HomeMy WebLinkAboutRESO 5587•• • \
ORIGINAL
RESOLUTION NO. 5581..
RESOLUTION OF THE COUNCIL OF THE CITY OF
PALO ALTO PROVIDING FOR 'l'HE BORROWING OF
FUNDS FOR THE FISCAJ' .. YEAR 1978-1979 AND
THE ISSUANCE ANO SALE OF TEMPORARY NOTES
THEREFOR
WHEREAS, the City of Palo Alto (the "City"), a muni-
cipal corp9ration and a chartered city in the State of California,
desires to.avail itself of the previsions of Article 7.6 (commen-
cing with Section 53850), Chapter 4, Part l, Division 2, Title 5,
of the Government Code of the State of California (the "Gov-
ernment Code•), for the purpose of borrowing the sum of
$5,000,000 by issuance of notes in anticipation of the re-
ceipt of taxes and other income, revenue, cash receipts and
other moneys to be received by the City during the 1978-1979
fiscal year (commencing July 1, 1978 and endinq June 30,
1979} (the aFiscal Year•); and
WHEREAS, Section 53858 of the Government Code'pro-
vides that notes shall not be issued pursuant to said Article 7.6
in any fiscal year in an amount which, when added to the interest
payable thereo.Q, shall e>Geeed eighty-five percent (85-eJ of the
estimated amount of the then uncollected taxes, income, revenue,
cash receipts and other moneys of the City which will be avail-
able in said fiscal year for the payment of said notes and
interest thereon .•
NOW, THEREFORE, the Council of the City of Palo Alto
hereby finds, determines, declares and resolves as follows:
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Section 1. The estimated amount of the taxes,
revenue and other moneys remaining uncollecte~ on September 13,
1978, and, as hereinafter provided, are specifically pledged
for the pa~'ll\ent o! the notes and interest thereon, and which
will be available on or before June 8, 1979, is the sum of
at least $6,340,000. Said sum is exclusive of taxes levied
to pay the prin~ipal of and interest on bonded indebtedness
of the City, moneys which when received wil.1 be encWllbered
for a special purpose and utility-revenues required for util-
ity maintenance and operation.
Section 2. No sums have heretofore been borrowed
by the City in allticipation of the receipt of taxes, other
income revenue, cash receipts or other moneys for the Fiscal
Year.
Section 3. The City hereby determines to and shall
borrow the aggregate principal sum of Five Million Dollars
($5,000,000) by the issuance of temporary notes (the ·"notes"),
to be numbered l to 50, both inclusive, of the denomination
of $100,000 each, or of such«smaller number(s) and larger
denomination(s) as shall be specified by the successful bidder
therefor, to be dated Septero.ber 13, 1978 and to mature (without
option of prior redemption) on June 8, 1979. The notes shall
bear interest at the rate of not to exceed eight percent (8%)
per annum (payable at maturity)~ The exact rate or rates of
interest to be paid on the notes shall be designated at the
time of determining the best bid and making the award after
calling for sealed proposals for the ~,...;.:""Cn .. .._se thereof. The . \ .
notes shall be sold to the bidder offering to--purchase all of
them at the lowest rate or rates of interest computed from
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the date of the notes to the maturity date thereof, or whose
bid represents the lowest net interest cost to the City. The
notes. shall be sold for not less than the face value thereof
and shall be delivered to the purchaser and paid for on the
date thereof. Both the principal of and interest on the notec
shall be payable only upon surrender thereof, in lawful money
of the United States of America at the'Palo Alto Main Office
of Crocker National Bank in Palo Alto, California. The notes
shall be issued without coupons·and.shall be substantially in
the form set forth in Exhibit •A" attached hereto and by this
reference incorporated herein, the blanks in said form to be
filled in with appropriate words and figures.
Section 4. Said swn of $5,000,000, together with
the interest payable thereon as provided herein, is less than
BS• of the amount aet forth in Section 1 hereof.
Section 5. The r~neys so borrowed shall be used
and expended by the City for any purpose for which it is ...
authorized to expend funds, including, but not limited to
current expenses, .capital expenditures, and the discharge of
any obligation or indebtedness.
Section 6. For the payment of the principal of and
interest on the Notes the City hereby pledges the following
(the •Pledged Revenues-..):
a. All.sales and use taxes received·by the City
durift.9 the period commencing on September 13, 1978 and
ending on (and including) June 8, 1979 (said period
being hereinafter called the "Note reriodn);
b. All ad valorem property taxes received by
the City during the Note Period;
c. All transient occupancy taxes received by
the City during the Note Period7 and
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d. All amounts received by the City during the
Note Period from the Controller of the State of Cali-
fornia, or any successor distributor, as motor vehicle
license fees, pursuant to Section 11005 of the Revenue
and Taxation Code of the State of California, or any
successor law (and any other money appropriated by law
-·ror expenditure pursuant to said Section 11005).
The principal amount of the notes, together with tl';e interest
thereon, shall be payable from the Pledged Revenues and, to
the extent not so payable, shall be paid from any ot.~er mo_neys
lawfully available therefor. The principal of the notes and
interest thereon shall be a first lien and charge against the
Pledged Revenues. All Pledged Revenues, as and when received,
shall be deposited by the City in a special fund to be held by
the Treasurer of the City (the "Repay.-rient Fund"), and all
moneys of the City in the Repayment Fund shall be used to
repay the principal of the notes and the interest· thereon.
Jl.dditionally, the City hereby covenants that, if the amount
in the Repayment Fund on June 1, 1979. is not sufficient to
repay in full all of the notes and interest thereon to matu-
rity¥ it will cause to be deposited in the Repayment Fund •
an amount of money sufficient to pay in full the principal
of the notes and the interest thereon to maturity.
Section 7. It is hereby covenanted by the City that
.tc will make no use of the proceeds of the notes which would
cause the notes to be "Qrbitrage bonds" under Section 103(c)
of the Internal Revenue Code; and to that end, so lonq as any
of the notes are outstanaing, the issuer with respect to the
proceeds of the notes and all officers having custody or
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control of the proceeds of the not~s shall ~omply with all
requirements of such section and the regulations of the Onited
States Department of the Treasury thereunder, to the extent
that such regulations are, at-the time, applicable and in
e~fect, so that the notes will not be •arbitrage bonds•.
Section 8. It is hereby covenanted and warranted
by the City that all representations and recitals contained
in this resolution are true and correct, and that the City,
and its appropriate officials, have duly taken all proceed-
ings necessary to be taken by them, and will take any addi-
tional proceedings necessary to be taken by them, for the
levy and collection of the Pledged Revenues in accordance
with law for carrying out the provisions of this resolution
and the notes ..
Section 9. The City Treasurer is hereby autho-
rized and directed to execute the notes for and on beha·lf
.of the City and the City Clerk is hereby authorized ·and
directed to countersign and seal the notes for and on behalf
of ~~e City, and said signing, countersigning and sealinq
shall constitute a valid and sufficient execution of the
notes.
Section 10. The notes shall be sold by the Council
at public sale on Monday, September 11, 1978 at 8:00 P.M.
and the City Treasurer is hereby directed to cause notice to
be qiven for the sale of the not~s by mailing copies of a .
notice of sale to interested bidders. Said notice shall be in
substantially the form set forth in Exhibit·•aft attached
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hereto and by this reference incorporated herein • •
Section_!!.. This resolution shall take effect from
and after its passage and approval.
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INTRRODUCED AND PASSED: · August 28, 1978
AYES: Carey, Clay, Eyerly, Fazzino, Flet~her, Henderson,
Sher, Witherspoon
NOES: Brenner
ABSTENTIOUS: Uone
ABSENT: Uone
ATTEST: APP~~'
• Mayor -, ·•
APPROVE~ , /~ ci~y Manlger
l/JlaJ_ ~ &i~
City Treasurer
d'4''U£L '?_ // 2d:C7/1af../ Ci Contreier
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EXHIBIT A
CITY OF PALO ALTO
TEMPORARY NOTE
FISCAL YEAR 1978-1979
No.
$ ______ _ September 13, 1978 .
FOR VALUE RECEIVED, the City of Palo Alto (the "City"),
State of California, acknowledges itself indebted and promi~es
to pay to the bearer hereof, at the Palo Alto Main Office of
Crocker National Bank in Palo Alto, California, the principal
sum of
in lawful money of the United States of America on .June 8, 1979
(without option of prior redemption), together with interest
thereon at the rate of ~% per annum (on a 365-day year basis)
in like lawful money from the date hereof until payment in full
of said principal sum. Both the principal of and interest on
this note shall be payable only upon surrender of this note as
the same shall fall due; provided, however, no interest shall be
payable for any period after maturity during which the holder
hereof fails to properly present this_note for payment.
It is hereby certified, _recited and decl.ared that
this note is one of an authorized issue of notes in the aggregate
pr~ncipal amount of Five Million Dollars (SS,000,000) all of
like tenor made, executed and given pursuant to and by authority
of a resolution of the Council of the City duly passed and
adopted on August 28, 1978 under and by authority of Article 7.6
(commencing with Section 53850) of Chapter 4, Part 1, Division 2,
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Title S, of the Government Code of the State of California,
and that all acts, conditions and things required to exist,
happen and be performed precedent to and in the issuance of
this note have existed, happened and been performed in reg-
ular and due time, forzr1. and manner as required by law, and
that this note, together with all other indebtedness and
obligations of the City, does not exceed any limit prescribed
by the Constitution or the statutes of the State of California
or the Charter of the Cit}' of Palo. Alto.
For the payment of the principal of and interest on
this note and the principal of and interest on all other notes
of the same authorized issue ($5,000,000 in· aggregate principal
amount), the City hereby pledges the following revenues (the
•Pledged Revenuesn):
a. All sales and use taxes received by the City
~uring the period commencing on September 13, 1978 and
ending on (and including) June 8, 1979 (said period
being hereinafter called the •Note Period");.
b. All ad valorem property taxes received by
the City during the Note Period;
c. All transien~ occupancy taxes received by
the City during the Note Period; and
d. All amounts received by the City during the
Hote Period from the Controller of the State of Cali-
foraia, or any successor distributor, as motor vehicle
license fees, pursuant to Section 11005 of the Revenue
and Taxation Code of ~e State of California, or any
successor.law (and "any other lilO~ey approprlated by law
for expenditure pursuant to said Section 11005).
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This note and all other notes of the same issue, together with
the interest payable hereon and thereon, shall be a first lien
and charge on the Pledged Revenues. and to the extent not paid
from the Pledged Revenues shall be paid from any other ~oneys
of the City lawfully available therefor.
IN WITNESS WHERE~F, the City of Palo Alto has caused ... --:·-
this note to be executed by the City Treas·urer of the City and
countersi9ned by the City Clerk of the City and caused its
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official seal to be affixed-hereto this 13th day of September,
1978.
City of Palo Alto
[Seal]
Countersigned:
City Clerk
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EXHIBIT B
NOTICE OF SALE
of
·!?1 000,000 TEMPORARY NOTES
of
THE CITY OF PALO ALTO
STATE OF CALIFORNIA
Fiscal Year 1978-1979
NOTICE IS ~EREBY GIVEN that the Council (the
~council~) of the City of Palo Alto (the "City"), Santa Clara
County, State of California, will receive bids up to 4:00 P.M.
on Monday, September 11., 1978 at the office of the City
Treasurer, Civic Center, 250 Hamilton Ayenue, Palo Alto, Cali-
fornia 94301, for $5,000,000 p~incipal amount of temporary
notes (the "notes") hereinafter described. The notes will he
sold by the Council at 8:00 P.M. en said date at the meetinq -..
place of the Council in said Civic Center, for cash to the
bidder offering the lowest rate of interest thereon or whose
bid represents the lowest net interest cost to the City.
I The notes will be issued in accordance with the provisions
of Section 53850 et seq. of the Government Code of the State
of California, and will be 50 in number, numbered 1 to 50,
both inclusive, of the denomination of $100,000 each, or of
such smaller number(s) and larger denomination(s) as shall
Qe specified by the successful bidder therefor, iri the aggre-
gate principal amount of $5,000,000, all dated September 13,
1978 and all maturing on June a, 19i9 (without option of prior
redemption). The notes will bear interest at such rate or
rates, not to exceed eight percent (St) per annum (computed on
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a 3f.S-day year basis), as shall be named by the successful
bidder therefor. Each bid must be for all of the notes. Each
biddec may name any number of different rates for the notes,
provided that each rate so named shall be a multiple of 1/100
of l\ and that no one note shall bear more th~~ one rate of
interest. Interest on the notes shall be paid at the maturity
thereof. Each bidder shall state separ•tely in his bid the
rate of interest that he desires notes of specified numbers
to bear and the premiwn offered, . i-f any.
Both the principal of and interest on the notes shall
be payable in lawful money of the United States of America at
the Palo Alto.Main Office of Crocker National Bank in Palo Alto,
Californ;;a.
The notes, in accordance with California law, are a
general obligation of the City and are payable only out of the
taxes, revenue, cash receipts and 'other moneys of the City
attributable to the fiscal year 1978-79 and legally available
for payment thereof. The ability of the City to levy ad valorem
property taxes has been substantially limited by the Jarvis-
Gann Initiative which amended the California Constitution. The
City has pledged as security for the notes and interest thereon,
sales and use tax receipts, motor vehicle tax receipts, tran-
sient occupancy tax receipts and property tax receipts, in
_each case received during the period from Septetnber 13, 1978
tc June.a, 1979. The pledged ~evenues estimated to be re-
ceived durin9 such period agqreC}ate $6,340,000.
· The notes will be awarded and sold to the bidder
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whose bid represents the lowest net interest cost to the City,
such interest to be computed from the date of the notes to
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June 151 1979 on the basis of three hundred sixty-five (365)
days per year. If two or more bidders offer to purchase
the notes at the same lowest net interest cost, the Council
shall determine wbich bid shall be ac~epted.
The right is reserved by the Council to reject any
or all bids. . Each bid must be not less than the par value thereof
and must be accompanied by a separate certi_fied check . or cash-
ier's check or cash deposit in the sum of $5,000 payable to
the order of the City Treasurer of the City of Palo Alto.
Checks or cash deposits will be returned to unsuccessful
bidders whose bids are rejected, and the check or cash de-
posit of the successful bidder for the notes will be for-
feited in case he fails to accept and pay for the notes be-
fore noon on their date if his bid is accepted and the notes
are duly tendered for delivery on their date&
Payment of the purchase price of the notes shall -
be made on the date of delivery of and payment for the notes
·1n bank funds immediately available to the City in Palo Alto,
California.
The opinion of Messrs. Orrick, Herrington, Rowley &
Sutcliffe, San Francisco, California, approving the validity
of the notes will be furnished to the successful bidder
·without charqe.
Dated: August 28, 1978
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City Treasurer cf the City of
Palo Alto, California