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HomeMy WebLinkAboutMINUTES - 07131993 - 1.125 TO: BOARD OF SUPERVISORS � .. Contra FROM: Phil Batchelor ..'4— Costa . S County July 13, 1993 DATE: SUBJECT: Issuance and sale of Series B, 1993-94 Tax and Revenue Anticipation Notes SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION Recommendations : 1 . Adopt resolution providing for the issuance and sale of a Series B, 1993-94 Tax and Revenue Anticipation Note issue in the amount of $25,000,000 . 2 . Authorize the County Administrator or his designee to execute any necessary documents and agreements necessary to implement the issuance and sale of the Notes . 3 . Approve continuation of the financial advisor and note counsel consultants used for the Series A issue to complete the Series B issue. Financial Impact: The additional borrowing will provide for the increased cash flow needs of the County as a result of the impact from the State budget. The cost of issuance for the additional borrowing will be offset by interest earned on the funds until they are needed for cash flow requirements . CONTINUED ON ATTACHMENT: x YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. �J ATTESTED / Contact: PHIL BAT ELOR,CLEFK OF THE BOARD OF CC: CAO SUPERVI ORS AND COUNTY ADMINIS RATOR Auditor-Controller e7 Treasurer-Tax Collector County Counsel BY DEPUTY Babkground: The Board on May 18, 1993 authorized issuance and sale of Tax and Revenue Anticipation Notes for 1993-94 in an amount not to exceed $150,000,000. The Series A issue of $125,000,000 was sold on June 10, 1993 and funds received on July 1, 1993. The Series A borrowing was based upon the information available in May as to the County's anticipated cash flow needs for the new fiscal year. Since that time the State budget has been adopted with significant impacts upon the County. The shift of property tax and the timing of the receipt of sales tax alters the cash flow deficit so that additional borrowing is necessary. The Series B issue of $25,000,000 will provide for the altered cash flow needs and generate additional interest earnings above the cost of issuance. The rating agencies assigned the Series A rating on the entire authorization of $150,000,000 and will rate the Series B issue with only minimal updating of the State impacts and the County response to the changes. The financial advisor has determined that the Series B issue must be completed prior to August 15, 1993 due to future changes in regulations, effective that date, that alter the formula used in computing the borrowing limits. The continued use of the note borrowing program is an important part of the cash management system which also generates significant revenue for the County. -6-93 OH&S Y RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA PROVIDING FOR THE ISSUANCE AND SALE OF COUNTY OF CONTRA COSTA, CALIFORNIA, 1993-1994 TAX AND REVENUE ANTICIPATION NOTES, SERIES B RESOLUTION NO. 93/428 WHEREAS, pursuant to Sections 53850 et seq. of the Government Code of the State of California (the "Government Code") , this Board of Supervisors (the "Board") has heretofore found and determined in Resolution No. 93/250, adopted May 18, 1993, that the sum of not to exceed One Hundred Fifty Million Dollars ($150,000,000) was needed for the requirements• of the County of Contra Costa (the "County") to satisfy obligations payable from the General Fund and that it was necessary that said sum be borrowed for such purpose at this time by the issuance of temporary notes (the "Notes") therefor in anticipation of the receipt of taxes, revenue and other moneys to be received by the County for the General Fund of the County allocable to Fiscal Year 1993-1994; and WHEREAS, it appears, and the Board hereby finds and determines, that said sum of One Hundred Fifty Million Dollars ($150, 000, 000) , when added to the interest estimated to be payable thereon, does not exceed eighty-five percent (85%) of the estimated amount of the uncollected taxes, income, revenue, cash receipts and other moneys of the County for the General Fund of the County attributable to Fiscal Year 1993-1994 and available for the payment of the principal of and interest on the Notes; and WHEREAS, pursuant to Section 53856 of the Government Code of the State of California (the "Government Code") , certain revenues which will be received by the County for the General Fund of the County and attributable to Fiscal Year 1993-1994 can be, and have been, pledged for the payment of the principal of and interest on the Notes; and WHEREAS, the County has authorized the issuance of said notes in two series, with. an initial issuance of a first series of notes (the "Notes of Series A") in the amount of not to exceed $125,000, 000 with authorization to issue and sell a second series of notes (the "Notes of Series B") in the amount of not to exceed $25,000,000; and WHEREAS, the Notes of Series A have heretofore been issued; and WHEREAS, it is now desirable to sell the Notes of Series B; and SF2-18580.1 5-5-TRS-07/06/93 WHEREAS, the Notes of Series B shall be sold pursuant to a negotiated sale in accordance with the terms of a Request for Proposals for the Notes of Series B, to be provided to not to exceed six selected underwriters; NOW, THEREFORE, the Board of Supervisors of the County of Contra Costa hereby finds, determines, declares and resolves as follows: Section 1. Recitals. All of the recitals herein above set forth are true and correct, and the Board so finds and determines. Section 2. Terms of Notes of Series B. The aggregate principal amount of the Notes of Series B shall not in the aggregate exceed Twenty-five Million Dollars ($25,000,000) or such lesser amount upon which Orrick, Herrington & Sutcliffe ("Bond Counsel") will deliver an approving opinion as to the exclusion from gross income for federal income tax purposes of interest on the Notes of Series B. The Notes of Series B shall be dated the date of issuance thereof and shall be issued on or before December. 15, 1993, shall mature (without option of prior redemption) on July 29, 1994, or such other date not later than 13 months after the date of issuance of such Series of Notes as shall be designated by the County Administrator of the County, and shall bear interest, payable at maturity and computed on the basis of a 360-day year composed of twelve 30-day months, at the rate determined in accordance with this Resolution and, as set forth in the best proposal as awarded by the County Administrator of the County. Section 3 . Sale of Notes of Series B. The Request for Proposals for the Notes of Series B, in substantially the form presented to this meeting (a copy of which is on file with the Clerk of the Board) , is hereby approved and adopted as the Request for Proposals for the Notes of Series B, with such changes, additions and corrections therein as the County Administrator of the County shall require or approve. All of the Notes of Series B shall be offered for negotiated sale in accordance with the Request for Proposals. Prager, McCarthy & Sealy (the "Financial Advisor") is hereby authorized and directed to cause to be offered to not to exceed six underwriters copies of said Request for Proposals, subject to such changes, additions and completions as may be acceptable to the County Administrator . of the County. The County Administrator of. the County is hereby authorized to accept the best proposal and to execute a certificate of sale selling the Notes of Series B, and fixing the interest rate thereof and principal amount to be issued. Section 4. Form of Notes of Series B. The Notes of Series B shall be issued in fully registered form without coupons and the Notes of Series B and the Certificate of Registration shall be substantially in the form and substance set forth in Exhibit A attached hereto and by reference incorporated herein, SF2-18580.1 2 5-5-TRS-07106!93 the blanks in said form to be filled in with appropriate words and figures. Section 5. General Covenants. It is hereby covenanted and warranted by the Board that all representations and recitals contained in Resolution No. 93/250, this Resolution are true and correct and that the Board and the County, and their appropriate officials, have duly taken all proceedings necessary to be taken by them, and will take any additional proceedings necessary to be taken by them, for the levy, collection and enforcement of the taxes, income, revenue, cash receipts and other moneys pledged hereunder in accordance with law and for carrying out the provisions of this Resolution No. 93/250, this Resolution and the Notes. Section 6. Tax Covenants; Rebate Fund. (A) The County covenants that it shall make all calculations in a reasonable and prudent fashion relating to any rebate of excess investment earnings on the proceeds of the Notes of Series B due to the United States Treasury, shall segregate and set aside from lawfully available sources the amount such calculations may indicate may be required to be paid to the United States Treasury and shall otherwise at all times do and perform all acts and things necessary and within its power and authority, including complying with each applicable requirement of Section 103 and Sections 141 through 150 of the Code, to assure that interest paid on the Notes shall, for the purposes of federal income taxes and California personal income taxation, be excludable from the gross income of the recipients thereof and exempt from such taxation. As part of the performance of the covenant contained in the preceding sentence, promptly after six months from the date of the issuance of the Notes of Series B, the County will reasonably and prudently calculate the amount of the Note proceeds which have been expended, with a view to determining whether or not the County has met the requirements of Section 148 (f) (4) (B) of the Code with respect to the Notes of Series B, and if it has not met such requirements, it will reasonably and prudently calculate the amount, if any, of investment profits which must be rebated to the United States and will immediately set aside, from revenues attributable to the 1993-1994 Fiscal Year or, to the extent not available from such revenues, from any other moneys lawfully available, the amount of any such rebate in the Fund referred to in paragraph (B) of this Section 6. (B) The County shall establish and maintain a fund separate from any other fund established and maintained hereunder designated as the 111993-1994 Tax and Revenue Anticipation Notes of Series B Rebate Fund" . There shall be deposited in the Notes of Series B Rebate Fund such amounts as are required to be . deposited therein in accordance with the written instructions from Bond Counsel pursuant to Section 4 of Resolution No. 93/250. SF2-18580.1 3 5-5-TRS-07/06.93 (C) Notwithstanding any other provision of this Resolution to the contrary, upon the County's failure to observe, or refusal to comply with, the covenants contained in this Section 6, no one other than the owners or former owners of the Notes of Series B shall be entitled to exercise any right or remedy under this Resolution on the basis of the County's failure to observe, or refusal to comply with, such covenants. (D) The covenants contained in this Section 6 shall survive the payment of the Notes of Series B. (E) Notwithstanding any provision of this section, if the County shall provide to the Paying Agent an opinion of Bond Counsel that any specified action required under this section is no longer required or that some further or different action is required to maintain the exclusion from gross income for federal income tax purposes of interest on the Notes of Series B, the Paying Agent and the County may conclusively rely on such opinion in complying with the requirements of this section, and the covenants hereunder shall be deemed to be modified to that extent. Section 7. Official Statement for Notes of Series B. The proposed form of official statement relating to the Notes of Series B, in substantially the form presented to this meeting, is hereby approved with such changes, additions and corrections as the County Administrator of the County may approve. The Financial Advisor is hereby authorized to distribute such official statement in preliminary form to the selected underwriters for the Notes of Series B and is hereby authorized and directed to deliver such official statement in final form to the purchasers of the Notes of Series B. The County Administrator of the County is authorized to certify on behalf of the County that the preliminary form of the official statement is deemed final as of its date, within the meaning of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (except for the omission of certain final pricing, rating and related information as permitted by said Rule) . Section S. Incorporation of Resolution No. 931250. Resolution No. 93/250, adopted by this Board of Supervisors on May 18, 1993, be and it is hereby ratified and confirmed and incorporated herein by reference as if set forth herein in full, and any capitalized terms used herein and not defined herein shall have the meaning ascribed to such terms in said Resolution No. 93/250. Section 9. Approval of Actions. All actions heretofore taken by the officers and agents of the County or the Board with respect to the sale and issuance of the Notes are hereby approved, confirmed and ratified, and the officers of the County and the Board are hereby authorized and directed, for and in the name and on behalf of the County, to do any and all things and take any and all actions and execute any and all SF2-18580.1 4 5-5-TRS-07/06/93 certificates, agreements and other documents which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Notes of Series B in accordance with this Resolution. Section 10. Proceedings Constitute Contract. The provisions of the Notes of Series B and of this Resolution shall constitute a contract between the County and the registered owners of the Notes of Series B, and such provisions shall be enforceable by mandamus or any other appropriate suit, action or proceeding at law or in equity in any court of competent jurisdiction, and, upon issuance of the Notes of Series B, shall be irrepealable. Section 11. Effective Date. This resolution shall be effective from and after its date of adoption. PASSED AND ADOPTED by the Board of Supervisors of the County of Contra Costa, State of California, this 13th day of July, 1993, by the following vote: AYES: Supervisors Powers, Smith, Bishop, McPeak, Torlakson NOES: None ABSENT: .done Chair of the Board of Supervisors of the County of Contra Costa (Seal) Attest: Phil Batchelor, County Administrator and Clerk of the Board of Supervisors of the County of Contra Costa By: SF2-18560.155 5-5-TRS-07/06/93 I EXHIBIT A REGISTERED REGISTERED No. $ COUNTY OF CONTRA COSTA, CALIFORNIA, 1993-1994 TAX AND REVENUE ANTICIPATION NOTE SERIES B Rate of Interest: Note Date: Maturity Date: CUSIP: Registered Owner: Principal Amount: FOR VALUE RECEIVED, the County of Contra Costa (the "County") , State of California, acknowledges itself indebted to and promises to pay to the Registered Owner identified above, or registered assigns, at the office of the Treasurer-Tax Collector of the County (the "Paying Agent") , the Principal Amount specified above, in lawful money of the United States of America; on the Maturity Date specified above, together with interest thereon at the Rate of Interest per annum set forth above (computed on the basis of a 360-day year composed of twelve 30-day months) in like lawful money from the Note Date specified above until payment in full of said principal sum. The principal of and interest on this Note shall be payable only to the registered owner hereof upon surrender of this Note at the office of the Paying Agent as the same shall fall due; provided, however, that no interest shall be payable for any period after maturity during which the registered owner hereof fails to properly present this Note for payment. It is hereby certified, recited and declared that this Note is one of an authorized issue of Notes entitled "County of Contra Costa, California, 1993-1994 Tax and Revenue Anticipation Notes" (the "Notes") , in the aggregate principal amount of not to exceed One Hundred Fifty Million Dollars ($150,000, 000) , of the series designated above, all of like tenor, made, executed and given pursuant to and by authority of a resolution of the Board of Supervisors of the County (the "Resolution") duly passed and adopted under and by authority of Article 7.6 (commencing with Section 53850) of Chapter 4, Part 1, Division 2, Title 5 of the California Government Code, and that all acts, conditions and things required to exist, happen .and be performed precedent to and in the issuance of this Note have existed, happened and been performed in regular and due time, form and manner as required by law, and that this Note, together with all other indebtedness and obligations of the County, does not exceed any limit prescribed by the Constitution or statutes of the State of California. SF2-18580.1 A-1 5-5-TRS47/06/93 The principal of and interest on the Notes shall be payable from taxes, income, revenue, cash receipts and other moneys which are received by the County for the General Fund of the County for the fiscal year 1993-1994 and which are lawfully available for the payment of current expenses and other obligations of the County (the "Unrestricted Revenues") . As security for the payment of the principal of and interest on the Notes, the County has pledged to deposit in the Repayment Fund (as defined in the Resolution) : (i) an amount equal to 50% of the principal amount of the Notes from the first Unrestricted Revenues received by the County during the accounting period commencing on December 12, 1993 and ending January 13, 1994, inclusive (the "Sixth Accounting Period") , and (ii) an amount equal to 50% of the principal amount of Notes from the first Unrestricted Revenues received by the County during the accounting period commencing on April 13, 1993 and ending May 12, 1994, inclusive (the "Tenth Accounting Period") , together with an amount sufficient (net of anticipated earnings on moneys in the Repayment Fund) (x) to satisfy and make up any deficiency in the Repayment Fund with respect to the prior Accounting Period and (y) to pay the interest on the Notes at maturity (such pledged amounts being hereinafter called the "Pledged Revenues") . In the event that there are insufficient Pledged Revenues received by the County by the third business day prior to the end of any such accounting period to permit the deposit into the Repayment Fund of the full amount of the aforesaid moneys to be deposited, then the amount of any deficiency in the Repayment Fund shall be satisfied and made up from any other moneys of the County lawfully available for the payment of the principal of and interest on the Notes (such other pledged moneys being hereinafter called the "Other Pledged Moneys") . The Pledged Revenues and Other Pledged Moneys shall be deposited in the Repayment Fund at the intervals specified in the Resolution. The principal of and interest on the Notes shall constitute a first lien and charge on, and shall be payable from, moneys in the Repayment Fund. This Note is transferable by the registered owner hereof in person or by such owner's attorney duly authorized in writing at the office of the Paying Agent, but only in the manner, subject to the limitations and upon payment of the charges provided in the Resolution, and upon surrender and cancellation of this Note. Upon such transfer a new Note or Notes of authorized denominations and for the same aggregate principal amount and series will be issued to the transferees in exchange herefor. The County and the Paying Agent may deem and treat the registered owner hereof as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest. due hereon and for all other purposes, and neither the County nor the Paying Agent shall be affected by any notice to the contrary. SF2-18580.1 A-2_ 5-5-TRS-97106/93 ' 1 This Note shall not be valid or become obligatory for any purpose until the Certificate of Registration hereon shall have been signed by the Paying Agent. IN WITNESS WHEREOF, the County of Contra Costa has caused this Note to be executed by the manual or facsimile signature of its Treasurer-Tax Collector and countersigned by the manual or facsimile signature of the Clerk of its Board of Supervisors and caused the official seal of its Board of Supervisors to be impressed hereon, all as of the Note Date specified above. COUNTY OF CONTRA COSTA By Treasurer-Tax Collector (SEAL) Countersigned: County Administrator and Clerk of the Board of Supervisors CERTIFICATE OF REGISTRATION This Note is one of the Notes described in the within mentioned Resolution, which Note has been registered on the date set forth below. Date of Registration: COUNTY OF CONTRA COSTA By Treasurer-Tax Collector SF2-18580.1 A-3 5-5-TRS-07/06/93 (FORM OF ASSIGNMENT] For value received the undersigned do(es) hereby sell, assign and transfer unto (insert Social Security Number or taxpayer identification number) the within-mentioned registered Note and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the books of the Paying Agent with full power of substitution in the premises. Dated: Signature NOTE: The signature to the assignment must correspond to the name as written on the face of this Note in every particular, without any alteration or change whatsoever. Signature Guaranteed By: NOTE: The signature to the assignment must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. SF2-18580.1 5-5-TRS07106/93 CLERK'S CERTIFICATE I, JEANNE O. MAGLIO, Deputy Clerk and Chief Clerk of the Board of Supervisors of the County of Contra Costa, hereby certify that the foregoing is a full, true and correct copy of a resolution duly adopted at a meeting of the Board of Supervisors of the County of Contra Costa duly and regularly held in Martinez, California, on July 13, 1993, of which meeting all of the members of said Board had due notice. I further certify that I have carefully compared the foregoing copy with the original minutes of said meeting on file and of record in my office; that said copy is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes; and that said resolution has not been amended, modified, rescinded or revoked in any manner since the date of its adoption, and the same is now in full force and effect. I further certify that an agenda of said meeting was posted at least 72 hours before said meeting at 651 Pine St. Lobby, Martinez, California,. freely accessible to the public and a brief general description of the resolution to be adopted at said meeting appeared on said agenda. IN WITNESS WHEREOF, I have executed this certificate and affixed the seal of the Board of Supervisors of the County of Contra Costa hereto as of this 43 th day of July, 1993. By De P ty Clerk of theBoard of Supervisors of the County of Contra Costa, State of California [SEAL] SF2-19580.1 5-5-TRS-07106193