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BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA
RESOLUTION NO, 2000/219
RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF NOT TO
EXCEED $100,000,000 COUNTY OF CONTRA COSTA, CALIFORNIA, 2000-
2001 TAX AND REVENUE ANTICIPATION NOTES; APPROVING THE
FORMS OF AND DIRECTING THE DISTRIBUTION OF A NOTICE OF
INTENTION TO SELL, AN 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 Cade 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 Million Dollars ($100,000,000) is
needed for the requirements of the County of Contra Costa(the"County") to satisfy obligations
payable from the general fund of the County(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 2000-2001;
WHEREAS, it appears, and the Board hereby finds and determines, that said sum
of One Hundred Million Dollars ($100,000,000),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 2000-2001 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 2000-2001;
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 2000-
2001 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 $100,000,000;
WHEREAS, the Notes shall be sold to the highest bidder or bidders pursuant to a
competitive sale to be held on May 30, 2000 or on such earlier or later date as is established by
the County Administrator of the County in accordance with the terms of the Official Notice of
Sale for the Notes;
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WHEREAS, an Official Statement describing the Notes and an Official Notice of
Sale for the sale of the Notes will be distributed to potential purchasers of the Notes and a 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 the form
of 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 and 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 2000-2001, 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 Million Dollars ($100,000,000),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, 2000-2001 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
principal amount of not to exceed $88,000,000. A second series of Notes labeled "Series B" (the
"Series B Notes") may hereafter be issued prior to January 1,2001, in an amount not to exceed
the difference between $100,000,000 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, 2001, and shall bear interest, payable on June 29, 2001 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 check mailed to such registered owner. Both the principal of and interest payable at
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:
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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 June 29, 2001 and at maturity computed on the basis of a 360-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 Notes 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'Tinancial 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 TBE
BOND BUYER, a financial publication generally circulated throughout the State of California.
Sealed proposals or faxed bids 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 May 30, 2000 or on
such earlier or 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
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shall not exceed 12% 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 gale. The County Administrator is hereby authorized to determine whether to
accept partial bids in increments of a specified denominational amount, such as $20,000,000, and
to award the Series A Notes to the highest responsible bidder or bidders resulting in the lowest
true 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 the same designation with the number of
designations equal to the number of different interest rates.
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, 2001,by negotiated or
publicly bid sale at not less than the principal amount thereof and at an interest rate or rates not
to exceed 12%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 1999-
2000).
9992000). 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").
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Section 5. Sgurce of Payment.
(A) The principal of and interest on the Notes shall be payable from taxes,
income, revenue, cash receipts and other moneys which are received by the County for the
General Fund for the fiscal year 2000-2001 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"2000-
2001 Tax and Revenue Anticipation Note Repayment Fund"(the"Repayment Fund") (i)an
amount equal to fifty percent(50%) of the aggregate principal amount of the Notes from the first
Unrestricted Revenues received by the County during the accounting period commencing on
December 13, 2000 and ending January 11, 2001, inclusive(the"First PIedge 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 12, 2001 and ending
May 11, 2001, inclusive(the"Second Pledge 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 Pledge Period and (y)to pay the
interest on the Notes on June 29, 2001 and at maturity. 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."
(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 Pledge 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 Pledge 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 Pledge 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 Pledge Period and on each business day thereafter, until the full amount of the
moneys required by Section 5(13)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 Dotes 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.
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(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 respective maturity dates of the
Notes to pay the principal of and interest on the Notes then due. Any moneys remaining in the
Repayment Fund after all such payments, or after provision for such payments have been made,
shall be transferred to the General Fund of the County. If for any reason amounts in the
Repayment Fund are insufficient 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 respective maturities thereof, taking into account anticipated
earnings to be received on amounts in the Repayment Fund prior to the final maturity date
thereof
(C) Moneys in the Repayment Fund shall be invested in Permitted Investments
as defined below, except that no such investments shall have a maturity date later than the
maturity date of the respective series of Notes expected to be paid with proceeds of such
investments. 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.
(D) Permitted Investments mean any of the following:
(1) United States Treasury notes, bonds, bills or certificates of indebtedness, or
those for which the full faith and credit of the United States are pledged for
the payment of principal and interest.
(2) Obligations of instrumentalities or agencies of the United States of
America limited to the following: (a) the Federal Horne Loan Bank Board
(FHLB); (b) the Federal Home Loan Mortgage Corporation (FHLMC); (c)
the Federal National Mortgage Association (FNMA); (d) Federal Farm
Credit Bank (FFCB); (e) Government National Mortgage Association
(GNMA); (f) Student Loan Marketing Association (SLMA); and (g)
guaranteed portions of Small Business Administration(SBA) notes.
(3) Bills of exchange or time drafts drawn on and accepted by a commercial
bank, otherwise known as bankers acceptances. Purchases of bankers
acceptances may not exceed a maturity of 270 days. The financial
institution must have a minimum short-term rating of"A-1" and `°P-1" by
Standard & Poor's Ratings Service and Moody's Investors Service,
respectively, and a long-term rating of no less than"A"
(4) Commercial paper of "prime" quality of the highest ranking or of the
highest letter and numerical rating as provided for by Moody's Investors
Service or Standard and Poor's Ratings Service. Eligible paper is further
limited to issuing corporations that are organized and operating within the
United States and having total assets in excess of five hundred million
dollars ($500,000,000) and having an "A" or higher rating for the issuer's
debt, other than commercial paper, as provided for by Moody's Investors
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Service or Standard & Poor's Ratings Service. Purchases of eligible
commercial paper may not exceed a maturity of 180 days.
(5) Negotiable certificates of deposits issued by a nationally or state-chartered
bank or a state or federal association (as defined by Section 5102 of the
Financial Code) or by a state-licensed branch of a foreign bank in each case
which has, or which is a subsidiary of a parent company which has,
obligations outstanding having a rating of "Aa" or AA" or better from
Moody's Investors Service and Standard & Poor's Ratings Services,
respectively.
(6) Investments in repurchase agreements of any securities listed in (1) through
(4) above. Investments in repurchase agreements may be made with
financial institutions having a rating of "Aa" or "AA" or better from
Moody's Investors Service and Standard & Poor's Ratings Service,
respectively, and when the term of the agreement does not exceed 30 days
and are fully secured at or greater than 102% of the market value plus
accrued interest by obligations of the United States Government, its
agencies and instrumentalities, in accordance with number(2) above.
(7) Deposits in the State of California Treasurer's Local Agency Investment
Fund (LAIF).
(8) Investment agreements with or the obligations of which are guaranteed by
(a) a domestic bank, financial institution or insurance company the
financial capacity to honor its senior obligations of which is rated at least
"AA" by Standard & Poor's and "Aa2" by Moody's Investors Service, or
(b) a foreign bank the long-term debt of which is rated "AA" by Standard
& Poor's and "Aa2" by Moody's Investors Service (a "Qualified
Provider"); provided, that the investment agreement shall provide that if
during its term the provider's (or, if guaranteed, the guarantor's) rating by
either Standard & Poor's or Moody's Investors Service falls below"AX' or
"Aa2", respectively, the provider must within 10 days assign the
investment agreement to a Qualified Provider reasonably acceptable to the
County or collateralize the investment agreement by delivering or
transferring in accordance with applicable state and federal laws (other
than by means of entries on the provider's books) to the County or a third
party acting solely as agent therefor (the "Holder of the Collateral") United
States Treasury Obligations which are free and clear of any third-party
liens or claims at sufficient collateral levels to maintain the highest short-
term rating on the Notes.
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
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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. Form of Notes and Certificate of Authentication and Registration.
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 Exhibit 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 ofDepositorv. Registration 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).
(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.
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(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
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
Nate 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.
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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 became 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 so lost, destroyed or stolen (or if any such Note shall have matured or shall be about to
mature, instead of issuing a substitute Note, the Paying Agent may pay the same without
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 14, 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
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40911-103 M. A.0 10
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.Reb to 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 flax 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
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 2000-2001 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"2000-2001 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.
DOCSSfi1:440628.3
40511-103 MAC 11
(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. Playing 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.
Section 13. Official Statement for 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
name 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. Continuing Disclosure. 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
Commission 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.
DMSSF1:440628.3
40511-103 u4.c 12
Section 15. A proval of Actions. All actions heretofore taken by the officers
and agents of the County or the Board with respect to the sale and issuance of the Notes are
hereby approved, confirmed and ratified, and the officers of the County and the Board are hereby
authorized and directed, for and in the name and on behalf of the County,to do any and all things
and take any and all actions and execute any and all certificates, agreements and other documents
which they, or any of them, may deem necessary or advisable in order to consummate the lawful
issuance and delivery of the Notes in accordance with this Resolution.
Section 16. Proceedings Constitute Contract. The provisions of the Notes 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. Severability. 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.
DOCSSF 1:440628.3
40511-103 MI AC 13
PASSED AND ADOPTED BY THE BOARD OF SUPERVISORS OF THE
COUNTY OF CONTRA COSTA this 2nd day of May , 2000 by the following vote:
AYES: SUPERVISORS GIOIA, UILKEMA, DESAULNIER and GERBER
NOES: NONE
ABSENT: SUPERVISOR CANCIAMILLA
COUNTY OF CONTRA COSTA
By:
Cha` f the Board
o pervisors
ATTEST: Phil Batchelor, County
Administrator and Clerk of the Board
of Supervisors of the County of
Contra gosta.
Z�"' 1
n44��
Deputy
DOCSSF1:440628.3
40511-103 MAC 14
/25'
EXHIBIT A
REGISTERED REGISTERED
No. R- $100,000,000
COUNTY OF CONTRA COSTA, CALIFORNIA,
2000-2001 TAX AND REVENUE ANTICIPATION NOTE, SERIES [AB]
Rate of Interest: Note Date: Maturity Bate. CUSIP No.:
% July 3, 2000 October 1, 2001
Registered Owner: CEDE & CO.
Principal Amount: DOLLARS
FOR VALUE RECEIVED,the County of Contra Costa(the"County"), State of
California, acknowledges itself indebted to and promises to pay to the Registered Owner
identified above, or registered assigns, the Principal Amount specified above, in lawful money of
the United States of America, on the Maturity Date specified above, together with interest
thereon payable on June 29, 2001 and at the maturity thereof, at the Rate of Interest per annum
set forth above(computed on the basis of a 360-day year composed of twelve 30-day months) in
like lawful money from the Note Date specified above until payment in full of said principal
sum. Interest on this Note, due on June 29, 2001, shall be paid to the person in whose name this
Note is registered as of the close of business on the 15th day of the calendar month immediately
preceding the interest payment date by check mailed to such registered owner. The principal of
and interest on this Note payable at the maturity hereof shall be payable only to the registered
owner hereof upon surrender of this Note at the office of the Treasurer-Tax Collector of the
County, as paying agent (together with any successor appointed by the County, the"Paying
Agent") as the same shall fall due; provided, however, that no interest shall be payable for any
period after maturity.during which the registered owner hereof fails to properly present this Note
for payment.
It is hereby certified, recited and declared that this Note is one of series of Notes
of the Series specified above issued in the aggregate principal amount of$ and is
part of an authorized issue of Notes entitled"County of Contra Costa, California, 2000-2001 Tax
and Revenue Anticipation Notes" (the"Notes'), authorized in the aggregate principal amount of
One Hundred Million Dollars ($100,000,000), 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 A40628.3
40511-103 MAC A-1
Supervisors of the County adopted on April�, 2000 (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 2000-2001 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 13, 2000 and ending January 11, 2001,
inclusive (the"First Pledge 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 12, 2001 and ending May 11, 2001, inclusive(the"Second Pledge
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 prier Pledge Period and (y) to pay the interest on the Notes on June 29, 2001 and at-
maturity
tmaturity(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 Pledge 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 be 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.
DOCSSF1:440528.3
40311-103 NIAC A-2
/7
IN WITNESS WHEREOF,the County of Contra Costa has caused this Note to be
executed by the manual or facsimile signature of its Treasurer-Tax Collector and countersigned
by the manual or facsimile signature of the Clerk of its Board of Supervisors and caused the
official seal of its Board of Supervisors to be impressed hereon, all as of the Note Bate 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 AUTHENTICA'T'ION AND REGISTRATION]
This Note is one of the Notes described in the within-mentioned Resolution,
which Nate,has been authenticated and registered on the date set forth below.
Date of Authentication:
By
Treasurer-Tax Collector
of the County of Contra Costa
DOCSSF1:W628.3
00511-103 MAC 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.
DOCSSF1:4406283
40511-103 MAC A•4
CLERK'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 , 2000, 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:
Does:
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 adopted 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 hull force and effect.
Bated:
Clerk of the Board of Supervisors
County of Contra Costa
[Seal]
DOCSSF1:440638.3
40511-103 MAC
OFFICIAL NOTICE OF SALE
AND
BID FORM
COUNTY OF CONTRA COSTA
STATE OF CALIFORNIA
$88,000,000-
2000-2001 TAX AND REVENUE ANTICIPATION NOTES, SERIES A
DATE OF SALE
TUESDAY,MAY 30, 2000
10:00 A.M.. LOCAL TIME
BIDS TO BE RECEIVED AT THE OFFICES OF
BOND COUNSEL
ORRICK., HERRINGTON&SUTCLI FE LLP
400 SANSON E STREET
SAN FRANCISCO, CALIFORNIA 94111
Tel: (415)392-1122
Fax: (415)773-57.59
Preliminary, subject to change.
DOCSSF1:#39915.3
40511-103 NUC
OFFICIAL NOTICE OF SALE
$88,000,000`
COUNTY OF CONTRA COSTA CALIFORNIA
2000-2001 TAX AND REVENUE ANTICIPATION NOTES, SERIES A
NOTICE IS HEREBY GIVEN that faked 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 $88,000,000* principal amount of County of Contra Costa 2000-2001 Tax and Revenue
Anticipation Notes,Series A(the"Notes"):
TIME: 10:00 a.m. local time on Tuesday, May 30, 2000, or at such later date and/or other
time as shall be established by the County Administrator of the County or his
designee (the "County Administrator") and communicated through Thomson
Municipal News ("Munifacts") and Bloomberg Business News ("Bloomberg") not
less than 24 hours prier to the time bids are to be received. If no legal bid or bids are
received for the Notes on May 30, 2000 (or such other date as is communicated by
Munifacts and Bloomberg) at the time and place specified, bids will be received at
the same place at such time specified on such other date as shall be designated by
Munifacts and Bloomberg.
As an accommodation to bidders, telephonic or faked notice of the postponement of
the sale time and/or 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;
Attn, Jean Buckley(Phone -(415) 339-8944). Failure of any bidder to receive such
Munifacts. Bloomberg, telephonic or faked notice shall not affect the legality of the
sale.
PLACE: Orrick,Herrington&Sutcliffe LLP
400 Sansome Street
2nd Floor, Conference Room C
San Francisco, California 94111
Telephone: (415) 392-112.2
Facsimile: (415)773-5759
MAIL: 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.
naess1 1:439915.3
40511.103.MAC
The Notes will be issued pursuant to a Resolution (the"Resolution") adopted by the County on
May 2, 2000. Copies of the Resolution will be furnished to any interested bidder upon request to the Director,
Capital Facilities and Debt Management, County of Contra Costa,651 Pine Street,6h Floor,Martinez, CA 94553-
0063, (925)335-1093, Attn: Laura W.Lockwood.
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 or more Note certificates 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 interests in 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 on June 29,
2001 and at the maturity thereof and will mature on October 1,2001.
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 2000-2001)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 notes(the"Series
B Notes")payable on a parity with the Series A Notes., in an aggregate principal amount with the Series A Notes of
$100,000,000.
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 Fiscal Year 2000-2001 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 deposit in trust in a special fund designated as the"2000-
2001 Tax and Revenue Anticipation Note Repayment Fund"(the"Repayment Fund")specific amounts on specific
dates. Bidders are referred to the Resolution and the Preliminary 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, San Francisco. California ("Bond Counsel").
approving the validity of the Notes and stating that.in the opinion 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 Preliminary Official Statement.
FORM OF BID -- NO DISCOUNT: The bids may be for all or part (in increments of
$20,000,000) of the Notes hereby offered for sale, Bids for less than ail of the issue are required to be made in
increments of$20,000,000 and no bid for less than $20,000,000 principal amount of Notes will be entertained.
Awards will be made in increments of$20.000.000 up to [5.000.000] 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
12%per annum, and together with the bidder's good faith check described herein(unless a Financial Suretv Bond is
furnished pursuant to"BID CHECK OR BOND"), must be delivered by facsimile transmission, as described below,
DOCSSrl:439915.3
40 5 1 1-103 MAC 2
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,2000-2001 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
TINE 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 COUNTYS BOND COUNSEL WILL ACCEPT RESPONSIBILITY FOR, AND THE
BIRDER 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 is computed on the basis of a 350-day year
and a 30-day month and accrues from the date of issuance of the Notes. Interest on the.Notes is payable on June 29.
2001 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 1%) per annum, which rate shall not
exceed 12% per annum; (2) interest with respect to a Note shall be computed from the date of issuance thereof
(expected to be July 3,2000)to June 29, 2001 and to the stated maturity date of October 1,2001,at the interest rate
specified in the bid; (3) the same interest rate shall apply to all Notes (with respect to the$20,000,000 increments
specified in the bid); and(4)any premium must be paid as part of the purchase 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 Motes will be awarded to the best responsible bidder or bidders,considering the
rate specified and the premium offered. if any, in increments of$20.000,000 up to$80,000,000.and the remainder
out of the next best $20,000,000 until all $88,000,000' 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 Notes will be awarded to the
bidder or bidders whose bid or bids represent the lowest true interest cost to the County,considering the interest rate
specified and the premium offered, if any. The true interest cost will be that nominal annual discount rate which.
when compounded semiannually and when used to discount all payments of principal and interest payable on the
Notes at the rate specified in the bid to the date of the Notes (disregarding for the purposes of the calculation the
accrued interest to the date of delivery of the Notes), results in the amount equal to the purchase price, which is the
principal amount of the Notes plus the amount of any premium offered. In the event that two or more bidders offer
bids for the Notes at the same lowest true interest cost. the County shall determine by lot which bidder shall be
awarded such Motes.
PRINCIPAL AMOUNT: The County reserves the right following receipt of bids and
determination of the winning bid or bids to decrease the principal amount of the Notes by not more than 10°fin. In
such event, the County will award such lesser amount of Notes and the purchase price bid of the successful bidder
will be proportionally reduced or the bid or bids less advantageous to the County will not be accepted or will be
accepted in a lesser amount.
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.
"Preliminary, subject to change,
DCCSSF1:439915.3
40511-103 MAC j
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 3,2000. 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 Five days after award of the Notes and upon 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%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 Bond 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 form 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 accordance with 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 TRITE INTEREST COST: Each bidder is requested,but is not required. to
state in its bid the true interest cost in dollars. which shall be considered as informative only and not binding.
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
ounission 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 two hundred copies of the final Official Statement will be supplied to
the purchaser or purchasers of tate Notes for this purpose at the expense of the County.
DOCSSF1:439915.3
40511-103%,L-kC 4
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 of the California Debt and Investment
Advisory Commission ("CMAC"). 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 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 interest received 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. A 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 the light of
the circumstances under which they were 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."
txxssFt;439915.3
aos t t-tn3 4saC 5
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)339-9944,or the
Director,Capital Facilities and Debt Management of the County,(925)335-1093.
Dated:May__,2000.
COUNTY OF CONTRA COSTA
By
County Administrator and
Clerk of the Board of Supervisors,
County of Contra Costa,
State of California
D()CSSFI:439915.3
40511-103 MAC 6
BID FORM
PROPOSAL FOR THE PURCHASE OF
COUNTY OF CONTRA COSTA,CALIFORNIA
2000-2001 TAX AND REVENUE ANTICIPATION NOTES,SERIES A
.2000 From:
Name of Bidder
County of Contra Costa
c/o Orrick,Herrington&Sutcliffe LLP
400 Sansome street
San Francisco, CA 94111
Attn: Mary A. Collins
Tel: (415)373-5998
Fax: (415) 373-5359
Dear Sir:
Pursuant to the Official Notice of Sale, dated May�, 2000,and in accordance with all terms and conditions of said
Official Notice of sale for the sale of the County of Contra Costa, California, 2000-2041 Tax and Revenue
Anticipation Notes, series A(the"Notes"), we offer to purchase the Notes, to be dated the date of issuance thereof
(July 3. 2000) and to mature on October 1. 200 1, in the principal amount set forth below(as a whole in the amount
of$88,000,000 or in part in increments of$20,000,000),as follows:
Our calculation.made as provided in the Official Notice of Sale,but not constituting any part of this proposal.of the
true interest cost with respect to each$20.000,000 increment of Nates is also provided in the following table.
Optional
Principal Interest Total Interest Less Premium
Amount Premium Rate TIC
I
(continued on nest page)
DOCSSF I:#39915.3
40511-103 MAC
This proposal is made subject to all the terms and conditions of said Official Notice of Sale,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.
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.
We understand that bids will be awarded in increments of$20,000,000 up to $,®,000,000 and then the remainder
will be awarded out of the next$20,000,000 bid so that all Notes are awarded. Therefore,we may be awarded Motes
in an amount which is less than that requested by us. We also understand that the County has reserved the right to
decrease the principal amount of the Dotes awarded by not more than 10%of the principal amount thereof.
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)
Attn:
Telephone#:
Telecopy#:
(Authorized Signature)
(continued on next page)
Ix3CSSFt:439915.3
40511-143 NAC �
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:
DOCSSF1 4399153
44311-103 MAC �
CONTINUING DISCLOSURE CERTIFICATE
COUNTY OF CON-IRA.COSTA, CALIFORNIA
2000-2001 TAX AND REVENUE ANTICIPATION NOTES, SERIES A
This Continuing Disclosure Certificate(the"Disclosure Certificate")is executed and delivered by
the County of Contra Costa, California (the "County") in connection with the issuance of$88,000,000 aggregate
principal amount of its County of Contra Costa 2000-2001 Tax and Revenue Anticipation Notes, Series A (the
"Notes") pursuant to Resolution No. authorizing the issuance of the Notes adopted by the board of
Supervisors of the County on May 2, 2000 (the "Resolution"); and in connection therewith the County covenants
and agrees as follows:
SECTION 1. I-Ni=sc of the DisCIngure C rti cats The Disclosure Certificate is being
executed and delivered by the County for the benefit of the Holders (defined below) of the Notes and in order to
assist the underwriter of the Notes in complying with S.E.C.Rule 15c2-12.
SECTION 2. Dtfinitinns, In addition to the definitions set forth above and in the Resolution,
which apply to any capitalized term used in the Disclosure Certificate unless otherwise defined herein, the
following capitalized terms shall have the following meanings:
"Beneficial Owner" shall mean any person which has the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, any Note or Notes, including persons holding Notes through
nominees or depositories.
"Holders" shall mean either the registered owners of the Notes, or, if the Notes are registered in
the name of The Depository Trust Company or another recognized depository, any Beneficial Owner or applicable
participant in its depository system.
"Listed Event" shall mean any of the events listed in Section 3(a)of the Disclosure Certificate.
"National Repository" shall mean any Nationally Recognized Municipal Securities Information
Repository for purposes of the Rule. The National Repositories currently approved by the Securities and Exchange
Commission can be found at the following website: http://w,,viv,smgov/consumer/nnnsir.htm.
"Repository" shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
"State Repository" shall mean any public or private repository or entity designated by the State of
California as a state repository for the purpose of the Rule and recognized as such by the Securities and Exchange
Commission. As of the date of the Disclosure Certificate, there is no State Repository.
"Tax-exempt" shall mean that interest on the Notes is excluded from gross income for federal
income tax purposes. whether or not such interest is includable as an item of tax preference or otherwise includable
directly or indirectly for purposes of calculating any other tax liability, including any alternative minimum tax or
environmental tax.
"Underwriter" shall mean and
and any other original underwriters of the Notes. if any, required to comply with the Rule in connection with the
offering of the Notes.
DOCSSFt:439916.2
SECTION 3. Repolfing of Simi antr Events
(a) Pursuant to the provisions of this section, to the extent applicable, the County shall give
notice of the occurrence of any of the following events with respect to the Notes,if material:
(i) principal and interest payment delinquencies.
(ii) non-payment related defaults.
(iii) modifications to the rights of the Molders.
(iv) optional,contingent or unscheduled note calls.
(v) defeasances.
(vi) rating changes.
(-,rii) adverse tax opinions or events adversely affecting the tax-exempt status of the
Notes.
(viii) unscheduled draws on the debt service reserves reflecting financial difficulties.
(ix) unscheduled draws on the credit enhancements reflecting financial difficulties.
(x) substitution of the credit or liquidity providers or their failure to perform.
(xi) release,substitution or sale of property securing repayment of the Notes.
(b) Whenever the County obtains knowledge of the occurrence of a Listed Event.the County
shall as soon as possible determine if the occurrence of such event would be material.
(c) If the County determines that the occurrence of a Listed Event would be material, the
County shall promptly file a notice of such occurrence with each Repository.
SECTION 4. Termination of Re'.pnrting_Obligatinn. The County's obligations under the
Disclosure Certificate shall terminate upon the defeasance,prior redemption or payment in full of all of the Notes.
SECTION 5. Additional Infbrmation. Nothing in the Disclosure Certificate shall be deemed
to prevent the County from disseminating any other information, using the means of dissemination set forth in the
Disclosure Certificate or any other means of communication, or including any other information in any notice of
occurrence of a Listed Event, in addition to that which is required by the Disclosure Certificate. If the County
chooses to include any information in any notice of occurrence of a Listed Event in addition to that 'which is
specifically required by the Disclosure Certificate, the County shall have no obligation under the Disclosure
Certificate to update such information or include it in any future notice of occurrence of a Listed Event.
SECTION b, lD2efaiill. In the event of a failure of the County to comply with any provision of
the Disclosure Certificate, the Underwriter or any Folder may take such actions as may be necessary and
appropriate, including seeking mandate or specific performance by court order. to cause the County to comply with
its obligations under the Disclosure Certificate. prcajded that the sole remedy under the Disclosure Certificate in
the event of any failure of the County to comply with the Disclosure Certificate shall be an action to compel
performance hereunder.
SECTION 7. Bren_f ciar es. The Disclosure Certificate shall inure solely to the benefit of the
County,the Underwriter and the Holders, and shall create no rights in any other person or entity.
tx7cssF1:439916.2
Dated: July 3,2000.
COUNTY OF CONTRA COSTA
By
Philip J.Batchelor,
County Administrator and
Clerk of the Board of Supervisors
of the County of Contra.Costa
DOCSSP1.439916.2
ant.. —1-1 1
NEW ISSUE-BOOK ENTITY ONLY RATINGS: Moody's:
Standard&Poor's:
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 and is exempt from State of California 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 calculating federal 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 74X AM77ER:S"herein.
$8$90009000*
COUNTY OF CONTRA COSTA, CALIFORNIA
2000-2001 TAX AND REVENUE ANTICIPATION NOTES, SERIES A
Dated: July 3,2000 Due: October 1,2000
The County of Contra Costa,California(the "County")2000-2001 Tax and Revenue Anticipation Notes, Series
A (the "Notes")are being issued to finance the seasonal cash flow requirements of the County during the fiscal
year ending June 30, 2001. The Notes will be issued as fixed-rate notes in fully registered form. The Notes,
when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company
("DTC"), New York, New York, which will act as securities depository for the Notes. Purchases of the Notes
will be made only through DTC Participants under the book-entry system (without certificates) maintained by
DTC in the denominations of$5,000 or any integral multiple thereof. Purchasers will not receive certificates
representing their ownership interest in the Notes purchased.
The Notes will be dated July 3, 2000 and will not be subject to redemption prior to maturity. The Notes will
bear interest at a fixed-rate per annum from their dated date and will be priced as set forth above. Interest on
the Notes is payable on June 29, 2001 and at the maturity of the Notes. Principal is payable at the maturity of
the Notes.
In accordance with California law, the Notes 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 2000-
2001 and legally available for payment thereof. The Notes are equally and ratably secured by a pledge of
certain unrestricted taxes, income, revenue, cash receipts and other moneys. The County is not authorized,
however,to levy or collect any tax for the repayment of the Notes. See"THE NOTES---Security for the Issue"
herein.
The Notes will be awarded pursuant to competitive bidding to be held on May 30, 2000. The Notes are offered
when, as and if issued by the County, 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 3, 2000. For information
regarding the competitive sale of the Notes, contact the Financial Advisor to the County:
C.M. DE CRINIS & CO., INC.
Ti-ns 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 INFORMED
INVESTMENT DECISION.
Dated: June 2000
*Preliminary,subject to change
COUNTY OF CONTRA COSTA, CALIFORNIA
BOARD OF SUPERVISORS
Joe Canciamilla
(District 5)
Chair
Jahn Gioia Gayle B. Llilkema
(District 1) (District 2)
Donna Gerber Mark.DeSaulnier
(District 3) (District 4)
Vice-chair
COUNTY OFFICIALS
Philip J. Batchelor
Clerk of the Board and
County Administrator
Laura W. Lockwood
Director, Capital Facilities and Debt Management
Kenneth J. Corcoran William J. Pollacek
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
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.
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 jurisdiction in which or to any person to whom it is
unlawful to make such an offer,solicitation or sale. 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 Pag
COUN'T'Y OF CONTRA COSTA
BOARD OF SUPERVISORS AND
COUNTY OFFICIALS..........................................................i
INTRODUCTION....................................................................1
COUNTY OF CONTRA COSTA CASH MANAGEMENT Legislation Implementing Article XIIIA............... 21
PROGRAM........................................................................1 Article XIII B of the California Constitution...........,21
CONTINUING DISCLOSURE....................................................3 Article XII C and Article XIII D of the
THE NOTES..........................................................................3 California Constitution............... ........22
Authorityfor Issuance........................... .......................
. .....................
Proposition 62...........................................................23
Purpose of Issue..........................................................3 Proposition 187............... ............24
...........................
Security for the Notes.................................................4 Future Initiatives....................... .. ..............25
Lien in Bankruptcy ...... ......•••4
P y.................................... TAX MATTERS....................................................................25
Investment of Moneys in the Repayment Fund..........5 LEGAL MATTERS.......................
Available Sources of Payment...................................
Y LEGALITY FOR 1NVESTMENT IN CALIFORNIA........................26
State of California Finances........................................6 RATINGS ...........26
Intrafund Borrowing,Intrafund Borrowing ............... ................................ .............
and Cash Flow 6 LiRGATTON........................................................................27
............ ................................. ........ ADDITIONAL INFORMATION ....27
Cash Flow Estimates....................... ..........7
THE CONTRA COSTA COUNTY INVESTMENT POOL 14 APPENDIX A-GENERAL COUNTY ECONOMIC AND
SUMMARY OF CERTAIN PROVISIONS OF THE RESOLUTION...18 DEMOGRAPHIC INFORMATION ....................A-I
Resolution to Constitute Contract........ ...... .............18 APPENDIX B-COUNTY FINANCIAL,INFORMATION..............B-1
Issuance of Series B Notes........................................19 APPENDIX C—PROPOSED FORM OF OPINION OF
Covenants of the County..........................................18 BOND COUNSEL .......................................0-1
Paying Agent and Note Registrar.............................19 APPENDIX D-FINANCIAL STATEMENTS OF
Exchange and Transfer of Notes...............................19 THE COUNTY FOR THE FISCAL YEAR
Permitted Investments 19 ENDED JUNE 30, 1999..............................D-I
COUNTY INFORMATION 20 APPENDIX E-FORM OF CONTINUING
CONSTITUTIONAL AND STATUTORY LIMITATIONS ON DISCLOSURE CERTIFICATE........................E-I
TAXES,REVENUES AND APPROPRIATIONS......................21 APPENDIX F-BOOK ENTRY-ONLY SYSTEM........................F-I
Article XIII A of the California Constitution...............21
IN MAKING AN INVESTMENT DECISION ItiVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE COUNTY AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFICIAL
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS 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 UNDERWRITERS
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 UNDERWRITERS.
$88,000,000*
COUNTY OF CONTRA,COSTA, CALIFORNIA
2000-2001 TAX AND REVENUE ANTICIPATION NOTES, SERIES A
INTRODUCTION
The purpose of this Official Statement, which includes the front cover and the attached
Appendices, is to provide certain information concerning the sale and delivery of $88,000,000* in
aggregate principal amount of 2000-2001 Tax and Revenue Anticipation Notes, Series A of the
County of Contra Costa, California (the "County"). The 2000-2001 Tax and Revenue Anticipation
Notes, Series A (the "Notes") will be fixed rate notes bearing interest as set forth on the cover of this
Official Statement. Issuance of the Notes will provide moneys to help meet current (Fiscal Year 2000-
2001) County General Fund expenditures, including current expenses, capital expenditures and the
discharge of other obligations or indebtedness of the County.
The Notes are authorized by and are being issued in accordance with Article 7.6, Chapter 4,
Part 1, Division 2, Title 5 (commencing with Section 53850) of the Government Code of the State of
California(the "Act"), and a resolution adopted by the Board of Supervisors of the County (the "Board
of Supervisors") on May 2, 2000 and referenced as "Resolution Authorizing the Issuance and Sale of
Not to Exceed $100,000,000 County of Contra Costa, California 2000-2001 Tax and Revenue
Anticipation Notes" (the "Resolution"). If circumstances warrant, the County may issue in Fiscal Year
2000-2001 an additional series of 2000-2001 Tax and Revenue Anticipation Notes (the "Series B
Notes") in an amount not to exceed $12,000,000'". The Series B Notes, if issued, would be issued no
later than January 1, 2001, would have a maturity date not more than 15 months thereafter, 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 such issuance does not cause a reduction in the ratings from Moody's Investors Service
and Standard& Poor's on the Notes.
The Notes are issued subject to the terms and conditions of the Resolution. Pursuant to
California law, the Notes and the interest thereon are general obligations of the County payable from
the taxes, income, revenue, cash receipts and other moneys of the County attributable to the 2000-2001
Fiscal Year and lawfully available therefor. The Notes and the interest thereon are secured by a pledge
of certain unrestricted taxes, income, revenue, cash receipts and other moneys of the County
attributable to the 2000-2001 Fiscal Year as specified in the Resolution. See "THE NOTES -- Security
for the Notes."
'Preliminary,subject to change.
1
COUNTY OF CONTRA COSTA CASH MANAGEMENT PROGRAM
The County implemented a cash management program in 1979 to finance General Fund cash
flow shortages occurring periodically during its fiscal year (July 1 through June 30). In each year
since the program's inception, the County has sold either tax anticipation notes or other notes in
annual aggregate amounts up to $140,000,000. The Resolution authorizes the County to issue and sell
up to $100,000,000 aggregate principal amount of 2000-2001 Tax and Revenue Anticipation Notes in
one or two series.
In addition to the 2000-2001 Tax and Revenue Anticipation Notes, certain funds held in trust
by the County until apportioned to the appropriate agency are available to the County for intrafund
borrowings. Further, while it does not expect to do so, the County may, under certain circumstances,
undertake interfund borrowing to fund shortages in the General Fund. See "THE NOTES - Interfund
Borrowing, Intrafund Borrowing and Cash Flow."
The Notes represent the twenty-fourth 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 of 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 15,0001000 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 July 1, 1998
July 1, 1998 107,315,000 October 1, 1999
July 1, 1999 88,000,000(2) Sept.29,2000
(t) Taxable Notes.
(2) All funds necessary to retire these Notes have been placed in a trust fund to be disbursed in certain amounts on July 1,2000 and
October 1,2000.
2
Continuing Disclosure
The County will agree to 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 "Mule"). The specific nature of the notices of material
events and certain other terms of the continuing disclosure obligation are described in "APPENIDIX E -
FORM OF CONTINUING DISCLOSURE CERTIFICATE." There has been no failure on the part of the
County to comply in any material respect with prior undertakings under the Rule.
THE NOTES
The Notes will be issued in the aggregate principal amount of$88,000,000*. When issued, the
Notes will be registered in the name of Cede & Co., as nominee for The Depository Trust Company
("DTC"),New York, New York, which will act as securities depository for the Notes. Purchasers will
not receive certificates representing their ownership interest in the Notes purchased. See "APPENDIX F
- BOOK-ENTRY ONLY SYSTEM." Beneficial ownership interests in the Notes may be transferred only
in accordance with the rules and procedures of DTC.
The Notes will be dated July 3, 2000, v ill mature on October 1, 2001, and will be issued in
fully registered farm. The Notes are not subject to redemption prior to maturity.
The Motes will be issued in denominations of $5,000 and any integral multiple thereof
("Authorized Denominations") and will bear interest at the rate set forth on the cover page hereof.
Interest on the Notes will be payable on June 29, 2001 and at maturity and will be computed on the
basis of twelve 30-day months and a 360-day year. Interest due on the Notes, prior to maturity, is
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 15' day of the calendar month immediately preceding the interest
payment date, such interest to be paid by check mailed to such registered owner. Principal and interest
payable at maturity will be payable in immediately available funds, upon presentation and surrender of
the Notes at the office of the Treasurer-Tax Collector of the County (the "Treasurer"), the Paying
Agent with respect to the Notes.
Authority for Issuance
The Notes are issued under the authority of the Act and pursuant to the Resolution and are
subject to the terms and conditions of the Resolution.
Purpose of Issue
The Notes are being issued to finance the County's General Fund cash flow requirements
during the 2000-2001 Fiscal Year (July 1, 2000 through June 30, 2001). County General Fund
expenditures tend to occur in level amounts throughout the fiscal year, Conversely, receipts have
followed an uneven pattern primarily as a result of secured property tax installment delinquency dates
in December and April and as a result of delays in payments from other governmental agencies, the
two largest sources of County revenues. The proceeds received from the sale of the Notes will allow
the County to cover periods of deficits resulting from such uneven flow of revenues and are an
alternative to borrowing from County-held pooled income funds. The proceeds of the Notes will be
invested in the Contra Costa County Investment Pool (the "County Pool") until expended. See "THE
CONTRA COSTA COUNTY INVESTMENT POOL".
Preliminary,subject to change.
3
Security for the Notes
The 2000-2001 Tax and Revenue Anticipation Notes issued under the Resolution (in the
aggregate principal amount of$88,000,000* for the Notes and up to an aggregate principal amount of
$12,000,000 for the Series B Notes) are ratably secured by a pledge of an amount equal to fifty percent
(5061o) of the aggregate principal amount of the Notes and Series B Notes from the first unrestricted
taxes, income, revenue, cash receipts and other moneys to be received by the County in the accounting
period beginning January_, 2001 and ending February_, 2001 and an amount equal to fifty percent
(50%) of the aggregate principal amount of the Notes and Series B Notes (plus an amount (net of
anticipated earnings on moneys in the Repayment Fund) equal to the interest on the Notes and the
Series B Notes payable on June 30, 2001 and at maturity) from the first unrestricted taxes, income,
revenue, cash receipts and other moneys to be received by the County in the accounting period
beginning April_, 2001 and ending May_, 2001.
Accordingly, pursuant to Section 53856 of the Governnsent Code of the State of California (the
"Government Code"), the principal of the Notes and the Series B Notes and the interest thereon are a
first lien and charge against, and are payable from, such pledged moneys. In addition to such pledged
moneys, pursuant to Section 53857 of the Government Code, the Notes are general obligations of the
County, and, to the extent not payable from the taxes, income,revenue, cash receipts and other moneys
of the County pledged for the Fiscal Year 2000-2001 for the payment thereon shall be paid with
interest thereon only from any other moneys of the County lawfully available therefor. The County is
not authorized to levy or collect any tax for the repayment of the Notes or the Series B Notes.
In accordance with the terms of the Resolution, the Treasurer will deposit the money pledged
for the repayment of the Notes and the Series B Notes in a special fund in the County Treasury
designated as the "2000-2001 Tax and Revenue Anticipation Note Repayment Fund" (the "Repayment
Fund"). Moneys pledged for the payment of the Notes and the Series B Notes will be deposited into
the Repayment Fund in the amount and at the tunes described above. 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 respective maturity dates of the Notes and the Series B Notes to
pay the principal and interest thereon then due. The Resolution provides that such amounts may not be
used for any other purposes and may be invested in Permitted Investments. See "Investment of the
Repayment Fund" and "SUMMARY OF CERTAIN PROVISIONS OF THE RESOLUTION — Permitted
Investments."
The Treasurer will use the moneys in the Repayment Fund on June 29, 2001 to pay interest on
the Notes and the Series B Notes then due and on the respective maturity dates 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. If for
any reason amounts in the Repayment Fund are insufficient to pay both the Notes and the Series B
Notes in full, such amounts shall be applied pro rata to the payment of the Notes and the Series B
Notes based on the total principal of and interest payable upon the Notes and the Series B Notes at the
respective maturities thereof, taping into account anticipated earnings to be received on amounts in the
Repayment Fund prior to the final maturity date thereof. Any moneys remaining in the Repayment
Fund after such payments, or after provision for such payments has been made, will be deposited by
the Treasurer in the General Fund of the County.
Lien in Bankruptcy
A March 8, 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 Change 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
4
following the bankruptcy. The Bankruptcy Court ruled that under the United states Bankruptcy Code
the lien securing the grange 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, holding that the lien was a
statutory lien. 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, if the County were to file for bankruptcy, whether it would be
required to set aside revenues pledged under the Resolution as described in the preceding paragraphs
following such filing.
As more particularly described under the heading "THE NOTES -- Interfund Borrowing,
Intrafund Borrowing and Cash Flow," the County may, under certain circumstances, undertake
interfund borrowing to fund shortages in the General Fund. While the County does not expect to
resort to any such interfund borrowing, Section 6 of Article XVI of the California Constitution
requires that any such borrowing be repaid from revenues before any other obligation of the County
(including the Notes) is paid from such revenues.
Investment of the Repayment Fund
Moneys in the Repayment Fund will be invested in one or more instruments of the types
included in Permitted Investments. See "SUMMARY OF CERTAIN PROVISIONS OF THE RESOLUTION -
Permitted Investments." The proceeds of any such investments shall be retained in the Repayment
Fund until payment of principal of and interest on the Notes and the Series B Notes (or provision
therefor) has been made, at which time any excess amount shall be deposited by the Treasurer in the
General .Fund of the County.
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 received for the
General Fund of the County attributable to Fiscal Year 2000-2001 and legally available for payment
thereof: Under the Act, no obligations, including the Notes, may be issued thereunder if the principal
thereof and interest thereon exceeds 85 percent of the estimated amount of the then-uncollected taxes,
income, revenue, cash receipts and other moneys which will be available for payment of such principal
and interest.
The County estimates that the total moneys available for payment of the Notes and the Series B
Notes will be in excess of$ million as indicated in the table that follows. Except for pledged
amounts, these moneys will be expended during the course of the fiscal year, and no assurance can be
given that any moneys, other than the pledged amounts, will be available to pay the Notes and the
Series B Notes and the interest thereon.
5
ESTIMATED GENERAL FUND UNRESTRICTED REVENUES
FISCAL YEAR 2000-20011
BASED ON FISCAL YEAR 1999-2000 ADJUSTED FINAL BUDGETtt>
Source Amount($000)
Estimated Unrestricted Available Cash Balance at July I,2000
Property Taxes
Other Taxes
Licenses,Permits and Franchises
Fines,Forfeitures and Penalties
Use of Money and Property
Aid from Other Governmental Agencies
Charges for Current Services
Other Unrestricted Revenue
Total
Less amount pledged for payment of the Notes and
Series B Notes(2)
Net Total in excess of pledged revenues
(t} Reflects revenues set forth in the Fiscal Year 1999-2000 Adjusted Final Budget that will serve as the County's budget
until the Fiscal Year 2000-2001 Final Budget is adopted.
(2) Based on$100,000,000 aggregate principal amount of Notes and Series B Notes plus an amount equal to interest thereon
calculated at the rate of %per annum,assuming delivery on July 3,2000.
Source: County Auditor-Controller.
State of California Finances
On January 10, 2000, the Governor released the proposed 2000-2001 State Budget. On May
2000, the Governor released the "May Revision" to the proposed budget. For additional
information on the State budget, see "APPENDix B — COUNTY FINANCIAL INFORMATION — Proposed
2000-01 Fiscal Year State Budget."
The County cannot predict the outcome of the State's budget negotiations or accurately
measure the impact of any State proposals at this time. In the event the final State budget includes
decreases in County revenues or increases in required County expenditures from the levels assumed by
the County, the County would need to generate additional revenues or curtail programs and/or services
to ensure a balanced budget.
Interfund Borrowing,Intrafund Borrowing and Cash Flow
County General Fund expenditures tend to occur in level amounts throughout the fiscal year.
Conversely, receipts have followed an uneven pattern primarily as a result of secured property tax
installment delinquency dates in December and April and as a result of delays in payments from other
governmental agencies, the two largest sources of County revenues. As a result, the General Fund
cash balance prier to Fiscal Year 1979-80 had typically been negative for most of the year and had
been covered by interfund borrowings pursuant to Section 6 of Article XVI of the California
Constitution and intrafund borrowings. "Interfund borrowing" is borrowing from specific fiends of
other governmental entities whose funds are held in the County Treasury. "Intrafund borrowing" is
borrowing for General Fund purposes against funds held in trust by the County. Because such General
Fund interfund borrowings caused disruptions in the General Fund's management of pooled
investments, beginning in 1979 the County has regulated its cash flow by issuing tax and revenue
anticipation notes for the General bund and by using intrafund borrowing. All notes issued in
connection with the County's cash management program, with the exception of the most recent
$88,000,000 in aggregate principal amount of tax and revenue anticipation notes issued in Fiscal Year
1999-2000, which are due September 29, 2000, have been repaid on their respective maturity dates.
Sufficient revenues have been reserved in a fund held by the County, separate from the General Fund,
6
COUNTY OF CONTRA COSTA
GENERAL FUND
MONTH-END CASH BALANCES AND INTRAFUND BORROWING CAPACITY(1)
FISCAL YEARS 1995-96 THROUGH 1999-2000
(in thousands)
ACCOUNTING FINDING
PERIOD MID-MONTH 1995-96(3) 1996-97(l) 1997-98(s) 1998-99(6) 1999-2000 cn
1 AUGUST $67,189 559,235 $69,005 $ 55,204
2 SEPTEMBER 50,491 46,989 62,899 49,274
3 OCTOBER 37,249 47,052 57,389 38,571
4 NOVEMBER 25,144 36,564 50,455 38,794
5 DECEMBER 20,310 18,853 41,318 21,842
6 JANUARY 10,650 18,829 7,081 9,809
7 FEBRUARY 10,167 20,891 8,026 2,988
8 MARCH 6,049 20,475 14,191 10,919
9 APRIL 6,070 19,712 10,475 13,848
10 MAY 11,238 6,403 12,167 6,258 proj
11 JUNE 7,679 2,897 22,464 10,135 proj
12 AT JUNE 30 33,134 12,662 15,419 11,244 proj
INTRAFUND BORROWING CAPACITY("
AT JUNE 30 $323,757 ,5363,044 $372,208 $365,590 proj.
(1)Period-end balances include the effects of intrafund borrowing net of deposits to the repayment funds relating to the short-term notes.
See "TIE NOTES - Interfund Borrowing, Intrafund Borrowing and Cash Flow. In the 1996-97 fiscal year, the County began
financing its Teeter Plan cash flow needs through the General Fund;thus,the period-end balances also reflect the effects of intrafund
borrowing undertaken to finance the Teeter Plan cash flows, "Intrafund Borrowing Capacity" reflects borrowable balances as of
June 30 of each fiscal year.
(2)The County utilizes a twelve-period accounting system,with the first period beginning on July I and ending in the middle of August,
The subsequent periods end in mid-September, mid-October and so forth until mid-June. The final accounting period runs from
mid-June to the end of the fiscal year at June 30.
(3) Includes receipt in July 1995 of proceeds from sale of$90,000,000 of 1995-96 Tax and Revenue Anticipation Notes, Series A.
(4) Includes receipt in July 1996 of proceeds from sale of$120,000,000 of 1996-97 Tax,and Revenue Anticipation Notes, Series A.
(5) Includes receipt in July 1997 of proceeds from sale of$130,000,000 of 1997-98 Tax and Revenue Anticipation Notes, Series A.
(6) Includes receipt in July 1998 of proceeds from sale of$107,315,000 of 1998-99 Tax and Revenue Anticipation Notes,Series A.
(7) Includes receipt in July 1999 of proceeds from sale of$88,0010,000 of 1999-2000 Tax and Revenue Anticipation Notes,Series A.
8
[THIS PAGE INTENTIONALlLY LEFT BLANK]
9
[INSERT FY 1999-2000 CASH FLOWS]
10
[INSERT FY 1999-2000 CASH FLOWS]
11
[INSERT FY 2000-2001 CASH FLOWS]
12
[INSERT FY 2000-2001 CASH FLOWS]
13
v 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 2000-2001. The money pledged for the repayment of the Notes
and the Series B Notes will be deposited in trust in the Repayment Fund held by the Treasurer for
payment of the interest on the Notes and the Series B Notes on June 29, 2001 and the principal of and
interest on the Notes and the Series B Notes at maturity. See "THE NOTES - Security for the Notes"
and - "Investment of Repayment Fund" herein.
Since the net proceeds of the Notes will be deposited in the Pool for general County operating
purposes, the following information about the Pool and the County's investment policy is provided.
State law requires that all moneys of the County, County school districts, and certain special
districts in the County 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 Section 53600 et
seq. of the 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,
2000, there were [37] 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 (88.07%] of the Pool's investments as of March 31, 2000.
The Contra Costa County Investment Policy (the "Policy") governs the County's investments
in the Pool. The Policy has historically been more restrictive than that mandated under the
Government Code. For instance, the purchase of mutual fund shares is prohibited. Although the
Policy permits reverse repurchase agreements between the County and both primary dealers with the
Federal Reserve Bank of New York, the County currently does not intend to engage in such
transactions. 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, 2000, investments in the Pool were held for the following local agencies in the
indicated amounts:
Contra Costa County Investment Pool
Investments Held by Type of Local Agency
as of March 31,2000
Par Value Percent Number
Local Agency (n millions} of Total of Aaencies
County of Contra Costa 1
School Districts 19
Community College District 1
Other Public Agencies* 16
Total 37
*Sanitation, Fire, Transportation Authorities and two Joint Power Authorities are the only Voluntary Participants in the
Pool.
14
As of March 31, 2000, the Pool had approximately [47.8%] of its assets invested in U.S.
Treasury and federal agency securities. Approximately [36.7%] of the Pool's assets were invested in
highly liquid short-term money market instruments (repurchase agreements, certificates of deposit,
bankers acceptances, and commercial paper). As of March 31, 2000, the detailed composition, cost,
and market value of the Pool were as follows:
Type of Investment Cost Market Value % of Total
Cash
U.S. Treasuries
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 [93.9%] of the portfolio having a maturity of less than one year
and an average weighted days to maturity of [99] days. The maturity distribution of the Pool's
portfolio as of March 31, 2000 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.
*'Notal may not add due to independent rounding.
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 millionsl
1995 $ 869
1996 998
1997 1,135
1998 1,152
1999
15
SUMMARY OF CERTAIN PROVISIONS OF THE RESOLUTION
The following is a summary of certain provisions of the Resolution. This summary is not to be
considered a full statement of the terms of the Resolution and accordingly is qualified by reference
thereto and is subject to the full text thereof. Except as otherwise defined herein, capitalized terms
used in this Official Statement without definition have the respective meanings set forth in the
Resolution.
Resolution to Constitute Contract
The provisions of the Notes and the Series B Notes and of the Resolution constitute a contract
between the County and the registered owners of the Notes and the Series B Notes, and such
provisions may 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 will be
irrepealable. See "THE NOTES—Lien in Bankruptcy"herein.
Issuance of the Series B Notes
The Series B Notes will be dated the date of issuance thereof, will mature (without option of
prior redemption) not more than 15 months thereafter and will bear interest payable on June 29, 2001
and at maturity computed on the basis of a 360-day year composed of twelve 30-day months at the rate
or rates determined in accordance with the Resolution. The issuance of the Series B Notes is subject to
the following conditions:
(1) Receipt of confirmation from Moody's Investors Service and Standard & Poor's (each an
"Agency") that the issuance of the Series B Notes will not cause a reduction or withdrawal
in such Agency's rating on the 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.
Covenants of the County
The County represents under the Resolution that with respect to the 2000-2001 Fiscal Year, the
amount of $100,000,000 (the aggregate of the Notes and the Series B Notes) when added to the
interest payable thereon, does not exceed 85 percent of the estimated amount of the uncollected taxes,
income, revenue, cash receipts, and other moneys of the County which will be available for the
payment of said notes and the interest thereon.
In order to maintain the exclusion from gross income for federal income tax purposes of
interest on the Notes and the Series B Notes, the County covenants to comply with each applicable
requirement of the Internal Revenue Code of 1986, as amended, necessary to maintain the exclusion of
interest on the Notes and the Series B Notes from gross income for federal income tax purposes and
the County agrees to comply with the requirements of the Tax Certificate of the County as such Tax
Certificate may be amended from time to time. The County further covenants that it will make all
calculations relating to any rebate of excess investment earnings on the Note proceeds due to the
United States Department of the Treasury in a reasonable and prudent fashion and will segregate and
set aside the amounts such calculations indicate may be required to be paid to the United States
Department of the Treasury from revenues attributable to the 2000-2001 Fiscal Year or from any other
lawfully available moneys. See "TAX MATTERS"herein.
16
Notwithstanding any other provision of the Resolution to the contrary, upon the County's
failure to observe, or refusal to comply with, the foregoing tax covenants, no one other than the owners
or former owners of the Notes and the Series B Notes will be entitled to exercise any right or remedy
provided to the owners or former owners under the Resolution.
Paying Agent and Note Registrar
The Treasurer will initially act as Paying Agent and as Note Registrar for the Notes. This
appointment does not preclude the County from appointing a financial institution to act as Paying
Agent. Any such successor Paying Agent will be or have co-paying agent relationships with one or
more banks or trust companies in New York, New York or Los Angeles, California or San Francisco,
California.
Exchange and Transfer of the Notes
The registered owners of the Notes which are evidenced by registered certificates may transfer
such Notes upon the books maintained by the Note Registrar, in accordance with the Resolution.
The County and any Paying Agent may deem and treat the registered owner of any Note as the
absolute owner of such Note, regardless of whether such Note is overdue, for the purpose of receiving
payment thereof and for all other purposes, and all such payments so made to any such registered
owner upon his or her order will satisfy and discharge the liability upon such Note to the extent of the
sum or sums so paid, and neither the County nor any Paying Agent will be affected by any notice to
the contrary. Cede & Co., as nominee of DTC, or such other nominee of .UTC or any successor
securities depository or the nominee thereof, will be the registered owner of the Notes as long as the
beneficial ownership of the Notes is held in book-entry form in the records of such securities
depository. See "APPENDIX F—BOOK-ENTRY-ONLY-SYSTEM."
Permitted Investments
Moneys on deposit in the Repayment Fund will be retained therein until applied to the payment
of the principal of and interest on the Notes and Series B Notes. Such amounts may not be used for
any other purposes, although they may be invested in Permitted Investments, except that no such
investment shall have a maturity date later than the maturity date of the respective Notes or Series B
Notes expected to be paid with the proceeds of such investment. The Resolution specifically
designates the following investments as Permitted Investments, subject to certain limitations more
fully described in the Resolution:
(1) United States Treasury notes, bonds, bills or certificates of indebtedness, or those for
which the full faith and credit of the United States are pledged for the payment of
principal and interest.
(2) Obligations of instrumentalities or agencies of the United States of America limited to
the following: (a) the Federal Horne Loan Bank Board (FHLB); (b) the Federal Home
Loan Mortgage Corporation (FHLMC); (c) the Federal National Mortgage Association
(FNMA); (d) Federal Farm Credit Bank (FFCB); (e) Government National Mortgage
Association (GNMA); (f) Student Loan Marketing Association (SLMA); and (g)
guaranteed portions of Small Business Administration (SBA) notes.
(3) Bills of exchange or time drafts drawn on and accepted by a commercial bank,
otherwise known as bankers acceptances. Purchases of bankers acceptances may not
exceed a maturity of 270 days. The financial institution must have a minimum short-
term rating of"A-1" and "P-1" by Standard & Poor's and Moody's Investors Service,
respectively, and a long-term rating of no less than"A".
17
(4) Commercial paper of"prime" quality of the highest ranking or of the highest letter and
numerical rating as provided for by Moody's Investors Service or Standard & Poor's.
Eligible paper is further limited to issuing corporations that are organized and operating
within the United States and having total assets in excess of five hundred million
dollars ($500,000,000) and having an "A" or higher rating for the issuer's debt, other
than commercial paper, as provided for by Moody's Investors Service or Standard &
Poor's. Purchases of eligible commercial paper may not exceed a maturity of 180 days.
(5) Negotiable certificates of deposits issued by a nationally or state-chartered bank or a
state or federal association (as defined by Section 5102 of the Financial Code) or by a
state-licensed branch of a foreign bank in each case which has, or which is a subsidiary
of a parent company which has, obligations outstanding having a rating of "Aa" or
"AA" or better from Moody's Investors Service and Standard & Poor's, respectively.
(6) Investments in repurchase agreements of any securities listed in (1) through (4) above.
Investments in repurchase agreements may be made with financial institutions having a
rating of "Aa" or "AA" or better from Moody's Investors Service and Standard &
Poor's, respectively, and when the term of the agreement does not exceed 30 days and
are fully secured at or greater than 102% of the market value plus accrued interest by
obligations of the United States Government, its agencies and instrumentalities, in
accordance with number(2) above.
(7) Deposits in the State of California Treasurer's Local Agency Investment Fund (LAIF).
COUNTY INFORMATION
For a discussion of the economic and demographic profiles of the County, see "APPENDIX A -
GENERAL COUNTY ECONOMIC AND DEMOGRAPHIC INFORMATION" hereto. For information on the
County's finances, see "APPENDix $ - COUNTY FINANCIAL INFORMATION" and APPENDIX D
FINANCIAL STATEMENTS OF THE COUNTY FOR THE FISCAL YEAR ENDED TUNE 30, 1999" hereto.
18
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 limits the amount of any ad valorem tax on real property to I% 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.
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.
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 level 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 1990191 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 local 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.
19
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 received by the State to a fund established to assist in
financing certain school needs. Appropriations for "qualified capital outlays" are excluded from the
limits of Proposition 111.
For Fiscal Year 1999-2000, the County's Article XIII B limit is $ and budget
appropriations subject to limitation are $ . Thus, for Fiscal Year 1999-2000, the County
therefore anticipates that it will be under its limit by $
On or before June 30, 2000, the County Board of Supervisors is expected to adopt the Fiscal
Year 2000-2001 appropriations limit. It is likely that it will exceed the Fiscal Year 1999-2000 limit of
$ . Based upon the assumption that the County's General Fund Budget will not
significantly increase in Fiscal Year 2000-2001, the appropriations subject to the limit will be
approximately $_ billion 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 2000-2001.
Article XIII C and Article XIII D of the California Constitution
On November 5, 1996, 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 a 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 provi-
sions 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,
20
(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. While other jurisdictions in California may have fees and assessments which could
be subject to the provisions of Article XIII I.7, the County estimates that in Fiscal Year 2000-2001 it
will collect no such fees and assessments. 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.
Proposition 62
On September 28, 1995, the California Supreme Court affirmed the lower court decision in
Santa Clara County .Local Transportation Authority v. Guardino, 11 Cal. 4th 220 (1995)
("Guardino"). 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 Guardino on Proposition 62 grounds, the Court disapproved the decision in City of
Woodlake v. Logan, 230 Cal. App. 3d 1058 (199 1) ("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.
21
The County has two taxes to which Proposition 62 could apply: a business license tax enacted
in 1991, which generates approximately $ per year, and a transient occupancy tax, an increase
in which was enacted in 1990, that generates approximately [$1,500,000] per year (approximately
[$225,000] 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
initiative statute, which makes illegal aliens ineligible for public social services, public health care
services (unless emergency services are requested 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 California Attorney
General and the united States Immigration and Naturalization Service (the "TNS").
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 Casts. 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
federal funding received by California 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 immigration 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 judgment 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 then State Attorney General Daniel Lungren was filed with
the 9"' Circuit Court of Appeals on March 25, 1998. On April 15, 1999, Governor Gray Davis
announced that he would ask a federal appeals court to mediate challenges to Proposition 187. On
April 26, 1999, the 9`h Circuit Court of Appeals granted Governor Davis' request for mediation of the
controversy. In response, David E. Lombardi, chief mediator of the 9th Circuit Mediation Office,
ordered a stay until June 18, 1999 in all appellate proceedings for the six cases now before the Court of
Appeals involving Proposition 187. On June 1, 1999, the Howard Jarvis Taxpayers' Association sued
22
Governor Davis in the California Supreme Court challenging Governor Davis' right to submit
Proposition 187 to mediation, which the plaintiff claims undermines the public's right of initiative.
Due to uncertainties surrounding the 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.
TAX IVIA` TERS
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. Bond Counsel is of the further
opinion 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.
Notes purchased, whether at original issuance or otherwise, for an amount greater than their
principal amount payable at maturity ("Premium Notes") will be treated as having amortizable note
premium. No deduction is allowable for the amortizable note premium in the case of notes, like
Premium Notes, the interest on which is excluded from gross income for federal income tax purposes.
However, a purchaser's basis in a Premium Note, and under Treasury Regulations, the amount of tax
exempt interest received, will be reduced by the amount of amortizable note premium properly
allocable to such purchaser. Owners of Premium Notes should consult their own tax advisors with
respect to the proper treatment of amortizable note premium in their particular circumstances.
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
23
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 2000-2001
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 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 State 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"SUMMARY OF CERTAIN PROVISIONS OF THE RESOLUTION", "TAX MATTERS", "LEGAL
MATTERS", and"LEGALITY FOR INVESTMENT I v 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. 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.
24
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. 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 concerning the validity of the Notes,
and a certificate of the County Counsel to that effect will be furnished to the purchaser 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 repay 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 Notes.
ADDITIONAL.INFORMATION
The purpose of this Official Statement is to supply information to prospective purchasers of the
Notes. Summaries and explanations of the Notes, the Resolution, and statutes and documents
contained herein do not purport to be complete, and reference is made to said documents and statutes
for a full and complete statement of their provisions. This Official Statement is not to be construed as
a contract between the County and any purchasers or owners 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. 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.
Philip J. Batchelor
County Administrator and Clerk of the Board
of Supervisors
25
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. The County contains 19 incorporated cities, including Richmond in the west, Oakley in the northeast,
and Concord in the middle.
A large part 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 580 corridor in the County has been substantial and has 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 Attomey-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 California State Department of Finance reported that the County's population stood at as of
January 2000,an increase of since 1990.
The County's population grew 21.5°1 during the 1980s, a moderate acceleration from the 17.7% growth
rate achieved in the decade of the 1970s. As detailed in the table below, population growth within the County has
been positive since 1980 in every city.
The strongest growth is concentrated in the eastern portions of the County, particularly in Clayton,
Antioch and Brentwood, although strong growth is also evident in Hercules and Richmond, situated in the western
part of the County. In addition, of particular significance is the resumption of population growth in the western
portion of the County, particularly in Pinole, Richmond and San Pablo. Each of these cities experienced
population declines during the 1970s, 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 18.4% increase in population since 1990.
A-1
COUNTY OF CONTRA COSTA
POPULATION(')
Special
Census
1960 1970 1975 1980 1990 2000
Antioch 17,305 28,060 33,215 42,683 60,900
Brentwood 2,186 2,649 3,662 4,434 7,500
Clayton -- 1,385 1,790 4,325 7,150
Concord 36,208 85,164 94,673 103,763 110,900
Danville* __ _ -_ 26,143 31,200
El Cerrito 25,437 25,190 22,950 22,731 22,850
Hercules 310 252 121 5,963 16,400
Lafayette -- 20,484 19,628 20,837 23,450
Martinez 9,604 16,506 18,702 22,582 31,700
Moraga -- 14,205 14,418 15,014 15,850
Oakley* --
Orinda* -- _- -- 17,070 16,650
Pinole 6,064 15,850 15,337 14,253 17,000
Pittsburg 19,062 20,651 24,347 33,465 47,250
Pleasant Hill -- 24,610 25,398 25,547 31,550
Richmond 71,584 79,043 70,126 74,676 86,600
San Pablo 19,687 21,461 19,392 19,750 25,000
San Ramon* -- -- -- 20,511 35,100
Walnut Creek 9,903 39,844 46,034 54,033 60,400
Unincorporated 191,680 163,035 173,036 128,551 150,100
Total 409,030 558,389 582.829 656.331 797.600
California 15,717.204 18,136,045 21,185.000 23,668145 28,558.000
(1) Totals 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. Oakley was incorporated on 7/1/99.
Source: United States Census: 1960-1990;State Department of Finance: 1999.
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 1998 job base of having grown about v since 1993.
As shown below, the County's labor force stood at in 1999. With average 1999 unemployment
rates of and 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
COUNTY OF CONTRA COSTA
EMPLOYMENT AND UNEMPLOYMENT OF
RESIDENT LABOR FORCE
WAGE AND SALARY WORKERS BY INDUSTRY
ANNUAL AVERAGES(IN THOUSANDS)
1993 1994 1995 1996 1997 1998 1999
Civilian Labor ForceM 448.5 454.0 456.0 460.5 472.7
Employment 419.4 426.0 429.9 437.9 453.1
County Unemployment 29.1 28.0 26.1 22.6 19.6
Unemployment Rate:
County 6.5% 6.2% 5.7% 4.9% 4.1%
State of California 9.2% 8.6% 7.8% 7.2% 6.3%
Wage and Salary Employment) 1993 1994 1995 1996 1997 1998
Agriculture 1.3 1.2 1.0 1.0 1.2
Mining and Construction 19.8 19.8 19.7 20.5 22.2
Manufacturing 28.8 27.2 26.6 26.0 26.0
Transportation and Public Utilities 18.8 20.2 20.3 19.8 20.5
Wholesale Trade 10.2 10.5 10.6 11.8 12.6
Retail Trade 56.5 56.2 56.1 56.2 57.0
Finance,Insurance,and Real Estate 29.0 28.4 26.7 26.0 27.7
Services 76.4 81.0 86.7 91.1 99.2
Government 44.8 44.8 45.1 45.3 46.4
TOTAL(3) 284.8 289.3 292.7 297.7 312.8
(') Based on place of residence.
m 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,March 1997 benchmark.
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, three 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
A-3
by two railroad carriers as well as distributed by pipeline. The 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 1,777 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 402 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 1,328 employees operate the accounting and credit card center for Chevron's entire
domestic operations. Chevron also operates a facility in San Ramon where 2,100 employees are involved in
computer, marketing, consumer services and other administrative functions and in Walnut Creek where 246
employees work in various divisions
Chevron is the fifth largest company in the San Francisco Bay Area (as measured by market
capitalization) and is one of the largest employers in the County. The company has approximately 5,320
employees located among its various facilities in the County.
Shell Oil Company, recently merged with Texaco to become Equilon Enterprises LLC ("Equilon"), began
operating in Martinez in 1915. The Martinez Refining Company, located on 1,100 acres, is a combined oil
refinery and industrial chemical production plant. It is one of three facilities on the West Coast that supply all
Shell-brand 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, while the remainder is shipped from Alaska. Equilon'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.
Equilon employees in the County total approximately 930, of whom approximately 880 work at the
Martinez complex and 50 work from their homes to provide marketing services to Shell and Texaco gas stations.
Tosco Refining Company, a wholly owned subsidiary of Tosca Corporation ("Tosco"), operates an oil
refinery at Rodeo between the cities of Richmond and Martinez, and 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 owns a second refinery with a capacity of 150,000 barrels per day at Avon near Martinez
and a carbon plant on Franklin Canyon Road near Highway 4 in the County. Total Tosco employment in the
County is approximately 1,200. Tosco shut down its Avon refinery in March 1999 following an explosion that
claimed the lives of four employees. On April 27, 1999,the company announced that it would repoen the refinery
as well as adopt all 72 recommendations in a consulting firm's critical safety report on the plant. Prior to the
Avon refining accident, Tosco had announced a major restructuring of its San Francisco Area Refinery Complex,
which includes the facilities in Richmond and Rodeo. This restructuring will affect production capacity but is not
expected to have a major impact on employment.
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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 capital investment amounts undertaken for each of the Clean Fuels
Projects that employs a significant number of County residents.
County of Contra Costa
Clean Fuels Projects
Investment
Company chy ($mm)
Chevron Corp. Richmond $ 500
Tosco Corp. Avon 400
Equilon Enterprises LLC Martinez 1,300
Tosco Corp. Rodeo 300
Total L5 00
Health Cure. 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 and opened a major
facility in Richmond in 1999.
Telephone Services. The San Ramon Chamber of Commerce has reported that SBC (formerly known as
"Pacific Telesis"), a major provider of telephone services, employs approximately 7,500 people at its Bishop
Ranch offices in the County.
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The following table provides a listing of major employers headquartered or located in the East Bay and
their recent employment levels.
Major Employers in the East Bay
with Employees in the County")
Primary Location Full-Time
Firm in County Product or Service Employment
SBC San Ramon Telephone Services 11,800
U.S.Postal Service Countywide Postal Services 10,600
County of Contra Costa(2) Martinez County Government 8,228
Bank of America Countywide Banking 7,081
Chevron Companies Countywide Energy,Oil&Gas 6,586
Pacific Gas&Electric Countywide Gas&Electric Service 5,200
Kaiser Permanente Medical
Center(2) Walnut Creek Health Care 4,730
Lucky Stores Countywide Supermarkets 4,631
Wells Fargo&Co. Countywide Banking 4,000
Safeway Countywide Supermarkets 3,500
AT&T Countywide Telecommunications 3,341
Western Contra Costa
School District(2) Richmond K-12 Education 2,844
Mt.Diablo Unified School
District(2) Concord K-12 Education 2,502
John Muir/Mt.Diablo Health
System(2) Walnut Creek Health Care 2,170
Longs Drug Stores(2) Walnut Creek Retail Drug Stores 1,909
Contra Costa Newspapers(2) Walnut Creek Newspaper Publishing 1,417
Round Table Franchise
Corp. Countywide Pizza Restaurants 1,230
Tosco Refinery Corp. Martinez Oil Refinery 1,200
Hill Physicians Med.Group San Ramon Health Care 1,050
USS Posco Industries Pittsburg Steel Manufacturing 1,000
Shell Martinez Refinfng Co. 1 Martinez Oil Refinery 930
(1) Source: The companies;East Bay Business Times,December 1999;San Francisco Business Times,November 1999.
(2) Headquartered in the County.
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 1999 Sales and Marketing Management Survey of Buying Power, the County's median household effective
buying income for the 1998 calendar year of $49,645 was in the top four among all California counties.
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According to the U. S. Department of Commerce's Bureau of Economic Analysis, the County's per capita
personal income of$32,881 in 1996 was the fifth highest among California counties. The medians for the State
were$36,483 (household income)and$25,368(per capita income).
Commercial Activity
Commercial activity comprises an important part of the County's economy, with dollars generated by
taxable transactions totaling approximately$9.3 billion in 1997.
COUNTY OF CON'T'RA COSTA
TAXABLE TRANSAC'T'IONS
1993 TO 1997
(IN THOUSANDS)
1993 1994 1995 1996 1997
Apparel Stores $ 276,507 $ 263,835 $ 246,879 $ 261,695 $ 277,962
General Merchandise Stores 1,156,050 1,166,204 1,223,187 1,213,152 1,283,994
Specialty Stores 720,715 754,092 817,531 890,623 957,508
Food Stores 435,502 428,585 433,694 458,877 478,924
Packaged Liquor Stores 40,707 38,242 39,972 42,925 44,700
Eating and Drinking Places 549,473 563,770 591,767 625,283 664,184
Home Furnishings and Appliances 333,179
273,110 270,691 283,020 323,400
Building Materials and Farm 591,710
Implements 461,036 492,850 493,436 543,324
Service Stations 510,835 507,073 551,686 538,840 780,857
Automotive and Vehicle Dealers,
Darts and Supplies 842,469 868,095 927.563 1.046,980 1,143,170
Total Retail Outlets $5,266,404 $5,353,437 $5,608,735 $5,945,099 $6,556,188
Business and Personal Services $ 313,314 $ 326,664 $ 330,063 $ 365,029 $ 407,816
All Other Outlets 1,896,702 2,138,064 2,400,957 2.265,576 2,313,414
Total All Outlets $7,476,420 $7,818,165 $8,339,755 $8,575,704 $9,277,418
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, Martinez, Antioch and
Danville and Sam's Club is located in Concord.
The County is served by all major banks including Bank of America 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.
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Construction Activity
The value of residential building activity rose sharply in 1998, to the highest level since 1989. The
overall increase was attributable to gains in both single and multi-family units.
Within incorporated cities in the County, Antioch accounted for the largest percentage (16.2%) of total
valuation growth in 1998 at$117.5 million.
The following table provides a summary of building permit valuations and number of new dwelling units
authorized in the County since 1990.
COUNTY OF CONTRA COSTA
BUILDING PERMIT VALUATIONS 1990- 1999
Valuation($millions) Number of New Dwelling Units
Residential Single Multiple
Year (New) Nonresidential Total Family Family Total
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
1996 584,108 N/A NIA 3,094 450 3,580
1997 582,793 N/A N/A 3,105 381 3,486
1998 738,939 N/A N/A 3,144 999 4,142
1999
Note: Totals may not be precise due to independent rounding.
Sources:Economic Sciences Corporation: 1989- 1398.
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 BART on its extension to the West
Pittsburg/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 $8.6 billion of construction projects are currently approved or underway in the County,
including a $2.2 billion development known as "Dougherty Valley" that will add 11,000 new homes to the
County's housing stock and construction projects totaling more than $1 billion on three major bridges. Other
major subdivisions are also approved that will add$4.6 billion in new home construction, primarily in the eastern
half of the County. Approximately $2.6 billion of projects are pending approval, including a project known as
"Cowell Ranch,"which involves$1.0 billion of construction spending on 5,000 residential units.
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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 ("680") and Highway 24 ("24") in Walnut Creek. The $315 million
project will add traffic lanes, an elevated bypass, and redesigned access patterns. The northbound 680 to
westbound 24 connection and the eastbound 24 to northbound 680 connector have been completed. With the
majority of the work being conducted at night, the remainder of the project is scheduled to finish later in 1999.
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:
Central Contra Costa Transit Authority provides local bus service to the central area of the
County including Walnut Creek,Pleasant Hill and Concord.
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/Bay Point area. 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.
• The Santa Fe and Union Pacific Railroads' main lines serve 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 Francisco Bay and several privately owned industrial
docks 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.
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Agriculture
The County is comprised of 470,400 acres, with over half(254,445) of these acres allocated to farmlands
and harvested cropland. In 1998, the total gross value of agricultural products and crops reached $ million.
The value of agricultural production since 1994 is illustrated in the table below.
COUNTY OF CONTRA COSTA
AGRICULTURAL PRODUCTION, 1994-98
1994 1995 1996 1997 1998
Nursery products $25,409,000 $21,782,000 $26,219,000 $31,288,000
Livestock&poultry 3,656,000 3,444,000 4,668,400 5,708,000
Field crops 11,122,000 10,616,900 12,281,800 12,695,700
Vegetable&c seed 20,242,500 19,037,000 19,899,000 20,033,000
crops
Fruit and nut crops 13,156,900 14,967,500 15,294,000 18,520,000
Livestock,apiary&t
poultry products 6.171,680 5,970,430 7.260,490 7,597.420
Total $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 recently
constructed 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.
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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 1998 numbered approximately 150,534 students in public schools and 16,838 students in
regular graded private schools. The County's average SAT scores exceed regional, State and national averages.
In addition, while County secondary school enrollment went up 14% from 1992-93 to 1996-97, the County's
dropout rate went down 32% in the same period.
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 Concord where late afternoon and evening classes in business, education and liberal arts are offered.
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 P. Kennedy University. In addition, County residents are within easy
commuting distance of the University of California, Berkeley. Approximately 64% of County residents have
attended college,and approximately 49%of County residents have completed four or more years of college.
There are nine privately operated hospitals and one public hospital in the 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. Kaiser has recently opened a new hospital in Richmond with new critical care
beds, surgical suites and a full service emergency department. The public hospital is Contra Costa Regional
Medical Center, a 156-bed facility that the County completely rebuilt and opened to the public in January 1998 on
the existing campus in Martinez.
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•
APPENDIX B
COUNTY FINANCIAL INFORMATION
•
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.
Over the last several years, State and federally mandated expenditures in justice, 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.
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%.
The level of intergovernmental revenues that the County will receive from the State in Fiscal
Year 2000-2001 and in subsequent fiscal years is likely to be affected by the financial condition of the
State. Presented below is a summary of recent State budget issues and financial performance.
Recent State Budgets
Following a severe recession beginning in 1990, the State's financial condition improved
markedly during the fiscal years starting in 1995-96, with a combination of better than expected
revenues, slowdown in growth of social welfare programs, and continued spending restraint based on
actions taken in earlier years. The State's cash position also improved, and no external deficit borrowing
occurred over the end of the last four fiscal years.
The economy grew strongly during the fiscal years beginning in 1995-96, and as a result, the
General Fund took in substantially greater tax revenues (around $2.2 billion in 1995-96, $1.6 billion in
1996-97 and $2.4 billion in 1997-98 and $1.7 billion in 1998-99) than were initially planned when the
budgets were enacted. These additional funds were largely directed to school spending as mandated by
Proposition 98, to make up shortfalls from reduced federal health and welfare aid in 1995-96 and 1996-
97 and particularly in 1998-99 to fund new program incentives.
The following were major features of the 1998 Budget Act and certain additional fiscal bills
enacted before the end of the legislative session:
1. The most significant feature of the 1998-99 budget was agreement on a total of $1.4
billion of tax cuts. The central element was a bill which provided for a phased-in reduction of the
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Vehicle License Fee("VLF"). Since the VLF is transferred to cities and counties under existing law, the
bill provided for the General Fund to replace the lost revenues. Starting on January 1, 1999, the VLF has
been reduced by 25 percent, at a cost to the General Fund of approximately $500 million in the 1998-99
Fiscal Year and about$1 billion annually thereafter.
In addition to the cut in VLF, the 1998-99 budget included both temporary and permanent
increases in the personal income tax dependent credit ($612 million General Fund cost in 1998-99, but
less in future years), a nonrefundable renters tax credit($133 million), and various targeted business tax
credits ($106 million).
2. Proposition 98 funding for K-14 schools was increased by $1.7 billion in General Fund
moneys over revised 1997-98 levels, over $300 million higher than the minimum Proposition 98
guarantee. Of the 1998-9 funds, major new programs included money for instructional and library
materials, deferred maintenance, support for increasing the school year to 180 days and reduction of
class sizes in Grade 9. The Budget also included $250 million as repayment of prior years' loans to
schools, as part of the settlement of the CTA v. Gould lawsuit.
3. Funding for higher education increased substantially above the actual 1997-98 level.
General Fund support was increased by $340 million (15.6 percent) for the University of California and
$267 million(14.1 percent)for the California State University system. In addition, Community Colleges
funding increased by$300 million(6.6 percent).
4. The Budget included increased funding for health, welfare and social services programs.
A 4.9 percent grant increase was included in the basic welfare grants, the first increase in those grants in
9 years.
5. Funding for the judiciary and criminal justice programs increased by about 11 percent
over 1997-98, primarily to reflect increased State support for local trial courts and rising prison
population.
6. Major legislation enacted after the 1998 Budget Act included new funding for resources
projects, a share of the purchase of the Headwaters Forest, funding for the Infrastructure and Economic
Development Bank ($50 million) and funding for the construction of local jails. The State realized
savings of$443 million from a reduction in the State's contribution to the State Teacher's Retirement
System in 1998-99.
Final tabulation of revenues and expenditures contained in the 2000-01 Governor's .Budget
reveals that stronger than expected economic conditions in the State produced total 1998-99 General
Fund revenues of about $58.6 billion, almost $1.6 billion above the 1998 Budget Act estimates. Actual
General Fund expenditures were $57.8 billion, the amount estimated at the 1998 Budget Act. Some of
this additional revenue will be directed to R-14 schools pursuant to Proposition 98. The Governor's
Budget projects a balance in the Special Fund for Economic Uncertainties("SFEU")at June 30, 1999, of
approximately$3.1 billion.
1999-2000 Fiscal Year State Budget
On January 8, 1999, Governor Davis released his proposed budget for Fiscal Year 1999-00 (the
"January Governor's Budget"). The January Governor's Budget generally reported that General Fund
revenues for FY 1998-99 and FY 1999-00 would be lower than earlier projections (primarily due to
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weaker overseas economic conditions perceived in late 1998), while some caseloads would be higher
than earlier projections. The January Governor's Budget proposed $60.5 billion of General Fund
expenditures in FY 1999-00,with a$415 million SFEU reserve at June 30,2000.
The 1999 May Revision showed an additional $4.3 billion of revenues for combined fiscal years
1998-99 and 1999-00. The completion of the 1999 Budget Act occurred in a timely fashion. The final
Budget Bill was adopted by the Legislature on June 16, 1999, and was signed by the Governor on June
29, 1999 (the"1999 Budget Act"), meeting the Constitutional deadline for budget enactment for only the
second time in the 1990's.
The final 1999 Budget Act estimated General Fund revenues and transfers of$63.0 billion, and
contained expenditures totaling $63.7 billion after the Governor used his line-item veto to reduce the
legislative Budget Bill expenditures by $581 million (both General Fund and Special Fund). The 1999
Budget Act also contained expenditures of$16.1 billion from special funds and $1.5 billion from bond
ftinds. The Administration estimated that the SFEU would have a balance at June 30, 2000, of about
$880 million. Not included in this amount was an additional $300 million which (after the Governor's
vetoes) was "set-aside" to provide funds for employee salary increases (to be negotiated in bargaining
with employee unions), and for litigation reserves. The 1999 Budget Act anticipated normal cash flow
borrowing during the fiscal year.
The principal features of the 1999 Budget Act include the following:
1. Proposition 98 funding for K-12 schools was increased by $1.6 billion in General Fund
moneys over revised 1998-99 levels, $108.6 million higher than the minimum Proposition 98 guarantee.
Of the 1999-00 funds, major new programs included money for reading improvement, new textbooks,
school safety, improving teacher quality, funding teacher bonuses, providing greater accountability for
school performance, increasing preschool and after school care programs and funding deferred
maintenance of school facilities. The Budget also includes $310 million as repayment of prior years'
loans to schools, as part of the settlement of the CTA v. Gould lawsuit.
2. Funding for higher education increased substantially above the actual 1998-99 level.
General Fund support was increased by $184 million (7.3 percent) for the University of California and
$126 million (5.9 percent) for the California State University system, In addition, Community Colleges
funding increased by $324 million (6.6 percent). As a result, undergraduate fees at UC and CSU will be
reduced for the second consecutive year, and the per-unit charge at Community Colleges will be reduced
by$1.
3. The Budget included increased funding of nearly $600 million for health and human
services.
4. About $800 million from the general fund will be directed toward infrastructure costs,
including $425 million in additional funding for the Infrastructure Bank, initial planning costs for a new
prison in the Central Valley, additional equipment for train and ferry service, and payment of deferred
maintenance for state parks.
5. The Legislature enacted a one-year additional reduction of 10 percent of the VLF for
calendar year 2000, at a General Fund cost of about$250 million in each of FY 1999-00 and 2000-01 to
make up lost funding to local governments. Conversion on this one-time reduction to a permanent cut
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will remain subject to the revenue tests in the legislation adopted last year. Several other targeted tax
cuts,primarily for businesses,were also approved, at a cost of$54 million in 1999-00.
6. A one-time appropriation of$150 million, to be split between cities and counties, was
made to offset property tax shifts during the early 1990's. Additionally, an ongoing $50 million was
appropriated as a subvention to cities for jail booking or processing fees charged by counties when an
individual arrested by city personnel is taken to a county detention facility.
The revised 1999-2000 budget included in the 2000-01 Governor's Budget also reflects the latest
estimated costs or savings as provided in various pieces of legislation passed and signed after the 1999
Budget Act. The revised budget includes $730 million for various departments for enrollment, caseload
and population changes and$562 million for Smog Impact Fee refunds.
Revised 1999-2000 revenues are $65.2 billion or$2.2 billion higher than projections at the 1999
Budget Act. Revised 1999-2000 expenditures are $65.9 billion or$2.1 billion higher than projections at
the 1999 Budget Act. The State's Legislative Analyst ("LAO") issued a report in January 2000,
following the receipt of actual revenues for the month of December 1999, which were not available at the
time the Governor's Budget estimates were prepared. The LAO report indicates General Fund revenues
for the 18-month period (January 2000 through 2001) could be as much as $3 billion higher than the
2000-01 Governor's Budget estimates. The LAO report assumed the continuation of strong economic
growth in the State during this period. The Department of Finance will provide new projections of
1999-00 and 2000-01 revenues in May 2000.
Proposed 2000-01 Fiscal Year State Budget
On January 10, 2000, Governor Davis released his proposed budget for Fiscal Year 2000-01,
The 2000-01 Governor's Budget generally reflects that General Fund revenues for Fiscal Year 1999-
2000 will be higher than projections make at the time of the 1999 Budget Act.
The Governor's Budget projects General Fund revenues and transfers in 2000-01 of $68.2
billion. This includes anticipated payments from the tobacco litigation settlement of$3879 million and
the receipt of one-time revenue from the sale of assets. More accurate revenue estimates will be
available in May and June before the adoption of the Budget. The Governor has proposed $167 million
in tax reduction initiatives.
The Governor's Budget projects General Fund expenditures of $68.8 billion. included in the
Budget are set-asides of $500 million for legal contingencies and $100 million for various one-time
legislative initiatives. Based on the proposed revenues and expenditures, the Governor's Budget projects
the June 30, 2001 balance in the SFEU to be $1.238 billion. Subsequent to the release of the proposed
Governor's Budget,the LACI indicated that the SFEU may rise to $5.0 billion or higher. The revision to
the proposed Governor's Budget is expected to be released on or about May 16, 2000 and will contain
updated estimates of revenue, expenditures and the SFEU.
Federal Funding and Welfare Reform
The federal government provided approximately 16% of the County's 1998-99 General Fund
Budgets. The human services departments receive substantial funds for assistance payments and social
service programs.
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On August 22, 1996, President Clinton signed the Personal Responsibility and Work Opportunity
Reconciliation Act which made substantial modifications to the welfare system and required the State to
submit a plan detailing how it would meet the provisions of the Act in order to begin receiving federal
funding under the Temporary Assistance to Needy Families ("TANF") Block grant. As early as March
1995, in anticipation of the passage of Welfare Reform, the County initiated the development of a local
welfare reform proposal with the intent of seeking State and federal waivers and status as a
demonstration project. On July 22, 1997, the Califomia State Department of Social Services notified
counties that waivers to operate the Shared Understanding to Change the Community to Enable Self-
Sufficiency ("SUCCESS") Demonstration Project had been approved and would be effective for three
years beginning August 1, 1997. The SUCCESS project, the first welfare reform demonstration project
to be approved in the State, is based on a community-designed model for delivering comprehensive,
integrated and effective services to public assistance populations. The SUCCESS model emphasizes
family self--sufficiency and responsibility through up-front employment assistance, child care and
comprehensive case managed services. Services are delivered in partnership with community-based
organizations and through multi-disciplinary teams to ensure the appropriateness of services while
eliminating duplication. Integration of the child protective services, child support enforcement and
housing assistance staff into the SUCCESS program design as additional components to the
demonstration project have enhanced efforts to improve the well-being of children in the County.
Among other changes, the Welfare Reform Act has allowed the State to deny access to some
federally funded welfare assistance programs to legal immigrants(but not to refugees). In the aggregate,
the bill's restrictions would reduce federal expenditures in low-income programs by more than $55
billion over the next four 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. The Governor's budget for 1997-98 eliminated State mandates for General Assistance.
Public outcry over the severity of the reductions, particularly to legal aliens, coupled with a
robust economy, has resulted in a restoration of benefits to many legal aliens who were already in the
County prior to the reform legislation. For example, the Fiscal Year 1998-99 State budget provides for
the Cash Assistance Program for Immigrants (CAPI) which provides for the continuation of SSI type
payments for some 3,600 aged, blind and disabled legal aliens statewide. This program will be fully
funded by the State with no share of costs to the County.
As part of the 1997-98 Budget Act's legislative package,the Legislature and Governor agreed on
a comprehensive reform of the State's public assistance programs to implement the new federal law. The
new basic State welfare program is called the California Work Opportunity and Responsibility to Kids
Act (CalWORKs), which replaces the former Aid to Families with Dependent Children (AFDC) and
Greater Avenues to Independence (GAIN) programs effective January 1, 1998. Consistent with the
federal law, Ca1WORKs contains new time limits on receipt of welfare aid, both lifetime as well as for
any current time on aid. The centerpiece of Ca1WORKs is the linkage of eligibility to work participation
requirements. Administration of the new Welfare-to-Work programs will be largely at the county level,
and counties are given financial incentives for success in this program. Although the longer-term impact
of the new federal law and Ca1WORKs cannot be determined until more time has passed, the County
does not presently anticipate that these new programs will have any material adverse impact on its
finances.
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
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during the 2000-2001 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 2000-2001 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.
Trial Court Funding
Assembly Bill 233 ("AB 233"), which was adopted by the State Legislature in 1997 and became
effective January 1, 1998, transferred responsibility from the counties to the State for local trial court
funding commencing in Fiscal Year 1997-98. Under the legislation, the State assumed a greater degree
of responsibility for trial court operations costs starting in Fiscal Year 1997-98. The County's trial court
funding requirement declined from $22.8 million in Fiscal Year 1997-98 to $16.8 million in Fiscal Year
1999.2000 as a result of AB 233. The final court funding requirement is expected to be approximately
$ in Fiscal Year 2000-2001.
The County will continue to be obligated to provide court facilities for all judicial officers and
support positions authorized prior to July 1, 1996. This includes those judicial officers and positions
which replace those officers and positions created prior to July 1, 1996. However, AB 233 does not
require that the County finance new capital facility expenditures related to judicial officers and support
staff required for any judgeships authorized during the period from January 1, 1998 to June 30, 2001.
County Budget Process
The County is required by State law to adopt a balanced budget by August 30 of each year,
although the Board of Supervisors 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 County's 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 1999-2000 on September_, 1999, ahead of the legally
extended deadline of October 2, 1999.
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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 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.
Recent 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 1999-2000. For a summary of the actual audited financial
results of the County for Fiscal Year 1998-99, see "FINANCIAL STATEMENTS OF THE COUNTY FOR THE
FISCAL YEAR ENDED JUNE 30, 1999" in Appendix D to this Official Statement.
Fiscal Year 1996-97 The County's fiscal year 1996-97 Final 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 Final 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 Final Budget was slightly smaller than
that of the prior fiscal year. Public assistance costs continued to drop significantly, paced by General
Assistance expenditures that fell to $3.5 million compared to over $6.3 million in Fiscal Year 1996-97.
Expenditure increases in the Public Protection and Health and Welfare categories were primarily due to
federal and State grant increases identified in the 1997-98 State Budget Act. The fund balance increased
13%to a level of$77 million compared to Fiscal Year 1996-97. As in Fiscal Year 1996-97, the County
budget did not contain any significant budget cuts, as the health of both the State and local economies
continued to improve.
Fiscal Year 199899. The County's Fiscal Year 1998-99 Final Budget, as adjusted through April
1999, was 3.8% percent larger than that of the prior fiscal year due to increases in costs for general
government, health and sanitation, public assistance, and public ways and facilities. Health and
sanitation costs increased due to increased grant funding of public health programs, increases in SB
855/1255 Disproportionate Share healthcare funding, and expansion of mental health programs. Public
assistance rose by $20 million compared to the prior fiscal year due to increased funds for federally-
funded Head Start programs and State-funded CaIWORKS programs for childcare. The general fund
balance reached$85 million,representing an increase of 11%over Fiscal Year 1997-98.
Due to the Master Settlement Agreement pertaining to national tobacco litigation, the County
expects to receive significant revenues from the tobacco industry beginning in 1998-99. The County
received approximately $3.7 million in discretionary revenue in Fiscal Year 1998-99, and expects to
receive approximately$9.9 million in Fiscal Year 1999-2000.
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In addition, a levy of 50 cents on every pack of cigarettes sold is collected in California pursuant
to Proposition 10, effective January 1, 1999. Tobacco tax revenue generated in excess of 10 million in
Fiscal Year 1998-99 for health and children's programs in the County.
Fiscal Year 1999-2000 [TO COME[
2000-2001 Recommended Budget
The County's Recommended Budget for Fiscal Year 2000-2001 (the"Recommended Budget") is
expected to be presented to and adopted by the Board in July 2000. Since the Recommended Budget will
not be adopted by June 30 of the 1999-2000 Fiscal Year, the current Adjusted Budget, as adjusted
through April e» 2000, will be continued into the 2000-2001 Fiscal Year. The cash flow projections for
the Notes for the 2000-2001 Fiscal Year are based upon the current Adjusted Final Budget,
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A comparison of the County's General Fund budgets for Fiscal Years 1997-98 and 1998-99 is
shown below.
COUNTY OF CONTRA COSTA
GENERAL FUND BUDGETS(i)
FOR FISCAL YEARS 1998-99 AND 1999-2000
(IN THOUSANDS OF DOLLARS)
Final Final Final Budget
Budget Budget (as adjusted)
1998-99 1999-2000 1999-2000(1)
REQUIREMENTS
General Government $99,068
Public Protection 217,238
Health and Sanitation 156,268
Public Assistance 252,787
Education 13,157
Public Ways and Facilities 20,111
Recreation and Culture 1
Reserves and Debt Service 16,251
Total Requirements $774.881
AVAILABLE FUNDS
Property Taxes $99,548
Fund Balance Available 49,156
Cather`faxes 9,535
Licenses, Permits and Franchises 12,385
Fines, Forfeitures and Penalties 13,209
Use of Money and Property 12,402
Intergovernmental 405,699
Charges for Current Services 125,973
Other Revenue 46,974
Total Available Funds 214L881
Includes General Fund,Library Fund,Land Development Fund,and Child Development Fund.
«� Final Budget,as adjusted through April__,2000.
Source: County Auditor-Controller.
Ad Valorem Property Taxes
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
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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 1 and February 1 of
each fiscal year. If unpaid, such taxes become delinquent on December 10 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 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 January 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
195051.
Major property tax assessment appeals by business and the oil industry total $5.6 billion in
assessments with the potential loss of revenue in the millions to various units of County local
government. The County has hired Baker and O'Brien, a firm with international experience in the oil
refinery sector, to do valuations, and the County Assessor will vigorously contest the appeals. The first
appeal of$1 billion by an oil refinery (Unocal) has been decided in favor of the County Assessor and
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may affect future negotiations with companies whose appeals are pending. It is expected that the oil
refinery will appeal the recent decision to the courts. Another oil refinery (Chevron) filed a number of
tax appeals with the County and has been successful in reducing a portion of its assessed valuation. On
June 11, 1999, the Contra Costa County Appeals Board approved the reduction in assessed values for
certain Chevron parcels. The approved appeals and other adjustments to the assessed value of Chevron
property have reduced the overall assessed value by $432,372,069, or approximately 20% from 1996/97
through 1998/99. The successful appeals by Chevron resulted in a one-time County wide refund in
Fiscal Year 1999-2000 of approximately $7.6 million, which includes the property tax refund plus
interest. Three oil refineries (Chevron, Tosco and Martinez Refining Co.) are currently seeking property
tax refunds of$80 million over three years by reducing their individual property assessments by up to
three-fourths. The refineries are currently assessed at a value of about$3.8 billion but claim that the real
value is approximately $1.94 billion. Heavy industry accounts for 20 percent of the collected property
taxes in Contra Costa.
The County has incorporated$ million of property tax revenue adjustments in its Fiscal Year
1999-2000 budget as a precaution against potential assessment appeal decisions.
A recent history of County tax levies, delinquencies and the Tax Losses Reserve Fund cash
balances as of June 30 is shown below.
COUNTY OF CONTRA COSTA
SUMMARY OF ASSESSED VALUATIONS AND
AD'VALOREM PROPERTY TAXATION FOR FISCAL YEARS 1990-91 THROUGH 1999-2000
Secured Current Levy % Current Levy Tax Losses
Property Tax Delinquent Delinquent Reserve Fund
Fiscal Year Assessed Valuation Levies June 30 June 30 Balance June 30
1990-91 $54,114,860,918 $669,071,124 $19,762,687 2.95 $24,093,615
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
1.997-98 70,314,800,892 892,581,453 15,547,736 1.74 19,508,732
1998-99 73,699,554,452 n/a n/a n/a n/a
2999-2000
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 Sections
4703 and 4703.2 of the California Revenue and Taxation Code. Sections 4703 and 4703.2 allow any
county to draw down their 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
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response to a February 1, 1991, Sacramento Superior Court decision in AT&T Communications of
California, Inc. et al v. State Board of Egualization, in which the court held that the SBE's valuation
approaches had overvalued AT&T's unitary property, and ordered AT&T's statewide assessed value to be
reduced from approximately$1.75 billion to approximately$1.1 billion. The Agreement was approved by
the Sacramento Superior Court on July 14, 1992 in a validation action brought by the county parties.
The California electric utility industry is currently undergoing significant changes in its structure
and in the way in which components of the industry are or are not regulated. Sale of electric generation
assets to largely unregulated, nonutility companies may affect how those assets are assessed in the future
and which local agencies are to receive the property taxes. The County is unable to predict the impact of
these changes on its utility property tax revenues, or whether legislation may be proposed or enacted in
response to industry restructuring, or whether any future litigation may affect the State's methods of
assessing utility property and the allocation of assessed value to local taxing agencies.
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 1990-91 THROUGH 1999-2000
Fiscal Year Base Year Value Full Cash Value Increment) Total Tax Allocations(3)
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
1997-98 2,198,412,524(a} 5,687,404,922 60,454,787
1998-99 2,343,330,103{4} 6,080,461,083 64,427,525
1999-00
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.
ez� 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.
Actual tax revenues collected by the County which have been or will be paid to the community redevelopment agencies.
t'f The Base Year Value is reduced to exclude project areas with negative increment.
Source: County Auditor-Controller
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Accounting Policies,Reports and Audits
Except as mentioned below, 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.
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. See "APPENDIX D — FINANCIAL STATEMENTS OF THE
COUNTY FOR THE FISCAL YEAR ENDED JUNE 30, 1999—Note 21 hereto."
In addition to the above-mentioned audits, 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 page is the County's 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, 1999 appears in Appendix
D to this Official Statement.
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COUNTY OF CONTRA COSTA
GENERAL FUND
SCHEDULE OF REVENUES,EXPENDITURES AND CHANGES IN
FUND BALANCES-BUDGET AND ACTUAL-BUDGETARY BASIS
FISCAL YEARS 1994-95 THROUGH 1998-99
(IN THOUSANDS)
1994-95 1995-96 1996-97 1997-98 1998-99
REVENUES
Taxes $89,992 $95,773 $99,974 $101,370 $110,242
Licenses,permits&franchises 4,978 6,689 7,419 6,476 6,597
Fines,forfeitures&penalties 18,371 17,437 14,082 12,725 13,514
Use of money&property 12,693 13,406 12,062 13,459 14,937
Intergovernmental revenues 383,118 373,167 371,750 378,383 411,112
Charges for services 116,447 99,678 103,913 107,530 123,203
Other revenue 11,635 17,456 18,198 15,083 17,750
TOTAL REVENUES 637,234 623,606 627,398 635,026 697,355
EXPENDITURES
General government 67,825 82,256 77,199 83,847 105,967
Public protection 157,135 141,875 150,121 168,054 198,836
Health&sanitation 114,585 115,286 122,676 138,241 146,927
Public assistance 238,859 233,862 218,081 213,246 233,217
Education 122 130 133 145 144
Public ways and facilities 9,454 6,933 9,266 6,965 11,096
Recreation and culture 0 0 0 0 0
Interest 4,469 4,273 4,204 4,302 5,296
Capital outlay') 3,477 _ 1,371 _ 2,615 2,947 3,173
TOTAL EXPENDITURES 595,926 585,986 584,295 617,747 704,656
Excess of revenues over(under)expenditures 41,308 37,620 43,103 17,279 (7,301)
OTHER FINANCING SOURCES(USES)
Operating transfers in 24,266 18,804 24,581 31,318 49,025
Operating transfers out (71,628) (50,911) (55,844) (42,005) (34,834)
Capital lease financings') 3,477 1,371 2,615 2.955 3,173
TOTAL OTHER FINANCING SOURCES(USES) 43 885 30 736 28 648 (7,732 17,364
Excess(deficiency)of revenues and other financing sources (2,577) 6,884 14,455 9,547 10,063
over(under)expenditures and other financing uses
FUND BALANCE AT BEGINNING OF YEAR, 50,213 51,570 56,524 68,185 79,960
as Previously Reported
Adjustment to beginning fund balance 4,664 418 0 0 0
FUND BALANCE AT BEGINNING OF YEAR,as 54,877 51,152 56,524 68,185 79,960
Restated
Residual equity transfers in 5 0 0 0 0
Residual equity transfers out 735 IL512 -2,-79-4) 772 (1,593)
FUND BALANCE at end of year $51,570 $56,524 $_68,185 $76,960 $85,430
<u 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 future years.
Source: County Auditor-Controller
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County Employees
A summary of County employment follows:
COUNTY OF CONTRA COSTA
COUNTY EMPLOYEFSM
As of Number of Permanent
June 30 Employees
1989 6,463
1990 6,635
1991 7,008
1332 7,080
1993 6,689
1994 6,658
1995 6,822
1436 6,856
1997 6,474
1498 7,106
1499 7,683
2000
Excludes temporary or seasonal employees.
Source: County Auditor-Controller.
County employees are represented by 30 bargaining units of 11 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 three percent salary increase through September 30, 1997, a two percent salary increase
effective October 1, 1337, and a 3.5% salary increase effective October 1, 1998. The agreement covers
approximately 75%of the County's employees and expires in September 1999.
Contract negotiations with the firefighters were concluded in January, 1949, with a 0% salary
increase through March,2000. Negotiations with the deputy sheriffs are ongoing.
Pension Plan
The Contra Costa County Employees' Retirement Association ("CCCERA") 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.
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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.
Except for the new Tier III described below, the CCCERA is divided into three separate benefit
sections of the 1937 Act. These sections are known as: General - Tier I, General- Tier II and Safety.
Tier I includes all General members hired before August 1, 1980 and electing not to transfer to Tier II.
The Tier II section includes all employees hired on or after August 1, 1950 and all General members
electing to transfer from Tier 1. The Safety section covers all employees in active law enforcement,
active fire suppression work or certain other "safety" classifications as designated by the CCCERA'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 the twelve highest pay months, in
accordance with Government Code Section 31462. For Tier II, the benefit is based on a three-year
average salary.
Effective October 1, 1998, a Tier III retirement plan was established for permanent County
employees with over five years of service, allowing employees to transfer from Tier Il to Tier III. Tier
III offers a better retirement plan using Tier I pay-out levels, except that the more stringent requirements
for disability retirement are retained from Tier II.
The CCCERA 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 OF THE COUNTY FOR THE FISCAL YEAR ENDED
JUNE 30, 1999-Note 19."
Impact of the Ventura Decision
On August 14, 1997, the Supreme Court of the State of California rendered a decision in the
matter of Ventura County Deputy Sheriffs Association v. Board Q,f Retirement of Ventura County
Employees'Retirement Association which held that compensation not paid in cash, even if not earned by
all employees in the same grade or class, must be included in "compensation earnable" and "final
compensation" on which an employee's pension is based. This California Supreme Court decision
became final on October 1, 1997, requiring, among other things, certain items such as vacation buy-back
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. Settlement negotiations concerning these two lawsuits have been conducted by the County,
other public agencies in the County's retirement system and the plaintiffs' attorneys. A settlement may
be entered after court approval in the next four or five months of these two lawsuits with no additional
costs for the County during this and at least the next several fiscal years. No assurance can be given,
however,that such settlement will necessarily be effected without any further court proceedings.
Subsequent to the Supreme Court decision, the CCCERA 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. In the actuarial report prepared by William M. Mercer
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Incorporated dated October 1999, the estimated unfunded liabilities totaled $142 million. CCCERA has
allocated a portion of its reserves to retire the liabilities.
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 five to
30 years. The longest capital lease ends in 2028. For a summary of the County's lease obligations as of
June 30, 1999, see "APPENDIX D- FINANCIAL STATEMENTS OF THE COUNTY FOR THE FISCAL YEAR
ENDED JUNE 30, 1999-Notes to General Purpose Financial Statements-- Note 6 - Lease Commitments"
and "- -Note 7-Long-Term Obligations" attached hereto.
Annual debt service for the County's outstanding lease obligations and pension obligation bonds
("POB")is shown in the next table.
B-18
Fiscal Year Total Lease Total POB Total Net
Ending 6/30 Debt Service Debt Service Debt Service(" Debt Servicets)
2000 $23,724,639 $31,741,855 $55,466,494 $47,392,232
2001 24,142,071 33,527,413 57,669,484 49,500,969
2002 24,430,579 35,409,713 59,840,291 51,101,632
2003 24,190,734 37,382,933 61,573,666 53,215,706
2004 24,181,701 39,459,053 63,640,754 55,162,667
2005 24,180,678 41,641,953 65,822,630 57,221,970
2006 24,188,874 43,935,590 68,124,464 59,387,941
2007 24,187,751 46,347,585 70,535,336 61,658,081
2008 24,204,110 48,879,460 73,083,570 64,041,127
2009 22,827,036 51,543,575 74,370,611 65,156,732
2010 21,610,370 44,576,215 66,186,585 57,290,728
2011 21,608,654 17,892,033 39,500,686 31,930,819
2012 21,613,945 21,613,945 14,944,146
2013 21,613,244 21,613,244 14,950,157
2014 21,616,106 21,616,106 14,954,216
2015 21,634,558 21,634,558 14,977,479
2016 21,626,887 21,626,887 14,969,344
2017 19,207,779 19,207,779 12,560,478
2018 19,203,379 19,203,379 12,561,785
2019 19,229,680 19,229,680 9,324,070
2020 17,502,265 17,502,265 11,051,284
2021 17,500,458 17,500,458 8,306,584
2022 14,745,888 14,745,888 8,616,009
2023 14,740,601 14,740,601 2,539,421
2024 4,281,629 4,281,629 4,179,688
2025 4,283,179 4,283,179 2,439,719
2026 2,489,000 2,489,000 2,489,000
2027 2,491,500 2,491,500 2,491,500
2028 _2,488,500 2,488.500 2.488,500
TOTAL. $529.745,793 1472,337,335 $1,002,353.168 5806,903983
Excludes estimated reimbursement from the State for County hospital debt service and excludes earnings on various debt
service and debt service reserve funds.
t:5 Includes estimated reimbursement from the State for County hospital debt service, earnings on various bond funds and the
reduction in debt service obligation when the debt service reserve funds are liquidated at the maturity of the applicable
obligations.
Source: The County.
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 June 1, 2000. 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.
B-19
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 public
agency are payable only from the general fund or other revenues of such public agency.
B-20
Contra Costa County
Estimated Direct and Overlapping Bonded Debt
as of June 1,2000 [to be updated]
1998-99 Assessed Valuation: $70,618,556,055 (includes unitary utility valuation)
Redevelopment Incremental Valuation: .2
_6.049.123 01
Adjusted Assessed Valuation: $64,569,432,854
OVERLAPPING TAX 6ED ASSESSMENT DEBT: !10�Iicable Debt 6/1/99
San Francisco Bay Area Rapid Transit District 30.795% $ 12,660,331
East Bay Municipal Water District and Special District No. 1 48.799&5.849 6,420,045
Martinez Unified School District 100. 43,407,276
Pittsburg Unified School District and West Contra Costa Unified School District lK 44,890,000
San Ramon Valley Unified School District 100. 70,000,000
San Ramon Valley Unified School District Lease Tax Obligations 100. 32,690,000
AAcalanes and Liberty Union High School Districts 100, 86,384,809
Lafayette School District 100. 27,270,000
Other School Districts 100. 67,096,306
Cities 100. 6,940,000
East Bay Regional Park District 44.727 83,245,892
Other Special Districts 100. 2,860,000
Community Facilities Districts 100. 195,880,000
1915 Act Assessment Bonds(Estimate) 100. 312,11086
TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT $991,859,545
Less: East Bay Municipal Utility District and Special District No.I (100%self-supporting) 6.420 0-4
TOTAL NET OVERLAPPING TAX AND ASSESSMENT DEBT $985,439,500
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:
Contra Costa County General Fund Obligations 100. % $307,491,0000)
Contra Costa County Pension Obligations 100. 313,190,000
Contra Costa County Board of Education Certificates of Participation 100. 3,575,000
Contra Costa County Mosquito Abatement District Certificates of Participation 1,00. 1,695,000
Alameda-Contra Costa Transit District Certificates of Participation 11.015 2,738,880
Antioch Unified School District Certificates of Participation 100, 15,225,604
San Ramon Valley Unified School District Educational Facilities Corporation lK 34,360,000
Other School District General Fund Obligations 0.493-100 43,770,400
City of Antioch General Fund Obligations 100. 16,727,124
City of Concord General Fund Obligations 100. 31,685,000
City of Pleasant Hill General Fund Obligations 100. 12,960,000
City of Richmond General Fund Obligations 100. 26,242,772
City of San Ramon General Fund Obligations 100. 23,070,000
Other City General Fund Obligations 100. 22,455,000
Hospital Authorities 100. 6,980,000
Other Special District Certificates of Participation 100. 11,250,000
TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $873,415,780
Less: San Ramon Unified School District Certificates of Participation(self-supporting
from GIC from Bayerische Landesbank) 14,150,000
City of Concord lease bonds(100%self-supporting) 1,250.000
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $858,015,780
GROSS COMBINED TOTAL DEBT $1,865,275,325(2)
NET COMBINED TOTAL DEBT $1,843,455,280
(1) Excludes the Notes.
(1) Excludes tax and revenue anticipation notes,revenue,mortgage revenue and tax allocation bonds and non-bonded capital lease obligations,
Ratios to 1998-99 Assessed Valuation:
Total Gross Direct and Overlapping Tax and Assessment Debt...............................................1.40%
Total Net Direct and Overlapping Tax and Assessment Debt..................................................1.40%
Ratios to AdjustedAssessedValuation:
Combined Direct Debt ($590,487,000).................. .............. ..........___.....0.960%
Gross Combined Total Debt.................................... .............................................-2.89%
NetCombined Total Debt....._.................................._........................................-............-2.85%
B-21
Future Financings
In the summer or fall of 2000, the County anticipates financing various specialty clinics at the
Contra Costa Regional Medical Center in Martinez, California., and several other projects including
construction of a new animal shelter, expansion of social services facilities and tenant improvements to
an evidence storage facility. No other major debt financings of new capital projects are currently
scheduled by the County, although the County may undertake the replacement of its main administration
building in 2001.
Insurance and Self-Insurance Programs
The County self-insures its unemployment, dental, management long-term disability and medical
liability exposures. The County is self-insured to $750,000 per occurrence for workers' compensation,
and maintains $10 million of excess insurance coverage per occurrence with commercial insurance
carriers. The County is self-insured to $1.0 million per occurrence on public and automobile liability
(excluding the airport, which is insured for catastrophic losses by a commercial insurance carrier up to
$75 million per occurrence) and maintains $10 million excess insurance coverage with commercial
insurance carriers. The County is self-insured to $500,000 per occurence on medical malpractice and
maintains $11 million of excess insurance with commercial insurance carriers. All claims are adjusted
in-house by the County, except for dental which is adjusted by outside parties.
Excess coverage is provided by the California State Association of Counties' Excess Insurance
Authority (Insurance Authority), a joint powers authority, the purpose of which is to develop and fund
programs of excess insurance and provide the joint purchase of coverage from independent third parties
for its member entities. The Insurance Authority is governed by a Board of Directors consisting of
representatives of its member entities.
In addition, the County maintains up to $550 million "All Risk" coverage (including flood
insurance) with a $50,000 deductible, and up to $350 million earthquake coverage on all locations with
commercial insurance carriers.
During the past three years there have been no instances of the amount of claim settlements
exceeding insurance coverage.
Internal Service Funds are used to account for the County's self-insurance activities. It is the
County's policy to provide in each fiscal year, by charges to affected operating funds, amounts sufficient
to cover the estimated expenditures for self-insured claims. Charges to operating funds are recorded as
expenditures/expenses of such funds and revenues of the Internal Service Funds. Accrual and payment
of claims are recorded in the Internal Service Funds.
The County has accrued a liability of$84.2 million at June 30, 1999, for all self-insured claims
in the Internal Service Funds, which includes an amount for incurred but not reported claims. The self
insurance reserve is based on actuarially determined amounts for workers' compensation, public and
automobile liability, and medical liability and based on management's estimates for all other reserves.
In the opinion of the County, the amounts accrued are adequate to cover claims incurred but not reported
in addition to known claims.
B-22
For additional information on the County's insurance coverage, see "APPENDIX D- FINANCIAL
STATEMENTS OF THE COUNTY FOR THE FISCAL YEAR ENDED JUNE 30, 1999 - Notes to General Purpose
Financial Statements-Note 17"attached hereto.
E-23
•
APPENDIX C
PROPOSED FORM OF OPINION OF BOND COUNSEL
•
•
APPENDIX D
FINANCIAL STATEMENTS OF THE COUNTY
FOR THE FISCAL YEAR.ENDED JUNE 3% 1999
•
APPENDIX E
FORM OF CONTINUING DISCLOSURE CERTIFICATE
i
•
APPENDIX F
BOOK ENTRY ONLY SYSTEM
•
APPENDIX F
BooK-L'NTRY-ONLY SYSTEM
Book-Entry System
DTC, New York, New York will act as securities depository for the Notes. The Nates
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 Nates in the aggregate
principal amount 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 Nate ("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.
F-1
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
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.
DTC may 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.
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.
No Assurance Regarding DTC Practices
The foregoing information 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
AS 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, Each person for whom
a Participant acquires am interest in the Notes, as nominee, may desire to make arrangements
F-2
with such Participant to receive a credit balance in the records of such Participant, and may
desire to make arrangements with such Participant to have all communications to DTC, which
may affect such a person, forwarded in writing by such Participant and to receive notification of
all interest payments.
NEITHER THE COUNTY NOR THE UNDERWRITER WILL HAVE ANY
RESPONSIBILITY OR OBLIGATION WITH RESPECT TO THE PAYMENTS TO THE
DIRECT PARTICIPANTS OR THE BENEFICIAL OWNERS, OR THE PROVISION OF
NOTICE TO THE DIRECT PARTICIPANTS, ANY INDIRECT PARTICIPANTS OR THE
BENEFICIAL OWNERS WITH RESPECT TO THE NOTES. NO ASSURANCE CAN BE
GIVEN BY THE COUNTY OR THE UNDERWRITER THAT DTC, DIRECT
PARTICIPANTS, INDIRECT PARTICIPANTS OR OTHER NOMINEES OF THE
BENFICOIAL OWNERS WILL MAKE PROMPT TRANSFER OF PAYMENTS TO THE
BENEFICIAL OWNERS, THAT THEY WILL DISTRIBUTE NOTICES RECEIVED AS THE
REGISTERED OWNER OF THE NOTES TO THE BENEFICIAL OWNERS, THAT THEY
WILL DO SO ON A TIMELY BASIS, OR THAT DTC WILL ACT IN THE MANNER
DESCRIBED IN THIS PRELIMINARY OFFICIAL STATEMENT.
Risks of Book-Entry System
The County makes no assurance, and the County shall incur no liability, regarding the
fulfillment by DTC of its obligations under the book-entry system with respect to the Notes.
In addition, Beneficial Owners of the Notes may experience some delay in their receipt
of distributions of principal of, and interest on, the Notes since such distributions will be
forwarded by the county to DTC and DTC will credit such distributions to the accounts of the
Direct Participants which will thereafter credit them to the accounts of the Beneficial Owners
either directly or through Indirect Participants.
Since transactions in the Notes can be effected only through DTC, Direct Participants,
Indirect Participants and certain banks, the ability of a Beneficial Owner to pledge Notes to
persons or entities that do not participate in the DTC system, or otherwise take actions in respect
of such Notes, may be limited due to lack of a physical certificate. Beneficial Owners will not
be recognized by the County as registered owners of the Notes, and beneficial Owners will only
be permitted to exercise the rights of registered owners indirectly through DTC and its
Participants.
F-3
NOTICE OF INTENTION TO SELL
$88,000,000'
COUNTY OF CONTRA COSTA,CALIFORNIA
2000-2001 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,May 30,2000,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, $88,000,000* principal amount of tax and revenue anticipation notes of the County of Contra
Costa designated"County of Contra Costa, California,2000.2001 Tax and Revenue Anticipation Notes, Series A"
(the "Notes"). The County reserves the right to postpone to a later date and/or other time said public sale or to
change the principal amount by announcing such postponement or change on Thomson Municipal News
("Munifacts")and Bloomberg Business News ("Bloomberg')no later than 24 hours prior to 10:00 a.m. local time
on May 30, 2000. If no legal bid or bids are received for the Notes on May 30, 2000 (or such other date as is
established by Munifacts and Bloomberg) at the time and place specified,bids will be received for the Notes at the
same place and at such time and date as shall be designated by Munifacts and Bloomberg. 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, Ann. Jean Buckley(415)
339-8944. Failure of any bidder to receive such Munifacts,Bloomberg,telephonic or Fax notice shall not affxt 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 and copies of said Official Notice of Sale and
the Preliminary Official Statement relating to the Notes will be furnished upon request to C.M.de Crinis&Co.,Inc.,
3000 Bridgeway, Suite 206, Sausalito, California 94965.
Dated: May 15,2000.
/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:447670.1