated in the
Official Statement or omit to state any fact necessary to make the
statements made therein, in light of the circumstances under which
they are made, not misleading in any material respect;
(7) An opinion of Orrick, Herrington &
Sutcliffe, counsel for the Underwriter, dated as of the Closing
Date and addressed to the Underwriter, in a form and substance
satisfactory to the Underwriter; provided, that in rendering such
opinion, such counsel may rely on the opinions of Bond Counsel, the
City Attorney and counsel to the Authority;
(8) A certificate, dated as of the Closing
Date and signed by a duly authorized official of the Authority,
ratifying the use and distribution by the Underwriter of the
Preliminary Official Statement and the Official Statement in
connection with the offering and sale of the Bonds, and certifying
that (i) the representations and warranties of the Authority
contained herein are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date; (ii) no event has occurred since the date of the
Official Statement affecting the Authority which should be
disclosed in the Official Statement for the purposes for which it
is to be used in order to make the statements and information
contained in the Official Statement not misleading in any material
respect, and the Bonds and other applicable agreements conform as
to form and tenor to the descriptions thereof contained in the
Indenture and the Official Statement; (iii) the Authority has
complied with all the agreements and has satisfied all the
conditions on its part to be performed or satisfied under this
Purchase Agreement at and prior to the Closing Date; and (iv) as of
the Closing Date, the information contained in the Official
Statement under the captions "INTRODUCTION" and "THE AUTHORITY" is
true and correct and such information does not contain any untrue
statement of a material fact required to be stated in the Official
Statement or omit to state any fact necessary to make the
statements made therein, in light of the circumstances under which
they are made, not misleading in any material respect;
(9) A certificate, dated as of the Closing
Date and signed by a duly authorized official of the City,
ratifying the use and distribution by the Underwriter of the
Preliminary Official Statement and the official Statement in
connection with the offering and sale of the Bonds, and certifying
the (i) the representations and warranties of the City contained
herein are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing
Date; (ii) no event has occurred since the date of the Official
SF2-37734.1 19 40979-57SS4-11/12/95
Statement affecting the City which should be disclosed in the
Official Statement for the purposes for which it is to be used in
order to make the statements and information contained in the
Official Statement not misleading in any material respect, and the
Local Obligations and other applicable agreements conform as to
form and tenor to the descriptions thereof contained in the
Official Statement; (iii) the City has complied with all the
agreements and has satisfied all the conditions on its part to be
performed or satisfied under this Purchase Agreement at and prior
to the Closing Date; and (iv) as of the Closing Date, the
information contained in the Official Statement under the captions
"INTRODUCTION," THE "REFUNDING PLAN," "REASSESSMENT DISTRICT NO.
95-1," "THE CITY" and "APPENDIX C" (excluding therefrom statistical
and financial data) is true and correct and such information does
not contain any untrue statement of a material fact required to be
stated in the Official Statement or omit to state any fact
necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading in any
material respect;
(10) A certificate dated the Closing Date and
addressed to the Underwriter, from Muni Financial Services, Inc. in
substantially the form attached hereto as "Exhibit C";
(11) Two counterpart originals or copies
certified by an authorized officer of the Authority of a transcript
of all proceedings relating to the authorization, issuance, sale
and delivery of the Bonds and the Local Obligations;
(12) The opinion of counsel to the Trustee,
dated the Closing Date, addressed to the Underwriter, in form and
substance acceptable to counsel for the Underwriter substantially
to the following effect:
(i) The Trustee is a duly
organized and validly existing under the laws of
(ii) The Trustee has duly authorized the
execution and delivery of the Indenture and the Escrow Agreement.
(iii) The Indenture and the Escrow
Agreement have been duly entered into and delivered by the Trustee
and assuming due, valid and binding authorization, execution and
delivery by the other parties thereto, constitutes the legal, valid
and binding obligations of the Trustee enforceable against the
Trustee in accordance with their respecting terms, except as the
enforceability thereof may be limited by applicable bankruptcy,
insolvency or other similar laws affecting the enforcement of
creditors' rights generally, or by general principles of equity.
(iv) acceptance by
duties and obligations under the Indenture and
and compliance with provisions thereof will
the Trustee of the
the Escrow Agreement
not conflict with or
sF2-37734.1 20 40879-57-S54-11112/95
constitute a breach of or default under any law or administrative
regulation to which the Trustee is subject.
(v) All approvals, consents and orders of
any governmental authority or agency having jurisdiction in the
matter which would constitute a condition precedent to the
performance by the Trustee of its duties and obligations under the
Indenture or the Escrow Agreement have been obtained and are in
full force and effect.
(13 ) A Certificate of the Trustee, dated the
Closing Date, addressed to the Underwriter, in form and substance
acceptable to counsel for the Underwriter to the following effect:
(i) The Trustee is duly organized and
existing as a in good standing under the laws of
having the full power and authority to accept and
perform its duties under the Indenture and the Escrow Agreement;
(ii) Subject to the provisions of the
Indenture, the Trustee will apply the proceeds from the Bonds to
the purposes specified in the Indenture; and
(iii) Within the scope of its trust
obligations under the Indenture, the Trustee agrees to cooperate
with the Underwriter and its counsel, at the expense of the
Underwriter, in endeavoring to qualify the Bonds for offering and
sale under the securities or blue sky laws of such jurisdictions of
the United States as the Underwriter may request; provided,
however, that the Trustee will not be required to executed a
special or general consent to service of process or qualify as a
foreign corporation in connection with any such qualification in
any jurisdiction in which it is not now so subject.
(14) Evidence as of the Closing Date
satisfactory to the Underwriter that the Bonds have received, at a
minimum, a rating of " " from Moody's Investors Service (the
"Rating Agency") (or such other equivalent rating as the Rating
Agency shall issue), and that such ratings have not been revoked or
downgraded.
(15) Receipt of the verification report of
Grant Thornton, dated the Closing Date, and in form and substance
acceptable to the Underwriter and Counsel to the Underwriter;
(16 ) The No -Arbitrage or Tax Certif icate of the
Authority and the City in form and substance acceptable to the Bond
Counsel;
(17) Evidence that the federal tax information
Form 8038-G with respect to the Bonds and the Local Obligations has
been prepared for filing and mailed;
SF2-37134.1 21 40879-57-SS4-11/12/95
(18) Evidence that the Authority has purchased,
simultaneously with the delivery of the Bonds, the Local
Obligations; and
(19) Such additional legal opinions,
certificates, instruments and other documents as the Underwriter
may reasonably request to evidence the truth and accuracy, as of
the date hereof and as of the Closing Date, of the statements and
information contained in the Official Statement, of the Authority's
and the City's representations and warranties contained herein and
the due performance or satisfaction by the City and the Authority
at or prior to the Closing Date of all agreements then to be
performed and all conditions then to be satisfied by the City and
the Authority in connection with the transactions contemplated
hereby and by the Official Statement and the Indenture.
If any of the conditions to the obligations of the
Underwriter contained in this section or elsewhere in this Purchase
Agreement shall not have been satisfied when and as required
herein, all obligations of the Underwriter hereunder may be
terminated by the Underwriter at, or at any time prior to, the
Closing Date by written notice to the Authority and the City.
5. Expenses.
(a) The Underwriter shall be under no obligation to
pay, and the Authority and the City shall pay or cause to be paid
out of the proceeds of the Local Obligations, all expenses incident
to the performance of the City's and the Authority's obligations
hereunder, including but not limited to: the cost of printing and
delivering the Bonds to the Underwriter and the Local Obligations
to the Authority; the cost of preparation, printing (and/or word
processing and reproduction), distribution and delivery of the
resolutions, and the cost of printing (and/or word processing and
reproduction), distribution and delivery of the Preliminary
Official Statement and the Official Statement and all other
agreements and documents contemplated hereby (and drafts of any
thereof) in such reasonable quantities as requested by the
Underwriter; the fees and expenses in connection with obtaining a
delinquency report and statement of direct and overlapping bonded
debt from California Municipal Statistics, Inc.; and the fees and
disbursements of the Trustee for the Bonds, the Bond Counsel, any
accountants, financial advisors or other engineers or experts or
consultants the City or the Authority have retained in connection
with the Bonds and the Local Obligations and any out-of-pocket
disbursements of the City or the Authority to be paid from the
proceeds of the Local Obligations. All out-of-pocket expenses of
the Underwriter and the fees and disbursements of Counsel to the
Underwriter shall be paid by the Underwriter.
(b) Whether or not the Bonds are delivered to the
Underwriter as set forth herein, provided that the City and the
Authority shall not have defaulted in the performance of their
obligations under this Purchase Agreement, the City and Authority
SF2-37734.1 22 40679-57.ss4-11/12N5
shall be under no obligation to pay, and the Underwriter shall pay,
the cost of preparation of any "blue sky" or legal investment
memoranda and this Purchase Agreement, expenses to qualify the
Bonds for sale under any "blue sky" or other state securities laws
and all other expenses incurred by the Underwriter in connection
with its public offering and distribution of the Bonds (except
those specifically enumerated in paragraph (a) of this section),
including the fees and disbursements of its counsel and any
advertising expenses.
6. Indemnifications.
(a) The City and Authority hereby indemnify and
hold harmless to the fullest extent permitted by California or
other applicable law, the Underwriter, its officers, directors,
employees and agents and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Securities Act
of 1933, as amended, or of Section 20 of the Securities Exchange
Act of 1934, as amended (each an "Indemnified Person") , from and
against any and all claims, damages, losses, liabilities, costs or
expenses which any Indemnified Person may incur or which may be
claimed against any Indemnified Person by any person or entity by
reason of any untrue or misleading statement of any material fact
relating to the City or the Authority or omission or misleading
statement of any material fact relating to the City or the
Authority or the omission or alleged omission to state therein a
material fact relating to the City or the Authority necessary to
make such statements in the Preliminary Official Statement and the
Official Statement, in the light of the circumstances under which,
and as of the date when, they were made, not misleading; provided,
however, that the City shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged
untrue statement or a material fact contained in the Official
Statement, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact
necessary to make the statement therein not misleading, made
therein in reliance upon and in conformity with written information
furnished to the City or the Authority by the Underwriter
specifically for use in connection with the preparation thereof.
This indemnity agreement shall not be construed as a limitation on
any other liability which the City may otherwise have to any
Indemnified Person provided that in no event shall the City or the
Authority be obligated for double indemnification.
(b) Each Indemnified Person shall, within ten (10)
days after the receipt of notice of the commencement of any action
against it in respect of which indemnification may be sought on
account of any indemnification agreement contained herein, give
written notice of the commencement thereof to the party against
whom indemnification is sought hereunder, but the omission so as to
notify the indemnifying party of any such action shall not relieve
the indemnifying party from any liability which it or they may have
to such Indemnified Person otherwise than on account of such
sF2-37734.1 23 40979-57-%S4-11/12AS
indemnification agreement. In case such notice of any such action
shall be so given, the indemnifying party shall be entitled to
participate at its own expense in the defense or, if it so elects,
to assume the defense of the action, in which event the defense
shall be conducted by counsel chosen by such indemnifying party and
reasonably satisfactory to the Indemnified Person (or Indemnified
Persons, if more than one) who shall be defended (or defendants) in
the action, and the Indemnified Person (or Indemnified Persons, if
more than one) shall bear the fees and expenses of any additional
counsel retained by it or them; but, if the indemnifying party
shall elect not to assume the defense of the action, the
indemnifying party will reimburse the Indemnified Person (or
Indemnified Persons, if more than one) for the reasonable fees and
expenses of any counsel retained by the Indemnified Person (or
Indemnified Persons, if more than one). No party from whom
indemnification is sought shall be obligated to pay the fees or
expenses of more than one counsel for all Indemnified Persons in
any single action or series of related actions, unless, in the good
faith judgment of such counsel, such conflicts or potential
conflicts of interest exist among such Indemnified Persons as to
render representation of all such Indemnified Persons by the same
counsel undesirable. It is understood, however, that an
indemnifying party will not be liable for the legal fees and
disbursements of any Indemnified Person if the Indemnified person
agrees to settle and settles any claims, action or proceeding in
respect of which indemnification is- sought without the prior
written consent of such indemnifying party, which consent will not
be unreasonably withheld.
(c) The City or the Authority shall also reimburse
the Underwriter and its officers, directors, employees and agents
for all reasonable expenses incurred by it, including compensation
for witnesses' time and the fees and expenses of separate counsel,
in connection with the Underwriter being compelled to appear as a
witness in any action or proceeding brought against the City or the
Authority or in connection with the Bonds or the Local Obligations,
whether or not the Underwriter is named in such action or
proceedings.
(d) The indemnities and obligations of the City and
the Authority contained in this Section 6 shall survive the
termination of this Purchase Agreement.
7. Undertakings of the Authority and the City. The
Authority and the City agree, at their expense, to make available
to the Underwriter sufficient copies of their audited financial
statements, if any, certified assessment revenue projections,
certified copies of the tax reports relating to the annual levy of
the reassessments, a certification of the annual collections of the
reassessments, resolutions of the City Council with respect to the
Local Obligations, the Preliminary Official Statement and the
Official Statement and any amendments or supplements thereto and
other documents related to the Bonds or the Local Authority and
pertaining to the City, to the extent such documents are publicly
srn-37734.1 24 4OM57-SS4-11/12M
available, as may reasonably be required from time to time for the
prompt and efficient performance by the Underwriter of its
obligations hereunder (except for all or any portions of any such
documents which, by contract, are not subject to disclosure).
S. Notices. Any notices, requests, directions,
instruments or other communications required or permitted to be
given hereunder shall be in writing and shall be given when
delivered., against a receipt, or mailed certified or registered,
postage prepaid, to the City, the Authority and the Underwriter at
the respective addresses below.
If to the City:
City of Tustin
300 Centennial Way
Tustin, California 92680
Attention: Finance Director
If to the Authority:
Tustin Public Financing
Authority
c/o City of Tustin
300 Centennial Way
Tustin, California 92680
Attention: Finance Director
If to the Underwriter:
PaineWebber Incorporated
725 South Figueroa Street, 41st Floor
Los Angeles, California 90017
Attention: Municipal Finance Department
provided, however, that all such notices, requests or other
communications may be made by telephone and promptly confirmed by
writing. The City, the Authority and the Underwriter may, by
notice given as aforesaid, specify a different address for any such
notices, requests or other communications.
9. Parties in Interest. This Bond Purchase Agreement
is made solely for the benefit of the Authority, the City and the
Underwriter (including successors or assigns of the Underwriter)
and no other person shall acquire or have any right hereunder or by
virtue hereof.
10. _Survival of Representation and Warranties. The
representations and warranties of the Authority and the City set
forth in or made pursuant to this Purchase Agreement shall not be
deemed to have been discharged, satisfied or otherwise rendered
void by reason of the Closing or termination of this Purchase
Agreement and regardless of any investigations made by or on behalf
of the Underwriter (or statements as to the results of such
sF2-37734.1 25 40679-57-Ss4-11/12 S
investigations) concerning such representations and statements of
the Authority and the City and regardless of delivery of and
payment for the Bonds the Local Authority.
11. Effective. This Purchase Agreement shall become
effective and binding upon the respective parties hereto upon the
execution of the acceptance hereof by the Authority and the City
and shall be valid and enforceable as of the time of such
acceptance.
12. ADAlicable Law; Nonassignability. This Purchase
Agreement shall be governed by the laws of the State of California.
This Purchase Agreement shall not be assigned by the Authority or
the City.
13. Execution of Counterparts. This Purchase Agreement
may be executed in several counterparts, each of which shall be
regarded as an original and all of which shall constitute one and
the same.
14. No Prior Agreements. This Purchase Agreement
supersedes and replaces all prior negotiations, agreements and
understandings between the parties hereto in relation to the sale
of Bonds by the Authority and the sale of the Local Obligations by
the City and represents the entire agreement of the parties as to
the subject matter herein.
15. Partial Unenforceability. Any provision of this
Purchase Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating
the remaining provisions of this Purchase Agreement or affecting
the validity or enforceability of such provision in any other
jurisdiction.
SP2-37/34.1 26 40979-S7-SS4-11/12/93
16. Capitalized Terms. Terms with initial capital
letters not otherwise defined herein shall have the meanings
assigned to them in the Indenture.
Very truly yours,
PAINEWEBBER INCORPORATED
By:
Title:
CITY OF TUSTIN
By:
Mayor
By:
City Clerk
TUSTIN PUBLIC FINANCING AUTHORITY
By:
President
By:
Secretary
sF2-377M.1 27 4M79-37-&%-11/12/95
Maturity
(September 2)
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
EXHIBIT A
Maturity Schedule for Series A Bonds
Principal Interest Price or
Amount Rate Yield
Mandatory Sinking Fund Redemptions for Terms Bonds of 2013
2006
2007
2008
2009
2010
2011
2012
2013 (maturity)
Total Principal - $
SF2-37734.1 A-1 40679-57-&%-11/12195
EXHIBIT B
molmoMad• •: •�
sF2-37734.1 B-1 40979-37534-I 1/12/95
PaineWebber Incorporated
725 S. Figueroa Street, 41st Floor
Los Angeles, California 90017
Ladies and Gentlemen:
I, the undersigned authorized principal of Muni Financial
Services, Inc. (the "Assessment Consultant"), hereby certify as
follows:
(To Come)
Capitalized terms used in this Certificate which are not
otherwise defined shall have the meaning ascribed thereto in the
Official Statement.
Dated: CLOSING DATE, 1995
MUNI FINANCIAL SERVICES, INC.
By:
(Name)
(Title)
M-37734.1 C-1 40879-57ss4-11/12195
PRELIMINARY OFFICIAL STATEMENT DATED NOVEMBER _, 1995
In the opinion of Jona Hall Hill & White, A Professional Lw Corporation, San Francisco, California, Bond Counsel, subject, however to
certain qualifications described herein, under existing Lw, i on the Series A Bonds is excluded from gross income for
Waal income tax purposes and such interest it not an item of tax preference for purposes of the federal ahemative
minimum tax imposed on individuals and corporations, although for the Purpose of the alternative
minimum tax imposed on certain corporations, such interest is taker into account in datutnu . g certain
income and earnings. In the further opinion of Bond Counsel, such interest is exempt from
California personal income taxes. See "TAX MATTERS' herein.
NEW ISSUE - B -ENTRY ONLY RATING: Mood 's to come
(See "RATINGS'herein.;
Dated: Date of Delivery
TUSTIN PU
BLIC ffl7 MG AUTHORITY
REVENUE BONDS
(Tustin Bch)
Dare~ September 2, = shown on the inside front cover
The 537,829,000* Tustin Public Financing Authority Revenue Bonds (Tustin Ranch), Series A (the "Series A Bonds") are being issued by the Tustin
Public Finaming Authority (the "Authority") pursuant to an Indenture of Trust, dated as of 1995 (the "Indenture"), between the Authority
and State Street Bank and Test Company of California, N.A., as trustee (the "Trustee"), and�be secured as described hretein. The Bond: ars
being issued to � certain limited obligation improvement bonds (the "Assessment Bonds (95-1)") of Reassessment District No. 95-1 (the
"Reassessment District") of the City of Tustin (the "City"). The Assessment Bonds (95-1) are: being issued by the City pursuant to the Refunding
Act of 1984 for 1915 Improvement Act Bonds (the "Act") and further pursuant to a Fiscal Aunt Agrsemrerrt, dated as of 1, 1995, between
the City and State Sued bank and Trust Company of California, N.A., as fiscal agent (the "Fiscal Agent"), and will be secured by certain unpaid
reassessments levied by the City pursuant to the Act. Sec description under "THE REFUNDING PLAN" herein.
The Series A Bonds will be issued in book form, initially registered in the Dame of Cede & Co., New York, New York, as nominee of The
Depository True Company ( DTC'), New York, New York. Interest on the Series A Bonds, payable at the rates set forth below, will be payable
on September 2 and March 2 of each year, commencing Marsh 2, 1996. Purchasen will not receive certificatesg their interest in the
Series A Bonds. Individual purchases will be in principal amounts of 55,000 or in any integral multiple of $5,O�yments of principal and
interest will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants who will remit such payments to the beneficial owners
of the Series A Bonds.
The Series A Bonds will mature on September 2 in the years and in the amounts as shown on the Maturity Schedule set forth on the inside front
cover hereof. The Serio A Bonds are subject to redemption prior to maturity as set forth herein. Sec "THE SERIES A BONDS - Redemption
of the Series A Bonds" herein.
The Series A Bonds ars limited obligations of the Authority. The Serio A Bonds are payable solely from Revenues of the Authority, consisting
rip mu�ly of payments roodvod by t#te Authtority from the City in connection with the Assessment Bonds (95-1), which payments are secured by
herr: of tread rassessmer►ts as more fully described herein. Payments under the Assessment Bonds (95-1) are calculated to be sufficient to peanut
the Authority w pay the principal of, premium, if any, and interest on the Series A Bonds when due. The City has determined that it will not
obligate itself to advance funds Som its treasury w cover any delinquency on the reassessments or payments on the Aasessment Bonds (95-1).
THE SERIES A BONDS ARE NOT A DEBT OF THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS,
AND NEITHER THE FAITH AND CREDIT NOR THE GENERAL TAXING POWER OF THE CITY, THE STATE OR ANY OF ITS
POLITICAL SUBDIVISIONS IS PLEDGED TO THE PAYMENT OF THE SERIES A BONDS.
The Authority is considering applying for an insurance policy to insure payment of all or a part of the principal of and interest on the Series A
Bonds. As of this date, no decision has been made on whether to apply, and no company has provided a commitment to issue such a policy
Furthermore, there can be no assurance that, if the Authority did decide to apply for insurance, such insurance would be available or cost effective.
This cover page contains information for reference only. It is not a summary of this issue. Investors must rad the entire Official Statement,
including the section entitled SPECIAL RISK FACTORS", for a discussion of special factors which should be considered, in addition to the other
matters set forth herein, in making an informed investment decision about the Series A Bonds.
The Series A Bonds are: offered, when, as and if issued and accepted by the Underwriter, subject to approval as to their validity by Jones
Hall Hill do White, A Professional Law Corporation, San Francisco, California, Bond Counsel, and subject to certain other conditions.
Certain legal matters will be passed upon for the Underwriter by its counsel, Orrick, Herrington dt Sutcliffe, San Francisco,
California, and for the Authority and the City by Rourke, Woodruff dt Spradlin, a Professional Corporation, Orange,
California. It is anticipated that the Series A Bonds will be available for delivery in book -entry form
in New York, New York, on or about December _, 1995.
Dated November .199: PaineWebber Incorporated
* Preliminary. subject to change
(Inside Cover)
MATURITY SCREDULE
$37,829,000*
TUSTIN PUBLIC FINANCING AUTHORITY
REVENUE BONDS
(Tustin Ranch)
Series A
$ Serial Bonds
Maturity Principal Interest
(,622teaber 2) Amount Rate Yield
1997
1998
1999
2000
2001
2002
2003
2004
2005
$ Term Bonds due September 2, 2013 Price: %
TUSTIN PUBLIC FINANCING AUTHORITY
and
CITY OF TUSTIN
(Orange County, California)
MEMBERS OF THE AUTHORITY COMMISSION
AND CITY COUNCIL
Jim Potts, Chair/Mayor
Tracy A. Worley, Vice Chair/Mayor Pro Tem
Thomas R. Saltarelli, Commissioner/Councilmember
Mike Doyle, Commissioner/Councilmember
Jeffery M. Thomas, Commissioner/Councilmember
AUTHORITY OFFICERS
AND CITY STAFF
William A. Huston, President/City Manager
Ronald A. Nault, Authority Treasurer/City Finance Director
Pamela Stoker, Authority Secretary/City Clerk
Tim Serlet, City Public Works Director
PROFESSIONAL SERVICES
Bond Counsel
Jones Hall Hill & White,
A Professional Law Corporation
San Francisco, California
City Attorney
Rourke, Woodruff & Spradlin,
A Professional Corporation
orange, California
Financial Advisor
Bartle Wells Associates
San Francisco, California
Assessment Engineer
Muni Financial Services, Inc.
San Francisco, California
Trustee
State Street Bank and Trust Company of
Los Angeles, California
Verification Agent
Grant Thorton
Minneapolis, Minnesota
California, N.A.
M -MSU 40MR-M-11n095
No dealer, broker, salesperson or other person has been
authorized to give any information or to make any
representations, other than as contained in this Official
Statement, and if given or made, such other information or
representations must not be relied upon as having been authorized
by the Authority or the City. This Official Statement does not
constitute an offer to sell or the solicitation of an offer to
buy, nor shall there be any sale of, the Series A Bonds by any
person in any jurisdiction in which it is unlawful for such
person to make such offer, solicitation or sale.
The information set forth herein has been obtain from the
Authority, the City, and other sources which are believed to be
reliable but is not guaranteed as to accuracy or completeness,
and is not to be construed as a representation of such by the
Authority or the City. The information and expressions of
opinion stated herein are subject to change without notice. The
delivery of this Official Statement shall not, under any
circumstances, create any implication that there has been no
change in the affairs of the Authority, the City, the
Reassessment District, or the property owner since the date
hereof.
The discussion and information herein relating to the Series
A Bonds, the Reassessment District, the Authority, and the City
do not purport to be comprehensive or definitive. All references
to the Series A Bonds are qualified in their entirety by
reference to the Indenture setting forth the terms and
descriptions thereof. The summaries and references to any code,
act, resolution or the Indenture and to other statutes and
documents in this Official Statement do not purport to be
comprehensive or definitive, and are qualified in their entirety
by reference to each statute and document.
IN CONNECTION WITH THIS BOND UNDERWRITING, THE UNDERWRITER
MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICE OF THE SERIES A BONDS DESCRIBED HEREIN AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
The Series A Bonds have not been registered with the
Securities and Exchange Commission under the Securities Act of
1933, as amended, in reliance upon an exception from the
registration requirement contained in said Securities Act of
1933. The Series A Bonds have not been registered or qualified
under the securities laws of any State.
m.0..3 ON"#- 4M&11a7As
INSERT LOCATION MAP
a -msis
MWP§657404-1 MMS
F
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . 1
THEREFUNDING PLAN . . . . . . . . . . . . . . . . . . . . . 4
ESTIMATED SOURCES AND USES . . . . . . . . . . . . . . . . . 7
Series A Bonds . . . . . . . . . . . . . . . . . . . . . 7
Assessment Bonds (95-1) . . . . . . . . . . . . . . . . 7
THE SERIES A BONDS . . . . . .8
Description of the Series A Bonds 8
Redemption of the Series A Bonds . . . . . . . . . . . . 8
Transfer and Exchange of Series A Bonds . . . . . . . . 10
Book Entry System . . . . . . . . . . . . . . . . . . . 11
Additional Authority Bonds . . . . . . . . . . . . . . . 13
Debt Service Schedule . . . . . . . . . . . . . . . . . 14
SECURITY FOR THE SERIES A BONDS . . . . . . . . . . . . . . . 15
General . . . . . . . . . . . . . . . . . . . . . . . . 15
Payments of Assessment Bonds (95-1) . . . . . . . . . . 16
Additional Assessment Bonds . . . . . . . . . . . . . . 18
Reserve Account . . . . . . . . . . . . . . . . . . 18
Covenant for Superior Court Foreclosure . . . . . . . . 19
Priority of Lien . . . . . . . . . . . . . . . . . . . . 19
BONDINSURANCE . . . . . . . . . . . . . . . . . . . . . . . 21
METHOD OF REASSESSMENT . . . . . . . . . . . . . . . . . . . 21
THE REASSESSMENT DISTRICT . . . . . . . . . . . . . . . . . . 21
General . .. . . . . . . . . . . . . . . . . . . 21
Status of Public Improvements . . . . . . . . . . . . . 21
Location and Terrain of the Reassessment District . . . 22
Land Uses and Development Status . . . . . . . . . . . . 22
Largest Landowners by Reassessment Amount . . . . . . . 24
Debt Service Coverage . . . . . . . . . . . . . . . . . 26
Delinquency History . . . . . . . . . . . . . . . . . 26
Estimated Value -to -Lien Ratios . . . . . . . . . . . . . 27
Estimated Direct and Overlapping Debt . . . . . . . . . 29
SPECIAL RISK FACTORS . . . . .31
The Series A Bonds are Limited Obligations of the
Authority . . . . . . . . . . . . . . . . . . . . . 31
The Reassessments are Not Personal Obligations of the
Property Owners . . . . . . . . . . . . . . . . . . 31
The Assessment Bonds (95-1) are Limited Obligations of
the City . . . . . . . . . . . . . . . . . . . . . 32
Bankruptcy and Foreclosure Delays . . . . . . . . 32
Existence of Undeveloped Property . . . . . . . . 34
Price Realized Upon Foreclosure . . . . . . . . . . . . 34
V24MLS i .WW57-W&11W1"
Uncertainties of Future Development . . . . . . . . . . 35
Direct and Overlapping Indebtedness . . . . . . . . . . 36
Earthquakes . . . . . . . . . . . . . . . . . . . . . . 36
Drought Conditions . . . . . . . . . . . . . . . . . . . 36
Land Values . . . . . . . . . . . . . . . . . . . . . . 37
Hazardous Substances . . . . . . . . . . . . . . . . . . 37
Endangered and Threatened Species . . . . . . . . 38
Cumulative Burden of Parity Taxes, Special Assessments
and Development Costs . . . . . . . . . . . . . . . 38
Loss of Tax Exemption . . . . . . . . . . . . . . . . . 39
Orange County Bankruptcy . . . . . . . . . . . . . . . . 39
Delays in Remittances . . . . . . . . . . . . . . . . . 45
THE AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . 45
THE CITY . . . . . . . . . . . . . . . . . . . . . . . . . . 45
CONCLUDING INFORMATION . . . . . . . . . . . . . . . .
. . . 46
Underwriting . . . . . . . . . . . . . . . . . . .
. . . 46
Legal Opinion . . . . . . . . . . . . . . . . . .
. . . 46
Tax Matters . . . . . . . . . . . . . . . . . . .
. . . 46
No Litigation . . . . . . . . . . . . . . . . . .
. . . 47
Rating . . . . . . . . . . . . . . . . . . . .
. . . 47
Financial Advisor . . . . . . . . . . . . . . . .
. . . 47
Verification of Mathematical Computations . . . .
. . . 48
Continuing Disclosure . . . . . . . . . . . . . .
. . . 48
Miscellaneous . . . . . . . . . . . . . . . . . .
. . . 49
APPENDIX A - Reassessment Diagram
APPENDIX B - Summary of Indenture and Fiscal Agent Agreement
APPENDIX C - The City of Tustin
APPENDIX D - Insurance Policy Specimen
APPENDIX E - Forms of Bond Counsel Opinions
APPENDIX F - Continuing Disclosure Agreement
svt-aost.s i i 4DM57-SS4-11 9995
$37,829,000*
TUSTIN PUBLIC FINANCING AUTHORITY
itEOENUB BONDS
(Tustin Ranch)
series A
INTRODUCTION
This Official Statement, including the cover, inside cover,
the table of contents and the Appendices, is provided to furnish
information in connection with the sale by the Tustin Public
Financing Authority (the "Authority") of its $37,829,000*
aggregate principal amount of Revenue Bonds (Tustin Ranch),
Series A (the "Series A Bonds"). The Series A Bonds will be
issued by the Authority pursuant to an Indenture of Trust, dated
as of , 1995 (the "Indenture"), between the Authority
and State Street Bank and Trust Company of California, N.A., as
trustee (the "Trustee").
The proceeds from the sale of the Series A Bonds will be
used principally to purchase certain limited obligation
improvement bonds of Reassessment District No. 95-1 [the
"Assessment Bonds (95-1)"] of the City of Tustin (the "City").
The Assessment Bonds (95-1) are being issued by the City pursuant
to the Refunding Act of 1984 for 1915 Improvement Act Bonds (the
"Act") and further pursuant to a Fiscal Agent Agreement, dated as
of , 1995 (the "Fiscal Agent Agreement"), between the
City and State Street Bank and Trust Company of California, N.A.,
as fiscal agent (the "Fiscal Agent"), and will be secured by
certain unpaid reassessments levied by the City pursuant to the
Act. The proceeds from the sale of the Assessment Bonds (95-1)
will be used principally to refund the outstanding fixed rate
improvement bonds (the "Prior Fixed Rate Bonds") of the City's
previously -formed Assessment District No. 85-1 and Assessment
District No. 86-2 (the "Prior Districts"). See "THE REFUNDING
PLAN" herein. Together, the Prior Districts include the entire
area of a mixed-use development project of the Irvine Company
known as the "Tustin Ranch".
The City is located in central Orange County, about 40 miles
southeast of Los Angeles and 80 miles north of San Diego. The
City spans approximately 11.2 square miles and adjoins the cities
of Irvine, Orange and Santa Ana, as well as unincorporated areas
of the County of Orange. As of January 1, 1995, the City's
current population was estimated at 62,500, representing an
approximate 4.5% increase from January, 1994.
* Preliminary, subject to change
sn aaox.� 1 4WW57ss4.11M7M
Reassessment District No. 95-1 (Tustin Ranch) (the
"Reassessment District") is bounded generally by the Santa Ana
Freeway (Interstate 5), Browning Avenue and Tustin Ranch Road,
Santiago Canyon Road, and Jamboree Road. See "Appendix_A -
Reassessment Diagram" herein.
In legal proceedings concluded in 1986, the City established
Assessment District No. 85-1 ("A.D. 85-1"), then comprised of 19
assessed parcels covering a total area of approximately 522
acres. A.D. 85-1 is bounded by the Santa Ana Freeway (Interstate
5), Browning Avenue, Irvine Boulevard and Jamboree Road. Within
A.D. 85-1, approximately 52 acres is occupied by the Tustin
Autocenter; 120 acres is either occupied by or designated for the
Tustin Market Place and Tustin Ranch Plaza, retail shopping
centers, and other commercial and retail development; and the
remaining 350 acres are either occupied by or designated for
residential development. In August, 1986, the City issued
$50,650,000 principal amount of variable rate improvement bonds
for A.D. 85-1, and proceeds of the issue have been used to fund
the design and construction of public improvements within A.D.
85-1, including streets and other traffic access and control
facilities, drainage facilities, and utility improvements. The
planned improvements are substantially completed. As of March,
1994, there were approximately 1,315 assessed parcels from the
original 19 parcels.
In legal proceedings concluded in 1988, the City established
Assessment District No. 86-2 ("A.D. 86-2"), then comprised of 56
assessed parcels covering a total area of approximately 2,260
acres, 1,440 of which are within the City boundary and the
remaining portion of which are located primarily in an
unincorporated area of the County (to the northeast of the City),
with a small portion of A.D. 86-2 falling within the southeastern
border of the City of Orange. A.D. 86-2 is bounded by Irvine
Boulevard, Tustin Ranch Road, Santiago Canyon Road, and Jamboree
Road. As to the portion of A.D. 86-2 within the City,
approximately 30 acres are either occupied by or designated for
commercial and retail development; 150 acres are occupied by the
Tustin Ranch Golf Club; 670 acres are either occupied by or
designated for residential development; and the balance to
various other uses. In September, 1988, the City issued
$81,400,000 principal amount of variable rate improvement bonds
for A.D. 86-2, and proceeds of the issue have been used to fund
the design and construction of public improvements within A.D.
86-2 of a similar nature to those for A.D. 85-1. Again, the
public improvements are substantially complete. As of March,
1994, there were approximately 2,298 assessed parcels from the
original 56 parcels.
The respective Indentures of Trust (the "Prior Indentures")
pursuant to which the variable rate improvement bonds of the
Prior Districts (the "Prior Variable Rate Bonds") were issued
each provided for the conversion of a portion of the Prior Bonds
to a fixed rate mode (the "Prior Fixed Rate Bonds") upon the
occurrence of certain events prescribed by the Prior Indentures
'R4X)SL3 2 4MO.374m yam
(primarily, the transfer to third parties of title to portions of
the assessed property by The Irvine Company, the owner of
substantially all of the assessed property at the time of
issuance of the Prior Variable Rate Bonds). The Prior Indentures
and related legal documents for the Prior Districts also provided
for conversion to a fixed rate of the unpaid assessments on the
related parcels (the "Fixed Rate Parcels"), the conveyance of
which caused the conversion of the subject portion of the Prior
Variable Rate Bonds into the Prior Fixed Rate Bonds. The
Reassessment District consists of all Fixed Rate Parcels from the
Prior Districts which have an unpaid reassessment.
Of the $132,050,000 principal amount of Prior Variable Rate
Bonds, $53,024,000 have been converted to Prior Fixed Rate Bonds,
of which $51,756,377 remain outstanding and will be redeemed on
September 2, 1995, from the proceeds of sale of the Series A
Bonds and other available funds. See "THE REFUNDING PLAN"
herein.
The Series A Bonds are limited obligations of the Authority,
payable solely from Revenues (as defined in the Indenture) of the
Authority, consisting primarily of payments received by the
Authority from the City in connection with the Assessment Bonds
(95-1), which payments are in turn secured by liens of the unpaid
reassessments levied upon the parcels in the Reassessment
District. The Series A Bonds are not a debt of the City, the
State of California or any of its political subdivisions, and
neither the faith and credit nor the general taxing power of the
City, the State or any of its political subdivisions is pledged
to the payment of the Series A Bonds.
Pursuant to the Act, reassessment installments sufficient to
pay the principal of and interest on the Assessment Bonds (95-1)
are to be billed on the regular County property tax bills and are
to be remitted to the City in accordance with established
procedures for such remittances. Pursuant to the Indenture, the
Authority has assigned to the Trustee, for the benefit of the
Owners from time to time of the Series A Bonds, all right, title
and interest of the Authority in the Assessment Bonds (95-1),
including the entitlement to receive payment of the principal of
and interest on said Assessment Bonds (95-1).
If a delinquency occurs in the payment of any reassessment
installment securing the Assessment Bonds (95-1), the Fiscal
Agent will have a duty only to transfer into the Redemption Fund
for the Assessment Bonds (95-1) from the Reserve Fund for the
Assessment Bonds (95-1)(but only to the extent funds are
available therein) the amount necessary to pay principal of or
interest on the Assessment Bonds (95-1) when due. There is no
assurance that sufficient funds will be available in the Reserve
Fund for the Assessment Bonds (95-1) for this purpose. The City
has determined, pursuant to Section 8769 of the California
Streets and Highways Code, that it will not obligate itself to
advance funds from its treasury to cover any delinquency on the
reassessments or payments on the Assessment Bonds (95-1).
m47D".3 3 .orr►ssr�ua,As
The City has covenanted in the Fiscal Agent Agreement that,
no later than October 1 each year, judicial foreclosure
proceedings will be commenced and diligently prosecuted to
enforce payment of reassessment installments which are then
delinquent in an amount of $2,000 or more and to enforce payment
of other, delinquent installments of a lesser amount in certain
prescribed circumstances. See "SECURITY FOR THE BONDS - Covenant
of Superior Court Foreclosure" herein.
THE REFUNDING PLKN
The Refunding Plan for the Prior Variable Rate Bonds and the
Prior Fixed Rate Bonds (the "Refunding Plan") is being
implemented in two separate components. The first component is
related to the Series A Bonds and pertains to refunding of the
Prior Fixed Rate Bonds, as discussed herein.
The second component is related to proposed Reassessment
District No. 95-2 and the proposed issuance and sale by the City
of its Series A of variable rate limited obligation improvement
bonds (the "Series A Assessment Bonds (95-2)") of said
Reassessment District No. 95-2 and provides for the proposed
refunding of the remaining outstanding Prior Variable Rate Bonds.
The proposed issuance and sale by the City of its Series A of
variable rate limited obligation improvement bonds, if, as and
when authorized, will be the subject of a separate Official
Statement pertaining to said proposed issue and is not further
discussed herein.
Pursuant to the Indenture, proceeds from the sale of the
Series A Bonds will be deposited as follows:
(a) An amount equal to the Reserve Requirement with respect
to the Series A Bonds, as established in accordance with the
definition of Reserve Requirement in the Indenture, will be
deposited in the Reserve Account.
(b) The remainder of the proceeds will be deposited in the
Program Fund.
On the Closing Date, the Trustee will withdraw from the
Program Fund an amount equal to the purchase price of the
Assessment Bonds (95-1), as established by the Bond Purchase
Agreement (the "Purchase Agreement (95-1)"), dated as of ,
1995, by and between the City and the Authority, and relating to
the acquisition by the Authority of the Assessment Bonds (95-1).
Payment of said purchase price will be made by the Trustee on
behalf of the Authority, pursuant to the Purchase Agreement (95-
1), and the ownership of the Assessment Bonds (95-1) will be
registered to the Trustee.
in -an" 4 4WW-"-J3&11WM
Payment of said purchase price of the Assessment Bonds (95-
1) will be made by the Trustee to State Street Bank and Trust
Company of California, N.A., as Fiscal Agent pursuant to the
Fiscal Agent Agreement. Pursuant to Section 3.02 of the Fiscal
Agent Agreement, proceeds of sale of the Assessment Bonds (95-1)
will be deposited or transferred as follows:
(a) An amount representing capitalized interest with
respect to the Assessment Bonds (95-1) will be deposited in the
Redemption Fund for the Assessment Bonds (95-1).
(b) An amount representing the Reserve Requirement for the
Assessment Bonds (95-1), as established pursuant to the Fiscal
Agent Agreement, will be deposited in the Reserve Fund for the
Assessment Bonds (95-1).
(c) A prescribed amount will be deposited in the
Improvement Fund to finance a portion of the cost of the
remaining components of the public improvement projects of*the
Prior Districts.
(d) A prescribed amount will be deposited in the Costs of
Issuance Fund for the Assessment Bonds (95-1).
(e) A prescribed amount will be transferred to State Street
Bank and Trust Company of California, N.A., as escrow bank (the
"Escrow Bank"), pursuant to the Escrow Agreement (the "Escrow
Agreement"), dated as of , 1995, by and between the
City and the Escrow Bank.
Pursuant to the Escrow Agreement, the Escrow Bank will
establish two separate escrow funds (the "Escrow Funds"), one
(the "85-1 Escrow Fund") for the redemption on the Redemption
Date of the Prior Fixed Rate Bonds of A.D. 85-1 and the other
(the "86-2 Escrow Fund") for the redemption on the Redemption
Date of the Prior Fixed Rate Bonds of A.D. 86-2. As provided in
the Escrow Agreement, the moneys deposited in the Escrow Funds
from proceeds of sale of the Assessment Bonds (95-1) will be
supplemented by transfers from prescribed funds held and
administered by the trustee under the Prior Indentures in amounts
certified by a nationally recognized firm of independent
certified public accountants to be sufficient to redeem the Prior
Fixed Rate Bonds on the Redemption Date.
m420SL3 5 M 3741W I M
The Prior Fixed Rate Bonds are the result of eleven (11)
separate conversion/reoffering transactions under the Prior
Indentures as follows:
Reoffering Outstanding
1.
No.
85-1A
$ 3,965,000
2.
No.
85-1B
7,165,000
3.
No.
85-1C
210,000
4.
No.
85-1D
21570,000
5.
No.
85-1E
1,035,177
6.
No.
86-2A
8,505,000
7.
No.
86-2B
14,135,000
S.
No.
86-2C
4,365,000
9.
No.
86-2D
6,390,000
10.
No.
86-2E
535,000
11.
No.
86-2F
7_aal inn
Total Principal Outstanding: $51,756,377
The total redemption price of the Prior Fixed Rate Bonds on
the Redemption Date is $ calculated as
follows:
Principal Amount $51,756,377
Interest Payable
Redemption Premium
Total Redemption Price: $
As evidenced by Sections 2 and 3 and Schedules 1 and 2 of
the Escrow Agreement, the sources of funds to pay the total
redemption price are as follows:
Transfer from Fiscal Agent
(from proceeds of Sale of
Assessment Bonds (95-1))
Transfers from Prior Indentures
Interest Earned on Escrow
Securities
Total Redemption Price:
S
S
W242ML S 6 .or,}r,.tr. l laays
ESTIMATED SOURCES AND USES
Series A Bonds
The estimated sources and uses of proceeds of sale of the
Series A Bonds are as follows:
Principal Amount of Series A Bonds $
[Less Original Issue Discount ( )�
[Plus Contribution from 95-1
Total Sources:
KM
Program Fund
Reserve Account
[Cost of Issuance
Total Uses:
Assessment Bonds (95-1)
$
$
The estimated sources and uses of proceeds of sale of the
Assessment Bonds (95-1) are as follows:
Principal Amount of Bonds $
Transfers from Other Sources $
Total Sources: $
Uses
[Reserve Fund for the Assessment
Bonds (95-1) $
Improvement Fund $
Costs of Issuance Fund $
Transfer to the Escrow Bank for
deposit in the Escrow Funds $
Total Uses: $
W2-GM.3 7 4MPP-374s&1jmM
THE SERIES A BONDS
Description of the Series A Bonds
The Series A Bonds will
amount of $37,829,000*. The
fully registered bonds in th,
integral multiple of $5,000.
their date of delivery. The
the rates per annum and will
provisions set forth below,
amounts, all as set forth on
be issued in the aggregate principal
Series A Bonds will be issued as
a denomination of $5,000 or any
The Series A Bonds will be dated
Series A Bonds will bear interest at
mature, subject to the redemption
Dn the dates and in the principal
the inside cover page hereof.
Interest on the Series A Bonds is payable semiannually on
March 2 and September 2 of each year, commencing March 2, 1996
(each an "Interest Payment Date") to the person whose name
appears on the Registration Books of the Trustee as the
registered Owner thereof on the Record Date. Such interest will
be paid by check mailed by the Trustee on such Interest Payment
Date, by first class mail, to such registered Owner at the
address which appears on such Registration Books or at such other
address as may have been filed with the Trustee for that purpose
prior to the Record Date. Interest on the Series A Bonds shall
be calculated on the basis of a 360 -day year consisting of twelve
30 -day months.
Principal of, and redemption premium, if any, on the Series
A Bonds will be payable upon presentation and surrender thereof
at the principal corporate trust office (the "Trust Office") of
the Trustee in Los Angeles, California. Principal of and
redemption premiums, if any, and interest on the Series A Bonds
shall be paid in lawful money of the United States of America.
The Series A Bonds will be issued in book -entry form,
initially registered in the name of Cede & Co., New York, New
York, as nominee of The Depository Trust Company ("DTC"), New
York, New York. Payment of interest with respect to any Series A
Bond registered as of each Record Date in the name of Cede & Co.
shall be made by wire transfer of same-day funds to the account
of Cede & Co. See "Book Entry System" herein.
7
The Series A Bonds maturing on or after September 2, 2005,
shall be subject to optional redemption in whole, or in part
among maturities on such basis as shall be designated by the
Authority in a Written Certificate of the Authority filed with
the Trustee, on any Interest Payment Date on or after September
2, 2004, at the following respective Redemption Prices (expressed
as percentages of the principal amount of the Series A Bonds to
* Preliminary, subject to change.
SP24205LS 8 .o?% -374W .uio,es
be redeemed), plus.accrued interest thereon to the date of
redemption:
Redemption Dates Redemption Price
September 2, 2004 and March 2, 2005 102%
September 2, 2005 and March 2, 2006 101
September 2, 2006 and thereafter 100
The Series A Bonds shall be subject to mandatory redemption,
in whole, or in part among maturities on the same basis as the
Assessment Bonds (95-1) are redeemed and by lot within a
maturity, on any Interest Payment Date, from and to the extent of
any Principal Prepayments with respect to the Assessment Bonds
(95-1), at the following respective Redemption Prices (expressed
as percentages of the principal amount of the Series A Bonds to
be redeemed), plus accrued interest thereon to the date of
redemption:
.ID_
September
2,
1995
through March 2, 2004
103%
September
2,
2004
and March 2, 2005
102
September
2,
2005
and March 2, 2006
101
September
Mandatory
2,
Sinkinc
2006
and thereafter
Fund Rod ration
100
The Outstanding Series A Term Bonds maturing on September 2,
2013, are subject to mandatory sinking fund redemption in part,
by lot, at a redemption price equal to 100% of the principal
amount to be redeemed, together with accrued interest to the
September 2 fixed for redemption, without premium, in the years
and in the aggregate principal amount listed below (provided
that, in the event of an optional or mandatory redemption of any
of the Series A Term Bonds maturing on September 2, 2013, such
amounts shall be adjusted as provided in the redemption
instructions pertaining thereto):
Redemption Date
(September 2)
2006
2007
2008
2009
2010
2011
2012
2013
(to come)
moos. 9 4WW."-U4.11MM
Whenever less than all of the Series A Bonds of a maturity
are redeemed, the Trustee shall select the Series A Bonds to be
redeemed from all Series A Bonds not previously called for
redemption, by lot in any manner which the Trustee in its sole
discretion shall deem appropriate and fair. For purposes of such
selection, all Series A Bonds shall be deemed to be comprised of
separate $5,000 denominations, and such separate denominations
shall be treated as separate Series A Bonds which may be
separately redeemed.
Notice of any redemption shall be given by the Trustee by
first class mail to the respective Owners of any Series A Bonds
designated for redemption, at their respective addresses
appearing on the Registration Books maintained by the Trustee, at
least 30 but not more than 60 days prior to the redemption date.
Neither the failure to receive any such notice so mailed nor any
defect therein shall affect the validity of the proceedings for
the redemption of the Series A Bonds or the cessation of the
accrual of interest thereon. The redemption price of any Series
A Bonds to be redeemed shall be paid only upon presentation and
surrender thereof at the Trust Office of the Trustee. From and
after the date fixed for redemption of any Series A Bonds,
interest on such Series A Bonds will cease to accrue.
Any Series A Bond may be transferred upon the Registration
Books by the Person in whose name it is registered, in person or
by his or her duly authorized attorney, upon surrender of such
Series A Bond for cancellation, accompanied by delivery of a
written instrument of transfer, duly executed in a form
acceptable to the Trustee. Whenever any Series A Bond or Bonds
are surrendered for transfer, the Authority shall execute and the
Trustee shall authenticate and deliver a new Series A Bond or
Bonds for a like aggregate principal amount of the same maturity,
in any authorized denomination. The Trustee shall require the
Series A Bond Owner requesting such transfer to pay any tax or
other governmental charge required to be paid with respect to
such transfer.
The Series A Bonds may be exchanged at the Trust Office of
the Trustee for a like aggregate principal amount of Series A
Bonds of the same maturity, but of other authorized
denominations. The Trustee shall require the payment by the
Series A Bond Owner requesting such exchange of any tax or other
governmental charge required to be paid with respect to such
exchange.
St.4=SL3 10 4MW574 -IIVM
The Trustee shall not
exchange of Series A Bonds
Trustee for the selection
with respect to any Series
redemption.
be obligated to make any transfer or
during the period established by the
of Series A Bonds for redemption, or
A Bonds which have been selected for
Except as otherwise provided in the Indenture, the
registered Owner of all of the Series A Bonds shall be DTC, and
the Series A Bonds shall be registered in the name of Cede & Co.,
as nominee for DTC. Any additional Series of Bonds under a
Supplemental Indenture may also be registered in the name of Cede
& Co., as nominee of DTC, as provided in such Supplemental
Indenture. Payment of interest with respect to any Series A Bond
registered as of each Record Date in the name of Cede & Co. shall
be made by wire transfer of same-day funds to the account of Cede
& Co. on the payment date for the Series A Bonds at the address
indicated on the record date or special record date for Cede &
Co. in the Registration Books or as otherwise provided in the
Representation Letter.
The Series A Bonds shall be initially issued in the form of
separate single fully registered Series A Bonds in the amount of
each separate stated maturity of the Series A Bonds. Upon
initial issuance, the ownership of such Series A Bonds shall be
registered in the Registration Books in the name of Cede & Co.,
as nominee of DTC. The Trustee and the Authority may treat DTC
(or its nominee) as to the sole and exclusive Owner of the Series
A Bonds registered in its name for the purposes of payment of the
principal, Redemption Price or interest with respect to the
Series A Bonds, selecting the Series A Bonds or portions thereof
to be redeemed, giving any notice permitted or required to be
given to Owners of Series A Bonds under the Indenture,
registering the transfer of Series A Bonds, obtaining any consent
or other action to be taken by Owners of Series A Bonds and for
all other purposes whatsoever, and neither the Trustee nor the
Authority shall be affected by any notice to the contrary.
Neither the Trustee nor the Authority shall have any
responsibility or obligation to any Participant, any person
claiming a beneficial ownership interest in the Series A Bonds
under or through DTC or any Participant, or any other person
which is not shown on the Registration Books as being an owner,
with respect to the accuracy of any records maintained by DTC or
any Participant; the payment by DTC or any Participant of any
amount in respect of the principal, Redemption Price or interest
with respect to the Series A Bonds; any notice which is permitted
or required to be given to Owners of Series A Bonds under this
Indenture; the selection by DTC or any Participant of any person
to receive payment in the event of a partial redemption of the
Series A Bonds; or any consent given or other action taken by DTC
as Owner of Series A Bonds. The Trustee shall pay all principal,
premium (if any) and interest with respect to the Series A Bonds,
only to DTC, and all such payments shall be valid and effective
02.2aS 11 4W79-P4M4-11WsW
to fully satisfy and discharge the Authority's obligations with
respect to the principal, premium (if any) and interest with
respect to the Series A Bonds to the extent of the sum or sums so
paid. Except under the conditions of (c) below, no person other
than DTC shall receive an executed Series A Bond for each
separate stated maturity. Upon delivery by DTC to the Trustee of
written notice to the effect that DTC has determined to
substitute a new nominee in place of CEDE & Co., and subject to
the provisions herein with respect to record dates, the term
"Cede & Co." in the Indenture shall refer to such new nominee of
DTC.
In the event (i) DTC, including any successor as securities
depository for the Series A Bonds, determines not to continue to
act as securities depository for the Series A Bonds, or (ii) the
Authority determines that the incumbent securities depository
shall no longer so act, and delivers a written certificate to the
Trustee to that effect, then the Authority will discontinue the
book -entry system with the incumbent securities depository for
the Series A Bonds with another qualified securities depository,
the Authority shall prepare or direct the preparation of a new
single, separate fully registered Series A Bond for the aggregate
outstanding principal amount of Series A Bonds of each maturity,
registered in the name of such successor or substitute qualified
securities depository, or its nominee, or make such other
arrangement acceptable to the Authority, the Trustee and the
successor securities depository for the Series A Bonds are not
inconsistent with the terms of the Indenture. If the Authority
fails to identify another qualified successor securities
depository of the Series A Bonds to replace the incumbent
securities depository, then the Series A Bonds shall no longer be
restricted to being registered in the Registration Books in the
name of the incumbent securities depository or its nominee, but
shall be registered in whatever name or names the incumbent
securities depository for the Series A Bonds, or its nominee,
shall designate. In such event the Trustee shall authenticate
and deliver a sufficient quantity of Series A Bonds as to carry
out the transfers and exchanges provided in Sections 2.05, 2.07
and 2.08 of the Indenture. All such Series A Bonds shall be in
fully registered form in denominations authorized by the
Indenture.
In the event that the book entry system is discontinued,
payments of principal of and redemption premiums, if any, and
interest on the Series A Bonds shall be payable as described in
the section herein entitled "THE SERIES A BONDS - Description of
the Series A Bonds". .
So long as any Series A Bond is registered in the name of
DTC, or its nominee, all payments with respect to the principal,
premium (if any) and interest with respect to such Series A Bond
and all notices with respect to such Series A Bond shall be made
and given, respectively, as provided in the Representation
Letter.
'nom 3 12 =10-5740&11971"
In connection with any notice or other communication to be
provided to Owners of Book -Entry Bonds pursuant to the Indenture
by the Authority or the Trustee with respect to any consent or
other action to be taken by Owners, the Authority or the Trustee,
as the case may be, shall establish a record date for such
consent or other action and give DTC notice of such record date
not less than 15 calendar days in advance of such record date to
the extent possible.
In addition to the Series A Bonds, the Authority may issue
additional Authority revenue bonds (the "Additional Bonds")
payable from the Revenues on a parity with the Series A Bonds, in
such principal amount as shall be determined by the Authority in
a supplemental indenture (the "Supplemental Indenture"), subject
to the requirements of the Bond Law (as defined in the
Indenture), and further subject to certain conditions set forth
in the Indenture, summarized as follows:
(1) The Authority shall not be in default under the
Indenture;
(2) The Supplemental Indenture shall provide for an
increase in the Reserve Account to an amount equal to the Reserve
Requirement, as computed for the combined Series A Bonds and
Additional Bonds;
(3) Principal and Interest Payment Dates for the Additional
Bonds shall be matched up to those for the Series A Bonds;
(4) The redemption provisions for the Additional Bonds
shall be compatible with the redemption provisions for the
additional Assessment Bonds (95-2) being acquired with the
proceeds of such Additional Bonds;
(5) Issuance of the Additional Bonds shall be related to
acquisition of the additional Assessment Bonds (95-2);
(6) No default shall have occurred and be continuing under
the fiscal agent agreement [the "Fiscal Agent Agreement (95-2)"]
pursuant to which the Assessment Bonds (95-2) were issued;
(7) The aggregate principal amount of the Series A Bonds
and Additional Bonds shall not exceed any limitation imposed by
law or by any Supplemental Indenture; and
(8) The Authority shall have filed the following documents
with the Trustee:
(a) An opinion of Bond Counsel respecting certain
matters prescribed by the Indenture, including an opinion that
the issuance of the Additional Bonds and the application of the
proceeds thereof in accordance with the applicable Supplemental
Indenture will not adversely affect the tax-exempt status of the
m_42M 3 13 4Wr5740+1IM?M
outstanding Series A Bonds and previously -issued additional
Authority revenue bonds;
(b) A certificate of the Authority that Item (1) above
has been met;
(c) A certificate of the fiscal agent (the "Fiscal
Agent (95-2") under the Fiscal Agent Agreement (95-2) that Item 6
above has been met;
(d) A written report of an Independent Financial
Consultant respecting the sufficiency of the Revenues to make
timely payment of the principal of and interest on the Series A
Bonds and Additional Bonds. Among other things, said written
report must confirm and demonstrate that, upon the issuance of
such Additional Bonds and upon acquisition of the additional
Assessment Bonds (95-2) related thereto, the Revenues in each
Bond Year will be at least equal to 110% of the principal of and
premium, if any, and interest on all remaining outstanding Series
A Bonds and Additional Bonds scheduled to be paid in each such
Bond Year; and
(e) An executed copy of the Supplemental Indenture.
Under the Indenture, Additional Bonds may be issued without
complying with the foregoing conditions if the Additional Bonds
are being issued to refund and retire any outstanding Series A
Bonds and previously -issued additional Authority revenue bonds.
The schedule of annual debt service payments on the Series A
Bonds, based on the maturity schedule and interest rates set
forth on the inside cover of this Official Statement, together
with the mandatory sinking fund redemption payments listed for
the Series A Term Bonds maturing on September 2, 2013, set forth
herein in the section entitled "THE SERIES A BONDS - Redemption
of the Series A Bonds - Mandatory Sinking Fund Redemption", is as
follows:
Year
(September 21
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
(to come)
(to come)
Annual
Debt
Service
(to come)
m_4WX3 14 4WWP.484.11M7M
Year Annual
Debt
1September 21 Principal Interest Service
2006 (to come) (to come) (to come)
2007
2008
2009
2010
2011
2012
2013
Totals:
SECURITY FOR THE SERIES A BONDS
The Series A Bonds are secured by the Revenues of the
Authority, as defined in the Indenture and consisting primarily
of principal of and interest on the Assessment Bonds (95-1),
whether as a result of scheduled debt service or redemption of
any Assessment Bond (95-1) in advance of maturity, together with
all investment earnings on any moneys held in the funds or
accounts established under the Indenture except the Rebate Fund.
Pursuant to the Indenture, a Reserve Account will be funded with
proceeds of the Series A Bonds in the amount of $
As prescribed by the Indenture, the Trustee will be the
registered Owner of the Assessment Bonds (95-1) and will
therefore receive from the Fiscal Agent the payments of the
principal of and the redemption premiums, if any, and interest on
the Assessment Bonds (95-1), all of which payments constitute
Revenues upon receipt by the Trustee. Pursuant to the Act, the
City is required annually to transmit to the County Auditor the
respective amounts of individual reassessment installments on all
unpaid reassessments, the sum of which individual reassessment
installments is sufficient to pay the principal of and interest
on the Assessment Bonds (95-1) as such principal and interest
become due and payable. Said reassessment installments are then
billed on the regular County property tax bills and are remitted
to the City in accordance with established procedures for such
remittances.
Assuming timely payment by the respective property owners of
the obligations (including the reassessment installments) billed
on the regular County property tax bills, and further assuming
timely remittance by the County to the City of the amount of such
reassessment installments thereby collected, the City will have
sufficient funds from the reassessment installments to make
timely payment to the Fiscal Agent of each March 2 interest
SP24MS S 15 gran ek-11a7n
payment and each September 2 principal and interest payment on
the Assessment Bonds (95-1), as the same become due and payable.
In December, 1994, and as a consequence of the bankruptcy
filing of the County of Orange (see "SPECIAL RISK FACTORS -
Delays in Remittances" herein), the City experienced temporary
delays in the remittance by the County of certain amounts
collected for the City on the County's property tax bills,
including installments of assessments related to the Prior Fixed
Rate Bonds. However, as of January 31, 1995, all amounts related
to property tax bill collections on behalf of the City had been
remitted to the City in full, and the March 2, 1995, interest
payments and September 2, 1995 principal and interest payments to
holders of the Prior Fixed Rate Bonds were made on time.
The City presently expects that future remittances of such
amounts will be made to the City on a timely basis and in
accordance with established procedures for such remittances.
However, as the County reduces staffing levels in response to its
financial problems, neither the City nor the Authority can be
certain that the City's expectation of timely remittances will be
met, and there may be further delays in such remittances from the
County to the City which could lead to delays in principal or
interest payments to the Owners of the Series A Bonds.
THE SERIES A BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY,
PAYABLE SOLELY FROM AND SECURED SOLELY BY THE REVENUES PLEDGED
THEREFOR IN THE INDENTURE. THE SERIES A BONDS ARE NOT A DEBT OF
THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL
SUBDIVISIONS, AND NEITHER THE FAITH AND CREDIT NOR THE GENERAL
TAXING POWER OF THE CITY, THE STATE OR ANY OF ITS POLITICAL
SUBDIVISIONS IS PLEDGED TO THE PAYMENT OF PRINCIPAL OR INTEREST
ON THE SERIES A BONDS. IN NO EVENT SHALL THE SERIES A BONDS OR
ANY INTEREST OR REDEMPTION PREMIUM THEREON BE PAYABLE OUT OF ANY
FUNDS OR PROPERTIES OTHER THAN THOSE OF THE AUTHORITY AS SET
FORTH IN THE INDENTURE. NEITHER THE SERIES A BONDS NOR THE
OBLIGATION TO MAKE PAYMENTS UNDER THE ASSESSMENT BONDS (95-1)
CONSTITUTE AN INDEBTEDNESS OF THE CITY, THE STATE OR ANY
POLITICAL SUBDIVISION THEREOF, WITHIN THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.
The Assessment Bonds (95-1) are secured by unpaid
reassessments levied against private property within the
Reassessment District, pursuant to the Act. Such unpaid
reassessments (together with interest thereon) and moneys in the
Redemption Fund established for the Assessment Bonds (95-1)
constitute a trust fund for the redemption and payment of the
principal of, premium, if any, and interest on the Assessment
Bonds (95-1). Principal of, premium, if any, and interest on the
Assessment Bonds (95-1) are payable exclusively out of the
Redemption Fund. Pursuant to the Fiscal Agent Agreement, a
Reserve Fund has been established for the Assessment Bonds (95-1)
in the amount of $
m-oscs 16 o7n.ns4.1IMM
THE ASSESSMENT BONDS (95-1) ARE NOT SECURED BY THE GENERAL
TAXING POWER OF THE CITY, THE STATE OR ANY POLITICAL SUBDIVISION
OF THE STATE, AND NEITHER THE CITY NOR THE STATE HAS PLEDGED ITS
FULL FAITH AND CREDIT FOR THE PAYMENT THEREOF. PURSUANT TO
SECTION 8769 OF THE CALIFORNIA STREETS AND HIGHWAYS CODE, THE
CITY HAS ELECTED NOT TO OBLIGATE ITSELF TO ADVANCE AVAILABLE
FUNDS FROM THE CITY TREASURY TO CURE ANY DEFICIENCY WHICH MAY
OCCUR IN THE REDEMPTION FUND. A DETERMINATION NOT TO OBLIGATE
ITSELF, HOWEVER, SHALL NOT PREVENT THE CITY FROM SO ADVANCING
FUNDS IN ITS SOLE DISCRETION.
The reassessments levied in the Reassessment District and
each installment thereof and any interest and penalties thereon
constitute liens against the parcels of land on which they are
levied until the same are paid. The liens imposed in the
Reassessment District are subordinate to fixed special assessment
liens previously imposed upon the same property but have priority
over existing and future private liens and over any fixed special
assessment liens which hereafter be created against the property.
Such liens are co -equal to and independent of the lien for
general property taxes and special taxes. While there are no
prior special assessment liens on any of the parcels of land in
the Reassessment District, there are liens for special taxes and
the recurring lien for general property taxes. See "LAND
OWNERSHIP AND FUTURE DEVELOPMENT - Estimated Direct and
Overlapping Debt" herein.
ALTHOUGH THE UNPAID REASSESSMENTS CONSTITUTE LIENS ON THE
PARCELS OF LAND ASSESSED, THEY DO NOT CONSTITUTE A PERSONAL
INDEBTEDNESS OF THE RESPECTIVE PROPERTY OWNERS. THERE IS NO
ASSURANCE THAT PRESENT PROPERTY OWNERS WILL REMAIN THE PROPERTY
OWNERS, THAT PROPERTY OWNERS WILL BE FINANCIALLY ABLE TO PAY
THEIR ASSESSMENTS, OR THAT PROPERTY OWNERS WILL IN FACT PAY SUCH
REASSESSMENT INSTALLMENTS EVEN THOUGH FINANCIALLY ABLE TO DO S0.
Under provisions of the Act, installments sufficient to meet
annual payments of principal and interest on the Assessment Bonds
(95-1) are to be collected on the regular property tax bills sent
by the Orange County Tax Collector to owners of the parcels of
land against which there are unpaid reassessments. These annual
installments are to be paid into the Redemption Fund for the
Assessment Bonds (95-1), which will be held by the Fiscal Agent,
and used to pay the principal of and interest on the Assessment
Bonds (95-1) as they become due. The installment billed against
each parcel of land each year represents a pro -rata share of the
total principal and interest coming due on all of the Assessment
Bonds (95-1) that year. The amount billed against each parcel of
land is based on the percentage which the unpaid reassessment
against the parcel bears to the total of unpaid reassessments in
the Reassessment District, plus an administrative charge of the
City. The failure of a property owner to pay an annual
reassessment installment will not result in an increase in
reassessment installments against other property in the
Reassessment District.
W2-MU.3 17 4WWV Z&31W1 s
In the event of delinquencies of a certain amount respecting
any installment of an unpaid reassessment, and with respect to
all delinquencies in certain circumstances, as prescribed in the
Fiscal Agent Agreement, the City has covenanted to institute
superior court foreclosure proceedings to enforce payment of such
delinquencies. See "Covenant for Superior Court Foreclosure"
herein.
The Assessment Bonds (95-1) are being issued pursuant to the
Fiscal Agent Agreement in a principal amount equal to the unpaid
reassessments for the Reassessment District. Pursuant to the
Act, no additional Assessment Bonds (95-1) can be issued upon the
security of the unpaid reassessments for the Reassessment
District.
Reserve Account
Under the Indenture, the Trustee is required on the Closing
Date to deposit in the Reserve Account from proceeds of sale of
the Series A Bonds an amount equal to the "Reserve Requirement",
which is defined in the Indenture to mean, as of the date of any
calculation, the lesser of (1) ten percent (10%) of the original
aggregate principal amount of the Series A Bonds or (2) the
maximum amount of principal of and interest on the Series A Bonds
coming due and payable in the current or any future Bond Year.
The moneys in the Reserve Account may be invested in any
"Permitted Investment", as said term is defined in the Indenture,
subject to the following:
(1) In the event that such Permitted Investments may be
redeemed at par so as to be available on each Interest Payment
Date, then any amount in the Reserve Account may be invested in
such redeemable Permitted Investments maturing on any date on or
prior to the final maturity date of the Series A Bonds.
(2) Otherwise, investment of Reserve Account moneys shall
be restricted to Permitted Investments which mature no later than
the earlier of (a) five years from the date of investment or (b)
the final maturity date of the Series A Bonds.
All interest or gain from the investment of moneys in the
Reserve Account shall be retained therein, subject to the payment
of rebate respecting portions of such interest or gain.
So long as no Event of Default shall have occurred and be
continuing, any amount in the Reserve Account in excess of the
then applicable Reserve Requirement on February 15 and August 15
of each year shall be withdrawn from the Reserve Account by the
Trustee and, subject to payment of rebate respecting portions of
such excess, deposited in the Interest Account.
W2 -42M.3 1s 4WWJ74W&11M7M
Pursuant to Section 6.02 of the Fiscal Agent Agreement, the
City has covenanted, for the benefit of the Owners of the
Assessment Bonds (95-1), that, no later than October 1 each year,
it will cause to be commenced and thereafter diligently
prosecuted a superior court foreclosure action, pursuant to
Sections 8830 through 8835, inclusive, of the California Streets
and Highways Code, under the following circumstances:
(1) If there is a cumulative delinquency respecting
reassessment installments of $2,000 or greater for a specific
parcel for one or more prior Fiscal Years, foreclosure shall be
commenced against each such parcel.
(2) If there is a cumulative delinquency respecting
reassessment installments of $1,000 or greater for a specific
parcel for one or more prior Fiscal Years, and if the total
amount of delinquent reassessment installments for the prior
Fiscal Year attributable to all parcels in the Reassessment
District other than the parcels subject to foreclosure under (1)
above exceeds 5% of the total reassessment installments billed
for the prior Fiscal Year, then foreclosure shall be commenced
against each parcel having the cumulative delinquency of $1,000
or greater.
(3) Finally, if the total amount of delinquent reassessment
installments for the prior Fiscal Year attributable to all
parcels in the Reassessment District other than the parcels
subject to foreclosure under (1) and (2) above exceeds 3% of the
total reassessment installments billed for the prior Fiscal Year,
then foreclosure shall be commenced against every delinquent
parcel.
Even though foreclosure is commenced and diligently
prosecuted in accordance with the City's covenant of foreclosure,
neither the City nor the Authority can be assured that, in the
event such foreclosure progresses to the point of a foreclosure
sale, there will be any bidder for the subject parcel or parcels.
While the City presently believes that each of the parcels in the
Reassessment District has sufficient value to assure meaningful
bidding at such foreclosure sale, there is no assurance that such
present value will not decline in the future, and neither the
City nor the Authority is obligated to be a bidder at such
foreclosure sale. In the absence of any outside bidder, the
foreclosure sale may not produce money to the City in
satisfaction of its foreclosure judgment from which to pay the
principal of or the interest on the Assessment Bonds (95-1).
Priority of Lien
vi�_11
The unpaid.reassessments and each installment thereof and
any interest and penalties thereon constitute a lien against each
m�=SLI 19 40rW57415&11X7 s
of the respective parcels within the Reassessment District until
the same are paid. Such lien is subordinate to all special
assessment or reassessment liens previously imposed upon the same
property, but has priority over all private liens and over all
special assessment or reassessment liens which may thereafter be
created against the same property. However, such lien will be on
a parity with the lien of any special taxes or other taxes
imposed, whether prior to the date hereof or in the future,
against parcels within the Reassessment District pursuant to the
Mello -Roos Community Facilities Act of 1982, as amended (the
"Mello -Roos Act"), or other applicable legislation.
The Tustin Unified School District has formed its Community
Facilities District No. 88-1 ("CFD No. 88-1") pursuant to the
Mello -Roos Act, encompassing a major portion of the land within
the Reassessment District, to provide financing for school
facilities. Special tax bonds (the "CFD Series A Bonds") have
been issued by CFD No. 88-1 upon the security of the special tax
lien established upon the parcels within CFD No. 88-1, and the
CFD is obligated to levy special taxes upon the parcels within
CFD No. 88-1 from year to year in amounts sufficient to pay the
principal of and the interest on the CFD Series A Bonds (together
with any additional CFD special tax bonds which may be issued
hereafter). The last maturity of the CFD Series A Bonds is in
2017, beyond the last maturity of the Series A Bonds.
The lien securing payment of the special taxes to be
levied from year to year upon the parcels within CFD No. 88-1
will be on a parity with the lien securing payment of the
reassessments. See "REASSESSMENT DISTRICT NO. 95-1 - Direct and
Overlapping Debt" herein.
ff2431DSL3 20 AWW57.314-IMM
BOND INSURANCE
(to come, if applicable)
JMTHOD OF REASSESSMENT
The total amount of reassessments levied in the Reassessment
District was established to be equal to the principal amount of
the Assessment Bonds (95-1). Said amount of each reassessment
was calculated for each of the individual parcels of land within
the Reassessment District in proportion to the unpaid existing
assessment on each such parcel. The amount of each of the
reassessments levied, identified by reassessment number, is shown
in the Reassessment Report for the Reassessment District, which
report is on file in the office of the Public Works Director of
the City.
THE REASSESSMENT DISTRICT
The parcels of land comprising the Reassessment District are
the Prior Fixed Rate Parcels of the Prior Districts (see
"INTRODUCTION" herein). Those parcels of the Prior Districts
which continued to have a variable rate status are included in
Reassessment District No. 95-2. See "REFUNDING PLAN" herein.
The public improvements financed with the proceeds of the
Prior Bonds are substantially complete.
The only remaining public improvements necessary to enable
the remaining undeveloped property in the Reassessment District
to develop are in -tract improvements to certain specific parcels
which will be the responsibility of the developer of such
specific parcel or parcels. Examples of such in -tract
improvements are local streets; curb, gutters and sidewalk;
traffic control signage and striping; street lights; landscaping;
water distribution lines and appurtenances; sanitary sewer
laterals, collection lines and appurtenances; and underground
gas, electric, telephone and cable television facilities.
IMMSL3 21
4Mr►5704-1 1mAs
With the exception of school facilities to be developed by
the Tustin Unified School District, no additional major
infrastructure such as arterial streets, parks, fire stations, or
libraries are required or anticipated for the full development of
the remaining undeveloped property in the Reassessment District,
and construction of such school facilities is not a condition
precedent to issuance of building permits for any of such
remaining undeveloped property in the Reassessment District.
The City is located in central Orange County, about 40 miles
southeast of Los Angeles and 80 miles north of San Diego. The
City spans approximately 11.2 square miles and adjoins the cities
of Irvine, Orange and Santa Ana.
The combined area of the Prior Districts, of which the
Reassessment District is a part (and consisting of the Prior
Fixed Rate Parcels from both of the Prior Districts), is
approximately 2,782 acres and is located along the east side of
the City, extending generally in a southwest -to -northeast band
approximately 3/4ths of a mile wide, from the Santa Ana Freeway
(Interstate 5)(the "Freeway") to Santiago Canyon Road, a distance
of approximately 6 miles.
The terrain is relatively flat, extending gently uphill
toward the northeast, and transitioning to gently rolling hills
in the last mile.
Land Uses and Development Status
The following Table 1 illustrates the land use categories of
the reassessed parcels in the Reassessment District. As used in
Table 1, the ten "developed" means that at least one structure
has been constructed on the parcel, which has been assigned
improvement assessed value by County. The developed portion of
the reassessed property represents approximately 85% of the total
number of reassessed parcels and approximately _% of the unpaid
reassessments on the reassessed property.
ZMANX3 22 4WW37 N-11MV5
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The following Table 2 illustrates the 15 largest landowners
in the Reassessment District, as measured by total reassessment
amount levied on property owned by such landowner. All other
parcels in the Reassessment District as single family residences.
'R4`'3 24 4WW57 .s.-114745
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Debt Service Coverage
The following Table 3 illustrates the estimated coverage for
debt service on the Series A Bonds from Revenues, consisting of
the debt service on the Reassessment Bonds (95-1) plus estimated
interest earnings on the Series A Bonds Reserve Account. In the
event transfers from the Reserve Account become necessary as a
result default by the City in the payment to the Trustee of debt
service on the Reassessment Bonds (95-1), there may be reduced or
no interest earnings on said Reserve Account.
Series A
Bond Year
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
TABLE 3
Reassesment District No. 95-1
Estinated Debt service Coverage frog Revenues
Series A Bond Estimated Estimated
Debt Service Revenues Coverage
As of , 1995, there were a total of
parcels within the Reassessment District which were delinquent in
the payment of assessment installments for Fiscal Year 1994-95.
These delinquent 1994-95 assessment installments totaled $
which represents % of the total 1994-95 assessment
installments levied. Of the 15 largest landowners (see Table 2
above), only the San Ramo and Lewis Homes parcels were
delinquent, and the San Ramo delinquency has been reinstated.
The following Table 4 illustrates the historical assessment
delinquency for parcels included in the Reassessment District.
See Table of Appendix A for a summary of property tax
collections and delinquencies (including assessment installments
for the Prior Districts) for the entire City for Fiscal Years
1987-88 through 1991-92, inclusive.
ZM4WSL3 26 4NMI M-11MM
TABLE 4
CITY OF TD8TIN
Reassessslent District No. 95-1, Tustin Ranch
Assessuent Installnent Delinquencies
for Fiscal Years 1990/91 through 1994/95
Fiscal
Parcels
Parcels
Dollars
Dollars
% of Dollars
Year
Levied
Delinauent
levied
Delinaent
Dotinamt
1990-91
1,979
0
& 3,570,645.34
i 0
0.00%
1991-92
2,826
3
4,388,590.30
77,063
1.76
1992-93
2,835
6
4,358,011.48
74,168
1.70
1993-94
3,288
21
4,991,716.82
91,040
1.82
1994-95 *
3.613
-9
2.688.941.30
118.16¢
im
TOTALS
14,541
123
&19,997,905.24
&360,428
1.80%
Estimated value -to -Lien Ratios
As of March 1, 1994, there were approximately 3,613 separate
parcels in the Reassessment District, both developed and
undeveloped. These parcels (including improvements, where
developed) had a total assessed value of $787,925,188. Total
reassessments of $38,214,000 have been levied in the Reassessment
District proceedings. This provides an over-all value -to -lien
ratio of
The following Table 5 illustrates the breakdown, by category
of value -to -lien range, of the total number of parcels and the
corresponding total reassessment amounts attributable thereto.
M -42M3 27 40MJ7-=& J j Wj"
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Neither the value -to -lien calculations nor the total
reassessment amounts include parity obligations for CFD No. 88-1
and for general property taxes.
Set forth in Table 6 is the existing authorized indebtedness
payable from taxes and assessments that may be levied on property
within the Reassessment District. Additional indebtedness on a
parity with the Reassessment Bonds (95-1) could be authorized by
the City, subject to the limitation of the total amount of
reassessments levied. In addition, other public agencies may
issue additional indebtedness on property within the Reassessment
District at any time.
V2-4WX3 29 .or,sr.w.iiaM
TABLE 6
Reassessuent District No. 95-1
Direct and Overlapping Debt
1994-95 Assessed Valuation: 5787,925,188
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT:
% Aoclicable
Debt 5/1/95
Orange County
0.497%
S 2,932
Orange County Flood Control District
0.498
5,453
Metropolitan Water District
0.098
614,367
Irvine Ranch Water District, I.D. 5105
37,466
15,138,754
Irvine Ranch Water District, I.D. 6250
37.583
17,670,185
City of Tustin
24.280
43,704
City of Tustin Reassessment District #1995-1
100.
38,214,000(1)
Tustin Unified School District Community facilities District 61988-1
99.698
14.670.561
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT
$86,359,956
(1) Refunding bonds to be sold. Excludes issues to be refunded.
OVERLAPPING LEASE OBLIGATION DEBT:
Orange County Certificates of Participation
0.497%
51,454,888
Orange County Pension Obligations
0.497
1,590,599
Orange County Transit Authority
0.497
104,867
Municipal Water District of Orange County Water Facilities Corporation
0.762
671,589
Saddleback Conamity College District Certificates of Participation
1.387
376,432
City of Tustin Water Corporation
24,280
789,100
Irvine Ranch Water District Certificates of Participation
4,715
2,829,000
Orange County Water District Certificates of Participation
0.713
1,482,113
Orange County Sanitation District #14 Certificates of Participation
6.635
125.136
TOTAL GROSS OVERLAPPING LEASE OBLIGATION DEBT
$9,423,724
Less: Orange County Transit Authority (80% self-supporting)
83,894
MWDOC Water Facilities Corporation
671,589
City of Tustin Water Corporation
789,100
Orange County Water District Certificates of Participation
1,482,113
TOTAL OVERLAPPING LEASE OBLIGATION DEBT
$6,397,028
Ratios to Assessed Valuation
Direct Debt. . . . . . . . . . 4.85%
Total Direct and OverlappingTax and Assessment Debt . . . . . 10.96%
Combined Groes Debt ($92,783,680) . . . . . . . . . . . . . . . 12.16%
Combined Net Debt (92,756,974) . . . . . . . . . . . . . . . . 11.77%
STATE SCHOOL BUILDING AID REPAYABLE A QF 6/30/94: $0
Source: California Municipal Statistics and
an4M$L3 30
M►sn-ru-umM
SPECIAL RISK FACTORS
The following information should be considered by
prospective investors in evaluating the Series A Bonds. However,
it does not purport to be an exhaustive listing of the risks and
other considerations which may be relevant to an investment in
the Series A Bonds. In addition, the order in which the
following information is presented is not intended to reflect the
relative importance of any such risks. If any risk factor
materializes to a sufficient degree, it alone could delay or
preclude payment of principal of or interest on the Series A
Bonds or both.
Funds for the payment of the principal of and the interest
on the Series A Bonds are derived from annual reassessment
installments. While a modest coverage factor has been
established in structuring the annual reassessment amounts (see
"REASSESSMENT DISTRICT - Debt Service Coverage - TABLE 6"
herein), the amount of annual reassessment installments that are
collected by the City could be insufficient to pay principal of
and interest on the Series A Bonds due to non-payment of such
annual reassessment installments levied or due to insufficient
proceeds received from a judicial foreclosure sale of land within
the Reassessment District following delinquency. The City's
legal obligations with respect to any delinquent reassessment
installments which secure the Series A Bonds are limited to (1)
payments from the Reserve Fund to the extent of funds on deposit
therein, and (2) the institution of judicial foreclosure
proceedings with respect to any parcels for which the
reassessment installment is delinquent (see "SECURITY FOR THE
SERIES A BONDS - Covenant for Superior Court Foreclosure"
herein). The Series A Bonds cannot be accelerated in the event
of any default.
Under the provisions of the Act, reassessment installments
will be billed to the owner of each parcel in the Reassessment
District against which there is an unpaid reassessment, such
billing to be made on the regular property tax bills sent to such
owners. Such reassessment installments are due and payable at
the same time and bear the same late charges and penalties as for
non-payment of regular property tax installments.
The obligation to pay reassessment installments does not
constitute a personal obligation of the current or subsequent
owners of the respective parcels which are subject to the
reassessment liens. Enforcement of the payment obligation by the
City is limited to judicial foreclosure in the Orange County
Superior Court pursuant to Sections 8830 and following of the
California Streets and Highways Code. There is no assurance that
any current or subsequent owner of a parcel subject to a
XMMSU 31 4NM3743&1 tarns
reassessment
installments
installments
lien will be able to pay the reassessment
or that such owner will choose to pay such
even though financially able to do so.
The obligation of the City, as issuer of the Assessment
Bonds (95-1), to advance the amount of delinquencies to the
Trustee, as the registered holder of the Assessment Bonds (95-1),
is strictly limited to funds on deposit in the Reserve Fund
established and held by the City pursuant to the Fiscal Agent
Agreement. Pursuant to Section 8769 of the California Streets
and Highways Code, the City has expressly elected not to obligate
itself to advance available funds from the City's treasury to
make up deficiencies in the amount of reassessment installments
collected.
Sustained failure by property owners to pay reassessment
installments when due, combined with depletion of the Reserve
Fund and the inability of the City to sell parcels which have
become subject to judicial foreclosure proceedings for amounts
sufficient to cover the delinquent reassessment installments,
will most likely result in the inability of the City to make full
or punctual payments of interest on or principal of the
Assessment Bonds (95-1), which could result in a default on the
Series A Bonds.
The payment of reassessment installments and the ability of
the City to foreclose the lien of a delinquent reassessment is
normally delayed by and may be limited in other ways by
bankruptcy, insolvency, or other laws generally affecting
creditors' rights or by State law relating to judicial
foreclosure. In addition, the prosecution of a judicial
foreclosure may be delayed due to congested local court calendars
or procedural delays.
The various legal opinions to be delivered concurrently with
the delivery of the Series A Bonds (including Bond Counsel's
approving legal opinion) will be qualified as to the
enforceability of the various legal instruments, including the
Series A Bonds, by bankruptcy, reorganization, insolvency or
other similar laws affecting the rights of creditors generally.
Although bankruptcy proceedings would not cause the
reassessments to become extinguished, bankruptcy of a property
owner could result in a delay in prosecuting judicial foreclosure
proceedings and could result in delinquent reassessment
installments not being paid in full. Such a delay would increase
the likelihood of a delay or default in payment of the principal
of and interest on the Series A Bonds.
The ability of the City to foreclose the lien of a
delinquent reassessment may be limited in certain respects with
W2-ODW 32 4o 70.57- .-uanss
regard to.parcels in which the Federal Deposit Insurance
Corporation (the "FDIC") or the Resolution Trust Company (the
"RTC") has an interest or hereafter obtains an interest. In 1991
and 1992, the RTC issued certain policy statements (the "Policy
Statements")(and later adopted by the FDIC) pursuant to which the
RTC, when liquidating assets in its corporate and receivership
capacities (but not when acting as a conservator) has taken the
position, in part, that real property owned by the RTC is subject
to state and local real property taxes if those taxes are
assessed according to the property's value, but that the RTC is
immune from real property taxes assessed on other bases.
The Policy Statements also provide that the RTC will pay its
proper tax obligations when they become due and will pay claims
for delinquencies as promptly as is consistent with sound
business practice and the orderly administration of the
institution's affairs, unless abandonment of the RTC interest in
the property is appropriate. It further provides that the RTC
will pay claims for interest on delinquent property taxes owed at
the rate provided under state law. The RTC will not pay for any
amounts in the nature of fines or penalties and will not pay nor
recognize liens for such amounts.
The Policy Statements also provide that if any property
taxes (including interest) on RTC -owned property are secured by a
valid lien (in effect before the property became owned by the
RTC), the RTC will pay those claims. No property of the RTC is
subject to levy, attachment, garnishment, foreclosure or sale
without the RTC's consent. In addition, a lien for taxes and
interest may attach, but the RTC will not permit a lien or
security interest held by the RTC to be eliminated by foreclosure
without the RTC's consent.
The Policy Statements are unclear as to whether the RTC
considers the reassessments levied by the City to be "real
property taxes" which the RTC intends to pay. The Policy
Statements provide: "The [RTC] is only liable for state and
local taxes which are based on the value of the property during
the period for which the tax is imposed, notwithstanding the
failure of any person, including prior record owners, to
challenge an assessment under the procedures available under
State law. In the exercise of its business judgment, the [RTC]
may challenge assessments which do not conform with the statutory
provisions, and during the challenge will generally pay tax
claims based on the assessment level deemed appropriate. The
[RTC] will generally limit challenges to the current and
immediately preceding taxable years and to the pursuit of
previously filed tax protests. However, the [RTC] may, in the
exercise of its business judgment, challenge any prior taxes and
assessments provided that (1) the [RTC's] records (including
appraisals, offers or bids received for the purchase of the
property, etc.) indicate that the assessed value is clearly
excessive, (2) a successful challenge will result in a
substantial savings to the [RTC], (3) the challenge will not
a2_osL3 33 4OM57.e94.11a7tvs
unduly delay the sale of the property, and (4) there is a
reasonable likelihood of a successful challenge."
The Authority and the City are unable to predict what
effect, if any, the application of,the Policy Statement will have
in the event of a delinquency in the payment of reassessments
relating to a parcel or to parcels within the Reassessment
District in which either the RTC or the FDIC have an interest.
The Authority and the City are likewise unable to predict what
effect, if any, the application of the Policy Statements will
have on the payment of the interest on and the principal of the
Series A Bonds. The Authority and the City are unable to
determine if the RTC or the FDIC has an interest in any parcel
within the Reassessment District.
Existence of Undeveloped Property
Approximately t of the reassessments are secured by
liens on undeveloped property, and the average value -to -lien
ratio for such undeveloped property is :1 (see "THE
REASSESSMENT DISTRICT - Development Status - TABLE 1" herein).
The undeveloped property consists of subdivided lots which are
owned by developers or merchant builders who intend to develop
the property for single family residential (see "THE REASSESSMENT
DISTRICT - Zoning Classifications for Undeveloped Property -
TABLE 3" herein). There may be subsequent transfers of ownership
of the undeveloped property prior to completion of development.
Failure of the owners of undeveloped property to pay the
reassessment installments when due could result in a default in
the payments of principal of and interest on the Reassessment
Bonds (95-1), which could result in the inability of the
Authority to make payments of the principal of and interest on
the Series A Bonds.
Price Realised Upon Foreclosure
Section 8832 of the California Streets and Highways Code
(the "Streets and Highways Code") prescribes the minimum price
(the "Minimum Price") at which property may be sold in a judicial
foreclosure resulting from delinquencies on reassessment
installments. The Minimum Price is the amount equal to the
delinquent installments of principal and interest of the
reassessment, together with all interest, penalties, costs, fees,
charges and other amounts more fully detailed in said Section
8832. However, Section 8836 of the Streets and Highways Code
provides that the court may authorize a sale a less than the
Minimum Price if the court makes certain determinations, based on
the evidence introduced at the required hearing, which evidence
must establish that no ultimate loss will result to the
Bondholders or that no other remedy is acceptable and at least
75% of the Bondholders' consent.
The reassessment lien upon property sold pursuant to this
procedure at a lesser price than the Minimum Price shall be
reduced by the difference between the Minimum Price and the
W242MS 34 W10 -574184-1107M
actual sale price. In addition, the court shall permit
participation by the Authority, as owner of all of the
Reassessment Bonds (95-1), in its consideration of the petition
as necessary to it determination. Reference should be made to
Section 8836 for the complete presentation of this provision.
If foreclosure proceedings do not result in full collection
of delinquent reassessments, it is possible that owners of the
Series A Bonds may not receive payment of principal of or
interest on the Series A Bonds.
The motivation of the present or future owners of the
undeveloped property in the Reassessment District may be
diminished in the event significant delays are experienced in
development efforts. However, further development of the lands
located in the Reassessment District may be affected by changes
in general economic conditions, fluctuations in the real estate
market, changes in the ownership of the land, and other factors.
In addition, any proposed development is subject to existing and
future federal, state and local regulations. Approval may be
required from various public agencies in connection with the
design, nature and extent of the required public improvements, or
such matters as land use and zoning. Failure to meet any such
future regulations or obtain any such approvals in a timely
manner could delay or adversely affect any proposed development
of the parcels of land in the Reassessment District.
The land within the Reassessment District is subject to a
number of contingencies which could slow or prevent future
development of the undeveloped land. Consequently, no assurance
can be given that such development will be partially or fully
completed, and in assessing the investment quality of the Series
A Bonds, prospective purchasers should evaluate the risks of
noncompletion, including but not limited to the following.
(1) First, undeveloped land.is less valuable than such land
in a developed condition and provides less valuable security to
the Series A Bondowners should it be necessary for the City to
foreclose due to the nonpayment of reassessment installments
which secure the Assessment Bonds (95-1).
(2) Second, if much of the land in the Reassessment
District remains undeveloped, the number of likely purchasers at
a foreclosure sale, in the event the City forecloses the lien of
delinquent unpaid reassessment installments, is likely to be
reduced.
(3) Third, in addition to potentially reducing the ability
and willingness of the landowners to pay reassessment
installments, a slowdown of the economic development process in
the region could adversely affect land values and reduce the
proceeds received at a foreclosure sale in the event reassessment
installments are not paid when due.
sn-=SLS 35 4WO-P-M-11M s
There can be no assurance that land development operations
within the Reassessment District will not be adversely affected
by future governmental policies, including, but not limited to,
governmental policies to restrict or control development.
Any event that significantly impacts the ability to develop
land in the Reassessment District may cause the property values
on undeveloped property to decrease substantially from the
assessed values set forth herein and could affect the willingness
and ability of the owners of the undeveloped property to pay the
reassessment installments when due.
The ability or willingness of an owner of land within the
Reassessment District to pay reassessment installments could be
affected by the imposition of other taxes and assessments imposed
upon the land. In addition, other public agencies whose
boundaries overlap those of the Reassessment District could,
without the consent of the City or the Authority, and in certain
cases without the consent of the owners of the land within the
Reassessment Districts, impose additional taxes or assessment
liens on the property within the Reassessment District to finance
public improvements or services to be located or provided inside
of or outside of the Reassessment District. A statement of
direct and overlapping indebtedness on land within the
Reassessment District is included herein under the heading
"REASSESSMENT DISTRICT NO. 95-1 - Estimated Direct and
Overlapping Debt - TABLE 911.
Earthquakes
The Reassessment District,
may be subject to unpredictable
of seismic activity in or around
result in substantial damage to
District, which, in turn, could
such properties and could affect
the property owners to pay their
due.
Drought Conditions
like all California communities,
seismic activity. The occurrence
the Reassessment District could
properties in the Reassessment
substantially reduce the value of
the willingness or ability of
reassessment installments when
California has recently experienced drought conditions,
although rainfall this year has terminated the drought conditions
throughout the State. Water service within the Reassessment
District is provided by the Irvine Ranch Water District ("IRWD").
While IRWD currently anticipates being able to supply water for
existing and new development within its service area for the
foreseeable future, there can be no assurance that any renewal of
drought conditions will not adversely affect IRWD's ability to do
so. Such failure could adversely affect the financial condition
of the property owners and could slow or halt development
efforts, thereby adversely affecting the willingness or the
m4205LS 36 408n.n40&11mn
ability of the owners of undeveloped property to pay their
reassessment installments when due.
Land Values
The value of land within the Reassessment District is an
important factor in evaluating the investment quality of the
Series A Bonds. In the event that a property owner defaults in
the payment of a reassessment installment, the City's only remedy
is to judicially foreclose on that property. Prospective
purchasers of the Series A Bonds should not assume that the
property within the Reassessment District could be sold for the
assessed amount described herein at a foreclosure sale for
delinquent reassessment installments or for an amount adequate to
pay delinquent reassessment installments.
The property values set forth in the various tables herein
are the property values determined by the Orange County Assessor
for property tax purposes. These assessed value determinations
may be subject to an appeal by the property owner. Assessment
appeals are annually filed with the County Assessment Appeals
Board for a hearing and resolution. At the time of filing,
applicants are required to estimate an opinion of value. The
resolution of an appeal may result in a reduction to the
Assessor's original taxable value and a tax refund to the
applicant/property owner. Any reduction in assessed taxable
values of property within the Reassessment District would have an
adverse impact on the value -to -lien ratios discussed in the
tables herein.
The actual market value of the property is subject to future
events such as downturn in the economy, occurrences such as
earthquakes, droughts or floods or other events, all of which
could adversely impact the value of the land in the Reassessment
District which is the security for the Assessment Bonds (95-1)
which secure the Series A Bonds. As discussed herein, many
factors could adversely affect property values or prevent or
delay land development within the Reassessment District.
The market value of the property in the Reassessment
District is subject to diminution upon the future release or
discovery thereon of a hazardous substance. In general, the
owners and operators of a parcel may be required by law to remedy
conditions relating to releases or threatened releases of
hazardous substances. The federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980, sometimes
referred to as "CERCLA" or "Superfund Act", is the most well know
and widely applicable of these laws, but California laws with
regard to hazardous substances are also stringent and similar.
Under many of these laws, the owner (or operator) is obligated to
remedy a hazardous substance condition of property whether or not
the owner (or operator) had anything to do with creating or
handling the hazardous substance. The effect therefore, should
m-OoSLa 37 4NW3749+11v M
any of the parcels be affected by a hazardous substance, is to
reduce the marketability and value by the costs of remedying the
condition, because the purchaser, upon becoming owner, will
become obligated to remedy the condition just as is the seller.
The value of the property within the Reassessment District,
as set forth in the various tables herein, does not reflect the
presence of any hazardous substance or the possible liability of
the owner (or operator) for the remedy of a hazardous substance
condition of the property. Neither the Authority nor the city
has independently verified, and neither is aware, that the owner
(or operator) of any of the parcels within the Reassessment
District have such a current liability with respect to any such
parcel. However, it is possible that such liabilities do
currently exist and that neither the Authority nor the City is
aware of them.
Further, it is possible that liabilities may arise in the
future with respect to any of the land within the Reassessment
District resulting from the existence, currently, of a substance
presently classified as hazardous but which has not been released
or the release of which is not presently threatened, or may arise
in the future resulting from the existence, currently, on the
parcel of a substance not presently classified as hazardous but
which may in the future be so classified. Further, such
liabilities may arise not simply from the existence of a
hazardous substance but from the method of handling it. All of
these possibilities could significantly adversely affect the
value of a parcel and the willingness or ability of the owner of
any parcel to pay the reassessment installments when due.
Endangered and Threatened Bpeciea
There is no known presence of any endangered or threatened
species of animal or plant life within the area of the
Reassessment District. Future discovery of any endangered or
threatened species could delay or halt further development of the
undeveloped property in the Reassessment District.
Cumulative Burden of Parity Taxes, special Assosmontg and
Development Costs
The reassessments and the annual installments thereon
constitute a lien against the parcels of land on which the
reassessments have been levied. Such lien is on a parity with
all special taxes levied by other agencies and is co -equal to and
independent of the lien for general property taxes, regardless of
when they are imposed upon the same property.
Development of the undeveloped land within the Reassessment
District is contingent upon construction and installation of
public improvements within the respective parcels of land,
including local streets, water distribution facilities, sewage
collection laterals and lines, drainage facilities, gas,
telephone, electrical and cable television facilities, as well as
Xn-OM3 38
on-site grading and related improvements. The cost of these
additional improvements could increase the public and private
debt for which the undeveloped land within the Reassessment
District is security. This increased debt could reduce the
ability or willingness of the owners of the undeveloped property
to pay the reassessment installments when due.
Neither the City nor the Authority has control over the
ability of other entities to issue indebtedness secured by
special taxes or assessments payable from all or a portion of the
property within the Reassessment District. In addition, the
owners of property within the Reassessment District may, without
the consent or knowledge of the City or the Authority, petition
other public agencies to issue public indebtedness secured by
special taxes or assessments. Any such special taxes may have a
lien on such property on a parity with the lien of the
reassessments.
Loss of Taz Zzemption
As discussed under the caption "CONCLUDING INFORMATION - Tax
Exemption" herein, the interest on the Series A Bonds could
become includable in gross income for federal income tax
purposes, retroactive to the -date of issuance of the Series A
Bonds, as a result of failure of the Authority or the City to
comply with certain provisions of the Code. Should such an event
of taxability occur, the Series A Bonds are not subject to early
redemption and will remain outstanding to maturity or until
redeemed under the optional redemption or mandatory sinking fund
redemption provisions of the Indenture.
On December 6, 1994, the County and the Orange County
Investment Pools (collectively, the "Pool") filed for protection
under Chapter 9 of the United States Bankruptcy Code following
losses which were eventually realized at approximately $1.7
billion in the market value of the Pool's investment portfolio.
County funds and funds of more than 200 non -County governmental
agencies within the State were invested in the Pool.
As of November 30, 1994, the Pool had assets of
approximately $20.6 billion, of which $13 billion was borrowed
through repurchase contracts and reverse repurchase contracts.
The remaining $7.6 billion included $2.7 billion deposited by the
County and $4.9 billion deposited by local agencies other than
the County.
Although non -County Pool investors ("Pool Participants")
were entitled to withdraw monies on relatively short notice, the
Pool was invested in securities with an average duration of four
(4) years in order to enhance returns. To further enhance yield,
some Pool monies were also invested in a variety of structured
sn_=58.3 39 a 79.57-M-i►Mss
instruments, such as inverse floaters and step-up callable notes,
which were highly sensitive to changes in market interest rates.
Repurchase and reverse repurchase agreements were also used to
obtain loans from broker/dealers to further enhance returns by
leveraging. Such borrowing exposed the County to cash collateral
calls in the event of losses in the market value of the
collateral. These long dated and structured securities, together
with leverage, caused the Pool's portfolio to generate high rates
of return while the interest rate yield curve was steep from late
1991 through 1993. However, these same factors limited the
Pool's liquidity and resulted in substantial losses of market
value when market interest rates incureased and the yield curve
flattened through most of 1994.
Shortly after the cases were filed, an Official Investment
Pool Participants' Committee (the "Pool Participants' Committee")
was formed, comprised of representative Pool depositors, to
facilitate negotiation and settlement of various issues with the
County. Several other official and unofficial committees and
subcommittees have been formed in each Chapter 9 cases, all with
the same overall purpose. The Bankruptcy Code provides for the
creation of official creditors' committees to represent their
constituents before the U.S. Bankruptcy Court, to investigate the
debtor's conduct and to advise the debtor in connection with
formulation of a plan of adjustment.
Following the $1.7 billion losses in the Pool's investment
portfolio and the resulting bankruptcy filings, distributions
from the Pool were stayed, and various Pool Participants asserted
a variety of tort claims against the County, including breach of
fiduciary duty, fraud and negligence, and asserted trust claims
seeking the full amount of the funds they had placed in the
County treasury. After extensive negotiations between the County
and the Pool Participants Committee, the County and the Pool
Participants entered into the Comprehensive Settlement Agreement
Re the Orange County Investment Pools ("the Settlement
Agreement"). See "The Settlement Agreement" below.
In 1994, the City had approximately $4 million of principal
on deposit with the Pool which it withdrew. There were certain
interest earnings on the City's investment that could be
withdrawn only after giving written notice to the County. These
earnings were not withdrawn before the bankruptcy filing. The
interest earnings of the City currently on deposit in the Pool
amount to approximately $8,000.00.
The Settlement Agreement
On April 5, 1995, the County filed with the Bankruptcy Court
the Settlement Agreement. The effectiveness of the Settlement
Agreement was contingent upon acceptance of the Settlement
Agreement within approximately three (3) weeks by at least 80% of
the Pool Participants holding at least 90% in aggregate amount of
the non -County investment balances in the Pool. The requisite
number of Pool Participants accepted the Settlement Agreement,
m42osc3 40 40M57s4-109s5
and on May 2, 1995, the Bankruptcy Court entered an order
approving the Settlement Agreement and authorizing the county to
perform its respective obligations under the Settlement
Agreement.
The Settlement Agreement generally provides for distributing
to Pool Participants a portion of their. December 6, 1994,
investment balances in the Pool which portion constitutes
approximately 77% of the Pool Participants' aggregate December 6,
1994, investment balances. This amount was distributed to Pool
Participants on May 19, 1995. Moreover, the Settlement Agreement
enables Pool Participants to select one or two options for the
treatment of the deficiency between that distribution and their
investment balances. Under "Option B", which was selected by
less than 10% of the Pool Participants, Pool Participants
generally reserve their rights to litigate against the County to
recover their deficiency. Under "Option All, which was selected
by more than 90% of the Pool Participants, including the City
(the "Option A Pool Participants"), Option A Pool Participants
release any and all.Pool-related claims they may have against the
County and assign to the County any and all Pool -related claims
they may have against third parties, and receive in exchange the
following three types of consideration, intended to enable the
Option A Pool Participants eventually to receive approximately
100% of their investment balances.
The first component of consideration consists of
approximately $236 million in "Recovery Notes" to be distributed
to Option A Pool Participants in amounts such that (a) each
Option A Pool participant that is a school district or school -
related entity (the "School Pool Participants") will receive
approximately $.13 for each $1.00 invested in the Pool and
(b) the other Option A Pool Participants will receive
approximately $.03 for each $1.00 invested in the Pool. The
Recovery Notes constitute administrative claims under Section
364(c)(1) of the Bankruptcy Code, with priority over all other
administrative expenses and unsecured claims against the County,
subject to certain carve -out expenses for professional and legal
fees incurred by the County in the bankruptcy proceedings. Under
the Settlement Agreement, the County is required to use its "best
efforts" to monetize the Recovery Notes, and did so by selling
bonds on June 16, 1995.
The second component of consideration consists of
approximately $343 million of "Settlement Secured Claims"
allocated to the Option A Pool Participants that are not School
Pool Participants in an amount that provides them the
approximately 90% level of recovery provided to School Pool
Participants through the Recovery Notes. The Settlement Secured
Claims are allowed general claims in the County's bankruptcy case
that are secured by a first priority security interest in a
ratable share of 65% of the net proceeds the County receives from
the assertion of certain Pool -related claims against third
parties.
SP2.msl3 41 4WI6S7-ss4-i IM9/95
The County has filed lawsuits against Merrill Lynch & Co.,
Inc. and its affiliates (the "Merrill Lynch Lawsuit") and may
proceed against other entities in efforts to recover some or all
of the Pool's investment losses. The outcome of these lawsuits
is not certain, but any recovery received by the County would be
subject to distribution as stated above.
The third and final component of consideration consists of
approximately $514 million of "Repayment Claims" that represent
the final approximately $.10 increment of the deficiency claims
asserted by Option A Pool Participants. The Repayment Claims are
allowed general unsecured claims in the County's bankruptcy case
on account of which the holder is not entitled to receive any
payment from the County or out of any assets of the County,
whether under a plan of adjustment or otherwise, until the
payment in full of all "Senior Claims" against the County and the
payment of postpetition interest therein, "Senior Claims"
include, among other indebtedness, short-term debt for borrowed
money, some trade debt incurred prior to the commencement of the
County's bankruptcy case, and certain other indebtedness of the
County.
On May 23, 1995, the Bankruptcy court determined that the
Pool was not eligible for bankruptcy relief because it is not a
"municipality" specifically authorized by State law to file for
bankruptcy protection and that the Pool's bankruptcy case would
be dismissed. All orders made in the Pool's case, including the
order approving the Settlement Agreement, will be preserved or
otherwise protected by transfer to the County's bankruptcy case.
The final eight orders were scheduled for court hearing to
approve transfer on July 27, 1995.
One -Half Cent Sales Tax Increase Ballot Proposal
The County submitted to the voters for election on June 27,
1995, a proposal to increase the County -wide sales tax by one-
half cent for up to ten years ("Measure R"). The election was
held and Measure R did not pass.
Consensus County Recovery Plan
The County submitted to the State Legislature a Consensus
County Recovery Plan which provided for the transfer of revenues
between certain public agencies in Orange County, the purpose of
which was to enable the County, over time, to obtain revenues
sufficient to satisfy its obligations under the Settlement
Agreement. Both Houses of the State Legislature adopted Assembly
Bill 1664, Senate Bill 863, and Senate Bill 1276, the purpose of
which was to amend or provide authority under State law to
effectuate the Consensus County Recovery Plan. These Bills were
signed by the Governor on October 9, 1995, along with Senate Bill
727 which pertains to Los Angeles County.
Assembly Bill 1664 authorizes the County to enter into an
agreement to finance the lease or lease purchase of County
sn-WSL3 42 a P9-"- 4-»MAs
property through the issuance of certificates of participation or
lease revenue bonds. Such certificates of participation or lease
revenue bonds shall be paid from monies credited to the Motor
Vehicle License Fee Account in the Transportation Tax Fund to
which the Orange County Transportation Authority ("OCTA") is
currently entitled. This Fund would then be reduced by the
amount of the payments on the certificates of participation or
lease revenue bonds to which the County would otherwise be
entitled. The monies of the County in the Motor Vehicle License
Fee Account in the Transportation Fund are pledged to all
certificates of participation or lease revenue bonds issued by
the County in 1996 or 1997, including any obligations issued
before 2010 to refund such certificates of participation or lease
revenue bonds having a maturity of 20 years or more.
In addition, the County may also elect to provide funds to
pay such certificates of participation or lease revenue bonds
from monies which would otherwise be transmitted by the County
pursuant to Section 7204 of the Revenue and Taxation Code (sales
and use taxes imposed by the County in excess of 1%). The funds
transferred from the Transportation Tax Fund and sales and use
taxes to pay for the certificates of participation or lease
revenue bonds are authorized to be transferred for a period of 15
years commencing in 1996. The legislation also limits the amount
of such taxes which may be transferred during the 15 -year period
to $38 million per year. The County is required to use these
funds to provide satisfaction in full or other consensual
treatment of the outstanding and allowed claims of County
vendors, employees and holders of outstanding debt of the County
and the expenses of administration of the County's bankruptcy
case and to perform the County's obligations pursuant to a
confirmed plan of adjustment.
Senate Bill 863 provides that the Orange County Development
Agency shall transfer to the general fund of the County $4
million per year. In addition, the Orange County Flood Control
District and Harbors, Beaches and Parks District is to transfer
$4 million per year to the County. The County is required to
utilize these funds for the purpose of providing satisfaction in
full, or other consensual treatment of the outstanding and
allowed claims of County vendors, employees and holders of County
debt. These funds may also be utilized to pay expenses of
administration in the County's bankruptcy case and of the
County's obligations pursuant to confirmed plan of adjustment.
Senate Bill 1276 provides that it is in the interest of the
State of California and all public debt issuers in the State of
California to enable the County of Orange to finance an
acceptable plan of adjustment in order to improve the credit
standing of all California public debt issuers and to protect the
health, safety and welfare of the residents of the County and the
State. This Bill also provides a backup plan in the event that
the County does not file a plan of adjustment with the Bankruptcy
Court by January 1, 1996, the Governor may appoint an individual
to serve as a trustee of the County. The appointment may occur
sn_=58.3 43 40M574SW IMns
at any time after January 1, 1996, until confirmation of the
plan. Moreover, if the Governor determines that as of May 1,
1996, or any date thereafter, the Parties in the Orange County
bankruptcy case have failed to reach substantial agreement on the
terms of a plan of adjustment and the timely confirmation of the
Plan appears unlikely, the Governor shall appoint a trustee.
This legislation also provides for the duties of the trustee with
regards to the Orange County bankruptcy case.
This Bill also provides that $23 million per year that would
be allocated to the County for motor vehicle fuel taxes shall be
transferred instead to OCTA. This transfer shall end in June,
2013.
It is anticipated that the County will file a plan of
adjustment with the Bankruptcy Court before January 1, 1996. The
City cannot currently predict when the County will be able to
emerge from the Chapter 9 bankruptcy.
The Authority was not a Pool Participant, and the City, with
only $8,000.00 remaining in the Pool, does not expect any
material adverse consequences from the losses to the Pool.
However, water, sanitary sewer, and fire protection services
are provided to property within the Reassessment District by
entities which are either governed by the County or are Pool
Participants. Furthermore, school facilities and K through 12
public educational programs and services are provided within the
Reassessment District by the Tustin Unified School District (the
"School District"), which is a Pool Participant.
Neither the City nor the Authority can predict the severity
of the adverse consequences to either the water, sanitary sewer
and fire protection service providers or the School District as a
result of the investment losses experienced by the Pool, and
neither the City nor the Authority can predict either (1) the
degree or duration of any possible curtailment of services
normally provided to the property and inhabitants of the
Reassessment District by the respective service providers and the
School District or (2) the need for either the service providers
or the School District to increase fees or taxes to pay for such
services. However, it is possible that such services will be
curtailed to a degree or for a period of time or that fees or
taxes will be increased to an extent that such curtailment or
increases or both may lead to delays in further development of
the undeveloped property in the Reassessment District or to
decreases in property values or both. Either such delays or such
decreases in property values could reduce the willingness or the
ability of the property owners in the Reassessment District to
pay reassessment installments when due, which could lead to
default in the payment of the principal of or the interest on the
Series A Bonds.
SP24203L3 44 4W79 -57 -SU -1009/95
As a consequence of the Orange County bankruptcy, the City
has experienced temporary delays in the remittance by the County
of certain amounts collected for the City on the County's
property tax bills, including installments of assessments related
to the Prior Fixed Rate Parcels. However, as of ,
1995, all amounts related to property tax bill collections on
behalf of the City have been remitted to the City in full, and
the March 2, 1995, interest payments to holders of the Prior
Fixed Rate Bonds were made on time.
The City presently expects that future remittances of such
amounts will be made to the City on a timely basis and in
accordance with established procedures for such remittances.
THE AUTHORITY
The Authority is a joint powers authority, organized
pursuant to a Joint Exercise of Powers Agreement, dated as of
April 3, 1995, between the City and the Tustin Community
Redevelopment Agency (the "Agreement"). The Agreement was
entered into pursuant to Sections 6500 and following of the
California Government Code. The Authority is a separate entity,
constituting a public instrumentality of the State of California
and was formed for the public purpose of assisting in financing
and refinancing projects pursuant to the Bond Law for the benefit
of the City.
The Authority is governed by a Commission, which is
comprised of five members. The members of the City Council of
the City constitute the members of the Commission of the
Authority. The Authority is specifically granted all of the
powers specified in the Bond Law, including but not limited to
the power to issue bonds and to sell such bonds to public or
private purchasers at public or by negotiated sale. The
Authority is entitled to exercise the powers common to its
members and necessary to accomplish the purposes for which it was
formed. These powers include the power to make and enter into
contracts; to employ agents and employees; to acquire, construct,
manage, maintain and operate buildings, works or improvements; to
acquire, hold or dispose of property within the City; and to
incur debts, liabilities or obligations.
THE CITY
The City of Tustin is located in central Orange County,
approximately 40 miles southeast of Los Angeles and 80 miles
north of San Diego. The City covers approximately 11.2 square
miles and adjoins the cities of Irvine, Orange and Santa Ana.
See APPENDIX [ ] hereto for a description of the City and certain
economic and demographic information related thereto.
snxsosu 45 .or79657-su-11M9A3
CONCLUDING INFORMATION
Underwriting
The Series A Bonds are being purchased through negotiation
by PaineWebber Incorporated (the "Underwriter"). The Underwriter
has agreed to purchase the Series A Bonds at an aggregate
purchase price of $ Simultaneously with the
purchase of the Series A Bonds by the Underwriter, the Authority
has agreed to purchase the Assessment Bonds (95-1) from the City.
The Underwriter's obligation to purchase the Series A Bonds is
contingent upon the Authority's purchase of the Assessment Bonds
(95-1), the approval of certain legal matters by counsel and
certain other conditions. The Underwriter is obligated to
purchase all of the Series A Bonds if any are purchased.
The Underwriter may offer and sell the Series A Bonds to
certain dealers and others at prices lower than the public
offering prices set forth on the cover page hereof. The offering
prices of the Series A Bonds may be changed from time to time by
the Underwriter.
Legal opinion
The legal opinions of Jones Hall Hill & White, A
Professional Law Corporation, Bond Counsel, approving the
validity of the Series A Bonds and the Assessment Bonds (95-1),
in substantially the forms set forth as Appendix [ ] hereto, will
be made available to purchasers at the time of original delivery.
A copy of the legal opinion approving the validity of the Series
A Bonds will be provided with each definitive bond. Certain
legal matters will be passed upon for the Underwriters by Orrick,
Herrington & Sutcliffe and for the Authority and the City by the
City Attorney.
Tax Matters
In the opinion of Jones Hall Hill & White, A Professional
Law Corporation, San Francisco, California, Bond Counsel,
subject, however to the qualifications set forth below, under
existing law, the interest on the Series A Bonds is excluded from
gross income for federal income tax purposes and such interest is
not an item of tax preference for purposes of the federal
alternative minimum tax imposed on individuals and corporations,
provided, however, that, for the purpose of computing the
alternative minimum tax imposed on corporations (as defined for
federal income tax purposes), such interest is taken into account
in determining certain income and earnings.
The opinions set forth in the preceding paragraph are
subject to the condition that the Authority comply with all
requirements of the Internal Revenue Code of 1986 (the "Code")
that must be satisfied subsequent to the issuance of the Series A
Bonds in order that such interest be, or continue to be, excluded
from gross income for federal income tax purposes. The Authority
sn-M$8.3 46 4OM57ss4-1 IMg3
has covenanted to comply with each such requirement. Failure to
comply with certain of such requirements may cause the inclusion
of such interest in gross income for federal income tax purposes
to be retroactive to the date of issuance of the Series A Bonds.
In the further opinion of Bond Counsel, interest on the
Series A Bonds is exempt from California personal income taxes.
Owners of the Series A Bonds should also be aware that the
ownership or disposition of, or the accrual or receipt of
interest on, the Series A Bonds may have federal or state tax
consequences other than as described above. Bond Counsel
expresses no opinion regarding any federal or state tax
consequences arising with respect to the Series A Bonds other
than as expressly described above.
There is no proceeding or litigation of any nature now
pending to restrain or enjoin the issuance, sale, execution or
delivery of the Series A Bonds, or in any way contesting or
affecting the validity of the Series A Bonds, the proceedings of
the Authority taken with respect to the issuance or sale thereof,
the proceedings of the City relating to the issuance and sale to
the Authority of the Assessment Bonds (95-1), the pledge or
application of any moneys or securities provided for the payment
of the Series A Bonds, the existence or powers of the Authority
or the title of any Commissioners or officers of the Authority to
their respective positions. A certificate of the Authority to
this effect will be delivered on the date of delivery of the
Series A Bonds.
Ratinc
(to come)
Financial Advisor
Bartle Wells Associates is acting as Financial Advisor to
the Authority and the City. The Financial Advisor's services
include.consulting with and advising the Authority and the City
regarding the structure and technical details of the financing,
providing the Authority and the City with information regarding
municipal bond market conditions, assisting the City and the
Authority in bond pricing negotiations with the Underwriter, and
attending meetings and hearings at the Authority's or the City's
request.
Sn4mu.3 47 4OMS"454.1 i"ps
erification of Mathematical Comoutatio
Upon delivery of the Bonds, Grant Thornton LLP will deliver
its independent certified public accountants' verification report
on the mathematical accuracy of certain computations, contained
in schedules provided to them which were prepared on behalf of
the Authority, relating to (a) the sufficiency of the anticipated
receipts from the securities deposited with the Escrow Agent (the
"Escrow Securities") to pay when due the principal whether at
maturity or upon prior redemption, interest and redemption
premium requirements of the Prior Bonds and, (b) the "yield" on
the Escrow Securities and on the Series A Bonds considered by
Bond Counsel in connection with the tax opinion rendered by such
firm. See "CONCLUDING INFORMATION - Tax Exemption" herein.
The report of Grant Thornton LLP will include the statement
that the scope of their engagement is limited to verifying the
mathematical accuracy of the computations contained in such
schedules provided to them, and that they have no obligation to
update their report because of events occurring, or data or
information coming to their attention, subsequent to the date of
their report.
Continuing Disclosure
The Authority has determined that no financial or operating
data concerning the Authority is material to any decision to
purchase, hold or sell the Series A Bonds, and the Authority will
not provide any such information. The City has undertaken all
responsibilities for any continuing disclosure to Bondholders as
described below, and the Authority shall have no liability to the
Holders of the Bonds or any other person with respect to such
disclosures.
The City has covenanted for the benefit of holders and
beneficial owners of the Series A Bonds (1) to provide certain
financial information and operating date (the "Annual Report")
relating to the City and the property in the Reassessment
District not later than eight (8) months after the end of the
City's Fiscal Year (which currently would be March 1), commencing
with the report for the 1995-96 Fiscal Year, and (2) to provide
notices of the occurrence of certain enumerated events, if deemed
by the City to be material. The Annual Report will be filed by
the Trustee, acting as Dissemination Agent, on behalf of the
City, with each Nationally Recognized Municipal Securities
Information Repository and with each State Repository, if any.
The notices of material events will be filed by the Trustee on
behalf of the City with the Municipal Securities Rulemaking Board
and with each State Repository, if any. The specific nature of
the information to be contained in the Annual Report or the
notices of material events is set forth in the Continuing
Disclosure Agreement. See "APPENDIX F - Continuing Disclosure
Agreement." These covenants have been made in order to assist
the Underwriter in complying with S.E.C. Rule 15c2 -12(b)(5) (the
"Rule"). This is the City's first undertaking with respect to
sn-os8.3 48 447947-M-1 I M9,V5
the Rule, and the City has not failed to comply in all material
respects with any previous undertakings with respect to the Rule
to provide annual reports or notices of material events.
All of the preceding summaries of the Indenture, the Fiscal
Agent Agreement, applicable legislation, agreements and other
documents are made subject to the provisions of such documents
and legislation and do not purport to be complete statements of
any or all of such provisions. Reference is hereby made to such
documents on file with the City for further information in
connection therewith.
This Official Statement does not constitute a contract with
the purchasers of the Series A Bonds.
Any statements made in this Official Statement involving
matters of opinion or of estimates, whether or not so expressly
stated, are set forth as such and not as representations of fact,
and no representation is made that any of the estimates will be
realized.
The execution and delivery of this Official Statement have
been authorized by the members of the Commission of the
Authority.
TUSTIN PUBLIC FINANCING AUTHORITY
By
Authority Chair
sn4203&3 49 40M57-ss4.1i)D9As
APPENDIX A
Reassessment Diagram
(To Come)
sP2420S a 50'.or,¢s�ss� unuss
REASSESSMENT DIAGRAM SHEET 1 OF 19
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CAUFORNIA
A REASEssmE T wAs LEVEE Ay THE QTY camam O' TIC CITY O' TUSM ON
THE LOTS. PIECES AND PARCELS OF LAND 910RN ON TNR REASKUMENT DIAOtAN.
SAD REASKIS I MT WAS LEIAED ON THE � OAr 10 19N.
TNS REASSESSMENT OMOAN AID M MEAS mx, R01LTRtconow N THE
oma or THE ORIECrOR or KOX .oats / an Damm OF THE CITY of
TIISiN ON THE — DAY OF It" REFERENCE R NIDE TO THE
REASISCISIMENT ROLL IIECOROED N AE OFFICE Of M OM -00 Or PUWX wCMKS /
Ory EIONEER rOR TIRE DEACT AMMT OF EACH REASSEMBOMT t[VRD AGAINST
EACH PAR= Or MND 900 ON ARS REASSEWMENT DIAOGIL
CITY CLEM Tm OF Tum
NOTE: THE REASSESSMENTS EV9EEMMD By THIS RGSSESlEIIT OIACRAM SLONOMEDE
ALL PRC MSLY LEVIED As$S91WTS AS SECOND N THE d'9RCE OF TME CONNECTOR
OF Py`NC wOafS / CITY t IGINI R OTY Or TUSM TO MRC ASSESSMENTS AND
REATQEfONO11S REEIEM4 R MESS WOE. REGINA-Or-wAr AND GADIEITs To RE
AC01/Im FOR TME ONPROVENDITS TO K NAGE rGR A4 REA1SSSMENT DISTRICT 94ML
NOT RE SUANECT TO TIE UEH W NEASSCISMI MIS LEVIED ON REASSEBRINNT PARS
SMOMN ON TNS REASSESSMENT CIAO AW
gaVeNCIE R HE EW NAGE To TIE MAPS or Rte= N THE Or"M Or TIE AssiSlOR
or TIE Cowry O' MUM FOR A DETAIUM 0M RrTROM Or THE LIES AND ORNDgOMS
FOT AW PARCELS 91O04 MEREN. MtO1 NMS SMALL GWAM FOR ALL DETALS
OONCDb" THE LINES AND OREMSIOR OF AICM PARCELS.
FItDTNfS DAY O' 1996. N DIE
ONi1CC
THE CITY com OF rE CITY O' TUSIIN. DRANO[ Cowry. fAUFORNAA
CITY CUE1N. CITY OF RISTN
RE'.F r F, TNS DAY OF 1996. N TIE O ICE
IEUAU
O' THE DCTOR Or PC MONKS / CITY E140011= or THE CITY OF TUSTIN.
GRAMM Cowry. CALNFORNA
DIRECTOR Or PUBIC 1101 s / CITY ENGINEER
CITY or IUSTN
IN ROO-� a OF MAPS OF ASSCNMCMT AW f OMM ITTY FFACLJ01 OF I[f OOKT�aCTS�
AT WA—ad N DE wim or TIE Cowry RE mmit or T/K COUNTY a
ORAMOL STATE OF CALIF0104I
cowry RECOROEI. COwTY OF ORANOL CALIFORNIA
®MFS
mw Fin.eawl S�Inc
28M Sm" Oak CIM
swa a Floc.
Ta ecuw Cabo . 92590
Voie6 (9001 699-3990 FAX (909) 699-5160
6095 DECEMBER 1994
REASSESSMENT DIAGRAM SHEET 2 OF 20
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CAUFORNIA
REASSESSMENT NUMBER INDEX REASSESSMENT NUMBER INDEX
®MFS
28265 SA" Ow 0•'.a
S.eana r6W
Tonaoda. :&.# •ro. 92590
vwca (906) 696-3290 FAN 1909) 699-5460
6095 DECEMBER 1994
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vwca (906) 696-3290 FAN 1909) 699-5460
6095 DECEMBER 1994
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REASSESSMENT DIAGRAM SHEET 3 OF 20
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CAUFORNIA
1
DMFS
mum r.Nrrcw Sa ft. m-
25765 Sno1R Oat Driw
54oena flea
TrnM.a. ;a;f-0, 92590
voice (909) 699-3990 rAx 2909) 699-3K0
6095 DECEMKR 1994
LEGOV
203 NEW OCA92(SSWO WLOMKR
1231
MEW REASYS511EN7 NU16ER RANGE
1734
REASSES91C11i NLAWNS ON INS SHUT:
203 2566-7213
REASSESSMENT DIAGRAM SHEET < OF 20
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CALIFORNIA
/,;SCAU:
Sww low r - loo•
SEE i
BELOW
SEE SHEET 3
BROWNING AVENUE
SW 5w w low
SCAU : ,• - ,Ow
(EGM
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mb Ainenow so-coc Inc.
NM
26765 S+a Oa 0— , NEW KASSESSMENt NMMKR RANGE
,54 -.. Calif—a. 92590 123a
Voice (909) 699-3990 FAX (909) 699-3460 REASUSSYENT wtAKRS ON IMS SMEt:
8095 DECEMKR 1994 -m
REASSESSMENT DIAGRAM
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CAUFORNIA
W P�
0-8.01 �
c
71
1,
278 R �
30,
,::Z) 276 30 �
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Voice (909) 699-3990 FAX (909) 699-3+60
!095 XCEM6ER 1994
w
VIA CAST"
SHEET 6 OF 20
mom
,=y4 0" IKA2100ftt NOW
n6n, .a6 Ru»oaipr raven Rewac
r "U " a 60 xn:
:o. -3u
60• 30• 0• 60'
sGIE : 1' . 60'
REASSESSMENT DIAGRAM
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
QTY OF TUSTIN
ORANGE COUNTY
STATE OF CALIFORNIA
UggoVWG Amu
10Dar 50 c 1D0'
SCAa : ,• • 100'
LEGM
17.34 WM RUSS S3►EMT WASM
1n2.NM 1EM REASSQ9W31T MRIT< RAUM
1234
REASYYSSIEIfT RIA9ILRS 0w T19S SHM:
.ss -635
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my r~csa s�.,G NgS1N
20765 Sinw. Oa or"
s.e.n. nw
T.T. . Cdito..a. 94590
v.ie. (909) 699-1990 7A% i909) 699-3440
6095 DECEMBER 1994
SHEET 7 OF 20
REASSESSMENT DIAGRAM
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CAUFORNIA
�F
SyFFT
IMFS
m4 rotonew Sween. Wn
0765 Si^" " Drove
66eene Veer
taneeute. cadm 92590
voice (909) 699-3990 r.0 (909) 694-3660
6025 XCEUKR t"4
IRME BOUI.EVAM
,236
NEW IKASICIBMi
12N
1♦9tU NEWRtASZMRS RANK
MRRANK12N
R[.SYSLEMY NLMNMS OM UR 94C,:
315-432
u
REASSESSMENT DIAGRAM SHEET 9 OF 20
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CALIFORNIA
60' 40' 0' 90'
SC/4L : ,' • 00'
O(—!Jt"t
ALVARADO DWA
W
M, N2
sfi= COURT 8
N7 2660
O
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1FA1 _
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252,
IMFS
Mum F'MUMuip 5-- MIC.
26766 S q.. 04M 0—
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T—"Oo. Cdit,-., 92590
Voicq (909) 699-3990 FAX (909) 699-3460
5095 DECEMBER 1994
A#
11481, 11,Ru
BRYAN AVENUE
HERR T
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,NRU
me ,�
LA
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,256 101 RfA!!S![I,T 1RRr6n
tjj 3-4'\
WEIR WA/IESSIENT WARNER RANGE
,236
RCA37rsl DOT ,888161,8 ON /KS 94M
636-6" ,fM-,806 2317-2335
REASSESSMENT DIAGRAM SHEET 10 OF 20
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CALIFORNIA
Mk- F.we Y. Hie.
25755 Smaw 06k 01we
s.eaea Foe.
ew`aewe. :d:fa . 92590
VO o (909) 699-3990 FAX ;9091 699-3460
2095 DECEMBER 1994
400' 200' 0• 400•
SCALE : 1' . e00'
r
■ RANK
s
if
QT
REASSESSMENT DIAGRAM SHEET 11 of 20
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CAUFORNIA
TUSnN RANCH ROAD
Sell: 11 . ,ow
RAWLINGS
7u WA Y
O O
ll a 7M m
742 �A 745 746 704 O O O h.
`p Qy 747 0
741
74o Jt 7� N 709 M2 787 O
701
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739 O 701 O O
741 O
730 TM RMERA 742
S�
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724
O
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11M FS NEW REASSCINIMENT HINDER
MWu FMOIIp01 SMKN. inc. GE
jj pV NEW REASSESSMENT NUMKR RAN
28755 S z Oe« 0... ��' low yo' 9' 1wSecond nop
T—ewlo. caidw. .. 92590 REASSESSMENT NIO,BERS ON TMS SHEET:
vwC• 1909) 699-3990 FAX 19091 699-3460 654-766 SCALE : 1' 100'
?095 DECEMBER 1994
REASSESSMENT DIAGRAM
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTINCOUNT
ORANGE COUNTY
STATE OF CALIFORNIA
RMFS
Nun 1Monya S:rvs 1nC
25755 SM1gb Oat Drive
i:n.e. Cdatis. a 91590
:t:u�
vac: :(9109)629-3M FAUN (909) 669-x60
8095 DECEMBER 1994
r
9'-W-
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SHEET 12 OF 20
N �S.1
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�PNG LEGEND
-oslo Six NEW REASSESSMENT NUMBER
tjj Ry NEW REASSESSMENT 160Mp RANK
� t2x
REASSESSMENT NUMBERS ON WS lKEN:
773-933
100' 50' 0' 100'
SCALE : 1* . 100'
REASSESSMENT DIAGRAM SHEET 13 OF 20
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CALIFORNIA
O O O O s6fy
*�2203
~ n g
9s4 6 tnlu
O2nwu
11MU
NJO 2727!
Dftkr
'AaW,
M— r~CW 5�IMC.
2676s Sq. Oa 0—
Socma nw
T�.cWo. Sdit ti . 92590
voce (909) 699-7990 FAx (909) 699-1460
6095 XCEMKR 1994
3041
1191U
3101
2179
1)IKJ
2614
tNN
3102
3121
2914
tww
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ttRfu
ens
aso' rr o• Iso'
SCALE : 1- . 1w
Lemw
1234 NE19 W -&SK otort wuuEtt
,234
WW fusscswwr w1N1eu R4w0E
U _ n-? --m-s6 ON nos smart
944-956 2153-2761 2814-3129
REASSESSMENT DIAGRAM SHEET to OF 20
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CALIFORNIA
T50' 76' o' 150'
MI
SCALE . r . M50•
LEGEND
t23a NEW REASSESAKNI NUMB
M FS ER
Md0l S.IvcaR. Ino
1N U
wY iinanNEW REASSESSNENI NUMBER RANGE
6765 Sin" oat Orm 12�
Scene n— ISO' 75' 0' 150'
Telnecwa. Ccdda . 92590 REASSESSMENT k%WKRS ON TMS WET:
/ace (909) 699-3990 FAX (909) 699-3460 SCALE . t' . 150'
257-10W 1076-1112
!095 DECEMBER 1994
REASSESSMENT DIAGRAM
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CALIFORNIA
SHEET 15 OF 20
1W\ - \V\ /
DMFS
MUM F~cw Smv m WI
26765 Sng14 Dco 0,"
soc-4 nom
iw�.ocwa Ca1:1mMa 92590
Vwo (909) 699-3990 FAX (909) 699-3460
1095 DECEMBER 1994
100' Sw 0' 100'
SCALE : t' . '100'
LEGM
12x
NEW 4EA59ESSMW WJMKR
t 2x
iMRU
12x
NEW REASSESSIIE)/1 MU116ER RANGE
R(ASSS94pIT
1AJkism OH TMS SHEET:
113-12�p
100' Sw 0' 100'
SCALE : t' . '100'
REASSESSMENT DIAGRAM SHEET 16 OF 20
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CAUFORNIA
too' So' 0. too•
SCAu : t' •too'
1 �
r
,292 1291
O 1290 N 1293
IM O
1s
12"$� 9.
,m
,295 1257 i
TUsnm Rm(pM ROAo
,Eao+o
125. NEM WAfYSSM04T ,t mm
1T�t MW WASSCIMAD41 NR19Q RAMQ
RE4SSE>9AEWT tAUMSERS OM TNS SHM.
1231-1321 2SS4-2565
NM FS
me r."Vel Sauk... mc
6755 Smwo Oa Dl—
S.c"o hoer
Tans . Cdow .. 92590
vo:c. 1909) 699-1990 FAX (909) 699-3460
!995 aCEMKO 1994
ton so o' ,00'
strut : 1' • 100'
REASSESSMENT DIAGRAM SHEET 17 OF 20
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
GTY OF TUSTIN
ORANGE COUNTY
STATE OF CAUFORNIA
0
,118
Aviv
RpgO
LEGEND
123 NEW BUSSESSWNT NUMKR
wEw NEBSSE=MDmT NUMM RANGE
t23s
REASAZlMpIT N{pa6ERS ON TNS TQT:
,327-,.96
�qMe� f f
RpAO
� O
,oD' 50' 1 ,00r
SCALE : ,• • ,00'
MM FS
o`
W
W
2
O
O_
0
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Qrl
MY r anew SINN6. me r
:6765 Smpo Oak D—
i«ew noo.
•aw�ocu�o. Coda—m. 92590
,We (909) 699-3990 FAX (909) 699-3460
?D95 DECEMBER Me
,o0 50 0' ,ao
SCALE : ,- • 109'
REASSESSMENT DIAGRAM SHEET 15 of 20
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CAUFORNIA
VM FS
Hub F -Wasp Servlcee. Mc.
25765 ! nA" Oak 01—
Seeena nae.
TM1Kub. Calvo o' 92590
voce (909) 699-3990 rAx (909) 6"-3"0
6095 '3ECEMKR 199-
127e NEM REASiSSWKNI MAWR
1T2jRxU NEO REASSESSMENT MAN" RANGE
u3e
REASSESSMENT NUMBERS ow TNS 94CI:
1497-1572 3AA6-3613
w w' w so'
ME: 0 • 60'
P.
REASSESSMENT DIAGRAM SHEET 19 OF 20
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
CITY OF TUSTIN
ORANGE COUNTY
STATE OF CAUFORNIA
ow 4w w ow
SCALE : r . 690'
VMFS
w— F~CW S.,. .& Nie.
6765 S". 00 Dr—
S.con. doer
'mn.cu�o. ca -f—. 92590
,wWo 1A09) 699-3990 FAX (909) 699-3460
'_195 :ECE4era 1994
Sw zw o soar
SCALE : ,' • sov
rpm
LEcm
Kw KASKSSktNr «JMSP
'111RU NEW KASSESSMDII ANYKR RAMOE
tt3.
R(ASSZSy/p, kwmRs ON AMs S-EE1:
1322-1326 1573- 663
,DO' 50' a• ,od
SCALE : V _ ,00•
REASSESSMENT DIAGRAM
REASSESSMENT DISTRICT 95-1 (TUSTIN RANCH)
OTY OF TUSTIN
ORANGE COUNTY
STATE OF CAUFORNIA
SHEET 20 OF 20
MM FS
MVM Fwwao 1 5p ". MIC.
.0763 S"o Oa W—
Iona n—
e ecwo. :ene.ne. 92590
.oKe 19091 :99-:i90 sAi !9091 699-5"0
•P95 .-:,rBER 1994
RO1D
Z11� R�
123A NEW REASSCSS ENI NUbOER
123A
T,IRU NEW REASS[SSIENI NUIlEII RAMC(
REASSESSMENT NUMEKRS ON rwS 9"EV
)SA -t "U 934-27 :046 =.0
•
APPENDIX B
Summary of Indenture and Fiscal Agent Agreement
(To Come)
SM -MAS i
4oa9-n.sss-11n0ss
APPENDIX C
The City of Tustin
(To Come)
SP24m52.3 ii 4W79-57,SS&I in.As
APPENDIX D
Insurance Policy Specimen
(To Come)
sn-=5 3 i i i 4Wro-374M4-11a4ss
KN44�9} _f=d
Forms of Bond Counsel Opinions
(To Come)
sn42DSL3 iv .o?s.s --$6.11/14/95
APPENDIX F
Continuing Disclosure Agreement
(To Come)
sF2-. SL3 V
4W79637434 -11n095