HomeMy WebLinkAbout90-32 - Assessment District 58 - Cannery VillageRESOLUTION NO. 90 -32
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NEWPORT BEACH, CALIFORNIA, AUTHORIZING ISSUANCE
OF BONDS, APPROVING BOND INDENTURE AND OFFICIAL
STATEMENT FOR A SPECIAL ASSESSMENT DISTRICT
WHEREAS, the CITY COUNCIL of the CITY OF NEWPORT BEACH, CALIFORNIA, is conduct-
•ing proceedings for the construction of certain public improvements in a special
assessment district pursuant to the terms and provisions of the "Municipal Improve-
ment Act of 1913 ", being Division 12 of the Streets and Highways Code of the State
of California, said special assessment district known and designated as ASSESSMENT
DISTRICT NO. 58 (CANNERY VILLAGE) (hereinafter referred to as the "Assessment
District "); and,
WHEREAS, this legislative body has previously declared in its Resolution of
Intention to issue bonds to finance said improvements, said bonds to issue pursuant
to the terms and provisions of the "Improvement Bond Act of 1915 ", being Division 10
of said Code; and,
WHEREAS, at this time this legislative body is desirous to set forth all formal
terms and conditions relating to the authorization, issuance and administration of
said bonds; and,
WHEREAS, there has been presented, considered and ready for approval a bond
indenture setting forth formal terms and conditions relating to the issuance and
sale of bonds; and,
WHEREAS, there has also been presented an Official Statement containing informa-
tion including but not limited to the Assessment District and the type of bonds,
including terms and conditions thereof.
NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS:
RECITALS
SECTION 1. That the above recitals are true and correct.
BOND AUTHORIZATION
SECTION 2. That this legislative body does authorize the issuance of bonds
pursuant to the terms and provisions of the "Improvement Bond Act of 1915 ", being
Division 10 of the Streets and Highways Code of the State of California, and also
pursuant to the specific terms and conditions as set forth in the BOND INDENTURE
presented herein.
BOND INDENTURE
SECTION 3. The BOND INDENTURE is approved substantially in the form presented
herein, and is subject to modifications as necessary and as approved by the
Treasurer. Final approval of the BOND INDENTURE shall be conclusively evidenced by
the signature of the City Treasurer upon final delivery of bonds and receipt of
• proceeds. A copy of said BOND INDENTURE shall be kept on file with the transcript
r
of these proceedings and open for public inspection.
OFFICIAL STATEMENT
SECTION 4. That the Official Statement, as prepared and submitted, is hereby
approved and adopted, and the execution and distribution is hereby authorized. A
COPY of said Official Statement shall be kept on file with the transcript of these
proceedings and remain open for public inspection.
FINAL ASSESSMENTS
SECTION 5. That the Certificate of Paid and Unpaid Assessments, as certified
by the Treasurer, shall remain on file in that office and be open for public inspec-
tion for all particulars as it relates to the amount of unpaid assessments to secure
bonds for this Assessment District.
IOR COURT FORECLOSURE
SECTION 6. In the event of delinquency in the payment of any installment of
unpaid assessments, this legislative body does specifically covenant for the benefit
of the owners of the bonds that it shall cause judicial foreclosures to be initiated
against all parcels for which the payment of assessment installments are delinquent
if the cumulative delinquencies in the payment of assessment installments throughout
the Assessment District exceed five percent (5 %) of the average annual debt services
on the bonds; however, foreclosure actions may be deferred if the reserve fund is
maintained at the Reserve Requirement as that term is defined in the Bond Indenture.
For further particulars and specifics, reference is made to the Bond Indenture to be
approved prior to any issuance and delivery of bonds.
APPROVED and ADOPTED this 9th day of April , 1990.
MAYOR Pro m Y
CITY OF NEWPORT BEACH
STATE OF CALIFORNIA
ATTE
CITY CLERK
CITY OF NEWPORT BEACH
STATE OF CALIFORNIA
STATE OF CALIFORNIA
COUNTY OF ORANGE
CITY OF NEWPORT BEACH
I, WANDA E. RAGGIO, CITY CLERK of the CITY OF NEWPORT BEACH, CALIFORNIA, DO
HEREBY CERTIFY that the foregoing Resolution, being Resolution No. 90 -32 , was
• duly passed, approved and adopted by the City Council, approved and signed by the
Mayor, and attested by the City Clerk, all at the regular meeting of said City
Council held on the 9th day of April 1990, and that the same
was passed and adopted by the following vote:
AYES: COUNCIL MEMBERS TURNER, WATT, SANSONE, HART, STRAUSS, COX
NOES: COUNCIL MEMBERS NONE
ABSENT: COUNCIL MEMBERS PLUMMER
ABSTAIN: COUNCIL MEMBERS NONE
EXECUTED this ay of , 1990, at Newport Beach, California.
[SEAL]
n
CITY CLERK All
CITY OF NEWPORT BEACH
STATE OF CALIFORNIA
NEW ISSUL;
In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial
decisions, interest on the Bonds is exempt from State of California personal income
taxes, is excluded from „ ross income for purposes of income taxation by the United
States of America, and is not an item of tax preference for purposes of the alternative
minimum tax imposed by the United States on individuals and corporations, subject to
certain qualifications more particularly described under the heading
"MISCELLANEOUS -TAX EXEMPTION" herein.
COUNTY OF ORANGE
STATE OF CALIFORNIA
$107,746.07
• CITY OF NEWPORT BEACH
1915 ACT LIMITED OBLIGATION IMPROVEMENT BONDS
ASSESSMENT DISTRICT NO. 58 (CANNERY VILLAGE)
(Property Secured Only - No Issuer Liability)
l
Dated: March 15, 1990
Due: September 2, as shown below
The Bonds which comprise the issue described herein are issued by the City of
Newport Beach, California pursuant to the Improvement Bond Act of 1915, constituting
Division 10 of the Streets and Highways Code, and are secured by assessments levied in
proceedings conducted by the City pursuant to the Municipal Improvement Act of 1913,
Division 12 of the Streets and Highways Code.
The Bonds are issued only as fully registered Bonds in the denomination of $5,000
each or any integral multiple thereof. Interest is payable on March 2, 1991, and
semiannually thereafter on March 2 and September 2 in each year. The principal of and
premium, if any, on the Bonds are payable at the office of the City Treasurer. Interest
on the Bonds is payable by check or draft mailed to the registered owners thereof. The
Bonds will mature on September 2 of each of the years and in the amounts, and will bear
interest at the rates, set forth in the following schedule.
MATURITY SCHEDULE
Maturity
Principal
Interest
Maturity
Principal
Interest
Sept.2
Amount
Rate
Price
Sept.2
Amount
Rate
Price
1991
$ 2,746.07
6.25%
100%
1996
$10,000.00
6.90%
100%
1992
10,000.00
6.40
Ui0
1997
10,000.00
7.00
100
1993
10,000.00
6.60
100
1998
15,000.00
7.10
100
1994
10,000.00
6.70
100
1999
15,000.00
7.20
100
1995
10,000.00
6.80
100
2000
15,000.00
7.30
100
Lne 0011us dre 0 ieueiiipuun on any Marcn �)epWmM-er t in aavance ut
maturity upon giving 3 ys prior notice and upon paymene the principal and interest
accrued thereon to the date of redemption, plus a redemption premium of 3% of the
principal amount of the Bonds to be redeemed.
The Bonds are being issued for the purpose of financing the acquisition and
construction of certain public improvements determined by the City to be of benefit to
the properties within the City's Assessment District No. 58 (Cannery Village)). The Bonds
will be secured by unpaid assessments on land within Assessment District No. 58. Under
provisions of the Improvement Bond Act of 1915, installments of principal and interest
sufficient to meet annual Bond debt service requirements are to be included on the
regular property tax bills sent to owners of property against which there are unpaid
assessments. These annual installments are to be paid into the Redemption Fund for the
• Bonds and used to pay debt service on the Bonds as it becomes due.
The Bonds are not secured by the general taxing power of the City, the State of
California or any of its political subdivisions, nor is the full faith and credit of the City,
the State of California or any of its political subdivisions pledged to the payment of the
Bonds. The City shall not be obligated to use available funds (including any surplus funds)
to purchase delinquent parcels or to pay the delinquent installment and future
installments of the assessments on delinquent parcels. (See "SECURITY FOR THE
BONDS, No Pledge of City Funds" herein.) The holders of the Bonds must assume,
therefore, that the sole source of funds with which to cover deficiencies in the
Redemption Fund will be the Reserve Fund.
See the section of this Official Statement entitled "SPECIAL RISK FACTORS" for a
discussion of special factors which should be considered, in addition to the other matters
set forth herein, in evaluating the investment quality of the Bonds.
The Bonds are offered when, as and if issued, subject to approval of Brown & Diven,
San Diego, California, Bond Counsel. The Bonds are expected to be available for delivery
on or about April 11, 1990, in Los Angeles, California.
MILLER & SCHROEDER FINANCIAL, INC.
The date of this Official Statement is April 9, 1990.
CITY OF NEWPORT BEACH
ASSESSMENT DISTRICT NO. 58
(CANNERY VILLEGE)
CITY COUNCIL
Donald A. Strass, Mayor
RutheRn Plummer, Mayor Pro Tern
Evelyn R. Hart, Councilmember
Clarence J. Turner, Councilmember
• Jean Watt, Councilmember
Phil Sansone, Councilmember
John C. Cox, Jr., Councilmember
Robert L. Wynn - City Manager
Benjamin B. Nolan - Public Works Director
George Pappas - Finance Director
Bond Counsel
Brown & Diven
[Newport Beach, California
Assessment Engineer
Professional Assessment Services, Inc.
Irvine, California
Underwriter
Miller & Schroeder Financial, Inc.
Solana Beach, California
No dealer, broke�alesman or other person has beauthorized by the City of
Newport Beach or Underwriter to give any infflPfnation or to make any
representations other than those contained in this Official Statement, and, if given or
made, such other information or representation must not be relied upon as having been
authorized by either of the foregoing. This Official Statement does not constitute an
offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds
by any person in any jurisdiction in which it is unlawful for such person to make such
offer, solicitation or sale.
The information set forth herein has been obtained from the City of Newport Beach
and other sources which are believed to be reliable, but, such information is not
guaranteed as to accuracy or completeness and such information is not to be construed as
a representation by the Underwriter. The information and expression of opinions herein
• are subject to change without notice, and neither the delivery of this Official Statement
nor any sale made hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the City of Newport Beach or Assessment
District No. 58.
The summaries and references to the legislation and resolutions relating to the
authorization, sale and issuance of the Bonds, and to other statutes and documents
referred to herein do not purport to be comprehensive or definitive and are qualified in
their entirety by reference to each such statute and document.
This Official Statement is not to be construed as a contract between the City or the
Underwriter and the purchaser or owner of any of the Bonds.
IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER
MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME.
• TABLE OF CONTENTS
Introductory Statement
The Bonds
Purpose of the Bonds
Authority for Issuance
Description of the Bonds
Bond Payment, Registration and Transfer
Redemption of the Bonds
Refunding Bonds
Redemption Fund Deficiencies
Sources and Application of Funds
• Debt Service Schedule
Security For The Bonds
General
Assessment Installments
Reserve Fund
Covenant to Commence Superior Court Foreclosure
Land Values
Prior Assessments
No Pledge of City Funds
Special Risk Factors
Payment of Assessment Installments
Tax Delinquencies
Foreclosure Delays
Loss of Tax Exemption
Bankruptcy
The Assessment District
Assessment Proceedings
Estimated Project Costs
Assessment Criteria
Land Use and Zoning
Miscellaneous
No Litigation
Legal Opinion
Tax Exemption
No Rating
Underwriting
Execution of Official Statement
Appendix A - List of Assessments and Land Values
Appendix B - Assessment District Diagrams
•
Pace No
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A -1
B -1
• •
$107,746.07
CITY OF NEWPORT BEACH
1915 ACT LIMITED OBLIGATION IMPROVEMENT BONDS
ASSESSMENT DISTRICT NO. 58 (CANNERY VILLAGE)
(Property Secured Only - No Issuer Liability)
INTRODUCTORY STATEMENT
This Official Statement is provided to furnish information relating to the issuance by
• the City of Newport Beach, California (the "City "), of $107,746.07 principal amount of its
Limited Obligation Improvement Bonds (the "Bonds ") for Assessment District No. 58
(Cannery Village) (the "District "). The District was formed pursuant to the Municipal
Improvement Act of 1913, Division 12 of the California Streets and Highways Code (the
"1913 Act "); and the Bonds are issued pursuant to the Improvement Bond Act of 1915,
Division 10 of the California Streets and Highways Code (the "1915 Act "). The proceeds
from the sale of the Bonds will be used to finance the cost of acquiring or constructing
certain public improvements determined by the City to benefit the properties within the
District, to fund a reserve fund (the "Reserve Fund "), and to pay costs related to the
issuance of the Bonds.
The Bonds are payable from the annual assessment installments collected on the
regular property tax bills sent to owners of property having unpaid assessments levied
against them. In the event of a delinquency in the payment of any installment of an
assessment, the City will transfer from the Reserve Fund to the redemption fund
established for the Bonds (the "Redemption Fund ') the amount necessary to pay the next
maturing installment of principal and interest on the Bonds. The Reserve Fund will be
funded from proceeds from the sale of the Bonds in an amount equal to $5,387.30. In the
event a superior court foreclosure proceeding is instituted by the City to enforce the lien
of a delinquent assessment installment and the City purchases such parcel, the Reserve
Fund will be used to make advances to the Redemption Fund for payment of the
delinquent assessment installment and future installments on the assessment, and interest
thereon, until such property is resold by the City. (See the section herein entitled
"SECURITY FOR THE BONDS. ")
As authorized by the 1915 Act, the City has determined not to obligate itself to
advance available funds from the City treasury to cure any deficiency or delinquency
which may occur in the Redemption Fund by reason of the failure of a property owner to
pay an assessment installment.
The Bonds are not an obligation of the City, the State of California (the "State ") or
any of its political subdivisions, nor has the City, the State or any of its political
subdivisions pledged its full faith and credit for the payment of the Bonds.
See the section of this Official Statement entitled "SPECIAL RISK FACTORS" for a
discussion of special factors which should be considered, in addition to other matters set
forth herein, in considering the investment quality of the Bonds.
The discussions and information herein do not purport to be comprehensive or
definitive. All references to the Bonds and the assessment proceedings are qualified in
their entirety by reference to the City's Bond Indenture and resolutions setting forth the
terms and descriptions thereof.
0 0
THE BONDS
( Purpose of the Bonds
The Bonds are being issued in order to acquire, construct and install street lighting,
plus missing street improvements including curbs, gutters and sidewalks, and other
facilities which are appurtenant and related to these public facilities (collectively, the
"Project ").
Authority for Issuance
• The improvement proceedings for the District were initiated by adoption of
Resolution No. 89 -144 (the "Resolution of Intention ") by the City Council of the City on
December 11, 1989. The Bonds represent and are secured by unpaid assessments levied
against private property in the District in accordance with the provisions of the 1915 Act
and will be issued pursuant to the 1915 Act.
Description of the Bonds
The Bonds will be dated March 15, 1990, and will bear interest at the rates, and will
mature in the principal amounts and on the dates, set forth on the cover page of this
Official Statement. The Bonds are issued as fully registered Bonds in the denomination of
$5,000 each or any integral multiple thereof, except that one Bond of the first maturity is
in the principal amount of $2,746.07.
Bond Payment, Registration and Transfer
Interest on the Bonds will be payable semiannually on March 2 and September 2 of
each year (each an "Interest Payment Date "), commencing March 2, 1991. Principal of
and premium, if any, on the Bonds are payable at the office of the City Treasurer, (the
"Paying Agent "), and interest thereon is payable by check or draft mailed to the
respective registered owners as their names appear on the registration books of the
Paying Agent as of the fifteenth day of the month immediately preceding each Interest
Payment !date (the "Regular Record Date ").
Each Bond shall bear interest from the interest Payment Date next preceding the
date on which it is authenticated and registered, unless it is authenticated and registered
(i) after a Regular Record Date and on or before the following Interest Payment Date, in
which event it shall bear interest from such interest Payment Date, or (ii) on or before
the first Regular Record Date, in which event it shall bear interest from March 15, 1990;
provided, however, that if at the time of authentication and registration c a Bond
interest thereon is in default, such Bond shall bear interest from the date ''.o which
interest shall have been paid.
Transfer of ownership of a Bond shall be made by exchanging the same for a new
fully registered Bond of the same maturity in the same aggregate principal amount. All
such exchanges shall be made in such manner and upon such terms as may from time to
time be determined and prescribed by the City; provided, however, that no such exchange
is required to be made between the Regular Record Date preceding any Interest Payment
Date and such Interest Payment Date or during the period from the selection of Bonds for
redemption through and including the applicable redemption date. Such transfer and
registration shall take place at the principal office of the Paying Agent.
2
• •
If any Bond is mutilated, lost, stolen or destroyed, the City may execute and the
Paying Agent may authenticate and deliver a new Bond. or Bonds in replacement thereof
in the same aggregate principal amount and of the same maturity. Mutilated Bonds must
be surrendered to the Paying Agent. In the case of a lost, stolen and destroyed Bond, the l
City and the Paying Agent may require satisfactory evidence of the loss, theft or
destruction of the Bond and indemnification prior to authenticating and delivering a new
Bond. The City and Paying Agent may charge the owners of mutilated, lost, stolen or
destroyed Bonds for their reasonable fees and expenses in connection with replacing such
Bonds.
. Redemption of the Bonds
Any Bond or portion thereof in increments of $5,000 may be called for redemption
prior to maturity on any March 2 or September 2 upon payment of 103% of the par value,
plus accrued interest to the date of redemption. No interest will accrue on a Bond
beyond the date of redemption. Notice of redemption must be given at least 30 days
prior to the redemption date. The determination as to which Bond or Bonds or portion
thereof are to be called is to be made by the City Treasurer in accordance with the
provisions of the L915 Act. These provisions generally require the redemption of Bonds
proportionately from each maturity and the random selection of Bonds within each
maturity.
Redemption of the Bonds may occur as a result of either the issuance of refunding
bonds (see the subsection hereof entitled "Refunding Bonds ") or the prepayment of one or
more assessments. Under the provisions of the 1915 Act, a property owner may prepay
the assessment and remove the lien of the same from his or her property by paying to the
City Treasurer the sum of the following amounts: (a) the amount of any delinquent
installments of principal and interest, together with penalties accrued to the date of
prepayment; (b) the unpaid, nondelinquent principal of the assessment, including principal
posted to the tae roll for the current fiscal year but not yet paid; (c) an allowance for
redemption premium, calculated by multiplying the amount of the unmatured principal
(exclusive of principal due during the fiscal year of prepayment) by three percent; (d) a
reasonable fee, to be fixed by the City Treasurer, for the cost of administering the
prepayment and the advance redemption of Bonds; and (e) interest accrued to the next
Interest Payment Date which is not less than 90 days after the date of prepayment. Upon
receipt of a prepayment of an assessment, the City Treasurer is to disburse the amount
thereof as follows: (a) the administrative fee shall be deposited into the general fund of
the City; (b) delinquent principal, interest, and penalties shall be transferred to the
Redemption Fund unless the Reserve Fund has been depleted on account of the
delinquencies, in which case the delinquent amounts and penalties shall be transferred
instead to the Reserve Fund; (c) the installment of principal due in the fi :al year of
prepayment shall be transferred to the Redemption Fund; (d) interest accrue( to the next
Interest Payment Date shall be transferred to the Redemption Fund; and (e) the balance
shall be used to advance the maturitv of Bonds to the next redemption date to the
maximum extent that principal and redemption premium may be paid in full from said
balance.
Refunding Bonds
Pursuant to the Refunding Act of 1954 for 1915 Improvement Act Bonds the City
may issue refunding bonds for the purpose of redeeming any or all the Bonds. Upon
issuing refunding bonds, the City could require that the Bonds be exchanged for refunding
bonds on any basis which the City Council determines is for the benefit of the City, but
3
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only with the consent of the Bondholders. As an alternative to exchanging the refunding
bonds for the Bonds, the City could sell the refunding bonds and utilize the proceeds to
( pay the principal of and interest and redemption premium, if any, on the Bonds as they
k, become due, or advance the maturity of Bonds and pay the principal of and interest and
redemption premium thereon. A refunding of some, but not all, of the Bonds could result
in a situation in which the Bonds remaining outstanding after such refunding are secured
by unpaid assessments on the less valuable properties within the District.
Redemption Fund Deficiencies
If a deficiency occurs in the Redemption Fund with respect to past due principal or
interest or with respect to interest which will become due during the then current tax
collecting year and said deficiency cannot be eliminated with transfers from the Reserve
Fund, but it does not appear to the City Treasurer that there will be an ultimate loss to
the bondholders, the City Treasurer shall pay matured Bonds as presented and make
interest payments when due, as long as there are available funds in the Redemption Fund,
in the following order of priority: (1) all matured interest payments shall be made prior
to the payment of anv principal; (2) interest shall be paid on Bonds in order of their
respective maturities starting at the earliest maturity date and in ascending numerical
order within a single maturity; and (3) principal shall be paid in the order in which Bonds
are presented for payments. Bonds not paid when presented, and interest payments not
paid when due, shall bear interest at the rate stated in the Bonds, without compounding,
until paid or until ten days from the mailing of notice to bondholders that funds are
available with which to make a payment with respect to such Bonds and /or interest.
If it appears to the City Treasurer that a Redemption Fund deficiency presents a
danger of an ultimate loss accruing to the bondholders for any reason, he or she shall
withhold payment of principal and interest and report the facts to the City Council so
that it may take proper action to equitably protect all bondholders. Upon receipt of such
a report from the City Treasurer, the City Council is required to fix a date for a public
hearing and post notice thereof. Following said public hearing, if it determines that there
will be no ultimate loss to the bondholders, it shall direct the City Treasurer to pay
matured Bonds and interest as long as there is available money in the Redemption Fund.
If the City Council determines that there will ultimately be insufficient money in the
Redemption Fund to discharge the unpaid Bonds and interest, it shall direct the City
Treasurer to pay the holders of all outstanding and unpaid Bonds such proportion of the
monev then on deposit in the Redemption Fund as said money bears to the total amount
of the unpaid principal of the Bonds and the interest which has accrued or will accrue
thereon. Similar proportionate payments shall thereafter be made periodically as moneys
come into the Redemption Fund.
4
•
Sources and Application of Funds
The Bond proceeds (other than accrued interest, which is to be deposited in the /
Redemption Fund) will be applied as follows:
Sources of Funds
Principal Amount of Bonds
Less: Bond Discount (2 %)
Net Bond Proceeds
Cash Collections
• City Contribution
Total Sources of Funds
Application of Funds
Construction Fund (including contingency
and incidentials)
Reserve Fund (5 %)
Total Application of Funds
Debt Service Schedule
$107,746.07
(2,154.92)
Set forth below is the debt service schedule for the Bonds:
$105,591.15
46,600.18
7,000.00
$159.191.33
$153,804.03
5,387.30
159.191.33
Maturity
September 1
Principal
Interest
Debt Service
1991
$ 2,746.07
$10,887.66 (1)
$ 13,633.73
1992
10,000.00
7,280.00
17,280.00
1993
10,000.00
6,640.00
16,640.00
1994
10,000.00
5,980.00
15,980.00
1995
10,000.00
5,310.00
15,310.00
1996
10,000.00
4,630.00
14,630.00
1997
10,000.00
3,940.00
13,940.00
1998
15,000.00
3,240.00
18,240.00
1999
15,000.00
2,175.00
17,175.00
2000
15,000.00
1,095.00
16,095.00
Totals
5107.746.07
$158.932.73
(1) Includes interest from March 15, 1990.
SECURITY FOR THE BONDS
General
The Bonds are secured by unpaid assessments levied against private property within
the District pursuant to the assessment proceedings. Such unpaid assessments, together
with interest thereon and moneys in the Redemption Fund, constitute a trust fund for the
redemption and payment of the principal of, premium, if any, and interest on the Bonds.
Principal of, premium, if any, and interest on the Bonds are payable exclusively out of the
Redemption Fund. The Reserve Fund is also a trust fund for the benefit of the registered
owners of the Bonds. (See "SECURITY FOR THE BONDS - Reserve Fund ".)
The assessments and each installment thereof, and any interest and penalties
thereon, constitute liens against the parcels of land on which they are levied until the
• same are paid. Such liens are subordinate to all fixed special assessment liens previously
imposed upon such property, but have priority over all existing and future private liens
and over all fixed special assessment liens which may thereafter be created against the
property.
Although the unpaid assessments constitute liens on assessed parcels, they do not
constitute a personal indebtedness of the respective property owners. There is no
assurance that the property owners will be financially able to pay the annual assessment
• installments or that they will pay such installments even if financially able to do so.
The Bonds are not secured by the general taxing power of the City, the State or any
of its political subdivisions, nor is the full faith and credit of the City, the State or any of
its political subdivisions pledged to the payment of the Bonds.
Assessment Installments
Installments sufficient to meet annual payments of principal of and interest on the
Bonds will be collected on the regular property tax bills sent to owners of property
against which there are unpaid assessments. These annual installments are to be paid into
the Redemption Fund which will be held by the Paying Agent, on behalf of the City, and
used to pay the principal of and interest on the Bonds as they become due. The
installment billed against each property each year represents such property's pro rata
share of the total amount of principal of and interest coming due on the Bonds with
respect to such years. The failure of a property owner to pay an annual assessment
installment will not result in an increase in assessment installments against other
property in the District.
In the event of a delinquency in the payment of any installment of an assessment, the
City Treasurer will transfer from the Reserve Fund, to the extent of available funds
therein, to the Redemption Fund the amount necessary, in addition to the moneys on
deposit therein, to pay the next maturing installment of principal and interest on the
Bonds. In the event a superior court foreclosure action is instituted to enforce a
delinquent assessment installment and the City purchases such property, the Reserve
Fund will be used, to the extent of available funds, to make advances to the Redemption
Fund for payment of the delinquent amount of the assessment on the property and future
assessment installments, including interest thereon, until such property is resold by the
City. Pursuant to the provisions of the 1915 Act, the City has determined not to obligate
itself to advance any available funds from the City treasury to cover any deficiency or
delinquency which may occur in the Redemption Fund by reason of the failure of a
property owner to pay an annual assessment installment. (This determination by the City
would not prevent the City, in its sole discretion, from so advancing such funds.)
Reserve Fund
The Bond Indenture approved by the City provides for the establishment of a Reserve
Fund to be held by the Treasurer of the City as a separate trust account. The Reserve
Fund shall be a source of available funds from which the City may make payment of
delinquent assessment installments. It is estimated that this Reserve Fund shall be
funded in an initial amount of $5,387.30. The Reserve Fund shall be maintained, used,
transferred, reimbursed, and liquidated as follows:
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(a) Amounts in said Reserve Fund shall be transferred to the Redemption
Fund for the Bonds if, as result of delinquencies in the payment of assessments, -there
are insufficient monies in said Redemption Fund to pay principal of and interest on
the Bonds when due. Amounts so transferred shall be repaid to the Reserve Fund
from proceeds from the redemption or foreclosure of property with respect to-which
an assessment is unpaid and from payments of the delinquent assessments;
(b) Interest earned on the permitted investments of monies on deposit in the
Reserve Fund shall remain in the Reserve Fund only to the extent that the amount
therein may accumulate to and subsequently be maintained at the "Reserve
• Requirement." The Reserve Requirement shall be an amount equal to the lesser of
(i) the Maximum Annual Debt Service on the Bonds, (ii) 125% of _'le average annual
debt service on the Bonds, or (iii) 5% of the original principal amount of the Bonds.
Annual Debt Service on the Bonds for each year ending September -'rid shall equal the
sum of (a) the interest falling due on the outstanding Bonds in such 12 month period,
assuming that the outstanding Bonds are retired as scheduled, and (b) the principal
amount of outstanding Bonds falling due during such 12 month period. "Average
Annual Debt Service" shall mean the average Annual Debt Service during the term of
the Bonds. "Maximum Annual Debt Service" shall mean, as computed from time to
time, the largest Annual Debt Service during the period from the date of such
computation through the final maturity of any outstanding Bonds.
(c) On July 15 of each fiscal year the amount on deposit in the Reserve
Fund in excess of the Reserve Requirement shall be transferred from the Reserve
Fund to the Redemption Fund and shall be credited to the unpaid assessment
installments payable during such fiscal year. The Auditor's record, prepared
pursuant to Section 8682 of the Streets and Highways Code, shall reflect the credits
against each of the unpaid assessments in the manner provided in Streets and
Highways Code Section 10427.1 in amounts equal to each parcel's proportionate
share of such transfer.
Notwitlistanding the above, interest earned on monies on deposit in the
Reserve Fund in excess of the "yield" on the Bonds, as that term is defined in the
Internal Revenue Code of 1986 (the "Code "), as amended, shall be subject to transfer
and rebate to the United States.
(d) Whenever monies in the Reserve Fund are sufficient to retire all of the
Bonds outstanding, plus accrued interest thereon, such money shall be transferred to
the Redemption Fund for the Bonds and collection of the remaining unpaid
assessments shall cease.
(e) In the event assessments are paid in cash in advance of their final
maturity date, the Issuer is required to credit the prepaid assessment with a
proportionate share of the Reserve Fund and to transfer en amount equal to such
credit to the Redemption Fund to be utilized for the advance retirement of the
Bonds.
Covenant to Commence Superior Court Foreclos=e
The 1915 Act provides that in the event any assessment or installment thereof or any
interest thereon is not paid when due, the City may order the institution of a superior
court action to foreclose the lien of the unpaid assessment. In such an action, the real
property subject to the unpaid assessment may be sold at judicial foreclosure sale. This
foreclosure sale procedure is not mandatory. However, in the Bond Indenture, the City
has
7
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covenanted for the benefit of the owners of the Bonds that, in the event of delinquency in
the payment of any installments of unpaid assessments, it will review assessment records
of the County not later than August 1 of each year to determine the amount of the
assessments collected in the prior fiscal year. If the cumulative delinquencies in the
payment of assessment installments throughout the Assessment District exceed five
percent (5 %), the Average Annual Debt Service on the Bonds, the Issuer shall commence
foreclosure action(s) on all parcels for which the payment of assessment installments are
delinquent in the Superior Court of the State of California (Part 14, Division 10,
"Improvement Bond Act of 1915," Streets and Highways Code) on or before November 1
of each year, and diligently prosecute and pursue such foreclosure proceedings to
• judgment and sale. Initiation of such foreclosure actions may be deferred in any fiscal
year if the Reserve Fund is maintained at an amount equal to the Reserve Requirement.
Prior to July 1, 1983, the right of redemption from foreclosure was limited to a
period of one year from the date of sale. Under legislation effective July 1, 1983, the
statutory right of redemption from any such foreclosure has been repealed. However, a
period of 140 days must elapse after service of the notice of levy before the sale of such
parcel. If the purchaser at the sale is a judgment creditor, i.e. the City, an action may be
commenced by the delinquent property owner within six months after the date of sale to
set aside such sale. The constitutionality of the aforementioned legislation which repeals
the one -year redemption period has not been tested, and there can be no assurance that,
if tested, such legislation will be upheld.
In the event such a superior court foreclosure is necessary, there may be a delay in
payments to the Bondowners pending prosecution of the foreclosure proceedings and
receipt by the City of proceeds from the foreclosure sale. Moreover, the lot or parcel
securing the delinquent assessment may not be sold unless the amount to be paid pursuant
to the bid is at least equal to the amount of the judgment with costs and interest, costs
and interest accruing after issuance of the writ pursuant to which the sale has been
conducted, the levying officer's costs, and any other amounts the total of which is
required by law to be bid in order that such lot or parcel may be sold. It is therefore
possible that no adequate bid for the purchase of any such property would be received at
the foreclosure sale.
Land Values
Reference is made to Appendix A which contains the Assessed Values for each parcel
in the District.
Based upon the Assessed Values, the value of each parcel of land exceeds the amount
of the assessment lien ap deist it. The 1915 Act requires only that a parcel be sold for the
delinquent amount, (plus osts and penalties) and not the entire outstanding assessment,
however, there is no assurance that in the event of a foreclosure sale for a delinquent
assessment installment a legally sufficient bid will be received for such property (see
"SPECIAL RISK FACTORS ").
The lien ratio analysis set forth below is based upon the total outstanding special
assessment indebtedness on the property including the City's Assessment District Limited
Obligation Bonds for Assessment District No. 58. (See "Appendix A - List of Assessments
and Assessed Values. ")
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(1) Includes overlapping assessment indebtedness as specifically set forth in Appendix A.
Prior Assessments
The assessments and each installment thereof and any interest and penalties thereon
constitute a lien against the lots and parcels of land on which they were imposed until the
same are paid. Such lien is subordinate to all fixed special assessment liens previously �.
imposed upon the same property, is on a parity with the lien of the reassessments
securing the Refunding Bonds, and has priority over all existing and future private liens
and over all fixed special assessment liens which may thereafter be created against the
property. Such lien is co =equal to and independent of the lien for general property taxes
and Community Facilities District special taxes. The Assessment Engineer reports that
there are no prior assessments overlapping the District as shown in Appendix A.
No Pledge of City Funds
As authorized by the 1915 Act, the City has determined not to obligate itself to
advance available funds from the City Treasury to cure any deficiency or delinquency
which may occur in the Redemption Fund by reason of the failure of a property owner to
pay an assessment installment. The City's legal obl' rations with respect to any
delinquent assessment installments are solely (i) advancing funds from the Reserve Fund
to the Redemption Fund to the extent such funds are available, and (ii) instituting judicial
foreclosure proceedings. The City has no obligation to advance available funds of the
City to the Redemption Fund under any circumstances.
SPECIAL RISK FACTORS
Payment of Assessment Installments
In order to pay debt service on the Bonds, it is necessary that unpaid installments of
assessments on land within the District be paid in a timely manner. Failure by owners of
such land to pay installments of assessments when due, depletion of the Reserve Fund, or
the inability of the City to sell parcels which have been subject to foreclosure
proceedings for the legally established minimum amounts may result in the inability of
9
The following table summarizes the assessment and
value information for each
parcel in the District as set forth
in Appendix A. The table indicates the amount of the
assessments in the lien ratio
groups. The lien ratios are arrived at by dividing the
Assessed Value of a parcel by
the special assessment indebtedness applicable thereto. �.
For example, a 2:1 lien ratio
means that the estimated
land value is twice the lien
amount.
Lien Ratio Analysis
Total Assessment
Lien Ratio Group
Amounts In Group (1)
Percent In Group
•
6.41 :1 to 10.00:1
$ 21,529.35
18.189%
10.01:1 to 25.00:1
37,403.88
31.600
25.01:1 to 50.00:1
4,364.85
3.688
50.01:1 and Over
55,068.55
46.524
Totals
$118,366.63
100.000%
(1) Includes overlapping assessment indebtedness as specifically set forth in Appendix A.
Prior Assessments
The assessments and each installment thereof and any interest and penalties thereon
constitute a lien against the lots and parcels of land on which they were imposed until the
same are paid. Such lien is subordinate to all fixed special assessment liens previously �.
imposed upon the same property, is on a parity with the lien of the reassessments
securing the Refunding Bonds, and has priority over all existing and future private liens
and over all fixed special assessment liens which may thereafter be created against the
property. Such lien is co =equal to and independent of the lien for general property taxes
and Community Facilities District special taxes. The Assessment Engineer reports that
there are no prior assessments overlapping the District as shown in Appendix A.
No Pledge of City Funds
As authorized by the 1915 Act, the City has determined not to obligate itself to
advance available funds from the City Treasury to cure any deficiency or delinquency
which may occur in the Redemption Fund by reason of the failure of a property owner to
pay an assessment installment. The City's legal obl' rations with respect to any
delinquent assessment installments are solely (i) advancing funds from the Reserve Fund
to the Redemption Fund to the extent such funds are available, and (ii) instituting judicial
foreclosure proceedings. The City has no obligation to advance available funds of the
City to the Redemption Fund under any circumstances.
SPECIAL RISK FACTORS
Payment of Assessment Installments
In order to pay debt service on the Bonds, it is necessary that unpaid installments of
assessments on land within the District be paid in a timely manner. Failure by owners of
such land to pay installments of assessments when due, depletion of the Reserve Fund, or
the inability of the City to sell parcels which have been subject to foreclosure
proceedings for the legally established minimum amounts may result in the inability of
9
the City to make full or punctual payment of debt ser-;ce on the Bonds. There is no
assurance the property owners will be able to pay the assessment installments or that
they will pay such installments even though financially ab'.e �o do so.
Tax Delinquencies
Assessment installments, from which funds necessan_ • for the payment of annual
installments of principal of and interest on the Bonds are derived, will be billed to each
property against which there is an unpaid assessment on .he regular property tax bills
sent to the owner of such property commencing with tax bills for fiscal year 1990 -91.
• Such installments are due and payable at the same time, and generally bear the same
penalties and interest for nonpayment, as regular proper.% tax installments. Assessment
installment payments cannot be made separately from proparty tax payments. Therefore,
the unwillingness or inability of a property owner to pay regular property tax bills, as
evidenced by property tax delinquencies, may also indicate an unwillingness or inability to
make regular property tax payments and assessment instailrnent payments in the future.
Foreclosure Delays
Foreclosure prosecution could take two years or more due to crowded local court
calendars, legal delaying tactics, or bankruptcy. (See "Bankruptcy" and "SECURITY FOR
THE BONDS - Covenant for Superior Court Foreclosure" herein.) It is possible also that
no bid would be received at the foreclosure sale. As a result, there could be a default in
payment of the principal of and interest on Bonds and curing of which would be dependent
upon resale of the property by the City or redemption of the property by the property
owner. No assurance can be given that the City will be able to resell any such delinquent
parcel for an amount sufficient to pay all of the delinquent assessment installment
amounts including the principal, interest, penalties, and cosTS due thereon.
CLoss of Tax Exemption
As discussed under the caption "MISCELLANEOUS - Tax Exemption," interest on the
Bonds could become includable in gross income for purposes of federal income taxation,
retroactive to the date the Bonds were issued, as a result of future acts or omissions of
the City in violation of its covenants.
,. r M
The payment of property owners' assessment installments and the ability of the City
to foreclose on the lien of a delinquent unpaid assessment, as discussed in the section
herein entitled "SECURITY FOR THE BONDS," may be limited by bankruptcy, insolvency
or other laws generally affecting creditors' rights or by the laws of California relating to
judicial foreclosure.
The various legal opinions to be delivered concurrently with the delivery of the
Bonds, including Bond Counsel's approving legal opinion, will be qualified, as to the
enforceability of the various legal instruments, by reference to bankruptcy,
reorganization, insolvency or other laws affecting the rights oz . creditors generally.
Although bankruptcy proceedings would not cause the assessment liens to become
extinguished, bankruptcy of a property owner could result in a delay in prosecuting
superior court foreclosure proceedings. Such a delay would Increase the likelihood of a
delay or default in payment of the principal of and interest on the Bonds and the
possibility that delinquent assessment installments might not be paid in full.
10
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THE ASSESSMENT DISTRICT
The District consists of approximately 10.2 acres located in the area known as
Cannery Village bounded by 32nd Street on the north, Newport Harbor on the east, 28th
Street on the south and Newport Boulevard on the west. The City is located in Orange
County approximately 45 miles south of the City of Los Angeles. A map showing the
general location of the District is set forth herein. The majority of the land within the
District is developed.
In response to requests from property owners in the District, the City has undertaken
to conduct a series of assessment district improvement proceedings to provide for the
• acquisition and construction of street lighting improvements plus missing street
improvements including curbs, gutters and sidewalks for the benefit of land within the
District.
Assessment Proceedings
The Assessment District was initiated by the City Council at the request of property
owners within the Assessment District. After the proceedings were initiated, the
engineer of work prepared a written report (the "Engineer's Report ") which contains,
among other things, the estimate of project costs and the assessment for each parcel.
The total amount of the proposed assessment was based upon the engineer's estimated
cost of the Project. The individual assessments were spread among the various parcels of
land within the Assessment District on the basis of the special benefit to be derived by
each parcel from the improvements and acquisitions.
The Engineer's Report was filed with and preliminarily approved by the City Council
on December 11, 1989. Thereafter, notice was published in a local newspaper designated /
by the City Council for that purpose. Notice was also posted along all of the open streets
within the Assessment District. In addition, notice of the proposed assessment and a
hearing thereon was mailed to each of the owners whose property was proposed to be
assessed. The notices advised the property owners of the filing of the Engineer's Report,
the date, time and place for a hearing on the Project, the proposed assessments and the
right to protest. The mailed notice also advised the property owners of the amount
proposed to be assessed against their properties, as shown in the Engineer's Report.
Property owners had the right to protest in writing prior to or at the commencement of
the hearing and to be heard at the hearing.
No owners of land proposed to be assessed in the Assessment District filed written
protests.
The statutory period during which any legal action could have been commenced
expired on March 14, 1990.
At the conclusion of the hearing on February 12, 1990, the City Council unanimously
adopted its Resolution No. 90 -11 confirming the Assessments, overruling protests and
ordering the work and acquisitions. After confirmation, the Assessments became liens
against the various assessed parcels. The property owners were given published and
mailed notice of the opportunity to pay all or a portion of the assessment in cash within
30 days of the recording of the assessment. The notice further advised the property
owners that if a cash payment was not made, bonds would be sold to represent unpaid
assessments. The cash payment period ended on March 16, 1990. Cash payments were
received in the total amount of $46,600.18.
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Estimated Project Costs
The following table sets forth the Assessment Engineer's confirmed estimated costs
of the Project.
I. Construction Costs Confirmed Costs
Bid Items
A. Street Lighting:
• Install Street Light $ 54,600.00
Replace Ex. Street Light 4,400.00
Electrical Conduit 19,500.00
Pullboxes 4,200.00
Subtotal $ 82,700.00
B. Street Improvements:
12
Curb & Gutters
$ 15,456.00
Sidewalk
7,541.00
Driveway Approach
9,522.00
AC Pavement (3 "ACl6 "AB)
2,325.00
AC Pavement (8 "AClNS)
783.00
AC Overlay
1,440.00
Ex. AC Pavement Removal
5,806.50
Misc. Removal & Relocation
2,689.00
Subtotal
$ 44,562.50
Total
$127,262.50
Contingency (10 %)
$ 12,726.25
Total Construction Cost
$139.988.75
II.
Incidental Expenses
A.
Design Engineering
$ 3,900.00
B.
Assessment Engineering
3,550.00
C.
Special Counsel
3,250.00
D.
Construction Administration
2,615.00
E.
Incidental Contingency
500.28
F.
Bond Discount (2 %)
2,154.92
G.
Bond Reserve (5 %)
5,387.30
Totallncidental
$21,357.50
Total Construction & Incidential
$161,346.25
III.
Contribution
Streetlighting in City Lot
(7,000.00)
Cash Collections and Assessments
Less: Cash Collections
46,600.18
Unpaid Assessments
S 7�QZ
12
i
Assessment Criteria
i
The law requires and statutes provide that assessments, as levied pursuant to the
provisions of the "Municipal Improvement Act of 1913 ", must be based on the benefit that
the properties receive from the works of improvement. The statute does not specify the
methods or formula that should be used in any special assessment district proceedings.
The responsibility rests with the Assessment Engineer, who is appointed for the purpose
of making an analysis of the facts and determining the correct apportionment of the
assessment obligation.
The Assessment Engineer then makes his recommendation at the public hearing on
• the Assessment District, and the final authority and action rests with the City after
hearing all testimony and evidence presented at the public hearing. Upon the conclusion
of the public hearing, the City must make the final action in determining whether or not
the assessment formula has been made in direct proportion to the benefits received.
The installation of the "antique style" streetlighting will provide an area -wide
benefit among the properties of the proposed district, including improved appearance,
pedestrian safety for residents, employees and patrons, and the establishment of a unified
theme throughout the Cannery Village area. All parcels would be assessed a pro rata
share of costs based on actual area of properties benefitting from the installation of
streetlighting. Those properties which partially front streets that will be receiving
streetlighting were assigned an adjusted area based on the actual frontage benefitting
from streetlight installation as a percentage of the properties total street frontage.
Construction of new parkway improvements have been historically the responsibility
of the fronting property owners. Installation of missing street improvements, such as
curb, gutter and sidewalk, will provide a direct benefit to the adjacent fronting property.
Therefore, the amount assessed to each parcel will vary according to the actual
dimensions of improvements to be constructed, including incidental costs associated with
the installation of curb, gutter and sidewalk, such as pavement removals, pavement patch
back, and miscellaneous removals and relocations.
According to the Superintendent of Streets the assessments for the Assessment
District have been spread in direct accordance with the benefits that each parcel
receives from the works of improvement.
Land Use and Zoning
The area included in the Assessment District is zoned Specific Planned District
(Cannery Village McFadden Square). Land uses designated in the area are S, 2ciality
Retail, Recreational, Service and Marine Commercial. Land uses include sl :ciality
retail, antique, marine service and related commercial businesses.
MISCELLANEOUS
No Litigation
There is no action, suit, or proceeding known by the City to be pending at the present
time restraining or enjoining the delivery of the Bonds or in any way contesting or
affecting the validity of the Bonds or any proceedings of the City taken with respect to
i
13
0
the execution or delivery thereof. A no litigation certificate, executed by an official of
the City, will be delivered to the Underwriter simultaneously with the delivery of the
Bonds.
Legal Opinion
All proceedings in connection with the issuance of the Bonds are subject to the
approval of Brown & Diven, San Diego, California, Bond Counsel for the City, in
connection with the issuance of the Bonds. The unqualified opinion of Bond Counsel,
approving the validity of the Bonds, will be printed on each Bond.
• Tax Exemption
In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial
decisions, interest on the Bonds is exempt from personal income taxes imposed by the
State of California, is excluded from gross income for federal income tax purposes, and is
not an item of tax preference for purposes of the federal alternative minimum tax
imposed on individuals and corporations. However, Bond Counsel notes that, with respect
to corporations (as defined for federal income tax purposes), interest on the Bonds will be
included in determining corporate adjusted net book income (adjusted current earnings for
taxable years ending after December 31, 1989), a portion of which may increase the
alternative minimum taxable income of such corporations.
Bond Counsel's opinion as to the exclusion from gross income of interest on the
Bonds is subject to the condition that the City comply with all requirements of the Code
which must be satisfied subsequent to the issuance of the Bonds to assure that such
interest will not become includable in gross income for federal income tax purposes.
Failure to comply with such requirements could cause the interest on the Bonds to be
included in gross income for federal income tax purposes retroactive to the date of
issuance of the Bonds. The City has covenanted to comply with all such requirements.
Bond Counsel will not undertake to determine (or to inform any person) whether any
actions taken (or not taken) or events occurring after the issuance of the Bonds may
affect the tax status of interest on the Bonds.
Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded
from gross income for federal income tax purposes, the accrual or receipt of interest on
the Bonds may otherwise affect the federal income tax liability of the recipient. The
extent of these other tax consequences will depend upon the recipient's particular tax
status and /or other items of income or deductions. Bond Counsel expressed no opinion
regarding any such consequences. Accordingly, all potential purchasers ; hould consult
their tax advisors before buyii . any of the Bonds.
No Rating
No rating has been sought or obtained for the Bonds.
Underwriting
Miller & Schroeder Financial, Inc., Underwriter of the Bonds, has purchased the
Bonds from the City at a purchase price equal to 98 %, plus accrued interest. The public
offering prices may be changed from time to time by the Underwriter. The Underwriter
may offer and sell Bonds to certain dealers and others at a price lower than the offering
prices stated on the cover page hereof.
j.:
Lµ
Execution of Official Statement
The execution and delivery of this Official Statement has been duly authorized by
the City.
CITY OF NEWPORT BEACH, CALIFORNIA
By /s/ f Robert L. Wcnn
• City Manager
15
Ll
•
APPENDIX A
0
LIST OF ASSESSMENTS AND ASSESSED VALUES
0 0
CITY OF NEWPORT BEACH
ASSESSMENT DISTRICT NO. 58
LIEN RATIO ANALYSIS OVERLAPPING ASSESSED ASSESSED
NUMBER ASSMT ASSESSMENT ASSESSMENT(1j__ASSESSMENT VALUE ?F I I
9,280
1,025
9
r
TOTAL TOTA
ASSESSED VALUE Ti
VALUATION LIEN RAID
47- 23- 92 76 553.88 :00 558:88 1,232;023:00 54;129:00 1,24id;94b:Otl
107,746,07 10,62036 118,366.63 10,233,074.00 4,052,981.00 14,285,255.00
asaasaaaasaaeaaaaaaaasamsaeaaaacasaaeaaaaaaaaaamaaacaaaaaaaaaaaaa��cggaasoaacasaac _saasaaa= aaaa_ssaanaaaaaaaaaa
RANGE ASSESSMENT PERCENTAGES5KENT
.................................}}�_---..._..._.._ ...............................
48� OVEOR
88 e uea '- s1e,366.� 1oa.oDOz
(1) Assessed NVVat enddcList of Unpaid AsaaDa.'f.9nia provided by the
•
C
APPENDIX B
ASSESSMENT DIAGRAM
•
•
(CANNERY VILLAGE )
CITY OF NEWPORT BEACH
COUNTY OF ORANGE, STATE OF CALIFORNIA
LEGEND
Ii EXISTDtC STREET IICHT TO BE REPLACED
TT- EXISMO UfERSECIION LIGHTING TO REMAIN
}Y PROPOSED STREET LIGHT
® ASSESSMENT PARCEL NUMBER
M O ® PROPOSED BOUNDARIES
I ha ebT cut* that do, wools mp sbowft
Prop L na,nndad C—A .-=m Dlstdc . N1 i2�
City of Newport Beach, stem of C waml> ems
Wptw w by the City C=wn of the City of Newport
Ilaa at a M14a Owd-C tbermt hats an the —day
of _— ,:PiC�YRamfatlaN"'PIS
Ciy Clash, Ctty of Newport Beach
Filed to time o1Rm of the
City Clerk or the CRT of
Hewpurt Beaeb, State or
6llfomla as tic _ day
of 1989
City Cteriy City of Noepart Bb
Doeowat d
PILED THIS _ DAY OF 198_ AT TTSE
HOUR OF O'CLOCK: M. IN BOOR
PACE _ OF MAPS OF ASSESSMENT AND
COMMUNITY FACILRTPS DISTRICTS IN TH$ OFFICE
OF THE RECORDER OF THE COUNTY OF ORANGE,
STATE OF CALIFORNIA.
Ceoaty Reamaea of On,nte Coaa.T
o wo sae
roes a sttr
BOND INDENTURE
This Bond Indenture (the "Indenture ") dated as of March 26, 1990, entered into and
approved by the City of Newport Beach (the "Issuer "), a municipal corporation, to
establish the terms and conditions pertaining to the issuance of bonds in a special
assessment district known and designated as ASSESSMENT DISTRICT NO. 58 (CANNERY
VILLAGE) (the "Assessment District ").
• SECTION 1. Issuance, Designation and Amount. Pursuant to the provisions of the
"Improvement Bond Act of 1915 ", being Division 10 of the Streets and
Highways Code of the State of California, as amended (the "Act "), the
Issuer does hereby authorize. the issuance of bonds to represent unpaid
assessments within the Assessment District in principal amount not to
exceed $196,650.00 and designated as the City of Newport Beach,
Assessment District No. 58 (Cannery Village) Limited Obligation
Improvement Bonds (the "Bonds ").
SECTION 2. Term of Bonds. Bonds to represent the unpaid assessments, and bear
interest at a rate not to exceed the current legal maximum rate of 12%
per annum, will be issued in the manner provided in the Act, the last
installment of which Bonds shall mature a maximum of and not to exceed
nine (9) years from the second day of September next succeeding twelve
(12) months from their date. The provisions of Part 11.1 of the Act,
providing an alternative procedure for the advance payment of assess-
-- ments and the calling of Bonds shall apply.
SECTION 3. Registered Bonds. Said Bonds shall be issuable only as fully regis-
tered Bonds in the denomination of $5,000, or any integral multiple
thereof, except for one bond maturing in the first year of maturity,
which shall include the amount by which the total issue exceeds the
maximum integral multiple of $5,000 contained therein.
SECTION 4. Date of Bonds. All of said Bonds shall be dated the 15th day of March,
1990, and interest shall accrue from that date.
SECTION 5. Maturity and Denomination. The Bonds shall be issued in serial form
with annual maturities on September 2nd of every year succeeding twelve
(12) months after theii date, until the whole is paid. The amount
maturing each year shall be as set forth in Exhibit "A" attached hereto
and incorporated herein oy this reference and has been established so
as to result in approximately equal annual debt service during the term
of the issue as reflected by the interest rate and /or rates and
principal amounts maturing in the respective years of maturity. The
Issuer shall prescribe the denominations of the Bonds, which shall be
in convenient amounts, not necessarily equal, and shall further provide
for their issuance and delivery.
SECTION 6. Interest. Each Bond shall be of a single maturity and shall bear
interest at the rate as set forth in Exhibit "A" attached hereto from
the interest payment date next preceding the date on which it authenti-
cated and registered, unless said Bond is authenticated and registered
as of an interest payment date, in which case it shall bear interest
1
0 0
from said interest payment date, or unless said Bond is authenticated
��- and registered prior to the first interest payment date, in which case
it shall bear interest from its date, until payment of its principal
sum has been discharged.
SECTION 7. Place of Payment. The principal on the Bonds shall be payable in
lawful money of the United States of America upon surrender of the Bond
at the office of the City Treasurer, or such other registrar, transfer
agent or paying agent as may be designated by supplemental indenture
• approved by the Issuer.
Interest on said Bonds shall be paid by check or draft to the regis-
tered owner thereof at his address as it appears on the books of regis-
tration, or at such address as may have been filed with the City
Treasurer for that purpose, as of the 15th day of the month immediately
preceding said interest payment date.
SECTION S. Redemption. This Bond, or a portion thereof if issued in a denomina-
tion greater than $5,000, shall be subject to redemption and payment in
advance of maturity in increments of $5,000 as provided in Section 8768
of the Streets and Highways Code, on the 2nd day of Marth or September
in any year, by giving the notice provided in said law to the regis-
tered owner thereof at his address as it appears on the books of regis-
tration and by paying principal of and accrued interest on such
redeemed amount, together with a premium equal to three percent (38) of
the redeemed principal amount. If less than the entire Bond is
redeemed, the unredeemed portion shall be reissued to the registered
owner thereof.
SECTION 9. Transfer of Registered Bonds. Any fully registered Bond may, in accor-
dance with its terms, be transferred upon the books of registration
required to be kept pursuant to the provisions of Section 10 by the
owner in whose name it is registered, or by his duly authorized
attorney or legal representative, upon surrender of such fully regis-
tered Bond for registration of such transfer, accompanied by delivery
of a written instrument or transfer in a form approved by the City
Treasurer and by the owner of said Bonds, duly executed.
SECTION 10. Exchange of Registered Bonds. Fully registered Bonds may be exchanged
at the office of the City Treasurer for a like aggregate principa.
amount of Bonds of the same series, interest rate and maturity, subject
to the terms and conditions provided in the system of registration foL
registered debt obligations, including the payment of certain charges,
if any, upon surrender and cancellation of this Bond. Upon such
transfer and exchange, a new registered Bond or Bonds of any authorized
denomination or denominations of the same maturity for the same
aggregate principal amount will be issued to the transferee in exchange
therefor.
SECTION 11. Books of Registration. There shall be kept by the City Treasurer
sufficient books for the registration and transfer of the Bonds and,
• upon presentation for such purpose, the City Treasurer shall, under
4� such reasonable regulations as it may prescribe, register or transfer
or cause to be registered or transferred, on said register, Bonds as
hereinbefore provided.
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SECTION 12. Execution of Bonds. The Bonds shall be executed in facsimile by the
Treasurer and by the City Clerk, and the corporate seal shall be
imprinted in facsimile on the Bonds. The Bonds shall then be delivered
to the City Treasurer for authentication and registration. In case an
officer who shall have signed or attested to any of the Bonds by facsi-
mile or otherwise shall cease to be such officer before the authentica-
tion, delivery and issuance of the Bonds, such Bonds nevertheless may
be authenticated, delivered and issued, and upon such authentication,
delivery and issue, shall be as binding as though those who signed and
attested the same had remained in office.
• SECTION 13. Authentication. Only such of the Bonds as shall bear thereon a certifi-
cate of authentication substantially in the form below, manually .
executed by the City Treasurer, shall be valid or obligatory for any
purpose or entitled to the benefits of this Indenture, and such
certificate of the transfer agent and registrar shall be conclusive
evidence that the Bonds so authenticated have been duly executed,
authenticated and delivered hereunder, and are entitled to the benefits
of this Indenture.
FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This bond has been authenticated and registered on
CITY TREASURER
as Paying Agent
By:
SECTION 14. Negotiability, Registration and Transfer of Bonds. The transfer of any
Bond may be registered only upon such books of registration upon surren-
der thereof to the City Treasurer, together with an assignment duly
executed by the owner or his attorney or legal representative, in satis-
factory form. Upon any such registration of transfer, a new Bond or
Bonds shall be authenticated and delivered in exchange for such Bond,
in the name of the transferee, of any denomination or denominations
authorized by this Indenture, and in an aggregate principal amount
equal to the principal amount of such Bond or principal amount of such
Bond or Bonds so surrendered. In all rases in which Bonds shall be
exchanged or transferred, the City Treaiirer shall authenticate at the
earliest practical time, Bonds in accc,tdance with the provisions of
this Indenture. All Bonds surrendered in such exchange or registration
transfer shall forthwith be cancelled. The City Treasurer may make a
charge for every such exchange or registration of transfer of Bonds
sufficient to reimburse it for any tax or other governmental charge
required to be paid with respect to such exchange or registration of
transfer. No transfer of fully registered Bonds shall be required to
be made between the fifteenth (15th) day of the month next preceding
each interest payment date, nor during the fifteen (15) days preceding
the selection of any Bonds for redemption prior to the maturity
thereof, nor with respect to any Bond which has been selected for
redemption prior to the maturity thereof.
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SECTION 15.
Ownership of Bonds. The person in whose name any Bond shall be regis-
€!�
tared shall be deemed and regarded as the absolute owner thereof for
all purposes, and payment of or on account of the principal and redemp-
tion premium, if any, of any such Bond, and the interest on any such
Bond, shall be made only to or upon the order of the registered owner
thereof or his legal representative. All such payments shall be valid
and. effectual to satisfy and discharge the liability upon such Bond,
including the redemption premium, if any, and interest thereon, to the
extent of the sum or sums so paid.
• SECTION 16.
Mutilated, Destroyed, Stolen or Lost Bonds. In case any Bond secured
hereby shall become mutilated or be destroyed, stolen or lost, the
Issuer shall cause to be executed and authenticated a new Bond of like
date and tenor in exchange and substitution for and upon the cancella-
tion of such mutilated Bond or in lieu of and in substitution for such
Bond mutilated, destroyed, stolen or lost, upon the owner's paying the
reasonable expenses and charges in connection therewith, and, in the
case of a Bond destroyed, stolen or lost, his filing with the City
Treasurer and Issuer of evidence satisfactory to them that such Bond
was destroyed, stolen or lost, and of his ownership thereof, and
furnishing the City Treasurer and Issuer with indemnity satisfactory to
them.
SECTION 17. Cancellation of Bonds. All Bonds paid or redeemed, either at or before
maturity, shall be cancelled upon the payment or redemption of such
Bonds, and shall be delivered to the City Treasurer when such payment
( or redemption is made. All Bonds cancelled under any of the provisions
\_ of this Indenture shall be destroyed by the City Treasurer, which shall
execute a certificate in duplicate describing the Bonds so destroyed,
and shall retain said executed certificate in its permanent files for
the issue.
SECTION 18. Creation of Funds. The Treasurer is hereby authorized and directed to
establish the following Funds for purposes of making payment for the
costs and expenses for the works of improvement and payment of
principal and interest on the Bonds. The Funds to be created are
designated as follows:
IMPROVEMENT FUND: The amounts received from the prepayment of assess-
ments, if any, and the proceeds from the sale of the Bonds, after
deposit of required amounts in the Reserve Fund and Redemption Fund,
shall be placed in the Fund hereby created, pursuant to Sections 10602
and 10424 of the California Streets and Highways Code, as amended,
which shall be called the "Improvement Fund ", and the monies in said
Fund shall be used only for the purposes authorized in said assessment
proceedings, and specifically to pay for the costs and expenses of the
construction or acquisition of the authorized public capital improve-
ments, together with all incidental expenses. Any surplus in the
Improvement Fund after completion of the improvements shall remain in
the Improvement Fund for a period of not lees than two (2) years from
the receipt of Bond proceeds as provided in Section 10427.1 of the
f California Streets and Highways Code, and thereafter shall be utilized
'rte Or distributed as determined by the Issuer.
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r^ REDEMPTION FUND: The Treasurer is hereby authorized and directed to
F keep a Redemption Fund designated by the name of the proceedings, into
which he shall place accrued interest, if any, on the Bonds from the
date of the Bonds to the date of delivery to the initial purchaser
thereof, all sums received for the collection of the assessments and
the interest thereon, together with all penalties, if applicable.
Principal of and interest on said Bonds shall be paid to the registered
owner out of the Redemption Fund created pursuant to Section 8671 of
• the California Streets and Highways Code. Accrued interest paid by the
purchaser of the Bonds, if any, shall be deposited in the Redemption
Fund. In all respects not recited herein, said Bonds shall be governed
by the provisions of the Act. Under no circumstances shall the Bonds
or interest thereon be paid out of any other fund except as provided by
law.
RESERVE FUND: Pursuant to Part 16 of the Act, there shall be created a
special reserve fund for the Bonds to be designated by the name of the
Assessment District and specified as the special "Reserve Fund ". An
amount equal to five percent (5%) of the original Bond proceeds shall
be deposited in the Reserve Fund out of said Bond proceeds.
Monies in the Reserve Fund shall be applied as follows:
A. Amounts in said Reserve Fund shall be transferred to the Redemption
Fund for the Bonds if, as result of delinquencies in the payment of
assessments, there are insufficient monies in said Redemption Fund
to pay principal of and interest on the Bonds when due. Amounts SO
transferred shall be repaid to the Reserve Fund from proceeds from
the redemption or foreclosure of property with respect to which an
assessment is unpaid and from payments of the delinquent
assessments;
B. Interest earned on the permitted investment of monies on deposit in
the Reserve Fund shall remain in the Reserve Fund only to the
extent that the amount therein may accumulate to and subsequently
be maintained at the "Reserve Requirement ". The Reserve Require-
ment shall be an amount equal to the lesser of (i) the Maximum
Annual Debt Service on the Bonds, (ii) 125% of the average annual
debt service on the Bonds, or (iii) 58 of the original principal
amount of the Bonds. Annual Debt service on the Bonds for each
year ending September 2nd shall equal the sum of (a) the interest
falling due on the outstanding Bonds in such 12 month period,
assuming that the outstanding Bonds are retired as scheduled, and
(b) the principal amount of outstanding Bonds falling due during
such 12 month period. "Average Annual Debt Service" shall mean the
average Annual Debt Service during the term of the Bonds. "Maximum
Annual Debt Service" shall mean, as computed from time to time, the
largest Annual Debt Service during the period from the date of such
computation through the final maturity of any outstanding Bonds.
C. On July 15 of each fiscal year the amount on deposit in the Reserve
.Fund in excess of the Reserve Requirement shall be transferred from
the Reserve Fund to the Redemption Fund and shall be credited to
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the unpaid assessment installments payable during such fiscal year.
The Auditor's record, prepared pursuant to Section 8682 of the
Streets and Highways Code, shall reflect the credits against each
of the unpaid assessments in the manner provided in Streets and
Highways Code Section 10427.1 in amounts equal to each parcel's
proportionate share of such transfer.
Notwithstanding the above, interest earnings on monies on deposit
in the Reserve Fund in excess of the "yield" on the Bonds, as that
• term is defined in the Internal Revenue Code of 1986 (the "Code "),
shall be subject to transfer and rebate to the United States.
D. Whenever monies in the Reserve Fund are sufficient to retire all of
the Bonds outstanding, plus accrued interest thereon, such money
shall be transferred to the Redemption Fund for the Bonds and
collection of the remaining unpaid assessments shall cease.
E. In the event assessments are paid in cash in advance of their final
maturity date, the Issuer is required to credit the prepaid assess-
ment with a proportionate share of the Reserve Fund and to transfer
an amount equal to such credit to the Redemption Fund to be
utilized for the advance retirement of Bonds.
SECTION 19. No Issuer Liability. It is hereby further determined and declared that
the Issuer will not obligate itself to advance any available funds from
its Treasury to cure any deficiency or delinquency which may occur in
�! the Bond Redemption Fund by failure of property owners to pay annual
�. special assessments. This determination shall be clearly set forth and
stated in the title of the Bonds to be issued pursuant to these proceed-
ings as authorized and required by Section 8769 of the Streets and
Highways Code of the State of California.
SECTION 20. Covenant for Superior Court Foreclosure. In the event of delinquency
in the payment of any installments of unpaid assessments, the Issuer
does covenant for the benefit of the owners of the Bonds that it will
review assessment records of the County not later than August 1 of each
year to determine the amount of the assessments collected in the prior
fiscal year. If the cumulative delinquencies in the payment of assess-
ment installments throughout the Assessment District exceed five
percent (5R), the Average Annual Debt Service on the Bonds, the Issuer
shall commence foreclosure action(s) on all parcels for which the
payment of assessment installments are delinquent in the Superior Court
of the State of California (Part 14, Division 10, "Improvement Bond Act
of 1915 ", Streets and Highways Code) on or before November 1 of each
year, and diligently prosecute and pursue such foreclosure proceedings
to judgment and sale. Initiation of such foreclosure actions may be
deferred in any fiscal year if the Reserve Fund is maintained at an
amount equal to the Reserve Requirement.
SECTION 21. Covenant to Maintain Tax - Exempt
Status.
The Issuer
covenants that
it
will not make any use
of the
proceeds
of the Bonds issued hereunder
_ which would cause the
Bonds
to become
"arbitrage
bonds" subject
to
Federal income taxation pursuant to the provisions of Section 148(a) of
the Code, or to become "Federally- guaranteed obligations" pursuant to
the provisions of Section 149(b) of the Cade, or to become "private
activity bonds" pursuant to the provisions of Section 141(a) of the
Code. To that end, the Issuer will comply with all applicable require-
ments of the Code and all regulations of the United States Department
of Treasury issued thereunder to the extent such requirements are, at
the time, applicable and in effect. Additionally, the Issuer agrees to
implement and follow each and every recommendation provided by Bond
Counsel and deemed to be necessary to be undertaken by the Issuer to
ensure compliance with all applicable provisions of the Code in order
• to preserve the exemption of interest on the Bonds from Federal income
taxation.
SECTION 22. Covenant Regarding Arbitrage. The Issuer shall not take or permit nor
suffer to be taken any action with respect to the gross proceeds of the
Bonds as such term is defined under the Code which, if such action had
been reasonably expected to have been taken, or had been deliberately
and intentionally taken, on the date of issuance of the Bonds, would
have caused the Bonds to be "arbitrage bonds" within the meaning of
Section 148 of the Code and the regulations promulgated thereunder.
SECTION 23. Order to Print and Authenticate Bonds. The Treasurer is hereby
instructed to cause Bonds, as set forth above, to be printed, and to
proceed to cause said Bonds to be authenticated and delivered to an
authorized representative of the purchaser, upon payment of the
purchase price as set forth in the accepted proposal for the sale of
Bonds.
` SECTION 24. Arbitrage Certificate. On the basis of the facts, estimates and circum-
stances now in existence and in existence on the date of issue of the
Bonds, as determined by the Treasurer, said Treasurer is hereby autho-
rized to certify that it is not expected that the proceeds of the issue
will be used in a manner that would cause such obligations to be
arbitrage Bonds. Such certification shall be delivered to the
purchaser together with the Bonds.
SECTION 25. Arbitrage Rebate Exemption. The term "Bond Proceeds ", as used in this
Section, shall mean all amounts actually or constructively received by
the Issuer from the sale of the Bonds. The term "Investment Proceeds"
as used in this Section shall mean all amounts actually or construc-
tively received from the investment of the Bond Proceeds.
The Issuer shall expend all of the Bond Proceeds, other than such
proceeds as are deposited in the Reserve Fund, and all of the Invest-
ment Proceeds (including Investment Proceeds received from the invest-
ment of Bond Proceeds deposited in the Reserve Fund) in accordance with
the following schedule:
(a) Not less than ten percent (108) of the above amount shall be
expended within six (6) months following the date of delivery of
the Bonds to the original purchaser thereof (the "Closing Date ");
( (b) Not less than forty -five percent (45 %) of the above amount shall
�. be expended within one (1) year following the Closing Date;
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(c) Not less than seventy -five percent (758) of the above amount shall
be expended within eighteen (18) months following the Closing
Date; and
(d) Not less than one hundred percent (1008) of the above amount shall
be expended within two (2) years following the Closing Date,
provided, however, an amount equal to one hundred percent (1008)
of the above amount shall be deemed to have been expended within
• such two (2) year period if such requirement is met within the
three (3) year period beginning on the Closing Date and the
requirement would have been met within such two (2) year period,
but for a reasonable retainage (not exceed 58 of the above
amount).
In the event that the Issuer does not satisfy the expenditure require-
ment of this Section, the Issuer shall assure compliance with all
applicable requirements contained in the Code for rebate to the Federal
government of excess investment earnings, if any, with respect to
earnings on the Bond Proceeds, the Investment Proceeds and on other
applicable funds.
Notwithstanding any other provision of this Section, the Issure shall
assure compliance with applicable requirements contained in the Code
for rebate to the Federal government of excess investment earnings, if
any, with respect to earnings on the Reserve Fund and on other applic-
able funds after the date which is two (2) yea wing the Closing
Date.
IN WITNESS WHEREOF, the Issuer has exe u d is and Indenture `ye^Ft the date
first written hereinabove. 0 / l
CITY OF'VEWPORT BEACH
STATE OF CALIFORNIA
0
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CITY OF NEWPORT BEACH
ASSESSMENT DISTRICT NO. 58
(CANNERY VILLAGE)
EXHIBIT ^A^
MATURITY SCHEDULE
PRINCIPAL
AMOUNT
2,746.07
10,000.00
10,000.00
10,000.00
10,000.00
10,000.00
10,000.00
15,000.00
15,000.00
15,000.00
C
INTEREST
RATE
6.25%
6.40%
6.60%
6.70%
6.80%
6.90%
7.00%
7.10%
7.20%
7.30%
MATURITY
SEPT. 1
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
E
CITY OF NEWPORT BEACH
ASSESSMENT DISTRICT NO. 58
(CANNERY VILLAGE)
EXHIBIT ^A^
MATURITY SCHEDULE
PRINCIPAL
AMOUNT
2,746.07
10,000.00
10,000.00
10,000.00
10,000.00
10,000.00
10,000.00
15,000.00
15,000.00
15,000.00
C
INTEREST
RATE
6.25%
6.40%
6.60%
6.70%
6.80%
6.90%
7.00%
7.10%
7.20%
7.30%