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Home My WebLink About0110.092I I i ~ .. : .. ,.~-. t~ January 9, 1992 HONORABLE CITY COUNCIL Palo Alto, California Attention: Finance committee OFFICIAL STATEMENT. INDEh"TURE O~ ~UST, JVlD RESOLUTION ~UTHORIZING SAL~ -UTILITY BONDS 1'92 SERIES A Members of the Council: Report ill Brief Thi6 purpose of this report is to request Council approval of the Official Statement, First Supplementa.l Indenture of Trust, and Resolution Authorizing the Sale of Bonds, for the city of Palo Alto Utility Revenue Bonds 1992 series A. In September 1989 (CMR:407:9 and CMR:427:9) the Council approved the StoriD Drainage Enterprise Fund -cost/Fees, Implementation Schedule and Public AWareness Program. The fund ~as established because the storm drainage system was incomplete ar.d inadequately maintained and the General Fund could not afford the necessary capital improve:ments and system maintenance. The approved storm drainage program included a capital improvements element to be financed p~imarily through revenue bonds and supplemented by the cash flow produced by the monthly storn drainage utility fee. In November 1989 council took action to establish the responsibi lities of the storm and Surface Water Management Enterprise and Utility (CMR:510:9), and to contract \r{ith Stone & Youngberg for financial advisory consulting services (CMR::548:9). CMR: 110: 92 .. ~ .. .. '---- In early 1991 (CMR:160:91L sta:ff repo~ted t.hat it expected to pursue approximately $3.0 to $3.5 million in financing and a:nticipated sellinq the bonds in the spring of 1992 {CKR:209:91). Past lipaneipg In o't"der to secure the best int.erest rates for utility revenue bonds # the City backs each issue with the combined revenue of all the utilities. currently, there are only two outstanding bond issues totaling just over $12 million, supported by the utilities enterprise 'With annual revenue in excess of $100 million.. In August 1990# the city refunded one of those bond i~sues--the 1985 Series A Utility Revenue. Bonds--by issuing $9.65 million in new bonds. As a part of that refunding, the ~Enterprise~ 'Was redefined to include the storm and surface water system. Potential purchasers will look to see that this ne .. · bond issue is also supported by the utilities enterprise. Furthermore,. staff has analyzed the cash flow of the sto~. drainage fund, to assure the Council that the fund can support the recommended financing. Cash Ploy staff has prepared a cash flow for the Storm Drainage Fund for 1990-91 through 1994-95 (AttachIilent A). Capital expenditures increase significantly in 1991-92 and would result in a deficit "Without bond financing. During the three years 1991-92 through 1993-94, expenditures for capital improvements total $5.6 million. The. City's fina.ncial advisors, Stone It: Youngberg, have reviewed this cash flow and recommend a bond issue of $4.8 million, which 'Would provide $4.6 million for projects and. SO.2 million for issuance costs. Bond proceeds will allow the finan~inq of various storm drainage capital imp~ovements. Those projects are e.ithe~ projects already approved by Council in the current Capital Improvement Froqrdm {CIP) or are projects staff -..il1 propose in future CIP's~ (Note. that existence of bond financing for expected future projects ~ill not. eliminate the normal capital budgeting review process. All future projects for "Which bond procep..ds are proposed will be b~ought before council in the normal five-year ClP approval process. ) projeots Approximately $4.6 million of 1992 bond proceeds are expected to be expended on the projects through fiscal year 1993-94. The Storm Drainage Fund will be co~ering the difference bet~een bond proceeds and total project expenditures with cash on a "pay as you go" basis. CKR:110,92 2 • ". \ "---"--" -< --• --, storm prai:'taqe Condit:.i9~n-A~_sessm?nt Study -Estimated expenditures! $900,000 In May 1991 (CMR:269:,1) Council approved an agreement ~ith Cn2M Hill california, Inc. to perform a condition assessment .of the City's existing storm drainage system to serve as the basis for a phased program of storm drain sY3tem replacE!l'le!1t/rehabil i tat ion projects~ The consultant will evaluate the condition of the storm drainage system, compile inventory data for all pipelines. catch basins, and manholes and identify illicit ccn~ections to the storm drainage system, Storm Drainage Master Plan study $250,000 Estimated expenditures: In AUq'..l.st 1991 (CMR:407:91J, Council approved an agreement .. 1':..."'1 CH2M Hill California, Inc. to prepare a storm drainage master plan to serve as the basis for a phased program of storm drainage improvernents~ The consultant will determine future storm drainage system capacity r-equirements and revieW' the existing storm dr3inrlqe system, in order to determine the existing c3pacity of the individual system component~~ Using this information, the consultant viII identify capacity deficiencies within the system. EVeret.t. Avenue Storm Dra~nage Improvements -Estimated exper.di tures: $2,500,000 This project consists of the design and construction of storm drainage improvements for the drainage basin a~C)ng Everett and Hawthorne Avenues. In August 1991 (CMR:407!91), 'the Counci~ approved an agreement with CH2M Hill California, Inc. to design the physical improvements and to assist City staft in a neighborhood outreach and environmental assessment ot the project. The consultant .. ill prepare complete construction do::.urnents (plans, specific3tions~ and estimate) for the installation ot the r~quired storm drainage system improvements. The project ~ill be competi tive~y bid, and a contract ~il1 he awarded to a private contractor for construction of the improvements~ Based upon preliminary design data gathered thus far, the construction cost for this project will be substant.ially higher than c.rig inally estimateci because the pipeline ~ill need to be lengthened and deepened due to conflicts with existing utilities. staff viII return for approval of this project in the 1992-1997 ClP and award of the construction contract in the summer (',f 1992 ~ CMIl: 110, 92 l - Storm DrAinage pump Station Improvements -Estimat~d expenditures: $245,000 This project consists of the design and construction of improve ments to the City's six primary storm drainage pump sta~ions. The improvements will upgrade the pump stations to meet current capacity and operational requirements. staff 'Wi 11 return fOl" approval o~ this project in the 1992-97 CIP, approval of consultant aqree~ent in summer 1933 and award of the construction contract in tha spring of 1994. pump station 'l'elemetry System Improvements -Estimated exp~ndi tures: $250,000 This project consists of the design and construction of i~prove ments to the telemetry system for the storm drain~ge pump stations. An engineering consultant will be retained to design improvements to the system, which monitors pWtlp station operation and relays pump status and alanl conditions to maintenance personnel at a central location. Staff will return for approval of this project in the 1992-97 CIP and award of the cor,struction contract ir: the summt:=r of 1993. Curh and Gutter Replacement -Estimated expenditures: $200,000 This project consists of replacement of defective sections of curb and gutter throughol.:.t the City.. A well-designed and maintained curb and. gutter network reduces localized flooding by conveying surface runo~f to the underground storm drainage system. Council awarded a construction contract for this project in the summer of 1991 (CMR: 368: 91) • Nonpoint Source Pollution Control Program Design expenditures~ .$395,000_ Estimated This project consists of the City's contribution to the Santa Clara Valley Nonpoint Source (NP3) Pollution Control Progra~ and capital improvements undertaken to improve stormwater quality. NPS pollution consists of oil/grease, heavy metals, suspended solids, pesticides/herbicides, and other pollutants which enter San Francis~o Bay via urban storm~ater runoff~ The Santa Clara Valley NPS Program, which has been mandated ~~. the Regional Water Quality Control Board, is a cooperative effor~ of 15 South Bay agencies to control NPS pol1u't,iol"l. This is an annual expenditure last approved by the Council in the summer of 1991 (CMR:342:91). CMP..:110:92 4 t ti i.: , , ; ! - BarroD Park Drainage/Street G~idelines st~dy -Estimated expendi tures: $15,000 This project consists of retaining a consultant to develop design guidelines for drainage and street improvements in the Barron Park neighborhood. Council approved an agreement for this project in August of 1991 (CMR:407:91). Geographic Infor'rnation. Svstern (GIS) Develqpm~_n..t expenditures: $120,000 Estimated This proj ect consists of the storm Drainage Enterprise Fund' 5 contribution to the development of a Citywide Geographic Informa tion System (GIS). The city has retained a consultant to implement a system to computerize all of the City's mapping functions, including the storm d~ainage system maps. Th~ ~ork includes aerial photography, surveying, digitizing of mapping data, and final production o~ computer-based maps. Cooperative Pro1ect_s .'ith the Santa Cl~_ra Valley water District - Estimated expenQitures: $125,000 This project provides for the City's share of agreements with the Santa Clara Valley Water District, the local flood control agency, to pay for improvements to City facilities as part of District flood control projects4 Staff will return to council for approval of any such projects. General Fund Paybae~ In September 1989 (CMR: 427: 9), staff recommended, and Council approved, that the General Fund be paid back over ten years at approximately $100,000 annually for the "startup· investment that the General Fund made in the Storm Drainage Fund in the years 1988 and 1989. Council added a stipulation at the time that interest s:bould not be charged to the Fund for this advance, thus giving the neW" utility special treatment jn its early years. Staff no .. recommends that Council change the payback policy and qirect the Storm Drainage Fund to repay the General Fund the remaining $797,000 balance of its initial advance, The repayment 'Would be in two equal installments--one in 1991-92 and one the nex~ j'ear. The budget for 1990-91 was put together assuming a bond sale durinq that fiscal year. In February 1991, staff reported (CMR:160:91) in the midyear financial report that it would be advantageous to delay the financing package until fiscal year 1991-1992. As reported, that action required that the General Fund ~dvance an additional amount to the Storm Drainage Fund to cover the capital improvement projects that would have been bond financed. These advanced funds have now been returned to the General Fund. 5 • Chang.' ip Interest R&t.~ This is an extremely qoocl time to sell bonds since interest rates are so low. As shown on Attachment B, interest rates for the Bond Buyers Index of 20-year 10.-1 rated general obliqation bends have gone below 7 percent. Durinq the last eleven years, interest rates have been that low only for short periods in 1986 and 1987. linancing of Future Proj~cts As shown in the cash flow (Attachment 1a.), the proposed bond financing a~ the existing revenue stream fro~ the monthly storm dra.inage utility fee are sUfficient to funa anticipated capital projects and operating .expenses through 15193-94. ~ previously discussed ~itb, Council when the Storm Drainage Fund was esta~lished and ~~e initial rate .as set, a rate increase will be necessary in 2 to ) years to support f~ture capital pr-ojects. An a.d.ditional bond. financi.ng may be appropriate at that time~ too. Official statament The Official Statement tAttachment C) will be provided ~o prospec tive purchasers of the new bond issue. This document describes the bonds and gives detailed information about the city and the Utilities oper-ations to prospective purchaser-s of bonds. The information is offered for the purpose of assessing the City's ability to pay interest and principal ~hen they are due. Indenture of Trust security pacific is the trustee on the 1990 issue. This 1992 bond issue will have a pledge of revenues on a parity 'With. the 1990 issue. Security .Pacific submitted a re.3sonat'lle bid and it was decided to retain them for the same work for this parity issue. Tbe Indenture of Trust (Attachment 0) is the legal document which provides the apPOintment of Sec~rity Pacific as trustee, outlines the duties of the trustee, and provides the covenants of the City. Resolutiop Authorizing Sale The Resolution authorizing the sale of the bonds (Attachment E) specifies tha~ bids will be acceptea at the offices of bond counsel ~ Jone.s Hall Hill' White on March 4, 1992 at 11:00 a.m. and the bonds \liill be authorized ana. the sale 'Will be a\lo'arded by resolution of the Council at its meeting on March 4, 1992. CHR: no: 92 Rpca ... ndation S~~£f recommends that the Council: 1) authorize the Mayor, City Manager, and Director of Finance to sign the Official statement, Indenture of Trust, and Resolutio~ Authorizing sale and make any changes necessary to complete the fina~cingj and 2) approve the repayment of thp. General Fund advance to the Sto~ Drainage Fund of ~797,OCO~ Respectfully submitted, ~<~p,lth£f GORDON B ~ FORD T:r:easury Manager ,--1) tiCLC>U{;') EMI\{.[ HARRISON Director Attachment5~ inance -A" Cash Flow MS" In~erest Rates ~c-Official Statement -D" Indenture of Trust "En Resolution Authorizing Sale Related Staff Reports: CHR:407:9 CHR:427:9 CMR:510:9 CMR:548:9 CHR: 160: 91 CMR:209:91 CMR: 269:91 CMR:407:91 CMR: 110: 92 7 .. :- ~---- CITY OF PALO ALTO STORM DRAINAGE FUND .s YEAR. CASH FLOW ESnMATE FiliI!: Mlal Ye~r Yur ,.,." '''''2 199] ,... ,995 T(ltalr 8f:fIt1"jn., Balance 6;'7,000 1;&4,000 "",676,58J 1.32-4.260 7<11'i,66S RMNUES Cul~&l!in.(l 1.659,000 1.6S~,OOO 1,659,000 1,659,000 1,659,000 $8,295,000 lru:erestOl1 ConstnJction Fund 'Ii 38,~35 78.269 0 0 $i 16,704 lr.terelC on Cunomer Blll1ngs 91,000 55,000 jl.OOO D,OOO 3),000 $246.000 Total ReYenut..S 1.750,000 1.75],435 l.nO,269 1,692,000 1,692,000 $8,657.70<4 OPEAATlNG EXPENSES Admif\"Manatttnel'lt J92.00c 41]8.000 456,000 47".000 49),000 $2.25J,000 OpentionslM.J.fntenanCt 365,000 447.000 465,000 ·un,ooo 50),000 $2.263,000 fnYironrnentIJ Control 0 60,000 62.000 £5,000 67,000 $25<1,000 Coroti"lende.s 0 28,000 29,000 )0,000 )1,000 $IIS,OOO Debe Servic~ (2) 0 -4J,110 298,592 ~asS92 ]~S42 $1,114,856 Subtotal 157,000 1.{1I6.130 1.310.592 1,«0,592 i.478.5-o12 $6,001.856 Net Oper.ltinr Rt:venues 99),000 737,305 159.677 25 I ,4a8 213',458 $2.65,",.848 Net ProaedJ from 1992 Bonds (J) "'.565,218 To Ruerves 50,000 50,000 50,000 50,000 50,000 $250,000 Gen,raI Fund "')'bod< ",000 ojIOO,OOO ]91,000 0 0 $-S9I,OOO DpiW Improvemen:.s 242,000 1,0460,000 3.365,000 716,OOV 91],1~£ $6,?56,125 To'" 385,000 1.910,000 J,8 1 2,000 626,000 963,116 $7.891,125 Endnt Balance 1,2&4.000 -4,676.SS3 1.32",260 7"9,668 0 Notel.; I . .,vertrnent umings off Co:-utruction Fvrld at 5':\. 2-An~n117 year maturity .....,·th TiC of 6.52~ and lint ,paymen[ net 0' accru~d intere~t. 3. Sued on par amount or $4.750,000 usuminJ Surety Bond in lie ... of Debt Sel"'¥ice ResE.r.'~ f-unc1 ., A T T A C X X E »T B , , '.J r~-----~-------------- I I , . ./ A ~ T A C B N ! N T C Due ~.l 1994 1995 1996 1997 1998 1999 2000 Aml!Wlt 85,000 90,000 90,000 95,000 105,000 110,000 115,000 S&Y DOC :-10. FJ<) OSJCRQDATED 1,1l8/92 lnrereM .Il..ru. MA1VRITY SCHEI>UU!. 2001 2002 2003 2004 200S 2006 2007 Am= 125,000 130,000 140,000 150.000 160,000 170,000 180,000 $. __ ---,,,,-_ 20 18 Term Bond Pri"": Plus Accrued __ " __ Interest % Interest &.t. "The 1992 Series A Bonds a.~ offered when, IS and if issued, subject to the approval of their Jegality by Jones Hail Hill & '\Vh.itc. a Professional u'\t' COlpOration, San Francisco, California, Bond CQunsel, Cenain legaJ matters will by passed upon for the-Cuy by the Cir-i Anomcy. It is e~pected mat the 1992 Series A Bonds will be made a-,,'ailable for delivery in defmiti ve fonn in New Yolk, New York, on 01 abou, April 9, 1992 . • Prelimixwy. subject to change. \ S&:Y DOC NO. 199 OS/CRQ DATED 1!08f)2 No ckalcr. broker. salesperson or Ofher person has been authorize-d by the City of Palo Al~o 10 give any irjormation or to make any representatitm.r. other than those contained in this OfficiaJ Statemenl::; arr.:i. i! giyen or mad~. such othe! infonnaricn Of representations must nol be relted upon as ba virlg been authorized by the City. This Orodal Stat.ement does not constitute an offer to sell or the solicitation of an offer to bu}", nor shaiJ there be any sale of the 1992 Series A Bonds by any person in any juris.d.ictlon in which it is urJawful for such person 10 make such an offer, solicitation or saI~. This Official Statement is not to be construed a.<; a contract with the purchasers of the 1992 Ser~s A Bo~d;<;.. Sratements contained in this Off'ldaI Statement which involl{-e es.timMes. forecasts or ma1ters of opiruon, whether or noi expressly ~o descri~d herein. are L'1tended so!~ly as such and are not to be c:onstrued.as a representation of facts. The information set fonh herein has been obtained by Stone & Youngberg from the City and other sources which 31e believed to be reliable, but is nnl guaranteed ~ to accuracy or completeness, and is not to be C'oru;trued as a represe:n!ation by Stone &: Your.g:berg. The information and expressions of opinion herein are subject to change \\'hhou[ notice; and neither the delivcry of this Official Statement nor any :sale made hereunder shall, under any circumstalloecs, create any implication that there has been no change: in the affairs of the Crty since the dafe hereof, Deflnition of cenaln renru used herein are set forth in Appendix A. This Official Statement is submitted in connection with tho: sale of the 1992 SC'ries A Borlds referred te he~in. and it may not be reproduced or used, in full or in part, for any other pu.rpose. IN CONNECI1ON WITH THIS OFFERING, 1HE UNDERWJtJ1E( MAY OVERAILOT OR FPPI!CT TRANSACUONS WlDCH STABIUZE OR MAINTAIN 11fE MARKIrr fRlCI! 01' 11fE 1992 SERIES A BONDS AT A LEVEL ABOVE 1lIAT WlDCH MlGKT OTHBRWlSI! PREV AlL IN THI! OPEN MARKET. SUCH STABILIZING,IF COMMI!NCI!D, MAY BE DISCONTINUED AT ANY TlMl!. THE 1992 SI!IlIBS A BONDS HA VB NOT BI!EN REGTS1l!IlED UNDER THI! SBCUR111I!S ACf 01' 1933, A!; AMENDI'D, IN Jll!UANCE UPON AN EXCI!I'TION fROM 11fE Jtl!GISTRAl1ON RI!Ql1IRI!MENTS CONTAINED IN SUCH ACT. llII! 1992 SERIES A BONDS HA VB NOT BI!EN RF.GISl1!RED OR QUAUFIED UNDER TIlE SECURITIE.'I lAWS OPANY STATE. S&Y DOC NO. 199 OSiCRQ DATED I/OSJ92 OTY Of PALO ALTO S ..... (lara Counry, California OTYCOUNCIL Gary Fazzino, Mayor Jean McCown, Vice Mayor Ron Anderson Mike Cobb Jo~Huber Liz Kniss; Rlchard Rosenbawn Joe Simitian Lallie 1Nheeler William Zaner. City Manager Ariel Calonne. Cny Attorney Gloria Young. City Clerk Emily Harrison, Director Kevin Riper, As:;istant Director Gordon B. Ford, Treasury Manager Jim Steele, Budget Manager Richard L. Young. Director Edward Mri.z.ek, Assistant Director Raben Colyer, Assistant Director Randy B aIdschun. Manage:I -Rates and Customer Services Ronald P. Belva!, Energy Manager -Resource Planning Debra Katz, Manager -Energy Scrv kes Da ..... id G. Adams. Director George Bagdon, ,Assistant Director ,"Villiam Miks, Regional Water Quality Contrrn Plam Manager Ioe Teresi, Senior Engineer SPIlClAL SI!RVICES Bood Counsel Jones Hall Hill & "''bite A Professional La ....... Corporation S an Francisco, CaJ ifomi a Security Pacific National Bank: Los Angeles, California ./~' LOCATION MAP S&Y DOC NO, 199 OSICRQ DATED 1/08,92 TABLE OF CONTfNJ'S INTIIOOIJCf I ON TIlE 1991 SElIl ES A BONDS .... , .... , .... , .... , .... , .. ' ... , ... , . , . , . , .. , . SOURCES A.'ID USES OF FUNDS IKE 1992 PROJECT SECIJR lIT fOR TIlE BONIJS IKE ENTElU'R I Sf The Electric Utility The Gas Utility 'Ibe Water Ud I ity The Wastewater Utility Tne Storm Drainage Uti f i ty APl'RQVAL OF LEGAl PROCEEDINGS ABSENCE OF LITIGATION TAX EXD!I'I'ION RATlNG LEGAL O/'INION .... , ........ , .......... , .... , ..... , ..... , ........... , nosING DOCUl!ENTS MISCELLANEOUS .. , ....... " ..... , ... , .. , .. , ... ', .... ,' APPENDIX A -SUlIMARY OF TIlE PRINCIPAL LEGAL IJOClJ)!ENTS The Genera1 Resolution The Indenture APPENDIX 8 -EloTElU'RISE FINANCES APPENDIX C -cln FINANCES APPfNDIX D -CITY OF PALO ALTO APPENDIX f. -FORM OF Bil'iD COL'NSEL OfT,JI}~ 2 6 6 II 21 26 JI 35 41 46 49 49 49 SO 50 50 51 .1.,1 A-I .1.-1 B-1 e-I D-I E-l • , ' .. ~,~~:,~, .';:~ :~: i, , - S&Y DOC NO, 199 OS/CRQ DATED 1/\)8~2 $4,750,000* OTY OF PALO ALTO U'IlL1IY REVENUE BONDS 1992 SERIES A IN1ll00uCTION The purpose of this Offi-::-ial Statement, which indudes the coyer page and appenciic('s hereto, is to set forth cel"ain information in connection with the sale of the City of Pale Alto Udliry Revenue Bonds. 1992 Series A (the "1992 Series A Bonds"). Certain capitalized terms used in this Official Statement and [lot otherwise defined bave the mCllnings St"t forth herein under "SIlCURJTY FOR TIlE BONDS -Definmoos". lbe 1992 Series: A Bonds are befng i..,;su'!d pursuant to the charter of the City and t.'fJe provi...o;ions of Chapter 12.28 (commencing with Section 12.28.010). of the Palo Alto Municipal Code, logether with . .A.rticle 9 (conuneccing with Section 5355U) and An.icle ! I (commencing with Section 53580) of Cb3£tet 3 of Part 1 of Division 2 of Title .5 of the Government Cod;: of the StBle ofCaluomia (the Sta:e"), all as in effect en the C1usin~ Date {me "Bond Law"), and pursuant to the tenIl.) and conditions of the Indenture of Trust by and between the City of Palo Alto and Securiry Pocific National B2rlk, as trustee (the "T:uslee") dated AugU"",1 I, 1990 (1M "lndenrure") and t.~ First Supplemental Indenture of TruS.f dated March 1,1992 (the FU'st Supplementallnlknture"). The 1992 Series: A Bonds are being issued to fmance certain exteruions and ~Iovements to the City~s Stonn and Surface Vlater Management Enterprise (the "1992 Project ). All references to and summaries ofprovl.'iions of the Indenture are qualified in their entirety by reference to tile full Indenture, copies of which are available for inspection al the offices of the City. The principal of, the redemption premium. if any, and the interest on the 1992 Series A Bonds are payable from the Net Revenues as defmed herein. The Enterprise generally consists of the Cuy 's exist ing electric ene rgy system, gEtS s),stem. water system, sanil ary sewerage and sewage disposal system. and stonn and surface water syMem. The] 992 Series A Bonds are special obligatioru; of the City and,together with the 1990 Series A Bonds $9.280,000 of which are outstanding: and any additional Parity Bonds (collectively "the Bonds") issued pursuant Ie the Indenture, are payable solely from. and secured by a pledge of and li~n on, the Net Revenues of the Enterprise, NcidJc< tbc geucraI _, tbc full foilh and c:rccfu, DO< tbc tuing PO'"" of tbc CiIy, tbc _ of California or any odJer poUrlcaI subdi'risXJa tbcn:of is pkd::cd to tbc _ of tbc 1992 Series A Bonds. The 1992 Series A _ ~ _ seemed by • legal or __ 1e pledge of or~, lien or CDCIDDb!aoce upon '"'Y propeny of tbc City or any of its mcomc or <=ips ""<qX tbc Not Revenues. The Bonds are secured by a lien on thl! Net Revenues which is junior to such lien with respect teo !he City of Palo .Alto Utilit)' Re .... enue and Refunding Bonds, 1983 Series A (the "1983 Bonds") issued in the aggregate principal amm.mt of $4,765,000 pursuant 10 Resolution No. 6111 (the "1983 General Resolution", and Resolution No. 6112 (Ihe "1983 Series Resolution", adopted by the City Council on April 25. 1983, A prin<ipal amoum ofS2.840.000 of the 1983 Bonds is currently outstanding. Under the It1denture, no additirmal bonds shall be issued pursuanl to the 1983 General Resolution un a parity with Ihe 19R3 Bond~ The City covenants in the Indenture thm it will at alilunes fi."I:. prescribe. reVi::,e and coI!eel Charges in each Fiscal Year which are sufficient to yield ~et Re .... enues equalw n~ less than 1.2..") times the Ma~imum Ar.nual Debt Service on all oUislanding Bonds. See"Secwily (or the Bonds-herein. "Pre1iminll!)', subject to change. -I- • S&Y DOC NO. 199 OSICRQ DATED 1~8192 To further secun-the payment of the prim:ipiiJ of and interest on L~ Bonds, the Indenture e~tabli.shes tM Resc:rv<e Account to be held by the Trustee, An amol:nl e1ual to the Reserve Requirement will be deposited in the Resene Account from the proceeds of the 1992 Series A Bonds. The Ir.d<::Ilture defmes the Reserve Requirement to equal the lesser of Maximum Annual Debt Service on all Bonds then outstanding or :oiuch rugber amount (not to exceed len percellt (100/,,) of me proceeds of me sale of the 't-onds to the investing public) as may be sel forth in a Supplementallndenlure, Under ce~a.in circUo.'TlStancelO. tl".te RescrvC' Ac .. ·ount may be replaced in whole or in part by a surety bond or a letter of credit. See -.Appendix A -Summary of Principal LepJ Dc ... _ "Scalrily foe Ibo _"0" THE 1992 SERIES A BONDS The 1992 Series A Bonds will be dated April!, 1992 and are to be issued in the aggregate principal amount, bear i'lterest at the rate pel annum and mature on the dales set forth on the cover pag~ hereof. Interest on the 1992 Series A Bonds is payable semlann'..lally on June: 1 and December J ofeach year, commencing December I, 1992 (each, an "Interest Payment Date"). The 1992 Series A Bonds v.'ill be is3ued in fully rc-gistered form, with~)ur coupons, in the denomination of $.5,000 or in any integ.ral multiple !hereof. Pri.."lcipal of and redemption premiu.'ns. if any. on the J992 Sene'S A Bonds, will be payable at the corporate uust office of the Trustee in Los . .o\ngeles, California upon the present.ation and surrender of the 1992 Series A Bonds. Interest on the 1992 Series A Bonds will be payable by check or draft mailed by flfSt class ma.i1 on each IntereST Payment Date to ~he owners of n:clJrd (the "Oovnu") as of the dose of bu:sine~s on the fifteenth ca1endru· d3.y oi the mor'IJh immedi2:tely pre~dtng each Interest Payment Date (each, .a "'RecorJ Date") at the addresses then shown on the 1992 Series A Bond registration books maintained by the Trustee for such pu~es. or by wire transfer on each Interesr Payment Date to any Owner of $1,000.000 0[ more in aggregate principal amount of 1992 Series A Bonds who has .requested stich transfer by written notice filed with the Trust~ by the Record Date preceding such Interest Payment Date, to such account as shall be specified in such written notice. Each 1992 Series A Bond is to bear inte~r from the Interest Payment Date next preceding the date of authenticatj(lD thereof unless said date of authentication is an Interest Payment Date. in which event such interest is payable from such date of authentication, and unless said date of authentication is prior to December 1, J 992. in which event such iIlt~rest is payable from April I, J992; provided, however, that if, as of the date of authentication of any 1992 Series A Bond. interest thereon is in default, such 1992 Series A Bond '(lhall bear interest from the date to which imerest htl...5 pre"l!)usly been paid or made available for payment thereon in full. ]nt~resr shaH i)e calculated on the basis of OIl 360-day year of twel ve 30-day month.,,>. Any 1992 Series A Bond may, in accordance wit:h its terms, be transferred upon the Bond Registration Books by the ~rson in whose name it is registered. in person or by his duly authorized attorney, upon surrender of such 1992 Series A Bond for canceIlatiol1. accompanied by delivery of a written insaumenl of transf~T in a fOml appro\·ed by the Tru<;!ee. dul~ o.eculed. "Whenever any 1992 ~ries A Bond shall be surrendered for [Jan~fer. the City shall e:\~cut{ ... nd (he Trusree shall thereupon authenticate and deliver to the transferee a new 1992 Series A P. -Id or 1992 Series A Bonds of like tenor. maturity and at:gregate principal amount No 1992 St. ·s A Bonds the notice ofredemp!ion ofwh.ich ba$ been mailed pursuant to the redemption provisions of the Indenture shall be subject to uansfer. -2- ----... 07--------.... ~ .. ~. L -- - • i i I l i I 1 r t - S&Y DOC NO. 199 OSiCRQ DATED 1/08/92 1992 Series A Bomi,> may be: ex.changed I!:t the tn'51 office of the Trust~, for 1992 Serles A Bonds of the same :enor and maturity and of other authorized denorrunations, Ifany 1992 Series A Bond shalll'oecome mutilated, the City. at the expense of the O',lmer of !laid 1992 Series A Bend, shall execute, and t.~c: Trustee shall thereupon authenrLc:He a.~d deliver, a new 1992 Series A Bond of like maturity and principal amount in e1.:chang-e and suhst!t'...:tion for the 1992 Series A B0nds so mutilated, but only upon 5unender to th(: Trustee of the i 992 $tries A Bond so mutilated. Every mutilated 1992 Series A Bonds so surrcnckred to !he Trustee shall be cancelled by it and deHvered to, oc upon the order of. the City. 1£ any 1992 Series A Bond issued shall be lost, destroyed or stolen, evidence of such loss, destnlcrion or theft may he submitted to the City and the Trustee and. if such evidence be satisfa.ctory to them and indemnity satisfactory to them shalJ be given, tM City, at the expense of the Owner, shail ell:~ure, and the Trustee shall thereupon authenticate and deliver, a new 1992 Series A Bond of like maturil)l and principal amount in lieu of and in substitution for the ] 992 Serles A Bond so lost, destroyed or stolen {Ol if any such 1992 Series A Bond shall have marured or shall have been called for redemption. instead of issuing: a substitute 1992 Series A Bond the Trust~ may pay the same without surrender thereofupnn receipt of indemniry satisfactory to the Trustee). The City may require payment of a reasonable fee for each new 1992 Series A Bond issued and of the e",.-pens.es which may be incurred by the City and the Trustee. Any 1992 Serie_" A Bond u;sued in lieu of any 1992 Series A Bond aIJeged to be lost. destroyed or stolen shaD cons!rtute an origin al contr&ct\l aI oblig atian on the part of the C it)' whether or not the 1992 Serie s A Bond alleged to b: lost. de:strClyed or stolen be at any time enforceable by anyone, and shall be equally and proportiopately entitled to the bene-fits of the lmknlure with all other 1992 Serif's A Bonds oecwed by .he Indenture. The 1992 Series A Bonds matt!ring on OJ befon:: June 1, 2OC1. shall not be suhject to optional redemption prior to maturity. The 1992 Series: A Bonds maturing on or after June 1. 2002 shall be subject to redemption prior to their respective marurity dates. at the optlon of the City, as a whole on any date. or in pan .in inverse order of marurities and by lot 'p;,hhin a m arurity on any Interest Payment Date, on or after June 1, 2001, from any soutC'e of available funds, at the following resp«:tivc redemption prices (the "Redemption Price") v.hich are expressed as pe1'Ceniages of the principal amount ef the 1992 Series A Bonds to. be red«tned, plus accrued i'lteresl thereon to the dale of redemption. June I, 200 I through May 31, 2002 June I, 2002 through May 31, 2003 June 1,2003 and thereafter &dt1llj1!ilID.I'lli.., 102% 101% jOO% 1be City shall give the Trustee wrinen notice of jts intention to <optionally redeem i992 Series A Bonds and shall deposit all amounts required fur su\,;h redempcion wirh the Trustee at least forty-five days prior ro the dale fu.ed for such redemption. Term Roods Sinking Fund Redemption Bonds maturing ~cember 1.2018 <the "Term"Bonds"I aJe SUbJe'l-! TO mandaTory redemption in pan from sinking fund payments to be made by the Ciry on December 1, Z008 and on each December 1 thereafter up to and including December 1. 2018, at a redemption price equal to 100% of the principal anlClunt thereof plus accrued lnte~st, if any, hJ the redemption date without premium. -3- - S&Y DOC NO. 199 OSICRQ DATED 1/08/92 1be folJowing sinking fund payments an: calculated to be sufficient 10 redee:n the (ollowing prinCipal amount of Tenn Bonds: 2008 2009 2010 2011 2012 2C13 2014 2015 2Ol6 2017 201S (ma!Urity) P .. dwoeol!loDds iDLieu ofR~ $190,000 205,000 220,000 235,000 250,000 265,000 185,000 305,000 325,000 350,000 315.000 In lieu of redemption of 199'2 Series A Bonds as described above, amounts in the RedemptioP Account of tho: Debt Service Fund may also tae csed and wilhdra~"D by the Trustee aI any time, upon the Request of the Ci.")' flied with the Trustee no later than April 15 in nny ycer. fo!' the purchase of the 1992 Series A Bonds at FJblic or private saIl! as and' when and at such prices (including bro~erage and othr..r charges, but e~cluding .2.Ccrued bUc:resl, which is payable from the Debt Service Fund) as the City may in ics discretion determine. but nO! 10 exceed the principal amount of such 1992 Series A Bonds plus the redemption p11.!'nllUm applicable on the next ensuing oprjona1 redemption date. The City shall. at the time of any such purchase, pay to the Trus'(e~ for deposit in the Debt Service Fund the amount of any deficiency in suc.'! fund which may be caused by such purchase. All 1992 Series A Bonds so purchased shall be =Iled. All 1992 Series A Bonds redeemed and all 1992 Series A Bonds pur<:hased by the City ,hall be cancelled and destroyed. SpecioI-, J> • 4 i<>a from ___ D< Qw>cIemnMjon rro.-I& The 1992 Series A Sondo; are subject to mandatory r..demption as a whole on any date or in pan on any Interest Payment Date in inverse order of matudty and by lot within a maturity. [0 the exteM of lhe Net Proceeds c f hazard insurance not used to improve, repair or re build the Enterprise or the Net "Proceeds of condemnaticn awards recei\'ed with respel:.11o the EnrerprEse at a Redemption Price equallO the principal amount of the 1992 Series A B,:mds plus interest accrued theR:on to the date fn: ed for redemption. without premiwn. Unless waived by any Owner of Bonds to be redeemed, notice of any redemption of Bonds shall be given. at the expense of the City, by the Trustee by mailing a copy of redemptlon notice by flISt class mail ar least 30 days a"d not more than 60 days prior 10 the date f!.Xed for redemption to the Owner of tl]e Bt1nd or Bonds ro be redeem<:d at the addre~s shown on the Bond Registratjon Boob or ar such othu adGress as is fumhhed in wriril1,g by such O",:ner to the Trustee. Neither thll:' failure to receive such notice no! any unma!erial defect in ~y notice shall affeC1 the suffilCiency of the proceedi..'1gs for the redemption of the Bonds AlI notices of redemption shall be dated and shall state: (i) the redemption date, -4- f I f ' I , , , I i I ! :.",{: . - S&Y DOC NO. 199 OSICRQ DATED 1/(18192 Oi) the Redemption Price. Gii) if fewer than all Outstatld..ing Bonds are to be redeemed. l.he itkntitlcation (and, in the case of partial redemption, tile respet1i ... e prmcipaJ amounts) cf me Bonds 1'0 be .redeemed. (iv) tllar on t..~ redemption dale the Redemption Price will b<: corne due and pCl.1'abie with !'"C'spect to each sur::h Bond or portion thereof ca.lled for redempfion, and that inrerest with respect thereto shall cease to :tCl'rue from and after slid date. and (v) the place or places where su.cb Bonds are to be surrendered for payment ofth~ Redemption Pri-::e, wI-J.ell plao,;;es 'Of payrnem may include the Trust Office of tile Trustee-. At least fony-five {45) days prior te all)' redemption date. the City shall deposit with me Trustee an amount of money sufficient to pay the Redemption Price 'Of all the Bonds or portions of Bonds wr.ich are to be redeemed on that dale. No~ice ofredcrnpuon havi.!1g ~n given as aforesaid, the Bonds or por.:ions of Bonds so to be redeemed shall, on the redemption date, become due and payable at the Redemption Price therein specified, and from and after sucb date I,unless the City shall default in the payment of the Redemption Price) such Bonds or p<lrtlons of Bonds shall cease 10 have interest accrue thc:n:on, Upon surrender of such Bonds for redemption in accordance with such notice, such Bond, !hall be paid by the: Trustee at !he Redemption Price. InslallmentS of interest due on or prior to tile:: redemption date shall be payable as set forth h~rein. Upon SUITei1<kr for any partial ~demption of any Bond, there shall be prepared for the owner a new Bond or Bonds of the same maturity in the arnounl ofthc-unpaid principal. All Bonds wh;c:h have been redeemed shall be ca...l1celled and destroyed by the Trustee and shall nol be redelivered. Neither the faih.;re of any Rond Owner 10 receive any notice so matled nor any defect therein sha:JJ affect the sufficienC}' of the proceedings for redemption of any Bonds nor the cessation of accrual of interest thereon. In addition 10 the foregoing notice, further notice shall be given by rhe Trustee as set forth below. but no defect in such further notice nor 3.Il)I failure to give all or any portion of such further notice shall in any marme r defeat me effectiveness of a call lor .redemption If notice thereof is giv.:n as above prescnbed: (i) Each fW1her notice of redemption given shall contain the infOfln2tion reGutred above for an official nodce of redemption pl!Js {A) 1m: CUSIP numbers of all Bonds being redeemed; (B) the stated interest rale witb respect to eacb Bond being redeem~d; (C,I tbe maturity date of each Bond being redeemed; and (D) any other descriptive infonnation needed ~o identify accurately the Bonds oci~g redeeme..cf. {u) Each further notice of redemption shall be sent at least 3.5 days before Li.e redemption dale by registered or certifi<:!d mail or overnight deli ve ry sen ice to all registered secw-ides depo&itories then in me business of holding sllbstantial amounts of instruments of types comprising the Bonds. and to one or more Infonnation Ser"rices. (iii) Each such funher notice shall be published one tUne in The Bond Buyer. or. if such publication is L."npractical or unlikely to re-a..:.h a subslanTial number of the O\HlerS of the Bonds. in some other fmancial newspaper or Joumal ';l.'hid'l regularl) came!> n(1 tices of r~demption of other instruments Similar 10 the Bond:., s.ucb publlcalion 10 be made al lea;;;t 30 days prior 10 the dale flXed for redemption. -s- , .. I r ! S&:Y DOC NO. 199 OSICRQ DAT.!OD It1)81')2 (h') Upon the pt:yrneor of the Redempcion rrtce of !.he Bonds being ~emed. each check Qf otlier tran:o;fer of funds: issued for sud: pwpose shaH bear the CUSIP number idenufying. by issue and maturiry, the Bonds being re<kemed with the proceeds of such check: or other tlansfer. SOURCBS AND USES OF I'UNCS 1be following table sets forth I~ estimated sources and uses of funds for the 1992 Series A Bonds. Sou:rce:s of Funds: Principal Amount of 1992 Series A Bonds Accrued Interest TQfaI Sonfees Uses of Funds: 1992 Project Fund Underwriter Discount Cost of Issumcc Fund Debt Service Fund (Accrued Imerest Due) Total Uses THE IWZ PRomcr $4,750,000.00' $4:;65,000.00' 6~,ooo.00· 120.000.00' $4.750,00000' TIle City has determined after due in .... estigation and deliberation that its best interest.s aJ~ served at this time by the issuance of the 1992 Serle s A Bonds to flnance the Project. Approximately $4,565.000 of 1992 Series A Bond proceeds and investment eami.Tlgs on those proceeds are expected 10 be expended on the Project through fISCal year 1993-94. Estimated expenditures listed below for each ponion of the Project only include costs to be incwred through the en<! offlScal Y" .. 1993-94. "The City will be funding the diff.,."", between bond pl"OCeeds and total project e.xptndi~s with cash on I. "pay as you go" basis. l11e fcUowmg deScription of facilittes and activities to l>.:-undertaken by the Cny tr:present details of the Project: Stoon Dr:a.inU.e Conditi~.s.sm~llI_~ Estimated expenditures: $ 900,000 This project consists of retaining 3. consuhant fO perform a conwtion assessment of the City~s existing stonn drainage system to serve as the basic;; for a ph~d program of stonn drain system n:placer.-.ent/rehabilifation projcc..u. The comultant will evaluate the condltinn of the stonn drainage system by performing \'iden LnspectjOl1 of undergrt1und p!pelin~s an~ manual inspection of manhoJes and c21ch basins. The work also includes {he compilation of iJlVemOf)' dara for all pipelines. carch basins, and manholes and the identification of potential illicit connections to the Slonn drainage SYSTem. The condition a:!:;se,<,smenr repon will identif: and analyze all system defects and recorrunend meinods of replacemc-nr or rehabilitation, inclllding: ·Preliminary. subject to change . - S& Y DOC NO. 199 OSiCRQ DATED 1108192 appropriate materiAls, methods, and cost ('stimates. TIle consultant will priori{ize the .recommended work, based upon Ihe severiry of the: defect, the lrrtpol1ance of the componenr in the tota! stonn drainage system, cosT-dfettl\lexss, and other applIcable criteria, S~rmDili!lll~1-.lisl~Pl .. ~ Estimated expenditures: S 250,()(X) This project consists ofretaintng a consultant to prepare a storm drainage master plan to serve as the basis for a phased program of storm drainage improvements .. The consultant will review and ide11tify the existing and proposcd land use for the CI~Y in ord~r to delemum: future 5tooo driilllage system capacity requirements for ~ 20·year planning period. The fl.TTJ1 will also fe'1liew the existing stonn drainage syste:n, iPduding the un.1ergJound pipe network., pump stations, and flood control channels, and will determine the existing capacity of!he individual system components. The consultant ",:ill develop adyn.am.ic computer-based model of the city's storm drainage system that will iJentify capacity deficiencies v.:ithln the system. The masier plan repor1 will present .a recommended construction option tor each sy stem de.(lc ienc y, itst ing appropriate materials. methods, and cost estimates. 1be consulrant will prioritize the recorntnended improvements, based upon the severity of tile capacity deficiency, the:: importance of the component in the Iota.! storm drainage system, cost-effectiveness. and other applicable criteria. Barron Park DrnJpage!Sm;et Guidelines .S.N.~ Estimated expenditures: $15,000 nus project consists of retaining a consubant to develop design guideiines for drainage and street improvew:nts in the Banon Park. neighoornooo.. The Bmon Park COID.-nurUty has e~pressed a Jesire to mamt2.in the rural character of the area rather chan i'1~orporate the City's standard curb. gutter. and sidewalk standards inta improvement projectS within its neighborhood. The consultant will develup altemilti,·c standards that achieve the necessary lcchnlcal results as v.'ell as the. desired ~St.hetlC quahtie~. This ~'ill be accomplished by researching similar neighborhood..<;, obt:a..ining re.eidenf feedback through survey questil1nnaires and neigh~.uhood meetings, and determining minirnwn technlcal requirements ~hi.~ .. JnfunnatipD System (GlSl.1&Y.t~ Estimated expendirures: $120,000 This proje.ct consists of the Storm Drain3ge Enterprise Fund's contribmion!O the development of the City~wide ~ographil,.; Infoml3tlon System (GIS). The City bas !elained a ronsulta..'1.t to implement a system to computerize all of the City··s mapping fundions, including the swan drainage system maps. The work includes aerial photography, SllTyeyL"'1.g. digitizing of mapping data. and fmal productio(l of computer-based maps. Everett Aven .. \,J.~ Drainage .lnJ.prove~t.s Estimated «penditure,,, $ 2,500,000 This project consists of the design and construction of storm drainage improvements for the drainage basin along Everett and Hawthorne Avenues. An engineering consultant will be retained fo design the physical improvements and to assist Ciry staff in a neighborh()od Qutreach and en,,'ironmental ass.e,c;sment of the project. The work will aL<;{) include aerial mapping of the project site, surveying. geotechnical explora 'ion. and coordmarion wjth per,nitting agencies Tbr consultant will prepare complete construction d~)("uments (plans. speCifications, and estimate) for the installation of the required :storm drainage system improvements. The project will be cQrnpetitively bid. and a conlIact ..... ill be awarded to a private contractor for C"onstruction of the improvements. , I "~. ~ ,"', ;:-"~-,,,. :,'" - r--'c-i~;::~:-A - r _.-.-.i.~"-~t;...",::;~":..'.- ..; " 0 ........ '· _ •• ->.: . ~--"....- ':::~-,"-)""~' " ;;*~~tl" · .. :C > -~, .,~-'-,"-"--",-="'-~,--,-'''' "--- Stoan Drainage Pump StatiQn~ Estimated expendir--lres: S 245,000 S&Y DOC NO. 19') OSiCRQ DATED l1OSJ92 This project consists of the design and constructiop of i.mprov~~-~nts to the City's six primary stonn drainage pump stations. $Qme shon-term modificat;c ,.s, .inciudIng paitlti.'1.g, cleaning and maintenance of equipment, safety-related modifications. and other miscellaneous equipmenf repa.ir/repJacement, will be .icc-omplished rhrough a C'ombin~tion of in-holJse labor and contract services. For me major improvements • .an ~ngine¢ring consultant will be retained to make I detailed tvaluation of the adequaLJ' of the pump stations and recommend and design ~cessary improvemtnts. The improvemen::s will upgrade the p'.unp stations to meet current capacjry and operational requirements. Tbe consultant will prepare complete ccnstrut1ion dOCumetlLS (plans. specifications, and r-stimate) for me installation of the ~quired pwnp station improvements. The projet1 ~·ill be competitively bid, and a contract will be awarded to a private contractor for construction of the improvemenl s. PII"", 51aJjon Trlemrtt)' System Improvements Esrimated .. pendi:ures: $250,000 nJs project cor..sists of the des ign and construction of impro\o'emenu to the telemetry system fcr the stonn drainage pmnp stations. An engineering con5ul~ant will be retained [0 design i.-nplOvemems ~lJ the system, wruch morutors pump station opera;ion and rei '\ s pump status and alam:: conditions to maintenance personnel at a central location. Tbe existing hardware, which is unreliable, difficull to maintain, or non-fun-.:tional. will be rep-lii.:«l wiih modem equipment. The consultant will prepare ccmplete con.<;trut1ion documents (plans, specif~catioos., and estimate) for the installation of the r.e"" telerneuy s)lstem. TIl<: project will be corr.petitively bid. and a contract will be awarded to a private contractor for construction of the improvements. Cprb and Gutter Replacement Estim.tted expenditures; $ 200,000 This project consists of replacement of defective sections of cum and gotter throughout L~ City. A weU-designed and maintained curb and gutter network reduces localized flooding by conveying surface runoff to the underground stonn drainage sys~em. TI-.e City bas idenlif1(:d sections of curb and gutter to be replaced ~cause they .PC'nd water as a resu!t of settlement. upheaval by ~ roots, or other displacement. The work in-:!udes the removal and replacement of defective sections of curb and gutter and adjacent pavement, driveways, and sidewalk. This \\-·odc will be perfonned by a contra~or as pan of the city~s annual sidrwa..lk replacemem program. . Ntmpoint Source Polllltiop CQ.Qlml..P..IQ-WUD EStimated expenditures; S 395,000 Thi~ project consists of the City'5 contribution to the Santa Qara VaDey Nonpoint Source (NPS) Pollution Control Program and capital improvemems undenaken to improve stom1'w'ater qualit)'. NPS poU\ltion con.c:;i.">ts or oil/grease, heavy metals, s\Jspended solids, pest icides!herbicides , and other poilutants which toter San Francisco Bay VI!. urban stormWa!er runoff. TIle Santa Oara Vaney NPS Program, v.:hicb ha<i been mandated by the Regional WateT Quality Control Soard, is a cooperative effort of 15 South Bay agencies 10 control NPS pollution through new re~u:lalory controls, increased maintenance, ~cycling, a."K! hazardous waste disposal activities by public ageocies, and a public education/outreach program. The City's contn"bution will be used for consullant services, Program administration, NPDES perm.it fees. and other related expenses. ------''"= ..... ----------_ . ., .. ·L - i j~ i l I , i ! r , \ ,- • • S&Y DOC NO. 199 OSICRQ DATED 1/08192 The City will undertake capital improvement projects designed'o improve Sformwater quality, such as a proposed pilol-scale projc<.1 to diven stormwater to the sanitary sewer system in an area of the City where storm water contains large L"IlOunts of urban c-ontaminanrs (oil, grease. chemicals, etc.). An engineering I;Qnsultant will be retained III desisn the .:iIvcrsion system and to identify a 3uitable project site. The consultant will p!ep~ a complete set of construction documents (plaras, specificatlons, and e5iimate) for the st.:;nnw.ater diversion project. This project will help City staff detcrntine !h.C' effectiveness of divers Lon in controlling nonpoinl" sou...T'Ct pollution. The project will be competitively bid. and a contract will be awarded to a private contractor for construction of the improvements. Cgoperativc ProieC..'1S wjrb the Santa C1ar.A.Y.all~y W.at.eJ District Estimated expenditure" $12:1,000 This project provides for the City's share of agreements with me Santa Clara Valley Water Dist::rict. the local flood control agency, to pay for improvements to City facJ1ities as part of District flood C'OI1ttol projecl~. For example, the City has and will continue to :!lh~ the cost of district ernsil)rl controi projects on San Francisquito Creek in order to prevent or-comct damage to adjacent City streets. In addition, the City intends to provide funding for the betterment e,f a City bicycIe!pedestrian bridge to be .replaced duri.,g the reconstruction of the Adobe Creek channel. The cost·shanI·.g agreements with the District typically cover engineering and constnlctioD costs incurred during an improvement plOject. .",. -..... ~n __ .. i .... J. Sol Y DOC NO. 199 OSICRQ DATED 1,1)8.' Set (onh below .is the annual debt service on the 1992 Serks A Bond!'. ba...~ on the inter~st rates and' maturity sC'bedule set {onh !'n the cover or this Offici al Statement. Year Ending llJJJC 1 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20!4 2015 2016 2017 2018 [raCOME] -10- . ~."'": "&.;. ~ :.:_:J~:-~ .' I , - S&Y DOC NO" 199 OSICRQ DATED 1/08/92 SIlCURrI'Y fOR THE BONDS "Bond.<;." means, collectively. the 1990 Un1iry Revenue Refunding Bonds Series A, the 1992 .xries A Bonds and any PaIit)' Bonds issued and at an)' time: outstandi.1g under the terms of the Indenture and tlnacr a Supplementa! Indenture The Bonds are special obtigations of the City and, pursuant 10 the Indenrure, there are pI~dged for the benefit of the Owners of the Bond. .. !ha.t portion of Net Revenues which ts necefisary 10 pay the princip~ or R-edtmption Pr~ of and interest on the Bonds in any Fiscal Year, together with all moneys on deposit in the Debt Ser\'ice Fund. The Net Revenues shan not be used for any other purpose while any of the Bonds fl'!main outstanding. except as plovided in die Indenture. This pledge shall constitute a fust, dIreel and exclusive: charge ar'Jd lien on the: Net Revenues for the payment of the principal or Re<lempLion Price of and interest on the Bonds subject only to the lien of the 1983 Bonds. The current olJtstanding principal balanc'!" of the 1983 Bonds is $2,849.000. '!be Indenture provides that no addilional oonds on a parity with the 1983 Bonds shall be issued" The Net Revenue~ constitute a trust fund for the security and payment of the principal or Redemption Price !)f and im~!esr on the Bonds. The general fund of the Cit)' is not liable and the credit or taxing }XIwer of the City .is not pledged for the payment of the principal or Redemprion Price of and interest on the Bonds. The Ovmer of the Bonds shall not compel the exercise of the taxing power by the City or the forf~iture of its property, The principal or Redemption Price of and intere_st on the Bonds are not a debt 0 f the City. rIor a legal or equ ilAble pledge, charge, lien or eJKumbrance, upon any of its property. or upor. all)' of its inCOI!le, .receipts. 0'[ revenues e~cept the Net Revenues ofthi!: Enterprise. The City covenants and agrees that aU G:-oss Revenues. when and as received, v.' ill be recei'led and he] d by the City b trust hereunder and w ill be deposiied by the City in the Reve nue FI.lJld {which has heretofore been created pursuant to me 19B3 General Resolution) and will be accounted for through L'ld heid in trust in the Revenue Fund. and the City shall only have sl1ch beneficial right Of interest in any of such mone)' as provided in the lnilenrure. Ail such Gras'; Revenues shall be transfened. disbu~d. allocated and applied solely to the uses and purposes idenruIed in the Indenture. a.rK! shall be accounted for separately and apart fmm all other mone.-y. funds, accounts Of other resources of the Cit)', TIle Indenrure de,fUles cenai.'1 renDS, the use and meanings of which are imponam ro an understanding of the security of the Bonds. C'!:rtain of the deflIled terms are set forth below. Capitalized terms herein are used with these meanings. "Bonds" means. collectively. the 1990 Utility Revenue Refunding Bonds 1992 &r~s A. the 1992 Series A Bonds and any Parity Bonds issued and Itt any time Outstanding under the terms of the Indenture and under a S'l!f'plemental Indenture. "Charges" means fees, tolls, a.~sessments, rates and rentals pn:f,;;:ribed under the Bond Law or any other Jaw of the State by the CllU!1cil for the wa:er. gas. or electric energy. or the services and facilities of the Enterprise furnished by the City. -I j- ". I I I - S& Y DOC NO. 199 OSICRQ DATED IMf';2 "Entc:rprist" means the whole and each and ~vef)' part of (i) the existing electric energy system of the City. comprising aH facilities for the generation, production, transmission and distribution of elednc energy. (ii) the exi..srtng gas system of the City. comprising all facilities for the production, storage. transmission and dismbution of gas for pubtlc or private use .... (iii) the existing wafer system of the City comprising aU facilities for the: obtaining. conserving, treating. distributing, sioring and supplying ":)f warer for domes-tic use, irrigation, sanitation. industrial use, ftre protection. recreatiOT' .. or any mher public or private uses, (iv) the existing sanitary sewerage and sewage disposal system of the City. comprising all faciilties for the coUection. treaJrnenl or disposal of sewage and waste, and (v) me existing storm il!1d surface water system of the City. IX'mpri~ing all facilities for ~ht= coJlection, treatlnenr and disposal of stonn and surface walet, and identiHed as the Storm and Surface Water Management Enterprise and Utility i"l Ordwmce No. 3910 effective on December 21,1989, including all addi:!ions, bett~rments, extensions and improvements 10 each such system, respectively. or any pan thereof, heretfter acquired or constructed or fInanced. "Gross Revenues" means, for any period of computation, all gross charges received for, and all other gross iN:ome a'ld revenues deri..,'~ by the Ciry from, the ow ne!ship or operation of the Enterprise or 0tberwisc. arising from the Enterprise during such perioo, including but not litnited to (a) all Charge~ received by the City. (b) all receipts defIned from the investm.ent of funds held by the Director of Finance or the Trustee uuder the IndentUre, {c) transfers from (but exclusive of any transfers to) any stabilization reserve: funds, and (d) all moneys received by the City from other public entities whOM: inhabitants are sen ed pursuant to, contract::; with the City. "Maintenance and Operation Costs" means me re&SO!"lab1e and necessary COSts spent en incurred by the City foc maintaining and operating the Enterprise. calculated in accordance with sound accounting principles. including the COS! of sl,.;~y of water, gas and electric energy under C{'lntracts or otherA'.Lse, the funding of reasonabJe n:5erve'E. and all ~able and necessary e"pc:nse.~ of managEment and repair and other expenses 10 maintain and preserve the Enterprise in good repair and wodcing: order, and including aI..I reasonable and necessary administrative costs of the City attributable to the Enterprise:: and the Bonds, such as salaries and wages and the necessary contribution to retirement of employees, oveIhead. insurance, taxes (If any), expenses, compensation and indemnification cfthe Trustee, the Fiscal Agent and the Paying AgentS and fets of auditors, ~ounlants, attorneys or engineers, and including all other reasonable and ltC.;essaJ')' COSts of the City or charges .requL'Cd to be paid t-y it to comply with the lenns of the Bonds O~ of the 1983 General Resolution. the 1983 Series A Re:.olution 0':' th.! Indenture, b ... t excluding depreciation, replacemenl ilIld obsolescence charges or reserves therefor and amoniz..ation of intangibles or other b<x>,klc:eeping entries of a sirniLu nature. "Net Revenues" means, for any J>C'.riod of complltation, the amount of the Gross Revenues received during such period less :he amount of Maintenance an<! Operation CoSl<1o becoming payable during SUch period. "Parify Bonds" means all bonds, notes or olherobhgarions (including. wit bout limitation.., Jong-Ierm contracts, loans, sub-leases or otherlegal financing arrangements} of the City payable fro,m and secured by a pledge of and lien upon ar.y of lhe Net Re\'enues issued or incurred on a parity with the i992 Series A Bonds. lbe Fint Supplemental Indenture defines certain addltional terms which are important to an understanding ofrne 1992 Series A Bonds. Certain oflhe.<;e defmed terms are set fonh below. '~-,":"'"""'L~Q -. -" .. ,,-- .. ",.:.:-~ •. - J 2- i I : , i I I I I ! I - S&Y DOC NO. 199 OSiCRQ DATED 1/08;'92 .. Alt<;mative PIQje..Ijj:" me.ms any project id~mified by the Cit)' pursuant tv Sc(..1!On 304 undertaken for the: purpose of improving, reconstructing. eruilTging. tXlend:.ng, replacing, f<!pairirlg. equipping, developing, embeili<.;hing or otherwi..<>e improving ail or an)' paJ1 of the E n1 e.rpri:;e, "Q~ __ ~" means the Ouaranry Agreement with respect to the 1992 Series A Bonds, dated as of the Oosing Dale, by and between the City and A'-w1BAC lndemniry. "interest Payment PAl:" means, wirh respect to the 1992 Series A Bond!'. June 1 and December I in each year, beginning December I, 1992 and continuing 50 long as any j 9Y2 &rks A Bonds remain Outstanding. "l..22.2...E.L~" means certain extrnsions and improvements to the Cit)i'$ StOrr:1 and Surface Water System consisting of~tudies. design projects RIld capital improvements more fully dest:n"bed herein cnder the ) 992 Project. "1922 Project fund" means Ute fund by that name establi ... hed and held by the Director of Fin~ pursuant to lhe First Supplemental Tru~1 Agreement "1992 Si:ties A Bonds" means the Bonds authorized by the Fintt Supplemental Trust Agreement and the Bond Law. "Orjginal Pu~r" means the bidder to whom sale of [he 1992 Series A Bonds c; awarded by the City Council. "Record Da[~" means, with respel..1: to the 1992 ~ries A Bonds, the f"Jiteenlh (l5th) calendar day of the months ufL"'TIediately preceding an Interest Paytl"1ent Date. "Swmv Bvnd" means the sUIety bond issued by AMBAC lndemniiy guaranteeing cenain payments into the Reserve Account with respeclto the 199~ Series A Bonds as provided therein and subject to tbt limitations set forth tbe~in. ''ThIm Ii2nd.i" means with .respe ct 10 the 1992 Serie:\. A Bond.~, the 1992 Series A Bonds maturing on December I, lOIS. "Trust Qffice" means, with respect to the 1992 Series A Bonds, the principal corporate trust office of [he Trustee a~ 333 South Beaudry Avenue, Los Angeles, Calu0m.ia 90017, or at such other or additional offICes. as may f)e specified to the City by the: Trustee in writing. The Ciry covenanu and ag.rees that all Gross Revenues, when and as received, will. be received and held by the City in uust and will be deposited by the Ciry in the R~ ... enue Fund (which has been created pursuant to the 1983 General Resolution) and will be accounted for through and held in trust in the Revenue Fund, and ti;,:-ei!)' shall only bave such beneficial right or interest in any of such money as provided in the Indenture. AU such Gross Revenues shall be transferred, disbursed, allocated a..'ld applied sole!)' to the:: uses and purposes set forth in the ]l1denture, and shaIl be accounl~d for separately and apart from all (l!her rIwney. fund". Jcc,,)unts or other resources 0 f the City ~ Debt Servlce Fund, as a special fund. and the Redemption Accounl and the R(:sc["I,'e Account, as special accounts therein, have been crealed. 1bc Debt Service Fund is held and maintained by the Trustee and the Revenue Fund is held and maintained by the Director of Finance -13- - .' .-' ~J~ ~.";. S&Y DOC NO. \99 OSiCRQ DATED If{)~!9l All Gross Revenues are heJd in trust by the Director of .FinaJi{:e in t~ Rt.venue FlJnd and shall be applied, transf~rn:d, usro and withdrawn as follows: (j) Qpt:r.a1ini Co:tU. loe Duec;(Jr of Finance sn:lll first pay from the moneys in the Reve!lllc Fund [~ budgeted Maintenance and Operation CC5tS as such Costs become du~ and payabl~. (2) J983 5(:ries A Bond pa~ The D:rector of Finance shall next pay and transfer from the Revenue Fund 10 the Fiscal Agent for deposit in [he :Sond Account and the Bond Reserve Accoum created pursuant ~o Section 503 of the j983 General Rr:sollJtiQn suc" amounrs as are nec-tssary to satisfy the req ... iremc:nts of said Section 503 in full with respect to the 1983 Bonds. (3) Dc:_bt_Sc:nice: Fund_ On or before the second day prior to elich Jntere$l P.s.yment Dale, the Director of Finance shalll1ansfer from the Rev~nue Fund to the Trustee for deposjf in the Debt Service Fund (i) an amount equal to tN.:: ag.gn::gate arnoanL of interest to become due. and payable on all Outstanding Bonds on the next suC"c-eeding Interest Payment Dat~, p'us (ij) an amount equal !o the aggregate amount of Principal Installments becoming due and payable on an Out.~anding BondS on the next succeeding PrinCipal tns.tallmenl Date. plu!i: an amoum equaI to I.bc aggregate amount of Sinking Fund Installmenu payable on the nCAt succerding Principal lru:~aUment Dare. All inferest earnings and prof LIs or losses on the investmenr of &m<lunfS in the: Debt Service Fund shall be deposited in o!' charged to the Debt Servic~ Fund and applied to rhe purposes tM~of. No transfer and deposit n~d be made into the Debt ~rvice Fund if:he amount contained therein, taking into account in ..... estment earnings and profits. is al }east equal to the Principal Installments or Principal lnslallments and interest to becon''' dLle on the next Interest Payment Date or Pri..ncipal Installment Date upon all Outstanding Bonds. (4) R,o;seryc A~, AftermaJdng the payments, allocations and transfers provick.d for in subsections UL12l....and.Jll above, if the balance in the Res~rve Account is less than t~ ReseIVc RequiRmern, the deficiency shaU be restored by transfers from the fust moneys. which become available in the Revt:nue fund to tht Trustee for depo5it in the Reserve Acccunt. (5)~. A ... long as all cf the foregoing payments. allocMioos and transfers are made at the times and in: the manner set forth above in subseC1joru 0) to (4), inclusive. any moneys rerT'..aining in the Revel1ue Fund may at any rime be treated as surplus and shall be applied by tM Director of Finance to the purposes required by the City Chart~r. 1he City shall flX. pre~{:ribe, n:\-ise and coiled Otarg,=s during each Fiscal Year ,,-hich {fogether witb other funds trsf1:!ferred from stabilization reserve funds and whicn are lawfully nailabte to the City for payment of atl:' of the folluwing amounts during such Fiscal Year) are at least sufficient, after makin~ allowan,o;::es for contingencies and error in the estimates. to pay the following: amounrs in the following ordet~ (3) all Maintenance and Operation Costs estimated by the Cuy to become: due and payabte in such Fisc al Yea:; (b) the prlncipal of and interest on the Out5t.3.ndin~ Bonds rec:Qmin£ due and payable during ~uch Fiscal Year, includi.ng the Redemprj{1n Price of Term Bond~ subJecllo Smk.ing Fund Installm~nt r~dernprion durmg such FLSCal Year: (c} all other payments required for cornptiance with the Indenture and I,.he instruments pursuant to whicn any Parity Bonds shall ha\'~ been issued; and ~14- .. ;. ;,- 5& Y DOC NO. 199 OSICRQ DATED 1/08/92 (d) all payments required to meet any othe-r obligaTions oC the City wbich art chargcs, liens, encumbrances upvn or payable from the Gr()s~ Revenues or tIle Net Revenues. In addition, the City shall flJl:. prescribe, re'o'ise and collect Charges during ea:::h Fiscal Year which ~ sufficient t("l yield Net Revenues. at least equal to one hundred twenty-five (125%) OL the amounts payabJ-e under t.m preceding clause (b) in such Fiscal Year. -15- ..... '.-~ • --"'-'-~"--'--'" ... -... -----.... S&Y DOC NO. 199 OS,O~Q DATED 1,'\l81'J" ENl1!RJ'IUSl! FINANCIAL SUMMARY (E>.d1acIiD& RduIe F-.md) (1) REVFMJES Sales 87,330 interest 3,493 Othe, 2,363 Fro~ contracting agencies ...Lrn rurAL REVENUES 96,803 OPaIATING EXPfNSES Purchases 49,195 Operating, Maintenance & Admin. 19, I 23 Debt Service -83 Issue 554 Debt Service -8S Is~ue 522 Debt Service -90 Issue 0 Calaveras Debt (NePA) ---.l! TOTAL OPElIATINC EXPENSES 69,994 INCOME BEFORE DEPRECIATION 26,809 Deprecia t i on 4,700 INCOME (before operating transfns) 22.109 Revenues 3vailable for Debt 21,885 Se rvi ce PayJIen t 5 (3) Debt Sen-ice PaYllents 1,076 Debt Service Coverage (x) 25.92 Capilal E~penditures 12,301 87,911 4,129 1.648 .l.lli 91,084 46,290 26,416 549 829 0 ---.J) 74 .1~4 12,940 4,872 18,Ofj8 24,318 1,378 17.65 11,140 ($000',) 8B,'&2 86,442 4, Jl2 1.695 !.Ll2 91,828 42,176 1S,261 553 992 0 .. .....-'! 61,982 35,846 5,037 30.809 37,391 1,545 24.20 12,227 2Q31 121 91,919 96,389 5,631 5,972 2,667 3,47i ~..tl2 .L!lll 105,636 ! 10,865 47,018 47,214 23,239 13,840 543 535 1.014 419 0 939 ---.l! ....s.....ill 71,864 78,230 33,772 32,635 5,084 5,693 28,688 26,942 35,329 34,528 1,551 1,893 22.69 ]8.24 9,975 14,152 (1) 1bese tables do not reflect the City's Refuse Enterprise. lbe presentation also diff~rs from GAAP due to inclusion of principal repaymen! on the 1983 Bonds and the Prior Bond issues. (2) Unoudited. (3) Revenues available for Debt S~r\'ke Payments are calculaled as Income before operating transfers plus Depreciation plus Bond Debt Service. -16· , , . . ' i ~ i , ~i t S&Y DOC NO. 199 OS/CRQ DATED Imi92 ENrERl'RlSE FlNANOAL SUMMARY (E:.cIoding Refuse Fuod) (I) I'mjecoed Revamos, pSI" b • and Debt Setvice ~ REVENUES Sales Interest Other from contracting agencies Fr::HII Calaveras Reserve TOTAL REVENUES OPERATING EXP!:NSES Purchases Operating, Maintenance & Admin. Debt Service -83 Issue Debt Service -90 Issue Debt Service 1992 Series A Bonds Calaveras Debt (NCPA) TOTAL OPERATING EXPENSES I N('()!E BEFORE DEPI!EC I AIl ON Depreciation NET IN<nIE Revenues available for Debt Service PaYl:lents (3) Debt Servic~ Paynents Debt Servlce Coverage (x) Capital Expendit~res 103,573 5,719 1,775 6.443 _.1.Ma 127,958 53,761 31,165 531 1019 (1) 229 -1..N1 9',892 33.066 5.822 17.244 34,845 1.779 19.59 11,971 111,9,8 5.230 3,785 6.813 _5....ii.l 133,269 52.525 33.347 S15 99. 354 .J,Ql!li 96.831 36,438 5,966 30.472 38,311 1,813 10.45 12. 198 ($000',) ~ II7,'/56 4.4U8 3.840 7. I 88 ~..lll 142,b!3 56.948 35.013 524 994 354 Q 411 103.244 39.369 6,OSe 33.281 41,24J 1.872 22.03 11,874 131,343 4.546 3.979 7.5S3 --2...ill 152,892 6 J ,759 36,704 SIS 993 354 9 172 109,600 43.292 6,252 37,040 45, J 57 1.865 24.21 13.031 136,095 4,63i 4.138 8,000 .--B..J)Jl 160,902 66, J 98 38.575 5J6 994 354 ~,l.l.4 IIS.791 45,1 J 1 6,35J 38,760 46.975 1.864 25.10 15,997 0) The~ tables do LlO! reflect the City's RefLl_~ Enlerprise The presentation als(> differ, from GAAP due to inclusion of principal repayment on the 198 3 Bond~ and Prior B0.nd is'>ues. (2) Estimated (3) Revenues available for D::N $entice Payments d1e calculated as Income before-operating transfers p1us Depreciation plus Bond Debt ServKe. ,]7. (1) These tables do 001: reflect the City"s Refuse Enterprise, The p~semation also differs from GAAP due to inclusion <if principal ~paymenr on the 1983 Bonds and Prior Bond issues. (2) Unaucfued. (3) Projeoted. ·18· • 'F:: .~~; -------~--~ S& Y DOC NO. 199 OS/CRQ DATED 1/08192 In addition 10 me Vti1it~ Revenue RefundinF Bonds 1 ~"O Series A and the 1992 Sen("s A Bonds the City rnay. by S':JppIemeiltal Indenture, issue or incur other loans, ac!vances Of indebtedness payttblc from Net Revenues on a pari!)' (the "Parity Bonds") with the Bonds to provide fmancing for !he Enterprise in such principaJ amount as shall be detennined by the City. The Ci:y may issue or incYr any such Parity Bonds subject to the following specific conditions which are conditions precedent to the iSSUMCX and deliver), of such Parity Bonds: (I) ~ City shall be in compliance with all covenants set forth in the Indemure. (b) The Net Revenues, calculated on sound accounting principles, and excluding any balances in any fund at the beginning of the period of computaticn, as shown by the books of the City for the latest Fi5cal Year or 3l1y more rec:ent twelve (12) month period selected by til(' City ending nol more than si1.t)· (60) days prior tQ !he adoption oft.;e Supplemental Ind~ntU!'e pursuant to .... hich instr"..unent such Parity Bonds are issued, as shown by the books of the City. pius, at the option of the City. any or aU of the items hereinafter in this paragraph designated (0 and (ii), shall at least equal one hundred twcnt),-fi ... ·c (125%) of Maximum AnnuRJ Debt St:rvice, with Maximum Annual Deb! Service calcu!2:ted on all Bonds to be Outstanding immediately subsequent 10 the iss'J.a..,(:e of such Parity Bonds. The items any or all of which may be added to such Nel Revenues for the purpose of issuing or inCU1rii'lg Parity Bonds are the following: (i) An a!lowance for Net Revenues from any additions to or improvements or extensions of the Enterprise to be made wiih the proceeds of such Parity Bonds. and also for Net Revenues from any such additions, improvements or extensions which have been made from moneys from any source but in any case which. during all or any part of such Fiscal Year or such twelve (12) month period. were nO! in service, all in an amount equ al to ninety percent (90%) of the estimated additional average annual Net Revenues to be defmed from such additions, improvements and extensions for the flrst thirty-six (36) month period in which each addition, improvement or extension is respectively :0 be in operation, all as shown .in the written report of an Independent Cons.ultanr engaged by the City; (ii) an allowance for earnings ariSlrJS from any increase in the Charges which has become effective prior to the incurring of such additional indebte:dnr-,,-'S but which. during all or any part of such Fiscal Year OJ such twelve (j 2) monlh period, was nor in effect, in an amounf equ3.1 to the amount by which the: 1'1 et Revenl:le-s would have been inclea."ed tf such incr~ase in Charges had bef.n in c:ffec t during me who1e of such Fiscal Ye ar 0 r such twc:l ve (12) month period, all a.<; shown in the written report of an Independenl Consultant engaged by the City. (c) The Supplemental Indenture providing for the issuance of ruch Pariry Bonds shall provide that: {i) The procc;eds of such Parity Bonds shall be applied to the ar:'quisition, construo;.1ion, improvement fm~cing: or refinancmg of additional facilities, improvements or extensions of exis.!ing. facil ities Qri!hin the Enterprise. or orher ... :i.'>C' for facilLties, irnpwvc:menls or pr.:'peny which the City delennin.es are ('If t.enefit 10 the Enterprise, or forthe purpose ofrefundrng any Bonds in whoh! or in pan. including all costs (inc!udUlg costs ('If iss.uillg: such PaIity Bond,; a.11d mLludmg capitalized mterest on suc:h Parity Bonds during a.."y period which the eny deems necessary or advis2ble) rdaring t1l ereto; -19- -----....-~--.-........ ~ .... --~. -.-'" .. -.......... '~-,~. ·L .. , <-~, \,.,;.:.jC· " 1¥::>" . 1.~ , (iil Date; S&Y DOC NO. 199 OSICRQ DATED li08!92 Interest on such Parity Bond:s shall be payable on an Interest Payment (iii) The principal of such Parity Bonds shall be payable on June I in iLl)' year in which principal is payable; and (i'Y} Money (o[ a letter of credit or .. Qualified Surety Bond as authorized by the Indenture) shall be deposited in the Reserve ACC(lunt from the proceeds of the sale of s:Jch Pari:y Bonds or oth!'r-Nise to increase the amount on deposit in the Re~rve Account 10 an amount equal to ~he Reser .. e Requirement, taking into 3Ccounl the Debt Service on all Outstanding Bonds (in~Iuding such Pariry Bonds). -20- S&Y DOC NO. 199 OS/CRQ DATED 1!O8!92 THE l!Nll'JU'IUSll Ttjt Ctty of Palo A1~o is ];:x;,atcd ilppro~lmately 15 mi.les south of San fra.""Kisco and 15 milf!s nor..hwest of San Jose, The City's .5~.90() rcsidenls are part of IDe San Francisco Bay Area population offiv~ million, The Cit)' ...... hich is adjacent to Stanford University. is a major employment center with approXilTl.lltcly 7S.00Q jobs a. .... d a unique: ~.!>idemial comrmmily of aOOIl! 25,D<JO housing units, The City was i.rlco~ra!ed in 1894 and has operated as a chane! city since 1909. 1l1e City operates under the council-rnanag~r fonn of goverrunent with nine c01.l!lcilmcmbers elected at large for four-year tCITJ'.5. The Mayor and Vice Mayo[ Me selected from among the Coundl annually_ Toe Mayor presides al all Council meetings The Ciry Manager is rcsIX"'nsible for the operation of all rnunir:.ipal functions e"cept thf! offices of Cit} Attorney, City Gerk, and Ci.ty Auditor. These officials are appointed by aT1d repon directly to ~ City Counctl MANAGEMENT OF THE CITY The :i 990-91 Budget authoriz.es the emplo),ment Df 926 City employees, a general fund budget of approximately $64 million., and an enterprise budget of approximately $125 million Jne City off~rs a full range of municipal sen'k~s in addition to providing its o~n electric, gas, water, wastewater, stOITI"J draina~e and Jefuse C"oll~ction Utlllt.le5. City Manager. William Zaner Mr. Zar.er was appcinted Ciry Manager fO[ the City of Palo Alto in 1979. Prior to this appomtment, I\1r. Zaner was the City Managc~ for Union City, California for nine years. City Anomey -Ariel Calonne Mr. Calonne was appointed City Attorney of the City of Palo Alto in August 199{). He was admitted to the California Bar in 1983, and has served as C it)' Attorney of Rancho Palos Verdes, and: Assistant City Attorney for the Cities of Palmdale. Westlake Village, and San Buenaventura (Ventura}. City Oede -Gloria Young Ms, Young was appoinfed 10 the position of Cit), Oerk for the Cl!), of Palo Aha in 1985. She has been with the City of Palo Alto .since 1973. MANAGEMENT OF THE FlNANCI! DIlPAJtD,fENf The Finance Dep ... "'tIr.ent is responsible for directing all of the City's fmanc!3l operations including lKcountmg. budgeting,long~term fmandal ptan.ning, real property and portfolio management and purchasing Director of Finant:e ~ Emily Harrison Ms. Harrison has held this PQSltiml smce 1987 ... ·ith prinr experience a.3 Chief of Accounting in the City of San Jose and Assistanl Finance Director in !he Ciry of Orange. -21- ." ';:.' .... S&Y DOC NO. 199 OSieR? DATED I~SI92 A1sistanl Financt Director· Kevin Riper Mr, Riper joined the City of PaJo alto in 1990 after two years as deputy hLldg~1 di!'C'ctor for the State of Mkhigan, and five years as a flnancial economist with the Office of Management and Budget il: Waf>hington, D.C. Treasury Manager -Gordon B. Ford Mr, Ford has worked with the City since 1982 and was appointed Treas\.II)' Manager Aogust 8, 1988. lie is responsible for investing ali City funds, administering the sale of bonds, and administering banking agreements. Budget Manager. Jim Steele z..tr. Steele has been with the City of Palo Alto in the Budget Division f·;)c six years He was • Senior FinandaI Analyst for five ~d one half years. before be ing promoted to f,js current positi(."n as Budget Manager. Prior to jcining the Clry staff, he 'Worked as a flllanc-ial maIyst at StanIord University. MANAGEMIlNT OF lliE lJTlUTJES DIlPARlMENT The Utilities Department is respons[b!e fQC the operation of four miJity sysrems that seT\le the City of Palo Aha. The City Services 27,000 arcounlS for the electric. gas, water and wastewater collection systems. 8Ii Din:Clo( of Utilil.ies ~ Richard L. Young Mr. Young hAS twenty~six years of experience wi::h public utiliries and ~ a registered Professional EJectrical Engineer in the State of California. After four years with the L.Js Angeles Department oC\Vater and Power, he becalne engineer of System Planning with the City of Glendale, California where he spent the nexr 14 years, ultimately becoming the Power Management Din:ctor. M:r. Young was appointed to the position of Director of Utilities of the Ciry of Palo Alto in 1983 and ha.i managed me Utilities activities for the City since thai da",. Assistant Director of Utilities, Engineering: -Edward Mri.zek Mr. Mrizek ha.'t -spent t'"Nenty-thR~ years in engineermg and management ~:iL'" the Palo Aito Utilities and ten years as an enginee rand' sup::rvisor in t.lte electronic testing L'1du5try. Mr. Mrize!t: was apJX>inted to the position of A,sistanr Director of UriJities, Engineering in 1981. He is I Professional Electrical Engineer in the Slate ofCalifomia and was previously a Principal Engineer in the Palo Alto Electric Utility. He has been a City employee since 1969. For the last 'Six years he has ~rved on the Board of Duectcrs and is the cunent President of the American Public Gas Association. Assistant Director of Utilities, Operations -Robert A, COlyer Mr, Colyer has founC'en years of experience with put'llic ulillties U1 ope-rarione<; and managemen! and ten yean as a project englneer in de~ign/lesting of mechanic-a! components .. -: was appointed 10 hiS pres.em position in January 1986 and was previously Assistant Dittr.:tor cf Administrative Services. He has been a Cil)' employee since 1985. ~22- I I, f" r 1.-.1 I~ I I I , J""""" . :' -. --'~: . ", i I I j - S&Y DOC 1'10.199 OS!CRQ DATED IfQ8/92 Manager of Rates and Customer Services· W. Randolph BaIdschun Since 1990 Mr. EaJds,:hun ha3 been actillg in the: <:apacity of Assistant D~(.."1or of Utilities, Administrative Services. His re.c:ponsibililies ;ncIude management of a Dj"ision consisting of Customer Services, Rat('making. Meter R~ading. and Computer Suv!cC's . .Mr. Baldschun has twenty years of exper~nce with the Palo AJto Utilities Department L'1 operations and man:agement. His backgrou.nd indude'§ fourteen years of ratemaking experience, nine of which with primary management re~nsibiliry for ratemaking. He received a BS in Business Adrll.inistra t ion from San Jose State Un.iversit)', Energy Manager ~ Resource Planning - R onaJd P. Be 1 ... ·31 Mr. Belval has been responsible for managing the Energy Planning section of the RescH..I.!C"C" nanning Division since 1986. The responsibilities include Ior~casling, c:or:lf"aCf administrat:ion and negotiation and int~grated Re:<;Qurce Planning for the EI~ctric, "-later and Gas Utilities. He has twenty years experience v.'ith borh investor o'JIned and public tlliJitieS in the areas of distn"bution and tranSffiisslon system plaf'.ning. engin~~ring. &\nd in !t:~o'll!ce planning. He received aBSEE from the University of Vermont in 1970. Manager, Energy Servkes -Resource Planning -Debra Katz Ms. Katz has ten years experience with L~e Palo }\lto Utilities D!partmenr and has been the Manager of the Energy Servkes section since June 1990. Ms. Katz has a Masters in Public Administration. as well as being I!: Slate Cenified Cornm~rci31 Energy Speciali5t In her current position, M~. K.uz L"i responsible for developing and implem~l1ting demand·side programs and services for all residential, commercial and industria! customers. MA."~AGEMENT OF THE PUBUC WORKS DEPARTMENT The Public Works Dep~nt manages the new Storm Drainage Enterprise and the 38 milli{'n gallon per day Regional Water Q\lality Control Pia.,t whic..:h also serves the cities of Mountain V,lCW and Los Altos, the Town of Los Altos Hills, Stanford University and the East Palo Alto Sanitary District. DirectQI of Public Works -David G. Adams Mr. A.dams has 'been the Public Works D1.;~ctor for the City of Palo Alto since Januarv 1980. He has been inpuhlic works management in California since 1975 and is a registered Professional Engineer in California and Ohio. As~i..o;ran, Director of P-I.lblic 'Works . George Bagdon Mr. BagdoD ha.'. been Assistant Public Works Director for the City of Palo Alto since february 1980. Priorto coming to Palo .. 1\110 he had six years of engineering experience fer City of Burlingame and six years for the City of Milwaukee, Wisconsin. Mr. Bagdon is a registered Professional Engineer in Cahfomia. Manager. Regional "'"arer Quality Conlfol Plant -William :r-,.·hks Manager, CIt)' of Palo Regiona! W ller Quality Control Plant. srnce Januorr)" 1 Cls,q. Mr Mib has been employed by the CIty of Palo Alto since 1 Y72 witb progressively increasing responsIbilitie s in manageme nt/supe 1"\0' isof)' pos.itior.<; since 1979. He was appointed Manager of the Palo Alto Regional Wat-er Qualn), Control Plant in Janua.I)· 1989. -23- -:-c.""'-''1c ....... _ ... .5 ••. -.... ,,-••. -••. • -"- - S&Y DOC NQ.I99 OS/CRQ DATED 1108192 Senior Engineer" j oc 1 el'e,-c;j Mr. Teresi has managed the City's new StQ!'m Drainage Vtility since September 1990 He has worked fer the Ciry of Palo ,4JtoJ Pu.biic Wm-ks Departmenl in increasingly responsible positions sinet.: 15184. Mr. Teresi is. registered Professional Engineer in California. SWIiDI TIle Enterprise is staffed with 210.5 employees (full time equivalents) who are treated as employees of the City of PalD .. "-'10 for ptUposes of pension obl.igations and labor :elations. All petmaller:.~ employees.are covered under the Public Employees Retirement Syst~m (PERS) of the State of Califomia. Pension costS are 100% funded by the City. PERS is a stale-wide system operated pursuant 10 Title 2, Divis.ion.5, Pan 3 of the: Government Cod~, The Board of Administration of PERS administers the PERS FurKl {the "Fund") and sLx other funds. The Fund represents 908,161 members and thr.-ir families (including re~irees) Mate-wide at june 30. 1m. There are 210 non-management employees who are represented in coDecu\le bargaining by the Servke Employees International Unit. Local 71Sa, (AFL-ClO). Th~ ~IVice employees memorandum of understanding provides for annual percenlQge adjustments in compensation. The latest service employees' adjustment, effective May I, 1991 is based em annual prict inflation and cannot exceed 5%. M.-'"8'8 _m· Policy Treated as Enterprise Funds, the E1~ctric. Gas, Water, Wastewater and Slonn Drainage Ulilities are fmanct.!d and operared in l manner comparable 10 private business enterprises. Cily policy provides mar the cost ofprovkling Utility services to the general public continue to be funded predominafdy through user charges All 8nterprise funds arc accounted for using the aCi-"rual basis of accounting. Revenues 1m' recognized when earned, and expenses are recognized when incurred. Utlliries revenues are used 10 pay operating Costs, bond 5eIVice, capital expendiwRS, and reserve accumulations. Transfers to the general fund, are based on the approved rate of :return rOi comparable publlc utilities and were established at 1 I % (Gas and Electric) and 11.33% (Water) for th~ 1990~91 fISCAl year. The Utilides and Public Works Departments are upected 10 continue meeting all o[their fmancial Obligations while charging competitive rerail rates 10 their customers. Careful budgeting and sounl1 financial planning have 't'Jeen and will continue to be imponant factors in maintaining competitive rales. 'Ibe U1i1ities Department recogn.iz.e! the ir.lportance of minirniting over wholesale commodity CflSfS which is the largest upenditure cate.gory, Much ti.me and effon are spent in dealing with the various couunodity suppliers, regulatory agencies and commissions to help eru:urc reasonable and economical wholesale conunodity COSts. TIle Cit)" Council has full discretion to set utili1y rates. fo~ each of the r,ve utility systems The Depanment collects utilii)' charges b)' means of a single monthly bill t('l e:o.ch CU~'Clmer listing charges for each service provided Ovcr tht past Imec years. uncollectable ac-counl.~ for all utilities ha\'e averaged a tota! of $4-0.734 per year. ar approximately O.045'ff of the amoum billed. .24- • / 5& Y DOC NO. 199 OSIL'RQ DATED 11081'/2 1be following is an all'h~.betical list of Pal"!) .AJro 's !argest utility cusromcrs for all five of the Utilit ies CilY of Palo A1to LORAL He"'l~rt·Pa('kard Lockheed Stanford Medical Center Synte~ Labs. [nco Varian Associates Veferans Administration Hospital Watkins-loMson Company Xerox Corporation , . - S& Y DOC NO. 199 OSICRQ DATED 1/08/92 Operation of the City's eleCtric utility dates from 1900 when the City acqumd the faciliries of Per.insula Lighting Company. lne City provided electricity from its O\o\'n steam powen~d @cneratingplantunti11921. In resporue to accelerating load growth, the Ci:)' entered intl1 a wholesale supyty contact with PG&E in 1923. In 1%4. the City c-xecuted a ~holesa1e, all.requiremenUi contract with the Western ~a Power Administration ("Western") to purchase power produced by the Central Valley Proje<:t. 'The contracf with PG&E was termm~Ted, Since that time, the lower 'COS! power pro"'ided by Western has enabled the City 10 provlde electric service at rates well be10w those prevailing in adjacenl PG&E service areas. TIle City t'wos no electric gfmeraling facilities. The en) 's contract for electric po\1,cr with tJ-.e federel govennnent is administ.ered by Western. Western markets F<-lwer from the Central Valley Project. a feder.aI multi-usc hydroelectric development in Northern Califomia., and has traditionally been the least e;r;.pc116ive source of bulk power for the City. It provides power to the City at a capacity of up to 1 7 5 MW with associate d enc:Ig)'. The contract expires in 2004 and is subject to adjustments in the prke of power. The City purch~c;.es supplemenl al power above the capacity of the Western contract through its membernhip in the Northern California Power Agency ("NCPA") and is a sign.atory of the NCPA/PG&:E lrtt,=rCQnnection Agreement. The City's Fiscal 1991 peak demand was approxi.:nately 188.95 MW and annual energy c.onsumptio[l was approximately 1,084,700 MWH. The average rrwnthly load factor during Fiscal 199 i was 65.54 perceJ'lt In addition, the City of Palo Alto is participatin~ in NCPA's Calavera.<; Hydroe:lca .. "tric Project, Geotbennal Pro~Cf (the City·s share whicb has been sold to a third party. as dtscnbe-J below), and Geysers Transmission Project .. The City i5 also. member of the Transm.i~ion Agency of Nonhem California {,.. ANC"). Throu(!:h in pan:.icipatio[] in NCPA and TANC. the Ciry belie"'es it is able to diversify its source base and gain economies of scale rnat would not otherwise be availilble as well as I~sser:: its dependence on purchaud power. Except for certain start-up costS, current NCPA and TANC }'I0jeC\S are fun~d through the f'!spective agencies. The City is cu.rrendy panicipating 1..'1. several projects, as described betow: CaInu» H)'<IrocIcdric Projocl-The City is a 22.92 pc,cent panidpam in til< NCPA CaJave:ras project, a 230 MW hydroelectric project with related facilities. Pursuant 10 a power purchase agreemen~ with the Calavc:ras County Water Dlstri<:t, NCPA is entitled 10 the electric output of the project for 50 years from February 1982, 'ifr,lith an option 10 purchase power in excess of the District requirements thereafter. The Clty'S 22,92 perce", entitlement is (m a take or pay basis. The project is expected to supp!y peak lo .. d requir~mef1ts and complement 01her resources which are presentiy a."1d anlicipated to 'bo! a\'<u.1a'tole to the City. ~CPA enlered intI) a construction contract 10 provide for the design and construcTion of the project on a turnkey basis. lbe com;uuction was cornp[eted and ope-ration of the proje\.."'! y"as commenced on. Fe'hruary 1.1990 Subsequent 10 Li.at date Pa10 ALto made conuactuaI arrangements t,a.'ith the City of Roseville to sell 6.52% of the project output 10 Rose'lrille for a period ending in 2004, This layoff sale relie .... es Palo Alto of a portion of Ca1av~Ias debt service and operating and maintenance costs. The portion sold is surplus to Pale AI~o's needs. -26- .,--.-.!~ S& Y DOC NO. 199 OS/CRQ DATED I,<JBtl2 Oeu'l1c' ... aI The Cit) is eo 6, 1S8 pen',ent partic-.i.l'<l!lt in the NCFA GeothC'xmal Projec.t Number I, ccnsio;:ri'1g oflWO {2) 110]vfV.' geothermal :>team-generating plants opemting in the Geysers ate2;. Palo Alto bas ~old all of irs share of the project to the Tur!ock Irrigation Di:;tric( ('TID") on a take or pay ba5is fer the life C'f~ plant since the need for ba;;e lQad generarion is limited during this time period. Ca1ifomia..Oregoo Tnnmtissioo Project -The City is a 4.254 pe~ent participant of T ANC's share of a proposed third!iOO KV AC Inlcrtie IT".:Ulsmis:sion line from the Paclfk Nonhwest to Northern California. Ba..~d upon a 1,600 MW transfer capabilit)'. T ANC expects to re~ive berween 1,000 -1 ,300 MW of capacity in wruch the Cit)' would become a fou~ percent panicipant. Presenl plans call for line: c:ompleDon in 1993. The Utilities Departmenl continues 10 e~plore additional power supply opp0!1unities including evaluation of d~mand-side resources and emerging. tec.hnologies suo.:h a5 fuel celis, photovoltaics and ather renewabl-: resources. MamI""'M'U Qtcmim ofQpculimss F!om 1986-87 through 1990-91 sale ... re\'enues incre.ased at II. compcund annual rate of 2%. Operating reYenues have generally increased with each fLScal year .r:I';Je 10 ccor"lt.ir;.l,.led grolNth in energy consumption. Purchased power costs playa: major role in fonnl.l!ating the: City's financial policies as they pertain (0 the Electric S)'stem. Purchased power COSf.'> decreased at an armual compounded tate (If 4.5% between the ye&rs 1986/81 to 1990191. The 5-year projected flflancial statement 'Shows sales revenue forecao:;ted to increa.se by 32%. This revenue increase refleru compo!Jflded annual growth rate in kwh sales of 1.7'* over this period. The major IIi1pact on the Electric Utility is purchased po ..... er e~pense which is estimated at a net increase of 19% Qver the five ·year period. In lenns of absolute don us, wholesale commodily costs are expected 10 increase by $8,837,000 and will maintain these costs at approximately 57¢ oul of each sales revenue doBar in 1995/96. This estimate is based on CQntinued availability of fedtraI power from Western as presently provided under the elliting contract. Billing rates to Palo Aho's, residential accounts were th~ Imll,'est in California in 1~-91 as determined by a survey conducted}:.y [he PaJo AltO Utilities Department, CIpita' IuqHuW1l"pt Pmgrw:n S~ Tbe Utilities Department t991-95 Capital Improvement Program Re,PC'n idemifies 111e majorpropo~ capital expenditures for the I!lectric :system improvements. Improvements to the existing system total S23.165,000 for the four-year ~riod, with proposed annual e~pendirures varying between $6.1 million in 1991-92 and $3,7 milljon in 1994-95. The large.;;t major category of improvements to the system are major ann rourine distnoution system proje(."1s totalling approximately $14,8 million, lln<krground projects-totalling $4,7 milllon compris.e the 5(:conc! largest categoT)' of Electric err projects -27- .,--.-- , ,kY DOC NO. 199 OSiCRQ DATED 1/08/92 Hjetprjcw11Prpjxrd Os"";'" TIte following table shows. ten-year rustorical and fi,'c-year projected reco~d of electric ulilif'y operations by megawatt-hour (~fWHj sold. The rates of change show thai the number of cust'.)mers has remained almost const3J11 and load growth ba.~ been moderately driven by increasm@ economic lcti· ... ity and some increase if; hQusi:1B density. Fisca1 ~ 1982 1983 1984 1985 19S6 19~1 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 EU!CI1UC l1IlUIY "In;-YEAJt (lm··91) HISrORICAL SALES Energy Sol d i!LLlIJ 853,012 88~,178 945,183 965,733 972,867 981,000 1,011,587 1,029,387 1,047,908 1,036,741 F!VB-YEA!!. (\ 992-1997) PROJl!Ci1!D SAUlS 1,055,000 1,068,000 1,098,000 1,112,000 1,127,000 1,141,000 ANNUAL COMPOUNDED RATE OF CHANGE 1982-91 .60'\ 1992-97 L 93% Source: City of ralo Alto -Z8- Pe ak Deland MI 163.9 174. J 178,5 186.3 181. 2 188.3 178.4 186,2 189.0 189.0 191.5 195.7 197.7 203.2 206.0 210.1 • "-, ;-: . \ S&Y DOC NO. 199 OS/CRQ DATED 1;lJ8!92 The following reflects ~rgy sales by d ... ,,;s and number of electric cust<Y.llC'rs by class for the years 1986-87 through 1990-91 and projected sales. The City's top ten EJectric Utili[)' customers use 46.6% (If the eIectricuy sold. I!NERGY SALES, ELECIlUC CUsroMERS Fi seal Year illoen ill"1=.£a ~ 19.BJ,~ ill9,~ Energy Sales (MWH ) Residential 148.050 149.937 153.714 152,211 151,488 Couercial 321,762 322,839 336,431 331,643 319,829 Industrial 464,871 484,894 484.621 508,107 508,289 Municipal and Other 52.311 53.917 54,615 55,947 57. JlS Total 987,OOQ 1,011,587 I. 029,387 1,047,908 1.036,741 Electric Customers by (ius Residential 23.876 24,175 24,274 24.334 24,391 COJUPlercial 2,323 2,327 2,353 2,349 2.371 Indus! rial 191 203 172 189 189 Municipal and Ot!ler 168 173 192 116 175 Total Cus :omers 26,558 26,878 27,021 27,048 27,126 l'RQJ1ITEQ fiscal Y-ear 1991-92 lJ~') 1993.94 ~ 199;;~ lfifi=.ll Energy Sales (MWH) Residential 154.296 156,050 160,433 162,479 164,671 166,716 Cou:ercial 325,758 329,460 336,115 343,033 347.661 351,979 Indus t ria I 517.712 523,595 538.303 545.167 552,521 559,384 Municipal and OtJler 58,233 58.895 60,549 61,32] 62, [48 6],920 rurAL 1,056,000 1,068,000 1,098,000 1.111,000 1,127,000 1.141,000 Scillrce: City of Palo Alto -29- ; ;. S&Y DOC NO. 199 ;/CRQ DATED 1"'8192 EU!CIlUC Sll!tVlCE RA TBS Domc!ti'; Ratu (Scheduk~~.lJ September 10,1990 Per ]vlele! PCLMQlltb First Next Remainder over C!l!!!!IICrcial RaJes lSctl<dllloE:.t1 September 10,1990 Per Mtter Per Month NQP--dernand Metc;re d· E:ler!)' Rate (summer) Energy Rate (winter) I&maru! Metered Effectiv~ during summ~r period Effective during winter perjod 300 kwh 300 kwh 600 kwh P.CLKiIQwan-Hcur $0411 $.D597 S0795 per KUqwan-HQu.r S.Q73\ $.()657 I!U!CTRIC lTI1llTY ~rionq wiIh Sar:!o<mdiDg ComnamiIicI II-. I'.II'tctm 9-10-90 Residential (SOD klfl) Co ... erci.1 (30,000 KWH's; IOOK'i) IndustrIal (2,400,000 KWH's; 5400 Kll) $ 24.27 -30- 2,332.06 163,164.45 $ 57. 3S 3,364 00 283,846.80 - ·-.' S&Y DOC NO. 199 OSiCRQ DATED II\lS,m Mllnicipal ov.'Ilership of tile gas system began on October 1,1917 when thl: City purcha..<:,ed ilie Palo Alto Gas Company through a $40,000 bend isslle. On October 7. 192q natural gas was introduced into t.~ City's mains, as Palo Alto began purchasing gas from Pacific Gas and Electric Company (PG&E). This natural ga'l, (which PG&E obtained from the lower San loZ!J.uin oil r~ld.) had a superior quality of 1180 btu per cubic foot. As a consequen<:e. domestic gas <:onsumption began to rise dramalicalJy L~ the earlY 1930'5 . TIle system and its gas. com>umption have grown with the developrm:nt of the City. Until J 99 J PG&E had troclditionaily been the City's source of supply. Under new California Public lh.ilities Ccmro..is5i<m r'J!ings, Palo Alto has developed a favorable contract for natural gas from Canada. The City's f:utrent Natural G~ Supply AgreemC'nt wjth Shell Canada i5 dated August 1. 199 J. and has a tenn of one year. 1be City also utilizes PG&E 's gas storage: system to "bank'" inexpensive gas supplies which can be wifhdrawn during the winter months when gas prices .rise. There are sev~ra1 issues before the Ciilifomia Public Utilities Commission which will result in significant rt structu.ring of the gas industry. The net result will be ~reater opponunit)' and associated responsibility for the Cit)' in bandling its gas supply. The Palo Alto Gas UtUlty closely monitors and i~tervenes in these proceedings to protect its intert51$ wd ins~ue development of an optimum portfolio of supplies TIle City's gas system performs tlIe functiofl5 of pressure regulation, distribution and metering. 1bc: City does nol foresee adding fO the service area.in the future. PJanned improvements will control and reduce system leakage and increase the capaciry of <:enain lines to meet current and projected den:s.i.t)! in certain area.\ of the City. From 1%6.-&7 through 1990-91 sales revenues decrea.;.ed at a compound annual rare of .83% because of conservation efforts. The Ciry's costS to purchase gas have actually increased by 33.2% from 1986-87 to 1990-9 J due to an increase in sales and as a .resuh of an increase in naTural gas prices. Prior to J 988 the ejty maintamed its rates at a f~ed percentage bc-low the rates charged by PG&E. In 1988 the City determined that its gas supply reserve was ill excess of the amount required and refunded in the fonn of credits or rebates approximately $9.3 million. The City's 1990 gas rates are approximately 37% low~r than the rates which PG&E charges 10 residential customers in neighboring cities. The five-year projected sales. forecast shows a 3 L7% revenue increase by 1995-96. This revenue increase reflects a .31O/C compounded annual growth rate in sales (thenns). SaTes: e5timales are principally affe.:ted by additional days for leap year and w~alher factors. The la.rgest operating cost accounting for higher revenue reqUl1emenl5 l..S an anticipated ri~e (11 o/d in wholesale commocWy costs effected by the elt)" supplier -31- • :i S&Y DOC NO. 199 OS!CRQ DATED 1/08"'2 Recent price discounts and fo.rccasted shon term price stabilirj are attnouted to ~structwing. greater competirion among :iuppHers. and ne&.r lerrn excess pipeiine c.3pacif)' into the S'ate. QpiteI '''C'q· 'The Utilities Deparur~nt 1191 -95 Capital Impnrvemenr Program Report ldentifies various projects totaling $9.371,000 in proposed expendirures for the gns s),stem. System ext~nsjons, main replacements. meters and the Geographic InforTniltion System comprise the majority of t~e proposed capital spending (or a total amowu of $8.6 million over four years. -32- • j ,j , q ,I i 1 • I / S& Y DOC NO, 199 OS/CRQ DATED 1/08/92 The foUowirg table shows a len-year rusrorical and fiv"! year prcrjl!cted reccrd of gas l'l1erms '<.old and reflects the low rate of growth in th~ City and impact of climatjc variation on gas usage. TIle City's lOp ten Gas Utlliiy customers usc 26.5% of l">e gas sold. GAS 1!IUJTY TEN-YEAR 1982-1991 HISTORICAL SALES Fiscal X •• L 1982 1983 1984 1985 1986 1967 1988 1989 1m 1991 Qcanti<y Soid !.1:hcmlsJ 35,489,i53 36,457,091 33,680,897 37,957,255 35,216,739 35,194541 34,737,600 34,941,405 38,193,684 36,685,422 FIVE-YEAR (1992-95) PROJ'ECIED SALES (TIfERMS) 1992 1993 1994 1995 1996 1997 36,438,000 35,601,000 36,764,000 36,927,000 37,262,000 37,430,000 COMI'IJUNDED ANNUAl, RATE Of' CHANGE F~ Year hriods Scwce: City of Palo Alto 1986-91 1992-97 -33- 0,37% 0,54% -'", , • , ,-.. " ---'--------.-....... -• " S&CY DOC NO, 199 OSiCRQ DATED IJ{JS/91 TIle fQllowing reflects lhenn sales by chi,55 and number of GlS custmmrs by cJa.. .. s for the years 1986-87 through 1990-91 and projected ,>1." PALO ALTO lnllnlES Dl!PAR'IMI!NT 1l!FRM SAUlS. UAS CUSTOMFRS Fiscal fear 1986-87 illlc8B lJ~ 19l1o9.Q ~,2l Gas Saiu (Ther.,) Residential 16,974,152 15.634,401 16, OB4, 217 15,978,985 15.895.933 (Delle rc i a I 8,748,792 8,058,259 8,290,i03 8,097,604 6,655,847 Industrial 9,047,896 8,333,755 8,573,525 10,257,915 10,374,238 Municipal and Other 2,617,160 2,410.591 2,479,946 3,859,451 3,759,405 Total 37,388,000 34,437,006 35,427,791 38,193,684 36,685,422 Gaa Custoaers by Class R'esidtntial 21,088 21,172 21.204 21.151 21,100 COBle r ci a 1 1,652 1.630 1,628 I, S7I 1.S8! Joduurial 195 212 201 19J 189 Munidpal and Other n 73 71 73 96 Total (ustOllers 23.001 23.087 23,104 n,9S8 23.066 PR()JECfED fiscal Year 1~"1-22 1222-2l ill..lc~ 1224-95 l.m.=2Ji 1990~~ Cas Sales (The cas ) Residential 16,542,852 16,616,854 16,690.856 16,764,858 15,588,935 15,659,219 (omaercial 8,526,492 8,564,634 8.602,776 8.640,918 7,900,073 7.935,692 lcdustrial 8,817,996 8,857,442 8,896,888 8,936,334 10,007,687 10 ,052.808 ... unicipal and 2,550.660 2,562,070 2,513,480 2,584,890 3.765.305 3.182,281 Other TOTAL 36,438,000 36,60I,(~0 36.764.000 36,927.000 37,262,000 37,430.000 Source: City of Palo Alto -34- - S&Y DOC NO. 199 OS/CRQ DATED I/OJS/92 The C".lffcnt rate schedule is shoVwn below. Fer approJOtmaleiy 25 years, the City has mamlaiotd rates at a kvel equivaJ~nl to or lower than the rates charged by PG&E in adjacent service areas A, of 5<ptember 1991 the ~sidentia1 rates are 27% lower than PG.&:E rates, com.men:ial rateS &rc 12% lower and industrial rates are 4% lowe1. Rates: G I-R Commodity Charge; S l1JlU1'i('I Rate o to 20 !herms. pe< thenn OYer 20 tbeons. per thc:rm GAS RATES EFFIlCITVE JULY J. JIili9 (Fo! individually metered residentiz.l customen;) (May I '0 October 3l ): Winter Rate (Nov. 110 April 30,: 0-% tberms, per !henn Over 96 tberms. per the nn Per Meter EeIM<ll1!b 35.7. 663. 35,7;t 66J¢ Gl-C Com..'!lodiry Charge: (For aI.J other customers,induding commercial customers) YcW"-round raIe fo!' all ,gas usage 0'025.000 <bemIS, per thenn Over 2S ,000 thenns, per thtrm THE WAT!!R UTIlITY 51.0¢ 44.8¢ Prior to incorporation in 1894lhe arel that WiU to 'become the City of Palo Aho develcped as a number of small popu1;;.tion centers. Tho:-se centers were served by private water companies that drew their ~uppIy from relatively sh.t!lo"", wells In 1 3%, t'Voto years after incorporath1n, a bond issue was 8mhoriz.ed for purcha...~ by the Cit" ofa majority oCthe warer companies. In succeeding years additional pW"chasn COfupte1ed the acquisition ofprivate-Iy owned facilities. Deep wells provided waler 10 the $raduaHy inr.:~.a.~ing population until J 938, when the decline of the groundwater level net:.·e~siTaled the purchase D( t."nported waler The ~ro\\'in~ demand thereafter was met with mcreasm.g purch.L"-C"\ (1( <;.uppl) from [he Water Departmcn~ of the City and County of San Franci.5,co ISF\lI.'D I in J %~, In ord('r 10 provide a nigher quality of water 10 its customers, Palo Aho ~fan sUrPI.\ Ulg lO· .. Y< of it~ \Io.aH~r from SF\\'D, .)~- S& Y DOC NO. 199 OSiCRQ DATED 1108/92 SUI Francisco impons 80% of the water s\lpply s.old \0. P'i1Jn A!tQ from the Tuolumne Ri,'C"\" watershed in the Siena Nevada near Yo~mile Na~ional Parle. lmpounded at Hetch-Hcl<:hy R~rvoit. the water is delivered to terminal reservoirs em the San Fr9J"lcisco Peninsula via an aquedul,."t that crosses Sanra Oa.:.:ti County; providing acc~ss to the City of Palo Alto and other wbole:;aJe cusfomers. Tne r!:maining 20% of the supply is local runaff impounded in reservoirs located in tht C0a51 R2lIlges. of the San Francisco Peninsula and Ease Bay. Tbe c-..Irrent water sales conLract with SFVV'D was implemented on July 1.1984 with a 2.5 yeartcmt If) e~pire on June 30. 2009. II is.an all-requirements contract with ~;tplicir provisions f()f' adjuSting wholeuI~ rates Co match changing revenue requirements of the SFVlD on a period.w: basis. Tbe contract entitles Palo AJto to a minimum of 15.5 million gallons per day, 1ne City also maintains irs own deep well system. which could supply half of the: sen'icc area's neeW on en emergency basis Fe. Hi,. The SF¥lD supply i:l dellvered thIOUgh four connections chat fap inti) three differenf branch pipelines 0( ihe SFWD aqucdud. The Ciry also continues to maintain and -:JPCrate four deep wells .as I supplementary and backup supply. lh! SFWD ""oZier is uf e~~tle!'J.f quality, ConsequentI)'. the C.lfy's water treatJnenr is limiled to fluoride injection. lbe cumn~ rate strucrure is an increasmg block rate to eru:ourage water t:onser.'ation. The Cify also has prog rams it can implement in response fo periodic drought iituations. The Ciry of Palo Allo maintains about 10.5 million gallons of STorage in its distnbution system. Cucrent a.verag,e consumption is 16.l million gallons per day. Most areas of the City are rated Class 1 {very good} by me Board of Pacific Fire Underwriters, From 198&-81 to 199Q..91 sales revenue i.~creased at a compound ar.nual rate of 9.7'k, Purchase costs of~aler have increased b)' 25% from 1986-8710 199D-91. due to drought ~onditions, TIle five-year projected fmar-cia! statement sb.o,,:s sales revenue forecasted to increase 88~ by 1995-9'6. The ~venue increase reflects an 18% rale increase in July l5WO and an 18% incruse in Ju1y 1991 to compensate for the sales reduction due to conservation. In tenns of absohae dollars, wholesale commodity costs art rxpected to iocrease and will result in costs of approximately 3S¢ out of e-ach salr.s I!!Venue dot. by J 995-96, This estima.te assumes continuation of the Hetch-Helchy system and rhe City·s water supplier a..,d the adequacy of necessary facilities, California is in its fifth year of a droughl The Cit)' of San Francisco has imposed ",caler rationing on its municipal CUSlomen. indudU'l~ the City of Pata Atto. Palo .6.J.10·~ allotment is 27% below the amount purchased in 1987 The CIty of Palo Alto is responding ..... tth a three pan Watu Management Plan: (I) Implementing a Drought Rate Schedule with adju"ited rare blocks and more sleeply inctined rates in the higber [jers ·36· -.:~'i~'L--·"--'~-·- _:.;,::',~' i - .-". S&Y DOC NO. 199 OSICRQ DATED li\JS/92 (2) Ex~anding the list cfprohibitions beyond thQS-C already in the existing water use ordinance. \3) Initiating a targeted prognull of public olltreach and <,;:onservation assistance, The San Francisco Water Departmen! has implemented a 402% wholesale r&te inr::rease effective June 1991. Tnis increase will translate into approximately ali 18% retail rate increase for Palo .. ".Ito I.::onsurners. QpiW JUI-V"tlff'" Propwn SmnmI!y lbe Utilities Depa.'l'fmenl 1991·95 Capital Improvement Program jdentifie~ $6,630.0<)) for a -".-ariety of water system projects. 'The: bulk: of the fundmg. S.s.2 milHon, is scheduled for Q.'ater main replacements. -37- v I I ! .--------'.-~.--.... . ':t , i l I 1 i \ .. , ,- / ~ .. - S&:Y DOC NO, 199 OSiCRQ DATED It1J8f'}2 WATEI': UTILITY TI!N-YI?,AR 1982-9\ HlSTOR1CAL SAUlS Fiscal Quantity 50id ~ tcrFJ 1982 6,S41,450 1983 6,576,334 19S4 7,4~7,924 19B5 7,338,060 1986 7,223.916 1987 7,389,000 198B 7,651,265 1989 6.350,384 1990 6.359.853 1991 5.U23,848 PiVB-YEAR (1992-97 I'ROIECn!D SAU'S) 1992 1993 1994 1995 1996 1997 5,380,000 5.810.000 6.275,000 6,714,000 7,185,000 7,400.000 ANNUAL COMPOUNDf![) RAT!! OP CHANGI! SO!JIce: City of Palo .oI\!to 1986-91 1991-96 FrveYear~ -38- -338% 6,58% ., , S&Y DOC NO. 199 OS/CEQ DATED 1/08192 1be foJ1owing reflects Waler saI~s by class and nurn~r of Warer customers by class for the years 1986-87 through 1990-91 and projected sales 1h: CIty'S top ten Water customers account for 22.3% cfwaler use. CdSAUlS, WATER CUSTOMERS Fiscal Year l~ l.!1_i.IcM U~ Ulic.9Q 1990-91 later Sales (Cef ) Res ide-nti a1 3, B21, 502 3,963,355 3,289,499 2,431,024 I, 871,533 Commercial 1,463,022 1,514,950 1,257,376 2.003.910 1.645,6BI Industrial 1.499.967 1,553.207 1.289.128 1.109.104 88.1,752 Municipal and Otner 598.509 619.753 514.381 815.756 SIO,SI6 Totai 7.389.000 7.651.265 6.350.384 6,359.853 4,917.482 Water Custoll.ers by Class Residential 16,537 16,587 16.583 16,595 16.640 COMlercial 1,749 1.733 1.729 1.722 1,743 Industrial 249 278 267 263 264 Municipal and Other 342 326 328 332 342 Tota! Custolllers 18,877 18,924 18.907 18.912 IB.989 IWlliILl! fi seal Year ~ 1222-2J 1993..02.4 122~-2~ U~ li2lic~1 'ater Sales (Ccf) Residential 2,786.358 3.009.060 3,249.88B 3,471.251 3.721,181 3.832.531 Commercial 1,065,240 1.150,380 1,242.450 1.329.372 1.422.630 1,465.200 rndustria! 1.092,060 1,179,343 1.273.731 1.362.842 1,45B.448 l, 502.090 Municipal 436.342 471, :i17 508.9.11 544,535 582.735 600.173 and Other TOTAL 5,380.0QO 5.810.000 6.275.000 6,714,000 7,185.000 7,400,000 Source: City of Palo Alto -39- ----.---...--- • S.!zY DCCNO. 199 OS/CRQ DATED 1~81'}2 WATIlR RATI!S (I)nJusIJI Jt-.) Service Cb81rC: For 5/8-inch l'Ilet~r For 3/4-incb ~ter For l-inch meter For 1 1/2-inch meter For 2-inch met~r For 3-incb meter For 4-inch meter For 6-inch meier For 8-inch meter For lO-inch meter Commodity Rates: {to be edded to Service O!arge} P~r Meter Per MQotb Fi rst 7 Cef {Ba~el ine Allowance) 8 Cd -14 Ccf 15 Cef .... 20 fef 21 Ccf -50 Ccf Over 50 Cd Commodiry RaJes: (to be added 10 Servic~ Charge) Per Meter &rJlonlh o to .90 BCA .90 to 1.50 BCA 1.50 to 2.0 BCA 2.0 to 5 BCA Over 5 BCA NOTES: Per Meter EorMoruh $2.50 2.60 2.80 390 5.10 8.50 12.50 22.65 35.15 43.50 Single Family Residences Pe r Hund r ed Cub [c __ I-".L_LCill til Pres sure Zones $1. 00 2.19 5.75 8.75 18.00 Multifamily Residences per Hundred Cubi.c..it_u fCef} __ All pressure Zones $1.50 2. ':xl 3.30 9.00 18.00 The Basellne Conswnption AIlowan~ (BCA} is intended to represent a custQmer's monthly essential water consumption requirement for indoor use or business openU:ions. The BCA is based 00 the average consumption (in units of hu.ndred cubic feet) for an indivirlual customer (mete;) during the billing ~riods of February and March 1990. Under certain c:ircumstances, such as the unavailabiJit)' of billing data or the l:ranrir.~ of a customer's request for a variance, the Utiht)' may select alternative months or methods tQ a:ri-\ie at a re:::sanable BCA. Variances may be granted based on 2 demonstration of seasonal flucruarjons in internal business. -40- • · , S&Y DOC NO, 199 OS/CRQ DATED li\l8192 WATI!R lTIlUTY COMPARlSON wrm SURROUNDING COMMUNITIES RATES EFFECTIVE 7-1-9\ Residential (Baseline) Rt!sidential (Average) (NOD Droog!lt ltItts) Fal'LAlll! $ 6.50 24,83 Surrounding Communities AV5'fage" $ 9.90 2J. 96 ·Surrounding Commutlities which also purchase water from San Francisco Water Department including Menlo Parle. ~Duntain View and los Altos. TIlE WASTIlWATI!R umrrv TIle wastewater coDection system became Palo Alto's fmt UfHi:y in 1896 s~rving II population of about 3,000. CUIT(:ntIy. the collectiun ;system serves approxima:ely 57,000 residents in Palo Ailo ..... ithin its l5 square mile ser.' ice area. W .... .-e:r TJafIDCDJ. TIle City of Palo Afro operat~s a 38 million gaUon per day (mgd) Regional Water Quality Control Plant fRWQCP) serving a 96 square mile area.lncluding the cities of Palo Alto. Los Altos. MOlJntain View, the Town of Los AltoS Hills. Stanford Universjty and the EasT Palo .ALllo S311ita....ry DisnjcL The Cities of Palo Alto, Mountaln V~W and Los AJloS are partners in an agreement specifying conditions fOI fmancing and operating the Plant. l.oti AHo'S Hills. the East PalQ Altc Sanitary Dismct, and Stanford University ~ included b)l separate cOntracts with Palo Alto which an: referred to as sub--panner agreements. In 1934, a wastewat"!I treattnenr plant was constructed to provide primary t!"eeLmen~ to all wastewaterconected in the City and Stanford University. Improvt!'ments in 1948 and 1956 .increased treatment capacity, ... ddressed special seasonal waste IOi!ds and extended the outfall into San Francisco Bay proper. In 1973, construction of the basic s('c>Jndary trearment facilify was completed with ser;ice e~tended to include wastewarer treatment for the cities of Palo Alto, Mountain View and LOi> Ahos as well as Los Altos Hills, Stanford University and the East Palo Alto SanitOU) DisuicL 1bese facihties ""erc fllla:nced by the local entiries with the assistance of federal and state grants In 1979, due to federal requirements related to secondal)' treatment standard:'., adYilfIced wastewater treatment facilities were added to the plant, Funding of the:;e fa.:i.] iries v.. as. from federal and state grants and reimburseme-nts from the 1973 treatment facility construction project. In 1983. a wastewater system dudgc dewatering faciliry was added to the plant. Fwuling of the $2.6 million facility wa.c; from a ponion ofIhe proceeds of the $4,765 million 1983 Series A Utllities Refunding Bonds. -41- J I -- , , - S&Y DOC NO. 199 OS/CRQ DATED 1108.192 In 1985. a RWQCP Cap-acit'"j Expansion program was developed to meet the news of all the fac:i1ity~s partner agencies through 1995. Tnis: u.pans.ion im:reased l..h.e capacity of \.he plant to 38 mgrl. and Pfimary!:secondaI)' tteaOTIenf for peak wei weather flows to 80 mgd. Also in 1985, a five-year capital improvement program was begun in the Wastewater Collection System dedicated to inflowft.ntllttation (lIl) sawee detection and system rehabilitation. These ~o msJor wastewater 'project~ were funded by llte issuance of the .$12.2 million Cit)' of Palo Alto Utility Revenue Bonds, 1985 Series A. This: .... ariabIe rate fmancing was kept in the weekly InQ\k: :and was refInanced with the S9.65 milllan City of PaIo Alto UUlity Revenue B.onds, 1990 Series A. The 1990 bond .issue was smaller due [0 the paymenl of principal and the elimination of the reserve fund through the use o( I. surety bond. Both projects have been completed. MY! g '0' Discassion of 0penIti00s From 1986-87 through 1990--91 sales revenues increased at a compound annual rate of7.2% which retlects revenues requlred to coover higher costs of operations. The wastewater residemial rates DC! not follo~ a per unit consumed increase, but an! mostly flat rates of fees per household. Increased flow rares do nor !lecessa..-ily result in increased "~les" regardless of their 50U1"«. Hence, the net fi .... e year average .annual growth in flow is not reflected in the projected revenue picture. Antkipated increases in operation and maintenance costs result!n significandy higher rev~.f'lue requirements. This estimate.is based on t.he assumption that present levels of treatment are adequate and no major capital expenditures will be required by the Bay Basin Plan or other Regional Water Quality Control Board cl.edsions. The Plant's disc:har~ into San Francisco Bay is authorized by a three year Natiottal Pollution Discharge Elimination System (NPDES) pennit which was issued on December 28, 1988 by the Regional Water Quality Control Boord. The permit was amended May 16. 1990 Ie include additional pre-treatment and wute minimizatWn requiremertts. lbe permit requiRs several ongoing studies regarding particular components of the Plant's effluent. All stUdy deadlinc.oCi have been met and the Ciry is budgeting $9OC'J,OOO per yeat to contirl'.le the re.sench and implementation of waste mirUmizaticm programs. The perm.i[ was again amended April 17. 1991, seuing "interim c<.mcemration limits fonoxic pollutant,,>." The e.7..tn:.mely low limit of 2.9 ugII foc copper cannot be achieved by conventional means; the !~ad and nickel values ar~ also questionable as to their achievability. ~ction from the Regional Water Quality Control Board is thai through sourr;(: <:ontrol and wa~er reclamation projects, to~ potlutant reductlon5 will be required. The water conservation measures adopted in response to drought conditions ~suI1 in a reduction of wastewarer Charges for major cllst(lmers. Consequently, the City has significantI)· increased the per unit rate for wastewater collection to meet revenue requirements. The UriIities Depa."1ment 1991·95 Capita] Improvement Program Re'por1lisl~ a number Qf capital projects wruch are to be fmanceJ from wastewafer system revenues over the upcomtng four·year period. The four-year period fOT Wastewater Collection tOfalS. $1 1.0 milli0n of which S8.2 million is for CoU~ctiC!n System Rehabi.litatiQn., More than $,3.0 million is projected for the Water Quality Control Treatment Plant impro ..... ements and equipment replacement Future capital improvement progrems propose e~penditures e~ceeding $,0.2 million per year for lreattnent planr reliability and equipment replacement needs. -42- - S&Y DOC NO_ 199 OSICRQ DATED IIOGi92 HisIoDcaJ,IProjocood Ope"dio"", 1hc: folll)wing table: reflects a ~n-year historic':ll and five-year projected record of weS1ewa~'~r trea.ted. The decrea~ £n quamity during the PflSt few years is due to cur 5 year drought and conservation response. The proJected L'1neases .lIe e;r.pecled from :relaxing of consenation measu.R:S and growth in the cities of Mountain View and E3$ot Palo .Alto. WASTEWATER UTILITY 1982-91IHSl'ORICAL llU'ATMENTVOWME Fiscal "~" 1982 198) 1984 1985 1986 1987 1988 1989 1990 1991 \Va.£tewater Trr:::ared (MOD] 27J 28_6 29_0 26_9 no )03 n5 22_2 21.9 21.0 FIVE-YEAR 1992-97 PROJECl1!D TREA 1MENT VOLUME 1992- 1993 1994 1 ')95 !996 1997 no 24_0 25_0 26_0 no 28_0 COMPOUND!!D RATE Of' mANGE f/"I\'C Year Periods 1987-91 1992-97 -2 879< 4m% *\Vsslewarer trea.ed is for the cities of Palo Aho, Los Altos and Mountain Vi~w. the East Palo Alto Sanitary Oistric[. Stanford University. a."1d 1..05 Altos Hills. After plant expansion. RWQCP capacity inneased 10 38.0 MGD. From 196910 1987. plant capacity was 30.6 MGD. Source: City of Palo .. 1\.110 -43- .. .. ~ I r I .... ... S&Y rxx: NO. 199 OSK:RQ DATED 1/O8!'!! TIle following reflects WaS":~w/t;ter Collection by class and number of Wa"tew.ater customers by class for the years 1986·87 thro:>ugh 1990-91 and projected sa.1es. The City's top ten Wastewater customers accOWlt for 12.7% of sewage tre2.ted. MOD TRP..A1lID. WASTEWATIlIl CUSTOMERS Fiscal Year J.2~-oSl l.!!ll,U l.llJ;o~9 Wastewater Treated (lI(,lJ ) Residential 13.7 10.6 10.0 COIIfI.erciaf 8.8 6.~ ti.4 Industrial 6.4 4.9 4.6 Municipal and Other 1.4 1.2 1.1 Total 30.3 23.S 22.1 Palo Alto Wastewater Customers by Class Residential 19,239 19,285 19,587 CODlercia! ) ,392 1,446 1,464 Industria! 177 177 180 M'tml cipal and Other 117 67 67 Total Customers 20,925 20,975 21,298 I'llQlliIfP fiscal Year 12~21 J~2, 2J l22J-94 ~ Wastewater Treated (M>D) Residential 10.4 10.9 11.3 11.7 CCHDercial 6.7 6.9 7.2 7.5 Industrial 4.9 5.1 5.3 5.5 Municipal and 1.0 1.1 I .2 I. 3 Other TOTAL 23.0 24.0 25 0 26.0 Source: Ci~ of Palo Alto COMMERCIAL RATES: Restaurants Minimu.rn charge per connection per month Based on metered waler, per 100 cubic feel 19a9,2Q 9.9 6.3 '.5 1.1 21.9 19,580 1.464 177 67 21,170 lli;;,9.6 12.2 1.8 5.7 1.3 n.O $1150 $4.50 li2lloll 9.5 6.0 4.4 .1 11.0 19,760 1,449 176 65 21,450 19~ 12.6 8.1 5.9 1.4 28.0 • S&Y DOC NO 199 OS.K:RQ DATED !/08,'92 ~cstah1dlIIHmt djs,haraioi scwaiC: in excess (!of 25 QQQ &aUQ..ns pr ~yaJjt)~_~Q.~_Qof sew!" per day as &:t .. anined by mct(rednwater usage _a.ndnSampl.i.ni., Coitection Syslem Operation, Mamtenance. and Inm.ration lntlow $954.00 per million gallons ($0.71 pe.1OO cubic feel of metered wilter.~ Advanced Waste Treatment Operations and Maintenance Charge $721.00 per million gallons (SO.54 per 100 cubic feet of metered water). $ 159.00 $ 339.00 $ 2.118.00 $ 10.000.00 AIlQlhcr Es\ablishmt~ per 1000 pounds of COD pel 1000 pou.'>ds of SS per 1000 pound, of NH) per lOOO pounds of tOXJes Minimum Charge per connection per month Quantity Rmes: Based on melcI""'..d waler per 1 ()IJ ct:bic fe-:t OOMESTIC RATI:S; PerMQnth Each domestic dwelling unit SPECIAL NOTES: $11.50 $2.32 $11.50 A, occupied dOl-nestic dwelling: is designated as any house, cONage, flat, duplex unit, or apartment unit having kirchen, bath, and sleeping facilities and to wl-.ic-h utilities services are being rendered. Any dwelling unit being individually served by gas or electric meter will be considered as conililuo11sIy occupied. For any dwelling unit being served by more th&n one wastewater .::onnection, the monL'1.Iy charge will be applied to ea~:h connection. WAS11!W ATER UTIUrY COMPARISON WIT!! SURROUNDING COMMUNITIES RATES EPFIlCI1VE 7-1-91 Residential (Baseline) $ll.SOlmoflth Retai!!Co~ercial 2 34/Ccf 45· ~tlrrounding Communi tiC's 7-j,2L $9.9S/monrh I.44/(cf .' -------~ · ~ -:' ,~'2"'.,.. . -,,', ,. .~'~~~~1' - .~i0 .... ____ . - S&Y DOC NO. ]99 OS/CRQ DATED ]/08/92 1liE STORM DRAINAGe UI1LITY ~ City of P:l!o Alto crea~ed by Ordinance a Stonn and Surface \Vater Management Ente.rprise on November 6, 19a9. On November 27.1989 the Council approved a method for calculating Stonn Drainage fee~ and estii!hlished a Utility Rate Schedule for the Enterprise to be effectiv~ Janua.-y 1,1990. Storm Drai'lage fees were collected for the ftrst time with the City's February utility bill. The purpose of the Storm and Surface Water Management Enterprise i~ to construct and maintain storm drainage improvemems on a City-wide basi .. , The Cit)' is responsible for all drainage facilities in the street and the public right of way including curbs and gutters, catch bssms, pipelines and pump stations. TItese facilities colleCt storm water and convey it to the Santa Clara Valiey Water District's system of major channels and creeks within the City. The City has detemtined that muc. ..... of its collection system is incomplete, undersized. or in need of repair/rep! aoemcnt. After considering a number of alternative funding solutions to corre-<:t these problems. the City concluded that the most appropriate :rm:lhod was the levying of a monthly Storm Drainage Fee computed on the basis of the use madt of, and the need for, and the .service p~vided by the stonn drainage facilities of the City. Fees fpr single.fa."l1ily and duplex n:sidcntia1 propenies are a fixed amount and arc ba.o;ed on the asswnption that t.~se types 0 f property have an average impervious area of 2,500 sqllare feel. Fees for multi-family residential, commercial, and industrial propenies ale proponional to the single-family residential rate, but are based on:he ih..'tUaI amount nf impervious area on the propeny. Revenue from the Stonn Drainage Fee for fiscal year 1990-91 was $1,660,000. Capital Improvement b:2irAJD Summary The Pubhc Works Department 1991 -96 Capital Improvement Program Report i~miftes various stonn drainage system improvement projects totalling S935,000 for flS.:'.:ii yea: 199I~92, Budget flgu.r.!S forme remaining years are yet to be fmaIized, subject to the results of the ongoing Stonn Drainage Condition A .. sessment and Master Plan studies. The~ 'h\-'O !::rudies will identify portions of the City'S existing storm drainage s),stem that need to be replaced or rehabili[ated, and areas of the City where the capaciry of the system needs to ~ im:.re:ased. Staff has identified $5,6 million in proposed capital expenditure-s for the stann drainage system for fISCal years 1991-92 through 1993-94, some ofwh.ich will be funded on a "pay as you go" basis. The projeCts to be funded a..'"'e locate-d throughoLlt the CIty and include the Condition Assessment and Master Plan s~dies, stonn drain construction, pump station improvements, curb and gutter replacement, fuading for the Santa Clara Valley Nonpoint Source Pollution Control Program, and ,slonnwater quality improvements. These proposed impro\'I:'.rnents are described in detail in an earlier3ection of this document. The City int~nds ro use the 1992 Bonds as a mea."1S of fmancing these improvements. The CilY imends that its Stann Drainage impro .... ements will be undertaken as Storm Drainage Fee revenues are sufficient to pay maintenance and operating expenses of the Utility and provide an increment of additional revenue to cover debt service payments resulting from the improvements, .'~. '0-" ~~;:t;.., I ! r i ~ S&Y DOC 1"0.199 OS/CRQ DATED 1/08/92 M&n,urmenl piscus .. ion of Qp<:ratiQos When tl:te Storm and Surface Water .Management Enterprise was created in 1989, the CiT), sta:ed that the stann drainage fe-'(: would not be increased for a period of three years. fherc~fore, January 1993 is the earliest date al which a rate .increase could be implemented. This date coincides with the projected completion of tbe Stonn Drainage Condition Assessment and Master Plan studies. These siUdies will aSSt51 staff in de:errnining the extent of capital improvC'lTh!nts rc:qllired to repair aging parts of the existing stann drainage system and to add on to tfH: system where it does not ha"c sufficient capacity to serve its drainage area. The Fee increase to be recommended to Council will be proportlonaJ to the amounf of capital improvements identified in these studies A fee mCf(:ase may also be ne~ded to pay for an expanded storm drainage mainten2nce program. The following table shows a two-year hlstoricaI anei five year projectec record of eqUivalent residential units (ERUJ* sold. As Palo Arlo is. virtually l.;lIilt out, no grou,1h in ERU's is projected. STORM DRAINAGE 1WO YFAR HISI'ORICAL SALES Fiscal Yt4L 1990 1991 Quantity Suld (ERU~ 42,635 42,635 FlYE-YFAR 1992-96 PR01ECl1!D SALES (ERU'S) 1992 1993 1994 1~95 1996 42.635 41,635 42,635 42,635 42,635 COMPOUNDED RATE OF CHANGE YIYC Year Periods 1990-91 1991-96 09< 09< ·ERU; Equivalent Residential Unit equalS 2500 sq. ft. of unpent'lous s'lirface -47- :,--.,.....----.. _--,., ..... ' . . ;'; \ , i I r ." I 1 'I , 1 j I i I , . S.lY [)()(:NO.199 OS!CRQ DATED IN8;'12 Stonn Pajnage Fce.Scbedulc Rate, Effective 1-1·90 puMooth: Stonn Drainage Fee per Eq,tivalent Residentu.1 Unit (EIIU) Special Notes; $3.25 1, An Equivalent RlCsidentiaI Unit (ERU) is the basic lUlit for computation of Stt)!I11 draiila8c tee:.s for residential and non-residential customers. All single-family and du .. __ :x uni~5 are ..-:or;:,idered 1 ERU based on data for Palo Alto and rue considered to have an average impervious ~ of 2.soo square: feet. All other properries will have ERU's compu~ed to the nearest 1/10 ERU using the foUowiItg formula: No. of ElW I: Iwpeuipus Area (Sq. Ft.) 2.500 Sq. f •. 48· 'v .' , / - S&Y DOC NO. 199 OS/CRQ DATED 1/08/92 APPROVAL OF LEGAL PROCEEDINGS The 11!.galiry of the sale, ~xecution and delivery of the 1992 Series A Bonds is subject to the approval of Jones Hail Hill atJd White San Francisco, California, acti"l,£ as Bond Coumel. Bond Counsel has not un<:k-rtaken any respomtClilily for the accuracy, completeness or fairness of Ihis Official Statement. A copy of such legal opinion will be primed on e.c'Ich Bond and is attached hereto as Appendix E. ABSENCE OF LrnGA nON At the time of delivery of ~"d payment fOi the 1 ?92 Series A Bonds, the City \1,,111 certify that there is no action. su1t, p!oceeding, inqui.ry or in"es~igation, allaw or in e({uity, before or by any court, regulatory agency, public board or body. pending or. to the knowledge of the City. threatened against the City affecting the existence of the City or the titles (If its offi<:ers to their respective ",f[}ces or seeking to restrain or to enjoin the sale or delivery of the 1992 Series A Bonds. the epplication oCthe proceeds thereof.in ac<:ordance with the Indenrure, cr the colie<:rion or application of any Net Revenues provided for the payment of the 1992 Series A Bonds, or in any way con~esting or affecti:lg the validity or enforceability of tbe 1992 Series A Bonds, th.: Indenture, any action of the City contemplate.d by aTlY cf the said documents., or the (;ollectiol1 or application of any revenues provided for the payment of the 1992 Series A Bonds, or in any way contesting the completeness 01 accuracy of this Official Slatemenr or any amendment or supplement thereto. or contesting !.he p-:::;wers of the City or its authori:y with respect to the 1992 Series A Bonds or any action of the City contemp!aled b}' any of said documents, no! ~o the knowledge ofthe City, is there any basis therefor. TAXMATfERS Ir1:he opinion of Jones HaIl Hill & White. A Professional Law Corporation, San Fra.l'lctsco. Ca.l.ifomi .... Bond Counsel. subject. however. to the qualifications set fonh below. under existing law, the interest on the 1992 Series A Bond .. is excluded from gross L.'lcome for federaJ (marne tu pwposes and such intere:st is noc 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 such corporations (as defined for federal income tID; purposes), such interest.is taken uno account in delennining certain income and earnings. The opinions set forth in the preceding: sentence are subject to the condition thilt the City comply with all requirements of the InternaJ Revenue Code of 1986 (the "Code") that must be satisfi~d suhsequem to rhe issuance of the 1992 Series A Bonds in order that ;uch interest be, or continue to be, excluded from gross in,;;ome for federallncome tax purpOSl:s. The Crty has covenanted to comply wlth eacb .~uch requirement. Failure to comply with certain of such requirements may cause the inclusion of sucb intt':Iest in ,gross income for federal income Iv:. purposes to be retroactive to the date of issuance afthe 1992 Series!.. Bonds. Bond Counsel expresses no opinion regarding otherfederallu consequences arising with respect to the 1992 Suies A Bonds. Prospective p~chasers of the 1992 Series A Bonds should be: aware thai (i r Section 2M of the Code denies a deduction for interest on u-Idebredness incurre(j or continued 10 purch,l\e or carry the 1992 Series. A Bonds Of. in tile cas!! of a financial institution. thaI portion of Iht' 1992 Series. A Bond owner's mIt-res! expense all0calerj 10 intere~l payable on the 199~ Series A Bonds, (ii) with respect to insl1rance compllnies 5uhjecllo [he ta;:( i:nposed by s.ectl'Jn S_~ 1 C'lt the Code. section 832t.b}l',5){B )\1) reduces the deduction for loss. reserves by 15 percent of the sum of c~nain items, including interest on the 1992 Series. A Bonds, (iii) for taxable years beginning before January 1. 1992, inlerest on the 1992 Series A Bonds earned by some corporations COl!.!J -49- . I I ~: . .i),":,' -'-'. =--~---~~---.--------<----~"-~ S&<Y DOC NO. 199 OS/CRQ DATED 1,\J8192 be sl,lraject to the environmental tax imposed by section 59A of the Code, (iv) intC':rt"st on the 1992 Series A Bonds earned by 'Certain foreign corporations doing business in the Unitt:d States could be subject t.o.Ii. branch proftts tax ilnposed by seclion 884 of the Code, (\.) passIve investment IDeotn'!, inc!uding interest on the 1992 Serics A Bonds. may be: subject to federal .income taxation under .section 1375 of the Code for subchapter S C('rporations that have subchapter C earnings and profits at the dose of the taxable year if greater than 25% of the gross receipts of su.ch subchapter S Cotp<Jrarion is passive Ulvesttnent income, and (vi) set.1ion 86 of the Cod~ requires rr:cipiems of cenain Social Securiry and certair. Railroad Retirement benefLts !o rake imo account, in detennining gross income, receipts or accruals of interest on the 1992 Series A Bonds. In the further opinion of Bond Counsel, such interest is ~;(emp4: from California personal income taxes. RATING Moody', Investors Servi<:o, Inc. ("Moody',") and Standard &< Poor', Corporation ("S&<P") have given the 1992 Series A Bonds the rating of" __ • and " ___ " respectively. The ratings reflect only t~ view of such organizations and an (:xplanarion of the SigniflCance of such ratings may be obtained from them as foJ)-ows: Moody's Investors Service, Inc., 99 Church Strut, Ne?' York, New York 1()(x)7, or Standard &:: Poor's Corporation, 25 Broadway, Ne\\' York, New York 10004. Tm:re is no assurance thar: the ratings will continue for any given period of time or that they will not be revised downward or withdrawn ~ntirdy by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant Any such downward revision or withdrawal of such 131ings may have an adverse effect on the market price of the 1992 Series A Bonds. U!GAL OPINION Jones Hall Hill &: 'White. A Professional Law Corporation, San Fnncisco, Califomia, will render an opinion with respect to the validity of the Bonds in substantially the fonn set forth in Appendix D hereto. Copies of such i!p?fOVin,g opinion will be available at the time. of ckl1very of the Bonds. Q.OSING DOCUMENTS In addition tl,) the opinion of Bond Counsel, the City will, at the t~ of delivery of the Bonds, furnish the purchaser with the following documents, signed by a :-esponsible offi<:er of the C jty, and dated as of L~e date of delivery: 1. Arbitrage Cert:ificate --/It. certificate of an appropriate officer of the City ceI1ifyinp: that, on the basis of facts, estimates and cu-cumstan(;es in effect ar the time of delivery ofthe Bonds, j[ is not expected that the p!oc~ds of the Bonds wilt be used in a manner th.t will cause the Bonds to be arbitrage bonds 2. No.Litigatioo Cert:ificate --A certifLcate of an appropriate officer of the City certifying that there is no litigation pendmg or. to the best (If such officer"s knowledge, threatened a&ainst the City affecting the validity of the Bonds. ~50- ---~~-. -.--.~~ - ~: l ~ !... 3. 4. · ... '.' S&Y DOC NO. 199 OS/CRQ DATED I/DS.fJ2 Sjg:o:abm: Cc:rtifi::atr.s --A certifi<:ille of appropriate officers of the Cir:: indicating thai they ha"we signed th~ Bonds by manual 0: facsimile signature and that the)' were duJy authom-ed 10 execute the same Trustt:e's IIDd DiroetoI" of FinIDoe's Receipts --The receipts of th~ Trustee and the City's Dirr.C1:or of Finance cf tht: Cit)' showing Ihat the purchase price of the Bonds, including accrued inlere~1 to the date of deliver)" if any, has been received by the City and the Trustee, respectively. S. Cesti6c:act::: Concerning: Ofticia! Staa:ematt --A .;ertificate of an appropriate officer of the City, actin~ in such pc !"Son's offIcial and n DC personal capacity. to the ~ffe,-"l that at the time of the sale of the Bonds and a! at! times subsequent thereto up to and including the time of delivery of the Borld's, the Official Statement relating to the Bonds did not contain any untrue statement of a materia! fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they v.'ere made, not misleading. Financing Consultant The material contained in this Offic':'al Statement was prepared by Stone & Youngberg as financing consultant to and under <:ontract with the City. The fmancing consultant will receive compensation from the City contingent upon the sale and dcliyery of the Bonds. Stone & Youngberg may submit a bid for the Bonds an", if it is the suc .. 'Cssfu] bidder, Inay purchase the Bonds and resell all or a portion of the Bonds 10 the public. The Bonds are bemg offered at public sale by the City and will be sold to the highest responsible bidder as determined by P!OV isions set forth in the Offtcial Notice of Sale of the Bonds. ~ successful bjdder may reoffer the Bonds to the public at any price or yield it detennines. All infonnation contained in this Offtcia! Statement pertaining to the City, tM City and the Utility Enterprise has been furnished by the City orthe City, and the execution and delivery of this Official Statement have been duly auuwrized by the City. A!kW~.QruJ...11fQnnati9n All qu rnali om from and summar~s and explanations of the Indenture and orner statutes and documents contained herein do not purport to be complete, and rderence is made to such documents, Indenture and statutes. for full and complete statements of their provisions. 1bls Official Statemenl is submitted ('nIy in connection with the sale of the: Bonds by the City. All estimates, assumptions, st::tistical hlforrnation and other Si:atemcnts contained herem, whiie taken from sources considered reliable. are not guaranteed by the elfY The irtfc>nnarion contained herein should nct be construed as repres.entUlg. all conditions affectmg the ell) or the Bonds, CJlY OF PALO ALTO By: hL _____ _ Mayer -51- ---" L • / S&Y DOC NO. 199 OS/CRQ DATED 111)8192 APPENDIX A SUMMARY OF THE PRINCIPAL LEGAL DOCUMEN1'S A-I • S&Y DOC NO. 199 OS;'CRQ DATED 1,1)8192 ArPENDIXB I!NI'1lRPRISE PlNANCES B-1 i 'i / S&:Y DOC NO. 199 OSiCRQ DATED J/08/92 CITY OF PALO ALTO Toni ~ DeI>t Senice C.,..,~ Ten Year ifut"'1 with S y_ """"' S (OOO) , , TnnsflPr"S Di~ Total r i "eel rD/f~ Qrerating cala.~ras .. , R_enue-5on<d Debt ~,...,i-te Toul fi-.t a..",.. fi seal 6r-o'!!.S IlHefYlH b~s" D@bt I~ Debt $er'Wicl' c.o.~~ ... COo .... ' CC'¥l'r .&9t -IHL_ (J) __ l1L __ 1.~f!L ~''''_i.Hph RftV.l.M _____ roC! ---U1-_ilL 1,"" -49,91] 36,137 14,290 \I' 27.80 51' 27,St' 198' ;6.~57 40,678 16,3M 3" '::2.94 381 42.94 198' 69.tiM SU,191 19,077 20S i:2 i 91 .7;' 2" 91.12 198!;' 82.fI07 59,211 n ,917 5021 45.91 521 45.9' 19"' 59,996 f:, 1,1137 23,076 '" 26,£2 567 26.52 1987 96,803 69.9g4 27,885 , ,076 25 -' 92 1 ,075 25.92 1988 97 -' Oa4 64,770 33.592 1 ,378 24.45 1, '37e 211,45 ,,.. 97,628 61,962 31.391 1,545 24 -' 2() 1,545 24 -' 20 'm 10::' ,t36 71,864 35, l2~ 1.551 22.,69 1,557 22.69 1991 nO,86S 72.941 5,283 34.528 i ,8Q3 18.24 7, , 'it. 4.82 1992 lie, 5 1 a 9,448 87,805 1,087 3.:1,845 1,779 19.59 e.86f, 3.93 1993 121,e25 5,443 87,7'=5 9,1J8€-39,3 j I l,en 20.4S 10,959 3.50 1'19' 133, In ~.421 93,833 9,411 4 1 ,241 1,5i2 22 .. 03 11,<'1:;:) 3.56 1995 147,451 5,441 100 , 3Z1.\ 9,272. 45, ~ 57' ! ,(!~5 44.21 11 , 131 4.!:I6 19% 152.87C 8,032 106,631 9,154 4ti,975 , ,864 25.20 11 ,0 1e 4.21 (I) E)(~llJd'@~ d~~H"pciation and Mtl)rtizatior; e:rpl'~~rs .. l2J Ho bond principal ""as paid ;n fiscal 196J-a4 (Iv,", to defuso'!rlce of 19I9 bo~t!s witll 1983 reh.nding bOr!O' pron·li'ds. {3) fVII(ling faT" C.&laveru JU'1'jil!'Ct ,..;11 be draW'!1 fr~ special r-es.erves set I.Ip for l~is pv""po .. e. ,4) Rl"lIenue AllanabT~ dividl!'d by Rellenue Bond Oebt Service Ji:eqvired. ,5, Reyer-VI! Bo~d ORbt S(Orlli~iI!' ~I!quired pl05 Cal/IIVeral Debt. (6) ~(O\lerlve A .. ailabl~ plus Calaveras Debt divided by Total fi><ed ChaT"9u. B-2 S&Y DOC NO. 199 OS/CRQ DATED 1/08/92 10 YEAR 11tI!ND 01' 1.INCOU.!!CIlBLI! BIlLS BY $ AMOUNT AND Pl!RCI!m"AGE 01' TOTAL B~ $ Amount AMount YtlrJ!il.Wl _---.I!i.l.lliL UncQl1ectll 1981-1982 47,579,000 N/A 1982-1983 53,122,000 33,590.00 1983-1984 66,789,000 38,750.00 1984-1985 77,123,000 43,270,00 1985-1986 82,471.000 66,215.00 1986-1987 90,158,000 38,535.00 1987-1988 91,254,000 49,5~1.00 1988-1989 90,566,000 34,!07.oo 1989-1990 101,525,000 154,403.00 1990-1991 105,836,000 127,181. 00 B-3 VQ_~ .06\ .06\ .06'4 .08'4 .04" .05'4 .04% .16% .I~ .. 5&'1 DOC NO. 199 OS/CRQ DATED 1/08/92 APPENDiXC CITY fINANCES C-I ,~ I I S&Y DOC NO. 199 OS/CRQ DATED 1:\)8192 fh<:ill ..I-.. l'opul,tj'" 19 .. 55. Z<:::S 19111 55,000 19132 '5S.3~O ""' 55, <mO 1984 5t;,100 19115 56,21Hi 1986 56,800 , 981 56,600 "08 56.900 1989 56,950 19'90 57,400 1991 5~, 900 FOl"'e(".a'!;t 1992 56,000 1993 56, tlOO 1994 56,000 1995 56,OGO 1996 St.,OUO ------ UTY OF PAI-O AI.TO Tooal Deb< 10 lwesacd V ..... Total Deb< Per Capita Ten y ..... Hmary Plus FlOe Yeu l'o= (in _ of doIlar» (l) (2) ........ , Rr.-enve &ondl ( 3J ........ OtIli g;et;,oo u,'iu.l Leas.. Crtflt1~t _ -.lt~ ---, _.l!oIOt __ Mi. __ $2,334,312 (5) 56,863 $ 2,320 2,1102,487 1i.077 1,690 2: ,763,261 14.036 1,.1170 3.166,:n~ 19,tlQ4 4,766 3,-457,251 ",lSe 4,155 (" 3,855,877 22,079 4,419 $152,30() 4,515,549 21,n3 15,414 190,960 .11,844,145 Z' ,1359 Hi,Z06 209.554 '50,162,525 20,671 1 S ,8s.< 2[19,288 5,339,58) 19.615 ~5,430 2C1~,462 5-.F.:64,n51 <'0,334 14,797 216,185 6,501,'PJ 19,040 14,7f.3 <:1.2',0('4 7,025,000· 17,895--11,607 2:1 0 ,i.'l!i5 7,5"C,OOO 16,8()1 16,229 209. [)43 8,075,MO 15,6"?1) T4,723 2.Cl7 ,346 5,600,0(10 14,606 13,136 2[)5,599 ~, 125,000 13 ,466 11,730 203,791 S o.bt t. 'fl.lt.al AssnsM __ ~t ___ .YillllL- $ 9,183 1. 57-:' 7,957 (1.33 15,506 0.56 13,859 , 75 21,925 0.63 178. ese 4.64 n9,155 5,07 ::1:41.7290 5.11 ,45,M3 .4 .16 241,5{l8 4.52 2:, 1 ,315 tl,.29 2AS ,813 3,79 245.567 3.50 242,073 J.l' J 237,7t!5 2..95 ;:33,34 i 2.72 2213. 9137 2.51 (I) GErn-ral Obligation Bantle::! Debt inc1udtos: r..n~.-,,1 Ot>lig.tian bOilD'S, Sltt'cial ASUSS-l\'If'nt ()eM, Ce.-lifical!i!:s of P.rticlp;wU(J\'1. and Capital Leue \lbli9ati~ns, (2) Jlevli'nu ... 80nd/CIlpHal l,use O .. bt inchH!es f1ropriptar), Capital luse ObligatioM arid Util it)' "evenuof' Bond 5 . 'fa .... l ~l ~~it.o $ 166.2~ 144.85- 280.40 426.82 390.62 3,182.53 4:,034.42 4.376.84 4,320.62 4,240.70 4,376,00 4,41)0.00 ~ ,3M. O[) 4,330.00 4,250.00 4,170.00 4,090,00 (3) Cr:mtingt'nt Debt h Palo A1 to's POl"'lio'l of m:Ptt' 5 debt fol"' Calavf!''-u l-i!dro PO~H and Geatl1erN.l Pl"'oJect Ind TANC's lrijlns.,is.iol"f faci1itip~ relfflnue anticipation I"ates. In 1984, lfle C;l, soH 6.15l of its sna!'"e of Geot~e1"ltlal projrd to TLlrhcil Il"'l"'igation District. TUl"'loclo;;1 rupOrlsi~le fol"' "t.~e debt Si'rv;Ci!' o~l;~tio" r-ehteod to tflt' Pl"'ojeoct. Also in 1990, tl,i' Cit)' sold 6.52% of its Cala~Ha5 l-ildrofl1l!ddc Proje~t to Cit)' ~f .RQ"Hvllleo for"" period of 14 year.s, In l""f'turn R'J:s.evilie .ill ,,01.1 it!: 6.S2%. sflare (If t~e dpct 5 .. rv;~1 I.'b1ig(!tion. ACCClrdinqly. t~e (it)' is liableo fOlI"' plIY'Mnt cf t~eSl!' drbt service p"lp:tfrlt"S 01111 if T'Jrlock .. rid i1o"!Oeviil,.. d.fault. (~I NfJ F.ond p.-inciFal "Was "<lid ;n fiHaT 1983-84 to defe"sl"c:e (If 1979 BOrlds ... itt1 19'33 ~efl,jn~ing Bond Pnn·ud:s.. (50) AdJu:s.tfl,d frOC! 25'" of "r'lir Harkpt ValLIe" t~ IDOl. of "Fair Mal"'ket \laT'J>!'" t(lr tansisl.encj C?f pl"'esentatiori . • +$502.50,000 '1f1i1 r "PH debt SE!'"¥ice sc~edule C-2 ~ ~ j I I , j I • '. . ".'" \ ' .. S& Y lXJC NO. 199 OSiCRQ DATED 11081'12 CITY OF PALO ALTO RJIlio of GeDend &oded DdJr to AJseued Value Ofld Net BoncItd DdJr Per CapiIa Last Tea F_ Y<oo (mILo k ofdollanl (UD~m...<l Percent of (Jenera I (1) Bondod Oebt Fiscal A:;sessed Ohl igat iOD ;0 Year Popylatjon Value Vended DelL. Assessed Value 1979180 sS,ns $ 583,593 $6,863 l.18 1980181 55,000 2.402,481 6.071 .25 1981182 55.300 2,763.26) 14.036 .51 1982183 55.900 3.166.228 19,094 .60 1983184 56,100 3.457,251 17.160 .50 1984185 56.200 3,855.871 22.079 .51 1985186 56,8CO 4,515,649 21,773 .48 1986187 56,600 4,844.145 21,869 .4S 1987/88 56,900 5, !i!2.ft2S 20,671 .40 1988189 56,950 5,339,581 19.616 .31 1989/90 57,400 5,864,061 20,334 .35 1990/91 55,900 6,501,973 19,C46 .29 (1) General OblIgation Bond.....a.<I Debt includes: General Obligation Bcands, Special Assessment Debt, CenifiC31e5 of P.arti{;ipation. and Capital Lease Obligations C-3 Bonded Debt Per ~l"- $.12 . 11 .25 .3' .31 .39 .38 .39 .36 .34 ,35 ,:)4 --~ ..... ' -~'~ S&:Y DOC NO. 199 OSICRQ DATED 1/08191 fiscal Ci ty OTY OF PALO ALTO Totol Deb!: 10 A-..ed Value Totol Debt Pee Capita Tm Year Hmlory Plus Frve Year Potecasi (jenera 1 (11 Cont ing.eRt As~e~sed Db] i.gat ion Debt Total " Deb t Total To Debt Assessed Per ~ fQmilllLQJl -.l'~ 1!!l.l1~OJ l.'K£A_LIA.~n ~~ ...YaJ.w: __ CaJUu 1980 55,225 $ SR3,593 $6,863 $ 6,863 J.I~ $0.12 1981 55,000 2,402,487 6,077 6.077 0.25\ O. 11 1982 55,300 2,763,261 14,036 14,036 0.51\ 0.25 1983 55.900 3,166.228 19.094 19,094 0.6G~ o 34 1984 56,100 3,457,251 17.160 17,160 O.S~ 0.31 1985 5:),200 3,855,817 22,079 $152,300 174,379 4.52\ 3.10 1986 56,800 4,515,049 21,773 190,968 212.741 4.71% 3.75 1987 56,600 4,844,145 21,869 209,654 231,523 4.7~ 4.09 1988 5~,900 5,162,625 20, 6? J 209,28R 229,959 4.45\ 4.04 1989 56,950 5.339,581 19,616 206,462 226,078 4.23\ 3.97 1990 57,400 5,864,061 20.334 216,185 236,519 4.03\ 4.12 1991 55,900 6,501,973 19,046 212,064 231,110 3.56\ 4.14 Forecast 1992 56,000 7.D1S,DOO· 17.895 .... 210,065 227,960 3.25\ 4.07 1993 56,000 7,550,000 16,801 209,043 225,844 3.00\ 4.04 1994 56,000 8,075,000 15,676 l07,346 223,022 2.77% 3.99 1995 56,000 8,600,000 14,606 205.599 220,205 2.56% 3.94 1996 56,000 9,125,000 13,466 203,791 217,257 2.3~ 3.88 • +SS25,OOO/year "'-per debt 5eN.ice schedule (I) General Ob:_igation Bonded Debt includes: General Obligation Bond'S, Special Assessment Deb!, CertuKates of Panicipatior:, and Capital Lease Obligations C-4 • '. - ----'Q' -,-~--~--.~ ..... ------- S&Y DO('NO. 199 OSiCRQ DATED 1~8192 CITY Of' PALO ALTO SOIEDULE OF DIRECT AND OVERl..APPlNG DEBT ]990:91 Asses$(;d Valuation, $6,501,973,175 DIRECT I>ND OVERl.AI'1'.lNG~QNDED DEBT: Santa Clara County Building Authorities Smta Qa..ra County flood Cor.trol and Water Conserntion District, Zone W - I Foothill Community College District: Cc:nificates of Participatton Palo Alto Unii!ed School District Whisnun School District Other School Di.-;tricts and School Authorities City of Palo Al.o General Fund Obligotions City of Pal 0 Alto Special Ass(:ssment Bonds Mldpeninsula Region a] Pari< District and Certificates of Partidpation 5Wla Qaa Valley Water District ~ A~jjcatie 7.385% 0.468 21.037 89.672 6m2 Various 100. 100. 13.040 Cenificates of Participation 7.385 Other Special Districts Various TOTAL GROSS DIRECT AND OVERLAPPING BONDED DEBT Less: EJ Camino Hospital Authority (100% "'If-supporting) TOTAL NET DIRECT AND OVERL"PPING BONDED DEBT (1) 1rK:ludes Tennan School lease purchase obligations. Rati.Q.S.12...&..sc:SIied Valuation: DilectDebt ($IO.3~ Iota} GICffiS Debe Total Net Debt STATE SCHOOL BWLPING.AlQREPAXABLEA,S.Qf6Ll019.l: $23,790 Source: California Municipal Sta.tistics, Inc. C-5 l&l1! 6130/91 11~,416,565 112,600 4,%7,887 448,360 238,075 4,090 10,397,896 (2) 8,649,000 6,216,950 2,845,071 _ 2311 551,305,841 __ ~4.9jj':; $52,300,856 i -, ·---~~..---. '-<,--~. S&Y DOC NO. 199 OS/CRQ DATED 1~8/9l APPI!NDlXD CITY OF PALO ALTO The City of Palo Alto is located approxim..ately 3:5 miles south of San Frarn::isco in SarHa Clara County. 1be Ciry covers approximately 26 square miles and is ~ordered by Los Altos on fhe SllUth. Menlo Park on the west, and East Palo Alto on the east, to the north is the San Francisco Bay. The City of Palo AIto was incorporate d in 1894 and operates as a charter dty. having: had its flf'St chaner granted by the Swe of California.in 1909. The nine council members are elected at larg~ for staggeno:d four-year terms. The Mayor and Vice-Mayor are elected annual at thf: first council meeting ~ January. The City Manager is responsible for the operation of all municipal functions except the offices of Ci~ Attorney. City Oerk and City Auditor. These official'S a.'"e appoin .. d by and repon directly to tM City Council. There are approximately .57,000 people living in Palo Alto. L"'ld a.bout 11,700 on the Stanford University Campus. Palo AItl"S population has inc.:rc:a.sed at an annual rate of 3.5% since 1980. The fcllowing ~able sefs forth population statisti(:s for the Ciry and L~ County of Santa Gara. I'OPtJIATION ESTIMATES _Y .... History Year 1980 1981 1982 1983 1984 1985 J986 1987 1988 1989 1990 Source: State Department of Finan-:e • I 990 Census Polo Abu 55,225 55,000 55,300 55.900 56.100 5Ii,200 56,800 56,600 56,900 5Ii.95IJ 55,971' p-- 1.295,071 1,308,500 1.325,200 ],344,700 1.363.,00 1.376,900 1.403,100 1.407.900 1,431,600 1,440,900 1,497,577' Effective buying income (EBI) is reponed annually by S~.tl.JlIlllM"'k.Iini..M""=llli magazine "Survey of Buying Power", It is dermed as persOll~J income Jess personal tues, non-tu payments (rmes, fees, and penaJties), personal contn"butions for social insurance, and D-I i ., st<y DOC NO. 199 OS/CRQ DATED If.J8,'l2 comper.:sation paid to military and diplomaJ:ic personnel overseas. As shown in the following table, tlv:: County's median household EBJ has increased at an average arnual rate of 3.4% betwern J986 and 1990. According to SiIlc:s and Mari::etinv Mana~mmt. the County of Santa Clara ranked second among the stale's 58 countks in 1990 in median h "~~hold EB!. behind Marin County. The County's median househ,,!d EfI for 1990 was $42,+26,37% abo.'c the statewide average of $30,713. SANTA CLARA COUNrY MBDIAN HOUSEHOlD El'fBC lIVE BUYING INCOME Santa elora Counl)! Stale of California 1986 $35,702 26,557 1987 $37,5!7 28,227 1988 $4!,748 30,537 Source: Sales!JKI Marketing Management, "Sur/t:}' of Buying Pow.er" 1989 $41,717 30,088 1990 $42,126 30,713 The following table &hows the distribution ofeffet.:tjvc: buying income by income group. SANTA CLARA COUNTY El'FEC lIVE BUYING INCOME DlSTItIBunON 1Doomoa.. Under $10.000 $10.000·19,999 S20.000. 34,999 $35.000 -49.999 $50,000 and over Source: Sales and Marketing Management """""" of fIoaIeboIds 7.9 12.1 20.1 19.1 40.8 Palo Aha has become one of the major c:mploymenl centers of the Bay Area, partly because me City is close tQ Stanford University tdld is identified with it. Large amounts of land were zoned for commercial and industrial uses during the mid-1960's a.'1d several' of the nation's largest e!ectrou.ics fums were founded in Palo AJto. Other industries c.hose to locate here because oCtile oulstanding educational and resea:rch institutions as well as the fmC'. residential areas. Business and profes.sional service firms and retai! stores were established.in Palo Al'~ 10 serve the expanding mAlket. The following is • list of the major employers in {!"Ie City of Palo Alto: 11te foUowing are Palo Alto's largest employers: 0-2 «"O~"""<.' . . -, . '. --. ~., 1,000 or more Emplo)'ee~ _______ _ Company Loral C~rporatlon Hewien-Pa<:kard Syntex Va.r:i an Associ ~tes ~Natklns-John:;:on Coherent, Inc. Lockheed 501 -1,000 Employ.es ________ _ Beckman Instrument electric Power Research lnstf_ Palo Alte Medical Foundation Sterling Software SYV A Company 101-500 Employees _________ _ Alza Corporation Benham Capital Management Group Computu Curriculum Corporation Castilleja School Collagen Corporation Cooper Companies Crystal Technology Inc. Dnax Research Dialog lnfonnalion Services, Inc. Digital Systems Research Center Dow Jones and Co. Inc. The Emporium Facc::iola Meat Company Failure Analys:i! AssCK:iatiun Foothill ('ollege/Middlefield 2ampu3 Hare> Brewer and KfU~)', ]nc. Holiday Inn -Palo Arto H'r3tt Palo Abc Hyatt Rickey's Mac ATthur Park Neiman-Marcus Quality Technology Regi:; McKenna. Inc." Peninsula Times-Tnbune Saks fifth Avenue Systems Conrrol, Inc Tab Products Telescnsory Syst~ms, Inc. Times Tribunt Wall Sueet Jouma! X~rox • ----' -~'-----'--$"'''' '"""" S.!.:Y DOC NO, 199 OSiCRQ DATED 1/08192 Aerospace Equipment Computers. electronic Phannaceutical Electronic equipment Electronic compol1ents laser Optical Systems Research and De .. 'elopmenr C!inical Instruments Energy Research Medical Clinic Diagnosti<: Testing Diagnostic Testing Equipmenl Therapy, systems Financial Sy~aems SoftwarelCu m<: ulum Material Girl's Schoo! Biomt.ulca.! products Diagnostic 3J,d Surgical Equipment Optical CI)'stals BiologkaI Equipment Electric al Retr~ \I aI Service Computers Publisher-Joum31s Department Store Meats Engint"..t:ring ConsultaJlts College Commercial and 1nd~strial Realtors Botel Holel Hmel Restaurant Department Sfore Opto-eiectronic Devices Public Relations Service Publishing Department Store Eng t.nl:"l:"r lnf: Da!a equipment Electrical readmg aids Newspaper Kews.paper Business Machines. Sowce. San Jose Chamber of Commerce. Industrial Directory D-3 "- ,j 1 l I I S&Y DOC NO. 199 OSICRQ DATED 1~18!92 1lte eif)' of Palo Airc-is part of the Sa.'1 Jose Meu-opolitan S!ati.<;tical Area, y.<hich encompasses all of Santa Oara CQWlly. 11te table below illustrates employment and unemployment staristics fo~ the county. cmlilol Lobo<~. &"''''''''''''' lOll ~ymD 1935-1990 Civi I ian Labor UOOllpI."..."t Iur fo[~ Em I Q)'ROIIt Une.w;; 1 mtw:nt R,te 1985 812,000 764,200 41,800 5 9 1986 797.100 750.900 46.200 5.8 J 987 807.100 770.700 36.400 4,5 1988 838,700 805.500 33,200 4.0 1989 846.800 814.500 32,300 3.8 1990 807.500 762,400 45.100 5., 1991 804,200 159.900 44.300 5.5 Source: Employment Development Department lbe ma.jority of 'Che County's tm?loyment is in the manufacturing. inrluS1l)', speciJ1cally the manufacturing of electronics. The second Jargest industry in the COWl!)' is sen'iees. 1be following table sets f(lIth wage and salary employment by .industry for Slil"'la Clara County. Agricu1tUTe Mining Cor.struction Mmufact"uing Durable Non-Durabl< TranspoI1ation & Public Utilities Trade -wholesale Retail Finance. L-lSurance & Real Estate Services Government Total All Indu sines Source: Employment Developmenl Dep4rtrnenl D-4 5,400 300 33,000 224,900 28.800 23,500 53,900 1l3,300 32,000 221500 _8a.200 825500 t r f , •. ~ i ;j " i"i " , ! I I. S&Y DOC NO. 199 OSICRQ DATED l/08f/2 Stwrf'mI Uaita aic , Stanford UniY'ersiry was established in 1885 by S::nator and Mn;. uland Stanford ".5 !I memorial 10 their son, LelUld, Jr. Eruollmenr for the Fall quarter 1989 was appro,"umuely 13.354 students. The University's academic influence t-...a!; beer. a principal factor in molding communiI)' anirudes and fostering an environment in which technology has flourished. The Universicy emptoys approximately 1,315 f~uIty members and a staff of 6,940 (not including Hospital sta....if not associated with the Medical School). TIle market value of the Universjty's endowment asseiS was estimated as of August 31, 1989 rotals $2,083,916,000. Stanford's academic and open iands arc unincorporated, but the non·student housmg. L'ldustrial and comm~rdal 8!eas are witt-Jn th~. City of Palo Alto. Palo Alto's majOl' industriaJ employers are clus~ered in the City's three industrial parks, The largest of the three. Stanford Industrial Park, covers 660 acres, and houses appro;l;imately 31 lenants. The park is zoned for light manufacturing. Sites are leased from Stanford Unlvcrsi!y for a maxi.-num tenn of 51 years on a net rent basis with the tenants paying all tues and assessments. Ea~h te-nan[ constructs its Ol''n building. Stanford exercises archite~turaI contIo!, Rquiring lessees to submit complete plans for approval prior to ~onstruction. The Palo Alto Industrial Park: is the Cty's second largest industrial pari:.. Covering 90 acres, the park is also zoned for light manufacturing and has about 15 [enants. Baylands Business Park is the third indU'Sf.ttal park; it covers 5.2 acres. ',.".' Trzde 1be two largest shopping centers .in paJ 0 Alto are the Stanford Shopping Center and the Town &: Country Village. The Stanford Shopping Center houses about 90 stores, whlch include Saks Fifth Avenue, Nordstrom, Nelrnan-Marcus. The Emporium. and Macy·s. Town & Counrl)' Village includes over 100 tenants, primarily specialry shops. The foHowing tables shows taxable sales data for the City of Palo Alto since 1984. From 1984101990 lotallaxable sale.s grew at all SIUtual rate of 3.5%. 0-5 .' ---- S&Y DOC NO. 1'19 OSJCRQ DATED [N8192 1984 1985 19S6 1981 1988 1989 1990 crry 01' PALO ALTO T"'-Permiu mel TnmsacLoos 1~1990 (000'.) IQ.taLi.e 1& i I Sturn IPtal Tauble ~DlliU I.r&o.Iac1 ioo. ~r:.i:tl 929 617,313 2,876 920 658,381 2,943 911 611,929 3,020 920 668,250 3,065 985 718,922 3, I I 7 989 757,419 3,127 963 736,381 3,019 Source: California Stale Boaed of EqoJ:aIizarion. C,", ,je., &11 OUtlotl Taxable IrmacHQIIt 996,879 1,033,819 1,022,2LJ 1,033,202 [,069,254 I, 184, 705 1,271. 704 Building permits issued by the City over the pas1 su yean are v.a.1ued I;t more thall $500 million. A!umm.&Jy by individual years is presented below. crry 01' PALO ALTO BaiWiz>« Pemd V_ 1bonW! rI. of$ I'oc Yeas 1985 tIIroup 1989 1m l2U 1m 1m 1m l22!! Valuation Residential S 31,461 $29,560 $ 39,205 $40,870 $ 47,334 $ 46,~8 Non-Res i deD t i.1 .. 1~ 44 l30 _..1LU2 ~.12Q ~~~ 77 3<] Tot .. l $107,503 $73,890 $1[3,544 $97,090 $111,543 $123,959 Source: Economic Sdences Corporation "California Building Pe.nn.it Activity" In 1990. the City had approximately 25.000 housing units, an increase of 1,250 over 1980. Rentals for one and two bedroom apartments and duple.J.:es range between $:;00·1600 ~r month. Renlals for two and three bedroom homes begin at 1.500 per rr!onth. Sale prices of hDmes spread in the approximate range of $250,000 to $2.5 mlllion depending on the age. size, condilion and loe<:.cion of the h:"me, wnh the medIan there are eight primary suburban areas within five miles of Palo Alto, with home prices \'ar),ing from about $250,000 -S4 million or mort. D-{i ·' -' S&Y DOC NO. 199 OSiCRQ DATED 1!D81'12 Trw I "'hm Highway 1 (11, alsc known a.<; the B<::yshor~ fle~"," Ii" and Interst~te 180 or th~ Junipero Serra Freeway, connect Palo Alto to San FraT1cisco in the North and San Jose to the South. San lose Municipal Airport is located approximately J5 r.Ules from Palo Alto. National and regional air service is provided for passengers and freight by several airlines, The City is abolll 20 miles from San Franci!lco Jntematioml Airport. The Santa Clara Count)' AiJpon in PaIo Alto services privale aircraft The California Department Qf Tran':'YOft<!lIOn (CAL TRANS) provides commuter trdin ~rvice to San Francisco and San Jose from Palo Alto. Additional rail passenger service is a .... ailable through AMTRAK, ...... hich has a terminal in San Jose The Santa Clara County Transit District provides local bus servke in und around the eil}. n.e San MaTeo County Transit Districl (SAMTRA.NS) provides ser;'~ betw~n Palo Alto and San F rar:cisco. Deepwater transpurtation is available at the POrt of Redwood Cltj, six miles nOl1h. PortS at San Francisco and Oakland are weU equipped to handle all types of coa'OtaI and overseas cargo. All three pons are conveniently acces'S.i:ble by freeway frem Palo Allo. Mrnic" PKilltics Stanford University Medical Center houses 663 beds and Veteran's Admini..-stratioru Hospital houses 1277 beds. Both facilities are located in the City, as are several private convalescent hospitals and nursing homes. The SlanfOrd Universiry M~dicaJ Center is il recognized center for medlcal research and is famous for pioneering in organ transplant surgery. City residents are also close to the El Camino Hospital in Mounlain Vie..,.', the Kaiser Foundation Hospitals in Santa Clara and RedwtlOd Clly, and hospitals in the San Jose area. The City of Palo Alto avms 3,400 acres of park and re<:reation lands.. The two largest parks are 1,800 acre Byxbee Recreation Area and the I .4()O acre Foothills Park. Sever-.tI cOlm£)' parks Me also localed near the City. These City and county racks and recreational lands provide residents of Palo AIto ",,:ith a wide varie~y of recrealional opportunities that inc!udc: hikmg. fiShing. picr.icking tennis and swinuning. There are [roee golf courses i"-I the City including. a municipal (''OlLfse. Palo Alto ha. ... five musewns, incIudmg three an museums on the Stanford CampLlS, TIle high quality of public and private education Ln S ama Clara County reflects widt!s.pH~ad interest in this. subject and Ihe !;nge numher of degree h(llder~ li\'ing in the area. Palo .o\Jr('1 ,mn adjacenL ,:ilies ale served by 14 elementary schools, t\\.() HudJle ~choois and two ~lIfh S.:h00is b;. the Palo Allo Uni5ed School District Stanford UniversiTY, es!ablished in 1885, is located adjacenT 10 the Cit)' Situated on over 8,000 acres, the University has a tOtal estimated enrollment of 13,354 including undergraduate, g:caduate and post-doctoraJ students D-7 ;:c-----...... --'..".;-:'-""'-" .. ........---. • ,- ; I ,<It)' DOC 1'0.199 OSrCRQ DATED 1AJ8/9Z Puo Allo is within tbe Foothill Community Colleg,e DistriCt, whjeh operates two modem CBInpUses 'With a tow enrolL"'llen; of approxi.rn~c:ly 39.150 day and ~ven.ing slUQenhi-. In addruon to Stanford Uni.versiry. olher nearby e(i'Jcational instiNtions otkring wldergroauate and graduate deg=s inclurle L'>. t'nh."ity of Santa Clara. San Jose State, 5,,-'1 FranciaCQ St&tc:, the Uc:.ivenity of San ff1UK:lsCO /Uld Unl-versil)l of California. £feddey. D-8 .. \'" :c ~-.-~ ~:~::--- I < S&'Y [)()c NO. 199 OSiCRQ DATED !lOS/'); API'ENDlXE FORM Of' BOND COUNSEL OPINION E·l / , ,.""'" ----------- FIRST SUPPLEMENTAL INDENTURE OF TRUST by and between the CITY OF PALO ALTO and SECURITY PACIFIC NATIONAL BANK, as '"rustee Dated as of March 1, 1992 Relatirlg to Not to Exceed $4,750,000 City of Palo Alto Utility Revenue Bonds 1992 Series A .0 ',>,'-. ~ .. Table of Contents ARTICLE I OEFtNITKlNS; .'.0THORlZATION AND PURPOSE OF BONOS; EQUAL SECURITY S:::CTION 1.01. Definitions................ . ................ .. SECTION 1,02. Rules of ConstructiOfL .......... . SECTION ~.(l3. AuthorizatiOn and Purpose of HI92 Series A Bonds .. ARTtCLEU ISSUANCE Of 1992 SERIES A BONOS Term'S trl '\992 Selies A Bonds ...................... .. ..2 . ... 3 . .. 3 . .. SECTION 2.01. SECTION 2.02. SECnON 2.03. Rede:t1ption of 1992 Series A Sonds ..................................... 5 SECTIO N 3.01. SECTION 3.02. SECTION 3.03. SECTION 3.04. SECnON 3.05. Form of 1992 Series A Bonds ..... .. ARnCLE III ISSU E OF 1992 SERI ES A BON DS Issuance of 1992 Series A Bono:ls........ . ............. . Appncation of Proceeds of Sale of 1992 Serf es A BondS .. Reserve ACcount..... . ....... " ..... .. 1992 Project Fund .... Validity or Bonds .. " ARTICLE IV REVENUES; FUNDS AND AOCOUNTS SECTION 4.01. Pledge 01 Re~'enues, RevenLJ€ Fund. SECTION 4.D2. Administre.~ion of Fuilds ar.d Accounts SECTION 4.0.'3. Appr,cation oj SinKing Fund A.xount .. " SEC,ION 5.01. SECTION 5.02 SECTION 5.03. SECTION 5.04" SECTION 5 05 SECTION 5.01>" SECTION 5 07. SECTION 5 08. ARTICLE V COVENANTS OF TKE CITY: SPECIN. ,AX COVENANTS No Arbitrage ..... Comprlance wttt\ Rebate Requirements .. information Report ... Private Business Use Limi!ation Private loan limitation Federal Guarantee pr;;:,hibit\oli Complete 1992 Prvject .. Confirmation 01 !ndenture .. -i - . ......... 6 ..7 ..7 . .. 7 7 ... 8 ...9 ... g ... 9 . ........... 11 . ............. 11 • ••••• 0< 11 ............ t 1 11 ,'1 11 11 • ARTIClE VI 1992 BOND INSURANCE PROVISIONS SEer,ON M1. [TO COME] ....... . SECTION 7.01. EXIlI3IT A ARTICLE VII APPLJCAlllllTY OF IN DEmURE Hl92 Series A Bonds ......................... .. FORM OF 1992 SERIES A80ND , I "."-~--'-- FIRST SUPPLEMENTAL INDENTURE OF TRUST THIS FIRST SUPPLEMENTAL INDENTURE OF TRUST, made and enlered i"IO as 01 March 1, 1992, b~ and be!ween the City 01 Palo Alto, a chartered city and municipal corporatiDn organized and existing under constitution and laws -of tile Slate of Californla (the "Cit~"), and Securtty P,1Cifk; Natiorla! Bank. a national banking association organized and el(istin9 under the laws of the United States of America, w:th a corporate trust office in San Fr2flc"lsco, Calriornia, and being Qualified to acx:ept and adminiS1er the trus1s t1ereby created (the "Truslee"); WITNESSETH: WHEREAS, !he City has heretolore aulhorized, issued and sold (i) $9,650,000 principal amount of ~s City of Palo Mo Utility Revenue Refunding Bonds 1990 Series A (the "'990 Series A Bonds") pursuant to an Indenture of Trust dated as of August 1, 1990 (t.he "Indenture"). by and bet'Neen tile City and the Trustee; WHEREAS, the Clty, after due inves11g.ation and deliberation, has determined that it is in the interests of the City .at tilis time to prcvlde tor the issuance of an add;tional series of its reven ue bonds under the Indenture for the purpose of financing certain [mprover.1ents fa the storm and surface water system component of the Enterprise, and 10 that end the Cit~ Council has heretofore adopted its Resorution No. ________________ , approving and autrlorizing the issuance of its City of Palo Alto Utility Revenue Bonde, '9925<>(1.8 A (the "1992 Series A Bonds") for such purposes; WHEREAS, in order to provide for the authentication and delivery of the 1992 Series A Bonds, to establish and declare the terms and condItions uPOTl which the 1992 Series A Bonds are to be issued and secured and to secure the payment of the principal thereof and of the interest and premium, if any, thereon, the Council has authorjzed the e)''2cution and de!ivery of this Fust Supplemental Indenture; and WHEREAS, aH acts and proceedings required by raw necessary to make the 1992 Series A Bonds, when executed by the CJty, avthent~c.aled and de1Jvered by the Trustee af"ld duly issued, !he valid, binding and legal special obligations of the Cit~, and to constitu1e this FJrst Supplemental Indenture a va~d and binding agreement IQf tr,e USE'S and purposes herein set forth, in accordance with its terms, nave been done and taken; and the execution and dehvery of U1is First Supplemental !ndenture !1a',.'B beer, in all respects duly authorized; NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH, that in orde:'to secure the payment of the principal of and the interest and premium (If aroy) on all 1,9'92 Series A Bonds at any time issued and Outst.:_wding under this First Supplemental Indan1ure, accord1ng to their tenor, and to secure the pertor;nance and observance 01 ail the covenants and concfrtions thNein and herein set forth, and to declare the terms arrd conditions upon and subject to which the 1992 Series A Bonds are to be tssued and recetved, and in consideration of the premises and of the mutual covenan1s rlerein cnr.tained and of the purchase 2nd acceptance of the 1992 Series A Borlds by the Owners thereot, and for other valuab!e cons"lderations, the receipt whereoi ~s hereby acknowledged, the City does hereby covenant and agree wJih the Trustee, for the benefit of the iespective Owners 1rom time to time of the 1992 Series A Bonds, as follows: - , ! r i ! - ARTICLE I DEFII>:ITICNS; AUTHORIZATION AND PURPOSE OF BON";;; EQUAL SECURITY SECTlON 1,01, Qefi.nttions. All terms which are defined in Section 1.01 of the indenture shaJI have the same meanings, respectively, in this First $upplemenlai Indenture as suetl terms are given in said Section 1.01. Unless the context otherwise requires, the aCSdWonat terms defined in this Section shall tor all purposes of this Flrs1 Supplemental Indenture and Of the 1992 Series A Bonds and of any certificate. opinion, request Of other documents herein mentioned have the meanings specified in the recitals and 'In this Section 1.01. "Aijernatiye Pmieo1~ means any prajse! identified by the City pursuant to Section 3.04- undertaken for the purpose of improving, reconstructing, enlarging, extending. raptacing. repairing, equipping, developing, embellishing or otherwise improving all or any part of the Enterprise. ~\12ranty Agreement" means the Guaranty Agreemenl with respect to the 1992 Series A Bonds, atOO as of the Closing Date, by and between tho City and AII'BAC Indemnity. "lnterest payment pale' means, 'ftit'n respect 10 the 1992 Series A Bonds, June 1 and December 1 in eaCh year, beginning December 1, 1992 and COr1t~nuing so JOr1g as any 1992 Series A Bonds remai n Outslandi ng. "1992 Bond Insurance Policy" means the municipal bond insurance policy issued by simultaneously with the delivery of the 1992 Series A Bonds, insuring the payment when due of the princlpat of and interest on the 1992 Series 1>, Bonds in accofdance wilh th<llerms mereof. "1m Project" means the improvements ana extension of 1he existing storm ano sur1ace water systc m compc)n€nt 01 the Enterprise geneiafiy described D ns 8rt description J. "1992 project Fund" means the fund by 111a1 n.ame established 800 ~eld by tl'1e Director of Finance pUlSuant to Section 3.04 "1992 Series A Bonds~ means the 80llds aulhorized by Article!1 hereof, "Original Purchaser" means the bidder to ...... ncTn sale of the ;992 Series A Bonds as awarded by lne City Council. "RecQrd Oille\' means, witn respect to the 1992 Series A Bonds, the fifteenth (15th) calendar day of the month immediately preceding an Interes1 Payment D81e. "Surety 8or'\d" meanS the surety bend issued by AMBAC Indemnity guaranteeing certain payment.~ into the Reserve Account wtth respec1 to the 1992 Series A Bonds as provided therein and subject to 'the limitations sel forth therei n. "Term BQnl1s~ means., witli respect to the 1992 Series A Bon.ds, the 1992 Series A. Beno'S maturing on June i, __ ' "Trust Office" mear.s, wtth respect to the 1992 Series A Bonds, the principal cDrporate 1rust oft ice of the Trustee at 333 South Beaud,ry A .... enue, Los Angeoles. Calitornia 90017, or a1 such other or additional offices as may be specdled to the City by ',he Trustee in writing. - 2 . • SECTION 1.02. BuIes of Construction AJI references in this First Supplemen1al Indef1ture tc "Articles," "Sec1ions," and other subchllisions are 10 the cor~espo!lding Articles, Sections or ~Jbdivisions oftl1i5 F~rst Suppfementallndenture; and ihe words "herein: "'hereof," "heralJnder,1l and other words of similar import refer to L"'tis Firs', St.JpplementC:lI fndenture 3S a whofe and not 10 any part-lCular Article, Section or subdlvision hereof. WordS of the mascul"ine gender shall be deemed and construed 10 include correlative words of the femrD,ne and neuter genders. Unless the context shall ot~erw1se indicate, words importing the singufar number sha!! inciude the plural number and vice 'Jersa, and words importing persons shall include corporations and associations, inclucflng. pubfic bodies, as weft as natural persons. SECTION 1.03. AuthQrizat!Qn and Purpose pi 1992 Series A 8'j~ The City tlas reviewed an proceedings heretofore taken re lalive to the autho rization o. the 1992 Series A Bonds and has found, P.S a result of such review, and hereby finds and determines that all things. conditions, and acts required by law 10 exist, happen and/or be performed precedent 10 and in the Issuance 011he 1992 Series A Bonds do exist, have hapPened and have been performed in due time, icrm and manner as required by law, aoo the City IS rlO'n' authorized, as an exercise of the municipal affairs power of the City as a chartered city under the constitutioo and laws of Ihe Stale and pUl'Sl.tantto the Bond Law and each and ~vety reQuirement of law, tv issue the 1992 Series A Bonds in the manner and form provided in this First Supptemental {ndenfure. Accordingly, trl8 Ctty hereby authorizes the issuance 01 the 1992 Series A Bonds pursuant to the Bond Law and this First Sur:ptementallndenture for 1he purpose of prolliding funds to finance improvements to the E merprise. - 3 - , • ~ ARTICLE II ISSUANCE OF 1992 SERIES A BONDS SECTION 2.01. Terms of 1992 series~. Tho 1992 Series A Bonds autllOrized to be issued by the City under and subject to the Bond Law and the terms of tho Indeclure and this First Su~ementallndenture shall be designated t"le "City of Palo Alto Uti~, y Revertue Bonds, 1992 Series A", and shall be iSStJed in the original principal amourt of not to exceed Four MiJHon Sever. Hundred Fifty Thousand Dollars ($4,750.000). The 1992 Series A Bonds shall be issued in fully registered form withOLJ! coupons in denominations of $5,000 or any integral multiple thereof, so long as no 1992 Series A Bond shall have more than one maturtty date. The 1992 Series A Bonds sh all mature on .,)1.1 ne 1 in each of the years and in the amounts, and shan bear interest at the rates, as fonows: Maturity Dale ~ 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 PrinQpai ~ Interest Rate Per AnOllm Interest en the 1 992 Series A Bonds shall be payable on each Interest Paymant Date to the person whose name appears on the Bond Registrat!on Books as t~e Owner thereof as of the Record Date immediately pmceding each such lnterast Payment Date, such interest to be paid by check mailed on said lnterest Payme1t Date to the Owner or, a~ the optIOn of any Owner of at least $1 ,000,000 aggregate principal amount of the Bonds and upon writteTl not;ce received by the Trustee on or prior i:J tn'9 Record Date. by wire transfer, at the address of SUC:l Owner as it appears on the Bond Reglstration Sooks, or to such account as snail nave been k1entifiecl b~' the Owner in the notice requesting payment by wire transfer, Principal of and premium (if any) on any 1992 Series A BDnd shaff be paid upon preseTltiitlon and surrender thereof a~ the Trust OHiC{! of the Trustee. Both the principal of and interest and premIum (if any) on the 1992 Series A Boods shan be payable in lawful money otlhe United Slates of America. ·4 . ------.... "-'-'~;:;> . -;'. ._",," L-:....c': .. ~-; .. -.-- - -.....-.---.~--.-- The 1992 Smies A Bonds shall be dated April 1, 1992 and bear interest from the Interes1 Payment Date next preceding the date of authentication t.hereof, unless sa~d date 01 f:ulhentlcatlOn is an tnterast Payment Date, In whiCh event such Int.zrest is payable from s:JGh date of authentication, and un}esssakl dale of authentfCation is prior to December 1,1992, in whJch event such ~n1elest is payable flom April 1, 1992; provided, ~owever. that It, as of L'le date of auttlentication of any' 992 Series A Bond, interest thereon is in def2ult, such 1992 Serles A Bond Shan bear interest from t"e date to -which interest has pre ... ·iouslj-, been paid Of made available ior payment thereon in fun. SECTION 2.02, Redemotkm of 1992 Series A Bqnr~ (a, Optional Redemption The 1992 Series A Bonds maturing an or before June 1,2001. shaA not be subject to optional redemption prior to maturity. The 1992 SerieS A Bonds maturing on cr after June 1,2002, shafl be subject to redemp~on priO( to their respective matu(~ dales, at the option of IPe Crty, as a whole on any date, or en part in in ..... erse order of maturities and by let within p maturity on any Interest Payment Date on or alter June 1.2001, from any source of avrulab:e funds, at the following respec~ive Redemption Pr~ces (expressed as percen;ages of the pr1ncipal amount of the 1992 Series A Bonds to be redeemed). plus accrued Interest th6reon to It,e date of redemption: ~emption Periods June 1, 2001 t/1roug h May 31, 2002 June 1, 2002 t/1roug h May 31, 2003 Jur.e 1 ,2003 and \herea~", Bedemptipf1 Prices li1e City sha~ be required to give tho Trustee written notice of ilS intention to redeem 1992 Series ..... Bonds Linder thiS subsection (al, and shal1 deposit all amour,ts required for such redemption with the Trustee at least forty-five (45) days prior to the date fixed ~or such redemption. (b) SPecial Mandatgry Redftnmtjon From Insurance or CQndemnatior, Proceeds. The 1992 Se1'ies A Bonds shafl also be subject to redemption as a wtlole or m part on any dale prior 10 maturity, in inverse order of maturity and by lot within a maturity, to the extent of the Nat Procee6s c1 hazard insuJanca not used to repair Of rebuild the Enterprise or It'ie Ne~ Proceetls of condemnation awards received with respect to ttle Enterprise to be used for such purpose pursuant to SectiOns 5.06 Of 5.07 of the Indenture, at a Redemption Price equal to the princ~pa' amoun1 of the 1992 Ser~s A Bonds plus interest ::j('crued fnereon!O the date fr)(ed for {ooemption, without premium. lei M.Jndatcw SjnkfilQ FUOd Act'ruln! Redemption ihe Term 1932 Series A BonC;s sf-Iail aiso be subject to redemption in part by lot, 011 June 1 in each year commer,cing June 1, __ ' from Slnking Fund In.stallments made by the Crty into the Debt Service Fund pursuant to Section 4.03, at a Redemp!icn Price equal to the principal amount thereof to be redeemed, without premium. in the aggregate respective principal amounts 8r1d on June 1 in the respectlve years as set forth U1 the following tables, ()( in fieu thereof shall be purchased pursuaf\t to Sect~n 2.D2(k) of the Indenture: provided, however, that if some but not all 0: the Term 1992 Series 1>, Bonds have been redeemed pursuant to subsections (a) or (b) above or purchased as provided in Section 2.02(k:) of the Indenture, the total a.mount of at! future Sin~l"!g Fund Installme:its with respect to the Term ~992 Series A Bonds of a particular maturity' snall be reduced by the aggregate principal amount of Term 1992 Series A Bonds of such malunty so redeemed or purchased, to be allocated among such Sinking Fund Installments on a pro rata basis in ~ntegral multiples of $5,000 as determin.ed by the City (wrrtten nOtice of which determina1ion shalt be glve:1 by the City 10 the Trustee not la!er than the 45th day prior 10 the Pnnclpa~ Installmen.t Da1e of each Sinking Fund Installmen!). The Sinking Fund fnstatlmen1s applicable to tile Term 1992 Series A Bonds maturing June 1. are as fa Ilows: -5- 1 i ~ 'I i ~ Sinking Fu11d Account Redempt'on Da~e lJlIrlU1 Sinki;1g Fund Ins181lm8nls Redeemed or p! Irch,1'"'#W (d) Aoohcable ?rcVjsir;Ds pi the Indent! ae. All of the provisions of Section 2.0?(d) to (K). inclusive, of the Indenture afB applicable to the 1992 &;ries A Bonds. SECTION 2,03, Form 01 1992 Series A Bon$, The 1992 Series A Bonds, the Trustee's certificate of authentication, and the aSSignment to appear thereon, sha!1 be substaqtially in 1he respective ~orms set forth in Exhlbit A attaChed hereto and by thtS reference incorporated herein, with: necessary or appropriate variations. omrssions and insertio:1s, as permi!1ed or req'Jired by this First Supplemental Indenture, - s - !."!"If\lI .... ---'~--' .. ---'--- l . .-~~'-.. ---... ~-, ART~CLE III ISSUE Of 1992 SERiES A BONDS SECTION 3.01. Issua~ce llf 1992 Series A Bonds, Upon the 8)(8cution and delivery of this First Su-pplemen'al Indenture, the City sr:ail execute end deliVer -1992 Se!ies A Bonds in the aggreg81e prinCipai amount of not to exceed Four MinJQ,1 Seven Hundred Flfty Thousand Dorlars ($4,750,000) to the Trustee for authen1lcation and de ii .... ery 10 the Origina; Purchaser there0f upon tile Request of tM City. SECTIO~~ 3.02. Application Qf Proce.gd~ _ Sale of 1 992 S~s A Bonds. Upor; the receipt of payment for the 1992 Series A Bonds on tne Clcsing Dale, the Trus1ee shall apply It-Ie procoods of 5a16 thereof (being $ _________________ ) as forbws: (a) The Trustee shall deposrt in the Debt Service Fund Ll1e amoun! 01 $ _______ • representing accrued interest from the date of the 1992 Serles A Bonds to the dais 01 delil,.'ery thereot (b} The Trustee shall pa~ tt"le remainder c~ $1.lCh proceeds (being $ J to the D~rect()l" of Fi:1arlGe for deposit jn tI1e 1992 Project Fund created pursuant to Section 3:-64-: SECTION 3.03. ~ ACCDlIQI. On the Closing Date the City shall deriver the Surety Bond to the Trustee for the account 01 the Reserve Account An amount equal to the ReseNe Requirement in the form 01 either cash, Surety Bond or otrer Qua1med Surety Bond under Section 4.06(c) of the Indenture Of a letter of credit under Sp.:ction 4.06(b) cf the Indenture klr the account of the Reserve Account. snarl be maintained in the Reserve Account at all times; any deficiency therein shaH be replenished from aV3ilabie Net RevenLles pursuant to Seclion: 4.03(5) oHlle Indenture. SECTION 3.04. 1392 Prpiect Fund. There is hereby created a separalB Fund to be known as the "City of ralo Alto Utiiiiy Revenue Bonds 1992 Project Fund," herein referred to as the "1992 Project Fund," to be tietd in trust by the Director of Finance. The Directur or Finance shall disburse moneys in the t992 Project Fund for the purpose of payfnQ or reimbursing the payment of the Costs of Issuance. and the costs of acquiring and constructing tr·le 1992 Project, lncluding but not limited to an costs incidental to or connected witn such acquisition and construction; in elther case upon receipt by the Director of Finance trom time 10 time of a Request of the City which; (a) identifies the 101al amount of sucn costs 10 be paid pursuant to such RequeSl. including al! items of cost in such detail as may be availab!>3 to the Cit~{: (b) stales with respect to such disbursement_l~i) the requisition numb8r, (ii;. the am01..J;,t io be disbursed for payment of such costs, and (Ijl) that each item Dr cost ider.tlfied therein has been properly incurroo, aoo is a proper cllarge against ~.r,e 1992 Protec.t Fund and has not bee-!) tne b3Sis of any previous dijsbursement; and (e) is accompanie<l by an invoice. i1 any. Such rt."'qLJiSilion shall also set forth the portion, if any, of the Net Proceeds of 1he 1992 Series A Bonds to be u-se>d for a Private Business Use or to make or finance a klan (other than a lean cOllstituHng a NonpJrpose Obligation) to c1.her than a state or local governmental unit and ceotlfy that there has been compliance with Section 5.03 and Section 5.04 of this Flrst Supplemeiltallndenlure, relating ~o the Private Business Use lim"11atlon and the private ~clan IlmltaUon. respectivel,... The City may apply any. or all of the moneys on deposit ill tile 1992 P.roject Fund to the financing of any Alternative Project in place of any component 01 ~he 1992 PrDJect upon the filing wi~h the OiieC10r of Frnaflce of a Certificate of the Clt~ stating that (i) -such subs:itu1lon WI:I not have anr adverse eHect un the securjty for U-,e Bands, and (ii) the Anemative Project iden1ified will be 0 benefit!o the Enterpnse. The Certificate oj the eii" shafl be accompanied by an opinion o.f bon.d counsel substanliatly to the etiect th.at such substitution witt t10t adversely affect the exclusion of interest on the Bends from gross income for 1ederal income tax purposes. -7 - • - '. Any amounts remaining in the 1.992 Praj>ect Fund after the date of completion of the 1992 Proiect shaU, uoon the fWr.g with the Dlrec10r a F!nance of a Request ot th.e Chy, be transferred by the Director'of Finance 10 the Debl Servic~ Fund 10 be applied 10 lhe payment vI the principal of any Ou1standing 1992 Series ,~ Bonds as the same becomes due and payable. At! interest earnings and profits or losses on the investment of amounts in the 1992 Project Fund shan b9 deposited in or charged to the 1992 Project Fund and applied to the purposes the,eof. SECTION 3.05. :ial1dttv of Bonds, The val~dlty of the au1horization and issua~1ce of tile 1992 Series A Bonds shaii not be affP.Cted in any way by any proceedings taken by the City for !he acquisition or construction of the 1992 Project, or by an~ contracts made by the City in co!1oectfon therewith, and the iecital co;'ltained in the 1992 Series A Bonds that the same are issued pursuant 10 the Bond Law shall be conclusive evidence of their validlty and of the regularity of their issuance. -B - • -_'A~' ....••.•.•...••• . . . '.. I .. - ART:CLE IV REVENUES; FUNDS AND ~.CCOUNTS SEcnON 4.01. PleOOe Q~ Revenues Revenue Fund. T~le Ci1y tlas heretofore transferred. placed a charge upon, assfgned and set over to the Trus1ee. for the benefil of the Owners, that portion 01 the Net Revenues which is necessary :0 P2Y the principal or Redemption Price of and interest on the Bonds Qncludln9 the 1992 Series A Bond~) in any Fiscal Year, logeiher with all moneys on deposit in the Debt Ser..,ice Fund, to the punGtual payment of tile prtncfpal or Redempiion Price cf and Interest on the Bonds 0ncluding the 1992 Series A Bonds). SECTION 4.02. Administration of Funds and Accouots. AI! funds and accoun.ts created pursuant 10 the Indenture shall continue to be adj'flinistered by the Trustee and the Direclor of Finance in the manner provided by the Indenture and thtS FirstSupplementai Inclenlure as ti there were a single issue of Bonds concurrently sold and delivered, including withol11 limitatlon the provisions of Section 4,05 of the Indenture relating te the appncatiorl of the Reserve Accoun1 and the paymerit procedure pursuant to the Surety Bond. SECTION 4.03. Aoo[jcaticn of Sinking Flln? ~tCQunt. ta) The Trustee shall estabDsh arid mail1tain a separate Account, suer. Account to be designated ".992 Series A Sinking Fund Account". (b} On or before the sixtleth da~ prior 10 each PrinCipal Installment Date on wllich a Slnking Fund Installment is payab!e. begrnning Apn12, _. the Director 01 Finance sh;;;11 transfer from t1e Revenue Fund 10 the Trustee for deposit in the 1992 Series A Sinking Fund Account an amount equal to the aggregate amount of Principallnsta~lments becoming due and pa)Jable on all Outstanding Term BondS on tile next SLJcceeding Principallns1allment Dale. (c) The Trustee shan apply moneys in the 1992 Series A Sinking Fund Account to the purchase or the redemption of the Term Bonds in 1he iTlanner provided in this Section and 10 the payment of the principal thereof at maturity. provided that no such Bonds shatt be so purchased during the period of thirty (30) days next preceding the date of a Stnkrng Fund Instal1ment estabnshed for such Bands. Tl1e purchase price pakl by the Trustee. at the directi')n at U:e City (excluding accrued interest (which shall be paid fram 1he Debt Service Fund) but includ1ng any brokerage and other charges) fClf tI.ny Bond purchased pursuant to this Section shalf not exceed the Redemption Price of such Sand <::Ippricable upon hs redemp!lon by operaiion of the 1892 Series A SinKing Fund Account through appiica1ion of the mOf'1eys available for suen purchase on the r.ext date o( a Sinking Fund Irtstallment estabrished for such Bonds. Subiect 10 the limilalians hereinbefore set forth or referred:o In this Section, the Clty may purcnase Term Bonds at suctl times, tor such prices, in such amounts and in such manner (whether after advenisemen1 for tenders or otherwise) as the City in its discretion may determfne and as may be possibfe wlth the amount of moneys available therefor tn the 1992 Series A S'mklng Fund Account. It on any date there shall be moneys ir. any such Sin~;hlg Fund Account and there shall be Outstanding none of the Bonds for which such Account was established, suet! Sinking Fund Account shall be closed and the Trusleil snail uansfer any moneys therein to the Dfrector of Finance fm depos~t in the Revenue Fund. The Cit,' shaff at the time of an~ such purchase, pay to the T:-ustee for deposit in the 1992 Series A Sinking Fund Account the amount of any defiCiency in Such Account w;lich may be caused by such purchase. (d) As soen as practicable aher the 1orty-frfth and before tile thlrtie.:h day prior to the Principalll1sta!lment Date of each Sjnking Fund Installment. the Trustee shal1 call for redemption in the manner provided In Article H on the said Princlpal Instailment Date of said Sinking Fund Ins!aTiment and by application of Said Sinking Fund Installment such principal amount 0; the Bonds entitled to said Sinking Fund Illstallmen1 less slich amounts oi 80nds purchased during the twefve (12) months prior to sucn PrinCipa! Ins!allment Date p~'.buant to subsectlon (b) of this -9- J. Section, and on such redemption datf' iJie Trustee shall app1~' the mone~'s in suci1 Sinking Fund Account to the payment of the Redemption Price of the Bonds so ca!l€<1 for redemptio n. (e) All amounts inth. 1992 Series A Sin~ing Fund Accounl shail be used and withdrawn by lf1e TM'1ee so",l, to purchas6 or redeem or pay at maturrty the Term 1982 Series A Bonds as provided herein and in If1e Indenture. (f) SlJt-tect 10 the terms and conditions set forth in the Indenture and in this Sectioo, the 199'2 Series A £londs shall be redeemed (or paid al maturity. as the case may be) by application of Sinking Fund Jnstallmsnts In the amounts and upon t1e dates set 10M in SectiafJ 2.02(c). -10 - • \ ~ . - ~'-~"" ... ""."'. ;~. -.. " . '. ,; . ---: - --'-'~--'" ARTICLE V COVE' . NTS OF THE CITY; SPECIAL TAX COVENANTS SECTION ~,.01. NQ Arbitrage The City snail not I.ake, nor permft nor sllffer to be takerL, any action with respect to the proceeds of any 01 the 1992 Series .b.. Bonds whfch would cause any of the 1992 Series A 80nds to be "arbitrage bonds" within the mear-iog of the Tax Code. SECTION 5.02. Compliance wjttJ Rebille ReQJJjrements The Ci1y shal! assure compliance with applicable requ!remen1s contained in the Tax Code and Tal( ReguiatiDns for rebate of Exc.ess Investment Earnings, if any, to the federal gO'lernment SECT,ON 5.03. l..rlfQ.rm..atiQn Reoort. The Director 01 Finance ts Mreby direr-ted to assure the filing of an fnformation report for the-1992 Series A Bonds in compTfance with Section 149(e) oi the Tax Code. SECT~N 5.04. PrivatE' Business Us.e limitation. Not mare tt1an. ten percent (10%) of the Net PrOCeeds of the 1992 Series A Bon.ds shaH be !Jsed for Private Business Use i1, in addilion, the payment of more than ten percen.t (10°'0) of the prinr.ipar of the 1992 Sel-Ies A Bonds Of ten percent ~10%) o11he amount of inleresl due on the 1992 Series A Sorrds durif1g the term thereof is, under the terms o~the 1992 Serles A Bcoos or any tlnderlying arrangement, directfy or indirectly, secured by any interest in propert~' used or to be used for a Private Busfm:3s Use Of by payments fn respect of property used or te be used for a Private Business Use or ~s to be derived from payments, whether or not to the City, in respect of prope:ty or bcrrowed money used or to be Uo.ed for a Private Business Use. I:) the ever.t that both (i) an amount in e::.:cess of five percent (5%) of the Net Proceeds of the 1992 Sedes A Bonds is used for a Private Busfness Use, and (ii) an amount in excess 0' five percent (5()fc.) of the princfpal cr five percent (So/e,) of the interest due on the 1992' Series A Bonds durIng the term thereol is, under the terms of the 1992 Series A Bonds Of any underly~ng arrangement, directl,' or indirectly secu~ed by any interest in property used Of 10 be used fO' said Private Business Use or in payments in respect of property used or to be used for said Private Business Use or is to be derived from payme-nts, whether or not the City. in respect of property or bcrrowed money used Of to be used for said Private Business Use; then such, excess over five percent (5%) of Net Proceeds of the 1992 Series A Bonds used for a Private Business Use shall be used tor a Private Business Use retaled to the go .... ernmental use of the 1992 Series A Bards. SECTION 5.05. PrivatUQa[l Limita1ion. Not rrrore thart five percent (5%) of the Net Proceeds of the IS32 Series A Bonds sllaH be used, directly or indirectly, to make or finance a klan (other than loans constftutlng Nonpurpose Obligations or assessments) to persons other tllan state or Iocar government units. SECTION 5.06. E.ftQ.erai Guarai1tee Prohfbftion. The City sllarl not take arw action or permit or suffer any 2~jon to be taKen if the resutt oi ttJe same would De to cause a.ly of the 1992 Series A Bonds to be ~federafly guaranteed" withIn the meamng of seclian 149(b) of HIe Tax Code. SECTION 5.07. Comolete 1992 Pro.kl..QL The City wit! commence the acquisition, constnlction and completion 01 the 1992 Project and continue the same ',\lith ari pr acticai dispatch and in a sound and economicaJ manner. SECTION 5.08. Confirmation of lndentwe All covenan!s made in S08ctians 5.01, 5 02, 5.03,5.04,5.05,5.06,5.07,5.08,5.09,5.10,5.11,5.12, 5.13 ane ~ 20 of the Indenture are hereby confirr:1ed as appHcable to the 1992 Series A Bonds und !hiS First $uppremental Indenture. -11 - • I I t ~i I I .f 'I I MTICLE VI 1992 BOND INSURANCE PROVISIONS [TO COME] ARTiCLE VII APi='UC.~BIUW Of INOENTlJ~E seCTION 7.01. lS92 Series A Bpnd~. excePl as ~therwi&e expreSSly provided In this First Supp£:mental Indenture, airet the proviSions of tii6! (/\denture S!1afi app1y 10 the 1992 Series A SO"" •. -13- .' IN WITNESS \\'HEREOF, the City of Palo Arto has caused this First Supplemental Indenture to be signed in t!s name by its Mayor and its seal to be affil('3d harl?{)n and attested to by its City Clerk, and Securily Pacific National BanK, in token of its acceptance of the trust created he~eunder, l1as caused th~s Firs1 SUP9lementa! Inder1ture to t..e signed in its corporats name by Its officer Identified be!ow, an as of the day and year first above wr1ten. [S E A L} ATIEST: By ___ _ I !'. -14 - CITY OF PALO ALTO By, ________ ~~-------- Mayor SECURiTY PACIFIC NATIONAL BANK By-----,=CNi::;:;;-___ _ -Trust OHiC>3r • -"'-'----~ NO, __ _ I NTER EST RATE REGISTERED OWNER: PRINCIPAL AMOUNT: EXHI91TA FORMO~ BOND UNITED STATES OF AMERiCA STATE OF CALIFORNIA COUNTY OF SANTA CLARA CITY OF PALO ALTO UTiliTY REVENUE BONDS 1992 SERIES A MATIJP,ITY DATE DATED DATE $ __ _ DOLLARS Under and by virtue of Chapter 12.28 of Title 12 of the Palo Alto Municipa! Code (the "Bond law") the City of Palo Alto (the ~Ctty"). a municipal corporation operating under a freehofders ' charter in the County of Santa Clara, State of CalITornia, for value received will (subject 10 any right of prior redemption hereinafter provided fOf) , on the Maturity Date specified above, pay to the Regi~tered Owoor named abcve, or registered assigns, (the "Qwner"}, the Principal Amount stated above, in lawful mone.y of the United States of America, and pay interest thereon in like lawful money from tile Interest Payment Date (as hereinafter defined) next preceding the date of authentlcatlon of this Bond (unless (1) this Bond is 8lrtnenticated on an In!erest Payment Date, in which event it shalt bear interest ~rom suer. datp.. of authenticallorl, or ('1<1) this B0r~ is authenkated prior to December 1, 1992. in which event tt sha!l bear interest from the Dated Date stated above; prov~dad, llowflver, t;'at if a1 tile trme of authentication of this 80nd, inte~"'t is in defauh on this Bond, this Bond shaH bear interest from the Interest Payment Date to which interest has previously been paid or made available ~or payment on this BOfld) UTltii payment of such Principal Amount in full, at the Interes1 Rate per annum stated above, payable on June 1 and December 1 in eacll year, cammen.ciilg December 1, 1992 (each an "Interest Payment Date"), calculated on the basis of a 36D-day year comprised of twelve 3Q-day months. Principal hereof and premium, IT any, upon early redemption hereof are payable at the corpara1e trust office of Security Pacific Na1iorial Bank (the ''Trustee~). ir, Los Al1geJes, California. Inlerest hereon (including the final interest payment upon maturity or earlier redemptfon) is p2yable by check or draft of the Truslee ma[led by first class mali to the Owner a1 the Owner's address as t1 appears on. the registratiorl book:s maintained by the Trustee as of the close of business on the fifteenth (15th) day of the month neX"t prececHng such lnteresl Payment Date (the "Record Date"); provided, that at the option of any Owner of atleast $1,000,000 aggregate principal amount of the Bonds with respect to which wrftten instructions hal.le been filed with ihs Trustee prkjrto the Record Date, such interest may be paid by wire transfer, Exhibit A -1 - • :.; --'-_alk - This Bond is one of a duly authoffzed issue 01 Bonds of the Clty designated as its "UtHity Revenue Bonds" {the ~Bonds"l issued and to be issued in var,ous series under and pursuant to t'1e charter 0: the City and the Bond Law and under ai1d pursuant to an Inden1ure of Trust (the "indenlure") by and between lhe City and lhe Trustee, daled .s of August 1, 1990, and approved by 1M City by ResGlul'lon No. 6921, adopted by the Council of the Crt, on July 23, 1990 (the 'General ~esolution') pursuant 10 which $9,280,000 01 Parity Bonds are outstanding, This Bc.nd is one of a series of Bonds of .... arious maturities designated as "Uljhty Revenue 80003.,1992 Series AM (the ~1992 Series A Bonds"). issued in the aggregate principal amount of $4.750,000, at! 01 like tenor {except for such variation, i1 an,', as may be required to deslgn~!e varying numbers, maturities, interest rales or redemption provisions). and issued under the Indenture and a First Supplemental Indenture of Trust [the "First Supplement") by and between the City and lhe Trustee, dated as of March 1, 1992, .nd approved by the City by Resolu~on No, __ • adopled by the Counc" of U1e City on ,1992, The Indenlure and the F:rst Suppfement a:-e hereinafter conectively referred to as the "indenture." Cop~es ot f . lndenture are on file at the Office of the City Cler~ and at the abo~e·mentioned of1ice of • Trustee, and reference to the lnoonture and any and an supplements thereto and modijicatior .• and amendments thereof and to the Bond law is made for a descriptioo 01 the terms on wnictl the 1992 Series A Bonds are issued, the provisi-ons with regard to the nature and extent of the Net Revenues, as that term is defined in the Indenture, and the rights of the Owners of the 1992 Series A Bonds. All the terms of the [ndenture and the Bond Law afe nereb~· incorporated heretn and constitute a contract between tJ"je City and tile Owner from time to time of this 1992 Series A Bond, and to all the provisions thereof the Owner of thIs 1992 Series A Bond, b:,.' acceptance hereof, col1sen1s and agrees. Each taker and subseQuenl ~ef hereof shall nave recourse to art 01 the provisions of 1119 Bond Law and the Indenture and shan be bound by all of the terms and canamons "thereof. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS OF THIS SOND SHALL. FOR ALL PURPOSES, H.~VE THE SAME EFFECT AS IF SET FORTH IN THIS PLACE 11 is hereby certified that an of the things, conditions and acts required to eKist, 10 have happened or to have been performed prP.Cedent to and in the issuanc.e of this Bond do 8)(ist, have happened or have been performed in due and regular time and manner as required by the laws 01 the State of California and that the amount of this Bond. logether With alt other indebtedness of the cry, does not exceed any limit prescribed by any laws of the State of California, and is not in excess of tne amount of Sonds pewlitted to be issued under the InOOflwre. This Bond shall not become valid or obligatory for an~ purpose or be ent11:ied to the benefits oi the lndenture until the certifjca1e cf al.rthenhcation 81ld registrahon hereon shari have been manually signed by an authorized officer Of Signatory' of the Trustee. ~, -=·=L-~--·--~~~" .. ,. f. Exh~bit A -2- " 1 , IN WITNESS WHEREOF, 1110 City 01 Palo Mo ~a, caused this 1992 Series A Baed 10 be executed in its name and on its behalf wtth the f.?csim~e signat'JieS of its Mayor 8:1d Diiector.of Finance and :\s seal to be reproduced hereon and attes1ed by the facsimile slgna1L!re of its City CIe!l<, all as of tile 1 st day of March, 1992. ",TTEST: Sy ____ __ c'~;--C\erk CiTY OF PALO ALTO By __________ ~~-------- Mayor Exhibit A -3- e fFOAM OF TRUSTEE'S CERTIFICATE OF AUTHENTIC.AnON] This is one of the Bonds descriOC.a in the within-mentioned Indemure.· Execution D81o: ____ _ SEOURITY PACIFIC NATIONAL BANI<" as Trustee By ___ • AtJ"!horized Sign atory Exhibit A -4- : ! I I -.,~",.: ~~ [FORM OF REVERSE SIDE OF ALL BONDS] The 199.2 Series A Bonds have been issued by the Council for the purpose of fina:1cing additions, betterments, extensions or imprO\lBmentsl0 the '3"lorm and surtace water system corilponent of an Er.terprise consisting of the water, sewer, gas, s!orm and surface waf'Sr and electric systems of the City. The 1992 Series A Bonds are special obligations of the Cit~ and are payable, as:o interest 1heret.)n, priflcipal thereof and ~ny premiums upon tf-]e redemption of any thereof, from the net revenues 01 the Enterprise as redaflned in the General ResOILItlon anlj the Indenture to include the surface and storrn water system of the C~ty (which net revenues, as more particularly redefined in the Genelal ResolLrtion and t'le Inden~u~e are !herein and I1ereirl caned the ~Net Revenues"). All of the Bonds are equafly secured by e pledge of, and cllarge and lien upon, all of the Net Revenues, subject only to the prior lien o11h6 pledge given to se~re the outstanding City of Palo Alto lJtil'rly Revenue Bonds, 1983 Series A, and the Net Revenues cons1!tute a trust fund fo( the security and payment of the ~nterest on and princlpar 01 an redemption premiums, if any, on atl of the Bonds. Acldrt~onal series of Bonds payable from the Net Revanues may be ~ssued on a parity with the 1992 Series A Bonds of this au!.horjzed issue, but only subject to th.e conditions aoo ~mttatbf'1,s containe<111"l the Indenture. The interest on and principal of and redemption premiums, If any, on the Bonds are payabl:s solely from the Net Re .... enues pledged for the payment thereof, and the City is not obligated to pay the Bonds except from the Nel Revenues .. The general fund of the City is not liable, and the tuH faith and credtt or taxing power 01 tl1e City is not p:edyed, for the pay·ment of the interest or. 01 principal of Of redemption premiums, H any, on the Bonds. The Bonds are not secured by a le~al or equITable pledge of, or charge, lien or encumbrance upon, any of the property of tlle City or any of its inr.ome O( receipts, ex.cept ttle Net Revenues. The City covenan!s that, so long as any of the Bonds are outstandlng, it wHi fix, prescribe and cofi('ct rates, fees and charges in connection wfth the services, facilities, waler, gas ar.d electric energy furnished by the Enterprise so as to yield Net Revenues at least equal to the amounts thereof pr€-3cnbed by the Indenture and sutficient to pay the interest on and principal of and redemptiOn premiums, if any, on the Bonds in accordance with the provisions of the Indenture The 1992 Series A Bonds are subject to redemption all any i.'1teres1 payment date Without premium under the Circumstances prescribed and as provided in the lndentur-e, at the option of the City, as a whole or ~n part, through H-Ie app1icatlon of net proceeds o! insurance and eminent domain proceedings. Bonds maturing on Of be{ore JU!'.B 1,2001, ar:a riot other·Nise suble.r::t to oO~lon3.( redemption prior to maturity. Bonds maturing on or aher June 1, 2002, are sublect to redemption prior to their respective maturity dates, at the option of the City, from any SOl1rce 01 available fundS, as a whole on any date, orin part in inverse order of ma1Urlties and by lo~ wrthin a ma1ur[ty on any Inter-est Payment Date on or aher June 1, 2001, at the following respective redempllon prices {expressed as percentages of the prlncipal amount of the Bonds to be redeem&j), plus accrued inl8fest therearl to the date of redemption: RHdemQ1;on periods June 1,2001 through May 31,2002 June 1, 20021hrough Ma)' 31, 2003 June 1,2003 and thereafter Redemption Prlces 102.0% 101.0%. 100.0%. As provided in the Indenture, notice 01 redemption shall be mailed by first class mail no less thar. thirty (30) nor more than sixty (60) days prim:o the redemption date to the respective owner or any Bonds deslgnated for redemption at therr address appearing on the Bond Exhib11 A - 5 - > :-,O::;r<· "-.: L- I I registration books maintained by tha Trustee, but failure!o man or to receive such notice, Of sny delect In file notice so mailed, 3r .. 111101 affect tho s:Jfficiency 01 Ihe proceeds '0< redemp~on. tf this Bond is called for redemption and payment is duly proilkled therefor as specified in the Indenture, intere~ shan cease to 8CCl1Je her&.)n from and afler the date fixed klr redemption. The 1992 Series A Bonds are issuable as fully registered Bonds. without coupons, in denominations 0: $5,000 or any integral mUl!iple ther~f. Subject to the fimitations and conditions and upon payment of the charges, H any, as provided in tns Indenture, Bonds may be 8lCcnanged for a like aggregate prin~ipar amount of 1992 Series A Bonds of other authorizea denominations ana 01 tI1e same marurity. This Bond js lransferabie by the Owner hereof, in person, or by 1115 attorney duly authorized in writing, at said office of the Trustee in los Angeles, California, but oniy 111 the manner and suo;ect to 1he Ilmitation;,; prnvided in the Indenture, and upon surrender and canceMation of this Solid, Upon registraiion of such transfer a new 60nd or Sonds, of any alo'thorized denomination or denominations, tor the same aggregate principaI amount and of the same maturity win be issued to the transferee in exchange hereror. The City and the Trustee may treat the Owner !'",ereof as the absolute Owner herevf for an purposes, and the C~y and the Truslee shall 001 be affected by any notice to the contrary. The Indenture may be amended without the consent of 1lle Owners of tria Bonds te,. the extent set forth in 'the lndentllre. ExhrDh: A -6- ABB8EVIP,TIONS The fonowing abbreviations, when used in the inscription on the face of the w~hin Bond, shall t>a constwed as though they were writ1en out in fuiJ according to applicable laws or regulations: TEN COM as tenants in common TEN HIT as tenants by the emlrelies JT TEN as joint ten.ants wrth rlght of SUrJIVOfshlP al1d not as 1enants In common UNIF GIFT MIN ACT -C"SlOOan (Cust) (Minor) UnC2f Unrform Gtfts to M!nors Act (State) ADDITIONAL ABB8EVlATIONS MAY ALSO BE USED TKOUGH NOT IN THE LIST ABOVE. Exhibi! A -7 - ------'-..... / ASSiGNMENT For value received the undersigned hereby sells, asaigns and transfers unto (Name. Address 81lG TalC identification or SOCial Security Number or Af:signee) the withJn registered Bond and hereby irrevocably constitute(s) and appoint{s) to transw. the same on the-bOnd registration books of the Trustee wftt1 fuil power of su~~~~n in the premises. Dated: Signature Guaranteed: Note: Signature(s) must be guaranteed tiy-a member firm of the New Yor, Stock Exc11ange or a commercial bank Of trust ~y. Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the withlr1 Bond in every partlcufar, without afteration or enlargement or any change whatsoever. Exhibit A ·8· • .. \-, ,'" j ~ A ~ T A C B HE. r B - ~.;.<~ ~'Ji · RESOLUTION NO. A RESOLUTION AUTHORIZING THE SALE OF NO: TO EX.GEED $4,750,000 PRINGIPAL AMOUNT OF UTILI1Y REVENUE BONOS, 1992 SERIES A, ADOPTING OFFICIAL NOTIOE OF S~.LE. NOTICE OF SALE, NOTICE OF INTENTION AND OFFICIAL STATEMENT AND AUTHORIZING OFFICIAL ACTION RElATED THERETO RESOLVED, by the Cour.·<:n althe City 01 Palo Alto, California, t~at WHEREAS, the CITy is a chartered city an<j municipal corporation organized ana existi~g under the constitution and laws of the State of Califomia and is duly empowefed as a chartered city to exercise the powers r€SeNeel to Jt under said constrtuvon with respect to municipal affairs; WHEREAS, as an exercise of such powers :he Crty has heretofore adopted tt1e provisions of Chapter 12.28 (commencing Vlltth Section 12.28.010) of the Palo Alto Municipal Code (the "laY/') which authorize the City, when the public interest a~d necessity require, by resofutlOn, to lesue fts revenue bonds for the purpose o( financing or refinancing the acquisr,lon, construction, 6).tension Or improvement of any utility enterpri<>e system or fac~ity of tt1e City; WHEREAS. the City, has heretofore adhorized an issue of revenue bonds and issued and sold its Ci1y of Palo Alto Utility Revenue .Refunding Bonds, 1930 Series A (the "Series A Bon~'l, under the taw for 1he purpose of refunding certain outstanding utiUty revenue bonds of the City; 'NHEREAS, the City, after due investigation an.:J delibera110n, nas determined tha1 it is in the flt.Jbnc interest of the City at this time to autnorize the issuance of an additional series of bonds to ~ knO'Nn as City of Palo Alto umrty Reven-u-e Bonds, 1992 Series A (the "Sonds"). under the Law fOf the purpose of financing extensions and impro.".:rnents 10 the storm and surface water system component of its utility Enterprise; WHEREAS, Stone & Youngberg, financial advisor to the City, has prepared and submftted to the City a preijminary OffiCial Statement rejating to trle Sands, in form a copy of which is hereto attached and incorporated herein by reference as Exhibit A. for disHibution to municipal bond broker-dealer.s, banking ir,st~utiof1.s and to members of the general pubric ",vho may be imerested in purchasing the Bonds; and WHEREAS:Jones Hall Hirl & White, A Profcssronallaw Corporation, as bond counse: to the City, has prepared an official notice of sale of the 8cnds (the "Official Notice of Sale~) in 10rm a copy of which is hereto attached and incorporated herein by reference as Exhibit B. and a notice of intention 10 sell the BondS (the "}.J:otiC9 of Intenflon"), tn form a copy o~ which is hereto atlacheC ~:md incorporated herein by reference as Exhrbft C, and a short form of Notic-: of Sale of Bor.ds ,the "Notice of Sale") for publication as hereln provided, a copy of which js hereto aUached and incorporated herein by reference as Exhibit 0; NOW, THEREFORE, IT IS ORDERED, as follows: SECTK)N 1, Aulhorization of Sale. Monday, March 16. 1992, at the hour of 11 :00 a.m. (Pacific Standaro Time), or d the City does not accept proposals received on sucn date or if no proposals are received on such date, then March 23, 1992, at tne hour of 11 :00 a.m. (Pacific Standard Time), is nereby fixed as the time, and the oti'i.:e of Jones Hall Hill & White, A Professional Law Corporation, bond counsel 10 the City, Four Embarcadero Ceroter, 19th FloGr, San Francisco, California 94111, is hereby Hxed as tne place at which bids wit! be received for the purchase of the B(lnds as described in and subjec1 to the terms and concmons of said Official Notice of Sale, The issuance of the Bonds will be authorized and the sale will be awarded by • .~,~ -, " , \- .--...... - resoiutkm of the Council 10 be adopted at rts meeting to be held on March 1,6, 1992, (or March 23, 1992, as the case may be) at 7:00 p.m. to rhe bidder whose wspanslDle bid for t~e Bonas resu~s in the iowest net interest cost to t~e City, to be determined in accordance with said Official Notice of Sale. SECTION 2. Not1ce of Intention. The Director of Finance is authorized and directed to pubHsh 1:1e Notice of Intention in the form hereto atlachecl as Exhibit C onc~ in Th_e:....~m. a fin.ancial put>f1cation generally circulated throughOut the State of Cailfomia, such publication to be not later th an February 28, 1 S92. SECTiON 3. Noljr;e Of Sale. The Director of Finartce is hereby authorized and direc!ed 10 pubfish the shmt form of Notlce of Sale hereto a"ached as Exhibit 0 one Urne in the Times ~ being a newspaper of ge.neral drCll!stlon C;rCl.li2.'Lea within the bov-fldaries. of the Ctty, such pubficanon to be not later "than Maich 9, 1992. SECTION 4. Official Statement. The preliminary Off~cial StJrement describing the Bonos in substantially the form heretofore submitted 10 the Counc~, subject to whatever addrt!ons and corrections may be deemeo aavisable by the Mayor or the City Manager, upon consultation with the City's fiiiancial consultant, bond counsel and City Attorney, is hereby adopted as the preliminary Official Slateme,nt describing the Bonds. The Mayor and the City Manager are hereby separately autl".oozea and directed, upon consulta1icn wlU"1 the City's financial consultant. bond counsel and City Anorney. to approve suctl changes to the preriminary Official Statement as shall be necessary to cause such preliminarj Offdal Statement to be brought into the form of a fir:a! Officia! Statement. aj1d 1he Mayor is hereby auttJorized aM cfirectec' to execute and dellv.ar copies at said final Official Statement to the purchaser of the Bonds, at the time of delivery of the Bonds. Tne Council hereby approves, and hereby deems nearly final within tne meaning of Rule 15c2-12 of 1he Securities Exchange Act of 1934, the prelrminary Offic~a! Statement. The MB)"Dr and City Manager are hereby separately au1horized to execute an appropriate certificate Matmg the Councirs determjnation 1hat the p!8timinary Officfal Statement has been d~med nearly final within L'le meaning ot &aid Rule. SECTION 5. Distribution Of Official Statement and Official Notice Of Sille. The City's financial consultant is hereby authorized ar.d directed to cause copies of the prelirninaiY Otfic~ar Statement to be printed and maned te prospective biddE:rs fO{ the Bonds, together with caples of said Offrcial Notice of Sale. SECTION 6. Prii1t:ng of Bonds, The Director of Fir1ance tS directed to cause to be lithographed, printed or engraved a Sond or Bonds in. accarcance with tile provisions of ttl'2 resolution ~o be adopted by ~e CounCil au1.horiz.ing the is.,,;uance of the 8C'ods, and to procure its or their execution b~ the proper officers of 1he City and authen11catior: by ..,"le Trus~ee and to cause rt or tbem to be derivered when so executed and authenticated to or on bet",aJ! of the purchasef or purchasers thereof, upon t"le receipt of the purctlase price therefor. SECTION 7 .. e~ecutiQn of Documents, Tne Mayor, Vice Mayor. City Manager, City Clerk, DirectOf of Firlance. City Attomey and any and all other officers of the CUy are each authorized and directed in the: name and on. behalf of the City to make any and ali certlftcates, requisitions, agreements, notices, consents, warrants and other documents, which they or any of them might deem necessary or appropriate in order to cons.ummate, the lawful issuance, sale and deliver! of the Bonds to the original purchaser t~ereof, subject to the adoption b}' the ColJriGil of a resolution authorizing the ~uance and award!r.g sale of the Bonds. . ... :; .. ,.< t I I , , \ , , .~-~ .. ~\< ;;.<,,'.' " . THE FOREGOiNG RESOLUTION was duly and regularly adopted at a regular meeling of the Counc~ of the c~y of Palo Aito held on tile _"_ day of ______ , 1992, by the following vote: • AYES: NOES: ABSTENTIONS: ABSENT; ATTEST: By _____ _ C;ryCIerk APPROVED AS TO fORM: JONES HALL HILL & WHITE, A ProfeSSional Law Corporaticn By __ ~~~~~~~ Kenneth l. Jones, PresiooilC-- Bond Counsel APPROVED: CITY OF PALO ALTO By __ _ City Attomey PASSED: _____ , 1 ~2 APPROVED: 8y __ _ - 3 - Mayor -. " \ .. - ) ~ , ." EXHIBIT A PREL"J.:NARY OFFICIAL STATEMENT [TO COME] E)(JlibrtA -1 . • .j~>:,:., .;:",,=.:,' EXHIBIT B OFFICIAL NOTICE OF SALE $4,750,000 CITY OF PALO ALTO (SANTA CLARA COUNTY, CALIFORNIA) UTILITY REVENUE BONOS 1992 SERIES A NOTICE IS HEREBY GIVEN that soaled proposals will be received by Jones Hall Hill & Wlltte, A Professional Law Corporation, as bond cour.sel to the City of Falo Mo (the 'C;(y'), at the office of Jones Hail Hill & White, A Professional Law Corporation, Four Embarcadero Center, 19th Floor, San Francisco, Ca!ifornia 94111, Of! Monday, March 16, 1992 and (without further advertising and SC k)r"]g as a proposal has not therefore been accepted by the Cfty) on Monday, March 23, 1992, at the hour of 11 ;00 a.m. {Pacific Standa.rd Time) for ttle purchase of $4,750,000 principal amount of utiirty revenue bonds of the City (the 'Bends'), more par1icula~y de&.Yibed below. ~. $4,750,000 designated 'City of Palo Mo VtLllty Revenue Bonds, 19S2 Series A: consisting of funy registsred bonds. without coupons. DATE MATURiTIES AND AMOUNTS.. The Bonds will be daled Apr" 1, 1992, and will mature serially on June 1 in each year as set forth in the followlng table: Maturity Dale (June 1) 1994 1995 1996 1997 1998 1999 20aa 2001 2002 2003 2004 2005 2006 Principal ~ t.!.aturity Date I.JJ.ill.!l..1. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Prlncip3l ~ INT~REST RATE. The maximum interes1 rate bfd may not exceed !'Nelve percent (12<:;M per annum, payable semi-annually on eaen June 1 and De~ember 1, commencing December 1, 1992 (each, an "Interest Payment Date"). Bidders mus~ specify the rate of interest which the Bonds bid upon shall bear, prolJlded that: (i) each bid must be on Hie Official Bid Form; (ii) each bid must state in a multiple of one-eigt:th (1/8) or one-twentie1h ,11201 of one percent {1 %) 01 the rate Of rates of interest per annum which the Bonds 01 the several maturities are to bear; 0ii) Qr;iy one interest rate may be named for Bonds of the same maturity; {IV} each Bond bid upon sha.ll bear im.erest from jt3 date to its sta1ed maturity at the interest rate specified in the bid; the in!eresl rate fOf Bonds of any maturit)' mus1 be equal 10 or ~ower than the interest rate on Bonds of the E).hibi, B - 1 - - next succeedln~ maturity; and (I;") the spread between the lowest to the highest inlerest rate shell! notexcead three percent (3%), PAIOR REDEMPTION. (3.) OptiQrlal Redemption. The Sonds maturing on or before June 1,2001. are r.ot subject to oplional1"edemption prior to maturity. The Bonds maturing on or after June 1, 2002, are ::;ubject 10 redemp~On prior 10 thejr respective maturity dates, at t .... e optior: 01 the Ci1y. as a whole on any date, or in part in inverse order of maturities and by lot wrthin a maturity on any Imerest Payment Date on or after June 1,2001, from any source of a .. ailable funds, at the foilowtng resp8Ctiy& Redemption Prices {expressed as percentages of the principat amount of !he Bonds to be redeemed), piuS accrued interest thereo:"! 10 the date of redemption: Redemption Periqjs June 1, 2001 through May 31, 2002 June 1, 2oo2l~'ougt! May 31,2003 June 1, 2003 and therea~er Be®mot1Dn Prices 102.0% 101.0% 100,QCl/C (b) SWcial Mandatory RedemptiQ'1 From Insurance or. Condemnation proceeds. The Bonds are aiso subject to redemption as a whole or in part on any date prior to maturity, in inverse order of maturity and by lot within a maturity, to the extent 0: the Ne! Proceeds of hazard inSUrance not used 10 repair ()( rebuild the Enterprise or the Net Proceeds of conde;nnation awards rec-3ived with respect to the Enterprise!o be used fO( su ch pu rpose, at a Redemption Price eq u al to the principal amount of the Bonds plus interest accrued thereon to the date ffxed 'for redemption, wtthmrt premium. (c) Mandatory Srnklng Fund Account Bedemptipo. The Term Bonds are also subject to redemption in part by lot. on June 1 in each year commencing June 1,2008, from Srnking Fund lnstanmen.ts, at a Redemption Price equa! 10 the principal a'1'1ount thel"IJof io be redeemed, wrthout premium, in the aggregate respective principal amounts and on June 1 in the respective years as set fmth i11 the following 1ables; Sinking Fund Account Redemption Date ~ Sinking rlmd ;nstanmel'1ts Notice of arty redemption of Bonds shall bemailed.postageprepaid.notl£ssthantr.ir1y {30) days nor more than sixty (60} days prior 10 the tedempt~on date to the fespeclive registered owners thereot at the addresses appearing on the bond reg!straHon boo~s. PAYMENT: PrinCipal on the Bonds is pa~able in la'#!ul money of the UnHed Slates 01 America at the corporate trust office of the TruS1ee in Los Angeles, Calilorr'lia, lnteres1 on the Bonds, payable Of1 each Interest Paymenl Da1e, commencing December 1,1992, w[il be paiD by cheQ; or draft of the Trustee mailed (Of by wire transfer made on the ~nterest Payment Date upon instfuctfons received by the Trustee on or before the fifteenth l 15th) day 01 tne mon1h preced~ng each interest Payment Date (1he "Recc..rd Date') of a'iy owner of $1 ,000,000 or more in aggregate principal amounl of Bonds) ~o the person registered as lhe owner thereof as of the Record Date to the address lisled on the registra'ion books 01 the City ma!n!ained by the Trustee for such purpose. PURPOSe OF ISSlJE: The BendS are to be issued by t/"18 Council of tne City in the name and on behalf of the City and are authQftZed pursuant to the charter Df the City and the provisi::rns of Chapter 12.28 (commencing with Section 12.28.01 OJ. of the Palo Alto Municipal '·;-L·.--·-·· -----;-;.. . Exhibit 13 -2- , Code, fOl' tile purpose ot financing capital impro .... ements !o a~ld expansion of the storr-! and surface waler (Xlmponem of tl1e C ity'$ ut l:ty Ente 'Prjse. SECURITV: Tne City has transferr9d. placed a charge upon, assigned and set over to the Trustee, for the benefit of the Owners, that portlOO ot the Net Revenues of the Enterorise which is necessary to pay the prmcipal or rede mptkm pj-'fC(;l 01 and ir'lterest 011 the Bonds in any Fiscal Year, together with all moneys on deposit in the Dobt Service F'Jnd, and such portion of tile Net Revenues has been irr~vocablr pledged 10 the punctual payment of the principal or redemption price of and interest on the Bonds. The Net Revenues canr.o1 be used for any other purpose whl1.e iIDy ot the Bonds remain Outstanding, except tha~ out ot Net RevenuBS there ma~ be apportioned and paki such sums for such purposes, as are e)(press:y perr.litted by the Indenture. Said pledge tonstrtutes a 'first, di'9ct and exclusive charge and !ien on 1he Net Revenues for the payment of tli9 principaf Of redemption price of and intere.st on the Bands in accordance with the terms thereof, su~ onty \0 the lien cltne Frklr Bonds, Tne Net Revenues constitUte a trust tJnd fO( the sec.urity and palo'ment of the principal or redem,otion price of and interest on the Soods. The general lund 01 the City is not liable and the credft or taxing pow9r of the City is not pfedged fQ( the payment or the prlncipaf or redemption price of and interest 0(1 the Bonds. The Owner of the Bonds cannot compel the exercise Df the taxing power by the City or 1he forfefture of its property. Tne priIlcipal or redemption pric..;-of and interest on me Bonds are not a debt of thB City. no;" a legal Of equfta91e pledge, charge, !len or encumbrance, LIpan any of its property, Of upon any of ff:s income, receipts, or revenues except the Net Re-.renues of the Enterprise. NUMBER OF aIDs: Each bidder may submit only one bid. HiGHEST BlP: Bids must be 10r tt-Ie purchase of all Qf the Bonds.. Trle Bonds will be awarded to the hrghest responsrble bidder tnerefor, coosidering the interest rate or rates specified and 1he premium or discount offered, if any. The highest bid w!l1 be determined by deducting the amount of the premium bid, if any, from, or aacing the amount of discount,.if any, to, the to!al amolJnt of intereS! whiCh would be required to be paid on trle Ban.ds from April 1. 1992., to their respective mat"urit)l dates, at t~e respective interest rates speCified in the bid, and the award wlll be made on the basis of the lowest net interest cost determined thereby. No bid 1m less than ninety-eigt1t percent (9B%) of Ihe par value of the Bonds and accrued interest (which interest shan be computed an a basis of a 360-day year composed ot twelve 30-day months) will be entertained. In Itle event two Cf more b~ds setting forth Kientical interest rates and premlum or cfrscount, if any, are received, the CounGiI reserves the right to exerc;se its own discretion and judgment in making Il1e award ar1d may award the Bonds on a pro rata :,asis in such denomin.ation~ as 1he Cound ShOin determine. RIGHT OF RE.IECTION: The Counc.il reserves the r;ght, in n:s discretion, to reject any and all bids and to waive any iJregularily or informalrty in any bid. PROMP1" AWARD: The Council Will taxe action awarding the Bonds or rejecting all bias not iater than thirteen (13) hours after the expiration of II-Ie time herein prescribed for the receipt of proposars unless such time of award is waived by the successfu~ bidder. DEUVERY AND PAYME.r~.I: Delive!)" oftM Bonds will be made to the Successful bidder on April 9, 1992; 1he bidder must accept temporary Bonds, if necessa~y,lo meet this deadlme, subject to prompt surreilder in exchange for definitive Bonds. Payment 01 the purcha3e price (less the amount 0' the bid chec,,", mentioned below) rnus1 be made by Federal Reserve funds cheCi< immediately ava~lab[e to the Clty. ihe cost or p~inting the Bonds wilr be borne by the Ci1y. RIGHT OF CANC~.l,..1ATIQN: Tne successful bfdder sha!! have the righ! at I1s option to cancer its obligation to purchase if the City shafl fail to eXl."(;u1e the Bonds and tender the same for delivery within Itlirty (30) days from 1he date of sale thereof, ar1d in suCh event, the sIJGcessful bkkjer shan be entitled to tt1e return of the depoSlt accornpan,'ing ns b·lo. -:!t'.", Y,-' :j" Exh,brt B -3- r - -----~--,.;:~--,-. ~ FORM OF BID: Bids must be for all of the Bonds, and must be )ex not less than ninety eight percent (98%) of the par vallie thereof plus accruea' int€-rest Each b,d, together with ttle bid:iers certified or cashier's c:'eck, must be enclcsed in lhe seated enve:ope addressed 10 "Crty ot Palo Alte;" at me address mentloqeo above no later than 11:00 a.m_ on said date o{ sale, and endorsed "Propos.;il for C;ty of Palo Atto Utllitv Re-.ienue Bonds, 1992 Series A: Each bid must be in accordance with the 1erms and conditions se: forth herein, and must be subm~ed on, or in slb$tantial accordance with.1!1e OffIcial Bid Form anachad ~ereto. eSTIMATE OF NET INTfRfST COSTS: Bidders are requested (bV'i ncol requirec') to supply an estimate of the total net interest cost to the City on the, baSIS of their respectlv8-bids, whid1 shan be consklered as informativ~ only and not blndlng 011 erttler the biOder or tile Cn:y. BiP CHECK: A certified or cashier's check drawn or. a responsible bank or trust company in the amoun! 01 Thirty Thousand dollars ($30.000) payable to the order 01 the City, must accompar.y each pr~a~ as a guarantee that the bidder, (1 su(;ce~~t\J1, will accept and pay for the Bonds in accordance with 1he terms of tts bid. Any proposal submitted !n response to this notice may not b. wltl1drawn prior \0 the time set ferth above for the award of sal. of the Bonds and the City reSel"\l9S the right to award sale of the Bonds to the highest responsible bidder wltllout regard to any attempt to withdraw the proposal prkw'to su\:h award. If s'..!ch proposal is accepted but not performed, unless swen fatlure of performance shall be caused by any act or omlssiGn of the City, ttle check snaH tn€n be cashed and the proceeds retained by the City. The check accompanying any accepted proposal shall be appned to the p:'Jrchase price. The cheo::k accornpany~ng each unaccepted proposal will be retumed promp~y. CLOSING PAPERS-LEGAL OPINION: Each prcposat wit1 be conditlaned uPOf1 the City furnishing to the successful bidder, without charge, concurrently with payment for" and derIVery o~ the Bonds, the following closing paps,s, each dated the date of such delivery: (al The opinion of Jones Hall Hill & White, A ProfeSSional Law Corporation, San Francisco, California, Bond Counsel, approving the validity of the Bends and stating that {I} under existing laws, regulatIons, rurlngs and judiciai decisions, and a.ssuming compllance with certa::1 provisions of the Indenture authorizing the issuance of the Bonds designed to meet the requirements of Section 103 of 1he Internal Revenue Code of 1986, as amended, and 1ht: regulations thereunder. interest on 1he Bonds is excluded from gross income for federal incvme tax purposes, and i!itel'est on the Bonds is not an item of t2K preference for purposes of the federal a~ernative minJmum tax imposed on incfrv1duais and corporations; however, with respect to corporations (as deftned for federal income tax purposes), sucn inleres1 is taken into account In determining certain lncome and earrings, and (I:) interest on ttlB Bonds is enc:ernpt from p8iSCnal income taxation by the State I)f California. (b) A certificate of the Mayor of the City tha! on :he basis of the facts, estimates and circumstances in existence on ihe date 01 issue, it is not expected that the proceeds of the Bonds Will be used in a manner that would cause the Bonds to be arbOrage bonds; (c) A certificate of the City Attorney that, to the best know~edge and befief, after due invest~ation, of s .. .Jch GOu:1sej, !here is no litigatfon threa1ened Of pending affecting the validlty of the Bonds; (0'} A ce1ificate of an appropriate City official, acting on behalf of the Clt~ solely in an official and not in a personal capacity, tl1at at the time o~ the sale o~ the Bonds and at afl times subsequellt thereto up to and ir.clLiding the time o{ the derrvery of the Bonds to the inrual purchasers thereof, the Official Statement of the Crty pertaining to said Bonds did not. and does not, contain any untrue statement of a material fac1 or omit to state a material fact necessary to make the sta1ernents E);hibit B -4- ~--~~ •. "'. .-. _,:t , therein, in the light of the circumstances under which they were mad;,. not m,sl6adlng ; (e) Tha signature certifica1e of ttle officials of the City. showing that they have signed the Bond:;; and impressed the seal of the Ciiy thereon, .<:.nd that they were respecti'v'efy duly authorized to ex.ecute the same; and (n The receipt of the Direc10r of Finan.ce sllowing that the purc:'ase price of the Bonds has been received. CERTIfiCATION REOUiRED: Tr,e successfu~ bidder wiil be required to certify to the City on the date of delivery of me BC'nds the prlce at which a subs1antial amount of the Bonds of each matu rity were sold tn members of tl1e public. INEQEMATION AyAIl ABLE: Requests fo( information concerning the City snould be addressed to: Stone & Youngberg One California Street, S" ~e 2800 San Francisco. CaI~omia 94111 Ann; Ed Schilling or Sohan Bengafi (415) 981-1314 {financial advisor to the City; City of Palo Mo City Han 250 Hamilton Avenue Palo Mo. California 94301 Attn: Emily Harrison, Director of Finance (415) 329-2533 The City wm pmvide the succes'St .. Ji bidder such number of printed copies of the Official Statement fOf thiS issue as such bidder may request. Up 10250 copies of the Officia~ Statement will be fumishod without cost. and any additional copies wLIl be furnish6{l at the expense of the bidder. Exhibi! B -5- '--'-~. '"'~e ___ _ ·j • GIVEN pursuant 10 resolution of the Council of the City of Palo A~o adopted 1992. Dated: ____ _ Bv , ------Cit, Clerk Exhibit B -6 - " 'I ) OFFICIAL 810 FORM PROPOSAL FOR TH!: PURCHASE OF $4,750,000 CITY OF PALO A,l TO {SANTA CLARA COUNTY, CAcIFORNIA) UTILfTY REVE~IUE BONDS City of Palo AlIa cia Jones Hall Hin & IVhHe, A Professional Law Corporation Four Embarcadero Center, 19th F100r San Francisco, Califomla 94' , 1 Lad'teS and Gentlemen: 1992 SERIES A We offer to pur¢~ase tI1e $4,750,000 C~) of Palo AlIo UtiI~y R,venue Bonds, ;992 Series A in the principaj amounts, in such denominations, maturing on June 1 in the years and bearing interest as Jollo'WS: Maturity Da'e (June '1) 1994 1995 1996 1997 1996 1999 2000 2001 2002 2003 2004 2005 2006 Principal lIuKl!illl Interest Bale Maturity Date 1!wlU1 2007 2008 2009 2010 20" 2012 2013 20'4 2015 2016 2017 2016 Principal 8mQuuJ Interest BaJa arld to pay therefor the principal amount thereof, plJ,.JS a premiurn of $_~ ____________________ (or minus a discount of $ _m___ ), plus interest accrued on such &.!nds fram Apr i1 1, 1992, to the date of denllery thereof. This proposal is made subject to an the 1erms and conditions of the Official No1ice of Sale Of said Bonds da1ed _____ , 1992, all of whicll terms and cond;tiO:1S are made a part hereof as fu lIy as though sel forth in full in this proposal. This proposal issubiect to acceptan.ce, in whale Of in part, within thirteen (13) hours after the expiratlon of the tJme for the receipt of proposals, as specified in said Official Notice of Sale; we agree thal it may not be witndrawn prior io"the expiration of said time. Exhibit B - 7 - j ~ II ~ :·1 I 'I I ThOre is enclosed herewrth a certmed '" cashi6~S cMcI< lor $:30,000 payable 10 tho oreer of the City 01 Palo Alto. W. hereby 'equ"'Sl that _____ printed copies 01 the Official Statemenl pertaining to the Bonds be furnished us in accordance with V1e terms of said Officiai No1ice of Sale. The fo«owing is aUf computation m~B as provided in the Officiar Not~ce of Sale, but not con.;1ituling any part 0 1 1116 laregoing, of the net Interest COS! under the loregolng proposal: Tolallnterest Less Premium (Of prus Discount) Net !nte,sst Cost Net Interes! Rate $._- $,--- $_- ---_% Fonawing is a rlSl of 1I1e members 01 our accounl 00 whOse behalf this bid is made. Respectfully submitted, Name 01 Firm By __ Address City _______ Slate __ Zip __ _ Dale ot Submission: _______ _ ExhlM B -8 . ---'-~~"' .. ' ... '. --. --~'"' .' :j i EXHIBITC NOTICE OF INTENTION TO SELL BONDS $4,750,000 CHY OF PALO ALTO (SANTA CLARA COUNTY, CALIFORNIA) UTILITY REVENUE BONDS 1992 SERIES A NOTICE IS HEREBY GIVEN, pursuant te California Government Code Section 531392, that the CIty of Paio Alto imends 10 sell, al pub!ic sale, $4,750,COO Uli:ily Revenue BonOs, 1992 Series A. !lids will be received on Monday, March 16, 1992 and (without fu rthet 8cNertising alld so long as a propJSal has not the retofore OO€I"I accepted by !he City of Palo Aha) on Monday, March 23, 1992, at I 1:00 a.m. iPacific Siandard T.me) al the offioeoftl>e bond counsel101l1e City, Jones Hall Hill 8. WMe, A Frofessional Law Corporalion, Four Embarcadero Center, 19th Floor, San FranCisco, GalifGrnia 94111, and the sale will be awarded by the Cou(oCR of the City of Palo AHo wtthin thirteen (13) hours a"er the expiration of Ilme prescribed for the receipt of bids. The official nolice of sale and official stalement pertaining 10 the Bonds may be obtained from !he City's bond counsel, Jones Hall Hill 8. While, A Professional Law Corpo<a1ion, at Four Embarcadero Center, 19th Floor, San Francisco, California 94111, lelephone (415) 391-5780. D~: ____________ __ By ----. ----,C"'rt""y...,C"'le=-=r"k -- City of Palo Aha Exhibit C • 1 - u \ EXHIBITD NOTICE OF SALE OF BONDS $4,750,000 CITY OF PALO ALTO (SANT," CLARA C.QUNTY, CALIFORNIA) UTILITY REVENUE BONDS 1992 SERIES A NonCE ;S HEREBY GIVEN, pursuanl to California Govemment Cod. SecUon 1102, that the City of Polo Alto 'Nill receive bids !or the sale of $4,750,000 lI1Jiity Revenue Bonds, 1992 Series A. on Mo.-<lay, March 16, 1992 aM (without funhCf adveniSing and so Ion9 as a proposal tlas nol Uwretofore been accepled by tlle City of Palo Alto) on Monday, March 23,1992, at 11;00 a.m. (Pacific Siandard Time) althe office of tlle bond counsel to the City, Jones Hal! Hill &. WMe, A Professional Law Corporation, Four Embarcadero Cerner, 19ttl Foor, San Francisco, California 94 i 11, and the sale wi!! be awarded by the Couocil of1he City of Pa!o Alto wfthin thlrteen (13) hours after the expira!ion of time presctted 104' the receipt of bids. The officiai notice of sale ar'ld offidal statement pertaining to the Bonds may be obtained from the C~y's bond counsel, Jones Hall Hill 8. WMe, A Prole55ional . Law Corporation, at Four Embarcadero Center, 19th Floo(, San Franciscc, California 94111, ta/ephene (415) 391-5780. Daled: _______ _ By ________ ~~~--------- City Clerk Extliblt D - 1 - City of Palo Alto