HomeMy WebLinkAboutMINUTES - 04281998 - C69 ..................................I.......................................................................................................................................................................
.. ................................................................I.................
BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA
RESOLUTION NO. 98/207
RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF COUNTY
OF CONTRA COSTA, CALIFORNIA, 1998-1999 TAX AND REVENUE
ANTICIPATION NOTES;APPROVING THE FORMS OF AND DIRECTING
THE DISTRIBUTION OF A NOTICE OF INTENTION TO SELL,OFFICIAL
NOTICE OF SALE AND AN OFFICIAL STATEMENT;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,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 enterprise funds of the County(collectively,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 1998-1999;
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 1998-1999 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 1998-1999;
WHEREAS,pursuant to Section 53856 of the Government Code,certain revenues
which will be received by the County for the General Fund and attributable to Fiscal Year 1998-
1999 can be pledged for the payment of the principal of and interest on the Notes;
WHEREAS,the County wishes to authorize the issuance of the Notes in an
amount not to exceed $150,000,000;
WHEREAS,the Notes shall be sold to the highest bidder or bidders pursuant to a
competitive sale to be held on June 2, 1998 or on such earlier or later date as is established by the
DOCSSFI:2508623
.-_...... ......... ......... ......... ......... 1.111. _
.. ..............111.1.. ......... ......... .........1....1...1.1 ......... ......... ......... ......... ......... .._11.11.
_ _ _. ......... ......... ......... ......... ........... ...... ......._.................
company has completed construction of a$160 million natural-gas-fired cogeneration plant to fulfill its own
requirements for electricity and steam.
A number of Chevron's divisions are located throughout the County. Chevron Products Company is
located in Richmond where 1,500 employees work at an oil refinery and management office. Chevron
Research and Technology Company, located in Richmond, is the only non-geological research arm of the
company. This facility employs 1,170 people and is used by Chevron Research in its continuing program to
improve the efficiency of conventional auto, aircraft and marine fuels. Chevron Accounting Division is
located in a 400,000 square foot building in Concord where 2,300 employees operate the accounting and
credit card center for Chevron's entire domestic operations. Chevron also operates a facility in San Ramon
where 350 employees are involved in computer, marketing, consumer services and other administrative
functions.
Chevron is the third largest company in the San Francisco Bay Area(as measured by market value)
and is the largest employer in the County,reporting approximately 45,758 people on its worldwide payrolls as
of December, 1995. The company has over 5,000 employees located among its various facilities in the
County.
Shell Oil Company ("Shell") began operating in Martinez in 1915. The Shell Oil and Chemical
Martinez Manufacturing Complex, located on 1,100 acres, is a combined oil refinery and industrial chemical
production plant. It is one of three Shell facilities on the West Coast that supply all Shell products to the
western states. The complex currently has the capacity to process about 145,000 to 160,000 barrels of crude
oil per day. About 70-80% of this crude oil is transferred via the company's pipeline from California oil
fields, white the remainder is shipped from Alaska. Shell's docking facilities can handle two tankers and two
barges simultaneously. Finished petroleum products are shipped via a company owned pipeline, Southern
Pacific Railroad's pipeline,and by rail car and truck.
Shell employees in the County total approximately 930, of whom approximately 880 work at the
Martinez complex and 50 work at a retail district office in Concord.
Tosco Refining Company, a wholly owned subsidiary of Tosco Corporation("Tosco"), operates an
oil refinery at Rodeo between the cities of Richmond and Martinez, a distribution terminal for Northern
California at Richmond,which began operations in 1896, occupies 1,100 acres and processes up to 100,000
barrels of raw materials per day. There are 600 full-time employees at the refinery and 75 at the distribution
terminal. Tosco also operates a second refinery with a capacity of 150,000 barrels per day and a chemical
plant on Franklin Canyon Road near Highway 4 in the County.
In order to comply with State and federal clean air laws, the County's major oil refineries have built
new facilities to produce cleaner gasoline and other products. The refinery projects are known as "Clean
Fuels Projects". Following are the locations and sizes of each of the Clean Fuels Projects that employ a
significant number of County residents.
A-4
..... ......... ......... ......... ......... ......... ......... 111.1
.._ .......... _........ ......... ......... ......... ........ ......... 1.11 ....1 ......... ......... ......... ......... .........
_. _._. . ......................................................
COUNTY OF CONTRA COSTA
CLEAN FUEL PROJECTS
Investment
Company City ($million)
Chevron Corp. Richmond $ 500
Tosco Corp. Avon 400
Shell Oil Co. Martinez 1,300
Tosco Corp. Rodeo 300
Total $2,500
Health Care, One of the Bay Area's largest private employers, Kaiser Permanente Medical Group
has approximately 3,300 employees in the County. Kaiser provides medical coverage to about one in three
Bay Area residents and operates hospital and clinic facilities in Martinez,Antioch and Walnut Creek.
Telephone Services. SBC, the Bay Area's ninth largest company as measured by market value,
reported 49,000 worldwide employees as of December 1995. The company has been trimming its worldwide
workforce over the past five years as a result of cost reductions,restructuring, and buyouts. The San Ramon
Chamber of Commerce reported in early 1995 that the company's employment totals approximately 7,500 at
its Bishop Ranch offices in the County.
The following table provides a listing of major companies located or headquartered in the County
and their recent employment levels.
COUNTY OF CONTRA COSTA
MAJOR COMPANIES LOCATED OR HEADQUARTERED IN THE COUNTY
AND EMPLOYERS WrrH MORE THAN 1,000 EMPLOYEES
Firm Primary Locations Product Employment(')
Bank of America Concord Financial Services 20,095
SBC San Ramon Telecommunications 16,832
Safeway Countywide Retail Food Outlets 15,800
Chevron Corporation Richmond,Concord,San Ramon Petroleum Products 9,078
County of Contra Costa(2) Martinez County Government 7,246
Longs Drugs Store(2) Walnut Creek Drug Stores 5,000
Kaiser Permanente Medical Group Martinez,Walnut Creek Health Care Service 3,300(')
Fibreboard(') Concord Wood Products 3,000
Bio-Rad(2) Hercules Clinical Testing Equipment 2,420
Village Resorts Lafayette Resort Condominiums 1,800(')
Central Garden Supply Lafayette Wholesale Garden Supplies 1,450
TakeCare(') Concord Health Maintenance 1,403
Knight-Ridder Walnut Creek Newspapers 1,267(')
Naval Weapons Station(2) Concord Munitions Depot 1,175
North American Title Co. Walnut Creek Title Insurance 1,1400)
Fresenius USA(2) Walnut Creek Medical supplies 1,100
City of Concord(2) Concord City Government 1.025
(1) Estimates;may include entire Bay Area workforce.
(2) Headquartered in the County
(3) As of April, 1993.
Source: The San Francisco Chronicle, "The Chronicle 100", April 1997; San Ramon Chamber of Commerce; Contra
Costa Times,"Top 50" July, 1992.
A-5
._-.._.. ......... ......... ......... ......... ......... ......... ......... ......... .._... . _
..... ........... ......... ......... ........ ........... ....... ....... . ........ ......... .. ...... . . ............ .... .........
Impact of Military Base Closings
The U.S. Congress enacted legislation in 1990 to close a number of domestic and international
military bases, including several in the Bay Area. A total of four rounds of base closures were announced
between 1988 and March, 1995. The list of bases in Northern California with scheduled closure dates
included Presidio Army Base, Letterman Hospital, Treasure Island Naval Station, and Hunter's Point Annex
of Treasure Island Naval Air Station (San Francisco County), East Fort Baker (Marin County), Alameda
Naval Air Station,Oakland Naval Hospital,Alameda Naval Aviation Depot, and Naval Public Works Center
(Alameda County), Fort Ord (Monterey County), Moffett Field Naval Air Station (Santa Clara County),
Sacramento Army Depot and Mather Air Force Base (Sacramento County), Mare Island Shipyard (Solan
County),and Castle Air Force Base(Merced County).
According to the 1993 Report of the California Military published by the Base'Reuse Task Force,
approximately 42,000 military positions and 26,000 civilian jobs are expected to be lost in Northern California
as these facilities are gradually closed. In Southern California, approximately 34,000 military positions and
9,000 civilian jobs are expected to be lost at seven military bases in Los Angeles, Orange, San Diego,
Imperial, and San Bernardino Counties. The cumulative impact of the defense cutbacks -including defense
contractors, civilian workers, and jobs that depend on military spending - includes the loss of an estimated
200,000 to 300,000 jobs in California at a cost of$5 billion to$7 billion, although this cost is expected to be
offset by the privatization and conversion of the closed military facilities to commercial use over a period of
time.
The cutbacks in nearby Northern California facilities are not expected to significantly affect the
County's economy.
The only military installation located in Contra Costa County is the Naval Weapons Station in
Concord,a facility that is not slated for closure.
Measures of Income
Owing to the presence of relatively high-wage skilled jobs and wealthy residents, the County
achieves high rankings among all California counties on a variety of income measurements. For example, as
reported in the 1997 Sales and Marketing Management Survey of Buying Power, the County's median
household effective buying income for the 1996 calendar year of$48,648 was the third highest among all
California counties. According to the U. S, Department of Commerce's Bureau of Economic Analysis,the
County's per capita personal income of$31,246 in 1995 was the fifth highest among California counties. The
medians for the State were$34,553(household income)and$24,090(per capita income).
A-6
.
__.
Commercial Activity
Commercial activity comprises an important part of Contra Costa County's economy, with dollars
generated by taxable transactions totaling approximately$8.6 billion in 1996.
COUNTY OF CONTRA COSTA
TAXABLE TRANSACTIONS
(1992 TO 1996)
(IN THOUSANDS)
1992 1993 1994 1995 1996
Apparel Stores $ 273,882 $ 276,507 $ 263,835 $ 246,879 $ 261,695
General Merchandise Stores 1,201,982 1,156,050 1,166,204 1,223;187 1,213,152
Specialty Stores 702,994 720,715 754,092 817;531 890,623
Food Stores 512,195 435,502 428,585 433;,694 458,877
Packaged Liquor Stores 50,195 40,707 38,242 39;972 42,925
Eating and Drinking Places 546,431 549,473 563,770 591;767 625,283
Home Furnishings and
Appliances 265,447 273,110 270,691 283;020 323,400
Building Materials and Farm
Implements 432,665 461,036 492,850 493;436 543,324
Service Stations 519,478 510,835 507,073 551,686 538,840
Automotive and Vehicle
Dealers,Parts and Supplies 795,286 842.469 868,095 927,563 1,046,980
Total Retail Outlets $5,300,555 $5,266,404 $5,353,437 $5,608,735 $5,945,099
Business and Personal Services $ 308,261 $ 313,314 $ 326,664 $ 330,063 $ 365,029
All Other Outlets , $1,956,354 $1,896,702 $2,138,064 $2,400 957 $2,265,576
Total All Outlets $7,565,170 $7,476,420 $7,818,165 $8,339;155 $8,575,704
Source: State Board of Equalization
Much of the County's commercial activity is concentrated in central business districts of the cities
and unincorporated towns. In addition, four regional shopping centers and numerous smaller centers serve
County residents. The regional centers, located in the cities of Richmond, Concord, Walnut Creek and
Antioch are each anchored by at least three major department stores. The largest regional shopping center in
the County is Sun Valley Shopping Center,Concord,which features 130 stores including Macy's, Sears,J. C.
Penney's and Mervyn's. In addition, Price Costco's large warehouse stores are located.in Richmond and
Martinez and Sam's Club is located in Concord.
The County is served by all major banks including Bank of America NT&SA and Wells Fargo Bank.
In addition there are numerous local banks and branches of smaller California and foreign banks. There are
over 30 savings and loan associations in the County,including Home Savings,Great Western,San Francisco
Federal and California Federal
Construction Activity
The value of residential building activity decreased slightly in 1997, although it remains above the
lowest level reached in 1991 while the recent California recession was at its deepest point. The overall
decline was a result of decreased multi-family unit construction, while the single-family sector posted a
marginal gain.
Within cities in the County, Brentwood accounted for the largest percentage (18.2%) of total
valuation growth in 1997 at$106.3 million.
A-7
_. . _... ......... ......... ......... ......... ........_...
.......... ........._.. ........... ....... .. ............... ............. . .. . ...... ........ ......... ......... ......... ....._.... ... ..
... .._._.... ......... ......... ........ .. ............ .... .........
The following table provides a summary of building permit valuations and number of new dwelling
units authorized in the County since 1987.
COUNTY OF CONTRA COSTA
BUILDING PERMIT VALUATIONS 1988- 1997
Valuation($millions) Number of New Dwelling Units
Residential Single Mu16131C
Year (New) Nonresidential Total Family Emily Total
1988 $785,925 $214,201 $1,000,126 5,853 2,171 : 8,024
1989 863,313 264,020 1,127,333 5,504 2,219 7,723
1990 560,193 252,443 812,636 3,132 1,149 4,281
1991 488,939 196,165 685,104 2,705 1,275 3,980
1992 638,714 207,099 845,812 3,279 614 : 3,893
1993 590,135 183,156 773,291 3,026 451 3,477
1994 699,395 166,160 865,555 3,682 230 3,912
1995 619,685 190,443 810,128 2,137 618 3,755
1996584,108 NIA N/A 3,094 450 3,580
1997' 582,793 NIA N/A 3,105 381 3,486
Note: Totals may not be precise due to independent rounding
Sources: Data Resources Inc.: 1988; Economic Sciences Corporation: 1989- 1997.
In terms of major construction projects in the County, approximately$2.5 billion was recently spent
by several major oil refiners to comply with federal clean fuels guidelines(see"Major Employers-Petroleum
and Petroleum Products"). In addition,$506 million was spent by Bay Area Rapid Transit District("BART")
on its extension to the West Fittsburgh/Baypoint region of the County, and$450 million of new construction
was completed by the Contra Costa Water District on the Los Vaqueros Reservoir in the eastern portion of the
County.
Approximately$3.8 billion of construction projects are currently underway in the County, including
a$2.2 billion development known as"Dougherty Valley„that will add 11,000 homes to the County's housing
stock and$800 million of new home construction associated with other major subdivision developments. In
addition, approximately $3.6 billion of projects are pending approval, including two projects known as
"Tassajara Valley" and "Cowell Ranch", which involve $2.0 billion of construction spending on 10,000
residential units, and a third project totaling $900 million to retrofit and repair two major bridges in the
County,the Carquinez Bridge and the Benicia Bridge.
Transportation
Availability of a broad transportation network has been one of the major factors in the County's
economic and population growth. Interstate 80 connects the western portion of the County to San Francisco,
Sacramento and points north to Interstate 5, the major north-south highway from Mexico to Canada.
Interstate 680 connects the central County communities to the rest of the Bay Area via State Routes 4 and 24,
the County's major east-west arteries.
On April 23, 1992, Caltrans began Northern California's largest freeway interchange reconstruction
project at the intersection of Interstate 680 and Highway 24 in Walnut Creek. The$315 million project will
add traffic lanes, an elevated bypass, and redesigned access patterns. With the majority of the work being
conducted at night, the project is scheduled to finish in I998. Caltrans is also widening Interstate 80 in the
western portion of the County at a project cost of$200 million.
In addition to private automobiles, ground transportation is available to County residents from the
following service providers:
A-8
..__- ......... ......... ......... ......... ......... ......... ......... ......... ._...._.. . ..
.. ...............__.... ......... ......... .. ............ .. ........ ... ......... ......... . ........ ......... ......... ......... .........
_. _ . ... ......... ........... ...... .........
• Central Contra Costa Transit Authority("CCCTA")provides local bus service to the central
area of the County including Walnut Creek,Pleasant Hill and Concord.
+� Bay Area Rapid Transit("BART')connects the County to Alameda County, San Francisco
and Daly City and Colma in San Mateo with two main lines, one from the San Francisco
area to Richmond and the other to the Concord/Walnut Creek/Pittsburg area. In December,
1996, BART opened its Pittsburg/Bay Point station in the northeast area of the County.
Construction of the 7.8 mile above-ground access down the middle of Highway 4 and the
widening of Highway 4 in the affected region was completed at a cost of approximately
$506 million. BART finished construction of a 14 mile extension to the City of Pleasanton
in nearby Alameda County at a cost of$517 million in May 1997. BART now has 39
stations and 95 miles of roadway in its system. BART is currently in the process of
building an extension to the San Francisco International Airport expected to be completed
by 2003.
AC Transit, a daily commuter bus service based in Oakland, provides local service and
connects Contra Costa communities to San Francisco and Oakland.
Other bus and rail passenger service is provided by Greyhound and Amtrak. Amtrak
operates an intercity line between Oakland and Sacramento that makes several daily stops at
the Martinez and Richmond stations.
0 The Santa Fe and Union Pacific Railroads' main lines service the County, both in the
industrial coastal areas and the inland farm section.
Commercial water transportation and docking facilities are available through a number of port and
marina locations in the County. The Port of Richmond on San Pablo Bay and several privately owned
industrial Clocks on both San Pablo and Suisun Bays serve the heavy industry located in the area. The Port of
Richmond, owned and operated by the City of Richmond, covers 202 acres and handles nearly 20 million
metric tons annually. The majority of the shipments are bulk liquids with the remainder consisting of scrap
metal,autos,and gypsum rock.
Major scheduled airline passenger and freight transportation for County residents is available at
either Oakland or San Francisco International Airports, located about 20 and 30 miles,respectively, from the
County. In addition there are two general aviation fields,one at Byron and the other at Concord.
Agriculture
The County is comprised of 470,400 acres, with over half(254,445) of these acres allocated to
farmlands and harvested cropland. In 1997, the total gross value of agricultural products and crops reached
$95.8 million. The value of agricultural production since 1993 is illustrated in the table below.
A-9
COUNTY OF CONTRA COSTA
AGRICULTURAL PRODUCTION,1993-1997
1993 1994 1995 1996 1997
Nursery products $24,940,000 $25,409,000 $21,782,000 $26,219,000 $31,288,000
Livestock&poultry 7,045,100 3,656,000 3,444,000 4,668,400 5,708,000
Field crops 10,115,600 11,122,000 10,616,900 12,281,800 12,695,700
Vegetable&seed crops 16,067,500 20,242,500 19,037,000 19,899,000 20,033,000
Fruit and nut crops 13,131,700 13,156,900 14,967,500 15,294,000 18,520,000
Livestock,apiary&
poultry products 5,760,950 6.171,680 5,970,430 7,260,490 7,597,420
Total $77,060,850 $80,118,080 $75,817,830 $85,622,690 $95,842,120
Source: Contra Costa County Department of Agriculture.
Environmental Control Services
Water. The East Bay Municipal Utilities District("EBMUD")and the Contra Costa County Water
District("CCCWD")supply water to the County. EBMUD,the second largest retail water distributor west of
the Mississippi, supplies water to the western part of the County. Ninety-five percent of its supply is the
Mokelumne River stored at the 68 billion gallon capacity Pardee Dam. EBMUD is entitled to 325 million
gallons per day under a contract with the State Water Resources Control Board,plus an additional 325 million
gallons per day under a contract with the U.S. Water and Power Resources Service(formerly the U.S. Bureau
of Reclamation). EBMUD does not plan to draw on its federal entitlement for the foreseeable future.
CCCWD obtains its water from the Sacramento-San Joaquin Delta and serves 400,000 customers in
Concord,Pleasant Hill,Martinez,Clayton,Pittsburg and Antioch. It is entitled under a contract with the U.S.
Water and Power Resources Service to 195,000 acre-feet per year. Water sold has ranged between 80,000 and
110,000 acre-feet annually. In addition, a number of industrial users and several municipalities draw water
directly from the San Joaquin River under their own riparian rights, so that actual water usage in the service
area averages about 125,000 acre-feet annually. To provide expanded water storage capacity, CCCWD is
currently constructing the Los Vaqueros Reservoir south of the City of Antioch at an estimated project cost of
$450 million.
Sewer. Sewer services for the County are provided by approximately 20 sanitation districts and
municipalities. Federal and State environmental requirements, plus grant money available from these two
sources,have resulted in about 14 agencies upgrading,expanding and/or building new facilities.
Flood Control. The Contra Costa County Flood Control District has been in operation since 1951 to
plan,build,and operate flood control projects in unincorporated areas of the County except for the Delta area
on its eastern border. The Delta is interspersed with inland waterways which fall under the jurisdiction of the
U.S. Corps of Engineers and the State Department of Water Resources. The District has recently completed
construction of the West Antioch Capacity Improvement Project.
Education and Community Services
Public school education in the County is available through nine elementary school districts,two high
school districts,and seven unified school districts. These districts provide 132 elementary schools, 36 middle,
junior high, and intermediate schools, 27 high schools, and a number of preschool,adult school, and special
education facilities. In addition, there are 121 private schools with six or more students in the County.
School enrollment in January of 1997 numbered approximately 146,102 students in public schools and 16,838
students in regular graded private schools.
A-10
__..... _..... ......... ......... ......... ......... ......... ......... .............._. .... _
_ _ ........ . ......_.. ......... ......... ........ .......... ........ .. ....... . ............ ..... ......... ......... .........
_ __._ ........ ._...._.... ...... ......_.
Higher education is available in the County through a combination of two-year community colleges
and four-year colleges. The Contra Costa County Community College District has campuses in Richmond,
Pleasant Hill and Pittsburg. California State University at Hayward opened a branch campus, called Contra
Costa Center,in the City of Pleasant Hill where late afternoon and evening classes in business,education and
liberal arts are offered. In addition, the California State University currently has a campus in Concord. St.
Mary's College of California,a four-year private institution,is located on a 100-acre campus in Moraga. Also
located within the County is John F. Kennedy University. In addition, County residents are within easy
commuting distance of the University of California at Berkeley.
There are nine privately operated hospitals and one public hospital in Contra Costa County, with a
combined total of 1,900 beds. Three of the private hospitals are run by Kaiser Permanente,the largest health
maintenance organization in the United States. The public hospital is Contra Costa Regional Medical Center,
a facility that the County renovated and opened to the public in Ianuary 1998 on the existing campus in
Martinez.
A-1 I
..............................._.
_ ....... ......_._... .._...... ......... ......... . ......... ......... _....... .. ....... .......... ....... . ............... ...........
APPENDIX B
COUNTY FINANCIAL INFORMATION
..............................................................
.......................................
1111..._. ......... ......... ......... ......... ......... ......... ......... ......... ......... ........._.1...11.1.
.... ............ ......... ......... ........... ....... . ......... ....... ......... ........... .1....111 ......... ...... .........
........ .........
APPENDIX B
COUNTY FINANCIAL INFORMATION
Changes in State Funding and County's Response
California counties administer numerous health and social service programs as the administrative
agent of the State pursuant to State law. Historically, many of these programs have been either wholly or
partially funded with State revenues that have been subject each year to the State budget and appropriation
process.
While the composition of State revenues has shifted over recent years,the overall proportion of the
County's General Fund budget financed by State revenues has remained steady at approximately 35%.
During the three fiscal years from 1991-92 through 1993-94, the State of California experienced
budget deficits largely attributable to the economic recession in California. In response to these budget
deficits, the State in 1991-92 implemented a "realignment program" removing State funding for certain
health and welfare programs from the State budget process and shifting the fiscal responsibility for these
programs to the counties. Under this plan, State funding for these programs was replaced with the sales tax
increase of 112-cent as well as an increase in vehicle license fees. An additional sales tax increase was
subsequently;approved by the voters as Proposition 172, permanently extending the tax for public safety
purposes. The realignment program shifted approximately$2.2 billion out of the State budget process.
In response to continued State budget deficits, the 1992-93 State budget reduced $1.3 billion in aid
to local governments, and the 1993-94 State budget shifted about $2.1 billion in>property taxes from
counties to relieve the State of its obligation to fund education. The property tax revenue losses for counties
were offset in part by additional sales tax revenues and the elimination of state mandates.
Over the last several years, State and federally mandated expenditures injustice,health and welfare
have grown at a greater rate than the County's discretionary general-purpose revenues. At the same time,
decreased State revenues have resulted in fewer State funds being available to the County. The result has
been that the County has increased its contribution to maintain mandated services while optional local
services have been reduced. The Board has responded to this trend in part by instituting measures to
improve management, thereby reducing costs and increasing productivity and maintaining services with
diminished funding.
1996-97 State Budget
On January 10, 1996, the Governor released his proposed budget for the 1996-97 (the "Governor's
1996-97 Budget"). The Governor requested total General Fund appropriations of about$45.2 billion, based
on projected revenues and transfers of about $45.6 billion, which would leave a budget reserve in the
Special Fund for Economic Uncertainties at June 30, 1997 of about$440 million. The May Revision of the
Governor's 1996-97 Budget released on May 21, 1996 reflected stronger economic activity and greater
revenue growth, including $47.1 billion in revenue and $46.5 billion in expenditures. The Budget Act
assumed savings of approximately $660 million in health and welfare costs that required changes in federal
law, including federal welfare reform. The Budget Act further assumed federal law changes in August 1996
which would allow welfare cash grant levels to be reduced by October 1, 1996. These cuts totaled
approximately $163 million of the anticipated $660 million savings. See "Federal Funding and Welfare
Reform" below. The Budget Act also assumed the federal government will provide approximately $700
million in new aid for incarceration and health care costs of illegal immigrants, of which $540 million was
expected to be received during the 1996-97 fiscal year. There was also a proposal (as yet unrealized) to
restructure trial court funding in a way which would result in a $300 million decrease in General Fund
revenues.
B-1
............................._........
1997-98 State Budget
On August 18, 1997, the Governor signed the 1997-98 State Budget. The $67.2 billion budget
reflects $52.5 billion in General Fund revenues/transfers and projected expenditures of$52.8 billion. An
additional$14.4 billion in expenditures is projected in special funds. A year-end surplus of$112 million is
projected for 1997-98.
The projected spending levels include a one-time payment of$1.2 billion to the Public Employees'
Retirement System pursuant to a court ruling in May, 1997.
With respect to welfare reform, the 1997-98 State Budget rejects the Governor's proposal to make
the SSI/SSSP statewide grant reduction payment. The grant was restored on November 1, 1997 and extends
the Aid to Families with Dependent Children (AFDC) grant through October, 1998. Appropriations for
AFDC assistance payments were reduced by 18%from 1996-97 levels due to declining caseloads. Cost of
living adjustments were also suspended on the AFDC and SSUSSP programs. The 1997-98 State Budget
also reflects the Governor's veto of the proposed extension of prenatal services for illegalimmigrants
beyond December, 1997. Food stamp and SSI/SSP benefits which are denied to legal noncitizens under
federal welfare reform will be maintained by the State for children and elderly noncitizens.
The 1997-98 State Budget funds a major Welfare to Work program in the California Work
Opportunity and responsibility to Kids program (CalWORKS). The program establishes aid limits and
participation requirements on adults,and expands childcare and job training services.
Of special interest to counties, the 1997-98 State Budget does incorporate $32.7 million in TANF
funding for probation camps and$100 million in funding for the Citizen's Option for Public Safety Program
(COPs). Approximately $4.3 million of the TANF funding and $1.1 million in COPS funding will be
allocated to Contra Costa County. Additionally,the County received a$1.2 million juvenile challenge grant
for the Probation Department.
Due to the payment to the Public Employees' Retirement System,the return of approximately$3.0
million in property tax revenues to the County from the Educational Relief Augmentation Fund was deleted
from the 1997-98 State Budget. The County received a $1.5 million reduction in the State's
Disproportionate Share Hospital administrative fee.
Federal Funding and Welfare Reform
The federal government provided approximately 16% of the County's 1997-98 General Fund
Budgets. The human services departments receive substantial funds for assistance payments and social
service programs.
On august 22, 1996, President Clinton signed the Welfare Reform Act that makes substantial
modifications to the welfare system. Among other changes,the Welfare Reform Act will allow the State to
deny access to some federally funded welfare assistance programs to legal immigrants(but not to refugees),
which could result in a significant impact on the County's budget. In the aggregate, the bill's restrictions
would reduce federal expenditures in low-income programs by more than $55 billion over the next six
years. Nearly all of the $55 billion in savings come from reductions in the federal food stamp program,
Supplemental Security Income (SSI) program, and assistance to legal immigrants. California would
potentially lose over $10.0 billion in federal funds during the same period of time. Absent revisions to
current state law,the California State Association of Counties has estimated that counties in the State could
see annual costs increase by $1.7 billion, while the State may realize savings of roughly $1.4 billion
annually. This analysis results from the expectation that expenditures required to be:made by counties for
B-2
General Assistance could increase significantly. For example,the annual increase in cost for county-funded
General Assistance due to the reduction of federal assistance to legal immigrants in the County receiving
SSI (one of the assistance programs impacted by amending California Welfare and Institutions Code
Section 17000, which mandates that counties provide support and relief to those residents who are not
supported by other means) could be between $54 million and $118 million under current state law and
General Assistance program parameters. This range of potential additional annual cost represents a worst
case scenario. A more precise estimate of the impacts of the Federal Welfare Reform to the County will not
be possible until the State of California adopts implementing legislation.
It is currently unknown what aspects of welfare reform the State will choose to implement and
whether or not the State will mitigate impacts to the County. If there are additional costs to the County
during the 1997-98 fiscal year due to the Welfare Reform Act or other related legislation, the County
anticipates that it may be necessary to reduce general government service levels by deleting positions and/or
reducing overhead costs. In any event, the County's budget for 1997-98 will be balanced, as required by
law, within the available financial resources. The County Board of Supervisors has repeatedly
demonstrated its resolve to balance the County's budget despite difficult program reductions, impacting
constituents and employees,that have often been necessary to achieve a balanced budget.
1998-99 State Budget [to come]
County Budget Process
The County is required by State law to adopt a balanced budget by August 30 of each year,
although the Board may, by resolution, extend on a permanent basis or for a limited period, the date to
October 2. The County's budget process involves a number of steps.
First, upon release of the Governor's Proposed Budget in January, the County Administrator
prepares a preliminary forecast of the County's budget based on current year expenditures, the assumptions
and projections contained in the Governor's Proposed Budget,and other projected revenue trends.
Second, the County Administrator presents the County's Proposed Budget to the Board of
Supervisors. Absent the adoption of a final County budget by June 30, the current existing budget is
continued into the new fiscal year until a final budget is adopted.
Third, between January and the time the State adopts its own budget, legally due no later than
June 15, representatives of the County Administrator monitor, review and analyze the State budget and all
adjustments made by the State legislature. Upon adoption of the final State budget, the County
Administrator recommends revisions to the Proposed Budget to align County expenditures with approved
State revenue. After conducting public hearings and deliberating the details of the budget,the Board adopts
the County's Final Budget by August 30,or by October 2 if the Board has adopted a resolution to extend the
deadline.
The County adopted its Final Budget for 1997-98 on September 23, 1997,;ahead of the legally
extended deadline of October 31, 1997.
In order to ensure that the budget remains in balance throughout the fiscal year, the County
Administrator monitors actual expenditures and revenue receipts each month. In the event of a projected
year-end deficit, immediate steps are taken, in accordance with the State Constitution, to reduce
expenditures. On a quarterly basis, the County Administrator's staff prepares a report that details the
activity within each budget category and provides summary information on the status of the budget.Actions
which are necessary to ensure a healthy budget status at the end of the fiscal year are recommended in the
quarterly budget status reports. Other items which have major fiscal impacts are also reviewed quarterly.
The County's ability to increase its revenues is limited by State laws which prohibit the imposition of fees to
B-3
................................................................................................................................................................................................
............................................................
raise general revenue, except to recover the cost of regulation or provisions of services. See
"CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES, REVENUES AND
APPROPRIATIONS" in the forepart of this Official Statement.
1996-97 and 1997-98 County General Fund Budgets
Set forth below is a description of the County's comparative budgetary and expenditure experience
for fiscal years 1996-97 through 1997-98. For a summary of the actual audited financial results of the
County for fiscal year 1996-97, see "FINANCIAL STATEMENTS OF THE COUNTY FOR THE FISCAL
YEAR ENDED JUNE 30, 1997" in Appendix D to this Official Statement.
Fiscal Year 1996-97. The County's fiscal year 1996-97 Adopted Budget reflected a 3.9% decline
from fiscal year 1995-96. However, the County experienced a decline in general assistance and welfare
caseloads compared to the prior fiscal year, thereby resulting in greater discretionary County revenue than
in the recent past. The County's 1996-97 Adjusted Budget did not contain any significant budget cuts as a
result of improvement in both the State and local economies.
Fiscal Year 1997-98. The County's Fiscal Year 1997-98 budget is slightly smaller than that of the
prior fiscal year,as shown below. Public assistance costs continued to drop significantly,paced by General
Assistance expenditures, which are projected to be $4.0 million compared to over $6.3 million in Fiscal
Year 1996-97. Expenditure increases in the Public Protection and Health and Welfare categories are
primarily due to federal and State grant increases identified in the 1997-98 State Budget Act. Fund balance
growth accelerated to a 14% increase over Fiscal Year 1996-97. As in Fiscal Yeari 1996-97, the County
budget did not contain any significant budget cuts, as the health of both the State and local economies
continues to improve,
Fiscal Year 1998-99 County General Fund Budget [discussion regarding FY 98-99 budget to come
from County
A comparison of the General Fund Budget portion of the County's 1996-97 Final Budget and the
1997-98 Adjusted Budget is shown below.
B-4
.........................................
__....... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......-_.
........................ ......... ...._... ......... .. ........ ......... . ....... .. ....... . .......... ........ ............. .... .........
__ _. _. .... . ......................
COUNTY OF CONTRA COSTA
GENERAL FUND BUDGETS(')
FOR FISCAL YEARS 19%-97 AND 1997-98
(IN THOUSANDS OF DOLLARS)
Final Adjusted
Budget Budget
1996-972) 1997-98
REQUIREMENTS
General Government $ 92,938 $ 94,328
Public Protection 194,258 199,084
Health and Sanitation 141,778 145,072
Public Assistance 256,137 244,197
Education 11,355 12,582
Public Ways and Facilities 13,862 13,473
Recreation and Culture I I
Reserves and Debt Service 16,328 16,334
Total Requirements $726,657 $725,071
AVAILABLE FUNDS
Property Taxes $ 93,975 $ 96,761
Fund Balance Available 38,014 43,382
Other Taxes 7,319 9,265
Licenses,Permits and Franchises 10,850 11,838
Fines,Forfeitures and Penalties 13,712 10,934
Use of Money and Property 12,871 12,196
Intergovernmental 393,680 392,565
Charges for Current Services 111,110 109,078
Other Revenue 45,126 38.952
Total Available Funds $726,65 $725,071
(1) Includes General Fund,Library Fund,Land Development Fund,and Child Development Fund.
(2) Final Budget,as adjusted through March 11, 1998.
Source; County Auditor-Controller
Ad Valorem Property'faxes
Taxes are levied for each fiscal year on taxable real and personal property that is situated in the
County as of the preceding January 1. For assessment and collection purposes, property is classified either
as"secured"or"unsecured,"and is listed accordingly on separate parts of the assessment roll. The "secured
roll" is that part of the assessment roll containing State assessed property and property,secured by a lien on
real property which is sufficient, in the opinion of the Assessor, to secure payment of the taxes. Other
property is assessed on the"unsecured roll."
Property taxes on the secured roll are due in two installments, on November l and February I of
each fiscal year. If unpaid,such taxes become delinquent on December I0 and April 10,respectively, and a
10% penalty attaches to any delinquent payment. In addition, property on the secured roll with respect to
which taxes are delinquent is declared to be in default on or about June 30 of the fiscal year. Such property
may thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus a
redemption penalty of one and one half percent per month to the time of redemption. If taxes are unpaid for
a period of five years or more,the tax-defaulted property is declared to be subject to the Treasurer's power
of sale and may be subsequently sold by the Treasurer.
Legislation established the "supplemental roll" in 1984, which directs the Assessor to re-assess real
property,at market value,on the date the property changes ownership or upon completion of construction.
Property on the supplemental roll is eligible for billing 30 days after the reassessment and notification to the
new assessee The resultant charge(or refund) is a one-time levy on the increase(or decrease) in value for
B-5
. . ........................................................................................................................................................................................................................................................
the period between the date of the change in ownership or completion of construction and the date of the
next regular tax roll upon which the assessment is entered.
Billings are made on a monthly basis and are due on the date mailed. If mailed between the months
of July through October, the first installment becomes delinquent on December 10th and the second on
April 10th. If mailed within the months of November through June, the first installment becomes
delinquent on the last day of the month following the month of billing. The second; installment becomes
delinquent on the last day of the fourth month following the date the first installment is delinquent.
Property taxes on the unsecured roll are due as of the March 1 lien date and become delinquent, if
unpaid,on August 31. A 10%penalty attaches to delinquent taxes on property on the unsecured roll, and an
additional penalty of one and one-half percent per month begins to accrue beginning November 1. The
taxing authority has four ways of collecting unsecured personal property taxes: (1) by filing a civil action
against the taxpayer; (2) by filing a certificate in the office of the County Clerk specifying certain facts in
order to obtain a judgment lien on certain property of the taxpayer;(3) by filing a certificate of delinquency
for recordation in the County Recorder's office, in order to obtain a lien on certain property of the taxpayer;
and (4) by the seizure and sale of personal property, improvements or possessory interest, belonging to the
taxpayer.
The County and its political subdivisions operate under the Teeter Plan pursuant to provisions of
Sections 4701-4717 of the California Revenue and Taxation Code. Pursuant to those sections, the accounts
of all political subdivisions that levy taxes on the County tax rolls are credited with 100%of their respective
tax levies regardless of actual payments and delinquencies. The County Treasury's cash position (from
taxes) is protected by a special fund(the "Tax Losses Reserve Fund") into which all countywide delinquent
penalties are deposited. The County has used this method since fiscal year 1950-51.
Historically, the County has borne the full cost of property assessment and revenue collection and
distribution. Senate Bill 2557, passed in 1990, allowed counties to charge cities, schools, special districts
and redevelopment agencies for their share of property tax administrative costs. This legislation was
subsequently repealed as to charges against school districts. In addition, the legality of the property tax
administrative charge has been challenged by the other affected taxing entities. While the County is unable
to predict the ultimate outcome of such litigation,the County has prevailed at the Court of Appeals level on
the issue of the viability of tax administrative charges to redevelopment agencies and at the Superior Court
level as to all other challenged fees. The amount in question, approximately $4 million per year, does not
represent a large proportion of the County's annual General Fund Budget,which exceeds$725 million.
A recent history of Contra Costa County tax levies,delinquencies and the Tax Losses Reserve Fund
cash balances as of June 30 is shown below.
B-6
................................................... ................................
.............................................................................................................................................................................................................
COUNTY OF CONTRA COSTA
SUMMARY OF ASSESSED VALUATIONS AND
AD VALOREM PROPERTY TAXATION FOR FISCAL YEARS 1988-89 THROUGH 1997-98
Percentage
Secured Current Levy Current Levy Tax Losses
Fiscal Assessed Property Delinquent Delinquent Reserve Fund
Year Valuation Tax Levies June 30 June 30 Balance June 30
1988-89 $44,101,311,276 $535,212,918 $13,387,564 2.50% $20,125,551
1989-90 48,641,369,485 593,937,412 14,746,710 2.48 21,797,766
1990-91 54,114,860,918 669,071,124 19,762,687 295 24,493,615
1991-92 58,422,186,087 714,963,082 24,787,991 3.47 26,558,333
1992-93 61,393,320,088 760,559,294 24,239,204 3.19 29,042,152
1993-94 63,427,696,578 794,435,830 20,652,106 2.60 31,225,565
1994-95 65,294,364,749 823,495,651 20,640,379 2.51 24,709,211
1995-96 67,146,461,590 854,519,586 18,296,237 2.14 18,670,811
1996-97 69,242,099,630 869,580,974 18,057,023 2.08 17,154,539
1997-98 70,314,800,892 894,661,0000) 19,235,0000) 2.1511) 17,265,5390)
1998-99 71,721,000,0000)
(l)Estimated
Source: County Auditor-Controller
During each fiscal year,the Tax Losses Reserve Fund is reviewed and when the amount of the fund
exceeds certain levels, the excess is credited to the County General Fund as provided by Section 4703 and
4703.2 of the California Revenue and Taxation Code. Sections 4703 and 4703.2 allow any county to draw
down the Tax Losses Reserve Fund to a balance equal to (i)one percent of the total of all taxes and
assessments levied on the secured roll for that year, or(ii)25% of the current year delinquent secured tax
levy. The reductions in the Tax Losses Reserve Fund balances during the last three years reflect multiple
reductions in minimum reserve requirements legislated over that period. The impact of these reductions
was to allow<increased credits to the County General Fund. No other material drawdowns have occurred.
B-7
''Ill.--,................................................................................................................................................................................................
...............................................................................................................................................................-...........................................
Largest Taxpayers [County wasn't able to get 97-98 data for the Lease Revene Bonds POS; can
County get this updated for the Notes OS??]
The ten largest taxpayers in the County, as shown on the fiscal year 1996-97 secured tax roll, and
the approximate amounts of their property tax payments are shown below. These ten taxpayers paid a total
of$101.0 million in taxes,or about 12.01%of the County's 1996-97 secured tax collection.
COUNTY OF CONTRA COSTA
TEN LARGEST PROPERTY TAXPAYERS
Total Taxes Paid
onivany 1996-97
Chevron USA $ 30,955,471.26
Pacific Gas& Electric Company 16,385,013.60
Shell Oil Company 15,168,513.22
Pacific Bell 10,605,778.14
Tosco Corporation 7,712,390.48
Unocal 6,531,011.10
USS Posco 4,547,710.40
Seeno/Sierra Pacific 4,473,518.62
Bank of America 2,342,724.00
Kaiser Permanente 2,337,602.78
TOTAL $101,059,733.60
Source: County Treasurer-Tax Collector
B-8
. ..................... ...................................................................
...............................................................................
......... ...._... _....... ......... ......... ......... ......... ........_......11.11_.
.. ... .......... ......... _1111_. ......... .. ........ .. . ...... ........ .......... 1 ...1.1..1................. ..... ....... .........
_ ......................
Redevelopment Agencies
The California Community Redevelopment Law authorizes city or county redevelopment agencies
to issue bonds payable from the allocation of tax revenues resulting from increases in full cash values of
properties within designated project areas. In effect, local taxing authorities other than the redevelopment
agency realize tax revenues only on the "frozen" tax base. The following table shows redevelopment
agency full cash value increments and tax allocations for agencies within the County.
COMMUNITY REDEVELOPMENT AGENCY PROJECTS
FULL CASH VALUE INCREMENTS AND TAX ALLOCATIONSM
FISCAL YEARS 1986-87 THROUGH 1996-97
Fiscal Full Cash Value Total Tax
Year Base Year Value Incrementc2> Allocations(3)
1987-88 $969,566,378 $2,618,912,341 $28,863,403
1988-89 1,342,442,031 2,845,683,596 33,282,273
1989-90 1,591,934,101 3,275,371,212 35,326,113
1990.91 1,696,768,706 3,966,154,674 42,171,285'
1991-92 1,806,223,553 4,573,718,772 48,590,841
1992-93 1,864,029,147 5,009,792,773 53,485,897
1993-94 1,864,029,147 5,236,543,696 55,748;579
1994-95 2,715,784,139 5,320,724,209 56,677,717'
1995-96 3,051,303,629 5,337,629,341 57,204,637'
1996-97 3,195,085,095 5,493,724,548 58,807,082'
ts> Full cash values for all redevelopment projects above the "frozen" base year valuations. These data
represent growth in full cash values generating tax revenues for use by the community redevelopment
agencies.
(3) Does not include unitary and operating non-unitary utility roll values which, starting with Fiscal Year
1988-89, are determined by the State Board of Equalization on a countywide basis as provided by
Assembly Bill 454,Chapter 921,Statutes of 1987.
(3) Actual tax revenues collected by the County which have been or will be paid to the community
redevelopment agencies.
Source: County Auditor-Controller
Accounting Policies,Reports and Audits
The County's accounting policies used in preparation of its audited financial statements conform to
generally accepted accounting principles applicable to counties. The County's governmental funds and
fiduciary funds use the modified accrual basis of accounting. This system recognizes revenues when they
become available and measurable. Expenditures,with the exception of unmatured interest on general long-
term debt, are recognized when the fund liability is incurred. Proprietary funds use:the accrual basis of
accounting, whereby revenues are recognized when they are earned and become measurable, while
expenses are recognized when they are incurred.
The Treasurer also holds certain trust and agency funds not under the control of the Board, such as
those of school districts,which are accounted for on a cash basis.
B-9
The California Government Code requires every county to prepare an annual financial report. The
Auditor-Controller prepares the Comprehensive Annual Financial Report for the County. This annual
report covers financial operations of the County, County districts and service areas, local autonomous
districts and various trust transactions of the County Treasury. Under California law, independent audits are
required of all operating funds under the control of the Board. The County has had independent audits for
more than 40 years. Additionally,the County Grand Jury may also conduct management audits of certain
offices of the County. Funds accounted for by the County are categorized as follows:
General County Funds. The general County funds consist of the General Fund and other
operating funds. The General Fund is used to account for the revenues and expenditures of the County that
are not accounted for by other funds. The other operating funds are used to account for the proceeds from
specific revenue sources (other than special assessments) or to account for the financing of specific
activities as required by law or administrative regulations.
Special District Funds Under Control of Board of Supervisors. These funds are used to account
for the transactions of fire protection districts, flood control and storm drainage districts, sanitation districts
and county service areas under the control of the Board.
Special District Funds Under Control of Local Boards and School District Funds. These funds
are used to account for cash received and disbursed and cash and investments held by the County for
districts controlled by local boards. These districts maintain their own accounting records supporting their
separate financial statements which are subject to separate audit under California law.
Trust and Agency Funds. Trust and Agency funds are used to account for money and other assets
received and held as trustee,custodian or agent for individuals and governmental agencies.
Presented on the following pages are the County's General Fund Balance Sheet and Schedule of
Revenues, Expenditures and Changes in Fund Balances as of June 30 for the five most recent fiscal years.
More detailed information from the County's audited financial report for the fiscal year ending June 30,
1997 appears in Appendix C to this Official Statement.
B-10
... .... .............................................................................................................................................................................................................................................
COUNTY OF CONTRA COSTA
GENERAL FUND BALANCE SHEET
JUNE 30, 1997
(WITH COMPARATIVE TOTALS FOR JUNE 30, 1993, 1994 1995,AND 1996)
(IN THOUSANDS)
1993 1994 1995 1996 1997
ASSETS:
Cash and investments $222,616 $236,514 $ 117,317 $ 114,420 $107,811
Accounts receivable and accrued revenues 43,419 45,654 56,268 59,008 62,375
Inventories 1,602 1,598 1,627 1,656 1,549
Due from other funds 36,791 45,533 35,380 47,783 93,175
Prepaid expenses and deposits 8,037 3,901 2,854 2,491 1,480
Advances to other funds 1,441 783 598 866 138
TOTAL ASSETS $313,906 $333,983 $214,044 $226.224 $266,528
LIABILITIES
Short term obligations $ 117,000 $140,000 $95,000 $90,000 $120,000
Accounts payable and accrued liabilities 22,341 31,576 27,990 27,512 28,476
Due to other funds 25,972 18,642 14,768 22,586 29,069
Welfare program advances 11,640 12,809 14,639 19,541 9,803
Obligations under reverse repurchase
agreements 81,502 74,050 0 0 0
Deferred revenue and credits 7,853 6,693 10,077 10,061 10,995
Total liabilities $266,308 $283,770 $ 162,474 $169,700 $198,343
FUND EQUITY:
Reserved for:
Encumbrances $ 7,225 $11,639 $10,239 $10,921 $16,972
Inventories 1,602 1,598 1,627 1,656 1,549
Prepaid items and other assets' 7,639 3,654 2,379 2,079 1,229
Advances to other funds 1,441 783 598 866 138
Unreserved:
Designated for future use 0 0 5,679 6,462 0
Designated for authorized expenditures 1,051 900 0 0 3,151
Designated for equipment replacement 1,692 2,921 0 0 5,528
Designated for trial court funding 495 495 0 0 0
Undesignated 26,453 28,223 31,048 34,540 39,618
TOTAL FUND EQUITY $ 47,598 $ 50,213 $ 51,570 $ 56,524 $68,185
TOTAL LIABILITIES AND FUND
EQUITY $313,906 $333,983 $214,044 $226,224 $266,528
* Reserves are less than prepaid items and deposits because the General Fund advanced federal program moneys to
subgrantees who will be expending the funds within the first quarter of the following year.
Source: County Auditor-Controller
B-11
. ...____.. ......... ......... ......... ......... ......... ......... ......... ......... ......... ............... .. .
...... ......... . ..._.._. ......... .......... ..... .......... .......... .... ..... ...... .. ......... . .......................................... .. .........
__.... _........
COUNTY OF CONTRA COSTA
GENERAL FUND
SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN
FUND BALANCES-BUDGET AND ACTUAL-BUDGETARY BASIS
FISCAL YEARS 1992-93 THROUGH 1996-97
(IN THOUSANDS)
1992-93 1993-94 1994-95 1995-96 1996-97
REVENUES
Taxes $153,044 $97,743 $89,992 $95,773 $99,974
Licenses,permits&franchises 6,964 6,229 4,978 6,689 7,419
Fines,forfeitures&penalties 3,732 9,789 18,371 17,437 14,082
Use of money&property 14,876 12,279 12,693 13,406 12,062
Intergovernmental revenues 344,534 375,371 383,118 373,167 371,750
Charges for services 78,572 77,835 116,447 99,678 103,913
Other revenue 2,234 10,446 11,635 17,456 18,198
TOTAL REVENUES 603,956 589,692 637,234 623,606 627,398
EXPENDITURES
General government 63,389 63,890 67,825 82,256 77,199
Public protection 151,322 152,161 157,135= 141,875 150,121
Health&sanitation 92,928 112,659 114,585 115,286 122,676
Public assistance 237,559 231,162 238,859 233,862 218,081
Education 101 102 122 130 133
Public ways and facilities 20,652 11,768 9,454 6,933 9,266
Recreation and culture 0 0 0 0 0
Interest 4,760 5,017 4,4694,273 4,204
Capital outlaym 773 3,384 3,477 1,371 2,615
TOTAL EXPENDITURES 589,195 580,143 595,926< 585,986 584,295
Excess(deficiency)of revenues over(under)expenditures 28,472 9,549 41,308 37,620 43,103
OTHER FINANCING SOURCES(USES)
Operating transfers in 10,851 28,022 24,266 18,804 24,581
Operating transfers out (32,768) (37,405) (71,628)_ (50,911) (55,844)
Capital lease financingo) 773 3,384 3,477 1,371 2,615
TOTAL OTHER FINANCING SOURCES(USES) (-21,144 (5,999} 43,885) 3( 0,7361 28.648
Excess(deficiency)of revenues and other financing sources 7,328 3,550 (2,577) 6,884 14,455
over(under)expenditures and other financing uses
FUND BALANCE AT BEGINNING OF YEAR,as 41,338 47,598 50,213 51,570 56,524
Previously Reported
Adjustment to beginning fund balance 0 (3981 4,664 (418) 0
FUND BALANCE AT BEGINNING OF YEAR,as
Restated 41,338 47,200 54,877 51,152 56,524
Residual equity transfers in 0 5
Residual equity transfers out (1.068) (537) (735) (1.5121 (2,794)
FUND BALANCE at end of year $47,598 $50,213 $51,570 $56,524 $68,185
(1> These entries are required by NCGA Statement 5 to disclose the value of fixed assets acquired during the year under
lease purchase agreements. The County does not appropriate these amounts since they apply to fixture years.
Source: County Auditor-Controller
B-12
County Employees
A summary of County employment follows:
COUNTY OF CONTRA COSTA
COUNTY EMPLOYEESM
Number of Number of
As of Permanent As of Permanent
June 30 Employees June 30 Employees
1980 5,960 1990 6,635
1981 6,052 1991 7,008
1982 6,063 1992 7,080
1983 5,915 1993 6,689
1984 5,743 1994 6,658
1985 5,791 1995 6,822
1986 5,968 1996 6,856
1987 6,111 1997 7,029
1988 6,317 1998 7,2460}
1989 6,463
(1) Excludes temporary or seasonal employees.
(2) As of March 17, 1998.
Source: County Personnel Department
County employees are represented by 30 bargaining units of 1 i labor organizations,the principal
ones being Local 1 of the County Employees Association and the Clerical Employees Union which,
combined,represent approximately 34%of all County employees in a variety of classifications.
The County has had a positive employee relations program,and has enjoyed successful negotiations
of cost effective agreements over the years. The County completed its latest contract negotiations with
labor representatives in July 1996, with the agreement providing for, among other things, a 3% salary
increase through September 30, 1997, a 2% salary increase effective October 1, 1997,and a 3 1J2% salary
increase effective October 1, 1998. The agreement covers approximately 75% of the County's employees
and expires in September 1999.
Pension Plan
The Contra Costa County Employees'Retirement Association(CCERA) is a cost-sharing multiple-
employer defined pension'benefit plan governed by the County Employees' Retirement Law of 1937. The
plan covers substantially all of the employees of the County, its special districts,the Housing Authority and
thirteen other member agencies.
The plan provides for retirement, disability, death and survivor benefits, in,accordance with the
County Employees' Retirement Law. Annual cost-of-living adjustments to retirement benefits can be
granted by the retirement Board as provided by State statutes.
B-13
The CCERA is divided into three separate benefit sections of the 1937 Act, These sections are
known as: General-Tier 1, General-Tier 11,and Safety. Tier I includes all General members hired before
August 1, 1980 and electing not to transfer to Tier 11. The Tier 11 section includes all employees hired on or
after August 1, 1980 and all General members electing to transfer from Tier I. The Safety section covers all
employees in active law enforcement, active fire suppression work or certain other "safety" classifications
as designated by the CCERA's Retirement Board.
Service retirement benefits are based on age, length of service and final average salary. For the
Tier I and Safety sections, the retirement benefit is based on a one-year average salary, in accordance with
Government Code Section 31462. For Tier I1,the benefit is based on a three-year average salary.
On October 1, 1997, the California Supreme Court rendered a decision in Ventura County
Deputy Sheriffs' Association v. Board of Retirement of Ventura County Employees' Retirement
Association that, among other things, requires certain items such as vacation buy-buck to be included in
the calculations that determine the retirement benefits that a retiree is eligible to receive. The court
decision pertains to defined pension plans governed by the County Employees' Retirement Law of 1937,
such as the pension plans of many counties in the State, including the County. In addition, two lawsuits
against the County on similar issues have been filed by certain retired County employees.
Subsequent to the Supreme Court decision, the CCERA commissioned actuarial studies to
evaluate and estimate the cost and its associated amortization with respect to the potential unfunded
liability arising from the court ruling. While definitive results are not yet available, the County
anticipates that any additional costs will be funded over a number of years according to prudent actuarial
practices and that the costs will not materially impair its ability to make Base RentalPayments under the
Facility Lease.
The CCERA issues a stand-alone financial report which is available at its office located at 1355
Willow Way,Suite 221,Concord,California 94520. For additional information on the County's
pension plan,see "APPENDIX D-FINANCIAL STATEMENTS FOR THE COUNTY FOR THE FISCAL
YEAR ENDED'JUNE 30, 1997-Footnote 19."
Long Term Obligations
The County has never defaulted on the payment of principal or interest on any of its indebtedness.
Following is a brief summary of the County's general obligation debt, lease obligations, and direct and
overlapping debt.
General Obligation Debt. The County has no direct general obligation bonded indebtedness, the
last issue having been redeemed in fiscal year 1977-78. The County has no authorized and unissued debt.
Lease Obligations. The County has made use of various lease arrangements with private and
public financing entities,nonprofit corporations,and the County Employees' Retirement Association for the
use and acquisition of capital assets. These capital lease obligations have terms ranging from 5 to 30 years.
The longest capital lease ends in 2023. For a complete summary of the County's lease obligations as of
June 30, 1997,see"APPENDIX D- Financial Statements of the County for the Year Ended June 30, 1997-
Notes to General-Purpose Financial Statements- Note 6- Lease Commitments and Note 7 - Long-term
Obligations"attached hereto.
B-14
Direct and Overlapping Debt. The County contains numerous municipalities,school districts and
special purpose districts, as well as the overlapping Bay Area Rapid Transit District and the East Bay
Municipal Utility District,which have issued general obligation bonded and lease indebtedness. Set forth
below is a direct and overlapping debt report (the "Debt Report") prepared by California Municipal
Statistics Inc. that summarizes such indebtedness as of April 1, 1995. The Debt report is included for
general information purposes only. The County has not reviewed the Debt Report for completeness or
accuracy and makes no representations in connection therewith.
The Debt Report generally includes long-term obligations sold in the public credit markets by
public agencies whose boundaries overlap the boundaries of the County. Such long term obligations
generally are not payable from revenues of the County (except as indicated) nor are they necessarily
obligations secured by land within the County. In many cases, long-term obligations issued by a private
agency are payable only from the general fund or other revenues of such public agency.
B-15
......... ......... ......... ......... .........
.. ........... ......... ......... . .............. .............. ..... ..... ...... .......... ......... ......... ......... .........._.....
_. ......... ......... ............... ..............................
CONTRA COSTA COUNTY
ESTIMATED DIRECT AND OVERLAPPING BONDED DEBT
AS OF APRIL 1, 1998
1997-98 Assessed Valuation: $70,314,800,892(includes unitary utility valuation)
Redevelopment Incremental Valuation: _5,_687.404,922
Adjusted Assessed Valuation: $64,627,395,970
OVERLAPPING TAX AND ASSESSMENT DEBT: °fo A2plicable Debt 411/98
San Francisco Bay Area Rapid Transit District 31.479% $ 26,694,192
East Bay Municipal Water District and Special District No. 1 48.743&5.893 6,755,545
Martinez Unified School District 100. 42,235,883
Pittsburg Unified School District 100. 15,000,000
Acalanes and Liberty Union High School Districts 100. 87,949,809
Lafayette School District 100. 27,300,000
Other School Districts 100. 44,034,699
Cities 100. 7,265,000
Sanitation and Sanitary Districts 100. 610,000
East Bay Regional Park District 45.348 68,414,260
Either Special Districts 100. 3,220,000
Community Facilities District 100. 170,520,000
1915 Act Assessment Bonds(Estimate) 100. 337,716,846
TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT $837,716,234
Less: East Bay Municipal Utility District and Special District No. 1(100%self-supporting) 6,755,545
TOTAL NET OVERLAPPING TAX AND ASSESSMENT DEBT $830,960,689
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:
Contra Costa County General Fund Obligations 100. % $273,887,000 (1)
Contra Costa County Pension Obligations 100, 328,610,000
Contra Costa County Board of Education Certificates of Participation 100. 3,835,000
Contra Costa County Mosquito Abatement District Certificates of Participation 100. 1,885,000
Alameda-Contra Costa Transit District Certificates of Participation 11.983 2,909,316
Antioch Unified School District Certificates of Participation too. 15,662,774
San Ramon'Valley Unified School District Educational Facilities Corporation 100. 77,595,000
Other School Building Corporations and Certificates of Participation 100.(1) 49,309,604
City of Antioch General Fund Obligations 100. 17,464,092
City of Concord General Fund Obligations 100. 30,387,559
City of Pleasant Hill General Fund Obligations 100. 13,780,000
City of Richmond General Fund Obligations 100. 28,840,958
City of San Ramon General Fund Obligations 100. 23,845,200
Other City General Fund Obligations too. 25,335,000
Hospital Authorities 100. 8,320,000
San Ramon Valley Fire Protection District Certificates of Participation 100. 11,515,000
TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $913,181,503
Less: San Ramon Unified School District Certificates of Participation(self-supporting
from GIC from Bayerische Landesbank) 14,850 000
City of Concord lease bonds(100%self-supporting) 1,605,000
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $896,726,503
GROSS COMBINED TOTAL DEBT $1,750,897,737 (2)
NET COMBINED TOTAL DEBT $1,7271687,192
(1) Excludes tax:and revenue anticipation notes to be sold.
(2) Excludes tax and revenue anticipation notes,revenue,mortgage revenue and tax allocation bonds and non-bonded capital lease
obligations.
Ratios to 1997-98 Assessed Valuation:
Total .Gross Direct and Overlapping Tax and Assessment Debt................................................................1.19%
Total Net Direct:and Overlapping Tax and Assessment Debt...................................................................1.18°l0
Ratios to Adiusted.Assessed Valuation:
Combined Direct Debt($602,497,000) ......................................................................................................0133%
GrossCombined"total Debt........................................................................................................................2.71%
NetCombined Total Debt............................................................................................................................2.67%
B-16
Future Financings
The County Capital Program includes the debt financing of the acquisition of a building in
Martinez for the relocation of certain County administrative offices. The financing may also include the
refurbishment and renovation of the existing County administrative offices located at 651 Pine Street in
Martinez, California. No other major debt financings of new capital projects are currently contemplated by
the County, although the County routinely evaluates the potential debt service savings from refunding its
prior debt issues.
Insurance and Self-Insurance Programs
The County is self-insured for claims relating to public liability(excluding the airport), automobile
accidents and medical malpractice. It is the County's policy to appropriate annually sufficient funds to
cover the estimated liability of the County for self-insurance claims to be made during the upcoming fiscal
year. Whenever a claim is made, the claim is evaluated and a portion of the appropriated funds is reserved
to satisfy the County's estimated liability for such claim. Although the County believes that its past
experience enables it to evaluate reasonably its liability for self-insurance claims,no assurance can be made
that the amount reserved for such purpose will be adequate, nor can there be any assurance that the funds
appropriated to satisfy claims arising during any fiscal year will be sufficient.
For information on the County's insurance coverage, see "SECURITY AND SOURCES OF PAYMENT
FOR THE 1998 SERIES A BONDS—Insurance" in the forepart of this Official Statement and Note 17 to the
County's General Purpose Financial Statements which appear in Appendix D hereto.
B-17
•
APPENDIX C
FORM OF OPINION OF BOND COUNSEL
APPENDIX D
FINANCIAL STATEMENTS OF THE COUNTY
FOR THE FISCAL YEAR.ENDED JUNE 309 1997
APPENDIX E
FORMOF CONTINUING DISCLOSURE CERTIFICATE
•
...._. ......... ......... ......... ......... ......... ......... ......... ......... ......_.. .__. ..... _
_. ....._......................................................................................................................................................................................................
_. _.. _._.. ..........
APPENDIX F
BOOK.ENTRY ONLY SYSTEM
i
Y
APPENDIX F
BooK-ENTRY-ONLY SYSTEM
DTC, New York, New York will act as securities depository for the Nates. The Notes
will be issued as fully-registered securities in the name of Cede & Co. (DTC's partnership
nominee). One fully-registered security certificate will be issued for the Notes in the aggregate
principalamount of such issue,and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking Law, a
banking organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System,a"clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a"clearing agency" registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange,Inc.,and the National Association of Securities Dealers,Inc.. Access
to the DTC system is also available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The Rules applicable'to DTC and its
Participants are on file with the Securities and Exchange Commission.
Purchases of Notes under the DTC system must be made by or through Direct
Participants,which will receive a credit for the Notes on DTC's records. The ownership interest
of each actual purchaser of each Note ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect' Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as periodic statements of their
holdings; from the Direct or indirect Participant through which the Beneficial Owner entered
into the transaction. Transfers of ownership interests in the Notes are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in Notes except in the
event that use of the book-entry system for the Notes is discontinued.
To facilitate subsequent transfers, all Notes deposited by Participants with DTC are
registered in the name of DTC's partnership nominee, Cede & Co. The deposit of Notes with
DTC and their registration in the name of Cede & Co. affect no change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Notes. DTC's records reflect only
the identity of the Direct Participants to whose accounts such Notes are credited, which may or
may not;be the Beneficial Owners. The Participants will remain responsible for keeping account
of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to indirect Participants, and by Direct Participants and indirect Participants to
F-1
a
Beneficial Owners will be governed by arrangements among them subject to any statutory or
regulatory requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to Notes. Under its usual
procedures, DTC mails an Omnibus Proxy to the County as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Notes are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Principal and interest payments on the Notes will be made to DTC. DTC's practice is to
credit Direct Participants' accounts on payable date in accordance with their respective holdings
shown on DTC's records unless DTC has reason to believe that it will not receive payment on
payable date. Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the responsibility of such
Participant and not of DTC or the County, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal and interest to DTC is the
responsibility of the Paying Agent, disbursement of such payments to Direct Participants shall be
the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be
the responsibility of Direct and Indirect Participants.
The County may decide to discontinue use of the system of book-entry transfers through
DTC (or a successor securities depository). In that event, Note certificates will be prepared and
delivered.
The information in this section concerning DTC and DTC's book-entry system has been
obtained from sources that the County believes to be reliable, but the County takes no
responsibility for the accuracy thereof.
THE COUNTY WILL HAVE NO RESPONSIBILITY OR OBLIGATION,
INCLUDING ANY OBLIGATION FOR THE PAYMENT OF PRINCIPAL AND INTEREST
AND THE PROVISION OF NOTICE WITH RESPECT TO THE NOTES, TO SUCH DTC
PARTICIPANTS OR TO THE PERSONS FOR WHOM THEY ACT AS NOMINEES WITH
RESPECT TO THE NOTES. SO LONG AS CEDE & CO., OR A SUCCESSOR AS
NOMINEE, IS THE REGISTERED OWNER OF THE NOTES, REFERENCES HEREIN TO
THE NOTE OWNERS OR THE REGISTERED OWNERS OF NOTES SHALL MEAN CEDE
&CO. OR SUCH NOMINEE AND NOT THE BENEFICIAL OWNERS OF THE NOTES.
DTC may determine to discontinue providing its services with respect to the Notes at
any time by giving notice to the County and discharging its responsibilities with respect thereto
under applicable law. In the event (i) DTC determines not to continue to act as securities
depository for the Notes, or (ii) the County determines that DTC shall no longer so act, then the
County will discontinue the book-entry system with DTC. If the County fails to identify another
qualified securities depository to replace DTC, the Notes will no longer be restricted to being
registered in the registration books kept by the County in the name of the ;depository or its
nominee, but shall be registered in whatever name or names the owners of Notes being
transferred or exchanged shall designate, in accordance with the Resolution.
F-2
....... ....... _........ ......... ......... ......... ...................................._..__. .
......... ......... ......... .......... ................................_.........._......................................................................................
x County Administrator of the County in accordance with the terms of the Official Notice of Sale
for the Notes;
WHEREAS,a form of Official Statement describing the Notes and a form of the
Official Notice of Sale for the sale of the Notes will be distributed to potentialpurchasers 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 authorize and direct the execution of such documents and the issuance
of the Notes; and
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;
NOW THEREFORE,BE IT RESOLVED by the Board of Supervisors of the
County of Contra Costa, as follows:
Section 1. Recitals. The foregoing recitals are true and correct and this Board
hereby so finds and determines.
Section 2. Authorization ad Issuance. (A) Solely for 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 1998-1999, 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 One Hundred Fifty Million Dollars($150,000,000),by
the issuance of temporary notes in one or more series under Sections 53850 et seq. Of the
Government Code, designated the"County of Contra Costa, California, 1998-1999 Tax and
Revenue Anticipation Notes." A first series of Notes labeled"Series A"(the"Series A Notes")
shall be issued pursuant hereto in the aggregate principle amount of not to exceed $130,000,000.
A second series of Notes labeled"Series B"(the"Series B Notes")may hereafter be issued prior
to January 1, 1999, in an amount not to exceed the difference between$150,000,000 and the
principal amount of the Series A Notes.
(B) The Series A Notes shall be initially issued and registered as provided in
Section 9 hereof and otherwise shall be in the denomination of$5,000 or any integral multiple
thereof, and shall be dated the date of issuance thereof, shall mature(without option of prior
redemption)on October 1, 1999, and shall bear interest,payable on July 1, 1999 and at maturity
and computed on the basis of a 360-day year composed of twelve 30-day months, at the rate per
annum determined in accordance with this Resolution.
(C) Interest due on the Notes,prior to the maturity thereof, shall be payable to
the person in whose name such Note is registered on the registration books of the County,
maintained by the Paying Agent,as of the close of business on the 15th day of the calendar
month immediately preceding the interest payment date (the "Record Date"), such interest to be
paid by cheek mailed to such registered owner. Both the principal of and interest payable at
DOCSSF]:250862.3 2
................................................................................................................................................................ .
. ..............................................................................................................................................................................................................................................
maturity 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 the Treasurer-Tax
Collector of the County(the"Paying Agent") in Martinez,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.
(D) The Series B Notes shall be dated the date of issuance thereof, shall
mature(without option of prior redemption)not more than 15 months thereafter and shall bear
interest payable on July I, 1999 and at maturity computed on the basis of a 364-day year
composed of twelve 30-day months at the rate or rates determined in accordance with this
Resolution. The issuance of the Series B Notes shall be subject to the following conditions:
(1) Receipt of confirmation from Moody's Investors Service and Standard&
Poor's(each an"Agency")(if such respective rating agency rated the Series A Notes)
that the issuance of the Series B Nates will not cause a reduction or withdrawal in such
Agency's rating on the Series A Notes; and
(2) Receipt of an opinion of Bond Counsel to the effect that the interest on the
Series B Notes is excludable from gross income for federal income tax purposes.
(E) At any time after the sale of a series of the Notes,the County.shall execute
the Notes of such series for issuance hereunder and shall deliver them to the Paying Agent, and
thereupon such Notes shall be authenticated and delivered by the Paying Agent to the purchaser
thereof upon the written request of the County and upon receipt of payment therefor from the
purchaser thereof.
Section 3. Sale of Notes. The proposed form of the Official Notice of Sale
for the Series A 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 Official Notice of Sale
for the Series A Notes. The County Administrator is hereby authorized and directed, for and in
the name of and on behalf of the County,to execute and deliver such Official Notice of Sale,
with such changes, additions,completions and corrections therein as the County Administrator
shall require or approve, such approval to be conclusively evidenced by the execution and
delivery thereof. All of the Series A Notes shall be offered for public sale in accordance with the
Official Notice of Sale. C.M. de Crinis&Co.,Inc. (the"Financial Advisor")is hereby
authorized and directed to cause to be mailed to prospective bidders for the Notes copies of said
Official Notice of Sale, subject to such changes, additions and completions as;may be acceptable
to the County Administrator.
The proposed form of the Notice of Intention to Sell 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 is hereby directed to cause said Notice of Intention to Sell
Notes 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 County Administrator of the County or
his designee up to the hour of 10:00 a.m. California time on June 2, 1998 or on such earlier or
WCSSFI:250&62.3 3
. . . ................................. ..
....................................................... ............................................ ..
...................... ...........
............................................................................................................................................................................................................................................................
later date determined by the County Administrator as set forth in the Official Notice of Sale, for
the purchase of the Series A 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 5%
per annum)to be designated in the bid or bids,the County Administrator reserving the right to
reject any and all bids, in accordance with the terms and conditions of said Official Notice of
Sale. The County Administrator 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
Series A 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 Series A Notes are awarded to more than
one bidder and at different rates of interest, each incremental amount of Series A 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
Series A Notes and negotiate for the sale of the Series A 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.
The County Administrator is hereby authorized,upon a determination it is in the
best interest of the County,to sell the Series B Notes prior to January 1, 1999,by negotiated or
publicly bid sale at not less than the principal amount thereof and at an interest rate or rates not
to exceed 5%per annum.
Section 4. Disposition of Proceeds of Notes. The County shall, immediately
upon receiving the proceeds of the sale of the Notes,place in the County General Fund
maintained in the County Treasury all amounts received from such sale. Such amounts held in
the County general Fund shall be invested as permitted by Section 53601 or Section 53635 of
the Government Code provided that no such investments shall have a maturity later than the date
that it is anticipated that such amounts will be required to be expended and provided further that
no such investments shall consist of reverse repurchase agreements. Such amounts may be
commingled with other funds of the County.
Amounts in the County General Fund attributable to the sale of the Notes 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 County's total working capital expenditures from its available funds in fiscal year 1997-
1998). If on the date that is six months from the date of issuance of a series of the Notes all
amounts attributable to the proceeds of the Notes of such series(including investment earnings
thereon)have not been so expended,the County shall promptly notify Orrick,Herrington&
Sutcliffe LLP ("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").
DOC'SSFI:250862.3 4
....... _. .........................................................................................................................
... ... ................................................................................................................................................................................................................................................
Section 5. Source of PA ent. (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 for the fiscal year 1998-1999 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 deposit in trust in a special County fund designated as the"1998-
1999 Tax and Revenue Anticipation Note Repayment Fund"(the"Repayment Fuad")(i) an
amount equal to fifty percent(500/0)of the aggregate principal amount of the Notes from the first
Unrestricted Revenues received by the County during the accounting period commencing on
December 12, 1998 and ending January 13, 1999,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, 1999
and ending May 12, 1999, 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 on July 1, 1999 and at maturity. The amounts pledged by the
County for transfer to the Trustee 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 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 6. Pledged Revenues.
(A) The Pledged Revenues shall be deposited by the Treasurer-Tax Collector
of the County(the"Treasurer") in the Repayment Fund on or prior to the last business day of
each respective accounting period, and applied as directed in this Resolution; and the Other
Pledged Moneys, if any, shall be deposited by the Treasurer in the Repayment Fund on the last
business day of such month and on each business day thereafter,until the full amount of the
moneys required by Section 5(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 a series of the Notes all amounts
attributable,to the proceeds of the Notes of such series(including investment earnings thereon)
have not been expended in accordance with Section 4,the amounts to be deposited in the
Repayment';Fund during the period in which received shall be deposited 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 Repayment Fund. Moneys in the Repayment Fund shall be applied
only as hereinafter in this Section 6 provided.
DOCSSF]:250862.3 5
.................................
.111.111......................................................................................................................................
.I ................................
.......... ........................................................................................................................................................................................
(B) The Treasurer shall use the moneys in the Repayment Fund on the interest
payment date to pay interest on the Notes then due and on the maturity date of the Notes to pay
the principal of and interest on the Notes then due. Any moneys remaining in the Repayment
Fund after such payment,or after provision for such payment has been made,shall be transferred
to the General Fund of the County. If for any reason amounts in the Repayment Fund are
sufficient to pay both series of Notes in full, such amounts shall be applied pro rata to the
payment of each series of Notes based on the total principal of and interest payable upon the
Notes at the maturity thereof.
(C) Moneys in the Repayment Fund shall be invested as permitted by
Section 53601 or Section 53635 of the Government Code,except that 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 to the General Fund of the County.
Section 7. Execution of Notes. The Treasurer 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 County 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 to the respective purchasers thereof. In the case of Notes executed by facsimile
signature of both the Treasurer and the Clerk of the Board of Supervisors, the Notes shall not be
valid unless and until the Paying Agent shall have manually authenticated such Notes.
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.
Section 8. Egrm of Note s and CggificLte of Augienticatign and Lkegistration.
The Notes shall be issued in fully registered form without coupons and the Notes and the
Certificate of Authentication and Registration shall be substantially in the form and substance set
forth in E2jhibit A attached hereto and by reference incorporated herein,the blanks in said form
to be filled in with appropriate words and figures.
Section 9. Use of Doosit=.Regnistration.Exchange and Transfer.
(A) The Depository Trust Company,New York, New York,is hereby
appointed depository for the Notes. The Depository Trust Company shall act as depository
pursuant to the Blanket Issuer Letter of Representations on file with the Clerk of the Board. The
Notes 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.
Registered ownership of each Note,or any portion thereof,may not thereafter be transferred
except as set forth in Section 9(B).
DOCSSFI:2508623 6
.............................................................................................
......................................................................................................................................................................................
..............................................................................................................................................-....................................................
(B) The Notes shall be initially issued and registered as provided in
Section(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 Treasurer, 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) determination by the
Treasurer to substitute another depository for The Depository Trust Company(or its successor)
because the Depository Trust Company(or its successor)is no longer able to carry out its
functions as depository;provided that any such Substitute Depository shall be qualified under
any applicable laws to provide the services proposed to be provided by it; or
(iii) to any person as provided below,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 Treasurer to discontinue using The
Depository Trust Company or a depository.
(C) In the case of any transfer pursuant to clause(i)or clause (ii)of subsection
(B)of this Section , upon receipt of all outstanding Notes of each series by the Paying Agent
(together, in the case of a successor paying agent appointed by the County pursuant to Section 12
hereof,with a written request of the Treasurer to such successor paying agent designating the
Substitute Depository),a single new Note for each series,which the County shall prepare or
cause to be prepared, shall be executed and delivered,registered in the name of any such
successor to Cede& Co. or such Substitute Depository, or their respective nominees, as the case
may be, all as specified by the Treasurer or, in the case of a successor paying agent appointed by
the County pursuant to Section 12 hereof, as specified in the written request of the Treasurer. In
the case of any transfer pursuant to clause (iii)of Subsection (B)of this Section 9 upon receipt of
all outstanding Notes by the Paying Agent(together, in the case of a successor paying agent
appointed by the County pursuant to Section 12 hereof,with a written request of the Treasurer to
such successor paying agent),new Notes,which the County shall prepare or cause to be
prepared, shall be executed and delivered in such denominations and registered in the names of
such persons as specified by the Treasurer or, in the case of a successor paying agent appointed
by the County pursuant to Section 12 hereof, as are requested in such written request of the
Treasurer, subject to the limitations of this Section 9,provided that the Paying Agent shall
deliver such new Notes as soon as practicable.
(D) The County and the Paying Agent shall be entitled to treat the person in
whose name any Note is registered as the owner thereof for all purposes of the Resolution and
for purposes of payment of principal of and interest on such Note, notwithstanding any notice to
the contrary received by the Paying Agent or the County; and the County and,the Paying Agent
shall not have responsibility for transmitting payments to,communicating with, notifying, or
DOCSSFI:25OM2.3 7
............................. ....................................................................
otherwise dealing with any beneficial owners of the Notes. Neither the County nor the 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 Resolution 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 arranging for
payment in such manner that funds 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,be transferred 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,if required, and deliver a new Note or
Notes of the same series of authorized denominations, for a like aggregate principal amount.
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, if
required,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 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 may be 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,tenor and number in lieu of and in substitution for
the Note solost,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 without
DOC'SSF1:250862.3 8
...I..........I..........................................................................................................................................................................................
..............................................................-,............................... ......
surrender thereof). The Paying Agent may require payment 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 Resolution with all other Notes secured by this Resolution.
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 10. General Covenants. It is hereby covenanted and warranted by the
Board that all representations and recitals contained in 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 and the Notes and shall cause to be paid in accordance with their terms the
principal of and interest on the Notes.
Section 11. Tax
-Covenants. Rebate Fund.
(A) The County hereby covenants that it will not take any action, or fail to
take any action, if such action or failure to take such action would adversely affect the exclusion
from gross income of the interest payable on the Notes under Section 103 of the Code. Without
limiting the generality of the foregoing,the County hereby covenants that it will comply with the
requirements of the Tax Certificate of the County with respect to the Notes(the"Tax
Certificate"),to be entered into by the County as of the date of issuance of the Notes. The
provisions of this Section 11 shall survive payment in full or defeasance of the Notes.
(B) 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 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 4 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
DOC'SSFI:250862,3 9
........... .................................
...........................................................
......... ......... ......... ......... ......... ......... -...__......
.............. ......... ......... ............. ........ ....... ........ ......... ......... ......... .......... ........ .........
_ _. _ _ ..._..... .. ....... .........
from the date of the issuance of each series of the Notes,the County will reasonably and
prudently calculate the amount of the Note proceeds of such series 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 such series,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 1998-1999 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(C)of this Section 11.
(C) If funds are required to be deposited therein,the County shall establish
and maintain a fund separate from any other fund established and maintained hereunder
designated as the"1998-1999 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 4 hereof.'
(D) 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,no one other than the owners or former owners of the Notes 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.
(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.
Section 12. Paving Agent. The Treasurer 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 deposit funds 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 or days on which they mature. Payment
of the Notes shall be in accordance with the terms of the Notes and this Resolution.
This appointment shall not preclude the County from appointing a financial
institution to act as Paying Agent or one or more successors thereto, all without notice to or the
consent of the registered owners of the Notes. Any such successor paying agent shall be or shall
have co-paying agent relationships with one or more banks or trust companies with offices in
New York,New York,or Los Angeles, California,or San Francisco,California.
The Paying Agent, initially the Treasurer, is also appointed as registrar and upon
the request of any registered owner is authorized to record the transfer or exchange of Notes in
accordance with the provisions hereof
oocssF1:25086'1.3 10
Section 13. 4 ci lta#eot hot Notes. The proposed form of Official
Statement relating to the Notes (the"'Official Statement"),on file with the Clerk of the Board of
Supervisors and incorporated into this Resolution by reference,is hereby approved with such
changes, additions, completion and corrections as the County.Administrator may approve. The
County Administrator or his designee is hereby authorized and directed, for and in the name and
on behalf of the County,to execute and deliver an official statement in substantially said form,
with such changes therein as such officer executing the same may require or approve, such
approval to be conclusively evidenced by the execution and delivery thereof: Distribution by the
Financial Advisor of a preliminary Official Statement relating to the Notes is hereby approved
and the County Administrator or his designee is hereby authorized and directed., for and in the
naive and on behalf of the County,to execute a certificate confirming that the Preliminary
Official Statement has been"deemed final"by the County for purposes of Securities and
Exchange Commission Rule 15c2-12.
Section 14. Co-n!iD my Djsrl2Mre. The Treasurer is hereby;authorized to
execute a Continuing Disclosure Certificate on behalf of the County containing such covenants
of the County as shall be necessary to comply with the requirements of Securities and Exchange
Commissions Rule 15c2-12. The County hereby covenants and agrees that it will comply with
and carry out all of the provisions of such Continuing Disclosure Certificate.
Section 15. roval of Actions. All actions heretofore talon 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 delivery of the Notes in accordance with this Resolution.
Section 16. lr„ cce gs ConstituteContract. The provisions of the Motes and
of this Resolution 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 17. aeverabiiity, If any one or more of the agreements,conditions,
covenants or terms contained herein required to be observed or performed by or on the part of
the Board shall be contrary to law,then such agreement or agreements,such condition or
conditions,such covenant or covenants or such term or terms shall be null and void and shall be
deemed severable from the remaining agreements,conditions,covenants and terms hereof and
shall in no way affect the validity hereof or of the Notes,and the owners of the Notes shall retain
all the benefit,protection and security afforded to them hereunder and under all provisions of
applicable law. The Board hereby declares that it would have adopted this Resolution and each
and every other section,paragraph,subdivision,sentence,clause and phrase hereof and would
have authorized the issuance of the Notes pursuant hereto irrespective of the fact that any one or
more of the sections,paragraphs, subdivisions, sentences,clauses or phrases hereof or the
application thereof to any person or circumstance may be held to be unconstitutional,
unenforceable or invalid.
riarssFI:2508623 11
_._.._. ......... ......... ......... ..._.._... ._._._.. .........
.........._._ ......... ........ ................. ...... ...... ......... ......... ......... ......... ......... ......... .........
..................... ......... ............... ... ........
PASSED AND ADOPTED BY THE BOARD OF SUPERVISORS OF THE
COUNTY OF CONTRA COSTA this 28th day of April , 1998 by the following vote:
AYES: Supervisors Uilkema, Gerber, DeSaulnier, Canciamilla and Rogers
NOES: None
ABSENT: None
COUNTY OF CONTRA COSTA.
By:_
hair of thetoard
of Supervisors
ATTEST: Phil Batchelor, County
Administrator and Clerk of the Board
of Supervisors of the County of
Contra Costa
a
Deputy
DOCSSF3:2S0R62.3 12
_.
EXHIBIT A
REGISTERED REGISTERED
No. R-1 $150,000,000
COUNTY OF CONTRA COSTA,CALIFORNIA,
1998-1999 TAX AND REVENUE ANTICIPATION NOTE,SERIES [AB)
Rate of Interest: Note Date: M,aturily Date: Ci,T,;IP No.:
oo
Registered Owner: CEDE&CO.
Principal Amount: DOLLARS
FOR VALUE RECEIVED,the County of Contra Costa(the "County"), State of
California,acknowledges itself indebted to and promises to pay to the Registered Owner
identified above, or registered assigns,the Principal Amount specified above,in lawful money of
the United States of America,on the Maturity Date specified above,together with interest
thereon payable on July 1, 1999 and at the maturity thereof, at the Rate of Interest per annum set
forth above (computed on the basis of a 360-day year composed of twelve 30-day months)in like
lawful money from the Note Date specified above until payment in full of said principal sum.
Interest on this Note, due on July 1, 1999, shall be paid to the person in whose name this Note is
registered as of the close of business on the 15th day of the calendar month immediately
preceding the interest payment date by check mailed to such registered owner. The principal of
and interest on this Note payable at the maturity hereof shall be payable only to the registered
owner hereof upon surrender of this Note at the office of the Treasurer-Tax Collector of the
County, as paying agent(together with any successor appointed by the County, the"Paying
Agent") as the same shall fall due;provided,however, that no interest shall be payable for any
period after maturity during which the registered owner hereof fails to properly present this Note
for payment.
It is hereby certified,recited and declared that this Note is one of a series of Notes
of the Series specified above issued in the aggregate principal amount of$ and is
part of an authorized issue of Notes entitled"County of Contra Costa,California, 1998-1999 Tax
and Revenue Anticipation Notes"(the"Notes"), authorized in the aggregate principal amount of
One Hundred Fifty Million Dollars($150,000,000), 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 a Resolution of the Board of
DOCSSFI:250862.3 A-1
---.....-..................................................................................................................................................................................
.................................................................................................................................................................................................
Supervisors of the County adopted on_, 19918(herein called the"Resolution''),
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 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 Notes of each
series shall be payable on a parity with each other.
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 1998-1999 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, 1998 and ending January 13, 1999,
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, 1999 and ending May 12, 1999,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 on
July 1, 1999 and 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
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 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 he affected by any notice to the contrary.
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,
I)OCSSFI:250862.3 A-2
............. ............... ............................................I............
.........................................................................
....................
. ...............................................................................................................................................................................................................................
IN WITNESS WHEREOF, the County of Contra Costa has caused this Note to be
executed by the manualor 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 Dote Date specified
above.
COUNTY OF CONTRA COSTA
By
Treasurer-Tax Collector
(SEAL)
Countersigned:
County Administrator and
Clerk of the Board of Supervisors
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This Note is one of the Notes described in the within-mentioned Resolution,
which Note has been authenticated and registered on the date set forth below.'
Date of Authentication:
By-
Treasurer-Tax Collector
of the County of Conga Costa
nocssr a:2sfl862.3 A-3
.........................
[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
Trustee 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.
[FORM OF DTC LEGEND)
Unless the certificate is presented by an authorized representative of The
Depository Trust Company to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede&Co. or such other name
as requested by an authorized representative of The Depository Trust Company and any payment
is made to Cede& Co.,ANY TRANSFER,PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the registered owner
hereof, Cede&Co., has an interest herein.
DOCSSFI:250862.3 A-4
..........
. ................................................ ...........................................................................................I...............
.............................................................................
CLEF'S CERTIFICATE
I, , Clerk of the Board of Supervisors of the County of Contra Costa,
hereby certify as follows:
The foregoing is a full,true and correct copy of a resolution duly adopted at a
regular meeting of the Board of Supervisors of said County duly and regularly;and legally held at
the regular meeting place thereof on ' 1998,of which meeting all of the members of
the Board of Supervisors of said County had due notice and at which a majority thereof were
present.
At said meeting said resolution was adopted by the following vote:
Ayes:
Noes:
Absent:
I have carefully compared the same with the original minutes of said meeting on
file and of record in my office and the foregoing is a full,true and correct copy of the original
resolution adapted at said meeting and entered in said minutes.
I further certify that an agenda of said meeting was posted at least 72 hours prior
to the date of the meeting in a place in the City of Martinez,California, freely accessible to
members of the public and that a short description of said resolution appeared on said agenda.
Said resolution has not been amended,modified or rescinded since the date of its
adoption, and the same is now in full force and effect.
Dated:
Clerk of the Board of Supervisors
County of Contra Costa
[Seal]
............................................................................................................................................................................................................................................................
CERTIFICATE OF THE DEPUTY CLERK-
BOARD OF SUPERVISORS
COUNTY OF CONTRA COSTA
I,ANN (:ETIZVELT,.,I ,Deputy Clerk-Board of Supervisors of the County of
Contra Costa, California, do hereby certify that the foregoing is a full,true and correct copy of
Resolution No. 981207 duly adopted at a regular meeting of the Board of Supervisors of said
County duly and regularly and legally held at the regular meeting place thereof on the 28th day
of April, 1998,of which meeting all of the members of said Board of Supervisors had due notice.
I do hereby further certify that I have carefully compared the same with the
original minutes of said meeting on file and of record in my office and that said resolution is a
full, true and correct copy of the original resolution adopted at said meeting and entered in said
minutes and that except for the amendment in Resolution No. 981302 adopted June 9, 1998,said
resolution has not been further amended,modified or rescinded since the date of its adoption and
the same, as amended,is now in full force and effect.
I do hereby further certify that an agenda of said meeting was posted at least 72
hours before said meeting at a location in Martinez, California, freely accessible to members of
the public, and a brief general description of said resolution appeared on said agenda.
WITNESS my hand and the seal of the County of Contra Costa, State of
California,this'1st day of July, 1998.
A14�044
eputy Clerk-Board of
Supervisors of the County
of Contra Costa
[SEAL]
DOCSSFi:267306.2
C, t
OH&.S SECOND DRAFT
4/16/98
NOTICE OF INTENTION TO SELL
$130,000,000`
COUNTY OF CONTRA COSTA, CALIFORNIA
1998-1999 TAX AND REVENUE ANTICIPATION NOTES, SERIES A
NOTICE IS HEREBY GIVEN that the Board of Supervisors of the County of
Contra Costa(the "County"), State of California, intends to offer for public sale on Tuesday,
June 2, 1998, at the hour of 10:00 a.m., local time, at the offices of Bond Counsel, Orrick,
Herrington& Sutcliffe LLP, 400 Sansome Street, San Francisco,California 94111,not to exceed
$130,000,000 principal amount of tax and revenue anticipation notes of the County of Contra
Costa designated "County of Contra Costa, California, 1998-1999 Tax and Revenue Anticipation
Notes, Series A"(the "Notes"). The County reserves the right to postpone to a later date in June
said public sale time and/or date or to change the principal amount by announcing such
postponement or change by Munifacts News Service no latter than 24 hours prior to 10:00 a.m.
local time on June 2, 1998. If no legal bid or bids are received for the Notes on June 2, 1998 (or
such other date as is established by Munifacts News Service) at the time and place specified,bids
will be received for the Notes at the same place and at such time as shall be designated by
Munifacts News Service. As an accommodation to bidders,telephonic or fax notice of the
postponement of the sale time and/or date will be given to any bidder requesting such notice
from C.M. de Crinis &Co., Inc., the County's Financial Advisor: Attn. Jean Buckley(415)339-
8944. Failure of any bidder to receive such Munifacts, telephonic or fax notice shall not affect
the legality of the sale.
NOTICE IS HEREBY FURTHER GIVEN that the Notes will be offered for
public sale subject to the terms and conditions of the Official Notice of Sale for the Notes,dated
, 1998, and copies of said Official Notice of Sale and the Official iStatement relating
to the Notes will be furnished upon request to C.M. de Crinis & Co., Inc., 3000 Bridgeway, Suite
206, Sausalito, California 94965.
Dated: 11998.
/s/Philip J. Batchelor
County Administrator and Clerk
of the Board of Supervisors,
County of Contra Costa, State of California
Preliminary, subject to change.
DOCSSFI:252257.2
......... ......... ......... ......... ......... _........ 11.1.1
......... .............. ......... ......... .1....1..........11........... .... ......... ......... ......... .._......
_.__......._....................................................................................................................................
.....................................................
F
OH&S SECOND DRAFT
4/16/98
6
OFFICIAL NOTICE OF SALE
AND
BID FORM
COUNTY OF CONTRA COSTA
STATE OF CALIFORNIA
$130,000,000-
1998-1999 TAX AND REVENUE ANTICIPATION NOTES, SERIES A
DATE OF SALE
TUESDAY, JUNE 2, 1998
10:00 A.M., LOCAL TIME
BIDS TO BE RECEIVED AT THE OFFICES OF
BOND COUNSEL
ORRICK,HERRINGTON& SUTCLIFFE LLP
400 SANSOME STREET
SAN FRANCISCO, CALIFORNIA 94111
Tel: (415) 392-1122
Fax: (415) 773-5759
Preliminary, subject to change.
DOC'SSF1:252262.2
OFFICIAL NOTICE OF SALE
$130,400,000"
COUNTY OF CONTRA COSTA, CALIFORNIA
1998-1999 TAX AND REVENUE ANTICIPATION NOTES,SERIES A
NOTICE IS HEREBY GIVEN that faxed bids as well as sealed proposals will be
received and opened on behalf of the County of Contra Costa(the"County")at the place and up
to the time specified below for the purchase of$130,000,000* principal amount of County of
Contra Costa 1938-1999 Tax and Revenue Anticipation Notes, Series A(the"Notes"):
TIME: 10:00 a.m. local time on Tuesday,June 2, 1998, or at such later date as
shall be established by the County Administrator of the County or his
designee(the"County Administrator")and communicated through
Munifacts News Service not less than 24 hours prior to the time bids
are to be received. If no legal bid or bids are received for the Notes on
June 2, 1998 (or such other date as is communicated by Munifacts
News Service) at the time and place specified,bids will be received at
the same time and place specified on such other date as shall be
designated by Munifacts News Service.
As an accommodation to bidders, telephonic or fax notice of the
postponement of the sale date or change in the principal amount will
be given to any bidder requesting such notice by request directed to the
County's Financial Advisor,C.M. de Crinis & Co.,Inc., 3000
Bridgeway, Suite 206, Sausalito,California 94965;jAttn. Jean Buckley
(Phone - (415) 339-8944). Failure of any bidder to receive such
Munifacts, telephonic or fax notice shall not affect the legality of the
sale.
PLACE: Orrick,Herrington& Sutcliffe LLP
400 Sansome Street
2nd Floor, Conference Room_
San Francisco,California 94111
Telephone: (415) 392-1122
Facsimile: (415)773-5759
MAIL: BIDS:Mailed bids should be addressed to:
County of Contra Costa
c/o Orrick,Herrington& Sutcliffe LLP
400 Sansome Street
San Francisco, California 94111
Attn: Mary A. Collins, Esq.
"Preliminary, subject to Change.
DOC'SSFI:252262.2
_. _
. ..........................................
S
The Notes will be issued pursuant to a Resolution(the"Resolution")adopted by
the County on June 2, 1998. Copies of the Resolution will be furnished to any interested bidder
upon request to County Administrator, County of Contra Costa, 651 Pine Street, 11th Floor,
Martinez, CA 94553-0063, (510) 335-1086,Attn: Philip J. Batchelor.
BOOK-ENTRY ONLY: The Notes shall be issued in registered form by means
of a book entry system with no distribution of note certificates made to the public. One Note
certificate representing the Note issue will be issued to The Depository Trust Company,New
York, New York("DTC")registered in the name of Cede&Co., its nominee. The book-entry
system will',evidence ownership of the Notes in the principal amount of$5,000 or any integral
multiple thereof, with transfers of ownership effected on the records of DTC.
MATURITY: The Notes will be dated the date of issuance thereof, will pay
interest at the maturity thereof and will mature on October 1, 1999.
PREPAYMENT: The Notes are not subject to prepayment prior to maturity.
PURPOSE: The proceeds of the sale of the Notes will provide moneys to help
meet current(fiscal year 1998-1999) County expenditures, including current expenses, capital
expenditures and the discharge of other obligations or indebtedness of the County.
ADDITIONAL NOTES: The County has authorized the issuance of additional
parity notes,(the"Series B Notes") up to an aggregate principal amount with the Series A Notes
of$150,400,000.
SECURITY: The principal amount of the Notes and Series B Notes,together
with interest thereon, 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;'attributable to the
fiscal year 1998-1999 and which are lawfully available for the payment of current expenses and
other obligations of the County(the"Unrestricted Revenues"). The Notes and Series B Notes
are secured by the County's pledge to transfer to the Trustee for deposit in trust in a special fund
designated as the "1998-1999 Tax and Revenue Anticipation Note Repayment Fund"(the
"Repayment Fund") specific amounts on specific dates. Bidders are referred to the Resolution
and the Official Statement for further information.
CONTINUING DISCLOSURE: The County will deliver to the accepted bidder
or bidders a Continuing Disclosure Certificate in connection with the issuance of the Notes in
which, among other things, the County covenants to provide notice of certain material events to
nationally recognized municipal securities information depositories.
LEGAL OPINION--DISCLOSURE COUNSEL: The accepted bidder or
bidders will receive a disclosure opinion from Fulbright&Jaworski L.L.P., Los Angeles,
California regarding the Official Statement.
LEGAL OPINION--TAX EXEMPT STATUS: The Notes will be issued
subject to the approving legal opinion of Orrick, Herrington& Sutcliffe LLP ("Bond Counsel")
of San Francisco, California, approving the validity of the Notes and stating that, in the opinion
DOCSSF 1:252262.2 2
.... .......
.............
of Bond Counsel,based on an analysis of existing laws,regulations,rulings,and court decisions,
and assuming,among other matters, compliance with certain covenants,interest on the Notes is
excluded from gross income for federal income tax purposes under Section 103 of the Internal
Revenue Code of 1986 and is exempt from State of California personal income taxes. A copy of
the proposed opinion of Bond Counsel is set forth in Appendix C of the Official Statement.
FORM OF BUD—NO DISCOUNT: The bids may be for all or part(in
increments of$25,000,000)of the Notes hereby offered for sale. Bids for less than all of the
issue are required to be made in increments of$25,000,000 and no bid for less than$25,000,000
principal amount of Notes will be entertained. Awards will be made in increments of
$25,000,000 up to$125,000,000 with the remainder to be then awarded. Each bid shall state the
purchase price,which shall not be less than par,and the interest rate,which shall not exceed 5%
per annum, and together with the bidder's good faith check described herein(unless a Financial
Surety Bond is furnished pursuant to"BED CHECK OR BOND"),must be delivered by
facsimile transmission, as described below,or enclosed in a sealed envelope addressed to the
County and received by the time and at the place specified above. Each bid must be clearly
marked"Proposal for Purchase of County of Contra Costa, California, 1998-1999 Tax and
Revenue Anticipation Notes,"or words of similar import. Each bid must be in accordance with
the terms and conditions set forth in this Official Notice of Sale.
WARNINGS REGARDING FAX BIDS: BIDS SUBMITTED BY
FACSIMILE TRANSMISSION ARE DEEMED LATE AND WILL NOT BE EVALUATED
UNLESS, AT PRECISELY THE TIME INDICATED ABOVE FOR SUBMISSION OF BIDS,
THE ENTIRE BID FORM HAS BEEN FULLY EJECTED FROM THE RECEIVING FAX
MACHINE AT THE PLACE OF THE BID OPENING,AND THE INTEREST RATES,
TOTAL PURCHASE PRICE,AND NAME AND SIGNATURE OF THE BIDDER ARE
CLEARLY READABLE BY THAT TIME. NEITHER THE COUNTY,THE COUNTY'S
FINANCIAL ADVISOR,NOR THE COUNTY'S BOND COUNSEL WILL ACCEPT
RESPONSIBILITY FOR,AND THE BIDDER EXPRESSLY ASSUMES THE RISK OF,ANY
INCOMPLETE, ILLEGIBLE OR UNTIMELY BID SUBMITTED BY SUCH BIDDER BY
FACSIMILE TRANSMISSION, INCLUDING BY REASON OF GARBLED
TRANSMISSIONS,MECHANICAL FAILURE,ENGAGED TELEPHONE OR
TELECOMMUNICATION LINES AT THE PLACE OF BID OPENING, OR ANY OTHER
CAUSE FOR REJECTION ARISING OUT OF ANY BIDDER'S ELECTION TO DELIVER
ITS BID BY MEANS OTHER THAN HAND DELIVERY.NO ATTEMPT WILL BE MADE
PRIOR TO THE DEADLINE FOR OPENING BIDS TO INFORM ANY BIDDER THAT ITS
BID WAS INCOMPLETE,ILLEGIBLE, OR NOT RECEIVED.
INTEREST RATE: Interest with respect to the Notes will be computed on the
basis of a 360-day year and a 30-day month and accrues from the date of issuance of the Notes.
Interest on the Notes is payable on July 1, 1999 and at the maturity of the Notes. In connection
with the bid submitted for the Notes, (1)each bidder must bid an interest rate in a multiple of one
one-thousandth of one percent(1/1000 of I%)per annum,which rate must be less than 5%per
annum; (2)interest with respect to a Note shall be computed from the date of issuance thereof
(expected to be July 1, 1998)to July 1, 1999 and to the stated maturity date of October 1, 1999,
at the interest rate specified in the bid; (3)the same interest rate shall apply to all Notes(within
the specified $25,000,000 increments); and (4) any premium must be paid as part of the purchase
DOCSSFI:252262.2 3
............... ......
-....... ..........
........ .....
price, and no bid will be accepted which contemplates the waiver of any interest or other
concession by the bidder as a substitute for payment in full of the purchase price.
BEST BID: The Notes will be awarded to the best responsible bidder or bidders,
considering the rate specified and the premium offered,if any, in increments of$25,000,000 up
to $125,000,000, and the remainder out of the next best$25,000,000 until all$130,000,000 of
Notes have been awarded. Therefore, a bidder may be awarded Notes in an amount which is less
than that requested by such bidder. The highest bid or bids will be determined by deducting the
amount of the premium bid,if any, from the total amount of interest which would be required to
be paid with respect to the $25,000,000 incremental amount of Notes(or lesser final amount)
from July 1 1998 to their maturity date at the interest rate specified in the bid, and the award will
be made on the basis of lowest net interest cost.
RIGHT OF REJECTION: The County reserves the right,in its sole discretion,
to reject any and all bids and to waive any irregularity or informality in any bid.
PROMPT AWARD: The County Administrator or his designee will take action
awarding the Notes or rejecting all bids not later than twenty-six (26)hours after the expiration
of the time herein prescribed for the receipt of proposals,unless such period for award is waived
by the successful bidder or bidders. Notice of the award will be given promptly to the successful
bidder or bidders.
DELIVERY AND PAYMENT: Delivery of the Notes through DTC is expected
to be made to the successful bidder on or about July 1, 1998. Payment for the Notes must be
made in Federal Reserve Bank funds or other immediately available funds. Any expense in
providing immediately available funds,whether by transfer of Federal Reserve Bank funds or
otherwise, shall be borne by the purchaser.
CERTIFICATE REGARDING REOFFERING PRICE: As soon as
practicable, but not later than the delivery date of the Notes,the successful bidder or bidders for
each accepted bid must submit to the County a certificate or certificates specifying the reoffering
price at which at least 10°10 of the Notes of such bid or bids were sold(or were offered in a bona
fide public offering and as of the date of award of the Notes to the successful bidder were
reasonably expected to be sold)to the public. Such certificate or certificates shall be in form and
substance satisfactory to Bond Counsel and shall include such additional information as may be
requested by Band Counsel.
RIGHT OF CANCELLATION: The successful bidder or bidders shall have the
right, at their option, to cancel the contract of purchase if the County shall fail to execute the
Notes and tender the same on or before sixty(60)days after the award thereof, and in such event
the successful bidder or bidders shall be entitled to the return of the deposit accompanying the
bid.
BID CHECK OR BOND: A Good Faith Deposit("Deposit")in the farm of a
certified or cashier's check or a bid bond("Financial Surety Bond"), in the amount of two
hundred fifty thousand dollars ($250,000)payable to the order of the County,must accompany
each proposal as a guarantee that the bidder, if successful,will accept and pay for the Notes in
OOCSSF1:252262.2 4
accordancewith the terms of the bid. If a check is used, it must accompany the bid and be drawn
on a bank or trust company having an office in San Francisco or Los Angeles,California. If a
Financial Surety Bond is used, it must be from a pre-qualified insurance company whose claims
paying ability is rated in the highest rating category by Moody's Investors Service or Standard&
Poor's, and is licensed to issue such a bond in the State of California. The form of such Financial
Surety Bond is subject to prior approval by Orrick,Herrington& Sutcliffe LLP, San Francisco,
California,Bond Counsel, and such form must be submitted to C.M. de Crinis& Co.,Inc.,the
Financial Advisor,prior to the opening of proposals. Such Financial Surety Bond must provide
that the surety shall make payment of the full amount of the Deposit by wire transfer to the
County within 24 hours of the receipt of written notice from either the County or the Financial
Advisor that the bidder has failed to submit the Deposit as required by this Official Notice of
Sale. The Financial Surety Bond must identify each bidder whose Deposit is guaranteed by such
Financial Surety Bond. If the Notes are awarded to a bidder utilizing a Financial Surety Bond,
then the purchaser("Purchaser")is required to submit its Deposit to the County in the form of a
certified or cashier's check or wire transfer not later than 3:30 p.m., California time, on the next
business day following the award. If such Deposit is not received by that time, the Financial
Surety Bond may be drawn by the County to satisfy the Deposit requirement. The Deposit shall
be cashed by the County and shall then be applied toward the purchase price of the Notes. If
after the award of the Notes the successful bidder or bidders fail to complete their purchase on
the terms stated in their proposal,the Deposit will be retained by the County. ;The checks
accompanying unaccepted proposals will be returned promptly. No interest on the Deposit will
accrue to any bidder.
STATEMENT OF NET INTEREST COST: Each bidder is lrequested,but is
not required, to state in its bid the net interest cost in dollars,which shall be considered as
informative only and not binding.
n
OFFICIAL STATEMENT: The County will approve a Preliminary Official
Statement relating to the Notes,which will be"deemed final"by the County for purposes of SEC
Rule 15c2-12, except for the omission of certain pricing and related information, and has
authorized the use of the final Official Statement in connection with the sale of the Notes. Up to
three hundred copies of the final Official Statement will be supplied to the purchaser or
purchasers of the Notes for this purpose at the expense of the County.
RESALE IN OTHER STATES: The successful bidder or bidders will assume
responsibility for taking any action necessary to qualify the Notes for offer and sale in
jurisdictions other than California, and for complying with the laws of all jurisdictions on resale
of the Notes, and shall indemnify and hold harmless the County and its officials and supervisors
from any loss or damage resulting from any failure to comply with any such law.
CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION:
The successful bidder or bidders will be required,pursuant to State law, to pay any fees to the
California Debt and Investment Advisory Commission("CDIAC"). CDIAC will invoice the
successful bidder or bidders after the delivery of the Notes.
RATINGS IN EFFECT: Each proposal will be understood to be conditioned
upon their being in place at the date of delivery of the Notes a rating or ratings at least as high as
DOCSSFI:252262.2 5
the rating or ratings,if any, as were in place with respect to the Notes at the time fixed for
receiving bids.
CHANGE IN TAX-EXEMPT STATUS: At any time before the Notes are
tendered for delivery,the successful bidder or bidders may disaffirm and withdraw its proposal if
the interestreceived by private holders of obligations of the same type and character as the Notes
(as determined by Bond Counsel) shall be declared to be includable in gross income under
present federal income tax laws, either by a federal court, or by legislation enacted subsequent to
the date of this Official Notice of Sale.
CLOSING DOCUMENTS: Each proposal will be understood to be conditioned
upon the County's furnishing to the accepted bidder or bidders,without charge,concurrently with
payment and delivery of the Notes,the following closing papers, each dated the date of such
delivery:
(a) Legal Opinion: The legal opinion of Orrick,Herrington& Sutcliffe LLP,
Bond Counsel, described in this Official Notice of Sale under the heading"Legal Opinion -- Tax
Exempt Status."
(b) No Litigation Certificate: Certificate of the County that there is no
litigation pending concerning the validity of the Notes, the existence of the County or.the
entitlement of the County Officers thereof to their respective offices except as set forth in the
Official Statement.
(c) Certificate: A certificate of an official of the County stating that as of the
date thereof, to the best of the knowledge and belief of said official, the Official Statement does
not contain an untrue statement of a material fact or omit to state any material' fact necessary in
order to make the statements made therein, in light of the circumstances under which they are
made, not misleading.
(d) Receipt: A receipt of the County showing that the purchase price of the
Notes has been received by the County.
(e) Disclosure Opinion: The legal opinion of Fulbright&Jaworski L.L.P.,
Disclosure Counsel, described in this Official Notice of Sale under the heading"Legal Opinion-
Disclosure Counsel".
(f) Continuing Disclosure Certificate: The Certificate described in this
Official Notice of Sale under the heading"Continuing Disclosure."
IOCSSF 1:252262.2 6
ADDITIONAL INFORMATION: A copy of said Preliminary Official
Statement and any other information concerning the proposed financing will be furnished upon
request to either the financial advisor to the County,C.M. de Crinis &Co., Inc., 3000
Bridgeway, Suite 206, Sausalito, California 94965,(415) 339-8944,or the Office of the County
Administrator of the County,(510) 335-1086.
Dated: , 1998.
COUNTY OF CONTRA.COSTA.
By /s/Philip J. B-atchelor
County Administrator and
Clerk of the Board of Supervisors,
County of Contra Costa,
State of California
nocssrI:252262.2 7
_... _.
_.....
BID FORM
PROPOSAL FOR THE PURCHASE OF
COUNTY OF CONTRA COSTA,CALIFORNIA
1998-1999 TAX AND REVENUE ANTICIPATION NOTES, SERIES A
, 1998
County of Contra Costa
c/o Orrick, Herrington&Sutcliffe LLP
400 Sansome Street
San Francisco,CA 94111
Attn: Mary A. Collins
Tel: (415) 773-5998
Fax: (415)'773-5759
Dear Sir:
Pursuant to the Official Notice of Sale, dated , 1998, and in accordance with all
terms and conditions of your Official Notice of Sale for the sale of the County of Contra Costa,
California, 1998-1999 Tax and Revenue Anticipation Notes, Series A (the"Nates"), we offer to
purchase the Notes, to be dated the date of issuance thereof(July 1, 1998) and to mature on
October 1, 1999, in the principal amount set forth below (as a whole in the amount of
,000,000 or in part in increments of$25,000,000), as follows:
Principal Amount Premium Interest Rate
i
This proposal is made subject to all the terms and conditions of the Official Notice of Sale dated
, 1998,all of which terms and conditions are made a part hereof as though set
forth in full in this proposal.
This proposal is subject to acceptance within twenty-six (26)hours after the expiration of the
time for the,receipt of proposals, as provided pursuant to said Official Notice of Sale.
DOCSSF1:252262.2
.............................................................. .........................
...............................................
Check One:
There is enclosed herewith a certified or cashier's check for$250,000'payable to the order
of the County of Contra Costa; or
We have obtained a Financial Surety Bond in the amount of$250,000 payable to the
County of Contra Costa.
Our calculation,made as provided in the Official Notice of Sale,but not constituting any part of
this proposal, of the net interest cost with respect to each $25,000,000 increment of Notes is as
follows:
Total Interest $
Less Premium
Net Interest Cost $
We understand that bids will be awarded in increments of$25,000,000 up to $125,000,000 and
then the remainder will be awarded out of the next$25,000,000 bid so that all Notes are
awarded. Therefore,we may be awarded Notes in an amount which is less than that requested
by us.
We represent that we have full and complete authority to submit this bid on behalf of our bidding
syndicate and that the undersigned will serve as the lead manager for the group if the Notes are
awarded pursuant to this bid.
Respectfully submitted, Address:
(Firm)
Telephone#:
Telecopy#:
(Authorized Signature)
DOCSSFI:252262.2 2
.................................................................. ..............................................-
.................................................................................................
.............................................................................................
...........
__ _ ............................................
. .. ........................................................................................................................................................................................................................................
If this proposal is not accepted,the good faith check should be returned to the following:
Name:
Address:
Following is a list of the members of our account on whose behalf this bid is made:
DOCSSF 1:252262.2 3
PRELIMINARY OFFICIAL STATEMENT DATED 1998
NEW ISSUE-BOOK EN'T'RY ONLY RATINGS: Moody's:
Standard&Poor's:
In the opinion of Orrick,Herrington&Sutcliffe LLP,Bond Counsel,based on an analysts of existing laws,regulations,rulings and court
decisions and assuming,among other matters,compliance with certain covenants,interest on the Notes is excluded from gross
income far federal income tax purposes under Seaton 1 b3 of the Internal Revenue Code of 1986 and is exempt from State
ofCalifornia personal income taxes.In the further opinion of Bond Counsel, interest on the Notes is not a specific
preference item for purposes of the federal individual or corporate alternative minimum taxes,although Bond
Counsel observes that such interest is included in adjusted current earnings in calculatingfederal
corporate alternative minimum taxable income. Bond Counsel expresses no opinion
regarding any other tax consequences related to the ownership or disposition
of or the accrual or receipt of interest on,the Notes.
See"TA,YB,YBMPTION"herein.
COUNTY OF CONTRA COSTA, CALIFORNIA'.
1998-1999 TAX AND REVENUE ANTICIPATION NOTES,SERIES A
Dated: July 1, 1998 Due: October 1, 1999
The County of Contra Costa,California(the"County") 1998-1999 Tax and Revenue Anticipation Notes, Serres
A(the "Notes")are being issued to finance the seasonal cash flow requirements of the County during the fiscal
year ending June 30, 1999. The Notes will be issued as fully registered Notes and, when issued, will be
registered in the name of and held by Cede & Co., as nominee for The Depository Trust Company ("DTC"),
New York, New York, an automated depository for securities and clearing-house for securities transactions.
Purchasesof the Notes will be made under the book-entry system (without certificates)'maintained by DTC in
the denominations of$5,000 or any whole multiple thereof. Purchases of the Notes may be made only through
DTC Participants,as more fully described herein, Beneficial owners of the Notes will not be entitled to receive
physical delivery of the Notes. So long as DTC or its nominee, Cede & Co., is the registered owner of the
Nates,payments of principal of and interest on the Notes will be made directly to DTC or its nominee,Cede&
Co., which will remit such payments to the DTC Participants, which will in turn remit such payments to the
beneficial'owners of the Notes. See"THE NOTES-Book-Entry-Only System"herein.
The Notes will be issued in an aggregate principal amount of$ * on July 1 1998 and will mature
999
on October 1, 1999. Interest on the Notes is payable on July 1, 1and at the maturity of the Notes. Principal
of and interest on the Notes are payable in lawful money of the United States of America and interest on the
Notes will be computed on the basis of a 350-day year comprised of twelve 30-day months and accrues from
the date of issuance, July 1, 1998. Interest due on the Notes on July 1, 1999 will be payable by check to the
registered owners appearing on the registration books of the County, as of the close of business on the 15`'day
of the calendar month immediately preceding the interest payment date. Both the principal of and the interest
payable at maturity on the Notes will be payable to the registered owners upon surrender thereof on the Note
maturity date. The Notes are not subject to redemption prior to maturity.
The Notes,in accordance with California law,are general obligations of the County,but are payable only out of
the taxes, income,revenue,cash receipts and other moneys of the County attributable to the fiscal year 1998-99
and legally available for payment thereof. The Notes are direct obligations of the County and,to the extent set
forth herein, are legal investments for commercial banks in California and are eligible to secure deposits of
public moneys.
The Notes are equally and ratably secured by a pledge of certain revenues as described in "THE NOTES -
Security for the Notes"herein. The Resolution of the Board of Supervisors of the County authorizing the Notes
requires that certain revenues of the County pledged to the payment of the Notes be transferred to a County
trust fund on certain dates and held in such special fund until these funds are used to pay principal of and
interest on the Notes when due.
The Notes will be awarded pursuant to a competitive bidding to be held on June 2, 1998 or on such later date as is
announced to the Notice Inviting Bids dated , 1998. The Notes are offered when, as and if issued by the Count),,
subject to the approval of validity by Orrick, Herrington & Sutcliffe LLP, San Francisco, California, Bond Counsel.
Certain other legal matters will be passed upon for the County by County Counsel and by Fulbright&Jaworski L.L.P., Los
Angeles, California, Disclosure Counsel. It is expected that the Notes will be available for delivery to DTC on or about
July 1, 1998. For information regarding the competitive sale of the Notes,contact the Financial Advisor to the County.
C. M. DE CRINIS & CO., INC.
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY AND IS NOT A SUMMARY OF THE TRANSACTION.
INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORI-IED
INVESTMENT DECISION.
Dated: , 1998
*Preliminary,subject to change.
This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy the
Notes nor shall there be any sale of the Notes by any person in any jurisdictio>W in which or to any
person to whore it is unlawful to matte such an offer, solicitation or sale. No dealer, broker,
salesperson or other person has been authorized by the County or the Underwriter to give any
information or to make any representations,other than those contained herein;in connection with
the offering of the Notes and, if given or made, such information or representations must not be
relied upon. The information set forth herein has been obtained from sources which are believed
to be current and reliable, but it is not guaranteed as to accuracy or completeness. This Official
Statement is not to be construed as a contract with the purchasers of the Notes. Estimates and
opinions are included and should not be interpreted as statements of fact. Summaries of
documents do not purport to be complete statements of their provisions. The information and
expressions of opinion 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 County since the date hereof.
TABLE OF CONTENTS
Page Page
COUNTY OF CONTRA COSTA Proposition 187..........................................................16
BOARD OF SUPERVISORS AND Future Initiatives.......................................................17
COUNTY OFFICIALS...................... .. ......i GENERAL COUNTY,ECONOMIC,DEMOGRAPHIC
SUMMARY STATEMENT....................... .. I AND FINANCIAL INFORMATION..............:........................,...
17
The 1998-1999 Tax and ADDITIONAL INFORMATION...................:............................
17
Revenue Anticipation Notes.......................................I APPENDix A-GENERAL COUNTY,ECONOMIC,AND
Purposes of the Issue ...1 DEMOGRAPHIC INFORMATION.......................................
.A-1
County of Contra Costa 1998-1999 General......................................................................A-1
Short-Term Financing Program..................................2 County Government..................................................A-I
ContinuingDisclosure................................................2 Population....................................___..........,.........A-1
THE NOTES..... ......................................................3 Industry and Employment................,............,...........A-2
General Provisions....................... ...3 Major Employers..............................,.......,...............A-3
Authority for Issuance .,,.,3 Impact of Military Base Closings..............................A-
Security for the Notes.............. .....3 Measures of Income.................................................,A-6
AVAILABLE SOURCES OF PAYMENT........................... ...5 Commercial Activity..............,.,,............,..,..............,A-7
Intrafund Borrowing and Cash Flow..........................6 Construction Activity...............................................A-
The Contra Costa County Investment Pool................9 Transportation...................................,.......................A-8
TAx ExEMPTION_................. ...,10 Agriculture....,..............................:.........,.......,..........A-9
LEGAL MATTERS...............................................................,12 Environmental Control Services...............................A-1
LEGALITY FOR INVESTMENT IN CALIFORNIA.......................12 Education and Community Services.........................A-1#1
RATINGS-_........................... ..12 APPENDix B-COUNTY FINANCIAL INFORMATION......,.......B-I
LITIGATION................................... . ....... ....... 13 APPENDrx C-FORM OF OPINION OF
...... ..............
BOND COUNSEL ....................................... -#
CONSTITUTIONAL.AND STATUTORY LIMITATIONS ON APPENDIX D-FI
TAxES,REVENUES ANT?APPROPRIATIONS.......................13 FINANCIAL STATEMENTS IS
CAL YEAR
Article XIII A of the California Constitution.....,.....13 THE COUNTY FOR THE FIS
............13 ENDED TUNE 3U, 1997,.....,.......................D-1
Legislation implementing Article XIIIA......
Article XIII B of the California Constitution............14 APPENDIX E-FORM OF CONTINUING
Article XII C and Article Article XIII D_........... ...#5 DISCLOSURE CERTIFICATE........................E-I
Proposition 62................... „16 APPENDix F-BOOK ENTRY-ONLY SYSTEM........................F-1
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER
MAY OFFER AND SELL THE NOTES TO CERTAIN DEALERS AND BANKS AT PRICES LOWER
THAN THE >PUBLIC OFFERING PRICE STATED ON THE COVER PAGE HEREOF AND SAID
PUBLIC OFFERING PRICE MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.
_...... ......... ......... ......... ......... ......_..._. .._. _
..._......_.. . ._....... ......... ......... ........ ......... ......... ......... ......... ..
.... ......_.. ........ ......... ............ ...... .........
COUNTY OF CONTRA COSTA, CALIFORNIA
BOARD OF SUPERVISORS
Jim Rogers
(District 1)
Chair
Gayle B. Uilkema Donna Gerber
(District 2) (District 3)'
Mark DeSaulnier Joe Canciamilla
(District 4) (District 5)'
COUNTY OFFICIALS
Philip J. Batchelor
Clerk of the Board and
County Administrator
Laura W. Lockwood
Director, Capital Facilities and Debt Management
Kenneth J. Corcoran Alfred P. Lomeli
Auditor-Controller Treasurer-Tax Collector
Victor J. Westman Stephen L. Weir
County Counsel County Clerk-Recorder
BOND COUNSEL FINANCIAL ADVISOR
Orrick, Herrington& Sutcliffe, LLP C. M. de Crinis& Co., Inc.
San Francisco, California Sausalito, California
DISCLOSURE COUNSEL
Fulbright&Jaworski L.L.P.
Los Angeles, California
i
COUNTY OF CONTRA COSTA,CALIFORNIA
199$ - 1999 TAX AND REVENUE ANTICIPATION NOTES,SERIES A
SUMMARY STATEMENT
This Summary Statement does not purport to be complete, and reference is made to the
body of this Official Statement, the Appendices and the documents referred to herein for more
complete statements with respect to the matters summarized.
The 1998-1999 Tax and Revenue Anticipation Notes
This Official Statement, which includes the attached Appendices, provides certain
informationconcerning the sale and delivery of the 1998-1999 Tax and Revenue Anticipation
Notes, Series A (the "Notes") of the County of Contra Costa, California (the "County"). The
Notes are equally and ratably secured as described in the section entitled"THE NOTES - Security
for the Notes" herein. The Notes are general obligations of the County, but are payable only out
of taxes, income, revenue, cash receipts and other moneys of the County attributable to Fiscal
Year 1998-99 (July 1, 1998 through June 30, 1999)and legally available for the payment thereof.
The Resolution of the Board of Supervisors of the County of Contra Costa(the "Board"),
adopted on April 28, 1998 (the "Resolution"), provides for the borrowing of funds for Fiscal
Year 1998-99 through the issuance and sale of the Notes, in two series. On July 1, 1998 the
County plans to issue the Notes, which will be secured by a pledge of certain taxes, income,
revenue, cash receipts and other moneys of the County attributable to the 1998-99 fiscal year and
legally available for the payment thereof. If circumstances warrant, the County may issue in
Fiscal Year 1998-1999 an additional series of 1998-1999 Tax and Revenue Anticipation Notes
(the "Series';B Notes") in an amount not to exceed $20* million. The Series B Notes, if issued,
would be issued no later than January 1, 1999, would have a maturity date no earlier than the
maturity date of the Notes, and would be secured by the same security pledge as the Notes. See
"THE NOTES- Security for the Notes" herein. The Resolution provides, among other things, that
the issuance'of the Series B Notes may occur only if the issuance of that additional series does
not cause a reduction in the ratings from Moody's Investors Service and Standard & Poor's on
the Notes.
Purposes of the Issue
The Notes are being issued to finance, in part, the County's General Fund cash flow
requirements during the 1998-99 fiscal year. The proceeds received from the sale of the Notes
will allow the County to cover periods of deficits resulting from an uneven,;flow of revenues.
County General Fund expenditures tend to occur in relatively level amounts throughout the year,
while receipts follow an uneven pattern. Cash receipts from secured property tax installment
payments primarily occur in December and April, while payments from 'other government
agencies are sometimes'delayed. As a result, the General Fund cash balance tends to show a
deficit during parts of the fiscal year. The Notes are intended to finance such cash deficits, and
are an alternative to borrowing from County-held pooled income funds.
*Preliminary, subject to change 1
_. _. ......... ......... ......... ......... ...............11.1.1 _
. ....... .._....... ......... ......... ......... ......... ......... ......... ......... ......... ................ .
. . ......................................................................................................................................................................
. . ...................................................
County of Contra Costa 1998-1999 Short-Terra Financing Program
The Notes represent the twenty-first short-term financing program which the County has
undertaken to meet its cash flow requirements. The County has never defaulted on the payment
of principal or interest on any of its short-term or long-term obligations.
Set forth below is a history of the County's short-term financing programs.
HISTORY OF COUNTY OF CONTRA COSTA
SHORT-TERM FINANCING PROGRAMS
Date of Issuance Par Value Maturity Date
September 11, 1979 S 20,000,000 June 17, 1980
July 15, 1980 30,000,000 June 18, 1981
July 10, 1981 30,500,000 June 24, 1982
July 1, 1982 48,000,000 June 28, 1983
July 1, 1983 64,000,000 July 18, 1984
July 18, 1984 65,000,000 July 31, 1985
July 1, 1985 70,000,000 July 30, 1986
July 1, 1986 75,000,000 July 29, 1987
February 11, 1987 10,000,0000) July 29, 1987
July 1, 1987 30,000,000 July 27, 1988
July 1, 1988 45,000,000 August 1, 1989
July 3, 1989 57,000,000 August 3, 1990
July 2, 1990 65,000,000 August 2, 1991
July 1, 1991 75,000,000 July 30, 1992
July 1, 1992 117,000,000 July 30, 1993
July 1, 1993 125,000,000 July 29, 1994
August 5, 1993 15,000,000 August 26, 1994
July 5, 1994 95,000,000 July 7, 1995
July 5, 1995 90,000,000 July 3, 1996
July 1, 1996 120,000,000 July 3, 1997
July 1, 1997 130,000,000(2) July 1, 1998
(�> Taxable Notes.
(2) All funds necessary to retire these Notes have been placed in a trust fund to be dispersed on July 1, 1998,
ContinuingDisclosure
The ',County will provide notices, during the time the Notes are outstanding, of the
occurrence of certain enumerated events, if material, in compliance with Rule 15c2-12 of the
Securities and Exchange Commission(the "Rule"). The specific nature of the notices of material
events and certain other terms of the continuing disclosure obligation are included below under
"APPENDix E - FORM OF CONTINUING DISCLOSURE CERTIFICATE." There has been no failure
on the part of the County to comply with prior undertakings under the Rule.
2
THE NOTES
General Provisions
The Notes will be executed and delivered in fully registered form without coupons, in
denominations of$5,000 or integral multiples thereof. Principal of and interest on the Notes are payable
in lawful money of the United States of America. Interest on the Notes is payable on July 1, 1999 and at
the maturity of the Notes. Interest due on July 1, 1999 shall be payable to the person in whose name
such Note is registered on the registration books of the County as of the close of business on the 15th
day of the calendar month immediately preceding the interest payment date (the "Record Date"). Such
interest is to be paid by check mailed to such registered owner. Both the principal of and interest
payable at maturity on the Notes will be payable to the registered owners of the Notes upon surrender
thereof at the office of the Treasurer—Tax Collector of the County (the "Paying Agent", who is also the
"Registrar") upon maturity. Principal and interest are payable by the Paying Agent to the registered
owner of the Notes, Cede & Co., as nominee of The Depository Trust Company in New York, New
York ("DTC"). DTC will act as securities depository for the Notes which will be sold in book-entry
form only. The Notes will mature on October 1, 1999. For additional information on the book-entry-
only system:utilized by DTC, see "APPENDIX F - BOOK-ENTRY-ONLY SYSTEM"hereto.
THE COUNTY WILL HAVE NO RESPONSIBILITY OR OBLIGATION, INCLUDING ANY
OBLIGATION FOR THE PAYMENT OF PRINCIPAL AND INTEREST AND THE PROVISION OF NOTICE
WITH RESPECT TO THE NOTES, TO SUCH DTC PARTICIPANTS OR TO THE PERSONS FOR WHOM
THEY ACT AS NOMINEES WITH RESPECT TO THE NOTES. SO LONG AS CEDE & CO., OR A
SUCCESSOR AS NOMINEE, IS THE REGISTERED OWNER OF THE NOTES, REFERENCES HEREIN TO
THE NOTE OWNERS OR THE REGISTERED OWNERS OF NOTES SHALL MEAN CEDE & CO OR
SUCH NOMINEE AND NOT THE BENEFICIAL OWNERS OF THE NOTES.
DTC may determine to discontinue providing its services with respect to the Notes at any time
by giving notice to the County. In the event (i) DTC determines not to continue to act as securities
depository for the Notes, or(ii) the County determines that DTC shall no longer so act, then the County
will discontinue the book-entry system with DTC. If the County fails to identify another qualified
securities depository to replace DTC, the Notes will no longer be restricted>to being registered in the
registration 'books kept by the County in the name of the depository or its nominee, but shall be
registered in whatever name or names the owners of Notes being transferred or exchanged shall
designate, in accordance with the Resolution. Under such circumstances, in, the event that a successor
securities depository is not obtained,Note certificates are required to be prepared and delivered.
Authority for Issuance
The Notes are issued under the authority of Article 7.6, Chapter 4, Fart 1, Division Z,
Title 5 (commencing with Section 53850) of the California Government Code and pursuant to
the Trust Agreement and the Resolution.
Security for the Notes
The principal amount of the Notes, and of the Series B Notes, together with the interest
thereon 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 attributable to Fiscal Year 1998-99
and which are lawfully available for the payment of current expenses and other obligations of the
County (the "Unrestricted Revenues").
3
As security for the payment of the principal of and interest on the Notes, and of the Series
B Notes, the County has pledged to deposit in trust in a special County fund designated as the
"1998 - 1999 Tax and Revenue Anticipation Note Repayment Fund" (the "Repayment Fund")
money or securities (eligible for investment as permitted pursuant to Section 53601 of the
Government Code) as follows: an amount equal to 50% of the principal amount of the Notes and
the Series B Notes from the first Unrestricted Revenues received by the County during the
accounting period commencing on December , 1998 and ending January _, 1999 (the "Sixth
Accounting Period") and an amount equal to 50% of the principal amount of the Notes and the
Series B Notes together with an amount sufficient (net of anticipated earnings on moneys in the
Repayment Fund) to satisfy and make up any deficiency in the Repayment Fund with respect to
the prior Accounting Period and to pay the interest on the Notes and the Series B Notes on July
1, 1999 and at maturity, from the first Unrestricted Revenues received by the County during the
accounting period commencing on April _, 1999 and ending May _, 1999 (the "Tenth
Accounting,Period"). The amounts pledged by the County for deposit into the Repayment Fund
from the Unrestricted Revenues received during each indicated accounting period are hereinafter
called the"Pledged Revenues".
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
deposit in 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 Series B 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.
The Pledged Revenues with respect to the accounting period in which received shall be
deposited by the Treasurer-Tax Collector of the County (the "Treasurer") 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 the Resolution; and
the Other Pledged Moneys, if any, shall be deposited by the Treasurer in the Repayment Fund on
the third business day prior to the end of such accounting period, and on each business day
thereafter, until the full amount of the moneys required for repayment 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, all of the amounts attributable to the sale of the Notes and the Series B Notes have not
been withdrawn from the County General Fund, the amounts to be transferred to the Trustee for
deposit in the Repayment Fund during the accounting period in which received shall be
deposited as soon as received. The principal of and interest on the Notes and the Series B Notes
shall constitute a first lien and charge on, and shall be payable from, moneys in the Repayment
Fund.
The Repayment Fund is required to be held by the County, in trust, and applied only for
the purposes and as directed in the Resolution. Any moneys deposited in the Repayment Fund
shall be for the benefit of the owners of the Notes and the Series B Notes. All amounts in the
Repayment Fund shall be held by the Treasurer, as trustee and pledge holder for the benefit of
owners of the Notes and the Series B Notes.
The Treasurer will use the moneys in the Repayment Fund on the interest payment date to
pay interest on the Notes and the Series B Notes then due and on the maturity date of the Notes
and the Series B Notes to pay the principal of and interest on the Notes and the Series B Notes
then due. Any moneys remaining in the Repayment Fund after such payment on the Notes and
the Series B Notes, or after provision for such payment has been made, will be transferred by the
Treasurer to the General Fund of the County.
4
......... ......... ......... ......... ........... _._._...
__....... .._...... . ......... ......... ........ ......... ......... . ........ ......... ......... ...............
_._... .. ..... ......... ........... ....... .........
. ... ............................................
Moneys in the Repayment Fund shall be invested by the Treasurer upon receipt of written
direction from the County and 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 53£01, and no such
investments shall have a maturity date later than the maturity date of the Notes or of the Series B
Notes. Notwithstanding what investments are permitted, the County intends to invest moneys in
the Repayment Fund solely in U.S. Treasury and agency obligations backed by the full faith and
credit of the United States. The proceeds of any such investments shallbe retained in the
Repayment Fund until payment of principal and interest(or provision therefor) has been made in
accordance,with the preceding paragraph, at which time any excess amount shall be transferred
by the Treasurer for deposit in the General Fund of the County.
A March 1995 ruling of the United States Bankruptcy Court for the Central District of
California, concerning an issue of Orange County notes issued in 1994 under the same statutory
authority as the Notes, held that the lien securing the Orange County notes did not attach to
revenues received by Orange County after the filing of its bankruptcy petition on December 6,
1994, and therefore, Orange County was not required to set aside the revenues pledged under the
note resolution following the bankruptcy. The Bankruptcy Court ruled that under the United
States Bankruptcy Code that the lien securing the Orange County notes did not attach to revenues
received by Orange County after the filing of its bankruptcy petition on December 6, 1994
because the lien was a consensual security interest rather than a statutory lien. In July 1995, the
United States District Court for the Central District of California reversed the decision of the
Bankruptcy' Court. Orange County appealed the decision of the District Court to the United
States Court of Appeals for the Ninth Circuit. Before the Ninth Circuit rendered a decision, the
parties settled their disputes. Accordingly, it is not clear, whether if the County were to file for
bankruptcy,'it would be required to set aside revenues as described in the preceding paragraphs.
AVAILABLE SOURCES OF PAYMENT
The Notes, in accordance with California law, are general obligations'of the County, but
are payable only out of the taxes, income, revenue, cash receipts and other moneys of the County
attributable to the Fiscal Year 1998-99 and legally available for payment thereof. A 1978 change
in the Constitution of the State of California substantially limited the County's ability to levy ad
valorem taxes. See "CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES, REVENUES
AND APPROPRIATIONS." Additionally, California counties are not permitted by State law to
impose fees to raise general revenue, but only to recover costs of regulation or provision of
services. The County may, under existing law, issue securities, such as the Notes, only if the
principal thereof and interest thereon will not exceed 85 percent of the estimated uncollected
moneys available for the payment of such securities. Assuming the full amount of Series B
Notes authorized by the Resolution is issued, the amount needed to repay the Notes and the
Series B Notes and the interest thereon is $ million. The County estimates that the moneys
available for payment of the Notes and the Series B Notes will be in excess of $ million,
thereby providing an estimated coverage factor for payment requirements of approximately
to 1. The table below presents a listing of estimated Unrestricted Revenues available for
payment of the Notes and the Series B Notes.
5
ESTIMATED UNRESTRICTED REVENUES AVAILABLE
FOR PAYMENT OF THE NOTES AND SERIES B NOTES
(IN THOUSANDS)
Source: Amount
Estimated-Unrestricted Available Fund Balance at July 1, 1998
Property Taxes
Taxes Other Than Current Property
Licenses,Permits and Franchises
Fines,Forfeitures and PenaltiesM
Use of Money and Property
Aid From Other Governmental Agencies:
State Reimbursed Homeowner Exemptions
Motor Vehicle In-lieu Tax
Charges for Current Services
Other Unrestricted Revenue
TOTAL
(11 Includespenalties and interest paid on delinquent property taxes.
Source: County Auditor-Controller
Intrafund Borrowing and Cash Flow
County General Fund expenditures tend to occur in relatively level amounts throughout
the fiscal year. Conversely, receipts follow an uneven pattern primarily as a result of 1) secured
property tax installment payments that are concentrated in December and April, and 2) delays
and uneven payments from other government agencies. These two components represent the two
largest sources of County revenues.
Historically, the County has utilized both the issuance of short-term nates and intrafund
borrowing in order to smooth out its monthly cash flow pattern. Prior to the sale of its first issue
of short-term notes in 1979, the County relied exclusively upon intrafund borrowing to cover
cash deficits. As a result of conducting annual note programs since 1979, however, the County
has used minimal intrafund borrowing to cover temporary General Fund cash shortfalls.
Another option allowed by the State Constitution is interfund borrowing, whereby
county-held funds of other agencies can be borrowed by counties until the last Monday in April
of each fiscal year in amounts that do not exceed 85 percent of taxes accrued. The County has
not utilized this cash flow management alternative in recent years.
The Auditor-Controller has prepared the accompanying General Fund Cash Flow tables
for fiscal year 1997-98 and a projected cash flow for fiscal year 1998-99 reflecting issuance of
the Notes.
6
__.._... ......... ......... ......... ......... ......... ....._... .........
.... _...._... ......... ......... ......... ......... ......... ......... ......... ......... .............._....
_.. _.._._.. ......... ......... ......... .........
[CASH FLOWS FOR FY 1997-19981
7
[CASH FLOWS FOR FY 1998-19991
8
......... ......... ......... ......... _.. ... . ._..
The Contra Costa County Investment Pool
On the delivery date of the Notes, the Treasurer will deposit all net proceeds of the Notes
in the Contra Costa County Investment Pool (the "Pool") for future withdrawal by the County to
meet its cash flow needs during Fiscal Year 1998-99. The Pledged Revenues that will be used to
pay interest on the Notes on July 1, 1999 and principal of and remaining interest on the Notes at
maturity will not be invested in the Pool. Rather, the Pledged Revenues will be deposited by the
Treasurer in the Repayment Fund for payment of interest on the Notes on July 1, 1999 and
principal of and remaining interest on the Notes at maturity. See "THE NOTES - Security for the
Notes" herein.
Since the net proceeds of the Notes will be deposited in the Pool, the following
information about the Pool and the County's investment policy is provided.
Stag law requires that all moneys of the County, school districts, and certain special
districts be held in the County Treasury by the Treasurer. The Treasurer has authority to
implement and oversee the investment of such funds in the Pool in accordance with California
Government Code Section 53600 et seq. (the "California Government Code"). The Treasurer
accepts funds only from agencies located within the County. The moneys on deposit are
predominantly derived from local government revenues consisting of property taxes, State and
federal funding and other fees and charges. As of March 31, 1998, there were participants in
the Pool, the largest being the County. The County, County Agencies, and School and
Community College Districts (who are involuntary members of the Pool) represented an
aggregate % of the Pool's membership.
The Treasurer has historically maintained a more restrictive investment policy for the
Pool than that mandated under the California Government Code. For instance, the use of reverse
repurchase agreements and purchase of mutual fund shares are prohibited. The County has an
investment oversight committee that meets quarterly to monitor and report on all investment
activities of the Treasurer's Office.
As of March 31, 1998, investments in the Pool were held for the following local agencies
in the indicated amounts:
Investment Funds
Local Agency (in$millions)
County and Agencies
School Districts
Community College Districts
Other Public Agencies*
Total
*Represents sanitation,fire,and transportation authorities that are
voluntary participants in the Pool.
As of March 31, 1998, the Pool had approximately _% of its assets invested in U.S.
Treasury and federal agency securities, and repurchase agreements. Approximately % of
the Pool's assets were invested in highly liquid short-term money market instruments (certificates
of deposit, bankers acceptances, and commercial paper). As of March 31,' 1998, the detailed
composition,cost, and market value of the Pool was as follows:
9
......... ......... ......... ......... ......... ......... ......... ......._. 1111
......... ...._.... ......... ......... .1 .......111 ...... ._....... ......... ......... ......... ......... .............._1111
_. _........ .._..... ............ ...... .........
Type of Investment Cost* Market Value* %of Total
U.S. Treasuries and Cash
U.S. Agencies -Federal, State, and Local
Money Market Instruments
Other
Total*
*Totals may not add due to independent rounding.
The Pool is highly liquid, with over % of the portfolio having a maturity of less than
one year and an average weighted days to maturity of____days. The maturity distribution of the
Pool's portfolio as of March 31, 1998 is presented in the following table.
Amount
Term to Maturity (Cost Basis) %of Total
Less than 1 year
1 to 2 years
2+years to 3 years
3+years to 4 years
4+years to 5 years
Greater than 5 years*
Total
*Represents bond proceeds of Martinez Unified school District.
The mix of investments is designed to ensure that sufficient liquid funds are available to
meet disbursement requirements. Funds on hand at the end of each of the past five fiscal years in
excess of disbursement requirements were as follows:
Fiscal Year Available Funds
Ending June 30 (in millions)
1993 $801
1994 864
1995 869
1996 998
1997 1,135
TAX EXEMPTION
In the opinion of Orrick, Herrington & Sutcliffe LLP ("Bond Counsel"), based on an
analysis of existing laws, regulations, rulings, and court decisions, and assuming, among other
matters, compliance with certain covenants, interest on the Notes is excluded from gross income
for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the
"Code") and is exempt from State of California (the "State") personal income taxes. The amount
treated as interest on the Notes and excluded from gross income may depend upon the taxpayer's
election under Internal Revenue Service Notice 94-84. Bond Counsel is of the further opinion
10
......... ......... ......... ......... ......... ......... ......... ..._..... _.
...... ..._._... ......... ......... ........ .. ....... ......_............................................................................................
_ _. __..._.. ._ ......... . ........ .........
that interest on the Notes is not a specific preference item for purposes of the federal individual
or corporate alternative minimum taxes, although Bond Counsel observes that such interest is
included in; adjusted current earnings in calculating federal corporate alternative minimum
taxable income. A complete copy of the proposed form of the opinion of Bond Counsel is set
forth in Appendix C hereto.
Notice 94-84, 1994-2 C.B. 559, states that the Internal Revenue Service (the"Service") is
studying whether the amount of the payment at maturity on short-term debt obligations (i.e., debt
obligations with a stated fixed rate of interest which mature not more than one year from the date
of issue) that is excluded from gross income for federal income tax purposes is (i) the stated
interest payable at maturity or (ii) the difference between the issue price of the short-term debt
obligations and the aggregate amount to be paid at maturity of the short-term debt obligations
(the "original issue discount"). The Notes may be issued as short-term debt obligations. For this
purpose, the issue price of the short-term debt obligations is the first price at which a substantial
amount of the short-term debt obligations is sold to the public (excluding bond houses, brokers,
or similar persons or organizations acting in the capacity of underwriters, placement agents or
wholesalers). Until the Service provides further guidance with respect to tax-exempt short-term
debt obligations, taxpayers may treat either the stated interest payable at maturity or the original
issue discount as interest that is excluded from gross income for federal income tax purposes.
However, taxpayers must treat the amount to be paid at maturity on all tax-exempt short-term
debt obligations in a consistent manner. Taxpayers should consult their own tax advisors with
respect to the tax consequences of ownership of Notes if the Notes are issued as short-term debt
obligations and if the taxpayer elects original issue discount treatment.
The Code imposes various restrictions, conditions and requirements relating to the
exclusion from gross income for federal income tax purposes of interest on obligations such as
the Notes. The County has covenanted to comply with certain restrictions designed to insure that
interest on the Notes will not be included in federal gross income. Failure to comply with these
covenants may result in interest on the Notes being included in gross income for federal income
tax purposes, possibly from the date of original issuance of the Notes. The opinion of Bond
Counsel assumes compliance with these covenants. Bond Counsel has not undertaken to
determine (or to inform any person) whether any actions taken (or not taken) or events occurring
(or not occurring) after the date of issuance of the Notes may adversely affect the value of, or the
tax status of interest on, the Notes. Further, no assurance can be given that pending or future
legislation or amendments to the Code, if enacted into law, or any proposed legislation or
amendments to the Code, will not adversely affect the value of, or the tax status of interest on,
the Notes. Prospective Noteholders are urged to consult their own tax advisors with respect to
proposals to restructure the federal income tax.
One of the covenants of the County referred to above requires the County to reasonably
and prudently calculate the amount, if any, of excess investment earnings on the proceeds of the
Notes which must be rebated to the United States, to set aside from lawfully available sources
sufficient moneys to pay such amounts and to otherwise do all things necessary and within its
power and authority to assure that interest on the Notes is excluded from gross income for federal
income tax purposes. Under the Code, if the County spends 100% of the proceeds of the Notes
within six months after issuance, there is no requirement that there be a rebate of investment
profits in order for interest on the Notes to be excluded from gross income for federal income tax
purposes. The Code also provides that such proceeds are not deemed spent until all other
available moneys (less a reasonable working capital reserve) are spent. The County expects to
satisfy this expenditure test or, if it fails to do so, to make any required rebate payments from
moneys received or accrued during the 1998-99 fiscal year. To the extent that any rebate cannot
be paid from such moneys, the law of California is unclear as to whether such covenant would
require the County to pay any such rebate. This would be an issue only if it were determined that
11
. . ......_...... ..._...... ......... . . ........ ....... ......... ........................................................................................
_._ _ _. ...... . . ..._.. .........
the County's calculations of expenditures of Note proceeds or of rebatable arbitrage profits, if
any, were incorrect.
Certain requirements and procedures contained or referred to in the Resolution and other
relevant documents may be changed and certain actions (including, without limitation,
defeasance of the Notes) may be taken or omitted, under the circumstances and subject to the
terms and conditions set forth in such documents. Bond Counsel expresses no opinion as to any
Note or the interest thereon if any such change occurs or action is taken or omitted upon the
advice or approval of bond counsel other than Orrick, Herrington & Sutcliffe LLP.
Although Bond Counsel is of the opinion that interest on the Notes is excluded from
gross income for federal income tax purposes and is exempt from California personal income
taxes, the ownership or disposition of, or the accrual or receipt of interest on, the Notes may
otherwise affect a Noteholder's federal or state tax liability. The nature and extent of these other
tax consequences will depend upon the particular tax status of the Noteholder or the Noteholder's
other items;of income or deduction. Bond Counsel expresses no opinion regarding any such
other tax consequences.
LEGAL MATTERS
The statements of law and legal conclusions set forth in this Official Statement under the
headings "THE NOTES" (excluding the section entitled "Book-Entry-Only System"), "TAX
EXEMPTION", "LEGAL MATTERS"and"LEGALITY FOR INVESTMENT IN CALIFORNIA" have been
reviewed by Bond Counsel. Bond Counsel's employment is limited to a review of the legal
proceedings required for the authorization of the Notes and to rendering the opinion set forth in
Appendix C hereto. Such opinion will not consider or extend to any sections, documents,
agreements, representations, offering circulars or other materials of any kind concerning the
Notes not mentioned in this paragraph. Bond Counsel takes no responsibility for the accuracy,
completeness or fairness of this Official Statement. Certain legal matters will be passed upon for
the County by the County Counsel and by Fulbright& Jaworski L.L.P., Los Angeles, California,
Disclosure Counsel.
LEGALITY FOR INVESTMENT IN CALIFORNIA
Under provisions of the California Financial Code, the Notes are legal investments for
commercial banks in the State to the extent that the Notes, in the informed opinion of the
investor bank, are prudent for the investment of funds of its depositors and under provisions of
the California Government Code,are eligible to secure deposits of public moneys in the State.
RATINGS
The County has obtained a rating of on the Notes from Moody's Investors Service
and a rating of on the Notes from Standard & Poor's. Certain information was supplied
by the County to the rating agencies to be considered in evaluating the Notes.; The ratings issued
reflect only the views of the rating agencies, and any explanation of the significance of such
ratings should be obtained from the rating agencies. There is no assurance that any rating will be
retained for any given period of time or that the same will not be revised downward or
withdrawn entirely by the respective rating agency if in its judgment, circumstances so warrant.
12
I-- ......... ......... ......... ......... ......... ......... ..........1.11.1_.._. .__ _
........ ...._...._.. ......... ......... . . ....... ......... ......... ......... ......... ......... ......... ......1111.....
......... ......... .......... .............. .... ........
The County undertakes no responsibility either to bring to the attention of the owners of any
Notes any downward revision or withdrawal of any rating obtained or to oppose any such
revision or withdrawal. Any such downward revision or withdrawal of the ratings obtained may
have an adverse effect on the market price of the Notes.
LITIGATION
No litigation is pending or threatened against the County concerningthe validity of the
Notes, and a certificate of the County Counsel to that effect will be furnished to the Underwriter
at the time of the original delivery of the Notes. The County is not aware of any litigation
pending or threatened against the County questioning the political existence of the County or
contesting the County's ability to levy and collect ad valorem taxes or contesting the County's
ability to issue and retire the Notes.
There are a number of lawsuits and claims pending against the County. The aggregate
amount of the uninsured liabilities of the County and the timing of any anticipated payments of
judgments which may result from suits and claims will not, in the opinion of the County Counsel
and the County Auditor-Controller, materially affect the County's finances or impair its ability to
repay the Nates.
CONSTITUTIONAL AND STATUTORY LIMITATIONS ON
TAXES,REVENUES AND APPROPRIATIONS
Article XIII A of the California Constitution
In 1978 California voters approved Proposition 13, adding Article XIII A to the
California Constitution. Article XIII A was subsequently amended in 1986, as discussed below.
Article XIII''A limits the amount of any ad valorem tax on real property to 1% of the full cash
value thereof, except that additional ad valorem taxes may be levied to pay debt service on
indebtedness approved by the voters prior to July 1, 1978 and on bonded indebtedness for the
acquisition or improvement of real property which has been approved on or after July 1, 1978 by
two-thirds of the voters voting on such indebtedness. Article XIII A defines full cash value to
mean "the county assessor's valuation of real property as shown on the 1975176 tax bill under
"full cash" or thereafter, the appraised value of real property when purchased, newly constructed,
or a change in ownership have occurred after the 1975 assessment." This full;cash value may be
increased at,a rate not to exceed 2%per year to account for inflation.
Article XIII A has subsequently been amended to permit reduction of the "full cash value"
base in the event of declining property values caused by damage, destruction or other factors, to
provide that there would be no increase in the "full cash value" base in the event of
reconstruction of property damaged or destroyed in a disaster.
Legislation;Implementing Article XIII A
Legislation has been enacted and amended a number of times since 1978 to implement
Article XIII A. Under current law, local agencies are no longer permitted to levy directly any
property tax(except to pay voter-approved indebtedness). The 1% property tax is automatically
levied by the County and distributed according to a formula among taxing agencies. The formula
apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1979.
13
......... ......... ......... ......... ......... ......... ......1.1.1.1 1111.
........ ......... ......... ......... .1...1.11.... .... .......... ........ ......... ......... ...........1111 .
.11.11... ......... ......... ............. . ......... .... .........
..............
Increases of assessed valuation resulting from reappraisals of property due to new
construction, change in ownership or from the 2% annual adjustment are allocated among the
various jurisdictions in the "taxing area" based upon their respective "situs." Any such allocation
made to a local agency continues as part of its allocation in future years.
Article XIII B of the California Constitution
On October 6, 1979, California voters approved Proposition 4, known as the Gann
Initiative, which added Article XIII B to the California Constitution. Propositions 98 and 111,
approved by the California voters in 1988 and 1990, respectively, substantially modified Article
XIII B. The principal effect of Article XIII B is to limit the annual appropriations of the State
and any city, county, school district, authority, or other political subdivision of the State to the
Ievel of appropriations for the prior fiscal year, as adjusted for changes in the cost of living and
population. The initial version of Article XIII B provided that the "base year" for establishing an
appropriations limit was the 1978/79 fiscal year, which was then adjusted annually to reflect
changes in population, consumer prices and certain increases in the cost of services provided by
these public agencies. Proposition 111 revised the method for making annual adjustments to the
appropriations limit by redefining changes in the cost of living and in population. It also required
that beginning in fiscal year 1990/91 each appropriations limit must be recalculated using the
actual 1986/87 appropriations limit and making the applicable annual adjustments as if the
provisions of Proposition 111 had been in effect.
Appropriations subject to limitations of a locals government under Article XIII B include
generally any authorization to expend during a fiscal year the proceeds of taxes levied by or for
that entity and the proceeds of certain State subventions to that entity, exclusive of refunds of
taxes. Proceeds of taxes include, but are not limited to all tax revenues plus the proceeds to an
entity of government from (1) regulatory licenses, user charges and user fees (but only to the
extent such proceeds exceed the cost of providing the service or regulation), (2)the investment of
tax revenues, and (3) certain subventions received from the State. Article XIII B permits any
government entity to change the appropriations limit by a vote of the electors in conformity with
statutory and constitutional voting effective for a maximum of four years.
As amended by Proposition 111, Article XIII B provides for testing of appropriations
limits over consecutive two-year periods. If an entity's revenues in any two'-year period exceed
the amounts permitted to be spent over such period, the excess has to be returned by revising tax
rates or fee schedules over the subsequent two years. As amended by Proposition 98, Article
XIII B provides for the payment of a portion of any excess revenues to a fund established to
assist in financing certain school needs. Appropriations for "qualified capital outlays" are
excluded from the limits of Proposition 111. The County is of the opinion that debt service on the
1998 Series A Bonds and capital outlays for the Project are excluded from the limits imposed by
Proposition111.
The County's Article XIII B limit for the Fiscal Year 1997-98 budget is $2,625,039,191
and Fiscal Year 1997-98 budget appropriations subject to limitation are $146,404,119. For Fiscal
Year 1997-98, the County therefore anticipates that it will be under its limit by $2,478,635,072.
On or before June , 1998, the County Board of Supervisors is expected to adopt the
Fiscal Year 1998-99 appropriations limit. It is likely that it will exceed the Fiscal Year 1997-98
limit of$2,625,039,191. Based upon the assumption that the County's General Fund Budget will
not significantly increase in Fiscal Year 1998-99, the appropriations subject to the limit will be
approximately $2,478,635,072 below that limit. The County has never exceeded its Article XIII
B appropriations limit and does not anticipate having any difficulty in operating within the
appropriations limit in Fiscal Year 1998-99.
14
... ......... ......... ......... ......... ......... ......... ......... ......... __ _
........ ......... ......... ........ .. .......... ....... .. ...... . ........ ......... ......... ......... .................
_.. ...... ......... ............... ... ........
The interest and principal payments to be made by the County pursuant to the Resolution
with respect to the Notes are not subject to an appropriations limit.
Article XIII C and Article XIII D
On November 5, 1995, the voters of the State approved Proposition 218, known as the
"Right to Vote on Taxes Act." Proposition 218 adds Articles XIII C and XIII'D to the California
Constitution and contains a number of interrelated provisions affecting the ability of the County
to levy and collect both existing and future taxes, assessments, fees and charges. The
interpretation and application of Proposition 218 will ultimately be determined by the courts with
respect to al number of the matters discussed below, and it is not possible at this time to predict
with certainty the outcome of such determination.
Article XIII C requires that all new local taxes be submitted to the electorate before they
become effective. Taxes for general governmental purposes of the County require a majority
vote and taxes for specific purposes, even if deposited in the County's General Fund, require a
two-thirds vote. Further, any general purpose tax which the County imposed, extended or
increased without voter approval after December 31, 1994 may continue to be imposed only if
approved by a majority vote in an election which must be held within two years of November 5,
1996. The County believes that no existing County-imposed taxes deposited into its General
Fund will be affected by the voter approval requirements of Proposition 218, although as
indicated below certain tax levies may be affected by Proposition 62. The voter approval
requirements of Proposition 218 reduce the flexibility of the County to raise revenues for the
General Fund, and no assurance can be given that the County will be able to impose, extend or
increase such taxes in the future to meet increased expenditure needs.
Article XIII D also adds several provisions making it generally more difficult for local
agencies to levy and maintain fees, charges, and assessments for municipal services and
programs. These provisions include, among other things, (i)a prohibition against assessments
which exceed the reasonable cost of the proportional special benefit conferred on a parcel, (ii)a
requirement that assessments must confer a "special benefit," as defined in Article XIII D, over
and above any general benefits conferred, (iii) a majority protest procedure for assessments
which involves the mailing of notice and a ballot to the record owner of each affected parcel, a
public hearing and the tabulation of ballots weighted according to the proportional financial
obligation of the affected party, and (iv) a prohibition against fees and charges which are used for
general governmental services, including police, fire or library services, where the service is
available to the public at large in substantially the same manner as it is to property owners. The
County estimates that in Fiscal Year 1997-98 it will collect approximately $ 8.6 million in fees
and assessments which could be subject to the provisions of Article XIII D. However, none of
these fees or assessments are deposited in the County's General Fund. If the County is unable to
continue to collect these revenues, the services and programs funded with these revenues would
have to be curtailed and/or the County General Fund might have to be used to support them. The
County is unable to predict whether or not in the future it will be able to continue all existing
services and programs funded by the fees, charges and assessments in light of Proposition 218 or,
if these services and programs are continued, what amounts (if any) would be used from the
County's General Fund to continue to support these activities.
Article XIII C also removes limitations on the initiative power in matters of reducing or
repealing local taxes, assessments, fees or charges. No assurance can be given that the voters of
the County will not, in the future, approve an initiative or initiatives which reduce or repeal local
taxes, assessments, fees or charges currently comprising a substantial part of the County's
General Fund. If such repeal or reduction occurs, the County's ability to repay the Notes could be
adversely affected.
15
......... ......... ......... ......... ......... ......... ....._... ......_.. ..
......... .............. ......... ......... ........... . ....... .. ...... ......... ......... ......... ......... ......... ......... .........
_ _ _ _.... _ ......... ................ . ... .......
Proposition 62
Can September 28, 1995, the California Supreme Court affirmed the lower court decision
in Santa Clara Cou= Local Transportation Authority v. Guarding, 1I Cal. 4th 220 (1995) (the
"Santa Clara Case"). The action held invalid a half-cent sales tax to be levied;by the Santa Clara
County Local Transportation Authority because it was approved by a majority but not two-thirds
of the voters in Santa Clara County voting on the tax. The California Supreme Court decided the
tax was invalid under Proposition 62, a statutory initiative adopted at the November 4, 1986
election that(a) requires that any new or higher taxes for general governmental purposes imposed
by local governmental entities be approved by a majority vote of the voters of the governmental
entity voting in an election on the tax, (b) requires that any special tax (defined as taxes levied for
other than general governmental purposes) imposed by a local governmental entity be approved
by a two-thirds vote of the voters of the governmental entity voting in an election on the tax,
(c)restricts the use of revenues from a special tax to the purposes or for the service for which the
special tax was imposed, (d)prohibits the imposition of ad valorem taxes on real property by
local governmental entities except as permitted by Article XIII A of the California Constitution,
(e)prohibits the imposition of transaction taxes and sales taxes on the sale of real property by
local governmental entities, (f)required that any tax imposed by a local governmental entity on
or after August 1, 1985 be ratified by a majority vote of the voters voting in an election on the tax
within two years of November 5, 1986 or be terminated by November 15, 1988 and(g)requires a
reduction of ad valorem property taxes allocable to the jurisdiction imposing a tax not in
compliance with its provisions equal to one dollar for each dollar of revenue attributable to the
invalid tax, for each year that the tax is collected.
In deciding the Santa Clara Case on Proposition 62 grounds, the Court disapproved the
decision in City of Woodlake v. Low, 230 Cal. App. 3d 1058 (1991) ("Woodlake"), where the
Court of Appeal had held portions of Proposition 62 unconstitutional as a referendum on taxes
prohibited by the California Constitution. The California Supreme Court determined that the
voter approval requirement of Proposition 62 is a condition precedent to the enactment of each
tax statute to which it applies, while referendum refers to a process invoked only after a statute
has been enacted. Numerous taxes to which Proposition 62 would apply; were imposed or
increased without any voter approval in reliance on Woodlake. The Court noted as apparently
distinguishable, but did not confirm, the decision in City of Westminster v. County of Orange,
204 Cal.App.3d 626 (1988), that held unconstitutional the section of Proposition 62 requiring
voter approval of taxes imposed during the "window period" of August 1, 1985 until
November 5 1986. Proposition 62 as an initiative statute does not have the same level of
authority as a constitutional initiative, but is akin to legislation adopted by the State Legislature.
The County has two taxes to which Proposition 62 could apply: a business license tax
enacted in 1991, which generates approximately $800,000 per year, and a transient occupancy
tax, an increase in which was enacted in 1990, that generates approximately $800,000 per year
(approximately $120,000 per year of which is from. the 1990 increase). The County has joined
other counties with similar taxes in pursuing legislation which would require that only future
such taxes be subject to Proposition 62 and that prior taxes be given legislative relief.
Proposition;187
At the November 8, 1994 General Election, California voters approved Proposition 187,
an initiativestatute, which makes illegal aliens ineligible for public social services, public health
care services (unless emergency services request under federal law), and public school education
at elementary, secondary and post-secondary levels. Among other things, Proposition 187 also
requires state and local agencies to report persons who are suspected illegal aliens to the
16
_ _....... ......... ......... ......... ......... ......... .._._.... ...._....
.. ......... ......... ......... .......... ............ ..... .......... . ...... ......... ......... ............... ._.
._. ......... ......... ......... .. ........... ..... .........
...........
California Attorney General and the United States Immigration and Naturalization Service (the
"INS").
The Legislative Analyst estimated the most significant fiscal effects of Proposition 187
would fall into the following three categories.
Program Savings. The State and local governments (primarily counties) would realize
savings from denying certain benefits and services to persons who cannot document their
citizenship or legal immigration status. The savings to State and local governments statewide
could be in the range of $200 million annually, based on the current estimated use of these
services and benefits by illegal immigrants.
Verification Costs. The State, local governments, and schools would incur significant
costs to verify citizenship or immigration status of students, parents, persons seeking health care
or social services, and persons who are arrested. Ongoing annual costs could be in the tens of
millions of dollars, with first-year costs considerably higher (potentially in excess of $100
million).
Potential Losses of Federal Funds. Proposition 187 places at risk;up to $15 billion
annually in California alone in federal funding for education, health and welfare programs due to
conflicts with federal requirements.
Opponents of Proposition 187 have filed at least eight lawsuits challenging the
constitutionality and validity of the measure. On November 5, 1995, a United States District
Court judge struck down the central provisions of Proposition 187 by ruling that parts of
Proposition 187 conflict with federal power over immigration. The ruling concluded that states
may not enact their own schemes to "regulate immigration or devise immigration regulations
which run parallel or purport to supplement federal immigration law." As a consequence of the
ruling, students may not be denied public education and may not be asked about their
immigrations status when enrolling in public schools. On November 14, 1997; the District Court
reaffirmed the 1995 decision, further stating that "California is powerless to enact its own
legislative scheme to regulate immigration." On March 18, 1998, the District Judge entered a
final judgement in the case, holding key portions of the measure unconstitutional and
permanently enjoining the State from implementing those sections which would have required
law enforcement, teachers and social service and health care workers to verify a person's
immigration status and subsequently report illegal immigrants to authorities and deny them social
service, health care and education benefits. An appeal by State Attorney General Daniel Lungren
was filed with the 9" Circuit Court of Appeals on March 25, 1998. Due to uncertainties
surroundingthe future legal interpretations and court decisions with respect to the
constitutionality of Proposition 187, the County is not able to estimate the future fiscal and
operational impacts of this initiative statute on the County.
Future Initiatives
Article XIII A, Article XIII B, Article XIII C, Article XIII D, Proposition 62, and
Proposition 187 were adopted as measures that qualified for the ballot through California's
initiative process. From time to time other initiative measures could be adopted, further affecting
the County's revenues.
17
_. _..... ......... ......... ......... ......... ......... ............._. __. .._._....
. ......... .......... ......... ....... ......... ......... ......... ......... ......... .........-_..
_. ...... .......... ........ ............... ... .........
GENERAL COUNTY,ECONOMIC, DEMOGRAPHIC AND FINANCIAL INFORMATION
For general, economic and demographic information pertaining to the County, see
"APPENDIX A - GENERAL COUNTY, ECONOMIC AND DEMOGRAPHIC INFORMATION" hereto.
For financial information pertaining to the County, see "APPENDIX B - COUNTY FINANCIAL
INFORMATION" and"APPENDIX D{-FINANCIAL STATEMENTS OF THE COUNTY FOR THE FISCAL
YEAR ENDED JUNE 30, 1997"hereto.
ADDITIONAL INFORMATION
The purpose of this Official Statement is to supply information to prospective buyers of
the Notes. Summaries and explanations of the Notes, the Resolution and of statutes and
documents 'contained herein do not purport to be complete, and reference is made to said
documents and statutes for full and complete statement of their provisions. This Official
Statement is not to be construed as a contract between the County and any purchasers of the
Notes.
The County regularly prepares a variety of reports, including audits, budgets and related
documents, as well as certain monthly activity reports. Any owner of a Note may obtain a copy
of any such report, as available, from the County.
All data contained herein have been taken or constructed from County records and other
sources. Certain appropriate County officials, acting in their official capacity,have reviewed this
Official Statement and have determined that as of the date hereof the information contained
herein is, to the best of their knowledge and belief, true and correct in all material respects and
does not contain an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements made herein, in light of the circumstances under which they are
made, not misleading. An appropriate County official will execute a certificate to this effect
upon delivery of the Notes. This Official Statement and its distribution have been duly
authorized and approved by the Board of Supervisors of the County.
By:
Philip J. Batchelor
Clerk of the Board and County Administrator
18
......... ......... ......... ......... ......._. _
_.... ............_. ......... .......... . ............ ........ ........ ......... ......... ......... ........_.._. .__.
_ _............._.................._...............................................................................................
....................................
i
APPENDIX A
GENERAL COUNTY, ECONOMIC AND
DEMOGRAPHIC .INFORMATION
APPENDIX A
GENERAL COUNTY,ECONOMIC AND DEMOGRAPHIC INFORMATION
General
Contra Costa County(the "County")was incorporated in 1850 as one of the original 27 counties of
the State of California (the "State"), with the City of Martinez as the County Seat. It is one of the nine
counties in the San Francisco-Oakland Bay Area. The County covers about 733 square miles and extends
from the northeastern shore of San Francisco Bay easternly about 50 miles to San Joaquin County. The
County is bordered on the south and west by Alameda County and on the north by Suisun and San Pablo
Bays. The western and northern shorelines are highly industrialized, while the interior sections are
suburban/residential,commercial and light industrial.
A large part of the interior of the County is served by the Bay Area Rapid Transit District("BART"),
a situation that has encouraged the expansion of both residential and commercial development. In addition,
economic development along the Interstate 680 corridor in the County has been substantial and accounted for
significant job creation in the Cities of Concord,Walnut Creek and San Ramon.
County Government
The County has a general law form of government. A five-member Board of Supervisors, each of
whom is elected to a four-year term, serves as the County's legislative body. Also elected are the County
Assessor, Auditor-Controller, Clerk-Recorder, District Attorney-Public Administrator, Sheriff-Coroner and
Treasurer-Tax Collector. A County Administrative Officer appointed by the Board of Supervisors runs the
day-to-day business of the County.
Population
The County's population grew 21.5% during the 1980's, a moderate acceleration from the 17.7%
growth rate achieved in the decade of the 1970's. The County's population growth ranked first among the nine
Bay Area counties for the 1980 - 1990 period and was slightly below the 24.9% growth rate for the entire
State of California.
As detailed in the table below, population growth within the County was positive during the 1980's
in every city except Orinda. Cities experiencing the strongest growth included Hercules, Brentwood,
Clayton, Antioch, Pleasant Hill, San Ramon and Martinez. Population growth in Concord, the County's
largest city,was relatively static by comparison during the 1980's.
Of particular significance is the population increases in the western portion of the County,
particularly in Pinole, Richmond and San Pablo. Each of these cities experienced population declines during
the 1970's but a number of factors have gradually reversed the population erosion. The availability of rapid
transit, close proximity to the major employment hubs in San Francisco and Oakland, and relatively
affordable existing and new housing have combined to attract more residents to these cities.
The unincorporated regions of the County registered a 17.8% increase in population during the
1980's after having dropped by 21.2%during the 1970's.
The California State Department of Finance reported that the County's population stood at 879,206
as of January 1997, an increase of 10% since 1990. The strongest growth is concentrated in the eastern
portions of the County,particularly in Clayton,Antioch and Brentwood,although strong growth was noted in
Hercules and Richmond,situated in the western part of the County.
A-I
COUNTY OF CONTRA COSTA
POPULATION(i)
Special
Census
1960 1970 1975 1980 1990 1997
Antioch 17,305 28,060 33,215 42,683 60,900 76,538
Brentwood 2,186 2,649 3,662 4,434 7,500 14,493
Clayton -- 1,385 1,790 4,325 7,150 10,029
Concord 36,208 85,164 94,673 103,763 110,900 111,837
Danville" -- -- -- 26,143 31,200 38,104
El Cerrito 25,437 25,190 22,950 22,731 22,850 23,275
Hercules 310 252 121 5,963 1.6,400 18,787
Lafayette -- 20,484 19,628 20,837 23,450 23,597
Martinez 9,604 16,506 18,702 22,582 31,700 35,360
Moraga -- 14,205 14,418 15,014 15,850 16,330
Orinda` -- -- -- 17,070 16,650 16,900
Pinole 6,064 15,850 15,337 14,253 17,000 18,167
Pittsburg 19,062 20,651 24,347 33,465 47,250 50,832
Pleasant Hill -- 24,610 25,398 25,547 31,550 31,455
Richmond 71,584 79,043 70,126 74,676 86,600 91,252
San Pablo 19,687 21,461 19,392 19,750 25,000 25,906
San Ramon" -- -- 20,511 35,100 41,930
Walnut Creek 9,903 39,844 46,034 54,033 60,400 62,205
Unincorporated 191,680 163,035 173,036 128,551 150,100 172,206
Total 409,030 558,389 582,829 656,331 797,600 879,206
California 15,717,204 18,136,045 21,185,000 23,668,145 28,558,000 32,609,000
'T'otals may not equal sums due to independent rounding.
" Dates of incorporation: Danville(7/1/82); Orinda(7!1/85); San Ramon(7/1/83), The 1990 Census
Report created 1980 population levels for these cities prior to official incorporation.
Source: United States Census: 1960-1990;State Department of Finance: 1997.
Industry and Employment
The County has one of the fastest-growing work forces among Bay Area counties,with growth in its
employment base being driven primarily by the need to provide services to an increasing local population.
The County has experienced an immigration of white-collar jobs due to the relocation of companies from
costlier locations in the Bay Area. The combined impact of population growth and immigration has resulted
in significant job creation in the County, with the 1996 job base of 298,300 having grown about 4% since
1992.
As shown below, the County's labor force stood at 472,700 in 1997. With average 1997
unemployment rates of 4.1%and 6.3%for the County and the State,respectively,the County has achieved a
lower unemployment rate than the State in each of the past six years.
A-2
11
........ ......... ......... ......... ......... ......... ......... ...... ...''I'll-,...
.......... ............. ......... ......................................... ...... . ..... ........ ......... ......... ......... ......... _
_. ...... ......... ......... ......... ............... ...... ......
COUNTY OF CONTRA COSTA
EMPLOYMENT AND UNEMPLOYMENT OF
RESIDENT LABOR FORCE
WAGE AND SALARY WORKERS BY INDUSTRY
ANNUAL AVERAGES(IN THOUSANDS)
1992 1993 199 1995 : 1996 1997
Civilian Labor Force(l) 436.0 440.0 454.0 456,0 458.1 472.7
Employment 409.8 410.9 426.0 430.5 435.5 453.1
County Unemployment 26.2 29.1 28.0 26.1 22.6 19.6
Unemployment Rate:
County 6.0% 6.6% 6.2% 5.7% 4.9% 4.1%
State of California 8.5% 9.2% 8.6% 7.8% 7.2% 6.3%
Wage and Salary Employment(2) 1992 1993 1994 1995 1996
Agriculture 13 1.3 1.2 1.0 1.2
Mining and Construction 19.6 19.8 19.8 19. 20.6
Manufacturing 30.1 27.3 27.2 26.6 26.1
Transportation and Public Utilities 18.6 19.2 20.2 20.3 19.8
Wholesale Trade 11.0 10.6 10.5 10.6 12.0
Retail Trade 56.3 56.1 56.2 56.1 57.0
Finance,Insurance,and Real Estate 27.5 27.7 28.4 26.7 26.1
Services 78.5 80.2 81.0 86.7 : 90.3
Government 44.1 43.0 44.8 45.1 45.3
TOTAL(3) 287.0 285.2 289.3 292.7 298.3
(1) Based on place of residence.Data for 1995 and 1996 are based upon the March 1997 benchmark and
are not comparable to other years, as the revised benchmarked data for those years are not yet
available.
(Z) Based on place of work.
(3) "Total"may not be precise due to independent rounding.
Source: State of California,Employment Development Department,Labor Market Information Division.
Major Employers
Major industries in the County include petroleum refining,steel manufacturing,prefabricated metals,
chemicals, electronic equipment, paper products, services and food processing. Most of the County's heavy
manufacturing is located along the County's northern boundary fronting on the Suisun and San Pablo Bays
leading to San Francisco Bay and the Pacific Ocean. Descriptions of major employers in selected industries
follow.
Petroleum and Petroleum Products. The production of petroleum products formed the initial basis
of industrial development in the County. Currently, four companies manufacture products from crude oil.
The largest in terms of capacity is Chevron Corporation's ("Chevron") Richmond Refinery, which began
operations in 1902 and is the company's oldest and third-largest refinery. The Richmond refinery, located on
3,000 acres, has a capacity of 365,000 barrels per day. The refinery produces a complete line of petroleum
products and imports the bulk of the crude oil from Alaska. Shipping facilities include the company's own
wharf, which is capable of handling four tankers at a time, making it the largest in the Bay Area in terms of
tonnage. Chevron operates a fleet of 37 tankers, of which seven are for intrastate business. Petroleum
products are also shipped by truck and by two railroad carriers as well as distributed by pipeline. The
A-3