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HomeMy WebLinkAboutMINUTES - 04041995 - 2.1 } - ) a T0: " BOARD OF SUPERVISORS Contra FROM: • . } Phil Batchelor, County Administrator Costa ,A ,,`. County DATE: April 4. 1995 �rr+•cuiii+'�c SUBJECT: 1995-1996 Tax and Revenue Anticipation Note Borrowing Program SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: 1. Adopt resolution prepared by the Bond Counsel authorizing the 1995-1996 Tax and Revenue Anticipation Note Borrowing Program and approving the necessary legal documents 2. Approve and authorize the County Administrator to carry out the necessary actions to proceed with the 1995-1996 Tax and Revenue Anticipation Note borrowing program for cash flow purposes. 3. Direct .the County Administrator to follow a competitive sale process for the sale of the Notes similar to what has been done for the past several years. 4. Authorize the County Administrator to utilize a process for negotiated sale of the notes only if it is determined to be necessary or financially advantageous due to market conditions. 5. Authorize the County Administrator to contract with an outside Trustee (U.S Trust, Co. ) to serve as paying agent and/or fiscal agent to hold the repayment funds on behalf of the Note investors. 6. Acknowledge that the Note Program is an essential tool for financial management and is required to meet the annual cash flow needs of the County during the fiscal year. 7. Acknowledge that while the borrowing is essential to meet the cash flow needs of the County, it also generates substantial revenues above the cost of borrowing. CONTINUED ON ATTACHMENT: YES «T .v•' SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR' RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON _ APrll 4 ,, 199 5 APPROVED AS RECOMMENDED X OTHER X__ l APPROVED the recommendations as set forth above ; DIRECTED that the minimal number of staff travel to New York on May 1 , 1995,. to meet with the rating agencies on the 1995. Note Norrowing Program. a; VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE UNANIMOUS JABSE T ) AND CORRECT COPY OF AN ACTION TAKEN AYES:, 1 , 2 ,4 , NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. ATTESTED April 4 , 1995 Contact: PHIL BATCHELOR,CLERK OF THE BOARD OF cc: SEE PAGE 2 SUPERVISORS AND COUNTY ADMINISTRATOR BY DEPUTY .r � -2- 8. Approve continuation of the use of Prager, McCarthy & Sealy as the Financial Advisor at a fixed fee for the issue plus reimbursement of expenses for the cost of issuance and other expenses advanced for the issue. 9. Approve the use of Orrick, Herrington & Sutcliffe for bond and tax counsel services for a fixed fee including expenses. 10. Authorize the County Administrator to contract for a Disclosure Counsel, if required in order to satisfy investor concerns for the Official Statement resulting from the Orange County bankruptcy. 11. Authorize the County Administrator and appropriate County staff to travel to New York on May 17, 1995 to meet with the rating agencies on the 1995 Note Borrowing Program. FINANCIAL IMPACTS: The annual program for Tax and Revenue Anticipation Note borrowing has become an essential part of the cash management for the County. It is required in order to meet the cash flow needs during the fiscal year. The expenses of the program are paid from revenues generated by the program and revenues above that are available to the General Fund. BACKGROUND: The County has issued Notes for cash flow borrowing needs every year since 1979. During 1994 a $95,000,000 issue was completed. The increase in short-term interest rates implemented by the Federal Government during the past year will have an impact on the program and make it difficult to estimate potential returns from the proposed issue, but past experience has indicated a potential for earnings of $500,000 to $1,000,000. The impact of the Orange County bankruptcy and with subsequent actions on meeting their obligations on outstanding notes will have an even greater but unknown impact on all other California public agencies issuing notes for 1995. Information received from various sources, including discussions with individuals from the rating agencies indicates that we can expect to pay a premium on the issues this year in order to attract buyers and that additional disclosure will be necessary on all aspects of County investments. Our County may avoid much of the premium due to our past reputation in the credit markets and we are preparing to include complete disclosure information on the County investment pool. Further developments in Orange County could adversely impact the market. It is important that our County proceed with the issue at the earliest date possible but remain flexible on the process to maximize any advantage in the market. Actions that have been determined to be necessary in order to improve investor confidence are to contract with a Trustee to hold the revenues pledged to repay the Notes. U.S. Trust has submitted the lowest bid of$750.00 for the services as Trustee and Paying Agent. It may be required to have a law firm serve as Disclosure Counsel to review the Official Statement and certify to it's accuracy and completeness. The Financial Advisor is asking for proposals for such service and a determination will be made whether to contract for the service or not depending upon further research in the market. The consulting team of Arnold Mazotti from Prager, McCathy & Sealy and Tom Shearer from Orrick Herrington & Sutcliffe has provided excellent results for the County in the past for very low fees. Continuation of the same consulting team will provide a successful program at low cost for the County. The complications from the Orange County problems and changes in IRS regulations requires that our consultants be fully knowledgeable about the County and provide consistency in representations before the rating agencies. Orig. Dept. : DeRoyce Bell 646-4093 cc: County Administrator Auditor-Controller Treasurer-Tax Collector County Counsel } 3/31/95 OH&S Draft RESOLUTION NO. 95/215 OF THE BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA CALIFORNIA RESOLUTION APPROVING ISSUANCE AND SALE OF 1995-1996 TAX AND REVENUE ANTICIPATION NOTES OF THE COUNTY; APPROVING FORM AND EXECUTION OF AN INDENTURE; APPROVING FORMS OF AND DISTRIBUTION OF PRELIMINARY OFFICIAL STATEMENT FOR THE SALE OF SAID NOTES, NOTICE INVITING BIDS AND NOTICE OF INTENTION TO SELL SAID NOTES; DELEGATING TO COUNTY ADMINISTRATOR OR HIS DESIGNEE AUTHORIZATION TO AWARD BIDS FOR SAID NOTES; AND AUTHORIZING TAKING OF- NECESSARY ACTIONS AND EXECUTION OF NECESSARY CERTIFICATES WHEREAS, the County of Contra Costa (the "County") is a political subdivision of the State of California; 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 found and determined that the sum of not to exceed One Hundred Fifty Million Dollars ($150,000, 000) is needed for the requirements of the County of Contra Costa (the "County") to satisfy obligations payable from the General Fund and that it is 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 1995-1996; 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 MA1986.2 40511-96-TRS-03/31/95 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 1995-1996 and available for the payment of the principal of and interest on the Notes; WHEREAS, no money has heretofore been borrowed by the County through the issuance of any temporary notes in anticipation of the receipt of, or payable or secured by, taxes, income, revenue, cash receipts or other moneys of the County received or accrued during or allocable to Fiscal Year 1995-1996; WHEREAS, the County proposes to enter into an Indenture, dated as of July 1, 1995, with U.S. Trust Company of California, N.A. , as paying agent (the "Paying Agent") , to provide for the issuance and payment of the Notes; WHEREAS, the Notes shall be sold to the highest bidder or bidders pursuant to a competitive sale to be held on June 1, 1995 or on such earlier or later date as is established by the County Administrator of the County in accordance with the terms of a Notice Inviting Bids for the Notes; WHEREAS, a form of Official Statement describing the Notes and a form of Notice Inviting Bids for the sale of the Notes will be distributed to potential purchasers of the Notes and a form of Notice of Intention to Sell the Notes will be published in THE BOND BUYER; WHEREAS, this Board has been presented with the form of each document hereinafter referred to, relating to the Notes, and the Board has examined and approved each document and desires to SF2-41986.2 2 40511-96-TRS-03/31/95 authorize and direct the execution of such documents and the issuance of the Notes; WHEREAS, the County has full legal right, power and authority under the Constitution and the laws of the State of California to enter into the transactions hereinafter authorized; and 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 this Board so finds and determines. Section 2. Indenture. The proposed form of the Indenture, to be dated as of July 1, 1995, by and between the County and the Paying Agent (a copy of which is on file with the Clerk of the Board of Supervisors), is hereby approved. The County Administrator of the County and the Clerk of the Board of Supervisors, and their designees, are hereby authorized and directed to execute and deliver the Indenture in substantially said form, with such changes, additions, completions and corrections therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 3 . Sale of Notes. The proposed form of the Notice Inviting Bids for the Notes, 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 Notice SF2-41986.2 3 40511-96-TRS-03/31/95 Inviting Bids for the Notes, with such changes, additions, completions and corrections therein as the County Administrator of the County shall require or approve. All of the Notes shall be offered for public sale in accordance with the Notice Inviting Bids. Prager, McCarthy & Sealy (the "Financial Advisor") is hereby authorized and directed to cause to be mailed to prospective bidders for the Notes copies of said Notice Inviting Bids, subject to such changes, additions and completions as may be acceptable to the County Administrator of the County. The proposed form of the Notice of Sale of the Notes, in substantially the form presented to this meeting (a copy of which is on file with the Clerk of the Board) , is hereby approved. The County Administrator of the County is hereby directed to cause said Notice of Sale to be published once, no later than 15 days before the date of sale of the Notes, in the Bond Buyer, a financial publication generally circulated throughout the State of California. Sealed proposals shall be received by the Treasurer-Tax Collector of the County or his designee up to the hour of 10:00 a.m. California time on June 1, 1995 or on such earier or later date determined by the County Administrator of the County as set forth in the Notice Inviting Bids, for the purchase of the Notes for cash at not less than their principal amount and accrued interest thereon to the date of their delivery, the interest rate or rates (which shall not exceed 9% per annum) to be designated in the bid or bids, the County Administrator of the County reserving the right to reject any and all bids, in accordance SF241986.2 4 40511-96-TRS-03/31/95 with the terms and conditions of said Notice Inviting Bids. The County Administrator of the County is hereby authorized to determine whether to accept partial bids in increments of a specified denominational amount, such as $25,000,000, and to award the Notes to the highest responsible bidder or bidders resulting in the lowest net interest cost to the County or to reject any or all bids. If the Notes are awarded to more than one bidder and at different rates of interest, each incremental amount of Notes of the same interest rate shall be given a separate designation. The County Administrator may, in his sole discretion, cancel the public sale of the Notes and negotiate for the sale of the Notes with an underwriter or underwriters, and enter into an agreement for the sale of the Notes, upon such terms and conditions as he shall deem appropriate. Section 4. Official Statement for Notes. The proposed form of official statement relating to the Notes, in substantially the form presented to this meeting (a copy of which is on file with the Clerk of the Board) , is hereby approved with such changes, additions, completions 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 potential bidders for the Notes and is hereby authorized and directed to deliver such official statement in final form to the purchasers of the Notes. The County Administrator of the County is authorized to certify on behalf of the County that the preliminary form of the official SF241986.2 5 40511-96-TRS-03/31/95 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 5. 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 certificates, agreements and other documents which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and sale of the Notes in accordance with this Resolution. SF2-41986.2 6 40511-96-TRS-03/31/95 PASSED AND ADOPTED by the Board of Supervisors of the County of Contra Costa, State of California, this 4th day of April, 1995, by the following vote: AYES: Supervisors Rogers, Smith, DeSaulnier and Torlakson NOES: Supervisor Bishop ABSENT: None Chair of the Board of Supervisors of the County of Contra Costa (Seal) Attest: BPhil- Batchelor, County 'Administrator and Clerk 'sof:'the .Board of Supervis is of the County of Contra Costa By: SF241996.2 7 40511-96-TRS-03/31/95 CLERK'S CERTIFICATE 1, 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 April 4, 1995, 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 4th day of April, 1994. By Q , 9 f ; Diputy Clerk of the Board of Supervisors of the County of Contra Costa, State of California SF2-41986.2 8 40511-96-TRS-03/31/95 OH&S Draft 3/28/95 INDENTURE BY AND BETWEEN THE COUNTY OF CONTRA COSTA AND U.S. TRUST COMPANY OF CALIFORNIA, N.A. , as Paying Agent RELATING TO THE COUNTY OF CONTRA COSTA, CALIFORNIA, 1995-1996 TAX AND REVENUE ANTICIPATION NOTES Dated as of July 1, 1995 SF2.41959.1 40511-96-TRs-03129/95 This INDENTURE, dated as of July 1, 1995, by and between U.S. TRUST COMPANY OF CALIFORNIA, N.A. , a national banking association duly organized and existing under and by virtue of the laws of the United States of America, as Paying Agent, and the COUNTY OF CONTRA COSTA, a public body, corporate and politic, and a political subdivision of the State of California; W I T N E S S E T H WHEREAS, pursuant to Sections 53850 et seg. of the Government Code of the State of California (the "Government Code") , the Board of Supervisors . (the "Board") of the County of Contra---Ccs da_(tha=.9!CauntV—�--), ,has ined that ;`she sum of not to exceed Hundred Million Dollars ($ ,000,000) is needed for the requirements of the County to sat fy obligations payable from the General Fund and that- it is 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 1995-1996; and WHEREAS, it appears, that said sum of Hundred Million Dollars ($ ,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 1995-1996 and available for the payment of the principal of and interest on the Notes; and WHEREAS, no money has heretofore been borrowed by the County through the issuance of any temporary notes in anticipation of the receipt of, or payable or secured by, taxes, income, revenue, cash receipts .or other moneys of the County received or accrued during or allocable to Fiscal Year 1995-1996; 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 1995-1996 can be pledged for the payment of the principal of and interest on the Notes; 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 $ ,000,000 and with authorization to issue and sell a second series of notes (the "Notes of Series B") in the amount of not to exceed $_,000, 000 in the event a second series can be sold on the terms set forth herein; SF241959.1 40511-96-TRS-03128/95 WHEREAS, the execution and delivery of this Indenture and the issuance of the Notes hereunder have in all respects been duly and validly authorized by resolutions duly passed and approved by the Board of Supervisors of the County; and WHEREAS, the County represents that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and the entering into of this Indenture do exist, have happened and have been..performed in regular and due time, form and manner as requried by law, and the parties hereto are now duly authorized to execute and enter into this Indenture; Authorization -&hd ssuance: 50 a-I y- BrM the purpose of anticipating.taxes, income, revenues, cash receipts and other moneys to -be received by the County for the General Fund of the County allocable to Fiscal Year 1995-1996, and not pursuant to any common plan of financing, the County hereby determines to and shall borrow the aggregate principal sum of not to exceed Hundred Million Dollars ($ ,000,000) , by the issuance of temporary notes under Sections 53850 et seq. of the Government Code, designated the "County of Contra Costa, California, 1995-1996 Tax and Revenue Anticipation Notes, " and shall be issued as Notes of Series A in an amount of $_,000,000 and Notes of Series B in an amount not to exceed $_, 000,000. The Treasurer-Tax Collector of the County, upon consultation with Orrick, Herrington & Sutcliffe ("Bond Counsel") , is hereby authorized to determine the aggregate principal amount of the Notes of Series B, which amount shall not in the aggregate exceed Hundred Million Dollars ($ ,000,000) , in such lesser amount upon which 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 each series. The Notes shall be initially issued and registered as provided in Section 7 hereof and otherwise shall be in the denomination of $5,000 or any integral multiple thereof, each series thereof shall be dated the date of issuance thereof and shall, in the case of the Notes of Series A, be issued on or before August 1, 1995' and shall, in the case of the Notes of Series B, be issued on or before December 1, 1995, shall mature (without option of prior redemption) on July _, 1996, 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 (except that the Notes of Series B shall mature no earlier than the Notes of Series A) , 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 rates determined in accordance with this Indenture and, as to the Notes of Series A, at the rate per annum of %, and, as to the Notes of Series B, as hereinafter determined by this Board. Both the principal of and interest on the Notes shall be payable in lawful money of the United States of America, only to the registered owners of the Notes upon surrender thereof at the office of U.S. Trust Company of California, N.A. (the "Paying 3F241959.1 2 40511-96-rxs-03/28/95 Agent") in Los Angeles, California upon the maturity thereof. No interest shall be payable on any Note for any period after maturity during which the registered owner thereof fails to properly present such Note for payment. At any time after the sale of the Notes of Series A, the County shall execute the Notes of SeriesA for issuance hereunder and shall deliver them to the Paying Agent, and thereupon the Notes of Series A shall be authenticated and delivered by the Paying Agent to the purchaser thereof upon the written request of the City and upon receipt of payment therefor from the purchaser thereof. ,.. .. ,Section 2. pis position. of_,JProceeds,a�f_Notes— The_- County shall, immediately"upon receiving the proceeds of the sale of the Notes of each series, place in the County General Fund maintained in the County Treasury all amounts received from such respective sale. Such amounts held..in the .County General Fund shall be invested as permitted by Section 53601 of the Government Code provided that no such investments shall be invested in "reverse repurchase agreements" permitted by subsection (i) of said Section 53601, and no such investments shall have a maturity later than the date that it is anticipated that such amounts will be required to be expended. Such amounts may be commingled with other funds of the County. Amounts in the County General Fund attributable to the sale of the Notes of Series A and, if. issued, the Notes of Series B, shall be withdrawn and expended by the County for any purpose for which the County is authorized to expend funds from the General Fund of the County, but (except for costs related to the issuance of the Notes) only after exhausting funds otherwise available for such purposes (which are not restricted funds) , and only to the extent that on any given day such other funds are not then available, and for purposes of this section, otherwise available funds excludes amounts that are held or set aside in a reasonable working capital reserve (as described in the tax certificate of the County delivered upon issuance of the Notes and, in any event, not exceeding five percent (5%) of the. Countyfs total working capital expenditures from its available funds in fiscal year 1994-1995) . If on the date that is six months from the date of issuance of the Notes of Series A, and, if issued, the Notes' of Series B, all amounts attributable to the proceeds of the Notes (including investment earnings thereon) have not been so expended, the County shall promptly notify Bond Counsel and, to the extent of its power and authority, comply with the instructions from Bond Counsel as to the means of satisfying the rebate requirements of Section 148 of the Internal Revenue Code of 1986 (the "Code") . Section 3. Source of Payment. (A) 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 SF2-41959.1 3 40511-96-TRS-03n8i95 1995-1996 and which are lawfully available for the payment of current expenses and other obligations of the County (the "Unrestricted Revenues") . (B) As security for the payment of the principal of and interest on the Notes, the County hereby pledges to transfer to the Paying Agent for deposit in trust in a special fund designated as the 111995-1996 Tax and Revenue Anticipation Note Repayment Fund" (the "Repayment Fund") , which fund the Paying Agent hereby agrees to establish and maintain while any Notes are outstanding: (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 f -15_F-=and=- endIng Januar y= X99:5, _incIusilre . (the 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 , 1996 and ending May 1996, 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. The amounts pledged by the County, for transfer- to the Paying: Agent for deposit into the Repayment Fund from the Unrestricted Revenues received during each indicated accounting period are hereinafter called the "Pledged Revenues. " (C) In the event that there have been insufficient Unrestricted Revenues received by the County by the third business day prior to the end of any such Accounting Period to permit the transfer to the Paying Agent for deposit into the Repayment Fund of the full amount of the Pledged Revenues required to be deposited with respect to such Accounting Period, 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 the Notes and the interest thereon (all as provided in Sections 53856 and 53857 of the Government Code) (the "Other Pledged Moneys") on such date or thereafter on a daily basis, when and as such Pledged Revenues and Other Pledged Moneys are received by the County. Section 4. Pledged- Revenues. (A) ThePledged Revenues with respect to the accounting period in which received shall be transferred by the Treasurer-Tax Collector of the County to the Paying Agent for deposit in the Repayment Fund commencing the third business day of each respective accounting period, and thereafter at intervals of no more than every five business days, and applied as directed in this Indenture; and the Other Pledged Moneys, if any, shall be transferred by the Treasurer-Tax Collector of the County to the Paying Agent for deposit in the Repayment Fund on the third SF2-41959.1 4 40511-96-TRS-03/28/95 business day prior to the end of such accounting period and on 'each business day thereafter, until the full amount of the moneys required by Section 3 (B) has been so deposited in the Repayment Fund; provided that, if on the date that is six months from the date of issuance of the Notes of Series A all amounts attributable to the proceeds of the Notes of Series A and, if issued, the Notes of Series B (including investment earnings thereon) have not been expended in accordance with Section 2, the amounts to be transferred to the Paying Agent for deposit in the Repayment. Fund during the accounting period in which received shall be transferred to the Paying Agent for deposit as soon as received. The principal of and interest on the Notes constitute a first lien and charge on, and shall be payable from, moneys in -- the Repal-m�xkt-:=F,and,.: a.Mrne� -.in ,the. R,epzymert�- nc�.,shall be _ - : applied only as hereinafter in this Section 4 provided. (B) The Paying Agent shall use the .moneys in the: Repayment Fund on the maturity date of the. Notes to pay the, principal of and interest on the Notes. Any moneys remaining in the Repayment Fund after such payment, or after provision for such payment has been made, shall be transferred by the Paying Agent to the County Treasurer-Tax Collector for deposit in the General Fund of the County. (C) Moneys in the Repayment Fund shall be invested as permitted by Section 53601 of the Government Code, except that no moneys shall be invested in investments permitted by subsection (i) (to the extent that subsection (i) applies to reverse repurchase agreements) of said Section 53601, and no such investments shall have a maturity date later than the maturity date of the Notes. The proceeds of any such investments shall be retained in the Repayment Fund .until payment of principal of and interest on the Notes (or provision therefor) has been made in accordance with paragraph (B) , at which time any excess amount shall be transferred by the Paying Agent to the County Treasurer- Tax Collector for deposit in the General Fund of the County. Section 5. Execution .of Notes. The Treasurer-Tax Collector of the County or his designee is hereby authorized to execute the Notes by use of his manual or facsimile signature, and the Clerk of the Board. of Supervisors of the County or one of his assistants is hereby authorized to countersign, by manual or facsimile signature, the Notes and to affix the seal of the Board of Supervisors thereto by impressing the seal or by imprinting a facsimile of the seal thereon. Said officers are hereby authorized to cause the blank spaces in Exhibit A to be filled in as may be appropriate and to deliver the Notes of each series to the Paying Agent. In case any officer whose signature appears on the Notes shall cease to be such officer before the delivery of the Notes to the purchaser thereof, such signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office until such delivery of the Notes. SF2-419591 5 40511-96TRS-03/28/95 Only those Notes bearing thereon a certificate of . authentication in the €orm hereinbefore recited, executed manually and dated by the Paying Agent, shall be entitled to any benefit, protection or security hereunder or be valid or obligatory for any purpose, and such certificate of the Trustee shall be conclusive evidence that the Notes so authenticated have been duly authorized, executed, issued and delivered hereunder and are entitled to the benefit, protection .and security hereof. Section 6. Form of Notes and Certificate of Authentication and Recgistration. The Notes shall be issued in fully registered form without coupons and the Notes and the Certificate of Registration -shall be substantially in the form _ and .substance ,set forth in. Exhibit A_attached-her-eto_amd-by_. reference incorporated herein, the blanks in said form to be filled in with appropriate words and figures. Section 7. Use of Depository: Registration, Exchange and Transfer. (A) The Depository Trust Company, New York, New York, is hereby appointed depository for the Notes. The County Administrator of the County, or his designee, is hereby authorized to execute and deliver to the depository the Letter of Representations substantially in the form submitted to this meeting (a copy of which is on file with .the Clerk of the Board) , with such changes, additions and corrections as the County Administrator of the County shall require or approve. The Notes of each series shall be initially issued and registered in the name of "Cede & Co. , " as nominee of The Depository Trust Company, New York, .- New York and shall be evidenced by a single Note for each series. Registered ownership of each Note, or any, portion thereof, may not thereafter be transferred except as set forth in Section 7(B) . (B) The Notes shall be initially issued and registered as provided in Section 7 (A) hereof. Registered ownership of the Notes, or any portions thereof, may not thereafter be transferred except: (i) to any successor of Cede & Co. , as nominee of The Depository Trust Company, or its nominee, or of any substitute depository designated pursuant to clause (ii) of this subsection (B) ("Substitute Depository") ; provided that any successor of Cede & Co. , as nominee of The Depository Trust Company or Substitute Depository, shall be qualified under any applicable laws to provide the service proposed to be provided by it; (ii) to any Substitute Depository not objected to by the County Administrator of the County, upon (1) the resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor), from its functions as depository, or (2) a determination by the County Administrator of SF2-41959.1 6 40511-94-TRS-03/28/95 Paying Agent shall have any responsibility or obligation, legal or otherwise, to any such beneficial owners or to any other party, including.The Depository Trust Company or its, successor (or Substitute Depository or its successor) , except to the owner of any Notes, and the Paying Agent may rely conclusively on its records as to the identity of the owners of the Notes. (E) Notwithstanding any other provision of this Indenture and so long as all outstanding Notes are registered in the name of Cede & Co. or its registered assigns, the County and the Paying Agent shall cooperate with Cede & Co. or its registered assigns, as sole registered. owner, in effecting payment of the principal of and interest on the Notes by . rY arranging, for, payment-An- suchmanner- that-tunds for such payments - - are properly identified and are -made available on the date they are due all in accordance with the Letter of Representations, the provisions of which the Paying Agent may rely upon to implement the foregoing procedures notwithstanding any inconsistent provisions herein. (F) In the case of any transfer pursuant to clause (iii) of subsection (B) of this Section, any Note may, in accordance with its terms, betransferred or exchanged for a like aggregate principal amount in authorized denominations of the same series, upon the books required to be kept by the Paying Agent. pursuant to the provisions hereof, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Note for cancellation, and, in the case of a transfer, accompanied by delivery of a written instrument of. transfer, duly executed and in form approved by the Paying Agent. Whenever any Note shall. be surrendered for transfer or exchange, the County shall execute and the Paying Agent shall authenticate and deliver a new Note or Notes of the same series of authorized denominations, for a like aggregate principal amount of the same interest rate. The Paying Agent shall require the owner requesting such transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. (G) The Paying Agent will keep or cause to be kept sufficient books for the registration and transfer of the Notes, which shall at all times be open to inspection by the County. Upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on such books, Notes as hereinbefore provided. (H) If any Note shall become mutilated, the County, at the expense of the owner of such Note, shall execute, and the Paying Agent shall thereupon authenticate and deliver a new Note of like series, tenor and number in exchange and substitution for the Note so mutilated, but only upon surrender to the Paying SF241959.1 8 40511-9e-rxs-03128/95 Agent of the Note so mutilated. Every mutilated Note so surrendered to the Paying Agent shall be cancelled by it and delivered to, or upon the order of, the County. If any Note shall be lost, destroyed or stolen, evidence of such loss, destruction or theft maybe submitted to the County and the Paying Agent and, if such evidence be satisfactory to both and indemnity satisfactory to them shall be given, the County, at the expense- of the owner, shall execute, and the Paying Agent shall thereupon authenticate, if required, and deliver a new Note of like series, interest rate, tenor and number in lieu of and in substitution for the Note so lost, destroyed or stolen (or if any such Note shall have matured or shall be about to mature, instead of issuing a substitute Note, the Paying Agent may pay the same iithout surret�de =ticie x j . The=_Pay ng�-Aad may=require paynrant - - -- 'by the registered owner of a Note of a sum not exceeding the actual cost of preparing each new Note issued pursuant to this paragraph and. of the expenses which may be incurred by the County and the Paying Agent. _ Any Note issued under these provisions- in lieu of any Note alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the County whether or not the Note so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Notes secured by this Indenture. All Notes surrendered for payment or registration of transfer, if surrendered to any person other than the Paying Agent, shall be delivered to the Paying Agent and shall be promptly cancelled by it. The County may at any time deliver to the Paying Agent for cancellation any Notes previously authenticated and delivered hereunder which the County may have acquired in any manner whatsoever, and all Notes so delivered shall promptly be cancelled by the Paying Agent. No Note shall be authenticated in lieu of or in exchange for any Notes cancelled as provided herein, except as expressly permitted hereunder. All cancelled Notes held by the Paying Agent shall be disposed of as directed by the County. Section S. General Covenants. It is hereby covenanted' and warranted by the Board that all representations and recitals contained in this Indenture 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 Indenture and the Notes. Section 9. 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 sF2-41959.1 9 40511-9&Txs-03n8/95 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 and complying with the instructions of Bond Counsel referred to in Section 2 hereof, 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-f.rom -the;date of tL-, - Series !A,.„= ,:tz_.- ___ 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, 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 1995-1996 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 9. (B) The County shall establish and maintain a fund separate from any other fund established and maintained hereunder designated as the 111995-1996 Tax and Revenue Anticipation Note Rebate Fund". There shall be deposited in the Rebate Fund such amounts as are required to be deposited therein in accordance with the written instructions from Bond Counsel pursuant to Section 2 hereof. (C) Notwithstanding any other provision of this Indenture to the contrary, upon the County's failure to observe, or refusal to comply with, the covenants contained in this Section, no one other than. the owners or former owners of the Notes or the Paying Agent shall be entitled to exercise any right- or remedy under this Indenture on the basis of the County's failure to observe, or refusal to comply with, such covenants. (D) The covenants contained in this Section shall survive the payment of the Notes. (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, 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. SF241959.1 10 40511-96-rxS-Mt28/95 Section 10. Paying Agent. U.S. Trust Company of California, N.A. is hereby appointed as Paying Agent for the Notes. The County hereby directs and authorizes the payment by the Paying Agent of the interest on and principal of the Notes when such become due and payable, from the Repayment Fund in the manner set forth herein. The County hereby covenants to transfer to the Paying Agent funds for deposit in the Repayment Fund at the times and in the amounts specified herein to provide sufficient moneys to pay the principal of and interest on the Notes on the day on which they mature. Payment of the Notes shall be in accordance with the terms of the Notes and this Indenture. - - _The Paying Agent is_also appointed As-regi str_ar_and upon the request of any registered owner is authorized to record the transfer or exchange of Notes in accordance with the provisions hereof. Section 11. Proceedings Constitute Contract. The provisions of the Notes and of this Indenture shall constitute a contract between .the. County and the registered owners of the Notes, 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, shall be irrepealable. Section 12. Governing Law. This Indenture shall be construed and governed in accordance with the laws of the State of California. Section 13. Effective Date of Indenture. This Indenture shall take effect upon its execution and delivery. SF2-41959.1 11 4W11-%-TRS-W128/95 Section 14. Execution in Countervarts. This Indenture may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument. U.S. TRUST COMPANY OF CALIFORNIA, N.A. , as Paying Agent By Authorized Officer COUNTY OF CONTRA COSTA - T' -"- 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: SP2-41959.1 12 40511-%-TRS-05/28/95 EXHIBIT A REGISTERED REGISTERED No. $ COUNTY OF CONTRA COSTA, CALIFORNIA, 1995-1996 TAX AND REVENUE ANTICIPATION NOTE SERIES PART Rate of Interest: Note Date: Maturity Date: CUSIP NO: Registered Owner: CEDE & CO. 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 U.S. Trust Company of California, N.A. (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, 1995-1996 Tax and Revenue Anticipation Notes" (the "Notes") , in the aggregate principal amount of not to exceed Hundred Million Dollars ($ ,000, 000) , of the se ies and part of a series designated above, all of like tenor, made, executed and given pursuant to the authority of Article 7.6 (commencing with Section 53850) of Chapter 4, Part 1, Division 2, Title 5 of the California Government Code and all laws amendatory thereof or supplemental thereto, and under and pursuant to the provisions of an Indenture, dated as of July 1, 1995 (herein called the Indenture") , between the Paying Agent and the County, authorizing the issuance of the Notes, and that all acts, conditions and things required to exist, happen and be performed precedent to and in the issuance of this Note have SF241959.1 A-1 40511-96-TRS-03/28!95 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. 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 1995-1996 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, .t_ he__CQunty; has__pledged to Ttransfer totthe-Pay : _Agar-t_ for. deposit in the Repayment Fund (as defined in the Indenture) : (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_, 1995 and ending January _, 1996, 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 _, 1996 and ending May 1996,- 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 transfer to the Paying Agent for 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 transferred to the Paying Agent for deposit in the Repayment Fund. at the intervals specified in the Indenture. 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 ownerfs 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 Indenture, 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 will be issued to the transferees in exchange herefor. SF241959.1 A-2 40511-96TRS-03/28/95